Third Quarter 2009 Results

For the quarter ended September 30, 2009, sales decreased by 1.4% to $22.2 million, compared to $22.4 million for the third quarter of 2008. The Aquaculture Product segment accounted for $14 million in sales, down 7% from $15.1 million reported for the same period last year. Sales from the Health and Bio-product segment were $8.1 million, up 10% from $7.3 million for the third quarter of 2008.

Gross profit for the third quarter of 2009 increased by 5% to $10 million, compared to gross profit of $9.5 million for the same period of 2008. Operating income for the third quarter decreased to $4.9 million, from $6.5 million in September 2008. The decrease experienced in the quarter was mainly the result of the provision for potential losses in the Company's receivables in its health and bio-product segment which had not materialized to date, as well as an increase in advertising and marketing expenses within the same segment. EBITDA for the quarter decreased by 27% to $5.2 million, from $7.1 million for the same period last year.

Net income for the third quarter was $4 million, or $0.268 cents per fully diluted share compared to net income of $5.6 million, or $0.427 cents per fully diluted share, for the third quarter of 2008. Net income during the current quarter was affected by increases in doubtful accounts of approximately $1,606,000 and marketing and advertising expenses by approximately $979,000 from the health and bio-product segment.

"Our Company continues to see significant demand for its biomass products, and to benefit from the manner in which we have balanced our portfolio of product offerings to reduce the impact of seasonality and price fluctuations. During the quarter, increased demand for our Marine Bio and Healthcare products resulted in much improved sales, and helped to mitigate the impact of the reduction in the selling price of tilapia in our aquatic products segment that we have seen this year. Increased vertical integration is also beginning to pay dividends, as we saw decreased raw material costs with respect to our fish and other indirect expenses during the quarter. This has resulted in a significant improvement in our profitability so far in 2009, and we hope to see this trend continued in future quarters," said Norbert Sporns, CEO of HQ Sustainable Maritime Industries, Inc.

Nine Month Financial Results

Revenues for the first nine months of 2009 were $49 million, up 6% from revenues of $46.2 million in the first nine months of 2008. Approximately 22% of the increase in sales revenue was a result of increased sales from the aquaculture product segment, and 78% of the increase was from sales from the health and bio-product segment. Gross profit margin reached $21.6 million, up 17.3% from gross profit of $18.4 million for the first nine months of 2008. The Company's gross profit ratio was 44% for the first nine months of 2009, compared to 39.8% for the first nine months of 2008. Operating income reached $8.7 million, up 17.6% from $7.4 million for the first nine months of 2008. Net income increased by 75% to $6.2 million, or $0.472 cents per fully diluted share, compared to net income of $3.6 million, or $0.291 cents per fully diluted share, for the same period a year earlier.

Financial Condition

As of September 30, 2009, cash and cash equivalents were $55.5 million, compared to $54.9 million at December 31, 2008. The Company had total assets of $120 million, up from $100.2 million at the end of the previous year. As of September 30, 2009, the Company had no long term debt.

Company Updates

--  The Company began production of extruded feed from its new feed mill,
    and revenues will flow through from the sale of feed to its cooperative
    farmers during the last quarter of 2009.
    
--  The Company's tilapia grow out operations, as well as its processing
    plant operations for tilapia in its wholly owned, Hainan-based subsidiary
    Hainan Quebec Ocean Fishing Co. Ltd., have been certified by Moody
    International Certification Ltd., as being in conformity with the GLOBALGAP
    Tilapia Standard recently launched in April 2009. HQS is the first company
    to be certified to this standard.
    

Use of Non-GAAP Financial Information

This press release includes certain financial information (EBITDA), which is not presented in accordance with GAAP. EBITDA was derived by taking earnings before financing costs, taxes, fair value change in derivative financial instruments, depreciation and amortization. The Company's management believes that this non-GAAP measure provides investors with a better understanding of the Company's historical results by focusing on its core business operations. Non-GAAP information is not meant to be considered in isolation or as a substitute for GAAP financials. The non-GAAP financial information that the Company provides also may differ from non-GAAP information provided by other companies. A table included at the end of the attached financial tables provides a reconciliation of the non-GAAP financial information to the nearest GAAP measure.

Conference Call

The company will host a conference call at 4:30 p.m. Eastern Time on November 9, 2009 to discuss its financial results for the third quarter of 2009. To participate in this live conference call, please call the following number five to ten minutes prior to the scheduled conference call time: (866) 394-1757. International callers should call (706) 643-3624. The Conference Passcode is 38267189. A replay of the conference call will be available from 5:15 p.m. Eastern Time on Monday, November 9 through Wednesday, December 9, 2009. To access the replay, please call (800) 642-1687. International callers should call (706) 645-9291. The Conference Passcode is 38267189.

To listen via the web, please go to http://www.hqfish.com/ approximately twenty minutes before the conference call is scheduled to begin in order to register as well as download and install any necessary audio software. The Webcast will be archived for 30 days.

About HQ Sustainable Maritime Industries, Inc.

HQ Sustainable Maritime Industries, Inc., headquartered in the United States, is an integrated aquaculture and aquatic product processing company, with production facilities in Hainan, PRC. HQS also uses North American production facilities for its new line of meal products. HQS practices cooperative sustainable aquaculture, using nutraceutically enriched feeds and produces and markets its products. The company is dedicated to sustainable all natural methods giving its customers the purest products possible. The Company holds HACCP certification from the U.S. FDA and the EU Code assignment of quality, permitting its products to be sold in international markets. The Aquaculture Certification Council, Inc.