Upward Revision to Q3 Guidance... $11+ million Revenues... Business Outlook Bullish... Zanett on Track to Profitable Q3 EBITDA*... FY2006 Revenues Forecasted +27%... (+16% Organic Growth)

NEW YORK--(BUSINESS WIRE)---Zanett Inc. (NASDAQ: ZANE) a leading information technology (IT) consulting firm serving Fortune 500 corporations, mid-market companies, and classified government agencies involved in Homeland Defense and Homeland Security, today announced an upward revision to Revenue guidance for third quarter of 2006.

GUIDANCE
The following statements are based on current management expectations. These statements are forward-looking and actual results may differ materially. This guidance supersedes and replaces any and all guidance or comments made by Zanett management prior to this date.

The company expects its Q3 2006 services revenue, including reimbursed expenses, to be just over $11 million, an upward revision from the last guidance of $10.5 million offered by the Company. The current guidance would represent Revenue Growth of about 22% Y-o-Y (ie, over the third quarter of 2005) and, together with results from Q1 and Q2, would be tracking a Revenue amount of $43 million to $45 million for all of FY2006.

27% REVENUE GROWTH FORCASTED FOR 2006
Claudio Guazzoni, Chairman and CEO stated, "The fundamentals underlying Zanett's operations have never been better. Zanett is continuing to show new signs of strength. We are forecasting year over year revenue growth of 27% for all of 2006, of which 16% is organic growth."

"The third quarter was another record quarter for Zanett," said Dennis Harkins, Zanett's CFO. "We continued to achieve robust revenue and profit growth, demonstrating our strong position in a growing market."

*EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortisation) is a non-GAAP performance measure and is not intended to be a performance measure that should be regarded as an alternative to nor more meaningful than GAAP earnings. EBITDA measures presented may not be comparable to similarly titled measures presented by other companies. EBITDA is defined as GAAP net income plus all cash and non-cash interest expense, plus all cash and non-cash tax expense, plus all cash and non-cash depreciation expenses, plus all cash and non-cash amortization expenses.