Kelso Technologies Inc.: Financial Results for the Three Months Ended March 31, 2013

VANCOUVER, BRITISH COLUMBIA and LISLE, ILLINOIS--(Marketwired - May 28, 2013) - Kelso Technologies Inc. (the "Company" or "Kelso") (TSX VENTURE:KLS)(OTCQX:KEOSF) reports that it has released its first quarter financial statements covering the three month period ended March 31, 2013. This is the first quarter subsequent to the fiscal year end change to December 31. In accordance with year end transition rules the March 31, 2013 results have been compared to the three months ended February 29, 2012 where applicable. All amounts are expressed in United States dollars.

HIGHLIGHTS OF THE THREE MONTHS ENDED MARCH 31, 2013

• Revenue for the three months ended March 31, 2013 reached $2,014,062 compared to the three months ended February 29, 2012 of $244,380.
  
  
• Positive cash flow derived from operations was $103,381 for the three months ended March 31, 2013.
  
  
• Reported net income for the three months ended March 31, 2013 was $79,972 compared to a loss of $290,856 for the three months ended February 29, 2012.
  
  
• Reported net income of $79,972 included items not involving cash for amortization of $19,153 and recognition of share based payments (Black Scholes option pricing model) in the amount of $4,256 which estimates the dilutive effect of incentive stock options granted during the period and vesting from the prior year.
  
  
• Business development objectives, pre-sales strategic costs and financial results are in line with management's budgets and expectations for the first quarter.
  
  
• Average gross profit on sales was 33.7% for the three months ended March 31, 2013.
  
  
• Cash on deposit at March 31, 2013 was $1,676,450.
  
  
• Working capital at March 31, 2013 was $3,637,144.
  
  
• New equity capital of $63,000 was received during the three months ended March 31, 2013.
  
  
• Company remains free of interest-bearing long-term debt commitments.
  
  
• Net tangible assets grew to $4,183,668 at March 31, 2013 up from $4,036,440 at December 31, 2012.
  
  

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2013 the Company had cash on deposit in the amount of $1,676,450; accounts receivable of $791,476; HST receivable of $33,405; prepaid expenses of $67,733 and inventory of $1,777,048 compared to cash on deposit in the amount of $1,421,053; accounts receivable of $1,016,129; HST receivable of $39,649; prepaid expenses of $88,506 and inventory of $1,188,467 at December 31, 2012.

The working capital position of the Company at March 31, 2013 was $3,637,144 compared to a working capital position of $3,470,762 which included $12,247 due to related parties at December 31, 2012.

OUTLOOK

Considerable progress has been made on our business development plans that were first introduced in April 2010. Under this strategic plan we reached the key milestone of profitability from operations over the four month period ended December 31, 2012 and this earnings trend continued during the three months ended March 31, 2013. Sales momentum continues to build and we expect our financial performance to improve quarter-over-quarter throughout 2013.

Key to our success is that Kelso has proven to be a reliable high quality railroad equipment supplier successfully gaining the confidence and approval of our many stakeholders. Reported net income reflects the positive financial impact of our OEM customers' willingness to adopt our products in much larger numbers.

Our priority is to continue to build the quality of our brand and sales in railroad applications and leverage this reputation into other transportation segments. Our sales growth will be based on our continuing ability to create and reliably deliver a wide range of "best available technology" products that address the demanding design criteria that our HAZMAT customers require.

About Kelso Technologies

Kelso is a railroad equipment supplier that produces and sells proprietary tank car equipment used in the safe loading, unloading and containment of hazardous materials during transport. Products are specifically designed to provide economic and operational advantages while reducing the potential effects of human error and environmental harm during the transport of hazardous materials.

For a more complete business and financial profile of the Company, the financials statements and management discussion and analysis can be viewed in their entirety on the Company's website at www.kelsotech.com or www.sedar.com.

On behalf of the Board of Directors,

James R. Bond, CEO and President

Legal Notice Regarding Forward-Looking Statements: This news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking statements are indicated expectations or intentions. Forward-looking statements in this news release include that we are very confident that we have gained the confidence, approval and willingness of our customers to adopt our products and this sales growth trend will continue in 2013. The Company's products involve detailed proprietary and engineering knowledge and specific customer adoption criteria, hence factors that could cause actual results to be materially different include that we may be unsuccessful in raising any additional capital needs that may arise; we may not have sufficient capital to develop, produce and deliver new orders; product development may face unexpected delays; orders that are placed may be cancelled; delivery of orders may be rescheduled; product may not perform as well as expected; markets may not develop as quickly as anticipated or at all; and operations may run into permit, labor or other problems. Further, we are reliant on certain key employees who may leave the Company and we may be unable to protect or defend our intellectual property. Investors are cautioned against placing undue reliance on forward-looking statements. We assume no responsibility to update these forward looking statements except to the extent required by law.