HydraLogic Reports First Quarter 2009 Financial Results

    TORONTO, May 29 /CNW/ - HydraLogic Systems Inc. ("HydraLogic" or the
"Company") (TSX.V: HLS, OTC Pink Sheet: HYSYF) today announced the Company's
financial operating results for the three months ending March 31, 2009, for
which Financial Statements and Management's Discussion & Analysis have been
filed on www.sedar.com.
    During the first quarter, HydraLogic and its subsidiaries produced
revenues of $1,304,756 and through on-going consolidation of its business
operations continued to record year-over-year advancements in bottom line

    Information in the table below is expressed in thousands CDN$ except per
share data.

                                                     Q1 - 2009     Q1 - 2008
    Quarter Ending March 31                          Unaudited     Unaudited
    Revenue                                              1,305         1,752
    Gross Profit                                           782         1,000
    EBITDA(1)                                             (109)         (236)
    Net Loss                                              (255)         (317)
    Basic and diluted (Loss) per Share                   (0.00)        (0.01)

    (1) Earnings before income taxes, depreciation and amortization

    In the three months ended March 31, 2009 the Company and its subsidiaries
produced revenues of $1,304,756 and decreased the net loss by $61,349 (-19.4%)
over the first quarter in 2008 to $255,284. Management achieved this by
reducing operating expenses by $279,101 (-22%), which more than offset the
overall reduction in gross margin. Revenue for the quarter was lower by
$447,040 over the same period in 2008, due in part to a weak cash position in
the quarter and the effects of a more cautious business environment as the
emerging recession continues.
    EBITDA, a non-GAAP indicator of financial performance, was $(109,330) for
the quarter, which included a $70,800 foreign exchange loss on the Company's
US$2 million debt. This number has improved from $(236,484)in the same quarter
last year.
    "We have undergone major restructuring events throughout this past year
including management and personnel changes, consolidation of facilities,
system integration and new sales initiatives," stated Michael Beckley,
President and Chief Executive Officer of HydraLogic Systems Inc. "These
changes have increased operating efficiencies and have helped considerably in
creating profitable business units, which we have achieved even in the off
season of Q1. As further indication of the level of improvement, had we not
included the $70,800 foreign currency adjustment on our US $2M note, we would
have reported a Q1 EBITDA of $(38,530), being an improvement of $197,000
(84%), over the first quarter in 2008. Additionally, most of the severance and
restructuring cost, at the corporate level, ran their courses in Q1 and will
no longer be an expense going forward. The mosquito and odour control season
is now in full swing and we will be focusing on sales growth with attention to
profit for the balance of 2009," concluded Mr. Beckley.

    About HydraLogic Systems Inc.

    HydraLogic blends proprietary environmental formulations and manufactures
misting systems for product application that together serve the multi-billion
dollar mosquito and odour control sectors in the U.S., Canada and 20 other
countries. Through its Bug Defence (www.bugdefence.com) and HLS Ecolo
(www.hlsecolo.com) distribution and service businesses, the Company is a
leader in providing turn-key dealer and service platforms applicable to many
markets around the globe. HydraLogic Systems Inc. is listed for trading on the
TSX Venture Exchange - symbol: HLS.

    To receive Company press releases, please email jacqueline@chfir.com and
mention "HydraLogic News" on the subject line.

    Neither TSX Venture Exchange nor its Regulation Services Provider (as
    that term is defined in the policies of the TSX Venture Exchange) accepts
    responsibility for the adequacy or accuracy of this release.

    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.

    %SEDAR: 00020350E

For further information:

For further information: please visit www.hydralogic.com or contact:
HydraLogic Systems Inc., Michael Beckley, President & CEO, Tel: (416) 740-3900
ext. 400, Email: beckley@hydralogic.com; CHF Investor Relations, Jacqueline
Wagenaar, Account Manager, Tel: (416) 868-1079 ext. 289, Email:

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