Enerchem International Inc. 2009 financial results favorably impacted by 24%
increase in sales volumes for the final quarter of the year

CALGARY, March 11 /CNW/ -

    
    Enerchem International Inc. Reports Financial Results
    For the Fourth Quarter and Year ended December 31, 2009

    Financial highlights (unaudited)
    (in Cdn $ 000's except per share amounts)

                                    Three months ended            Year ended
                                           December 31           December 31
                                       2009       2008       2009       2008
    -------------------------------------------------------------------------
    Revenues                         39,734     28,189    105,471    115,797
    -------------------------------------------------------------------------
    Net income (loss)                 1,401         81        (30)    (1,901)
    -------------------------------------------------------------------------

    Net income (loss) per share
      Basic                            0.10       0.00      (0.00)     (0.13)
    -------------------------------------------------------------------------
      Diluted                          0.10       0.00      (0.00)     (0.13)
    -------------------------------------------------------------------------
    EBITDA(1)                         2,130      1,115      1,242      2,398
    -------------------------------------------------------------------------
    EBITDA per share(2)                0.14       0.07       0.08       0.16

    Bank indebtedness - December 31                           368      3,448
    -------------------------------------------------------------------------

    (1) EBITDA is a non-GAAP measure which the Company defines as earnings
        before interest expense, income taxes, depreciation, amortization,
        accretion expense, restructuring costs and write-downs.
    (2) EBITDA per share represents EBITDA divided by the basic weighted
        average common shares outstanding.

    Non-GAAP measures do not have any standard meaning prescribed by GAAP and
    are therefore unlikely to be comparable to similar measures presented by
    other issuers. The Company includes these non-GAAP measures as it
    believes they are used by investors to assess the performance of the
    Company, and are used by management to assist in assessing comparative
    performance of the Company.
    

Industry Activity and Financial Overview

Industry activity during the fourth quarter of 2009 rose from levels earlier in the year but continues to be down significantly from the comparative period in the prior year. Year-over-year well completions were down 78% and rig utilization rates were down 39% to 25% during the quarter. Despite these activity reductions, Enerchem's fourth quarter 2009 sales volumes were up by 24% over fourth quarter 2008, driven by increased market share and a change in the industry's focus to wells that require more hydrocarbon fracturing and drilling fluids, the Company's main refined products.

Consolidated revenue for the three months ended December 31, 2009 increased by $11,545,000 when compared to the same period of 2008. A 24% sales volume increase in the final quarter of the year was partially offset by the impact of lower average crude oil prices compared to the same period of 2009. For the full year, lower average crude oil prices in 2009, and therefore the Company's lower product prices, more than offset the volume gain to result in a $10,326,000 year-over-year revenue reduction. The Company's pricing in two of its segments is directly linked to the price of crude oil, which is used as a feedstock in the Oilfield Services segment and as a marketed product in the Energy marketing segment. In Transportation services, industry activity is a driver for revenues and the slowdown in the industry in 2009 also resulted in a 34% downward shift in third party revenues for this segment. The more direct indicators of Enerchem's financial performance are overall margins achieved measured against the relatively fixed level of costs of the business, portrayed in the EBITDA results. EBITDA has improved 91% when comparing the final quarter of 2009 with the same period of the previous year.

Enerchem repaid the full amount of its bank indebtedness outstanding at December 31, 2008 during 2009 and relied on internally generated cash flow and capital leases to finance its operating and capital requirements except for $368,000 it had drawn on its operating line of credit at the end of the year.

Strategy and Outlook

Although the prospects for the world's economic recovery remain the subject matter of cautious commentary by analysts, Enerchem management believes that the cost containment work, inventory management effort and plant utilization rate improvement put in place over the last year along with a capital investment strategy targeting plant reliability and safety will position the Company well for favorable change in the economic environment in which we are now working. The Company is responding to the rapidly expanding market for drilling and completion fluids in the horizontal drilling plays evolving in the Western Canadian Sedimentary Basin (including the Cardium) as evidenced by the very high sales volumes of both produced and brokered fluids Enerchem has achieved in the post-2009 period up to the release date of these financial results.

Enerchem International Inc. fractionates and distributes hydrocarbon fluids designed for use in the fracturing (Fracsol(TM)) and drilling (Drillsol(TM)) of oil and natural gas wells as well as solvents (Waxsol(TM)) used to resolve production and processing problems for downstream producers. The Company's energy marketing group purchases crude oil and crude derived fractions for the Company's feedstock requirements and for resale. Through its wholly owned subsidiary, acquired on May 1, 2006. Millard Trucking Ltd., the Company provides fluid transportation and related oilfield services.

Certain statements contained in this press release, including statements which may contain words such as "could", "should", "expect", "anticipate", "believe", "will", and similar expressions and statements relating to matters that are not historical facts are forward looking statements. Such forward looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of Enerchem to be materially different from any future results, performances or achievements expressed or implied by such forward looking statements. Such factors include fluctuations in oil and gas activity levels, political and economic conditions, the demand for services provided by Enerchem, Enerchem's ability to attract and retain key personnel and other factor as listed in the Company's Annual Information Form.

Additional information on Enerchem International Inc., may be viewed at our website at: www.enerchem.com or by visiting www.sedar.com.

THE TSX HAS NEITHER APPROVED NOR DISAPPROVED THE INFORMATION CONTAINED HEREIN.

SOURCE ENERCHEM INTERNATIONAL INC.

For further information: For further information: Mr. Kenneth Bagan, President and Chief Executive Officer, Telephone: (403) 269-1500, Fax. (403) 269-1559, E-mail kbagan@enerchem.com or Mr. Kim Hubick, Vice President, Finance and Chief Financial Officer, Telephone: (403) 269-1500, Fax. (403) 269-1559, E-mail khubick@enerchem.com

Organization Profile

ENERCHEM INTERNATIONAL INC.

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