Divestco Inc.
TSX VENTURE : DVT

Divestco Inc.

November 17, 2005 09:00 ET

Divestco Inc. Announces 2005 Third Quarter Results

CALGARY, ALBERTA--(CCNMatthews - Nov. 17, 2005) - Divestco Inc. (TSX VENTURE:DVT) ("Divestco" or the "Company") is pleased to announce it has earned 5 cents per share (diluted) for the third quarter of 2005. This compares to 2 cents per share (diluted) for the same period in 2004, a 150% increase quarter over quarter. Additionally, net income for the three months ending September 30, 2005 increased by 111% to $1.3 million from $0.6 million for the same period in 2004. No participation survey revenue was booked in the third quarter of the current or previous year.

Divestco generated revenue of $7.9 million for the third quarter of 2005, an increase of $2.5 million or 47% from $5.4 million for the same period in 2004. Earnings before interest, taxes and amortization ("EBITA"), were $2.9 million, a $1.7 million or 140% increase over the same period in 2004. The Company also generated funds from operations of $2.9 million (10 cents a share - diluted) for the third quarter, an increase of $1.7 million or $153% as compared to $1.1 million (4 cents per share - diluted) for the same period in 2004.

From a year-to-date perspective, the Company has had record performance. Revenues generated were $25.9 million, up $8.2 million or 46%, from the $17.7 million of revenues generated in the same nine-month period in 2004. EBITA was $10.8 million compared to $3.6 million in 2004 and net income rose to $3.5 million (14 cents per share - diluted) from $1.8 million (7 cents per share - diluted) in 2004.

Mr. Stephen Popadynetz, CEO of Divestco commented: "I am pleased to report our third quarter results to our shareholders, Board and employees. Putting these results into perspective, Divestco has generated revenues in the first nine months of 2005 that have essentially matched revenues generated during the entire 2004 fiscal year. Divestco continues to implement its aggressive growth strategy while maintaining a strong balance sheet, which has resulted in increased earnings. We are excited about Divestco's future and look forward to the opportunities that will arise from the integration of our three most recent acquisitions: Drilling Records, Focus Integrated Solutions and Laser Software Limited. Divestco continues to demonstrate its ability to remain a profitable company by posting its eighth consecutive quarter of positive earnings. We look forward to our continued growth."



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Selected Financial Information
($000's, except per share amounts)
(Unaudited)
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Quarter ended Nine Months ended
September 30 September 30
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% %
2005 2004 Change 2005 2004 Change
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Revenue $ 7,944 $ 5,407 47% $ 25,880 $ 17,678 46%

Operating
expenses $ 5,043 $ 4,196 20% $ 15,050 $ 14,101 7%
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EBITDA $ 2,901 $ 1,211 140% $ 10,830 $ 3,577 203%

Interest $ 12 $ 50 (76%) $ 124 $ 324 (62%)

Amortization $ 904 $ 613 47% $ 5,249 $ 1,775 196%
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Operating income $ 1,985 $ 548 262% $ 5,427 $ 1,478 269%

Other income
(loss) $ 51 $ 74 (31%) $ 29 $ 134 (78%)
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Income before
taxes $ 2,036 $ 622 227% $ 5,486 $ 1,612 240%

Future income tax
expense
(reduction) $ 724 $ - N/A $ 1,974 $ (200) N/A
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Net income $ 1,312 $ 622 111% $ 3,512 $ 1,812 94%
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Per share
- basic $ 0.05 $ 0.02 150% $ 0.14 $ 0.07 100%

Per share
- diluted $ 0.05 $ 0.02 150% $ 0.14 $ 0.07 100%
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Funds from
operations $ 2,871 $ 1,134 153% $ 10,415 $ 3,427 204%
------------------------------------------------------------------------

Per share
- basic $ 0.11 $ 0.04 175% $ 0.41 $ 0.14 193%

Per share
- diluted $ 0.10 $ 0.04 150% $ 0.40 $ 0.13 208%
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Shares outstanding
(000's) 29,793 25,225 29,793 25,225

Weighted average
shares outstanding
(000's)

Basic 26,938 25,261 25,399 25,369

Diluted 27,847 25,349 25,754 25,453
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Divestco Inc. is a public oil and gas software, data, technical services, consulting services and seismic brokerage company committed to offering superior products and services primarily to the oil and gas industry. Divestco's shares are listed on the TSX-Venture Exchange and the Company is headquartered in Calgary, Alberta, Canada. The Company has offices in Calgary, Edmonton, Vancouver, Denver and Houston.

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.

Earnings before interest, taxes, and amortization ("EBITA"); "operating income"; "funds from operations", and "funds from operations per share (basic and diluted)" are not measures that have any standardized meaning prescribed by Canadian GAAP and are considered non-GAAP measures. Therefore, these measures may not be comparable to similar measures presented by other issuers. These measures have been described and presented in this press release in order to provide shareholders and potential investors with additional information regarding the Company's results, liquidity, and its ability to generate funds to finance its operations.

Management believes that in addition to net income, EBITA and operating income are useful supplemental measures for providing an indication of the results generated by the Corporation's principle business activities prior to the consideration of how those activities are financed or how the results are taxed. Management also utilizes funds from operations as a key measure to assess the ability of the Company to finance operating activities and capital expenditures.

Operating income is calculated by deducting interest and amortization from EBITA. Funds from operations is calculated by adding or deducting non-cash items from net income (loss). Funds from operations per share (basic and diluted) is calculated by dividing funds from operations by the weighted average number of shares outstanding (basic and diluted) for the relevant period.

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