March 19, 2008 08:30 ET

H2O Innovation Secures Over $3 Million in Contracts

QUEBEC CITY, QUEBEC--(Marketwire - March 19, 2008) - (All amounts indicated in this press release are in Canadian dollars unless otherwise indicated.) H2O Innovation (2000) Inc. (H2O)(TSX VENTURE:HEO)(Alternext:MNEMO:ALHEO) is pleased to announce the signing of four new contracts for the municipal and industrial markets in Canada and the United States. These new contracts add slightly more than $3 million to the firm's backlog, which currently totals $14.2M.

Industrial market

H2O's Alberta division, Sigma Environmental, has been awarded a contract by Primewest Energy Inc. to supply components and provide specialized on site services for the installation of a water treatment system. "The industrial market is currently experiencing significant growth in Western Canada. That is the main reason we acquired Sigma Environmental Solutions Inc. in December 2007. H2O's positioning strategy for this sector opens the door to many potential projects," explains H2O President and COO Frederic Dugre.

High demand for drinking water production systems, wastewater purification systems, and process water treatment units for the mining, oil, and gas sector has led H2O to diversify its customer base and turn its attention to this industrial market. H2O plans to improve its profit margins by increasing its commercial activities in this sector.

Municipal market

H2O's U.S. subsidiary, Membrane Systems Inc. (MSI) has been awarded two new contracts for the design and manufacture of drinking water production units. The first system installed in the Gila River Indian Community (GRIC) in Arizona will consist of three reverse osmosis units able to produce initially 5 million gallons of drinking water per day (MGD) with a potential capacity of up to 10 MGD.

MSI has also received a notice of award for the Mainland Water Treatment RO Expansion Project for Currituck County, North Carolina. The system initially designed and supplied by MSI in 2005 will be enhanced with two reverse osmosis units producing 1.5 MGD in order to meet increased demand for drinking water.

In addition, Indian and Northern Affairs Canada (INAC) has selected H2O to replace the outdated water treatment facilities of the Little Grand Rapids and Pauingassi native communities, both in Manitoba.

About H2O

H2O mission is to develop, manufacture and market innovative, environment-friendly products intended for drinking water production, wastewater treatment and industrial processes.

The TSX Venture Exchange and the Alternext Exchange assume no responsibility for the relevance or accuracy of this press release.

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