Kelman Announces Q2 and First Half 2008 Operating Results



    Stock Symbol: KTI.TSX

    
    -------------------------------------------------------------------------
                                                Three Months Ended
    -------------------------------------------------------------------------
                                           June 30,     June 30,
                                              2008         2007       Change
    -------------------------------------------------------------------------
    Operating revenue                  $ 6,328,323  $ 6,304,131  $    24,192
    Operating expenses                 $ 6,094,221  $ 5,546,247  $   547,974
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    EBITDA                             $   234,102  $   757,884  $  (523,782)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net loss before taxes              $  (845,379) $  (502,470) $  (342,909)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Per share
      (basic and diluted)              $     (0.02) $     (0.01) $     (0.01)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                 Six Months Ended
    -------------------------------------------------------------------------
                                           June 30,     June 30,
                                              2008         2007       Change
    -------------------------------------------------------------------------
    Operating revenue                  $12,918,279  $12,942,076  $   (23,797)
    Operating expenses                 $11,979,522  $11,127,016  $   852,506
    -------------------------------------------------------------------------
    EBITDA                             $   938,757  $ 1,815,060  $  (876,303)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net loss before taxes              $  (878,121) $  (420,255) $  (457,866)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Per share
      (basic and diluted)              $     (0.02) $     (0.01) $     (0.01)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    CALGARY, Aug. 12 /CNW/ - Kelman Technologies Inc ("KTI") today announced
a loss of $845 thousand, $0.02 per share, for the second quarter of 2008. For
the first half of 2008 the loss was $878 thousand, $0.02 per share. Capital
expenditures during the half of $1.5 million were down 15 percent when
compared to the comparable period in 2007. Working capital increased to $8.2
million up 15 percent from 2007, principally from the inclusion of the
proceeds of a secured non-convertible debenture financing which closed near
the end of the quarter.

    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
    (Unaudited)

    -------------------------------------------------------------------------
                                                        June 30, December 31,
                                                           2008         2007
    -------------------------------------------------------------------------
    Assets

    Current assets:
      Cash                                          $ 2,734,327  $ 1,662,952
      Accounts receivable                             5,632,477    5,525,538
      Work in progress                                1,642,242    2,354,399
      Prepaid expenses and deposits                     597,718      485,336
      -----------------------------------------------------------------------
                                                     10,606,764   10,028,225

    Property and equipment                            6,073,356    6,218,057

    Other assets                                          8,541       11,387
    -------------------------------------------------------------------------
                                                    $16,688,661  $16,257,669
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity

    Current liabilities:
      Indebtedness                                  $         -  $   487,500
      Accounts payable and accrued liabilities        1,464,059    1,570,896
      Deferred revenue                                   91,351            -
      Current portion of capital leases                 253,540      243,860
      Preferred shares                                  605,321      605,321
      -----------------------------------------------------------------------
                                                      2,414,271    2,907,577

    Long-term debt                                    1,966,966      450,944

    Preferred shares                                  3,862,907    3,808,316

    Shareholders' equity:
      Share capital                                  13,125,325   13,125,325
      Equity component of preferred shares              812,706      812,706
      Equity component of debenture                     204,740            -
      Contributed surplus                               952,794      925,728
      Deficit                                        (6,651,048)  (5,772,927)
      -----------------------------------------------------------------------
                                                      8,444,517    9,090,832

    -------------------------------------------------------------------------
                                                    $16,688,661  $16,257,669
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    KELMAN TECHNOLOGIES INC.
    Consolidated Statements of Operations, Comprehensive Income (Loss) and
    Deficit
    (Unaudited)

    -------------------------------------------------------------------------
                                Three Months Ended          Six Months Ended
                              June 30,     June 30,     June 30,     June 30,
                                 2008         2007         2008         2007
    -------------------------------------------------------------------------
    Revenue               $ 6,328,323  $ 6,304,131  $12,918,279  $12,942,076

    Expenses:
      Operating             6,094,221    5,546,247   11,979,522   11,127,016
      Depreciation and
       amortization           850,797      754,924    1,677,961    1,497,921
      Interest                169,681      145,430      295,322      287,701
      Interest income             (17)      (2,662)      (3,205)      (2,662)
      Foreign exchange
       loss (gain)             59,020      362,662     (153,200)     452,355
    -------------------------------------------------------------------------
                            7,173,702    6,806,601   13,796,400   13,362,331

    -------------------------------------------------------------------------
    Net earnings (loss)
     and comprehensive
     income (loss)           (845,379)    (502,470)    (878,121)    (420,255)

    Deficit, beginning
     of period            $(5,805,669) $(5,514,959) $(5,772,927) $(5,597,174)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Deficit, end of
     period               $(6,651,048) $(6,017,429) $(6,651,048) $(6,017,429)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings (loss)
     per Common Share,
     basic and diluted    $     (0.02) $     (0.01) $     (0.02) $     (0.01)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    KELMAN TECHNOLOGIES INC.
    Consolidated Statements of Cash Flows
    (Unaudited)

    -------------------------------------------------------------------------
                                Three Months Ended          Six Months Ended
                              June 30,     June 30,     June 30,     June 30,
                                 2008         2007         2008         2007
    -------------------------------------------------------------------------

    Cash provided by (used
     in):

    Operations:
      Net loss            $  (845,379) $  (502,470) $  (878,121) $  (420,255)
      Items not involving
       cash:
        Depreciation and
         amortization         850,797      754,924    1,677,961    1,497,921
        Accretion of
         preferred shares      44,355       40,635       54,590       81,271
        Stock-based
         compensation
         expense               13,533       21,254       27,066       67,008
        Amortization of
         other assets           1,424        1,424        2,847        2,847
        Loss on disposal
         of property and
         equipment                  -            -            -        1,910
        Lease inducement
         benefit               (7,837)         828      (15,673)       1,656
        Foreign exchange
         gain (loss)           59,020      362,662     (153,200)     452,355
    -------------------------------------------------------------------------
                              115,913      679,257      715,470    1,684,713

      Change in non-cash
       working capital
       items                1,151,797      613,429      588,118       59,525
    -------------------------------------------------------------------------
                            1,267,710    1,292,686    1,303,588    1,744,238

    Financing:
      Advances on
       long-term debt       1,850,000            -    1,850,000            -
      Repayment of capital
       leases                 (60,361)     (16,080)    (119,558)     (16,080)
      Decrease in
       indebtedness          (487,500)           -     (487,500)           -
    -------------------------------------------------------------------------
                            1,302,139      (16,080)   1,242,942      (16,080)

    Investing:
      Expenditures on
       property and
       equipment             (527,619)    (400,475)  (1,533,260)  (1,314,272)
      Change in non-cash
       working capital
       items                 (356,378)    (416,959)      58,105            -
    -------------------------------------------------------------------------
                             (883,997)    (817,434)  (1,475,155)  (1,314,272)

    -------------------------------------------------------------------------
    Increase in cash        1,685,852      459,172    1,071,375      413,886

    Cash, beginning of
     period                 1,048,475    2,000,499    1,662,952    2,045,785

    -------------------------------------------------------------------------
    Cash, end of period   $ 2,734,327  $ 2,459,671  $ 2,734,327  $ 2,459,671
    -------------------------------------------------------------------------
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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

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KELMAN TECHNOLOGIES INC.

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