Mr. Jason Theiss reports

BRI-CHEM ANNOUNCES FIRST QUARTER 2017 FINANCIAL RESULTS

Bri-Chem Corp. has released its first quarter financial results.

           SELECTED FINANCIAL AND OPERATING INFORMATION
                           (in $000s
                    except per-share amounts)

                                         For the three months ended March 31,
                                                     2017               2016

Revenue                                    $       33,990      $      14,821
Operating income (loss)                             1,848             (1,211)
EBITDA                                              2,036             (1,394)
EBITDA as a percentage of revenue                       6%               (9%)
Net earnings (loss)                                   681             (2,098)
                                                 --------           --------
Per-share data (diluted)
EBITDA                                     $         0.09      $       (0.06)
Net earnings (loss)                        $         0.03      $       (0.09)

First quarter highlights

Key first quarter 2017 highlights include:

• Bri-Chem generated consolidated revenue of $33.9-million, an increase of 129 per cent from the first quarter in 2016, resulting primarily from higher business activity levels throughout North America,
• Revenue increased by 200 per cent and 68 per cent in the Canadian fluid distribution and blending divisions, respectively, and the USA fluids distribution division was up 148 per cent over the first quarter of 2016.
• Operating income was $1.8-million for the three months ended March 31, 2017, compared with negative $1.2-million in first quarter 2016, representing a 253-per-cent increase.
• EBITDA (earnings before interest, taxes, depreciation and amortization) was $2.0-million versus negative $1.4-million in the comparable period in 2016. This 246-per-cent increase is mainly due as a result of significantly improved drilling activity throughout the company's business segments in North America.
• Bri-Chem reported net income of $681,000 or three cents per share, diluted, compared with a net loss of $2.1-million or nine-cent loss per share, diluted, in 2016, representing a 132-per-cent increase.
• Working capital, as at March 31, 2017, was $15.0-million compared with $12.7-million at Dec. 31, 2016. The company's current ratio (defined as current assets divided by current liabilities) was 1.37 to 1 compared with 1.33 to 1 as at Dec. 31, 2016.
• The company reached an agreement with its lenders to increase its asset-based loan facility by $5-million in credit available under its ABL facility, and no further amendments were made to the subdebt loan, which matures effective November, 2017.

Summary for the three months ended March 31, 2017

During the first quarter of 2017, drilling activity levels continued to show signs of recovery throughout North America as Canada experienced 252 average active rigs during the first quarter of 2017, an increase of 65 per cent over the prior-year quarter, while the active U.S. rig count increased 33 per cent over the same period with 739 active rigs operating in first quarter 2017. Bri-Chem's first quarter 2017 consolidated revenues from its North American oil and gas drilling fluid distribution, blending, and packaging businesses were $33.9-million compared with $14.8-million in the same prior period in 2016. This comparable quarter revenue increase is a direct result of an increase in oil and gas drilling activity throughout North America and a delay to the start of spring breakup in Western Canada.

Bri-Chem's Canadian drilling fluid distribution division generated sales of $16-million for the three months ended March 31, 2017, compared with sales of $5.4-million over the comparable period in 2016. First quarter 2017 sales were strengthened by the continued increase in drilling activity, with a significant recovery in winter drilling activity. The number of wells drilled in Western Canada for the three-month period ended March 31, 2017, was 2,264, representing an increase of 111 per cent over the comparable quarter in 2016. Bri-Chem's U.S. drilling fluid distribution division generated sales of $12.2-million for the three-month period ended March 31, 2017, compared with revenues of $4.9-million in the comparable period of 2016, representing an increase of 148 per cent.

Bri-Chem's Canadian drilling fluids blending and packaging division generated sales of $5.2-million for the quarter ended March 31, 2017, compared with the prior-year quarter sales of $3.1-million, representing a 68-per-cent increase quarter over quarter. This increase is directly related to higher customer demand for blending services as a result of the increase in drilling activity throughout quarter. Bri-Chem's U.S. fluid blending and packaging division, generated sales of $586,145 for the three-month period ended March 31, 2017, compared with $1.5-million for the comparable period in 2016.

Operating income this quarter was $1.8-million compared with an operating loss of $1.2-million in the first quarter of 2016. Operating results this quarter were positively impacted by the increased activity levels throughout the company's North American business segments. EBITDA was $2.0-million for the three months ended March 31, 2017, compared with negative $1.4-million in the same comparable prior-year period, an increase of $3.4-million quarter over quarter or 246 per cent. The first quarter EBITDA as a percentage of sales was 6 per cent compared with negative 9 per cent from the prior-year quarter. The company had net earnings of $680,762 for the quarter ended March 31, 2017, compared with net loss of $2.1-million in the same prior-year period. The first quarter earnings as a percentage of sales were 2 per cent compared with negative 14 per cent from the prior-year quarter.

Outlook

Northern American oil and gas drilling activity levels, during the first quarter of 2017, continued to improve from fourth quarter 2016, and the company expects activity levels to remain at or near current levels for the rest of 2017. PSAC has revised its forecast upward now forecasting 6,660 wells to be drilled in Western Canada for 2017, representing a 64-per-cent forecasted increase over 2016. This increase is anticipated to drive a more consistent demand for the company's drilling fluid products for third quarter and fourth quarter of 2017. The U.S. drilling market is also continuing to see improvements, as the active average rigs operating in the United States have increased to 877 from approximately 400 in May, 2016. As a result, the company is forecasting stronger activity in major U.S. resource plays it services and looks to take advantage of its low-cost infrastructure as demand continues to improve.

Bri-Chem has been pro-active in response to the recent increase in North American business activity and has managed to supply and service its customers during this recent surge in demand for oil field chemicals. As activity levels continue to improve over the short to medium term, the company will seek new growth opportunities while remaining committed to providing superior customer service while having sufficient inventory levels to meet the demand of its customers through its unmatched North American warehouse distribution network.

About Bri-Chem Corp.

Bri-Chem has established itself, through a combination of strategic acquisitions and organic growth, as the North American industry leader for wholesale distribution and blending of oil field drilling, completion, stimulation and production chemical fluids. It sells, blends, packages and distributes a full range of drilling fluid products from 27 strategically located warehouses throughout Canada and the United States.