Mr. James Horvath reports

LONESTAR WEST ANNOUNCES Q2 2015 FINANCIAL RESULTS

Lonestar West Inc. has released the financial results for the three- and six-month periods ended June 30, 2016.

Highlights for the three months ended June 30, 2016, include:

• Revenues decreased by 0.2 per cent to $10,626,555 from $10,643,600 in the previous-year equivalent period.
• Gross margin (1) increased to 23.0 per cent from 18.7 per cent in the previous-year equivalent period.
• Normalized EBITDAC (earnings before interest, taxes, depreciation, amortization and stock-based compensation, excluding foreign exchange gains or losses, which are primarily related to the U.S.-dollar activities of the company) (2) increased 114 per cent to $1,252,592 from $584,432 in the previous-year equivalent period.
• Normalized EBITDAC (3) per basic share increased to four cents from two cents in the previous-year equivalent period.
• Loss before taxes was $415,931, a decrease of $257,811 in comparison with a loss before taxes of $673,742 in the previous-year equivalent period.
• Net loss for the period was $449,713, a decrease of $332,257, in comparison with a net loss of $781,970 in the previous-year equivalent period.

The company achieved normalized EBITDAC (2) of $1,252,592 for the quarter ended June 30, 2016, which is an increase from $584,432 for the prior-year equivalent period. The normalized EBITDAC margin was 11.8 per cent for the quarter ended June 30, 2016, as compared with 5.5 per cent for the prior-year comparable period. The increase in EBITDAC is due primarily to the reduction of operating expenses as revenues remained consistent.

Highlights for the six months ended June 30, 2016, include:

The company achieved normalized EBITDAC (2) of $2,161,745 for the six-month period ended June 30, 2016, which is a decrease from $2,827,139 for the prior-year equivalent period. The normalized EBITDAC margin was 9.6 per cent for the six-month period ended June 30, 2016, as compared with 11.8 per cent for the prior-year comparable period. The decrease in EBITDAC is due primarily to lower revenues in the first quarter of 2016 with only a marginal decrease in the operating costs as the cost savings implemented did not take full effect until the second quarter of 2016.

"The company is pleased with the growth in both the gross margin percentage and normalized EBITDAC, considering the ongoing depressed commodity prices in the second quarter of fiscal 2016," commented James Horvath, president and chief executive officer of Lonestar. "Our diversification efforts have been paying off, and we will continue to focus on expanding into underserviced areas."

The company is continuing to focus on cost control while maintaining superior services to its customer base. In addition, the company is continually assessing the location of its fleet and redeploys assets to areas less impacted by the energy markets.

(1) Gross margin is calculated as gross profit as a percentage of revenues.

(2) This news release contains the term normalized EBITDAC as presented and does not have any standardized meaning prescribed by international financial reporting standards and therefore it may not be comparable with the calculation of similar measures for other entities. Management uses normalized EBITDAC to analyze the operating performance of the business. Normalized EBITDAC as presented is not intended to represent cash provided by operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. It is defined as earnings before interest, taxes, depreciation, amortization and stock-based compensation, excluding foreign exchange gains or losses, which are primarily related to the U.S.-dollar activities of the company and can vary significantly depending on exchange rate fluctuations, which are beyond the control of the company.

(3) Normalized EBITDAC per share is calculated as normalized EBITDAC divided by the weighted-average shares outstanding for the period.

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