EXHIBIT 99.1

Contacts:

Jeff Lambert

Lambert, Edwards & Associates, Inc.

616-233-0500 / avso@lambert-edwards.com

Avatech Solutions

Announces Second Quarter 2005 Results

Owings Mills, Md., Feb. 16, 2005—Avatech Solutions, Inc. (OTCBB: AVSO) today announced results for the second quarter ended December 31, 2004, highlighted by the Company’s return to profitability, double-digit increases in consulting services and substantial progress toward fiscal 2005 goals.

Avatech, the recognized leader in design and engineering technology for the manufacturing, building design and engineering markets, reported revenues for the second quarter of fiscal 2005 of $8.2 million, a 4.1 percent increase compared to revenues of $7.9 million for the second quarter of fiscal 2004. When compared to the first quarter of fiscal 2005, revenues for the second quarter increased 21.2 percent.

The Company also returned to profitability, posting second quarter net income of $9,482 following a first quarter loss of $813,448. The Company’s deferred revenue declined 3.9 percent to $982,514 million for the second quarter of fiscal 2005, primarily due to Product Lifecycle Management (PLM) software and services related revenue recognized during the second quarter.

During the second quarter of fiscal 2005, Avatech reported net income of $9,482, compared to net income of $4,725 for the same period last fiscal year. Avatech said improvements in consulting services and commission revenues, which were fueled by increased sales in Autodesk Subscription software maintenance agreements, drove the increase in net income. Product sales for the second quarter were consistent with the same period last fiscal year due.

“During the second quarter, we made substantial progress toward our fiscal 2005 goals—we hired 21 new customer-facing account executives and technical resources, increased service revenues, invested in employee education to enrich the customer experience and continued to transform Avatech into a diversified service and solution provider,” said Scotty Walsh, CEO of Avatech Solutions. “We continue to take an aggressive approach toward expanding our customer outreach efforts, and our hard work is beginning to take hold. Our consulting services are building traction as customers are increasingly turning to us to meet their needs for product integration, service and support.”

10715 Red Run Blvd, Suite 101 • Owings Mills MD 21117

410-581-8080 • 410-581-8088 FAX

www.avatechsolutions.com

Avatech Solutions

Fourth Quarter 2004 Results

Page 2 of 6 ~

Second Quarter 2005 Highlights

• When compared to the first quarter of fiscal 2005, revenues for the second quarter increased 21.2 percent.

• Revenues for the quarter rose 4.1 percent to $8.2 million. The increase included a 14.3 percent increase in commission revenues and an 11.7 percent increase in consulting services, partially offset by a 0.6 percent decline in product sales.

• For the second quarter of fiscal 2005, product sales were $5.2 million, commission revenues were $1.6 million and consulting services were $1.4 million.

• Income from operations for the second quarter of fiscal 2005 climbed to $160,277 versus $142,011 for the same period last fiscal year.

• Gross margins for the quarter were 43 percent, a nearly seven percentage point increase compared to the second quarter of fiscal 2004.

Walsh concluded: “During the first half of the year, we made significant investments in the Company, building a solid foundation for future growth—and we are beginning to see the return on those investments. Sales productivity is rising, we’re lowering our product-to-services revenue mix and order backlog has increased.”

“We have created a strong and increasingly diverse product and service offering, and our top priority for the remainder of fiscal 2005 is on execution and meeting our target of positive operating income on a revenue range of $16 million to $18 million.”

About Avatech Solutions

Avatech Solutions, Inc. (OTCBB: AVSO.OB) is the recognized leader in design and engineering technology solutions with unparalleled expertise in CAD software, data management and process optimization for the manufacturing, engineering, building design and facilities management industries. Headquartered in Owings Mills, Maryland, the company specializes in software integration, standards development and deployment, education and technical support. Avatech is one the largest integrators of Autodesk software worldwide and a leading provider of SMARTEAM PLM solutions. The company serves 18,000 clients worldwide including numerous Fortune 500 and Engineering News Record’s Top 100 companies. Please visit www.avatechsolutions.com for more information.

