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Message: NEWS - EcoMax Announces Q1 Results

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NEWS - EcoMax Announces Q1 Results

posted on Jun 04, 07 05:35AM
CALGARY, ALBERTA, Jun 4, 2007 -- EcoMax Energy Services Ltd. (TSX VENTURE: EES) ("EcoMax") (http://www.ecomax.ca) announces results for the quarter ended March 31, 2007.

EcoMax reported quarterly sales of $3,182,000, down 10% from the record sales of $3,544,000 in the 1st quarter of 2006. Sales decreased due to lower sales of the EcoMax Pump and new valves. The loss for the quarter of $116,000 ($0.005 per share) compares to last year's record Q1 earnings of $127,000 ($0.005 per share). Gross margin of 23% was down slightly from 25% in the 1st quarter of 2006 due to lower sales of the EcoMax Pump.

In reviewing the Company's performance, Mark Hopkins, the Company's CEO, noted:

"We continue to be pleased with the performance of the Company's base business (valve and BOP sales and service) and, although this current decrease in oilfield construction has slowed the growth of the valve part of this business, we see continued opportunities to grow, particularly as its relates to blowout preventers (BOP) and related products and services.

Base business sales for the 1st quarter decreased 10% to $3.2 million, largely due to a decrease in the sales of project-related valves and the performance of the Calgary shop. As a result, earnings for the base business decreased to $180,000 in 2007 from $348,000 in 2006. The Company expects activity in its base business to increase in the 2nd quarter as increases in maintenance and certification work offset the expected slow recovery in project activity. The Company continues to enjoy a backlog of BOP sales of over $3 million, which should help continue this strong performance.

The Company sold 6 EcoMax Pumps in the 1st quarter of 2007 compared to 18 in the same period of 2006. This resulted in the Pump division losing $261,000 for the quarter compared to a loss of $186,000 in 2006. We continue to believe in the benefits and reliability of the EcoMax Pump and we believe that the current regulatory environment (the Alberta government's Bill 3 and the Alberta Energy and Utilities Board Directive 060) creates the most positive marketplace yet for our technology.

Although we are continuing to invest in the sales and marketing of the Pump and believe that its proven field record and the current environmental climate provide a good base for growing sales, we are actively pursuing options that will allow us to benefit from the expected future success of the Pump, while reducing the risk to the Company.

Combining the base business and the Pump performance, EcoMax recorded sales of $3,182,000, down from $3,544,000 in the 1st quarter of 2006. The Q1 loss of $116,000 ($0.005 per share) compares to a 1st quarter profit of $127,000 in the 1st quarter of 2006. The earnings decrease was primarily a result of lower sales, higher expenses for non-cash stock-base compensation and increased amortization of deferred development costs of the Pump.

Our focus in the coming months is on opening a new BOP facility in Red Deer and expanding the facility in Leduc, finding alternate opportunities for exploiting the EcoMax Pump and rationalizing the Company's Calgary operation.

We are very optimistic about the remainder of this year and the future. I would like to thank our shareholders for their continued support and look forward to significant improvements in EcoMax's results."

The Company reclassified $390,000 of its bank debt from long-term to current as it was not in compliance with its current ratio covenant at the end of the 1st quarter of 2007. Without this reclassification, working capital would have increased to $815,000 at March 31, 2007 compared to $670,000 at March 31, 2006.

To review the complete financials, please go to SEDAR's web-site at www.sedar.com.

About EcoMax Energy Services Ltd.:

EcoMax Energy Services Ltd. is an oilfield services company whose product offering includes BOP and valve sales and service solutions to the oil and gas and other industries in Western Canada and the patented EcoMax Chemical Pump.

Corporate Inquiries
EcoMax Energy Services Ltd.
Mark Hopkins
Email: mhopkins@ecomax.ca
Website: http://www.ecomax.ca

Investor Relations
AGORACOM Investor Relations
Email: ees@Agoracom.com
Website: http://www.agoracom.com/IR/EcoMax

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