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  Arrow 3 Media Release 17 October 2002

ESTec announces year end results for fiscal 2002

- A successful year of growth: ESTec introduces new Top Drive, diversifies operations with the addition of rental units and increases revenues by 55% -

ESTec Systems Corp. (CDNX: ESE, today announced financial results for its 2002 fiscal year, ended June 30, 2002. The Company has performed remarkably well, and has successfully achieved its primary 2002 goals of introducing its new IntegraLine Top Drive and diversifying its revenue sources.

This year was an outstanding year for ESTec, one that has set the stage for a breakthrough year in 2003 and well beyond," said Mr. Anthony Nelson, President and CEO of ESTec Systems. "Our founding division, Allan R. Nelson Engineering (1997) Inc., has continued to be profitable. In turn, this has enabled us to fund expansion of our engineering business, launch our IntegraLine 150iH Top Drive, and fund continuing research in the software division of ESTec Systems, Inc."

Concluded Mr. Nelson, "We are very pleased with our financial results and that we were able to deliver substantial shareholder value. While engineering will remain a core function of our business, our manufacturing division may soon supersede it at the center of our investments, developments, and marketing, and may well become the chief contributor of sales, income, and profitability for the Company. ESTec has a proven, diverse business model and we expect to continue to deliver significant growth next year."

Fiscal 2001/2002
Fiscal 2001/2002 revenues were $2.10 million, representing an increase of 55.2% over revenues of $1.35 million in fiscal 2000/2001. Increased revenues, coupled with the required manufacturing expenses associated with the launch of the 150iH Top Drive, reduced net earnings to ($88,500), or a loss of $(0.008) per share - a $130,900 decline from 2000 net earnings of $42,400, or US$0.004 per share.

Gross margin for the year ended June 30, 2002 was $1.39 million (66.3% margin), as compared to $1.24 million (91.6% margin) for the same period in 2000/2001.

Operational Highlights

Launch of the IntegraLine 150iH Top Drive. During the past year, the ESTec Oilfield division successfully introduced the IntegraLine 150iH Top Drive. The first unit was sold to Nabors Drilling, one of the largest drilling companies in the world, and went into service at the end of February 2002.

First Top Drive Rental Contract. Our second 150iH Top Drive was unveiled at the Calgary Oil Show in June, resulting in the Company's first rental contract. This Top Drive entered into service in Texas in August, and its revenue is expected to add significantly to the bottom line of next year's financial statements.

Financing Alternatives to Increase Manufacturing Capabilities. Management has explored, and is currently assessing, several financing alternatives that would enable the Company to increase the number of Top Drives in our rental fleet. This is desirable since a Top Drive rental is capable of generating enough income to recover cost of manufacturing within the first year. In the short term, we expect sales of Top Drives to exceed rentals. In the long term, however, the profitability of rentals promises to be higher than that of sales.

Expansion of Sales and Marketing Team. In June, ESTec Oilfield hired Gary Hanke as product line sales manager for the IntegraLine Top Drives. He successfully closed our first rental contract, and has generated significant interest in both unit purchases and rentals, which are expected to close over the coming months.

ESTec Systems Corp: 2001/2002 Fiscal Year End Results
Selected Financial Information

Twelve Months Ended
June 30, 2002
Twelve Months Ended
June 30, 2001
Direct Expenses
  Cost of Goods Sold
  Travel and Automotive
Total Direct Expenses
Gross Profit
Selling, General and Admin Expenses
Loss on Disposal of Property & Equip.
Earnings (Loss) before Income Taxes
Income Taxes
Net Earnings (Loss) for the Year
Basic & Diluted Earnings (Loss) per Share
Weighted Average # of Shares Outstanding
As at June 30, 2002
As at June 30, 2001
Total Assets
Total Liabilities
Shareholders' Equity

About ESTec Systems Corp.
ESTec Systems Corp. is an Edmonton-based public company with two operating subsidiaries: Allan R. Nelson Engineering (1997) Inc., which delivers mechanical and forensic engineering services, and ESTec Oilfield Inc., which designs and manufactures innovative oilfield equipment. ESTec Oilfield has successfully developed and launched the smallest Top Drive system in the world, specifically designed for double or extended single rigs. ESTec Systems trades on the TSX Venture Exchange, under the symbol ESE.

©2007 ESTec Systems Corporation. All rights reserved.
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