FlagshipPDG Announces Second Quarter Results for Period Ended July 31, 2009

PITTSBURGH, PA, September 11, 2009 – 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 second fiscal quarter and six months ended July 31, 2009.

Revenues for the second quarter of fiscal 2010 were $12.8 million, down 45.0% from the $23.2 million reported in the second quarter of fiscal 2009. During the current quarter, an outstanding contract claim from a project completed in a prior year was settled for $900,000 resulting in a cash generating event of $900,000 but a negative adjustment to revenue of $800,000. Field margin, which is defined as the difference between contract revenues and direct field costs, increased to 25.7% of revenue for the current quarter, from 23.7% in the prior year fiscal quarter. Adjusting for the negative impact of the claim settlement on revenue, the field margin for the current quarter would have been 30.1%. Other direct and SG&A costs decreased $1.9 million from the second quarter of fiscal 2009 largely as a result of ongoing cost cutting measures initiated in the third quarter of fiscal 2009. The Company reported a net loss of $(1.3) million, or $(0.06) per diluted share in the second quarter of fiscal 2010, compared with a net loss of $(0.7) million, or $(0.04) per diluted share in the second quarter of fiscal 2009. EBITDA (earnings before interest, taxes, depreciation and amortization) was a negative $(465,000) for the current quarter versus a negative EBITDA of $(104,000) for the comparable period in fiscal 2009. Adjusting for the claim settlement, the net loss for the current quarter would have been ($0.7) million and EBITDA would have been a positive $135,000. In the second quarter of fiscal 2010, FlagshipPDG recorded non-cash accounting costs of $187,000 related to its July 2005 private placement as compared to $260,000 for the comparable period last year.

For the six months ended July 31, 2009 revenues were $25.4 million, a decrease of $15.5 million or 38.0% from the $40.9 million reported for the six months ended July 31, 2008. Field margins were $7.0 million or 27.4% of revenues in fiscal 2010 as compared to $10.2 million or 24.9% in fiscal 2009. Adjusting for the negative impact of the claim settlement on revenue, the field margin for the current six month period would have been 29.7%. Other direct and SG&A costs decreased $3.1 million from the first six months of fiscal 2009 due to lower personnel & related costs and lower marketing and bad debt expense. The company reported a net after-tax loss of $(2.7) million, or $(0.13) per diluted share for the six months ended July 31, 2009, compared with a net after-tax loss of $(1.9) million, or $(0.09) per diluted share for the six months ended July 31, 2008. EBITDA (earnings before interest, taxes, depreciation and amortization) was a negative $(1.0) million for the first six months of fiscal 2010 versus a negative EBITDA of $(0.9) million for the comparable period in fiscal 2009. Adjusting for the claim settlement, the net loss for the current six month period would have been ($2.1) million and EBITDA would have been a negative ($0.4) million. For the six months ended July 31, 2009 and 2008, FlagshipPDG recorded non-cash accounting costs of $0.5 million related to its July 2005 private placement.

“Our results continue to be greatly impacted by the overall national economic conditions. In addition, settlement of one of our outstanding contract claims adversely impacted second quarter results but generated nearly $1 million of cash. In the last half of fiscal 2009, we took necessary steps to begin rationalizing our fixed costs to achievable revenue levels resulting in a decrease to our overhead cost of approximately $1.9 million for the second quarter and over $3 million for the first six months of the current fiscal year. In addition, we have improved our field margins from previous years and are performing projects in a very efficient manner. We will continue to right size our cost infrastructure to realistic revenue levels for future quarters.” said John C. Regan, chairman and chief executive officer of FlagshipPDG.

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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