Winalta Inc.
TSX VENTURE : WTA.A

Winalta Inc.

March 21, 2006 17:42 ET

Winalta Inc. Announces 1st Quarter Financial Results

EDMONTON, ALBERTA--(CCNMatthews - March 21, 2006) - Winalta Inc. (the "Corporation") (TSX VENTURE:WTA.A) announced today its financial results for the 1st Quarter.



FINANCIAL HIGHLIGHTS
(in thousands of dollars, except for per share amounts)

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Three Months Ended
January 31
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2006 2005
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Sales $17,266 $15,964
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Gross Profit $2,107 $129
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Expenses $2,367 $2,356
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Other Income (Expenses) $(398) $(388)
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Income Tax Exp (Recovery) $(177) $(935)
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Net Income (Loss) $(481) $(1,680)
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Earnings per Share (0.04) (0.13)
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The Corporation achieved $17.3 million in total revenue for Q1 2006, an increase of 8.2% over last year. Gross profit was $2.1 million in Q1 2006 as compared to $129 thousand in Q1 2005. Gross margin in Q1 2006 was 12.2% versus 2005 at 0.8%, an increase of 11.4%.

Winalta Inc. had strong sales growth during the first quarter in all divisions. Gross margin in the manufactured and modular home division increased by $1.48 million over the same period last year and this division generated a positive EBITDA of $402 thousand. The custom built home division increased sales by 38% and improved gross margin by 60% or $147 thousand over the same period last year, generating a positive EBITDA of $257 thousand. The industrial trailer and RV division improved sales by 22% and gross margin improved by $306,000 over last years levels. Non compensatory pricing on certain lines of business and high administrative and selling costs in the industrial trailer and RV division contributed to continued losses in the industrial trailer and RV division and overshadowed the significant gains produced by the housing divisions.

OUTLOOK

For the balance of 2006 we anticipate increasing growth and profitability in sales of manufactured and modular homes. Prices are improved and 5 land development projects in Alberta, exclusive to Winalta Inc. will come on line. These include projects in Fort McMurray and Stony Plain as well as central Alberta. Industrial camp sales are expected to continue to grow over 2005 levels ($13.0 million) due to the increasing demand from oil sands projects. Demand for First Nation housing across Western Canada has increased due to First Nation oil sand revenue and C.M.H.C. programs to increase subsidy allocations. Winalta expects to improve market share as well as take advantage of increased demand in this market.

Our Custom Built Housing division believes it will take advantage of increasing demand throughout the Greater Edmonton region. Efforts to increase sales and productivity are well underway.

Demand and sales growth in the industrial trailer and RV market remains strong and is especially good in the industrial oilfield market. New products designed specifically for rugged use in a northern climate have been designed and produced to take advantage of oil sands demand. In recent weeks Vanguard Inc. installed new and professional management in manufacturing, administration and accounting. Efforts to further improve and stabilize management continue, as do efforts to improve both productivity and prices in order to stem losses and restore Vanguard to profitability this year.

Winalta Inc. is a producer of manufactured CSA certified homes, modular homes, site-built homes, industrial projects and recreational homes. In addition, through its subsidiary, Vanguard Inc., the Corporation designs, manufactures and wholesales motorized and non-motorized recreational vehicles and industrial oilfield units.

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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