E.G. Capital Inc.
NEX BOARD : EGC.H

June 28, 2005 16:40 ET

E.G. Capital Inc. Announces Results for the Fiscal Year Ended February 28, 2005

BROSSARD, QUEBEC--(CCNMatthews - June 28, 2005) - E.G. Capital Inc. (NEX:EGC.H), ("E.G. Capital"), formally National Construction Inc., today announces results for the fiscal year ended February 28, 2005.

Fiscal Year Ended February 28, 2005

Revenues increased by 16.4% from $28.9 million for the twelve months ended February 29, 2004 to $33.7 million for the twelve months ended February 28, 2005. This increase was entirely due to an increase in revenue from the Plant Maintenance Division and directly attributable to a temporary increase in demand for services from one customer.

For the year ended February 28, 2005, the Corporation achieved a gross profit of $3.5 million representing 10.5% of total revenue compared to $3.2 million or 11.07% for the year ended February 29, 2004.

Selling, General and Administrative Expenses were $2.3 million for the year ended February 28, 2005 as compared to $3.2 million for the prior year. Interest and bank charges were $138,671 for the year ended February 28, 2005 as compared to $166,314 for the same period last year. Interest on the note and loan due to shareholders for the year ended February 28, 2005 was $245,982 compared to $270,465 for the same period last year. Amortization expenses were $219,541 for the year ended February 28, 2005 as compared to $232,999 for the same period last year.

As a result of the foregoing factors, the income before Special Items and income taxes for the year ended February 28, 2005 was $0.5 million compared to a loss of $(0.4) million for the year ended February 28, 2004.

The income earned due to Special Items, which are not considered to be reflective of current or future operating performance, for the year ended February 28, 2005 of $1.8 million include $840,000 in CSST (Quebec Workplace Safety and Health Board) premiums refundable and a gain of $1,011,066 on the sale of the Maintenance business in February of 2005. Income earned from Special Items in the year ended February 29, 2004 included $294,484 in CSST premiums refundable, $107,435 in reversal of bad debt provisions and $439,803 in net gains on settlement discounts from selected suppliers on a major contract completed in 2003.

The income before income taxes for the year ended February 28, 2005 was $2,364,124 as compared to income before income taxes of $413,599 for the year ended February 29, 2004.

Current income tax for the year ended February 28, 2005 of $812,475 was offset by a recovery of income taxes due to the utilization of prior year losses in the amount of $812,200.

The net income for the year ended February 28, 2005 was $2,363,849 as compared to $413,599 for the year ended February 29, 2004.

About E.G. Capital Inc.

E.G. Capital is a multi-trade industrial construction and maintenance contracting services company primarily servicing Eastern Canada. Established in 1941, E.G. Capital provides piping, mechanical installation, electrical and instrumentation services to industrial clients, mainly in the petrochemical and chemical, oil and natural gas, energy, pulp and paper, and mining and metallurgy sectors. National also provides maintenance services for operating facilities in the petrochemical industry.

This press release may contain forward-looking statements relating to E.G Capital. Among the important factors that could cause actual results to differ materially from those indicated by such forward looking statements are competitive pressures, technical difficulties, market acceptance, changes in customer requirements, and general economic conditions, and other risks and uncertainties as described from time to time in E.G. Capital's reports, registration statements and filings filed by E.G. Capital with securities regulatory authorities.

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

Contact Information

  • E.G. Capital Inc.
    William G. Edwards
    Chief Financial Officer
    (450) 444-2405 ext 237