Mr. Roger Woeller reports

BLUMETRIC POSTS PROFITABLE SECOND QUARTER

Blumetric Environmental Inc. is releasing its unaudited results for the second quarter of fiscal 2015, which ended March 31, 2015.

Financial highlights

Revenues rose to $7.8-million in the second quarter of fiscal 2015, from $6.6-million in the same quarter of fiscal 2014. In the six months, revenues rose to $15.6-million, from $14.2-million in the same period of the previous year. Gross margins improved to 20 per cent from 14 per cent in the previous period. In the six-month period, gross margins grew to 21 per cent, from 18 per cent in the previous year. Sales, general and administrative (SGA) expenses continued to reduce to $1.1-million, from $1.8-million in the quarter and to $2.6-million, from $3.3-million in the six-month period. EBITDA (a non-IFRS (international financial reporting standards) measure of net income before interest expense, income taxes, depreciation and amortization) rose significantly to $644,000 and $1.2-million, respectively, for the three- and six-month periods ended March 31, 2015, compared with the same periods in the previous year. Net income increased to $246,000 in the second quarter of fiscal 2015, from a loss of $985,000 in the same quarter of fiscal 2014. In the six months, net income increased to $360,000, from a loss of $967,000 in the previous year.

"Blumetric delivered a solid performance in the second quarter, a significant improvement over last year," said Roger Woeller, chief executive officer of Blumetric Environmental. "This can be attributed to focus on our strategic plan, and excellent execution by management and staff. The professional services group improved its margins, and the water systems group contributed substantially to both revenue and profit during this quarter. Historically, the second quarter has been the slowest of our year, usually running at a loss. Both groups will aggressively pursue the new opportunities we have developed to increase revenue while supporting continuous improvement."

Highlights of the quarter

The new strategic business development team is putting intensified focus on revenue growth within the company's defined target areas through cross-group sales opportunities and initiatives.

Professional services group:

• Profits were higher on lower revenues;
• Improved project management, careful cost containment and aggressive pursuit of remote project work resulted in an increase of gross margin;
• Leveraged strong existing client relationships to build continuing business and expand service offerings, especially in geomatics, hydrology and the Canadian North.

Water systems group:

• Posted increases in specialized design-build waste water treatment solutions in the mining and development sectors;
• Continued to strengthen sales rep network in the Americas;
• First full-scale new combined membrane bioreactor (Cobra) signed for a food processing client in Central America;
• Continued to streamline operations and production functions.

Outlook

The company's focus remains on building revenues and improving margins in tandem, while tightly managing overhead. The company is targeting organic revenue growth, as well as partnering and co-venturing with technology suppliers in related fields and sectors.

The professional services group will work to maintain and build margins in new and continuing projects, and sees its growth coming from the strongly emerging areas of geomatics, UAVs (drones) and hydrology. The group will continue to emphasize initiatives in the Canadian North, given its technical excellence in that difficult environment.

Water systems will continue to support its existing military business while developing its design-build side by providing unique solutions to industrial problems.

                             FINANCIAL SUMMARY   
   (in thousands of dollars, except per-share amounts and as indicated)

                                 Three months ended       Six months ended
                                           March 31,              March 31,
                                    2015       2014        2015       2014

Revenue                         $  7,781   $  6,618    $ 15,561   $ 14,243
Cost of sales                      6,197      5,675      12,252     11,671
Gross margin                       1,584        943       3,309      2,573
Gross margin                          20%        14%         21%        18%
Operating expenses                 1,140      1,790       2,576      3,271
EBITDA                               644       (638)      1,176       (280)
Adjusted EBITDA                      477       (689)      1,033       (212)
Net income (loss)                    246       (985)        360       (967)
Net gain (loss) per share, 
basic                           $   0.01   $  (0.04)   $   0.01   $  (0.04)     
Net gain (loss) per share, 
diluted                         $   0.01   $  (0.04)   $   0.01   $  (0.04)     

We seek Safe Harbor.