Dynetek Industries Ltd. Announces First Quarter 2009 Results



    CALGARY, May 15 /CNW/ - Dynetek Industries Ltd. (TSX:DNK), a leader in
the design, manufacturing and marketing of proprietary fuel storage cylinders
and systems for compressed natural gas and hydrogen, today reported results
for the three months ended March 31, 2009. The full unaudited consolidated
financial statements and MD&A have been filed on SEDAR at www.sedar.com and on
Dynetek's website at www.dynetek.com.

    
    Financial Highlights
    (tabular amounts in thousands of Canadian dollars, except share numbers
     and per share data)
    (unaudited)

                                                 Three months ended March 31
                                                           2009         2008
    -------------------------------------------------------------------------
    Total revenue                                         6,856        4,449
    Net loss                                               (909)      (1,060)
    Net loss per common share (basic and
     fully diluted)                                       (0.04)       (0.05)
    EBITDA(1)                                                 1         (699)
    Cash and cash equivalents                               728        5,658
    Non-cash working capital(1)                          13,972       10,237
    Working capital (1)                                  15,108       16,303
    Total assets                                         42,478       43,181
    Long-term debt and capital lease                      6,948        7,297
    Capital expenditures                                     98           78
    Cash flow deficiency from operations                 (2,821)        (646)
    Weighted average number of common shares
     outstanding                                     20,936,500   20,936,500
    -------------------------------------------------------------------------

    (1) EBITDA, non-cash working capital and working capital are non-GAAP
        financial measures. Dynetek defines EBITDA as earnings before
        interest, taxes, stock based compensation, foreign exchange gain or
        loss, depreciation, and amortization. Dynetek defines non-cash
        working capital as current assets less cash, restricted cash and
        current liabilities and working capital as current assets less
        current liabilities. Dynetek believes these non-GAAP financial
        measures provide investors and analysts with useful information so
        that they can better understand the financial results.
    

    OPERATIONAL HIGHLIGHTS

    Dynetek reported stronger revenue and EBITDA for 2009 compared to the
first quarter of 2008. The increases in revenue and EBITDA were primarily
achieved from Dynetek's European operations. In the first three months of
2009, Dynetek achieved total revenues of $6.9 million, an increase of 54%,
compared to $4.4 million for the same period of 2008. Cylinder and system
sales for the three months ended March 31, 2009 were $5.8 million, an increase
of 79%, compared to $3.2 million for the same period of 2008. The Company's
EBITDA for the three months ended March 31, 2009, was positive compared to
negative EBITDA of ($0.7) million for the three months ended March 31, 2008.
    The increases in revenue and EBITDA resulted in Dynetek recording a
smaller loss in the first quarter of 2009, (net loss of $0.9 million or net
loss of $0.04 per common share), compared to the same quarter of 2008 (net
loss of $1.1 million or net loss of $0.05 per common share).
    In the first quarter of 2009, revenue from the European operations
increased 104%, due to stronger sales activities and fewer postponed and
cancelled orders, compared to the first quarter of 2008. North American
revenue increased 6% in the first quarter of 2009 compared to the same quarter
of 2008, in spite of increased competition and customer requests to defer
orders to the third quarter of 2009.


    For the three months ended March 31, 2009, the Company achieved research
and development revenue of $1.1 million, compared to $1.2 million for the same
period of 2008. In the third quarter of 2009, Dynetek expects to deliver the
third and final milestone under its contract with Magna Steyr, in connection
with Daimler's automotive fuel cell program. The program involves the
development, certification and supply of 700bar compressed hydrogen fuel
storage systems to Magna Steyr in connection with Daimler's fuel cell program.
    The Company continues to maintain consistent levels of liquidity as
working capital was $15.1 million at March 31, 2009, compared to $15.8 million
at December 31, 2008.

