08/22/2006

Clearford Announces Second Quarter Profit, Positive Cash Flow on Revenues of over $7.7 Million

Ottawa, Ontario – (August 22, 2006) – Clearford Industries Inc. (TSX-V: CLI) today announced financial results for the second quarter of fiscal year 2006, which ended June 30, 2006 (all figures in Canadian dollars and in accordance with Canadian GAAP). This is the Company's first profitable quarter and also the first quarter with positive cash flow from operations.

Revenue for the quarter was $7,736,000 as compared to $1,410,000 of revenue for the first quarter of 2006 and no revenue for the same period of the prior year. Gross margin was $4,279,000 as compared to $310,000 for the first quarter of 2006 and zero gross margin for the same period of the prior year. Operating income for the quarter increased to $1,024,000 as compared to an operating loss of $1,567,000 for the first quarter of 2006 and an operating loss of $319,000 for the same period of the prior year. Net income for the second quarter was $57,000 or $0.00 per share as compared to a net loss of $2,213,000 or ($0.09) per share for the first quarter of 2006 and a net loss of $302,000 or ($0.01) per share for the same period of the prior year.

Revenue for the six months that ended June 30, 2006 was $9,146,000 as compared to $23,000 for the same period of the prior year. Gross margin was $4,589,000 as compared to $3,000 for the same period of the prior year. The operating loss for the six months was $543,000 as compared to an operating loss of $1,216,000 for the same period of the prior year. The net loss for the six months was $2,155,000 or ($0.09) per share as compared to a net loss of $1,186,000 or ($0.06) per share for the same period of the prior year.

Cash flow from operations for the second quarter was $1,209,000 or $0.05 per share as compared to cash used in operations of ($1,686,000) or ($0.07) per share for the first quarter and ($647,000) or ($0.03) per share for the same period of the prior year. For the six month period cash used for operations was ($478,000) or ($0.02) per share as compared to ($938,000) or ($0.04) per share for the same period of the prior year.

Clearford is comprised of two divisions: the Brooklin Concrete Division and the Wastewater Systems Division. The Brooklin Concrete Division was acquired by Clearford Industries Inc. on January 26, 2006. The Company's results include Brooklin results for the period commencing as of the date of the acquisition. The Brooklin Concrete Division has been in operation since 1952, with 4 plants in Ontario, including: Brooklin, Newmarket, Huntsville and Haliburton. A leading producer of septic tanks in Ontario, Brooklin manufactures pre-cast concrete products ranging from patio stones and retaining walls, to transformer foundations and switching chambers. It is expected that third quarter revenue and net income will be higher than the second quarter as a result of the seasonality of the business.

Clearford's Wastewater Systems Division designs and implements the patented Small Bore Sewer™ (SBS™), a watertight small diameter wastewater collection system. This solution provides wastewater collection with superior operational and environmental performance at a significantly lower cost when compared to historic gravity sewers.  For the 2006 fiscal year to date, the Wastewater Division has focused on achieving regulatory approvals in Ontario and other provinces, and on building a back-log of sales opportunities. Though no revenue has been generated for the 2006 fiscal year to date period, the Division has made significant progress in these areas. The Division will continue to require investment from operating income to support its activities with initial revenues expected to be delivered during the last half of fiscal 2006.

Bruce Linton, President and CEO of Clearford commented: "I am delighted with the performance of the Corporation since the acquisition of Brooklin Concrete. Both Brooklin and the Wastewater Division have added to their strengths and the cash flow from Brooklin has allowed the company to build its market position in both divisions. Overall corporate profitability and positive cash flow delivered in the second quarter are key achievements which we expect to build on. The third quarter has traditionally been Brooklin's strongest quarter for revenue and net income."

Forward-Looking Statements
Any forward looking statements made in this press release involve risks and uncertainties, and actual results could differ materially from those expressed or implied in such statements. However, we disclaim any intention and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Clearford Industries Inc.
Clearford Industries Inc. (TSX-V: CLI) is comprised of two divisions: the Wastewater Systems Division and the Brooklin Concrete Division. The Wastewater Systems Division designs and implements the patented Small Bore Sewer™(SBS™), a watertight small diameter wastewater collection system. This solution provides wastewater collection servicing with superior operational and environmental performance at a significantly lower cost when compared to historic gravity sewers. With its first installation in 1989, the SBS™has since had several installations within Canada and the U.S. The Brooklin Concrete Division has been in operation since 1952, with 4 plants in Ontario, including: Brooklin, Newmarket, Huntsville and Haliburton. A leading producer of septic tanks in Ontario, Brooklin manufactures pre-cast concrete products ranging from patio stones and retaining walls, to transformer foundations and switching chambers. For more information on Clearford Industries Inc., please visit www.clearford.com.

For more information contact:
Mr. Bruce Linton
President and CEO
Clearford Industries Inc.
Phone: (613) 599-6474 ext. 301
www.clearford.com