Divestco Inc.
TSX VENTURE : DVT

Divestco Inc.

August 22, 2005 09:30 ET

Divestco Inc. Announces 2005 Second Quarter Results

CALGARY, ALBERTA--(CCNMatthews - Aug. 22, 2005) - Divestco Inc. (TSX VENTURE:DVT) ("Divestco" or the "Company") is pleased to announce it has earned 2.4 cents per share (diluted) for the second quarter of 2005, compared to 1.5 cents per share (diluted) for the same period in 2004, a 60% increase year over year. Net income for the current period increased by 55% to $599,000 from $388,000 for the same period in 2004. This included a one-time negative adjustment of $200,000 for a notice of reassessment received from the Canada Revenue Agency related to a 2003 Scientific Research and Development ("SR&ED") claim. The reassessment was associated to taxable income generated in a company acquired by Divestco in 2003. The Company would have earned 3.0 cents per share (diluted) for the second quarter of 2005 without this one-time adjustment.

Divestco generated record revenue of $9.2 million for the second quarter of 2005, an increase of $3.1 million or 52% from $6.1 million for the same period in 2004. The Company had its second best quarter ever in terms of earnings before interest, taxes and amortization ("EBITA") which was $3.8 million, a $2.9 million or 328% increase from $0.9 million for the same period in 2004.

The Company also had its second best quarter ever in terms of funds from operations which were $3.6 million (14.6 cents per share - diluted) for the second quarter of 2005 compared to $0.8 million (3.3 cents per share - diluted) in 2004, an increase of $2.8 million or 331% compared to the same quarter in 2004.

From a year-to-date perspective, the Company had a record performance. Revenues generated were $17.9 million, up $5.6 million or 46% from the same six-month period in 2004 with revenues of $12.3 million. EBITA was $7.9 million compared to $2.4 million in 2004, an increase of $5.5 million or 235%. Net income rose to $2.2 million (8.8 cents per share - diluted) from $1.2 million (4.6 cents per share - diluted) in 2004, an increase of $1.0 million or 85%. Funds from operations were $7.5 million (30.5 cents per share - diluted), compared to $2.3 million (9.0 cents per share - diluted), an increase of $5.2 million or 229%. Divestco reached another milestone by surpassing funds from operations for the entire 2004 fiscal year.

Mr. Stephen Popadynetz, CEO of Divestco commented: "I am pleased to report our second quarter results to our shareholders, Board and employees. Divestco continues to demonstrate its ability to remain a profitable company with record revenue this quarter and its seventh consecutive quarter of positive results. We look forward to continuing our growth for the remainder of 2005".



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Selected Financial Information
($000's, except per share amounts)
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Quarter ended June 30 Six Months ended June 30
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% %
2005 2004 Change 2005 2004 Change
(unaudited)(unaudited) (unaudited)(unaudited)
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Revenue $ 9,221 $ 6,073 52% $ 17,936 $ 12,270 46%
Operating
expenses $ 5,407 $ 5,182 4% $ 10,008 $ 9,904 1%
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EBITDA $ 3,814 $ 891 328% $ 7,928 $ 2,366 235%
Interest $ 48 $ 125 (62%)$ 111 $ 274 (59%)
Amortization $ 2,747 $ 615 347% $ 4,345 $ 1,162 274%
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Operating
income $ 1,019 $ 151 576% $ 3,472 $ 930 273%
Other income
(loss) $ (14) $ 37 N/A $ (21) $ 60 N/A
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Income before
taxes $ 1,005 $ 188 435% $ 3,451 $ 990 249%
Future income
tax expense
(reduction) $ 406 $ (200) N/A $ 1,251 $ (200) N/A
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Net income $ 599 $ 388 55% $ 2,200 $ 1,190 85%
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Per share
- basic $ 0.024 $ 0.015 60% $ 0.089 $ 0.047 89%
Per share
- diluted $ 0.024 $ 0.015 60% $ 0.088 $ 0.046 91%
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Funds from
operations $ 3,584 $ 831 331% $ 7,543 $ 2,294 229%
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Per share
- basic $ 0.146 $ 0.033 342% $ 0.306 $ 0.090 240%
Per share
- diluted $ 0.146 $ 0.033 342% $ 0.305 $ 0.090 239%
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Number of
shares
outstanding
(000's) 24,528 25,325 24,528 25,325
Weighted
average number
of shares
outstanding
(000's)
Basic 24,503 25,425 24,617 25,424
Diluted 24,718 25,498 24,743 25,507
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Divestco was formed on September 23, 2003 as a result of the amalgamation of International Datashare Corporation and Divestco.com Inc. Divestco is actively involved in the North American oil and gas software and services industry, and markets over 20 separate software applications that are widely used in both North America and International marketplaces. The Company also operates a significant database containing information relevant to oil and gas exploration. Additionally, Divestco has an expanding seismic data library and is the largest broker of seismic data in Canada.

This press release contains forward-looking statements based upon current expectations that involve a number of business risks and uncertainties. The use of forward-looking words such as, "may," "will," "expect" or similar variations generally identify such statements. Although management believes that expectations reflected in forward-looking statements are reasonable, such statements involve risks and uncertainties. Such factors include fluctuations in the market for oil and gas and related products and services, competition and the demand for services provided by the Company.

The TSX Venture Exchange has not reviewed nor accepts responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Divestco Inc.
    Mr. Stephen Popadynetz
    Chief Executive Officer
    (403) 218-6466
    or
    Divestco Inc.
    Mr. Roderick Chisholm
    Chief Financial Officer
    (403) 218-6450
    Website: www.divestco.com