Empire Industries Ltd.

Empire Industries Ltd.

April 30, 2007 06:00 ET

Empire Industries Ltd. Reports Financial Results for the Year Ended December 31, 2006

WINNIPEG, MANITOBA--(CCNMatthews - April 30, 2007) - Empire Industries Ltd. ("Empire") (TSX VENTURE:EIL), today announced its audited consolidated financial results for the year ended December 31, 2006. The audited consolidated financial statements and Management's Discussion and Analysis ("MD&A") for the fourth quarter and year ending December 31st, 2006 have been filed on SEDAR and can be viewed at www.sedar.com or on our website at www.empind.com.

For the year ending December 31st, 2006, Empire generated consolidated revenue of $72.9 million, Gross profit of $10.1 million (13.9% of Revenue) and Operating income of $3.3 million (4.6% of Revenue). This compares to the prior year Revenue of $78.2 million, Gross profit of $7.1 million (9.0% of Revenue) and Operating income of $1.4 million (1.7% of Revenue). The strengthening margins continued in the fourth quarter with the Gross profit margin increasing to 23.1% versus the prior year's level of 5.2%. Similarly, the Operating income margin increased to 7.0% in the fourth quarter of 2006 as compared to (1.0%) in the fourth quarter of 2005.

"The profit margins are improving and are in line with our expectations. This is reflected by the fact that our Operating income was $1.0 million for the first two quarters of 2006 combined, expanding to $1.2 million in the third quarter and $1.2 million in the fourth quarter. Our revenue decrease was also in line with expectations because the $5 million decline in the current year was largely attributed to unusually high revenue in the fourth quarter of 2005 related to field construction services contracts," stated Guy Nelson, Chairman and CEO of Empire.

Net income for the year was $2.2 million vs. $0.3 million in 2005. The Earnings per share was $0.04 with $0.03 coming from continuing operations and $0.01 coming from discontinued operations.

Empire's Balance Sheet at December 31st, 2006 strengthened significantly; Empire had $6.5 million of working capital and $8.9 million of fixed assets compared to December 31, 2005 when it had $1.5 million of working capital and $5.3 million of fixed assets. At December 31st, 2006 there was $1.5 million of long term debt, $2.2 million in notes and Shareholder loans payable and $16.6 million in Shareholders' Equity compared to December 31st, 2005 at which date Empire Iron Works Ltd. had $1.5 million of long term debt, $3.9 million in Shareholder loans and a deficit of $0.4 million in Shareholders Equity net of Minority interest. The strengthening of the balance sheet occurred largely because of a series of transactions during the year that resulted in the company issuing 56 million shares for a combination of cash from two private placements and share exchanges arising from three acquisitions.

"The significant strengthening of Shareholders' Equity has provided a solid foundation to finance future growth for Empire. It specifically helped to finance the acquisition of Empire Iron Works Ltd. on July 1, 2006 for $34.5 million; the acquisition of George Third & Son Ltd. on September 30, 2006 for $9.2 million and the investment in our partnership with Sorge's Welding on December 31, 2006 for $2.1 million," stated Guy Nelson, Chairman and CEO of Empire Industries Ltd.

There have also been two material events subsequent to year end that the company has issued press releases on. On March 14th, 2007, Empire announced the signing of a letter of intent to acquire KWH Constructors Corp. for $5.2 million and on April 17th, 2007 Empire announced the closing of the acquisition of AMEC Dynamic Structures Ltd. for $ 9.8 million.

The backlog of uncompleted contracts was $40 million at December 31, 2006 and has subsequently increased to a new record of $75 million at the end of April 2007.

About Empire Industries Ltd.

Empire Industries Ltd. is a public company that was formed in July 2006. Empire Industries Ltd. is one of Western Canada's fastest growing steel fabrication and construction service providers. It conducts its business primarily through five wholly owned subsidiaries: Empire Iron Works Ltd., George Third and Son Ltd., Empire Dynamic Structures Ltd., Ward Industrial Equipment Ltd., Hopkins Steel Works Ltd, and a 49% ownership interest in Sorge's Welding Ltd. 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.

For more information, please visit our web-site at: www.empireindustriesltd.com.

This press release contains forward-looking statements, within the meaning of applicable securities legislation, concerning Empire's business and affairs. These statements are identifiable by their use of verbs such as "expect", as well as by the use of future or conditional tenses. These forward looking statements are based on current expectations, and are naturally subject to uncertainty and changes in circumstances that may cause actual results to differ materially. Readers are cautioned not to place undue reliance on such forward-looking statements. Empire assumes no obligation to revise or update these forward-looking statements to reflect the occurrence of unanticipated future events, except as may be required under applicable securities laws.

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

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