Maxim Power Corp. Announces 2011 Financial and Operating Results and Appointment of Director
March 22 2012 - 8:16PM
Marketwired Canada
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.
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