The Consumers' Waterheater Income Fund

The Consumers' Waterheater Income Fund

April 25, 2007 21:03 ET

The Consumers' Waterheater Income Fund Reports Record Customer Growth Through Acquisition in the First Quarter 2007

TORONTO, ONTARIO--(CCNMatthews - April 25, 2007) - The Consumers' Waterheater Income Fund (TSX:CWI.UN) (the "Fund") today reported financial results for the first quarter of 2007.


- In the quarter, total revenue increased 6.2% over the first quarter of 2006

- Net earnings of $7.8 million represents a 6.8% increase over the first quarter of 2006

- In the quarter, the Fund acquired approximately 86,500 water heaters from Toronto Hydro Energy Services Inc.

- Previously announced monthly unitholder distribution increase to $0.1075 per unit payable April 30, 2007 in respect of unitholders of record on March 30, 2007

"Our recent acquisitions show that we have the ability to grow our business and enhance long-term value for our unitholders," said John Macdonald President and CEO of the Fund. "Together, they enhance our operations in our core market in the Greater Toronto Area and give us an expanded platform from which to pursue further growth in 2007."

The Fund announced that its trustees have approved entering into an agreement with Direct Energy to launch a furnace and air-conditioning rental program in Ontario, Alberta and Manitoba. Pursuant to this agreement, Direct Energy will originate HVAC equipment for sale and will service that HVAC equipment on behalf of the Fund. 100% of the revenues from this portfolio will accrue to the Fund. This program, which is expected to be accretive to the Fund's financial performance serves to broaden the products offered for rent by the Fund. This HVAC rental program will be offered both to new customers and to existing rental customers.

Selected Financial and Operating Highlights(1)

Three months ended
March 31
(Unaudited) 2007 2006
(in thousands of dollars,
except unit and per unit amounts)

Operating highlights

Total revenue $ 41,442 $ 39,017
Net earnings 7,818 7,337
Earnings before interest, taxes, depreciation
and amortization (EBITDA)(2) 35,294 34,469
Cash flow from operating activities 25,461 22,500

Investing Highlights

Capital expenditures (net)(3) 15,165 14,115
Acquisition of TH Energy Units 41,030 -
Total capital expenditures (net)(3) 56,195 14,115
Unitholder distributions declared 15,476 14,357

Balance Sheet

Total assets 1,058,555 1,071,288
Total debt(4) 529,856 500,000
Unitholders' equity 293,641 307,802
Average Fund units outstanding 49,524,092 49,524,092

Per unit analysis

Net earnings $ 0.158 $ 0.148
Cash flow from operating activities 0.514 0.450
Total capital expenditures 1.135 0.290
Unitholder distributions declared 0.312 0.290

Asset Portfolio

Asset replacements 17,430 17,786
Additions 5,473 5,668
Removals 6,203 5,006
Acquisition of TH Energy Units 86,420 -
Assets in service 1,418,623 1,327,618

(1) Financial results have been prepared in accordance with Canadian
generally accepted accounting principles (GAAP). Specific accounting
policies are disclosed in the Fund's audited annual financial statements,
which are available on SEDAR at On January 1, 2007, the Fund
adopted the CICA pronouncements concerning the accounting and reporting of
financial instruments. Refer to note 2 in the interim consolidated
financial statements.

(2) EBITDA is a non-GAAP financial measure, and therefore has no
standardized meaning prescribed by GAAP and may not be comparable to
similar terms and measures by other similar issuers. EBITDA is intended to
provide additional information on the Fund's performance and should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with GAAP. More specific details can be found in the
Operating Margins section of the MD&A.

(3) Net of proceeds realized from the disposition of assets.

(4) Includes the current portion of long-term debt financing.

The Fund's annual financial statements and management discussion and analysis are available at or at the Fund's investor relations website at

Conference Call and Webcast

Management will host a conference call and live audio webcast to discuss CWIF's performance for the first quarter of 2007 on Thursday, April 26, 2007 at 8:15 a.m. ET. The call can be accessed by dialing 416-644-3415 or 1-800-731-5319. The audio webcast will be archived at A taped rebroadcast will be available until midnight ET on May 3, 2007. The rebroadcast can be accessed by dialing 1-877-289-8525 or 416-640-1917 and entering the passcode 21227812#.

About The Consumers' Waterheater Income Fund

The Consumers' Waterheater Income Fund indirectly owns a portfolio of approximately 1.4 million installed water heaters and other assets, rented primarily to residential customers in Ontario.

The Fund is an unincorporated open-ended trust established with an unlimited number of trust units under the laws of the Province of Ontario pursuant to a Declaration of Trust dated October 28, 2002.

The Fund commenced operations on December 17, 2002, when it completed its initial public offering of Fund units, the proceeds of which were used to fund the purchase of the rental portfolio from Direct Energy Marketing Limited ("Direct Energy").

Direct Energy continues to provide service support to the rental portfolio and subject to certain exceptions, receives 35% of aggregate rental revenues for its co-ownership interest in certain water heater related assets (with the Fund owning and receiving the remaining 65%). As a result, the Fund's exposure to operating risk is significantly reduced. The Fund has no investment interest in Direct Energy's services business or operations.

Additional information regarding the Fund, including its current Annual Information Form is available on SEDAR at

Certain statements in this News Release are forward-looking statements, which reflect management's expectation regarding the Fund's growth, results of operations and business prospects. Such forward-looking statements reflect management's current beliefs and are based on information available to them. Many factors could cause results to differ materially from the results discussed in the forward-looking statements. Although the forward-looking statements are based on what management believes to be reasonable assumptions, the Fund cannot assure investors that actual results will be consistent with these forward-looking statements. Management is under no obligation (and expressly disclaims any such obligation) to update or revise the forward-looking information, whether as a result of new information, future events or otherwise.

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