Announces Q3 2006 Results

TORONTO, ONTARIO -- (MARKET WIRE) -- Oct 30, 2006 -- Incorporated (TSX VENTURE: EGN), developer of the online resource and business for engineers; today announced its financial results for the third quarter of fiscal 2006. revenue was $578,291 for the three months ended September 30, 2006, up 21% over the revenue of $478,391 for the third quarter of 2005. Revenue for the nine-month period ended September 30 2006 was $1,731,332 up 41% from $1,229,222 in the same period one year ago. Gross profit for the quarter ended September 30, 2006 was $370,547 (2005 - $317,279) and $1,178,541 for the nine months ended September 30, 2006 (2005 - $822,513). The increase in revenues and gross profit is attributed to growth in software sales to the education market, increased sales of the Company's proprietary hosted engineering solutions (Collaboration Suite) and the Company's application development and information technology services to RAND Worldwide.

Operating income (EBITDA) for the quarter ended September 30, 2006, measured as earnings before interest, taxes, amortization and stock-based compensation, totaled $5,211 compared with an EBITDA loss of ($137,479) for the same period one year ago. Net loss for the third quarter of 2006 was ($66,180) or a net loss of ($0.00) per Common Share. This is compared with a net loss of ($206,091) or ($0.01) per Common Share for the third quarter ended September 30, 2005. Total operating expenses decreased year over year with $365,336 in the latest quarter compared to $454,758 for the third quarter a year earlier.

Consistent with the first and second quarter of 2006, the Company's sales and service team focused its efforts in the third quarter on the sale of the company's Collaboration Suite hosted service to commercial customers and CATIA from Dassault Systemes to the education market. Both hosted solutions and education software are sold as annual licenses.

"During the third quarter we increased the number of customers using our hosted solutions and the number of customers in our resale software business," said John Hayes, President of "Both of these lines of business have recurring revenue streams, which bodes well for future quarters. At the same time, our operating expenses are significantly lower than last year."

As at September 30, 2006, the Company had a cash balance of $180,633 compared to a cash balance of $229,712 as at June 30, 2006.

About Incorporated Incorporated (TSX VENTURE: EGN) is the developer-owner of the Web site and Internet-based software and business. offers hosted and deployed engineering software and services to manufacturers, design consultants and engineering academia around the world. The Incorporated head office is located in Mississauga, Ontario, Canada and can be reached toll-free at 1-877-997-9917, by facsimile at 905-273-6691 or through the Internet at


EBITDA is defined by the Company as operating income before interest expense, income taxes, amortization, stock-based compensation, asset dispositions and provision for discontinued operations. The Company has included information concerning EBITDA because it believes that EBITDA is used by certain investors as one measure of the Company's financial performance. EBITDA is not a measure of financial performance under Canadian generally accepted accounting principles and is not necessarily comparable to similarly titled measures used by other companies. EBITDA should not be construed as an alternative to operating income or to cash flows from operating activities (as determined in accordance with Canadian generally accepted accounting principles) as a measure of liquidity.

Forward Looking Statements

This press release may contain forward-looking statements based on management's current projections, beliefs and opinions at the date of this press release. Actual results could differ materially from those anticipated in these statements. Incorporated undertakes no responsibility to update forward-looking statements if circumstances or management's projections, beliefs or opinions change.

The contents of this News Release have been reviewed and approved by the Audit Committee and the Board of Directors.

                              BALANCE SHEET
                                 (Cdn. $)

                                                 (unaudited)      (audited)
                                                      As at          As at
                                             Sept. 30, 2006  Dec. 31, 2005
                                                          $              $
 Cash                                               180,633        179,347
 Accounts receivable                                192,561        148,041
 Prepaid expenses and deposits                       71,121         60,258
 Due from related parties                           209,723        204,327
 Notes receivable - Short-term                       74,090        296,363
  TOTAL CURRENT ASSETS                              728,128        888,336

CAPITAL ASSETS                                       29,228         55,289
INTANGIBLE ASSETS                                   993,232      1,127,134
  TOTAL ASSETS                                    1,750,588      2,070,759

 Accounts payable and accrued liabilities           435,690        504,964
 Deferred revenue                                    82,136         76,680
 Promissory notes - Short-term                                  203,986                246,887
    TOTAL  CURRENT  LIABILITIES                                                  721,812                828,531

  Promissory  notes  -  Long-term                                              179,702                250,935
    TOTAL  LIABILITIES                                                                  901,514            1,079,466

  Share  capital                                                                      14,759,008          14,759,008
  Contributed  surplus                                                                252,359                191,015
  Deficit                                                                                (14,162,293)      (13,958,730)
TOTAL  SHAREHOLDERS'  EQUITY                                                    849,075                991,293
TOTAL  LIABILITIES  AND  SHAREHOLDERS'  EQUITY                1,750,588            2,070,759

                                              ENGINEERING.COM  INCORPORATED
                                      STATEMENT  OF  OPERATIONS  AND  DEFICIT
                                                        (Cdn.  $,  unaudited)

                                                                      Three  Months  Ended      Three  Months  Ended
                                                                              Sept.  30,  2006              Sept.  30,  2005
                                                                                                        $                                        $

REVENUE                                                                              578,291                            478,391
COST  OF  SALES                                                                  207,744                            161,112
GROSS  PROFIT                                                                    370,547                            317,279

  Salaries  and  benefits                                                202,828                            247,094
  Management  fees                                                                        0                              11,043
  Marketing  expenses                                                              799                              15,706
  Development  costs                                                          67,045                              47,560
  General  and  administrative                                        94,664                            133,355
                                                                                            365,336                            454,758
INCOME  (LOSS)  BEFORE  UNDERNOTED  ITEMS                      5,211                          (137,479)
  Stock  based  compensation                                          (21,237)                          (14,004)
  Depreciation  expense                                                  (50,154)                          (54,608)
                                                                                            (71,391)                          (66,612)

NET  LOSS                                                                            (66,180)                        (206,091)

Basic  and  diluted  loss  per  share  -  Total                (0.00)                              (0.01)

  COMMON  SHARES  (basic  and  diluted)                  29,496,499                      28,744,968

Consolidated  Statements  of  Deficit
  Deficit,  beginning  of  Period                          (14,096,113)                  (13,709,890)
  Net  loss                                                                          (66,180)                        (206,091)
DEFICIT,  end  of  period                                        (14,162,293)                  (13,915,981)


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