Kelman Announces 2006 Operating Results



    Stock Symbol: KTI.TSX

    
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                                       Years Ended December 31,            %
    -------------------------------------------------------------------------
    ($ 000's except per share amounts)      2006          2005        Change
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    Operating Revenue                  $  25,911     $  23,865             9
    Operating Expenses                 $  21,958     $  20,077             9
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    Net Earnings (Loss)                $     239     $  (2,817)           NA
      Per share (basic and diluted)    $    0.01     $   (0.07)           NA
    Cash Flow from Operations          $   3,761     $   3,631             4
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    CALGARY, March 7 /CNW/ - Kelman Technologies Inc ("KTI") today announced
a net income of $239 thousand ($0.01 per share) for the year 2006. Capital
expenditures of $2.6 million were down 5 percent when compared to 2005.
Interest expense increased slightly to $594 thousand. The Company ended the
year with working capital of $7.3 million, an increase of 31 percent compared
to last year and had no long-term debt.
    In commenting on the results Rene VandenBrand, President and CEO of KTI
said, "Overall, we achieved significant improvements in our US operations
mitigated somewhat by a slower than expected growth in our International
operations and a slowing down of activity in the later part of the year in our
Canadian processing business. We expect the beginning of 2007 to reflect a
continuation of this trend ."

    Kelman Technologies Inc. is a publicly traded Canadian company listed on
the Toronto Stock Exchange under the trading symbol "KTI". With offices in
Calgary and Toronto, Canada, Denver, Houston, and Oklahoma City, United
States, London, United Kingdom and Tripoli, Libya. KTI services oil and gas
exploration companies with a full suite of seismic processing and on-line data
management and data archival services.

    To the extent this press release includes forecasts or forward looking
statements about future performance of the company such forecasts or
statements are believed to be reasonable by the company but are based upon
assumptions in respect of commodity pricing and oil and gas exploration
activity levels over the next couple of years. The risks associated with
future events are mitigated where possible by KTI but are uncontrollable and
no guarantee of the accuracy of the forecasts or future financial performance
of the company is offered.



    
    KELMAN TECHNOLOGIES INC.
    Consolidated Balance Sheets

    December 31, 2006 and 2005

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                                                          2006          2005
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    Assets

    Current assets:
      Cash                                        $  2,045,785  $  1,851,476
      Accounts receivable                            5,406,905     5,348,804
      Work in progress                               2,081,447     2,026,388
      Prepaid expenses and deposits                    423,566       399,657
      -----------------------------------------------------------------------
                                                     9,957,703     9,626,325

    Property and equipment                           5,517,916     6,084,582

    Other assets                                        17,081        22,775

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                                                  $ 15,492,700  $ 15,733,682
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    Liabilities and Shareholders' Equity

    Current liabilities:
      Indebtedness                                $    487,500  $  1,000,000
      Accounts payable and accrued liabilities       1,613,736     2,239,071
      Deferred revenue                                       -       252,609
      Current portion of capital lease                       -         5,779
      Preferred shares                                 605,321       605,321
      -----------------------------------------------------------------------
                                                     2,706,557     4,102,780

    Preferred shares                                 3,645,774     3,483,233

    Shareholders' equity:
      Share capital                                 13,125,325    12,609,980
      Equity component of preferred shares             812,706       812,706
      Contributed surplus                              799,512       561,314
      Deficit                                       (5,597,174)   (5,836,331)
      -----------------------------------------------------------------------
                                                     9,140,369     8,147,669

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                                                  $ 15,492,700  $ 15,733,682
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    KELMAN TECHNOLOGIES INC.
    Consolidated Statements of Operations and Deficit

    Years ended December 31, 2006 and 2005

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                                                          2006          2005
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    Revenue                                       $ 25,911,148  $ 23,865,037

    Expenses:
      Operating                                     21,958,083    20,077,053
      Depreciation and amortization                  3,189,706     4,196,465
      Interest                                         594,424       591,875
      Foreign exchange gain (loss)                     (70,222)       16,945
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                                                    25,671,991    24,882,338

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    Earnings (loss) before income taxes                239,157    (1,017,301)

    Future income tax                                        -    (1,800,000)

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    Net earnings (loss)                           $    239,157  $ (2,817,301)

    Deficit, beginning of year                    $ (5,836,331) $ (3,019,030)
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    Deficit, end of year                          $ (5,597,174) $ (5,836,331)
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    Net earnings (loss) per Common Share,
     basic and diluted                            $       0.01  $      (0.07)
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    KELMAN TECHNOLOGIES INC.
    Consolidated Statements of Cash Flows

    Years ended December 31, 2006 and 2005

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                                                          2006          2005
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    Cash provided by (used in):

    Operations:
      Net earnings (loss)                         $    239,157  $ (2,817,301)
      Items not involving cash:
        Depreciation and amortization                3,189,706     4,196,465
        Stock-based compensation expense               241,043       145,645
        Accretion of preferred shares                  162,541       145,452
        Amortization of other assets                     5,694        33,628
        Lease inducement benefit                         3,313       101,574
        Loss on disposal of property and equipment       3,090         2,025
        Future income taxes                                  -     1,800,000
        Unrealized foreign exchange gain (loss)        (84,026)       23,549
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                                                     3,760,518     3,631,037

      Change in non-cash working capital items        (965,813)   (1,517,107)
      -----------------------------------------------------------------------
                                                     2,794,705     2,113,930

    Financing:
      Issue of common shares                           512,500             -
      Issue of preferred shares                              -     1,000,000
      Repayment of capital lease                        (5,779)      (40,829)
      Increase (decrease) in indebtedness             (512,500)      500,000
      -----------------------------------------------------------------------
                                                        (5,779)    1,459,171

    Investing:
      Expenditures on property and equipment        (2,626,130)   (2,766,490)
      Change in non-cash working capital items          31,513       314,429
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                                                    (2,594,617)   (2,452,061)

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    Increase in cash                                   194,309     1,121,040

    Cash, beginning of year                          1,851,476       730,436

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    Cash, end of year                             $  2,045,785  $  1,851,476
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For further information:

For further information: please visit our web site at
http://www.kelman.com or contact Mr. Rene VandenBrand, President and CEO at
(281) 293-0537, or by email to rene@kelman.com

Organization Profile

KELMAN TECHNOLOGIES INC.

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