TORONTO, ONTARIO (October 24, 2006) -- Aastra Technologies Limited - (TSX: “AAH”) today announced its unaudited financial results for the third quarter ended September 30, 2006. Net earnings for the three months ended September 30, 2006 were $4.7 million or $0.27 diluted earnings per share compared to $3.6 million or $0.20 diluted earnings per share in the same period last year. The results of continuing operations for the third quarter of 2005 have been adjusted to exclude sales and expenses of the Digital Video group. As previously announced, Aastra completed the sale of its Digital Video group on May 31, 2006 and as a result its results of operations have been presented separately as discontinued operations in the consolidated financial statements.

Sales for the three months ended September 30, 2006 were $142.8 million compared to sales of $138.4 million for the same period last year, an increase of approximately 3.2%. Sales in the North American Enterprise Segment were $25.2 million in the quarter compared to sales of $26.6 million in the third quarter last year, a decrease of 5.1%. Sales in the European Enterprise Communication Segment were $117.5 million in the third quarter compared to $111.8 million, an increase of 5.1%.

Gross margin was 40.5% of sales for the three months ended September 30, 2006, a decrease from a gross margin of 42.1% in the third quarter last year. The decrease in gross margins is primarily a result of lower gross margins in Europe resulting from an unfavorable shift in product mix as well as increased inventory provisions in this region.
Research and development expenses in the third quarter of 2006 were $14.3 million or 10.0% of sales, compared to $13.7 million or 9.9% of sales in the same quarter of 2005. Selling, general and administrative expenses were $35.4 million or 24.8% of sales in the quarter compared to $34.9 million or 25.2% of sales in the third quarter of 2005.
Amortization of capital and intangible assets, excluding tooling, was $4.0 million for the third quarter compared to $4.3 million in the same period last year. The Company recorded investment income of $1.5 million in the third quarter compared to $0.3 million for the third quarter last year as a result of substantially higher average interest rates on larger excess cash and short-term investment cash balances this quarter. The Company recorded a foreign exchange gain of $0.2 million in the third quarter of 2006 compared to a foreign exchange loss of $1.9 million in the same period last year. During the third quarter in 2005 the Canadian dollar appreciated rapidly against the Euro while it moved mildly weaker against the Euro in the third quarter this year.

During the third quarter the Company repurchased 700,000 of its own common shares for gross costs of $19.7 million under the terms of the Normal Course Issuer bid that it previously announced. A total of $4.2 million of the cost of this share repurchase has been recorded as a reduction to share capital while the remainder of the repurchase cost has been recorded as a reduction to retained earnings during the quarter.

The Company continued to generate positive cash flow from operations of approximately $11.3 million in the third quarter. At the end of the third quarter, Aastra had cash, cash equivalent and short-term investment balances of $144.0 million compared to $102.0 million at the end of December last year. The Company expects to see continued positive cash flows from operations in the quarters ahead.

About Aastra Technologies Limited

Aastra Technologies Limited (TSX: “AAH”), headquartered in Concord, Ontario, Canada, develops, markets, and supports a comprehensive portfolio of products, systems, and applications for building and accessing communication networks. Aastra’s products include a full range of both open-standard Internet Protocol (IP)-based and traditional networking solutions including; Enterprise Private Branch Exchanges (PBXs), gateways, digital and analog telephone terminals, VoIP telephones, wireless handsets, and advanced software applications. Aastra serves the majority of telephone companies in North America and Europe, with a growing presence in South America and Asia. For more information on Aastra, visit our Web site at http://www.aastra.com/ .

This press release may contain forward-looking information or forward-looking statements within the meaning of applicable securities legislation (“forward-looking statements”). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, potentials, future events or performance (often, but not always, using words or phrases such as “believes”, “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, or “intends” or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken or achieved) are not statements of historical fact, but are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Aastra, or developments in Aastra’s business or in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements may include, but are not limited to: expectations regarding Aastra’s restructuring and integration plans for the DeTeWe Telecommunications business acquired on July 31, 2005. As described in detail under the heading “Risk Factors” in Aastra’s annual information form filed on www.sedar.com, the material factors that could cause our actual results to differ materially from the forward-looking statements in this press release include: integration of Aastra’s recent acquisition of DeTeWe’s telephony business; continued demand for Aastra’s recently-acquired products; Aastra’s reliance on third party manufacturers and component suppliers (in general and related to the recently-acquired business); dependence on key personnel; risks related to expansion of Aastra’s business operations-domestically and internationally; exchange rate fluctuations; risks related to future acquisitions; requirements for additional financing of Aastra’s business; longer credit terms extended to Aastra’s customers; continued implementation of an enterprise resource planning system; potential fluctuations in quarterly financial results; possible volatility to Aastra’s share price; limited range of products that Aastra sells; risks associated with product returns and product defects; Aastra’s ability to protect its intellectual property; Aastra’s potential vulnerability to computer and information systems security breaches; competition from third parties; consolidation and reorganization in the telecommunications industry; rapid technological change; risk of third party claims for infringement of intellectual property rights by others; and risks related to technical standards and the certification our products. The material factors and assumptions that were applied in making the forward-looking statements in this press include: that Aastra will be able to continue with its restructuring and integration plans for the DeTeWe Telecommunications business; and that, after the implementation of the restructuring and integration plans, no further changes will be required in order to return the DeTeWe Telecommunications business to profitability based upon expected revenues.

It is important to note that: unless otherwise indicated, forward-looking statements in this press release describe Aastra’s expectations as of the date of this press release; Aastra cautions readers not to place undue reliance on the forward-looking statements in this press release as actual results may differ materially from expectations if known and unknown risks or uncertainties affect Aastra’s business, or if estimates or assumptions prove inaccurate. Therefore, Aastra cannot provide any assurance that forward-looking statements will materialize and Aastra assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or other reason.

For further information contact:

Allan Brett, CFO
905-760-4160
abrett@aastra.com