Elite Technical Inc.
TSX VENTURE : ET

Elite Technical Inc.

August 30, 2005 18:26 ET

Elite Technical Inc. Announces Second Quarter Results

CALGARY, ALBERTA--(CCNMatthews - Aug. 30, 2005) - Elite Technical Inc. (TSX VENTURE:ET) ("Elite") today announces its second quarter 2005 financial results for the three and six months ended June 30, 2005.

Results of operations

Sales for the three month period ended June 30, 2005, were $792,959 compared to $1,362,165 for the three month period ended June 30, 2004. For the six month period ended June 30, 2005 sales were $ 1,660,564 compared to $ 2,452,041 for the same period in 2004. Sales continue to be adversely affected by decreased sales to one large customer; other sales continue to grow but not yet to the point of replacing the lost revenue.

Gross profit was 20%, down from 43% for the comparable quarter last year, the decrease was primarily driven by significant overtime labour costs required to bring new products on line.

The net loss was $291,430 ($0.03 loss per share) for the three month period ending June 30, 2005, compared to net income of $123,463 ($0.01 earnings per share) for the three month period ending June 30, 2004. For the six month period ending June 30, 2005 the net loss was $328,199 ($0.03 loss per share) compared to a net income of $257,808 ($0.02 earnings per share) for the same period in 2004.

"New sales continue to replace declining historic business however the implementation costs on new products have been high in the second quarter, reflected in the significant decrease in gross margin." said Peter Fenton, President and CEO, Elite Technical Inc. "Although we have experienced a serious impact to the earnings in the quarter primarily due to the loss of sales from our largest customer, we have seen a subsequent two fold increase in orders for automotive products and continue to quote to potential new customers. Elite continues to experience very tight cash constraints due to costs associated with the prospectus, bulk purchase of automotive components and the operating losses incurred in Q2. We have made appropriate reductions to both indirect and direct costs, continue to work with our suppliers and continue to market the prospectus to raise funds."



Financial Performance Summary

Three Months Ended Six Months Ended
June 30, 2005 June 30, 2004 June 30, 2005 June 30, 2004
Revenue $ 792,959 $ 1,362,165 $ 1,660,564 $ 2,452,041
Gross margin $ 158,953 $ 591,421 $ 531,502 $ 1,103,711
Net income/
(loss) $ (291,430) $ 123,463 $ (328,199) $ 257,808
Net income/
(loss) per
share $ (0.03) $ 0.01 $ (0.03) $ 0.02


More information on Elite and the complete unaudited financial statements and the Management Discussion and Analysis ("MD&A") for the three and six month periods ended June 30, 2005 and 2004 are available on SEDAR at www.sedar.com and on Elite's website at www.etechi.com.

About Elite

Elite is a Calgary-based manufacturer of high-quality, high-reliability cable assemblies and connection solutions for use in a broad range of engineered, commercial and industrial products, and electrical systems. Elite is listed for trading on the TSX Venture Exchange under the symbol "ET."

Note Regarding Forward-looking Statements

Certain information regarding Elite Technical Inc. set forth in this document, including management's assessment of the Company's plans and future operations, contains forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, the lack of availability of qualified personnel or management, stock market volatility and ability to access capital from internal and external sources. The Company's actual results, performance, or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Company will derive there from. The Company undertakes no responsibility to update the information provided herein. More detailed information about potential factors that could affect Elite Technical Inc.'s financial results is included in the documents the Company files from time to time with the Canadian Regulatory Authorities and the TSX Venture Exchange which are available on SEDAR.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.

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

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