Maxim Power Corp. (TSX:MXG) ("MAXIM" or the "Corporation")
announced today the release of financial and operating results for
its fourth quarter and year ended December 31, 2011. The audited
financial statements, accompanying notes, Management Discussion and
Analysis, and Annual Information Form will be available on SEDAR
and on MAXIM's website on March 23, 2012. All figures reported
herein are Canadian dollars unless otherwise stated.
FINANCIAL HIGHLIGHTS
Three Months Ended Twelve Months Ended
December 31 December 31
($ in thousands except per
share amounts) 2011 2010 2011 2010
Net revenue (1) $ 44,816 $ 36,694 $ 155,290 $ 151,249
Adjusted EBITDA (1) 11,304 5,769 38,827 36,135
Net income (loss) (1,555) (633) 15,316 24,249
Per share - basic and
diluted $ (0.03) $ (0.01) $ 0.28 $ 0.45
Funds from operations (1) 11,489 5,538 38,802 30,107
Per share - basic and
diluted $ 0.21 $ 0.10 $ 0.72 $ 0.55
Electricity Deliveries (MWh) 295,420 323,551 1,203,227 1,322,037
Net Generation Capacity (MW)
(2) 815 809 815 809
Average Alberta Power Prices
($ per MWh) $ 76.07 $ 45.94 $ 76.21 $ 50.88
Average Milner Realized
Electricity Price ($ per
MWh) $ 89.12 $ 49.35 $ 80.12 $ 57.52
(1) Select financial information was derived from the audited
consolidated financial statements and is prepared in accordance
with International Financial Reporting Standards ("IFRS"), except
net revenue, adjusted EBITDA and funds from operations ("FFO"). Net
revenue is provided to highlight revenue net of any gains or losses
realized on commodity swaps. 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 certain other income and expenses
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. Net
revenue, 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 nameplate capacity net
of minority ownership interests of third parties.
OPERATING RESULTS
Net revenue, adjusted EBITDA, and funds from operations
increased in 2011 when compared to 2010. These increases are
primarily due to improving Alberta power prices and their positive
impact on Milner results.
Net income decreased over 2010 due to the impact of one-time
events that occurred in 2010. Net income in 2011 benefited from a
gain on derivative contracts and an increase in Alberta power
prices, net of realized losses on power price swaps entered
throughout the year. This increase was offset by a one-time $22.6
million tax gain recognized in 2010 as a result of MAXIM's
amalgamation with EarthFirst Canada Inc. net of a $4.2 million
arbitration settlement occurring in that year.
During the fourth quarter of 2011, MAXIM earned net revenue of
$44.8 million compared to $36.7 million for 2010 and adjusted
EBITDA was $11.3 million compared to $5.8 million in 2010 primarily
due to higher Alberta power prices. Fourth quarter 2011 production
decreased 28,131 MWh or 9% to 295,420 MWh compared to 323,551 MWh
during the same quarter of 2010. The decrease is primarily due to a
56% or 37,793 MWh decrease at the northeast United States
facilities as a result of milder weather. This was offset by
smaller increases in production at Milner and in France.
GROWTH INITIATIVES
Deerland Peaking Station ("D1")
MAXIM is actively pursuing commercial arrangements that will
allow for the construction of the 190 MW Deerland peaking station
("D1") to commence in 2012. MAXIM received regulatory approvals in
2008 to construct and operate D1. The D1 site is located near
Buderheim in Alberta's industrial heartland, which is in close
proximity to the entry point of the proposed Gateway pipeline and
adjacent to the existing Deerland high voltage substation. This
area is expected to experience significant growth in electrical
demand. MAXIM further expects peaking requirements across Alberta
to continue to grow to meet overall demand growth and to provide
firm backup for additional intermittent wind resources.
Summit Coal Mine 14 ("M14")
MAXIM has advanced the development of its Mine 14 ("M14")
metallurgical coal resource during 2011 and is currently assessing
the potential to expand the coal resources within its three coal
leases.
