EcoMax Energy Services Ltd.

EcoMax Energy Services Ltd.

December 01, 2008 15:16 ET

EcoMax Announces Q3 Results

CALGARY, ALBERTA--(Marketwire - Dec. 1, 2008) - EcoMax Energy Services Ltd. ("EcoMax") (TSX VENTURE:EES) announced results for the quarter ended September 30, 2008.

The Company recorded net income for the quarter of $9,000 ($0.000 per share) compared to a loss of $461,000 ($0.018 per share) in the same period of 2007. In reviewing the Company's past and future performance, Mark Hopkins, the Company's CEO, noted:

"The Company has completed the restructuring of its operations to create a financially sound and profitable business. In the 3rd quarter, the Company sold the assets of its Calgary operation, shut down the Calgary shop and admin facility and released the related employees and moved the EcoMax Pump assets and equipment to Red Deer. The restructuring has resulted in an improvement in operating results. The Company recorded third quarter net income of $9,000, which represented a significant improvement from a loss of $461,000 in the same period of 2007. This resulted from improved sales and margins and reduced administration costs in 2008 and the inclusion of some write-downs in the EcoMax Pump division in the 3rd quarter of 2007. Third quarter sales increased 11% from sales in the same period last year.

This sale and the earlier sale of the Sylvan Lake operation have allowed the Company to significantly improve its balance sheet. Working capital of $978,000 at September 30, 2008 compares to a negative working capital balance of $800,000 at December 31, 2007. A significant part (approximately $600,000) of that working capital relates to amounts owed by the purchasers of the valve operations' assets. These amounts are due over the next year and, with some bridge financing, the receipt of these items should allow the Company to meet its obligations.

For the quarter, the Company's BOP operations contributed $211,000 (2007 - $143,000) to the Company's earnings. Decreased sales of new BOPs were offset by activity at the new Red Deer facility. The Company has recently completed the expansion of its Leduc facility and is focused on growing its BOP operations. The Company expects a slight decline in activity (partly seasonal) in the 4th quarter of this year with service activity to improve in the first 2 quarters of 2009. The EcoMax Pump division incurred a loss of $73,000 (2007 - loss of $333,000). We are maintaining the ability to pursue existing sales leads, seek a partner to market the Pump and to maintain pumps purchased by our customers.

Although our working capital position has improved, the Company is pursuing alternatives to increase liquidity and grow our business during a very difficult time for the Canadian and world economy. The changes made have put us on a much better footing to move forward, but challenges remain."

Summarized financial information for the quarter and nine months ended September 30, 2008 and 2007 are as follows (in thousands of Canadian dollars):

Quarter ended Nine months ended
Sept. 30 Sept. 30
2008 2007 2008 2007
------- -------- -------- --------
Sales 1,944 1,746 5,829 6,524
Cost of sales 1,499 1,450 4,560 5,084
------- -------- -------- --------
Gross margin 445 296 1,269 1,440
------- -------- -------- --------

Selling, general & admin 362 590 1,164 1,512
Stock-based compensation 29 55 87 164
Amortization 29 72 79 203
Interest 15 35 88 96
------- -------- -------- --------
435 752 1,418 1,975
------- -------- -------- --------
Income (loss) from
continuing operations 9 (456) (149) (535)
Income (loss) from
discontinued operations - (5) 324 24
------- -------- -------- --------
Net income 9 (461) 175 511
------- -------- -------- --------
------- -------- -------- --------

Working capital 978 7

Shareholder's equity 1,757 2,465

To review the complete financials, please go to SEDAR's web-site at

About EcoMax Energy Services Ltd.:

EcoMax Energy Services Ltd. is an oilfield services company whose product offering includes BOP sales and service solutions to the oil and gas and other industries in Western Canada and the patented EcoMax Chemical Pump.

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

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