LONESTAR REPORTS 2010 FOURTH QUARTER AND YEAREND FINANCIAL RESULTS

SYLVAN LAKE, AB, Oct. 19 /CNW/ - Lonestar West Inc. (TSX(V):LSI) today announced its business performance for the fourth quarter of fiscal 2010.

Highlights:

    
    -   generated revenue of $6.3 million in the year ended June 30, 2010, an
        increase of 14% over the comparable prior year period, and
    -   realized positive EBITDAC of $488,000 during the year ended June 30,
        2010, as compared to $268,000 in the prior year.
    

President and CEO James Horvath commented, "Although we showed revenue and EBITDAC growth in 2010 we need to improve the utilization of our assets to achieve our profitable growth plans. Revenue in the final quarter of 2010 was below expectations but we have seen increases subsequent to yearend and are optimistic that future results will be improved. We have grown our customer base and continue to be a favoured supplier to our customers. We are confident that our focus on customer service will provide us the basis to keep the equipment working and move us towards our goal of becoming a major national competitor in the HVAC services business. We have the employees, equipment and management team that can contribute to achieving our growth plans."

CONSOLIDATED RESULTS

Financial Results (000's except per share amounts)

    
    -------------------------------------------------------------------------
                          Three month    Two month              Eleven month
                               period       period                    period
                                ended        ended   Year ended        ended
                              June 30,     June 30,     June 30,     June 30,
                                 2010         2009         2010         2009
    -------------------------------------------------------------------------
    Revenue                   $   778      $ 1,221      $ 6,334      $ 5,535
    -------------------------------------------------------------------------
    Net earnings (loss)          (426)        (200)        (613)        (551)
    -------------------------------------------------------------------------
    Per share, basic            (0.03)      (0.015)       (0.05)       (0.05)
    -------------------------------------------------------------------------
    EBITDAC(1)                   (139)         (10)         488          474
    -------------------------------------------------------------------------
    (1) EBITDAC means earnings before interest, taxes, depreciation and
        amortization and stock based compensation and is equal to earnings
        before income taxes plus interest on long-term debt plus amortization
        plus stock based compensation. EBITDAC is not a recognized measure
        under Canadian generally accepted accounting principles ("GAAP").
        Management believes that in addition to net earnings, EBITDAC is a
        useful supplemental measure as it provides an indication of the
        results generated by the Company's primary business activities prior
        to consideration of how those activities are financed, amortized or
        how the results are taxed in various jurisdictions as well as the
        cash generated by the Company's primary business activities. Readers
        should be cautioned, however, that EBITDAC should not be construed as
        an alternative to net earnings determined in accordance with GAAP as
        an indicator of Lonestar's performance. Lonestar's method of
        calculating EBITDAC may differ from other organizations and,
        accordingly, EBITDAC may not be comparable to measures used by other
        organizations.
    

The complete MD&A and annual audited consolidated financial statements for the year ended June 30, 2010 are available on SEDAR at www.sedar.com.

Business Description

Lonestar West Inc. currently operates a fleet of HVAC and vacuum trucks throughout Western Canada from its base in Sylvan Lake, Alberta. It is focussed on profitably growing its HVAC services to become a major national competitor in the market area.

Lonestar's shares trade on the TSX(Venture) Exchange under the symbol LSI.

Certain information and statements contained herein constitute forward-looking information, including the anticipated costs associated with the purchase of capital equipment, expectations concerning the nature and timing of growth within the business operated by Lonestar, expectations respecting the competitive position of such business, expectations concerning the financing of future business activities and statements as to future economic and operating conditions. Readers should review the cautionary statement respecting forward-looking information that appears in Lonestar's complete MD&A.

%SEDAR: 00027328E

For further information: James Horvath, President and CEO, [phone]