    OUTLOOK

    The Company remains committed to continuing to grow its Compressed
Natural Gas ('CNG') and Hydrogen revenue streams through targeted marketing
initiatives. The Company will have a stronger short-term focus on its CNG
activities due to a persistent economic lull in hydrogen market activities.
However, Dynetek believes that the market for compressed hydrogen enabling
technologies will continue to develop over the next few years in conjunction
with nearer term hydrogen industry energy applications.
    In 2009, the Company expects to increase its focus on revenue growth
opportunities in the CNG market for bus and heavy-duty truck applications and
for bulk hauling of larger quantities of compressed gas. The Company will
continue to market and deliver its Mobile Gas Distribution System, a
lightweight tube trailer designed for the gas utility industry. Currently, the
Company continues to develop and test new products for the CNG market.
    Major economic and environmental factors worldwide are contributing to
high-growth in natural gas demand for vehicles as follows:

    
    -   The high growth rate in demand for natural gas stems from the
        comparative advantages of natural gas compared to diesel, gasoline
        and bio-fuels;
    -   Natural gas is cleaner with less toxic emissions than diesel or
        gasoline and is currently less costly;
    -   A growing natural gas infrastructure. Continuing investment in
        infrastructure is adding to the number of compressed natural gas
        refueling centers; and
    -   CNG will continue to develop as a transportation fuel as it currently
        is less costly than oil based fuels which are also becoming supply
        constrained in developing economies.
    

    The above trends and related market opportunities are expected to create
a positive intermediate and longer-term outlook for Dynetek. The Company does
anticipate new legislation to improve and maintain the North American
environment, which could lead to increased sales of its CNG systems.
Turbulence in the global financial markets has negatively impacted the
financial abilities of certain industries. In response, Dynetek will narrow
its focus of its marketing activities to geographical areas that generate
revenues for the Company or potential to contribute significant revenue
through CNG growth.
    Dynetek expects to record increased revenue and EBITDA in Q2 of 2009 due
to increases in demand for its products, especially from European customers.
The Company has forecasted for Q2 of 2009 to surpass the financial results
from Q1 of 2009 and in comparison to Q2 of 2008.
    In response to the turbulent economic conditions experienced in North
American and Europe during the fourth quarter of 2008 and first quarter of
2009, the Company continues to manage its costs responsibly and improve
production efficiencies where possible. For the second quarter, the Company
has reduced production and administrative staff to core levels and continues
to review supplier alternatives.

    ABOUT DYNETEK

    Dynetek Industries Ltd. designs, produces and markets one of the lightest
and most advanced fuel storage and refueling systems for compressed natural
gas, low emission vehicles and compressed hydrogen, zero-emission fuel cell
vehicles. Dynetek is recognized around the world for its solutions-of-choice
to the alternate fuel vehicle sector, evidenced by strategic relationships
with major manufacturers around the globe. Dynetek is listed on the Toronto
Stock Exchange, symbol: DNK

    FORWARD LOOKING STATEMENTS

    In addition to historical information, this news release contains
forward-looking statements and should be read in conjunction with the
financial statements and related notes for the year ended December 31, 2008
and quarterly interim financial statements for the first quarter of 2009.
Forward-looking statements are based upon current assumptions, expectations
and estimates that involve a number of risks and uncertainties and actual
results could differ materially from those discussed in the forward-looking
statements. Readers are encouraged to review the section in the Management's
Discussion and Analysis titled 'Principal Risks and Uncertainties' for a
discussion of factors that could affect Dynetek's future operations and
financial results. Forward-looking statements are based upon management's
assumptions, expectations and estimates at the time the statements are made.
Dynetek does not update forward-looking statements should circumstances or
management's assumptions, expectations or estimates change, except where
required by securities laws.





For further information:

For further information: Christian Rasche, President and CEO, Dynetek
Industries Ltd., 4410 46th Avenue SE, Calgary, Alberta, T2B 3N7, Tel Calgary:
(403) 720-0262, Tel Germany: + 49 2102 30963-20, Toll free: 1-888-396-3835,
Fax Calgary: (403) 720-0263, Fax Germany: +49 2102 30963-10, Web:
www.dynetek.com

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Dynetek Industries Ltd.

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