Winland Electronics, Inc. announces record revenue for 2006

Winland Electronics, Inc. (AMEX: WEX), a designer and manufacturer of custom electronic control products and systems, announced financial results for the fourth quarter and full-year period ended December 31, 2006.

Revenues for the fourth quarter were $9.2 million, an increase of 5.0 percent compared to the $8.7 million reported for the fourth quarter of fiscal 2005. The sales for the quarter and year to date were led by new customer wins and expanding sales to our current customer base, combined with continued progress of the Company's proprietary products sales.

Gross profit for the fourth quarter was $1.5 million, or 16.1 percent of sales, down as a percent of sales from the $2.0 million or 22.5 percent of sales for the fourth quarter last year. Margins decreased due to lower margins from the Company's new agreement with Select Comfort, margins received from new business as well as increased costs relating to the introduction of 26 new or revised products for the quarter, partially offset by a contribution from higher-margin proprietary products. Total operating expenses increased 25.0 percent to $1.3 million when compared to $1.1 million in the fourth quarter last year due to a 32.4 percent increase in general and administrative expenses and a 24.2 percent increase in research and development expenses.

Income from operations decreased 85.1 percent to $131,538 compared to $885,154 for the fourth quarter last year. Net income decreased 92.4 percent to $51,036, or $0.01 per basic and fully diluted share (based on 3.6 million fully diluted shares) compared to net income of $671,171, or $0.19 per basic and fully diluted share (based on 3.6 million fully diluted shares) for the fourth quarter last year.