On December 2, 2009, the ERCB granted Milner Power Inc. a permit
to develop the underground coal mine referred to by the Corporation
as M14. On April 20, 2011, the ERCB granted Milner Power Inc. the
license to commence underground mining of the M14 coal reserve. M14
will be located north of Grande Cache, Alberta and is estimated to
contain 13 million recoverable tonnes of high quality metallurgical
coal reserves. The resource is considered valuable both as a
potential fuel source to Milner and for the potential sale of coal
to metallurgical coal markets.
On August 8, 2011, MAXIM incorporated Summit Coal Inc., which
entered into a partnership with Milner Power Limited Partnership
("MPLP") to form Summit Coal Limited Partnership ("Summit").
Pursuant to a contribution agreement between MPLP and Summit dated
October 3, 2011, MPLP agreed to contribute all of its interests in
M14, including its interest in the coal leases, to Summit in
exchange for limited partnership units. All further development of
M14 is now carried on through Summit and Summit Coal Inc.
During the third quarter of 2011, an adit was completed to
recover un-oxidized coal for the purpose of conducting
metallurgical quality testing. Results of this testing confirmed
that M14 coal is a low-mid volatile metallurgical grade coal.
On December 15, 2011, Summit entered into a ten year terminal
services agreement with Ridley Terminals Inc., commencing January
1, 2015. This agreement provides Summit with firm terminal capacity
and terminal processing services to enable the majority of Summit's
proposed coal production to access the valuable seaborne coking
coal market. Signing this agreement reduces the development risk of
M14 as Summit advances to the construction phase of its M14
project.
Summit has secured firm 2013 delivery dates for critical mining
equipment, including two continuous miners and three shuttle
cars.
Milner Expansion ("M2")
On August 10, 2011, MAXIM received approval from the Alberta
Utilities Commission for its new 500 MW M2 project. MAXIM is
planning to construct and operate this new 500 MW generating
station on the site of and adjacent to the existing 150 MW Milner
generating station. The M2 design incorporates emission control
equipment capable of achieving 60 to 80 percent reductions in
sulphur dioxide, nitrogen oxides and mercury compared to the
conventional coal fired power plants still operating in Alberta.
The highly efficient M2 design will also reduce carbon dioxide
emissions by 20% compared to these existing plants.
Buffalo Atlee ("B1")
MAXIM acquired the Buffalo Atlee Power Project ("B1"), situated
near Brooks, Alberta, through an amalgamation with EarthFirst
Canada Inc. This project has the potential for development of over
200 MW of wind generation capacity. Wind data has been collected on
the site for approximately four years and supports project
development based on higher power prices than those realized during
recent months. 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 will
diversify MAXIM's generation fuel types and provides the potential
to offset the impact of proposed carbon legislation. MAXIM plans to
advance the development of this project once greater clarity on
carbon policy is available in 2012.
CONFERENCE CALL FOR 2011 RESULTS
MAXIM will host a conference call for analysts and investors on
Tuesday, March 27, 2012 at 11:00 am MT. 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 (877) 440-9795
or (416) 340-8530 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 March
27, 2012 to April 10, 2012. To access the replay, dial (800)
408-3053 or (905) 694-9451 followed by the passcode 7623210. In
addition, the webcast will be available commencing March 28, 2012
in the Investor Relations section of MAXIM's website at
www.maximpowercorp.com.
APPOINTMENT OF MR. JOEL LUSMAN AS DIRECTOR
Mr. Joel Lusman has been appointed to the Board of Directors of
MAXIM. Mr. Lusman is the founder and portfolio manager of Lusman
Capital Management. Prior thereto, Mr. Lusman spent over five years
as portfolio manager for Korsant Partners. Mr. Lusman also gained
significant industry experience as an analyst working for Kingdon
Capital and Davidson Kempner.
About MAXIM
Based in Calgary, Alberta, MAXIM is an independent power
producer, which acquires or develops, owns and operates innovative
and environmentally responsible power projects. MAXIM currently
owns and operates 40 power plants in western Canada, United States
and France, having 788 MW of electric and 111 MW of thermal net
generating capacity. 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.
Contacts: Maxim Power Corp. John R. Bobenic President and CEO
(403) 750-9300 Maxim Power Corp. Michael R. Mayder Vice President,
Finance and CFO (403) 750-9311 www.maximpowercorp.com
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