Empire Industries Ltd.
TSX VENTURE : EIL

Empire Industries Ltd.

August 20, 2007 06:00 ET

Empire Industries Ltd. Reports Financial Results for the Period Ended June 30, 2007

Highlights: - Second quarter of 2007 compared to the second quarter of 2006: -- Revenue up 53% to $31.8 million from $20.8 million -- Gross profit up 249% to $5.2 million from $1.5 million -- Income before tax from continuing operations increases $1.0 million over prior year - First half of 2007 compared to the first half of 2006: -- Revenue up 37% to $53.9 million from $39.4 million -- Gross profit up 159% to $9.6 million from $3.7 million -- Income before tax from continuing operations increases $2.1 million over prior year - Successfully closed the acquisition of Dynamic Structures April 17, 2007 for $11.6 million - Successfully closed the acquisition of KWH Constructors April 30, 2007 for $5.2 million

WINNIPEG, MANITOBA--(Marketwire - Aug. 20, 2007) - Empire Industries Ltd. ("Empire"), (TSX VENTURE:EIL), today announced its unaudited consolidated financial results for the period ended June 30, 2007. The unaudited consolidated financial statements and Management's Discussion and Analysis ("MD&A") for this period have been filed on SEDAR and can be viewed at www.sedar.com or on Empire's website at www.empind.com.



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FINANCIAL HIGHLIGHTS
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Three (3) Months Six (6) Months
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Periods ended June 30 2007 2006 2007 2006
(000's) (000's) (000's) (000's)
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Revenue $ 31,767 $ 20,789 $ 53,946 $ 39,374

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Gross profit $ 5,211 $ 1,493 $ 9,641 $ 3,715
Gross profit margin 16.4% 7.2% 17.9% 9.4%
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Operating income (1) $ 2,044 $ 56 $ 4,046 $ 933
Operating income margin 6.4% 0.3% 7.5% 2.4%
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Income (loss) before tax
from continuing operations $ 1,181 $ (180) $ 2,666 $ 543
Diluted Earnings Per Share (2) $ 0.01 NM $ 0.03 NM
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(1) Operating income is defined as net income before interest, income
taxes, depreciation and amortization, stock based compensation
expense, equity income, discontinued operations income and any gains
or losses realized on property disposal. Operating income not a
recognized term under Canadian generally accepted accounting
principals ("GAAP") and should not replace net income as an indicator
of GAAP performance.
(2) The per share calculations are not meaningful because a share
restructuring took effect July 1, 2006 as part of the reverse takeover
of Empire Iron Works Ltd. by Empire Industries Ltd.


For the second quarter ending June 30th, 2007, Empire generated consolidated revenue of $31.8 million, gross profit of $5.2 million, operating income of $2.0 million and Income before tax from continuing operations of $1.1 million. This compares very favorably to the prior year's second quarter revenue of $20.8 million, gross profit of $1.5 million, operating income of $0.1 million and a loss before tax from continuing operations of $0.2 million. Fully diluted earnings per share were $0.01 for the second quarter.

For the first half ending June 30th, 2007, Empire generated consolidated revenue of $53.9 million, gross profit of $9.6 million, operating income of $4.0 million and income before tax from continuing operations of $2.7 million. This compares very favorably to the prior year's first half revenue of $39.4 million, gross profit of $3.7 million, operating income of $0.9 million and income before tax from continuing operations of $0.5 million. Fully diluted earnings per share were $0.03 for the first six months of 2007.

"The second quarter was defined by continuing strong revenue and margins in our steel fabrication business and by the successful closing of two strategic acquisitions for $16.8 million, adding $7 million in revenue to the second quarter. We expect that the gross margins and operating income realized with these two strategic acquisitions to continue to strengthen throughout the balance of the year as they get integrated into our British Columbia operations," stated Guy Nelson, Chairman and CEO of Empire.

Empire's balance sheet at June 30th, 2007 continued to change as the investment and financing activity remained very active during the first six months of 2007. Empire had $5.8 million of working capital and $22.4 million of fixed assets compared to December 31st, 2006 when it had $6.5 million of working capital and $8.9 million of fixed assets. These assets were financed with $20.6 million in shareholders' equity, $12.8 million of long term debt and $3.0 million in notes and shareholder loans payable. This compares to December 31, 2006 when the Company had $16.6 million in shareholders' equity, $1.5 million of long term debt and $2.2 million in notes and shareholder loans payable.

"We continue to manage our balance sheet and are confident that our strong backlog will continue to generate free cash flow to reduce our debt levels rapidly and as scheduled," stated Mr. Nelson.

About Empire Industries Ltd.

Empire Industries Ltd. is a public company that was formed in July 2006. Empire's mission is to increase shareholder value by adding value to steel. The company realizes its mission by growing profits organically, targeting acquisitions and expanding its market share in the burgeoning industrial, commercial and institutional construction marketplace of Western Canada. The Corporation trades on the TSX Venture Exchange under the trading symbol EIL.

This press release contains forward-looking statements, which reflect Empire Industries Ltd.'s current expectations regarding future events, its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "expects," "anticipates," "plans," "believes," "estimates" or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future acquisitions or dispositions, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company and economic factors. Forward-looking statements are not promises or guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made about the Company. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decision and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware that the Company disclaims any obligation to publicly update or revise any such forward-looking statements whether as a result of new information, future events or otherwise, prior to the release of the next Management Discussion and Analysis to be released by the Company or except as required by law.

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

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