Q3 2009 Highlights:

Gross margin of CAD989,000, 2% greater than CAD966,000 in Q3 2008;

Excluding non-core business of wholly-owned subsidiary, A&A Anderson Tank Services Ltd. (A&A) sold in October 2008, comparative revenue was 2% less than Q3 2008;

Paid off the asset-based revolving loan, strengthening the company’s balance sheet;

Established a new line of credit with the Royal Bank of Canada.

The net loss for the current quarter reflects a period of transition as the company adapts to a lower revenue base following the sale of A&A’s non-core assets and moves towards lower recycling costs through on-farm anaerobic digestion said Charles Buehler, chairman and chief executive officer of Organic Resource.

The decrease in revenue was due to the sale of A&A’s non-core assets in October 2008. On a comparative basis excluding the non-core business, revenue for the quarter was 2% less than the same quarter last year.

Total gross margin was CAD989,000, an increase of 2% or CAD23,000 from CAD966,000 last year. As a percentage of revenue, gross margin was 34% for the quarter compared to 25% for the same quarter last year. During the quarter, the company continued to use disposal sites in Ontario and New York that were sourced earlier in the year, which contributed to higher margins in the Ontario market.

Cash flows from operating activities were CAD77,000 for the three-months ended March 31, 2009, compared to CAD510,000 for the same quarter last year. The higher cash flows last year were largely a result of the combined effect of a decrease in accounts receivable and an increase in accounts payable.

During the quarter:

The company terminated its relationship with Textron Financial Canada Ltd., paid off the balance owing on its revolving loan and established a new line of credit with the Royal Bank of Canada. The company has not drawn on the new credit facility.

The company was successful in obtaining new grease trap customer accounts that is expected to generate annual revenues of between CAD1 and CAD1.5 million.

The Ontario government announced the intent to pass the Green Energy Act in the legislature by midyear. This act positions Ontario as the North American leader in renewable energy policy. If passed, it will stimulate Ontario anaerobic digestion development.

Nine-month results:

Net income before taxes for the nine-month period ended March 31, 2009 was CAD1,700,000, an increase of CAD1,610,000 from CAD90,000 for the same period last year. The increase was due to the gain of CAD1,708,000 on the sale of A&A’s non-core assets. This gain was partially offset by about CAD250,000 in one-time costs related to the sale and rebranding of Organic Resource’s remaining assets in British Columbia from A&A to the company, as well as the relocation to a new Vancouver facility.

Total revenue for the current nine-month period was CAD10,213,000, a decrease of CAD1,138,000 compared to CAD11,351,000 for the same period last year. Total gross margin for the nine-month period ended March 31, 2009 was CAD3,544,000, an increase of CAD116,000 compared to CAD3,428,000 for the same period last year. Gross margin as a percentage of revenue was 35% for the current period compared to 30% during the same nine-month period last year.

Organic Resource is a Canada-based provider of vacuum truck services for the collection, processing and recycling of food-related organic residuals.