EcoMax Energy Services Ltd.

EcoMax Energy Services Ltd.

November 08, 2005 09:44 ET

EcoMax Announces Record Third Quarter Earnings / Sales

CALGARY, ALBERTA--(CCNMatthews - Nov. 8, 2005) - EcoMax Energy Services Ltd. (TSX VENTURE:EES) ("EcoMax") announces its results for the third quarter ended September 30, 2005.

EcoMax reported a record quarterly profit of $117,000 for the quarter ended September 30, 2005 a turnaround of $515,000 from the loss of $398,000 for the comparable period of 2004. This marks the third consecutive quarter the Company has shown a profit. Sales increased 73% to a record $3,510,000 from sales of $2,031,000 recorded in the quarter ended September 30, 2004. This sales increase is a result of increased service activity and sales of new valves and BOP stacks. Gross margins were up to 25% from 17% in the same period of 2004, while SG&A expenses as a percentage of sales fell to 19% in the 3rd quarter of 2005 compared to 32% in the same period of 2004.

Sales for the first nine months of 2005 were a record $9,906,000, up from $6,083,000 in the same period of 2004. Earnings of $245,000 represented a $1,055,000 increase from the $810,000 loss posted in the first nine months of last year.

President and CEO Wayne Thomson said:

"We are pleased to report another record quarterly profit and are optimistic about the 4th quarter and 2006. High oil and gas prices are leading to record activity levels in the oil and gas and drilling industries. To date, the Company has received commitments for the delivery of an additional $2 million in new BOP stacks and we are in the process of expanding Key B.O.P.'s facilities to allow it to grow the BOP service operation. We also expect our Central Valve Service facility to continue its profitable growth.

Our EcoMax Pump marketing effort is beginning to deliver results. We have received an order for 40 Pumps to be delivered during the 4th quarter and are working with several customers that could deliver significant new sales over the fall and winter months."

Summarized financial information for the quarter and nine months ended September 30, 2005 and 2004 are as follows (in thousands of Canadian dollars):

Quarter ended Nine months ended
Sept. 30 Sept. 30
---------------- ------------------
2005 2004 2005 2004
-------- ------- --------- --------

Sales 3,510 2,031 9,906 6,083
Cost of sales 2,621 1,690 7,289 4,752
-------- ------- --------- --------

Gross margin 889 341 2,617 1,331
Selling, general & admin 684 653 2,103 1,914
-------- ------- --------- --------

205 (312) 514 (583)

Interest 40 38 120 98
Amortization 48 48 149 129
-------- ------- --------- --------

Net income (loss) 117 (398) 245 (810)
-------- ------- --------- --------
-------- ------- --------- --------

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

Other items - Pursuant to the incentive share option plan approved by shareholders at the Company's Annual General and Special Meeting of Shareholders held on May 19, 2005, the Company granted 745,000 options to purchase shares of the Company. These options were granted at $0.25, which was the market price on the date of issue and expire on May 31, 2010. Of the options issued, 550,000 were granted to directors and officers of the Company.

EcoMax Energy Services Ltd. is an emerging 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 prevent 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 recently ratified Kyoto agreement and the updated 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.

Contact Information