CANTON, Mass., Feb. 14 /PRNewswire-FirstCall/ -- Avitar, Inc. (OTC:AVTI.OB) (BULLETIN BOARD: AVTI.OB) has released financial results for the three months ended December 31, 2006. For the quarter ended December 31, 2006, Avitar's revenues from continuing operations increased to $1,045,000 from $907,000 in the quarter ended December 31, 2005. The net loss was $943,000, or $0.08 per share, for the quarter ended December 31, 2006 compared with a net loss of $892,000, or $0.23 per share for the quarter ended December 31, 2005. The net loss for the three months ended December 31, 2006 reflects a decrease in income from discontinued operations of $120,000, an increase in interest and financing expenses of $97,000 and a decrease in non-cash income of approximately $22,000 resulting from changes in fair market value of derivative securities and warrants, offset in part by increases in revenue of approximately $138,000 and decreases in operating expenses of approximately $50,000. "Our technology and its associated value proposition for workplace drug testing, continues to be received well in the marketplace," said Peter P. Phildius, Chairman and CEO. "Our viral marketing strategy, particularly our various web-based communication techniques, have positioned us to be regarded as the thought leaders in workplace oral fluid drug testing. We will continue to exploit this high-return and cost effective approach in the months ahead." About Avitar, Inc. Avitar, Inc. develops, manufactures, and markets innovative and proprietary products. Their products span the oral fluid diagnostic market, the disease and clinical testing market, and customized polyurethane applications used in the wound dressing industry. Avitar manufactures ORALscreen(TM), the world's first non-invasive, rapid, onsite oral fluid test for drugs-of-abuse, as well as HYDRASORB(TM), an absorbent topical dressing for moderate to heavy exudating wounds. Avitar is also developing diagnostic strategies for disease and clinical testing in the estimated $25 billion in- vitro diagnostics market. Conditions targeted include influenza, diabetes, and pregnancy. For more information, see Avitar's website at http://www.avitarinc.com/. Safe Harbor Statement. This release contains forward looking statements that are subject to risks and uncertainties including financing risks and the development and marketing of new applications and other risks that are detailed from time to time in the Company's filings with the Securities and Exchange Commission. In view of such risks and uncertainties, the Company's actual results could differ materially from those anticipated in such forward looking statements. Contact: Jay C. Leatherman The Investor Relations Group Avitar Inc. Investors: 781-821-2440 Erika Moran/Tom Caden, 212-825-3210 http://www.avitarinc.com/ Media: Bill Douglass, 212-825-3210 CHART FOLLOWS Avitar, Inc. Summary of Financial Results (in thousands, except per share amounts) Quarter Ended December 31, 2006 2005 Sales $1,045 $907 Operating Expenses: Cost of Sales 749 659 Selling, General and Administrative 936 1,038 Research and Development 92 130 Total Operating Expenses 1,777 1,827 Operating Loss (732) (920) Other Expenses (211) (92) Loss from Continuing Operations (943) (1,012) Discontinued Operations: Income from the Disposal of USDTL - 120 Loss from Discontinued Operations - 120 Net Loss $(943) $(892) Basic and Diluted Loss Per Share From Continuing Operations Before Discontinued Operations $(0.08) $(0.26) Basic and Diluted Net Loss Per Share $(0.08) $(0.23) Weighted Average Number of Shares and Common Equivalent Shares Outstanding 11,667,963 4,045,403 Selected Balance Sheet Items: 12/31/2006 Cash $205 Total Assets 2,056 Total Liabilities 7,853 Convertible and Redeemable and Convertible Preferred Stock 3,185 Stockholders' Deficit (8,981) DATASOURCE: Avitar, Inc. CONTACT: Jay C. Leatherman of Avitar Inc., +1-781-821-2440, or ; or Investors, Erika Moran, , or Tom Caden, , both of The Investor Relations Group for Avitar, Inc., +1-212-825-3210; or Media, Bill Douglass of The Investor Relations Group, +1-212-825-3210, or

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