Avatech Solutions Safe Harbor Statement

This press release contains forward-looking statements about the expectations, beliefs, plans, intentions and strategies of Avatech Solutions, Inc. There are a number of important factors that could cause actual results to differ materially from those anticipated by any forward-looking information. A description of risks and uncertainties attendant to Avatech and its industry, and other factors that could affect the Company’s financial results, are included in its Securities and Exchange Commission filings, including, but not limited to, the annual report on Form 10-K for the fiscal year ending June 30, 2004 and other Securities and Exchange Commission filings. Investors and shareholders may obtain a free copy of the documents filed by Avatech Solutions, Inc. with the Commission at the Commission’s web site at www.sec.gov. The documents also may be obtained for free by directing a request to Melody Craigmyle, Vice President of Marketing at 410-581-8080 or email MCraigmyle@avatechsolutions.com.

All brand names, product names, or trademarks belong to their respective holders.

10715 Red Run Blvd, Suite 101 • Owings Mills MD 21117

410-581-8080 • 410-581-8088 FAX

www.avatechsolutions.com

Avatech Solutions

Fourth Quarter 2004 Results

Page 3 of 6 ~

Avatech Solutions, Inc. and Subsidiaries

Consolidated Balance Sheets

	December 31, 2004		June 30, 2004
	(unaudited)		(audited)
Assets
Current assets:
Cash and cash equivalents	$	78,851	$	689,995
Accounts receivable, less allowance of $100,000 at June 30, 2004 and $101,000 at December 31, 2004		4,462,579		3,906,724
Other receivables		274,322		366,475
Inventory		331,070		215,321
Prepaid expenses		322,736		398,815
Other current assets		71,719		70,775
Total current assets		5,541,277		5,648,105
Property and equipment:
Computer software and equipment		2,621,893		2,396,593
Office, furniture and equipment		846,750		881,036
Leasehold improvements		266,738		197,245
		3,735,381		3,474,874
Less accumulated depreciation and amortization		3,055,851		2,921,705
		679,530		553,169
Goodwill		52,272		52,272
Other assets		470,671		313,073
Total assets	$	6,743,750	$	6,566,619

10715 Red Run Blvd, Suite 101 • Owings Mills MD 21117

410-581-8080 • 410-581-8088 FAX

www.avatechsolutions.com

Avatech Solutions

Fourth Quarter 2004 Results

Page 4 of 6 ~

Avatech Solutions, Inc. and Subsidiaries

Consolidated Balance Sheets

	December 31, 2004			June 30, 2004
	(unaudited)			(audited)
Liabilities and stockholders’ deficit
Current liabilities:
Accounts payable and accrued expenses	$	4,533,671		$	5,257,848
Accrued compensation and related benefits		302,122			347,020
Borrowings under line-of-credit		3,096,035			1,640,180
Note payable to related party		890,447			—
Current portion of long-term debt		307,093			92,544
Deferred revenue		982,514			956,636
Other current liabilities		342,843			333,106
Total current liabilities		10,454,725			8,627,334
Long-term debt		1,365,407			1,606,206
Note payable to related party		—			878,725
Other long-term liabilities		334,746			318,316
Commitments and contingencies		—			—
Minority interest		—			1,525,000
Stockholders’ deficit:
Series D Convertible Preferred Stock, $0.01 par value; 1,297,537 shares authorized, issued and outstanding at June 30, 2004 and December 31, 2004		12,975			12,975
Common stock, $0.01 par value; 80,000,000 shares authorized; 9,460,380 and 10,843,064 shares issued and outstanding at June 30, 2004 and December 31, 2004, respectively		108,430			94,605
Additional paid-in capital		5,505,550			3,737,574
Accumulated deficit		(11,038,083	)		(10,234,116	)
Total stockholders’ deficit		(5,411,128	)		(6,388,962	)
Total liabilities and stockholders’ deficit	$	6,743,750		$	6,566,619

