Audiotech Healthcare Corp. has released record quarterly sales for the first quarter of fiscal 2009 and has had a return to profitability.

Total revenues for the first quarter ended Dec. 31, 2008, reached $1,279,645, an increase of 25 per cent over the same quarter in fiscal 2008. Revenues from the Canadian operations totalled $900,968, an increase of 24 per cent over the $728,926 reported a year earlier. Sales from the U.S. clinics surged 28 per cent to $378,677. Revenue growth in Canada was driven by contributions from the new clinic in Penticton and internal growth at a number of other clinics. Similar to the fourth quarter of fiscal 2008, U.S. growth was driven by both a significant improvement in the U.S./Canadian dollar exchange rate and a small increase in business volume. The previously disclosed staff changes in the Kelowna clinic are beginning to produce results.

                         Three months ended Dec. 31,
                                   2008        2007 

Canadian revenues             $ 900,968   $ 728,926 
U.S. revenues                   378,677     295,417 
Total revenues              $ 1,279,645 $ 1,024,343 
Operating cash flow             106,101    (18,838) 
Net earnings                     66,994    (54,200) 
Earnings per share (basic and 
fully diluted)                    0.005     (0.004) 

As a result of the strong revenue growth and continuing improvements within the newer clinic operations, the company is pleased to report net earnings of $66,994 or 0.5 cent per share for the first quarter of fiscal 2009. This compares with a loss of $54,200 or 0.4 cent per share in the same quarter in fiscal 2008. Operating cash flow also increased correspondingly from negative $18,838 during the first quarter of fiscal 2008 to positive $106,101 in the current reporting period.

As a result of a $44,135 cumulative translation adjustment resulting from the appreciation of the U.S. dollar during the quarter, comprehensive income for the period was $111,129 compared with a loss of $53,081 in first quarter of fiscal 2008.

Both the Canadian and the U.S. clinic operations produced positive operating cash flow during the quarter, however, the majority of the operating cash flow was derived from the Canadian operations. Management has undertaken an enhancement program aimed at improving margins and revenue growth, and a program of cost rationalization at the U.S. clinics to further improve profitability. Management expects a positive contribution from these efforts in upcoming quarters.

The first quarter financial results were slightly ahead of management's expectations. The company remains confident that the investments made in fiscal 2007 and 2008 to expand various clinics and open new locations will produce expanding profitability during the remainder of fiscal 2009 as targeted production levels at the new operations are achieved and as prudent cost reductions are completed. Management also remains confident that these investments have helped secure Audiotech as a dominant regional clinic operator in British Columbia, particularly outside of the Vancouver area, and that this positioning will result in a higher corporate valuation in the event that Audiotech is acquired by another entity in the current market consolidation cycle.

Management intends to focus on creating further operational efficiencies and improving the results from existing clinics during fiscal 2009 to ensure further earnings growth.

The company recommends that this press release be read in conjunction with the unaudited financial statements for the three months ended Dec. 31, 2008, and the accompanying management discussion and analysis.