Winalta Inc.
TSX VENTURE : WTA.A

Winalta Inc.

August 30, 2005 16:52 ET

Winalta Announces Third Quarter Results

EDMONTON, ALBERTA--(CCNMatthews - Aug. 30, 2005) - Winalta Inc. (TSX VENTURE:WTA.A) today announced its third quarter results for fiscal 2005



Financial Highlights
(in thousands of dollars, except for per share amounts)

Three Months Nine Months
Ended July 31 Ended July 31
2005 2004 2005 2004
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Sales $22,133 $19,025 $60,501 $52,621
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Gross Profit $ 4,090 $ 2,505 $ 7,402 $ 9,342
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Expenses $ 2,303 $ 2,500 $ 6,958 $ 6,780
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Other Expenses $ 415 $ 447 $ 1,224 $ 1,889
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Income Taxes Expense
(Recovery) $ 368 $(1,104) $ (390) (1,094)
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Loss from Discontinued
Operations $ 0 $ (5) $ 0 $ (84)
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Net Income $ 1,004 $ 665 $ (389) $ 1,683
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Earnings per share (basic) $ .08 $ .05 $ (0.03) $ 0.13
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James A. Sapara, Chairman and CEO reported total consolidated sales for the quarter ended July 31, 2005 had increased $3.109 Million to $22.13 Million. (2004 - $19.02) Total consolidated sales for the nine months ended July 31, 2005 increased $7.88 Million or 15.0%. Vanguard contributed $3.9 Million towards the increased revenue for the nine-month period, although as Vanguard was purchased during the first quarter of 2004, there were no comparative sales for November 2003 or December 2003.

Gross profit was $4.1 Million for the three months ended July 2005, an increase of $1.6 Million (63%) from the same period a year earlier. The cost containment and production improvement strategies that were developed late in the first quarter and early in the second quarter of the current year, has resulted in a substantial turnaround in Gross Profit of $1.02 Million when comparing the three months ended January 2005 to the three months ended July.

Vanguard experienced lower than anticipated gross profit for the period dropping from 24% in 2004 to 15% in 2005. In 2005, many retailers have delayed taking Canadian product in order to utilize floor plan lines to stock up on less expensive U.S. Product due to a strong Canadian dollar.

Production volumes in the manufactured housing segment, for the nine month period was up 36.9% over the prior year. A strong housing market and increased demand in the industrial products created this significant volume increase.

Outlook

Management continues to be focused on improving the company's gross margin. Cost initiatives have been implemented across the plant with the objective of reducing the level of production staff and cost of raw materials while improving quality and productivity throughout the organization. Vanguard is also participating in these initiatives with the intent to increase productivity and efficiencies in their operations.

Mr. Sapara stated that Winalta is looking forward to the selling of its product into our latest manufactured home communities, located in Leduc, Alberta and Sylvan Lake, Alberta. Both of these communities are expected to show strong sales in the fourth quarter of fiscal 2005 and into fiscal 2006.

Winalta is a producer of CSA certified manufactured homes, modular homes, industrial projects, and recreational homes. In addition, through its subsidiary, Vanguard Inc., the company designs, manufacturers, distributes, and wholesales motorized and non-motorized recreational vehicles.

For a full disclosure of Winalta's operating results for the third quarter ending July 31, 2005, please review the Companies financial reports at www.sedar.com

Winalta Inc. shares trade on the TSX Venture Exchange under the symbol "WTA.A"

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

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