Lonestar reports 2009 fourth quarter and yearend financial results and 2010
first quarter financial results

SYLVAN LAKE, AB, Oct. 27 /CNW/ - Lonestar West Inc. (TSX(V):LSI) today announced its business performance for the fourth quarter of fiscal 2009 and first quarter of fiscal 2010.

    
    Highlights:

    -   generated revenue of $2.1 million in the three months ended
        September 30, 2009 (a 39% increase over the comparable prior year
        period), $1.2 million in the two months ended June 30, 2009 and
        $5.5 million in the eleven months ended June 30, 2009,
    -   realized positive EBITDAC of $530,000 and net earnings of $272,000
        during the three months ended September 30, 2009, as compared to
        $259,000 and $74,000, respectively, in the prior year, and
    -   successfully closed debenture financing of $530,000 in July, 2009.
    

President and CEO James Horvath commented, "We are truly seeing the potential of our business plan as we grow our asset base and increase the utilization of our assets. We were successful in acquiring significant project-related work for our HVAC trucks and the increases in revenue drove higher income and EBITDAC. We have grown our customer base and continue to be a favoured supplier to our customers. We are confident that our focus on customer service will provide us the basis to keep the equipment working and move us towards our goal of becoming a major national competitor in the HVAC services business. We have the employees, equipment and management team that can contribute to achieving our growth plans."

For the three months ended September 30, 2009, Lonestar showed significant growth in Earnings Before Interest, Taxes, Depreciation and Amortization and Stock Based Compensation ("EBITDAC")(1) to $530,000 from $259,000 in the comparable prior year period. Due to the previously announced change in yearend, Lonestar's 4th quarter of 2009 included only two months and EBITDAC was a negative $10,000 as compared to a positive $101,000 in the prior year.

    
    CONSOLIDATED RESULTS

    Financial Results (000's except per share amounts)
    -------------------------------------------------------------------------
                                                         2 months  11 months
                                     3 months ended        ended     ended
    -------------------------------------------------------------------------
                                  September   October      June       June
                                      30,        31,        30,        30,
                                     2009       2008       2009       2009
    -------------------------------------------------------------------------
    Revenue                        $  2,148   $  1,544   $  4,314   $  5,535
    -------------------------------------------------------------------------
    Operating expenses                1,405      1,144      3,475      4,543
    -------------------------------------------------------------------------
    Gross margin                        743        400        839        992
    -------------------------------------------------------------------------
    Net income (loss)                   272         74       (351)      (551)
    -------------------------------------------------------------------------
    EBITDAC(1)                          530        259        278        474
    -------------------------------------------------------------------------
    Earnings per share - basic        0.021      0.010      (0.04)     (0.05)
    -------------------------------------------------------------------------
    (1) EBITDAC means earnings before interest, taxes, depreciation and
        amortization and stock based compensation and is equal to earnings
        before income taxes plus interest on long-term debt plus amortization
        plus stock based compensation. EBITDAC is not a recognized measure
        under Canadian generally accepted accounting principles ("GAAP").
        Management believes that in addition to net earnings, EBITDAC is a
        useful supplemental measure as it provides an indication of the
        results generated by the Company's primary business activities prior
        to consideration of how those activities are financed, amortized or
        how the results are taxed in various jurisdictions as well as the
        cash generated by the Company's primary business activities. Readers
        should be cautioned, however, that EBITDAC should not be construed as
        an alternative to net earnings determined in accordance with GAAP as
        an indicator of Lonestar's performance. Lonestar's method of
        calculating EBITDAC may differ from other organizations and,
        accordingly, EBITDAC may not be comparable to measures used by other
        organizations.
    

The complete MD&A and interim financial statements for the 2010 First Quarter and the complete MD&A and annual audited financial statements for the year ended June 30, 2009 are available on SEDAR at www.sedar.com.

Business Description

Lonestar West Inc. currently operates a fleet of HVAC and vacuum trucks throughout Western Canada from its base in Sylvan Lake, Alberta. It is focussed on profitably growing its HVAC services to become a major national competitor in the market area.

Lonestar's shares trade on the TSX(Venture) Exchange under the symbol LSI.

Certain information and statements contained herein constitute forward-looking information, including the anticipated costs associated with the purchase of capital equipment, expectations concerning the nature and timing of growth within the business operated by Lonestar, expectations respecting the competitive position of such business, expectations concerning the financing of future business activities and statements as to future economic and operating conditions. Readers should review the cautionary statement respecting forward-looking information that appears in Lonestar's complete MD&A.

SOURCE Lonestar West Inc.

For further information: For further information: James Horvath, President and CEO, (403) 887-2074; Randy Nicholls, CA, Chief Financial Officer, (403) 887-2074

Organization Profile

Lonestar West Inc.

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