10715 Red Run Blvd, Suite 101 • Owings Mills MD 21117

410-581-8080 • 410-581-8088 FAX

www.avatechsolutions.com

Avatech Solutions

Fourth Quarter 2004 Results

Page 5 of 6 ~

Avatech Solutions, Inc. and Subsidiaries

Consolidated Statements of Operations

	Three Months Ended December 31,
	2004			2003
	(unaudited)			(unaudited)
Revenues:
Product sales	$	5,152,600		$	5,183,449
Service revenue		1,434,110			1,283,609
Commission revenue		1,599,723			1,400,015
		8,186,433			7,867,073
Cost of revenues:
Cost of product sales		3,485,013			3,933,520
Cost of service revenue		1,161,068			1,047,075
		4,646,081			4,980,595
Gross margin		3,540,352			2,886,478
Other operating expenses:
Selling, general and administrative		3,307,190			2,662,030
Depreciation and amortization		72,885			82,437
		3,380,075			2,744,467
Operating income		160,277			142,011
Other income (expense):
Minority interest		(20,757	)		(38,125	)
Interest and other income (expense)		(8,932	)		5,006
Interest expense		(114,162	)		(95,172	)
		(143,851	)		(128,291	)
Income from continuing operations before income taxes		33,431			13,720
Income tax expense		6,944			10,000
Income from continuing operations		26,487			3,720
Income (loss) from operations of discontinued operating segments		—			1,005
Net income		9,482			4,725
Preferred stock dividends		19,463			10,122
Loss attributable to common stockholders	$	(9,981	)	$	(5,397	)
Loss per common share, basic and diluted	$	(0.00	)	$	(0.00	)
Shares used in computation		10,124,694			9,217,874

10715 Red Run Blvd, Suite 101 • Owings Mills MD 21117

410-581-8080 • 410-581-8088 FAX

www.avatechsolutions.com

Avatech Solutions

Fourth Quarter 2004 Results

Page 6 of 6 ~

Avatech Solutions, Inc. and Subsidiaries

Consolidated Statements of Operations

	Six Months Ended December 31,
	2004			2003
	(unaudited)			(unaudited)
Revenues:
Product sales	$	9,631,999		$	8,688,397
Service revenue		2,738,591			2,760,177
Commission revenue		2,567,905			2,284,811
		14,938,495			13,733,385
Cost of revenues:
Cost of product sales		6,604,474			6,414,849
Cost of service revenue		2,131,230			2,106,773
		8,735,704			8,521,622
Gross margin		6,202,791			5,211,763
Other operating expenses:
Selling, general and administrative		6,584,357			5,164,987
Depreciation and amortization		134,146			149,626
		6,718,503			5,314,613
Operating loss		(515,712	)		(102,850	)
Other income (expense):
Minority interest		(58,882	)		(76,250	)
Interest and other income (expense)		3,494			4,293
Interest expense		(217,823	)		(161,697	)
		(273,211	)		(233,654	)
Loss from continuing operations before income taxes		(788,923	)		(336,504	)
Income tax expense		15,044			21,000
Loss from continuing operations		(803,967	)		(357,504	)
Loss from operations of discontinued operating segments		—			(141,247	)
Net loss		(803,967	)		(498,751	)
Preferred stock dividends		38,926			17,379
Loss attributable to common stockholders	$	(842,893	)	$	(516,130	)
Loss from continuing operations per share, basic and diluted	$	(0.08	)	$	(0.04	)
Loss per common share, basic and diluted	$	(0.09	)	$	(0.06	)
Shares used in computation		9,862,176			9,177,399

10715 Red Run Blvd, Suite 101 • Owings Mills MD 21117

410-581-8080 • 410-581-8088 FAX

www.avatechsolutions.com