FSI Announce 2012 Fourth Quarter and Year-End Financial Results

Richard Ball, Chief Executive Officer of FSI Energy Group Inc. (TSX VENTURE:FSI)
("FSI" or the "Company"), is pleased to announce financial results for the three
and twelve months ended December 31, 2012.




Financial Highlights:         Twelve months ended        Three months ended 
                                     December 31:              December 31: 
                        ----------------------------------------------------
                                2012         2011         2012         2011 
                        ----------------------------------------------------
Cash flow from                                                              
 operations                5,810,506     (181,795)   2,682,051      (97,714)
Cash flow from                                                              
 operations (per share)         0.18        (0.00)        0.08        (0.00)
Revenue                    3,014,979    3,051,664      184,112      398,605 
Comprehensive income                                                        
 (loss)                     (733,143)    (281,634)      45,821     (874,024)
EBITDA(1)                 (1,223,543)     (53,961)    (626,723)    (812,331)
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Fiscal 2012 was marked by significant manufacturing and economic activity
pursuant to the substantial completion of construction of two major brine
projects during the year. As highlighted below, the construction of these
projects in 2012 had a significant effect on the financial results in 2012 and,
moreover, should result in recognition of operating income of over $4 million in
fiscal 2013.




--  The pending sale of the two brine plants in 2013, resulted in the
    Company recording an income tax recovery of deferred taxes of $700,000
    in the quarter, whereas prior to this a full valuation allowance was
    taken against any potential recovery 
--  With the focus on the construction of the two major brine plants,
    domestic revenue tapered to $184,122 or 54% lower than the same quarter
    last year with sales for the year of $3,014,919 being relatively flat in
    comparison to last year 
--  Although revenue was lower for the quarter, comprehensive income of
    $45,821 for the quarter was $919,845 higher than the loss of $874,024
    the same quarter last year mostly the aforementioned recovery of
    deferred income taxes and lower write-downs of accounts receivable 
--  Despite relatively flat revenue for the year and the aforementioned
    deferred income tax recovery, the comprehensive loss for the year of
    $733,143 was $451,509 higher than last year, mostly on higher selling,
    general and administration expenses as the Company geared up for the
    fabrication of two major brine plant contracts completed in December
    2012 
--  The economic activity from the brine plants substantially improved the
    Company's liquidity and cash flow as follows: 
    --  Cash flow from operations was $2,682,051 and $5,810,506 for the
        quarter and year, respectively, up $2.8 million and $6.0 million
        over the same quarters last year mostly on progress payments made by
        customers on the construction of the brine plants 
    --  Cash and restricted cash (which will become available on delivery of
        the brine plants) amounted to $5.5 million which will be more than
        sufficient to service the Company's short term monetary liabilities
        of $3 million



Further detail may be found in the Company's Management Discussion and Analysis
- which is available on SEDAR.


About FSI

Through its wholly owned subsidiary FSI International Services Ltd., FSI Energy
Group Inc. is a Calgary-based manufacturing and service company specializing in
customized filtration, filtration-related technologies and Brine Plants for the
energy, chemical, and water treatment industries.


Non-GAAP Financial Measures

EBITDA does not have a standard definition prescribed by GAAP and therefore may
not be comparable to similar measures disclosed by other companies. The Company
utilizes these measures in making operating decisions and assessing the
Company's financial performance and as an indicator of its ability to service
its liabilities. This non-GAAP measure has not been presented as an alternative
to net income (loss) or any other measure of performance or liquidity prescribed
by GAAP. EBITDA is calculated as follows:




Financial Highlights:         Twelve months ended        Three months ended 
                                     December 31:              December 31: 
                        ----------------------------------------------------
                                2012         2011         2012         2011 
                        ----------------------------------------------------
Comprehensive income                                                        
 (loss)                     (733,143)    (281,634)      45,821     (874,024)
Addback (subtract):                                                         
Deferred income tax                                                         
 recovery                   (700,000)           -      700,000            - 
Finance costs                 94,778       78,680       22,869       20,247 
Depreciation included in                                                    
 cost of sales                91,184      131,212        2,468       35,711 
Depreciation                  23,638       17,781        7,055        5,735 
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EBITDA(1)                 (1,223,543)     (53,961)    (626,723)    (812,331)
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Forward-looking Information Cautionary Statement

Certain information contained in this press release, including information and
statements which may contain words such as "could", "plans", "should",
"anticipates", "expect", "believe", "will", and similar expressions and
statements relating to matters that are not historical facts are forward-looking
information. In particular, this press release contains forward-looking
information about the completion of the Brine Plant export contracts and the
revenues associated therewith. Forward-looking statements are based on the
opinions and estimates of management relying on their experience at the date the
statements are made, and are subject to a variety of risks, uncertainties and
other factors that could cause actual events or results to differ materially
from those anticipated in the forward-looking statements including, but not
limited to, the risk factors discussed in FSI's MD&A and other continuous
disclosure documents. All of the forward- looking information contained in this
press release is qualified by this cautionary statement. There can be no
assurance that the actual results or developments anticipated by FSI, as
expressed or implied by the forward-looking information, will be realized or,
even if substantially realized, that they will have the expected consequences to
or effects on FSI or its business operations. FSI disclaims any intention or
obligation to update or revise any forward-looking information as a result of
new information or future events. Readers should not place undue reliance on
forward-looking information.


FOR FURTHER INFORMATION PLEASE CONTACT: 
FSI Energy Group Inc.
Richard Ball
President and CEO
[phone]
[phone] (FAX)
www.fsigroup.ca