Agoracom

RICHMOND, BC, May 31 - CON-SPACE Communications Ltd. (TSX-V: CCB), (www.con-space.com), a world leader in specialized voice communication products, today announced 2007 third quarter financial results for the period ended March 31, 2007.

"CON-SPACE ended its third quarter for fiscal 2007 with sales of $1,748 k, a 61.5% increase in sales over the $1,105 k for the comparative quarter last year," said Jim Swanson, Company Chairman. "Year to date sales increased to $4,728 k, or 17.3% over last year's $4,030 k."

Cost of goods sold increased to 60.0% year to date versus 57.9% last year. This resulted in a gross margin of $1,889 k for the first nine months compared to $1,698 k for the respective prior period.

At the end of March CON-SPACE launched its new Modular Radio Accessory Product Line at the International Wireless and Communications Exhibition. These high quality products were well received by Distributors with a high level of interest from potential OEM customers. Management does not expect to see the full benefit of increased sales until into the first quarter of the next fiscal year.

Operating expenses show a year over year increase as a percent of sales of 4.0%. The majority of the increase, approximately 63.4%, is due to a climb in salaries, wage and benefits expense. The increased expenditures for salaries, wages and benefits during the first three quarters of Fiscal 2007 are a result of a planned growth strategy. The Company has been positioning itself for expansion into new markets. To this end, a sales office was opened in the U.S. in July 2006 and three salespeople were hired to better service the America market. These new employees have significant knowledge of and experience in the communications industry and are expected to add real value as CON-SPACE enters this market with its new product line. Additionally, a new salesman was hired in the UK to continue development in that largely untapped market.

Marketing and Promotion expenses costs have increased by $85 k or 55.3% year to date. This figure includes costs related to the launch of the Company's new Armory product line in March. Research and development expenditures have risen by 51.8% year to date. Almost half of this increase, approximately $21 k, is due to an increase in the allocation of engineering salaries to research and development.

Earnings before interest, income taxes, depreciation and amortization (EBITDA) for the quarter was $66 k ($213 k ytd) compared to $9 k or ($384 k ytd) in the prior year.

Net earnings for the quarter reflected a loss of $22 k and year to date income of $55 k versus a loss of $12 k for the respective quarter in the prior year and year to date income of $181 k in 2006.

Subsequent to the quarter close the Company acquired Search Systems Inc. ("Search Systems"), of Bakersfield, California, effective April 1, 2007. No amount has been included in the 3rd quarter results with respect to Search Systems. The results of operations for the acquisition will begin inclusion in the the 4th quarter.

About CON-SPACE

CON-SPACE is recognized worldwide as the leading designer and manufacturer of specialized voice communication equipment used by Police, Fire, Rescue, Government Agencies, Militaries, Municipalities and general industry. The Company has distribution throughout North America, Great Britain, Australia, and parts of Asia, South America, and Europe. The Company also supplies many other manufacturers with Private Labeled products.

This press release is available on the company's official on-line investor relations site for investor commentary, feedback and questions.

"Forward-looking" statements in this release involve risks and uncertainties associated with, among others, economic, industry conditions, technological development, and competition and should not be relied upon as actual results may differ materially from those projected.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

For further information: 
James L. Swanson, 
Chairman, 
CON-SPACE, 
Tel: (800)755-2528; 

Investor Relations, 
AGORACOM Investor Relations,
                  http://www.agoracom.com or CCB@agoracom.com