EcoMax Energy Services Ltd.

EcoMax Energy Services Ltd.

March 28, 2006 09:22 ET

EcoMax Announces Record 2005 Results

CALGARY, ALBERTA--(CCNMatthews - March 28, 2006) - EcoMax Energy Services Ltd. (TSX VENTURE:EES) ("EcoMax") announced record results for the quarter and year ended December 31, 2005.

EcoMax reported record 4th quarter sales of $3,531,000, up $662,000 (23%) from the previous record $2,869,000 recorded in the 4th quarter of 2004. Sales increased due to sales of the Company's EcoMax Pump and increased project valve sales. Earnings for the quarter of $75,000 represented a $191,000 improvement from the loss of $116,000 in the 4th quarter of 2004. Annual sales of a record $13.4 million were up 50% from the prior year primarily due to higher sales of BOPs and increased activity levels in the base business. Gross margin percentages improved from 23% in 2004 to 27% in 2005 due to improved shop utilization and sales of the EcoMax Pump. Increased sales and improved margins resulted in earnings for the year of $320,000 compared to a loss of $926,000 in 2004.

In reviewing the Company's past and future performance, Wayne Thomson, the Company's CEO, noted:

"I am very pleased to report the first profitable year in the Company's history. The Company recorded a profit of $320,000 ($0.01 per share) for the year ended December 31, 2005 compared to a loss of $926,000 in the prior year, a turnaround of $1.25 million. Record sales of $13,437,000 were 50% higher than the $8,952,000 for the year ended December 31, 2004.

The growth has occurred in all parts of our business. Sales of new BOP stacks and increased valve sales and services have resulted in base business sales being up 48% in 2005. This growth is despite delivery delays of product components from several of our major suppliers. The Company sold 113 EcoMax Pumps in 2005 (70 of them in the 4th quarter), which is almost double the 61 sold in 2004.

This good news leads us to be optimistic about 2006. After a relatively slow start, activity levels should continue to be strong throughout the year. The expected high activity and new product lines available to our valve sales and service division should help deliver continued sales growth. The almost $1.5 million in BOP stacks whose delivery was delayed from 2005 should be delivered in the first half of 2006. This, combined with new commitments for the sales of BOP stacks, and an expected busy year for BOP certifications should allow Key B.O.P. to continue its aggressive growth. We have commitments for the installation of EcoMax Pump trials with 15 new companies or new areas with existing customers. These, when added to our existing base, give us a strong platform to grow Pump sales in 2006.

At December 31, 2005, we were in compliance with covenants of our bank loan. Our expected continued strong operating performance should allow us to continue to improve our financial position and give us access to additional funds to grow our business. We are pursuing expansion through new product lines and geographic locations and looking for opportunities to grow through strategic partnerships or acquisitions.

2005 was a positive year and a great turnaround to future success. I would like to thank our shareholders for their continued support, support which I believe is just starting to be rewarded. I would also like to thank our employees for their tremendous efforts, without which this success could not have been achieved."

Summarized financial information for the quarters and years ended
December 31, 2005 and 2004 are as follows (in thousands of Canadian

3 months ended Dec. 31 Year ended Dec. 31
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2005 2004 2005 2004
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Sales 3,531 2,869 13,437 8,952
Cost of sales 2,525 2,167 9,814 6,919
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Gross margin 1,006 702 3,623 2,033
Selling, general & admin 776 711 2,878 2,625
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230 (9) 745 (592)

Interest 43 45 163 143
Amortization 112 62 262 191
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Net income (loss) 75 (116) 320 (926)
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-------- -------- -------- --------

Working capital (deficiency) 464 (554)

Shareholders' Equity 1,512 1,039

Working capital has improved as a result of earnings during the year, the extension of the Company's $172,000 debentures and the reclassification of the Company's bank term loan; EcoMax is now in compliance with bank covenants. The Company expects its working capital position to continue to improve in 2006 with improved operating results.

To review the complete financials, please go to SEDAR's web-site at

EcoMax Energy Services Ltd. is an oilfield services company whose product offering includes BOP and valve sales and service solutions to the oil and gas and other industries in Western Canada and the patented EcoMax Chemical Pump. The EcoMax Pump reduces operating costs and greenhouse gas emissions at natural gas installations by utilizing a small pressure differential from the wellhead to the flow line to power a methanol chemical injection pump, which prevents hydrates from forming at the wellhead. The pump returns the exhaust gas to the sales line increasing natural gas sales and eliminating wellhead atmospheric emissions. The EcoMax Pump offers significant economic benefits to customers while enhancing safety and landowner relations. Operators can sell gas now being emitted to the atmosphere from sweet gas facilities, eliminate the need for propane at sour gas facilities and may accumulate carbon credits for greenhouse gas reductions. The EcoMax Pump addresses issues in the Kyoto agreement and the Alberta Energy and Utilities Board Guide 60 on the emission of fugitive gases from well sites.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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