Wenzel Downhole Tools Ltd.

Wenzel Downhole Tools Ltd.

January 30, 2007 07:03 ET

Wenzel Downhole Tools Ltd Declares 2006 a Record Year for Revenues and Profit

CALGARY, ALBERTA--(CCNMatthews - Jan. 30, 2007) - Wenzel Downhole Tools Ltd. (TSX:WZL)

Speaking to the Special and Annual meeting of shareholders yesterday, President & CEO, Harvie Andre stated, "In spite of the diversions of a hostile takeover attempt and other issues, 2006 was a year of record revenues and record profits for the company. While final audited financial statements are not yet available, the preliminary data indicate that gross revenues and gross profits are up approximately 40%, gross margins were maintained at near 50% and EBITDA before non-recurring items is up over 50%."

In their presentation to the meeting, company officers indicated that the fourth quarter of 2006 was more challenging in Canada, as a result of the slowdown in drilling activity. Industry analysts are predicting that 2007 will see 10% fewer wells drilled in Canada than in 2006 but the company expects to continue to grow market share and thus maintain current revenue levels. There is no indication of a slowdown in the U.S. where the market for company products remains very buoyant. The company expects that growth of revenues in the U.S. will continue at current significant rates. International sales in 2006 were at record levels and the company is anticipating the same or better results for 2007.

About Wenzel Downhole Tools Ltd.

Wenzel Downhole Tools Ltd. is a manufacturer, seller and renter of drilling tools used in oil and gas exploration. In Canada the company has its manufacturing and servicing facilities located in Edmonton, Alberta and its corporate offices in Calgary, Alberta. Its U.S. headquarters and service facilities are in Conroe, Texas, with a service and sales office in Casper, Wyoming and a sales office in Oklahoma City, Oklahoma.

Wenzel Downhole Tools Ltd. is listed for trading on the Toronto Stock Exchange, symbol WZL.

Forward Looking Statements

This press release contains certain forward looking statements that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control, including management's assessment of the future plans and operations of the Company and including the impact of general economic conditions in Canada and the United States, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond these parties' control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

Actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward looking statements and accordingly, no assurances can be given that any of the events anticipated by the forward looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Company will derive there from. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

(1) EBITDA, or earnings before interest, taxes, depreciation, amortization, and non-recurring expenses is calculated by adding these items back to reported net income. Management uses EBITDA as a measurement to determine the ability of the Company to generate cash from normal operations. EBITDA does not have a standardized meaning for Canadian generally accepted accounting principles ("GAAP") and therefore may not be comparable with calculations of similar measures presented by other issuers. EBITDA is not intended to represent net income for the period nor should it be viewed as an alternative to operating or net income or other measures of financial performance calculated in accordance with GAAP.

Contact Information

  • Wenzel Downhole Tools Ltd.
    Harvie Andre
    President and CEO
    (403) 205-6696
    (403) 265-8154 (FAX)
    Wenzel Downhole Tools Ltd.
    Ron Dooley
    Chief Financial Officer
    (403) 205-6696
    (403) 265-8154 (FAX)
    Website: www.downhole.com