Empire Industries Ltd.

Empire Industries Ltd.

November 29, 2006 08:00 ET

Empire Industries Ltd. Reports Financial Results for the Period Ended September 30, 2006

WINNIPEG, MANITOBA--(CCNMatthews - Nov. 29, 2006) - Empire Industries Ltd. ("Empire"), (TSX VENTURE:EIL), today announced its financial results for the period ended September 30, 2006. The consolidated interim financial statements and Management's Discussion and Analysis ("MD&A") for the third quarter ending September 30th, 2006 have been filed on SEDAR and can be viewed at www.sedar.com or on our website at www.empind.com.

There were two major events that occurred during the quarter ended September 30th, 2006:

- On July 1st, 2006, Empire (formerly Ryjencap Inc., a capital pool corporation trading on the TSX Venture Exchange), purchased all of the outstanding shares of Empire Iron Works Ltd. in a reverse take over, changing the stock symbol to EIL.

- On August 31st, the Company purchased all of the outstanding common shares of George Third & Son Ltd.

Subsequent to September 30th, 2006, Empire announced the following significant initiative:

- On October 26, 2006, Empire signed a letter of intent to acquire 100% of Sorge's Pro Welding Ltd., a steel fabrication company based in Fort McMurray, Alberta. Empire also signed a letter of intent to purchase a 49% interest in Aboriginal controlled, Sorge's Welding Ltd., a field construction services provider, also based in Fort McMurray, Alberta.

For the nine month period ending September 30th, 2006, Empire generated consolidated revenue of $56.3 million, net income of $1.0 million and basic earnings per share of $0.02. This compares to revenue of $50.3 million and net income of $0.6 million for the nine month period ending September 30th, 2005. The 12% increase in revenue was reflective of the strengthening construction market in western Canada. The 67% increase in net income is reflective of several, large, low margin jobs being completed and several new, more profitable jobs replacing them and the consolidation of one month of operations of George Third and Son Ltd.

"The 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 which expanded to $1.2 million in the third quarter alone and this only included one month of results from newly acquired George Third & Son Ltd. Notwithstanding this marked improvement, Empire has initiated a program to improve its efficiencies, expand its facilities, selectively add to its personnel and accelerate its investment in technology and equipment. We expect this program to have a continuing positive impact on margin and profitability expansion," stated Guy Nelson, Chairman and CEO of Empire.

Empire's Balance Sheet on September 30th, 2006 was strong; Empire had $7.7 million of working capital and $8.8 million of fixed assets compared to December 31, 2005 when it had only $1.5 million of working capital and $5.3 million of fixed assets. At September 30th, 2006 there was $1.8 million of long term debt, $2.4 million in notes and shareholder loans payable and $16.1 million in shareholders' equity compared to December 31st, 2005 at which date Empire Iron Works Ltd. had $1.5 million of long term debt, $3.0 million in shareholder loans and $2.0 million in shareholders equity. The significant strengthening of shareholders' equity arose primarily from the following actions:

- Two private placements netting $7.0 million

- Consolidation of Ryjencap's shareholders' equity of $0.8 million

- Conversion of $1.8 million of shareholders loans to shareholders equity

- Issuance of $3.5 million of common shares to the former owners of George Third & Son

- Addition of net income of $1.0 million for the nine month period ending September 30th , 2006

"This is our first reporting quarter as a public company and I am very pleased to report to our shareholders that Empire's strategic foundation for future growth was successfully implemented by the acquisition of Empire Iron Works Ltd. and the acquisition of George Third & Son Ltd. The board of directors and management of Empire own approximately 50% of the company and are deeply committed to building Empire in the most accretive and least dilutive way," stated Guy Nelson, Chairman and CEO of Empire Industries Ltd.

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 operates its business through four wholly owned subsidiaries; Empire Iron Works Ltd., George Third and Son Ltd., Ward Industrial Equipment Ltd. and Hopkins Steel Works Ltd. Empire's mandate is to increase shareholder value by growing profits organically, by targeting acquisitions and by 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 may contain forward-looking statements that are subject to risk factors associated with capital spending in Western Canada and the overall Canadian economy. The Corporation believes that the expectations reflected in this press release are reasonable but results may be affected by a variety of variables. Forward-looking statements are based upon the beliefs, estimates and opinions of management on the date the statements are made. The Corporation undertakes no obligation to update these forward-looking statements if management's beliefs, estimates and opinions, or other factors, should change.

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

Contact Information