Enerchem International Inc. Releases Financial Results



    CALGARY, Aug. 13 /CNW/ -

    
    Enerchem International Inc. Reports Financial Results
    For the Three and Six Months ended June 30, 2009

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

                                      Three months ended    Six months ended
                                                 June 30             June 30
                                          2009      2008      2009      2008
    -------------------------------------------------------------------------

    Revenues                            11,788    21,390    34,709    55,137
    -------------------------------------------------------------------------

    Net loss for the period             (1,453)   (1,068)   (1,776)   (1,138)
    -------------------------------------------------------------------------

    Net loss per share

      Basic                              (0.10)    (0.07)    (0.12)    (0.07)
    -------------------------------------------------------------------------

      Diluted                            (0.10)    (0.07)    (0.12)    (0.07)
    -------------------------------------------------------------------------

    EBITDA(1)                           (1,990)      153    (1,718)      706
    -------------------------------------------------------------------------

    EBITDA per share(2)                  (0.13)     0.01     (0.11)     0.05
    -------------------------------------------------------------------------

    (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. 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 is used by
        management to assist in assessing comparative performance of the
        Company.
    

    Industry Activity and Financial Overview

    Industry activity during the second quarter of 2009 declined
significantly when compared to the second quarter of 2008. Year-over-year well
completions were down 52% and rig utilization rates were down 43% to 11%
during the quarter. Despite these activity reductions, Enerchem has kept
year-to-date sales volumes approximately equal to those of 2008. While margin
pressure from our clients and relatively low plant utilization have negatively
affected our ability to leverage off our fixed cost structure, we are pleased
with the extent to which we have been able to maintain sales volumes.
    Consolidated revenue for the three and six months ended June 30, 2009
decreased by $9,602,000 and $20,428,00 respectively when compared to the same
periods of 2008. Lower revenues were driven mainly by significantly lower
crude oil prices in the three and six months ended June 30, 2009 compared to
the same periods of 2008. 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 the third segment, Transportation services, industry activity is a
driver for revenues and the slow down in the industry in 2009 also resulted in
a downward shift in revenues for this segment.
    Spring break up traditionally presents a trough in sales and operating
profits for us at which time we undergo turnarounds on our refineries and
otherwise prepare for the third and fourth quarter rallies. Through a
combination of inventory and receivables management we have maintained our
financial strength despite posting a loss for the period.

    Strategy and Outlook

    Although the prospects for the world's economic recovery remain the
subject matter of cautious commentary by analysts, we can't help but feel that
the only direction from here is up. Toward the end of the current quarter and
subsequent we have noticed improved levels of sales. Although we'd hesitate to
call it a harbinger of trajectory change, these sales levels are encouraging.
    We remain focused on retaining financial health. Our capital investment
strategy targets plant reliability and safety. We also continue in our efforts
to find alternative markets for our fluids, and in that regard have made
significant progress in identifying potential markets, developing contacts and
qualifying our fluids to meet required specifications. As the economic
environment in which we are now working improves, we will be well positioned
to take advantage of opportunities as they arises.

    Enerchem International Inc. is a producer and distributor of hydrocarbon
drilling and fracturing fluids designed to provide cost effective solutions to
the upstream oil and gas industry and specialty solvents to help resolve
production and processing problems to the downstream producers. The Company
also provides energy marketing services and, through its wholly-owned
subsidiary, Millard Trucking Ltd., provides fluid transportation and other
related oilfield services. The Company's common shares trade on the Toronto
Stock Exchange under the symbol "ECH".

    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.
    





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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