HydraLogic Reports Third Quarter 2007 Results



    TORONTO, Nov. 30 /CNW/ - HydraLogic Systems Inc. ("HydraLogic" or the
"Company") (TSX.V: HLS - OTC Pink Sheet: HYSYF) today announced its financial
operating results for the three month and nine month periods ending September
30, 2007, as follows:

    
    -------------------------------------------------------------------------
    Information in table is thousands        Three-Month         Nine-Month
     CDN $ except per share data                Period             Period
    -------------------------------------------------------------------------

    Period ended September 30, 2007          2007     2006     2007     2006
    -------------------------------------------------------------------------
    Revenue                               $ 2,283  $ 1,456  $ 5,839  $ 4,062
    -------------------------------------------------------------------------
    Gross Profit                            1,171      735    3,125    1,895
    -------------------------------------------------------------------------
    EBITDA                                   (374)    (538)  (1,388)  (1,696)
    -------------------------------------------------------------------------
    Net Loss                                 (565)    (578)  (1,873)  (1,820)
    -------------------------------------------------------------------------
    Basic and diluted Loss per Share        (0.01)   (0.02)   (0.05)   (0.06)
    -------------------------------------------------------------------------


    Third Quarter 2007 Highlights:

    -   The September, 2007 quarter revenues of $2,282,645 were up 57% on a
        quarter to quarter comparison and 44% on a nine month comparative
        basis.

    -   Gross Margin Profit, quarter over quarter, increased to 51% from 50%
        for a net gain of $436,000 (59%) and on a nine month comparative
        basis increased to 54% from 47% for a net gain of $1,230K (65%).

    -   The third quarter also resulted in a stronger EBITDA trend with an
        improvement of $164,000, quarter over quarter and a $308,000
        improvement for the nine month comparative.
    

    "We are pleased to report to shareholders that during the third quarter
period, the Company's revenues climbed to historical record levels of
$2.2 million," stated Michael Beckley, Chief Executive Officer of HydraLogic.
"Our operating margins during the period continued to improve and we fully
expect that trend to continue as we grow and scale our Bug Defence operations
in Texas and Florida."
    "During the quarter, the company also completed an important financing
with a Chicago based institutional investment fund. The financing enabled the
company to pay down all prior debt and secure working capital necessary to
grow the business. The timing of the funding did impact sales as it came late
in the traditional marketing season for mosquito control. The company expects
greater impact from such marketing efforts in the future having now secured
necessary capital for those advertising initiatives. With the Bug Defence Home
Services line gaining very strong traction in the Texas and Florida market and
with our very positive initial results from the test marketing of some of our
retail consumer products, we have established a solid platform to spearhead
future growth of our Company," continued Mr. Beckley.
    "Although we recorded a net loss for the period, it is important to note
that the Company was still integrating the acquisition of Third Coast Mosquito
Control, that HydraLogic acquired late in the second quarter. This loss
represents the lowest historical loss on a per share basis. We expect this
loss to continue to decrease as a result of maturation of severance packages
which the company issued to several employees from past acquisitions including
Bayou City, M-Nix, and Third Coast. Furthermore our continued efforts to cut
operating costs, consolidate operations and focus sales efforts in target
geographic areas for both odor and mosquito control, should begin to move
HydraLogic towards sustainable profitability in near term quarters."
    With the significant sales growth expected within the US market for both
the Bug Defence and HLS Ecolo product lines, the company followed through with
its plan this past quarter to broaden its awareness with the US investment
community. During this period, the company applied for and recently received
approval from the Financial Industry Regulatory Authority (FINRA) for
quotation on the OTC Pink Sheets. This quotation combined with the prior
registration by the company with Standard & Poor's Market Access Program
should provide greater visibility for HydraLogic."
    "It has been less than nine months since we launched our mosquito control
installation and services platform under the Bug DeFence Home Services brand
in the Texas and Florida market. In this short period of time, our products
have positioned HydraLogic as a leader in these initial strategic US
locations. With property owners spending record dollar amounts to improve
leisure time in their back yards and with greater awareness for the harmful
health effects that are attributed to disease carrying mosquitos, we believe
HydraLogic is positioned for significant growth as a result. There is no doubt
that the opportunity for HydraLogic to grow and prosper is as good as ever and
we look forward to continuing our revenue growth trend and to begin to report
profitable quarters in the near future," concluded Mr. Beckley.

    About HydraLogic Systems:

    HydraLogic is an innovator of engineered misting systems and proprietary
environmental chemistries with reoccurring revenue distribution platforms. The
company strives to be market leaders in providing technologies, though turn
key distribution and service models into the multi-billion dollar mosquito and
odour control industries as Bug DeFence and HLS Ecolo respectively.
    HydraLogic Systems is traded on the TSX Venture exchange - symbol: HLS.

    Forward Looking Statements

    This press release contains certain "forward looking statements". These
statements relate to future events or future performance and reflect
expectations and belief regarding growth, results of operations, performance,
business prospects, opportunities or industry performance and trends. These
forward looking statements reflect current internal projections, expectations
or beliefs and are based on information currently available. A number of
factors could cause actual events or results to differ materially from the
results discussed in the forward looking statements. Although it is believed
that the forward looking statements contained in this press release are based
upon reasonable assumptions, investors cannot be assured that actual results
will be consistent with these forward looking statements. These forward
looking statements are made as of the date of this press release, and
HydraLogic Systems Inc. assumes no obligation to update or revise them to
reflect new events or circumstances, except as required pursuant to applicable
securities laws.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this news release.

    %SEDAR: 00020350E




For further information:

For further information: Glen Akselrod - Bristol Capital Ltd., (905)
326-1888, glen@bristolir.com

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