FlagshipPDG Announces Third Quarter Results

PITTSBURGH, PA, December 12, 2008 – PDG Environmental, Inc. (dba FlagshipPDG) (OTC BB: PDGE), a leading provider of environmental remediation, disaster response and reconstruction services, today reported financial results for the third fiscal quarter and nine months ended October 31, 2008.

Revenues for the third quarter of fiscal 2009 were $28.1 million, up 5.6% from the $26.6 million reported in the third quarter of fiscal 2008. The increase was primarily due to an increase of $1.7 million in non-asbestos project related revenues as compared to the prior year quarter driven by emergency response revenues generated from the hurricanes in Louisiana and Texas in September. The results for the three months ended October 31, 2008, were impacted by negative contract adjustments of approximately $700,000 on two large asbestos abatement projects recently completed. The company reported a pre-tax profit of $705,000 and net after-tax profit of $342,000, or $0.02 per diluted share in the third quarter of fiscal 2009, compared with a net loss of $(1.0) million, or $(0.05) per diluted share in the third quarter of fiscal 2008. EBITDA (earnings before interest, taxes, depreciation and amortization) was a positive $1.7 million for the current quarter versus a negative EBITDA of $(221,000) for the comparable period in fiscal 2008. Other direct and SG&A costs decreased $740,000 from the third quarter of fiscal 2008 largely due to lower personnel and related costs as well as lower legal costs. In the third quarter of fiscal 2009, FlagshipPDG recorded non-cash accounting costs of $271,000 related to its July 2005 private placement as compared to $229,000 for the comparable period last year.

For the nine moths ended October 31, 2008 revenues were $69.1 million, a decrease of $5.9 million or 7.9% from the $75.0 million reported for the nine months ended October 31, 2007. The company reported a net after-tax loss of $(1.5) million, or $(0.07) per diluted share for the nine months ended October 31, 2008, compared with a net loss of $(181,000), or $(0.01) per diluted share for the nine months ended October 31, 2007. Earnings for the current nine-month period were adversely impacted by lower than anticipated revenues generated in the first quarter of fiscal 2009, the contract adjustments mentioned above, and an increase in bad debt expense of $550,000 largely driven by claim settlements in the second quarter of fiscal 2009. EBITDA was a positive $804,000 for the first nine months of fiscal 2009 versus a positive EBITDA of $2.8 million for the comparable period in fiscal 2008. Other direct and SG&A costs decreased $103,000 from the first nine months of fiscal 2008 due to lower personnel and related costs offset by increases in bad debt expense, marketing and re-branding costs, and non-cash stock option expense. For the nine months ended October 31, 2008, FlagshipPDG recorded non-cash accounting costs of $779,000 related to its July 2005 private placement as compared to $658,000 for the comparable period last year.

“Third quarter results were positively impacted by our response to the hurricanes in Louisiana and Texas but adversely impacted by contract adjustments on two large asbestos contracts recently completed. Excluding the impact of the contract adjustments, we would have achieved a field margin percentage at our expected levels of approximately 27%. With the emergency response work for the hurricanes complete, the reconstruction work has now begun and we anticipate this work continuing into early next year. At October 31, 2008, the backlog has decreased from previous quarter levels but still remains relatively strong at about $41.9 million. We have and will continue to cut our fixed overhead costs where appropriate as we continue to focus on bottom line profitability.” said John C. Regan, chairman and chief executive officer of FlagshipPDG.

Conference Call
FlagshipPDG will host a conference call on December 12, 2008 at 11:00 a.m. Eastern. During the call, John C. Regan, Chairman and Chief Executive Officer, and Nick Battaglia, Chief Financial Officer, will discuss the Company’s quarterly performance and financial results.

Conference Call Details
Date: Friday, December 12, 2008
Time: 11:00 a.m. (EST)
Dial-in Number: 1-800-762-8779
International Dial-in Number: 1-480-629-9041

It is recommended that participants phone-in approximately 5 to 10 minutes prior to the start of the 11:00 a.m. call. A telephonic replay of the conference call may be accessed approximately two hours after the call through December 19, 2008, by dialing 1-800-406-7325 or 1-303-590-3030 for international callers and entering the replay access code 3949986

The company makes use of EBITDA (earnings before interest, taxes, depreciation and amortization) as a financial measure which it believes is a useful performance indicator. EBITDA is not a recognized term under generally accepted accounting principles, or "GAAP," and should not be considered as an alternative to net income/(loss) or net cash provided by operating activities, which are GAAP measures. A reconciliation of EBITDA to net income/(loss) appears at the end of this release as actual results for the quarter.

About FlagshipPDG
FlagshipPDG, headquartered in Pittsburgh, PA, is a leading provider of specialty contracting services including asbestos abatement, mold remediation, emergency response, demolition and reconstruction to commercial, industrial and governmental clients nationwide. With over twenty years experience, FlagshipPDG has offices nationwide capable of responding to customer requirements coast to coast. For additional information, please visit http://www.FlagshipPDG.com.
Safe Harbor Statement under Private Securities Act of 1995: The statements contained in this release, which are not historical facts, may be deemed to contain forward-looking statements, including, but not limited to, deployment of new services, growth of customer base, and growth of service area, among other items. Actual results may differ materially from those anticipated in any forward-looking statement with regard to magnitude, timing or other factors. Deviation may result from risk and uncertainties, including, without limitation, the company's dependence on first parties, market conditions for the sale of services, availability of capital, operational risks on contracts, and other risks and uncertainties. The company disclaims any obligation to update information contained in any forward-looking statement.

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