Not a good day for Poseidon...

 

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MarketwirePoseidon Concepts Corp.December 27, 2012 - 09:29:00 AMPoseidon Concepts-Forms Special Committee; Suspends Future Dividends andAnnounces Board and Managerial ChangesCALGARY, ALBERTA--(Marketwire - Dec. 27, 2012) - Poseidon Concepts Corp.(TSX:PSN) (the "Company" or "Poseidon") has established a Special Committee ofthe Board of Directors to review and address various issues arising from therecent write-off of certain accounts receivable and the evolving business planof the Company. The Special Committee's mandate includes the review andassessment of the Company's business processes and controls. In addition, theSpecial Committee will make recommendations to the Board of Directors ofPoseidon regarding further changes including managerial changes that willstrengthen the operations and finance functions of the Company. In consideration of the review being conducted by the Special Committee, theBoard of Directors has determined to suspend the payment of undeclareddividends effective January 16, 2013 until such time as the Special Committeedelivers its report to the Board. Although the Company hopes that dividendpayments will resume upon completion of the Special Committee review, there isno assurance about the resumption of dividend payments, or that payments, ifresumed, will be consistent with historical payments. The Board of Directorswill utilize the results of the Special Committee's review to prioritize theuse of the Company's future cash flows from operations towards future dividendpayments, reduction in bank indebtedness or future capital expenditures. TheBoard of Directors is currently reviewing the previously declared dividendpayable January 15th, 2013 to shareholders of record on December 31st, 2012. The Company has been diligently addressing its accounts receivable in recentweeks and is actively pursuing collections, including commencing formalcollection processes in appropriate circumstances. While a final number cannotyet be determined, the Company may need to make additional write downs ofaccounts receivable in future periods and such write downs may be significant.In accordance with previously stated policy, the Company will update guidanceas appropriate however in the event that significant additional write downs ofaccounts receivable are necessary previously provided guidance will benegatively affected. In recent months, exploration and development activity has slowed considerablydue to weakness in commodity prices and uncertainty in the financial markets. As a result, some oilfield service companies, including Poseidon, are seeingreductions in realized pricing and contraction in earnings margins. In theface of reduced oilfield demand and increased market competition, alloperational and cost components of Poseidon's business are being reviewed toensure the company's profitability. Although the business environment hasremained weak in the fourth quarter, Poseidon remains confident in the qualityof its products and in the longer term growth potential in the industry. The Company also announces that effective immediately Mr. A. Scott Dawson willassume the role of Interim President and Chief Executive Officer, Mr. Michalukwill assume the role of Interim Chief Financial Officer and Mr. Wiebe willassume the role of Chief Technology Officer. Messrs. James McKee, LyleMichaluk and Cliff Wiebe have resigned from the Board of Directors. This news release contains certain forward-looking statements and otherinformation (collectively "forward-looking information") about our currentexpectations, estimates and projections. Forward-looking information is oftenidentified by words such as "anticipate", "intend", "believe", "expect","plan", "forecast", "target", "could", "focus", "vision", "goal", "proposed","scheduled", "milestone", "outlook", "potential", "may", "looking forward to",or similar expressions and includes, but is not necessarily limited to,suggestions of future outcomes, including statements about the SpecialCommittee's review and the nature of its recommendations, Poseidon's dividendpolicy and the payment of future dividends, Poseidon's review of its accountsreceivable and the pursuit of collections, the likelihood and amount of afuture write-down of accounts receivable, results of Poseidon's operations.Readers are cautioned not to place undue reliance on forward-lookinginformation as our actual results may differ materially from those expressedor implied in the forward-looking information. Developing forward-lookinginformation involves reliance on a number of assumptions and consideration ofcertain risks and uncertainties, some of which are specific to Poseidon andothers that apply to the industry generally. The factors or assumptions on which the forward-looking information is basedinclude without limitation: the outcome of litigation involving the Companyand assumptions inherent in our current guidance, including: foreign exchangeand interest rates; our projected capital investment levels; the flexibilityof capital spending plans and the associated source of funding; our ability togenerate sufficient cash flow from operations to meet our current and futureobligations; our expectations of the demand for tank systems and other productofferings and the general activity of the oil and gas industry; the ability ofPoseidon to continue to pay a dividend; and other risks and uncertaintiesdescribed from time to time in the filings we make with securities regulatoryauthorities. Actual results could differ materially from those currentlyanticipated due to a number of factors, risks and uncertainties. Such risksand uncertainties include, without limitation, risks associated with theoutcome of litigation involving the company, risks associated with dependenceon manufacturers of the Poseidon tank systems; operating risk liability;demand for Poseidon's tank systems; levels of competition in the fracturingfluid storage industry; the ability of Poseidon to attract and retainclientele; the impact of changes in marketing initiatives; the ability ofPoseidon to fund its ongoing capital requirements; delays resulting from orinability to obtain required regulatory approvals; the impact of generaleconomic conditions in Canada, the United States and globally; industryconditions; changes in laws and regulations (including the adoption of newenvironmental laws and regulations) and changes in how they are interpretedand enforced; the lack of availability of qualified personnel or management;fluctuations in foreign exchange or interest rates; and stock marketvolatility. Readers are cautioned that the foregoing list of factors is notexhaustive. All subsequent forward-looking statements, whether written ororal, attributed to Poseidon or persons acting on its behalf are expresslyqualified in their entirety by these cautionary statements. Additionalinformation on the foregoing risks and other factors that could affectPoseidon's operations and financial results are on file with Canadiansecurities regulatory authorities and may be accessed through the SEDARwebsite (www.sedar.com). Furthermore, the forward-looking statements containedin this news release are made as at the date of this news release and Poseidondoes not undertake any obligation to update publicly or to revise any of theincluded forward-looking statements, whether as a result of new informationfuture events or otherwise, except as may be required by applicable securitieslaws.FOR FURTHER INFORMATION PLEASE CONTACT: NATIONAL Public Relations1-800-842-4922Poseidon Concepts Corp.A. Scott DawsonInterim President and Chief Executive Officer(403) 206-4999