Enerchem International Inc. bucks industry trend with higher sales volumes

CALGARY, Nov. 12 /CNW/ -

    
    Enerchem International Inc. Reports Financial Results
    For the Three and Nine months ended September 30, 2009

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

                                      Three months ended   Nine months ended
                                            September 30        September 30
                                           2009     2008       2009     2008
    -------------------------------------------------------------------------

    Revenues                             31,028   32,471     65,737   87,608
    -------------------------------------------------------------------------
    Net income (loss) for the period        345     (844)    (1,432)  (1,982)
    -------------------------------------------------------------------------

    Net income (loss) per share
      Basic                                0.02    (0.06)     (0.10)   (0.13)
    -------------------------------------------------------------------------

      Diluted                              0.02    (0.06)     (0.09)   (0.13)
    -------------------------------------------------------------------------

    EBITDA(1)                               831    1,428       (886)   2,133
    -------------------------------------------------------------------------

    EBITDA per share(2)                    0.06     0.10      (0.06)    0.14
    -------------------------------------------------------------------------

    (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.
    (2) Calculated as EBITDA divided by the basic weighted average numbers of
        shares outstanding during the period.
    

Industry Activity and Financial Overview

Industry activity during the third quarter of 2009 continues to be down significantly from the comparative period in the prior. Year-over-year well completions were down 65% and rig utilization rates were down 58% - from 48% utilization to 20% - during the quarter. Despite these activity reductions, Enerchem sales volumes were up by 24% over third quarter 2008 levels. Tighter margins and a different mix of hydrocarbon fluid sales in the current period partially offset the favorable volume impact resulting in a quarter with a positive bottom line, but lower cash generated from operations compared to the third quarter of 2008.

Consolidated revenue for the three and nine months ended September 30, 2009 decreased by $1,443,000 and $21,871,00 respectively when compared to the same periods of 2008. Lower revenues were driven mainly by significantly lower crude oil prices in the three and nine months ended September 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 slowdown in the industry in 2009 also resulted in a downward shift in third party revenues for this segment.

Strategy and Outlook

Although the prospects for the world's economic recovery remain the subject matter of cautious commentary by analysts, Enerchem management believes that the cost containment work, inventory management effort and plant utilization rate improvement put in place over the last three quarters along with a capital investment strategy targeting plant reliability and safety will position the Company well for favorable change in the economic environment in which we are now working.

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.
    

SOURCE ENERCHEM INTERNATIONAL INC.

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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