Maxim Power Corp. Announces First Quarter 2011 Financial and Operating Results
June 09 2011 - 8:29PM
Marketwired Canada
Maxim Power Corp. ("MAXIM" or the "Corporation") (TSX:MXG) announced today the
release of financial and operating results for its first quarter ended March 31,
2011. The unaudited financial statements, accompanying notes and Management
Discussion and Analysis will be available on SEDAR on June 10, 2011 and on
MAXIM's website. All figures reported herein are Canadian dollars unless
otherwise stated.
FINANCIAL HIGHLIGHTS
Three Months Ended
March 31
($ in thousands except per share amounts) 2011 2010
Revenue $ 54,997 $ 50,775
Adjusted EBITDA (1) 15,792 12,561
Net income for the period 4,559 24,240
Per share - basic $ 0.08 $ 0.45
- diluted $ 0.08 $ 0.44
Funds from operations (1) 14,312 11,521
Per share - basic $ 0.26 $ 0.21
- diluted $ 0.26 $ 0.21
Generation (MWh) 392,005 384,635
Net Generation Capacity (MW) (2) 809 809
Average Alberta Power Price ($ per MWh) $ 83 $ 41
(1) Select financial information was derived from the consolidated financial
statements and is prepared in accordance with International Financial
Reporting Standards ("IFRS"), except Adjusted EBITDA and Funds from
operations ("FFO"). Adjusted EBITDA is provided to assist management and
investors in determining the Corporation's approximate operating cash flows
before interest, income taxes, and depreciation and amortization and FFO is
provided to assist management and investors in determining the Corporation's
cash flows generated by operations before the cash impact of working capital
fluctuations. Adjusted EBITDA and FFO do not have any standardized meaning
prescribed by IFRS and may not be comparable to similar measures presented
by other companies. Refer to Non-IFRS measures for reconciliations between
non-IFRS financial measures and comparable measures calculated in accordance
with IFRS.
(2) Generation capacity is manufacturer's name plate capacity net of
minority ownership interests of third parties.
OPERATING RESULTS
Effective January 1, 2011, MAXIM began reporting its financial results in
accordance with International Financial Reporting Standards ("IFRS"). Prior year
comparative amounts reported under Canadian GAAP have been restated to reflect
the effects of transition from Canadian GAAP to IFRS.
MAXIM generated a record 392,005 MWh in first quarter of 2011 compared to
384,635 MWh for the same quarter in 2010, which is an increase of 7,370 MWh or
2.0%. Revenue for 2011 increased $4.2 million or 8.3% to $55.0 million. Earnings
before interest, taxes, depreciation and amortization (refer to Non-IFRS
measures - "EBITDA" in the MD&A), increased $3.2 million to $15.8 million in the
first quarter of 2010 from $12.6 million in the same quarter of 2010. These
improvements are attributable to higher Alberta wholesale electricity prices and
increased electricity demand in the Northeast US, the effects of which were
partially offset by the expiration of the Pittsfield facility's RMR contract,
which provided fixed monthly capacity payments, in May 2010.
Net income for the first quarter of 2011 was $4.6 million compared to the same
period in 2010 of $24.2 million. Net income in the first quarter of 2010
includes the recognition of gain of $22.7 million as a result of the EarthFirst
amalgamation.
Funds from operations in the first quarter of 2011 of $14.3 million were $2.8
million higher compared to $11.5 million in the same quarter of 2010 primarily
as a result of higher power prices realized at the Milner generating facility
and increased electricity demand in the US Northeast.
GROWTH INITIATIVES
Mine 14
On April 20, 2011, the ERCB granted Milner Power Inc. the license to commence
underground mining of the Mine 14 coal reserve. MAXIM considers Mine 14 to have
significant value as a fuel source for MAXIM's existing Milner plant and its
proposed Milner Expansion Project, as well as for the sale of metallurgical
coal.
Extraction and testing of unoxidized coal is currently underway in order to
prepare detailed metallurgical specifications of the low volatile resource and
finalize the wash plant design. Subject to confirmation of satisfactory
financing arrangements, construction activities are targeted to commence this
summer and MAXIM anticipates that Mine 14 will be fully commissioned and
producing coal in 2013. Various options to capitalize/monetize Mine 14 are still
under evaluation.
Milner Expansion
In January 2009, MAXIM submitted regulatory applications to construct and
operate a 500 MW coal-fired generation facility (the "Milner Expansion Project"
or "M2") adjacent to the existing Milner Power Plant. M2 will utilize
state-of-the-art, supercritical, pulverized coal technology, making it the most
fuel-efficient coal-fired plant in Canada. The Environmental Impact Assessment
for the project was deemed complete by Alberta Environment on November 24, 2010,
and final regulatory approvals are anticipated in 2011.
Deerland Peaking Station
MAXIM received all required regulatory approvals to construct and operate the
Deerland Peaking Station which is a 190 MW natural gas-fired peaking facility
that will be located in Bruderheim, Alberta, immediately adjacent to the
existing Deerland high voltage substation in Alberta's Industrial Heartland.
This area is expected to experience significant growth in electrical demand.
Subject to satisfactory electricity market conditions and our ability to
conclude all commercial arrangements necessary to support the investment, MAXIM
will initiate construction of this shovel-ready project.
Buffalo Atlee
The Buffalo Atlee Power Project, situated near Brooks, Alberta, has the
potential for over 200 MW of wind generation capacity. Wind data has been
collected on the 22,000 acre project site for 5 years. MAXIM holds an
exploratory Crown land permit with a term of five years, expiring on January 1,
2016. The addition of wind generation to MAXIM's existing portfolio of assets
would diversify MAXIM's generation fuel types.
CONFERENCE CALL FOR Q1 2011 RESULTS
MAXIM will host a conference call for analysts and investors on June 15, 2011 at
10:00 a.m. MT (12:00 p.m. ET). The call will be hosted by John Bobenic, MAXIM's
President and Chief Executive Officer, and by Mike Mayder, Vice President,
Finance and Chief Financial Officer. To participate in this conference call,
please dial (866) 226-1792 or (416) 340-2216 in the Toronto area. It is
recommended that participants call at least ten minutes prior to start time.
A recording of the conference call will be available from 1:00 p.m. MT (3:00
p.m. EDT) on June 15, 2011 until June 22, 2011 at 9:59 p.m. MDT (11:59 p.m. ET).
To access this replay, please dial (800) 408-3053 or (416) 694-9451 followed by
the passcode 3376050. In addition, the call will be available commencing June
13, 2011 in the Investor Relations section of MAXIM's website at
www.maximpowercorp.com.
About MAXIM
Based in Calgary, Alberta, MAXIM is an Independent Power Producer ("IPP")
engaged in the acquisition and development, ownership and operation of power
generation facilities and the resultant sale of generating capacity, electricity
and thermal energy. At March 31, 2011 MAXIM had forty-four power plants with 809
MW of electric and 117 MW of thermal net generating capacity operating in three
identifiable geographic segments: Canada, United States and France. MAXIM trades
on the TSX under the symbol "MXG". For more information about MAXIM, visit our
website at www.maximpowercorp.com.
Statements in this release which describe MAXIM's intentions, expectations or
predictions, or which relate to matters that are not historical facts are
forward-looking statements. These forward-looking statements involve known and
unknown risks and uncertainties which may cause the actual results, performances
or achievements of MAXIM to be materially different from any future results,
performances or achievements expressed in or implied by such forward-looking
statements. MAXIM may update or revise any forward-looking statements, whether
as a result of new information, future events or changing market and business
conditions and will update such forward looking statements as required pursuant
to applicable securities laws.
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