Winalta Inc.

Winalta Inc.

May 26, 2006 18:06 ET

Winalta Inc. Announces 2nd Quarter Financial Results

EDMONTON, ALBERTA--(CCNMatthews - May 26, 2006) - Winalta Inc. (the "Corporation") (TSX VENTURE:WTA.A) announced today its financial results for the 2nd Quarter.

(in thousands of dollars, except for per share amounts)

Three Months Ended Six Months Ended
April 30 April 30
2006 2005 2006 2005
Sales $ 20,375 $ 22,404 $ 37,641 $ 38,368
Gross Profit $ 3,300 $ 3,182 $ 5,407 $ 3,311
Expenses $ 1,815 $ 2,298 $ 4,182 $ 4,654
Other Income (Expense) $ (769) $ (421) $ (1,167) $ (809)
Income Taxes Expense (Recovery) $ 194 $ 177 $ 17 $ (758)
Net Income (Loss) $ 522 $ 286 $ 41 $ (1,394)

Earnings per share (basic) $ 0.04 $ 0.02 $ 0.00 $ (0.11)

The Corporation reported total consolidated sales of $20.38 million for Q2 2006, an increase of 18% over last quarter and a decrease of 9.1% over the same quarter last year. Gross profit was $3.30 million in Q2 2006 as compared to $3.18 million in Q2 2005 and is up $1.19 million or 56.6% over Q1 2006.

Gross margin in Q2 2006 was 16.2% versus 14.2% over the previous year and 14.4% for the first 6 months of 2006 versus 8.6% in the first six months of 2005, an increase of 5.8%.


For the balance of 2006 we anticipate increasing growth and profitability in sales of manufactured and modular homes. Prices are improved and 5 land development projects in Alberta, exclusive to Winalta Inc. will come on line. These include projects in Fort McMurray and Stony Plain as well as central Alberta. Demand for industrial camp sales is expected to grow over 2005 levels due to the increasing demand from oil sands projects. Demand for First Nation housing across Western Canada has increased due to First Nation oil sand revenue and C.M.H.C. programs to increase subsidy allocations. Winalta expects to improve market share as well as take advantage of increased demand in this market.

Demand and sales growth in the industrial trailer and RV market remains strong and is especially good in the industrial oilfield market. New products designed specifically for rugged use in a northern climate have been designed and produced to take advantage of oil sands demand. In recent weeks Vanguard Inc. installed new and professional management in manufacturing, administration and accounting. Efforts to further improve and stabilize management continue, as do efforts to improve both productivity and prices in order to stem losses and restore Vanguard to profitability this year.

Our Custom Built Housing division believes it will take advantage of increasing demand throughout the Greater Edmonton region. Efforts to increase sales and productivity are well underway.

Winalta Inc. is a producer of manufactured CSA certified homes, modular homes, site-built homes, industrial projects and recreational homes. In addition, through its subsidiary, Vanguard Inc., the Corporation designs, manufactures and wholesales motorized and non-motorized recreational vehicles and industrial oilfield units.

Winalta Inc. shares trade on the TSX Venture Exchange under the symbol "WTA.A".

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

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