FirstGrowth Exploration & Development Services Corp.
OTC Bulletin Board : FGCDF

FirstGrowth Exploration & Development Services Corp.

May 02, 2008 08:00 ET

FirstGrowth Announces Record Fourth Quarter Revenues

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 2, 2008) - FirstGrowth Exploration & Development Services Corp. (TSX VENTURE:FGC)(OTCBB:FGCDF)(FRANKFURT:G8Q) (the "Company" or "FirstGrowth") is pleased to announce its financial results for fourth quarter and year end 2007.

The Company's subsidiary, Kinetex Inc., had audited gross revenues of $15,524,679 for the year ended December 31, 2007 compared with $9,266,311 for the year ended December 31, 2006 and $4,971,436 for 2005. This increase in revenue of $6,258,368 represents an increase of 68% over 2006 and 312% over 2005.

Financial Highlights for the year ended December 31, 2007:

Revenue $ 15,524,679
Cost of Sales $ 11,888,794
General Administration $ 7,145,351
Net Loss $ 2,991,636
Net Loss per Share (basic and diluted) 0.10
Total Assets $ 23,901,500
Total Long Term Financial Liabilities $ 8,103,769
Total Liabilities $ 8,103,769
Shareholders' Equity $ 15,797,731

During the year the Company expanded its geographic footprint to include South America, namely Colombia. This is a new area of revenue generation for the Company, and opportunities for growth in the South American market remain strong. For the year ended December 31, 2007, revenue from the South American operations represented approximately 5% of the company's gross revenue. Revenue from this geographic area is expected to continue to increase.

The Company also saw significant growth in revenue from the mining sector. During 2007, 66% of revenue was from the mining sector, up considerably from 2006. 2007 saw a substantial pullback of spending in the Western Canadian oil & gas market segment, particularly in Alberta, due in part to soft natural gas prices, high inventory levels and changes in government royalty rates. Industry sentiment indicates that this trend is not expected to continue. By providing services to multiple industry sectors and geographic areas, Management endeavors to cushion performance from some of the industrial and economic risk factors in evidence over the past year. While Management strives for a 50/50 mix of energy and resources work, moderate fluctuations can be expected in the sector revenue mix depending upon sector-specific economics and on the number and size of contracts undertaken.

Operationally the Company had a satisfactory fourth quarter generating top line revenue of $3,447,359 for the quarter as compared to $2,233,094 for Q4 2006, representing an increase of 54%. Entity-specific EBITDA for the year end was $1,250,084, or 0.04 per share. The Company reported a net loss of $1,663,621, or 0.06 per share. The loss in the quarter was due primarily to a change in the estimate of the useful life of property and equipment with the amortization charge for the quarter totaling $1,427,057.

(Readers are cautioned that "EBITDA" is a financial measure that does not have any standardized meaning prescribed by Canadian generally accepted accounting principles ("GAAP") and may not be comparable to similar measures presented by other companies. EBITDA is a measure of the Company's operating profitability and provides an indication of the results generated by the Company's principal business activities prior to how these activities are financed, assets are amortized or how the results are taxed in various jurisdictions. EBITDA is calculated from the Consolidated Statements of Earnings and Retained Earnings and is calculated as net earnings plus or minus interest expense, income taxes, depreciation and amortization, stock based compensation, gains or losses on disposal of equipment and foreign exchange gains or losses. Entity specific EBITDA includes stock based compensation as it more accurately reflects the amount of cash generated with which to service debt and grow the Company.)

Historical field margins in the range of 35% - 40% are expected to be maintained. The effect of these margins will start to be reflected in the consolidated statements, as these revenue contributions are expected to increase faster than the costs of operating a public company. The Company continues to focus on sustainable growth and the ongoing strengthening of its operations. Current job flow is strong and Management does not expect to have any under-employed assets in the foreseeable future.

The Company had a working capital position of $4,208,853 as at December 31, 2007 and had a cash position of $2,803,201. The Balance sheet is strong and is leveraged with reasonable levels of debt to support its day to day operations and the potential acquisition of additional operational assets.

In conclusion the Company has made solid progress over the past year both operationally and financially. Our infrastructure has been upgraded to provide a solid foundation for future growth and has enabled us to increase revenue while at the same time remaining cash flow positive. The Company's increased capacity and the implementation of Management's strategy to diversify geographically is uncovering many exciting new opportunities. The recent successes enjoyed by a number of our mining clients is very exciting and it is encouraging to know that we played a part in their discoveries.

Looking forward we see our opportunity for growth at an accelerated rate continuing as we seize additional opportunities in both the mining and the oil and gas sectors plus the development of additional geoscience services. We also see potential opportunities developing in the area of project participation and are pleased with our progress in this area.

We look forward to a busy year and are confident that the Company will be able to take advantage of the opportunities available to it.

Readers are encouraged to view the full financial statements and Management Discussion & Analysis on SEDAR as well as on the Company's website at


Gil Schneider

The company seeks safe harbour.

The TSX Venture Exchange Inc. has neither approved nor disapproved the contents of this press release.

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