Impax Energy Services Income Trust
TSX : MPX.UN

Impax Energy Services Income Trust

March 30, 2009 19:46 ET

Impax Announces 2008 Financial Results, Credit Facility Changes and Corporate Changes

TORONTO, ONTARIO--(Marketwire - March 30, 2009) - Impax Energy Services Income Trust ("Impax" or the "Trust") (TSX:MPX.UN) announces its 2008 financial results, credit facility changes and senior management changes related to relocation of its head office from Toronto, Ontario to Calgary, Alberta.

2008 FINANCIAL RESULTS



Year
Year ended
ended December
(in 000's of Canadian dollars, except per December 31, 31, 2007
unit amounts) 2008 (restated)
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Revenue $41,276 $41,380
Impairment charges (28,444) (32,200)
Net loss excluding impairment charges (2,084) (3,276)
Net loss (30,528) (35,476)
EBITDA(1) 11,806 11,497
Total assets 72,424 107,376
Loss per unit - basic and diluted $(2.36) $(3.03)
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Revenue for the year ended December 31, 2008 remained flat compared to the year ended December 31, 2007 despite the slowdown in oil and gas services activity year over year. The Trust had a net loss of $30,528 for the year ended December 31, 2008 in comparison to $35,476 for the year ended December 31, 2007. Significant components of the $4.9 million variance are a reduction of $4.1 million in non-cash expenses for amortization, goodwill and intangible asset impairment charges, $1.6 million lower operating and general and administrative costs and a $3.8 million favourable variance in future income tax balance, offset by $2.2 million higher interest and other bank charges and $2.5 million reduction in non-controlling interest.

The significant drop in total assets, year over year, is mostly attributable to the fourth quarter non-cash impairment charge of $28.4 million relating to the Trusts' goodwill and intangible assets.

CREDIT FACILITY CHANGES

Subsequent to December 31, 2008, the Trust entered into discussions with its lenders to obtain a new credit agreement which would remove the demand nature of its current facility, reduce the interest rates and reduce principal repayment requirements. In this regard, the Trust received, on March 30, 2009, confirmation from its lenders that a new credit agreement, along the lines requested by the Trust, was accepted subject to appropriate documentation and the completion of certain conditions precedent. The new facility will be for a two year term with significantly reduced interest rates and principal repayments. The Trust expects the final documentation to be completed in April 2009.

CORPORATE AND SENIOR MANAGEMENT ANNOUNCEMENTS

The Trust is relocating its head office from Toronto, Ontario to Calgary, Alberta and expects to complete the move by the end of April 2009. Mr. Scott Delaney, President and Chief Executive Officer, Mr. John Anderson, Chief Financial Officer and Mr. Jon Pinchuk, Vice President Corporate Development of Impax, have elected to remain in Toronto to pursue other opportunities available to them. The Board wishes to thank them and the other staff in Toronto for their contribution to the Trust over the past three years and in particular to acknowledge Mr. Delaney as a founder of the Trust, for bringing together a group of high quality private businesses into the Trust structure and for his leadership over the past three years.

The Trust is pleased to announce the appointment of Mr. William (Bill) McClelland as President and Chief Executive Officer of Impax effective April 1, 2009. Mr. McClelland is currently a Director of Impax General Partner and President and Chief Executive Officer of McClelland Oilfield Rentals Ltd., and brings to his new responsibilities over thirty years of experience and leadership in the oilfield services sector. Mr. McClelland will continue with his responsibilities with McClelland Oilfield Rentals Ltd. The Board welcomes Mr. McClelland in his new capacity and is pleased to have his experience and leadership through the challenging environment of 2009.

OUTLOOK

Uncertain global markets, constrained credit and low energy prices continue to depress general business activity including Canada's energy sector. Government initiatives are restoring some confidence and within the oil and gas sector specific initiatives such as the recent royalty announcements by the Alberta Government are being received favorably. These considerations combined with the producing sector's desire to sustain production levels will provide opportunities for the oil and gas service sector as it manages its way through 2009. The Trust is well positioned to compete in this environment.

Many of the oil field services offered by the Trust are directed to production maintenance as well as development activities and in 2008 this enabled the Trust to match its revenue and EBITDA performance compared to 2007. Entering 2009, the Trust has retained its key operating personnel, restructured its debt to reduce ongoing costs through 2009 and 2010 and with its relocation to Calgary expects to significantly reduce corporate G&A costs on a go forward basis.

While the experience and capability of its operating units will continue to enable the Trust to remain competitive, the Trust is committed to maximizing unit holder value by seeking strategic alternatives to improve its balance sheet and maximize growth opportunities.

Impax Energy Services Income Trust is an open-ended trust, providing oilfield services in western Canada. The Trust indirectly owns an approximate 72% interest in Impax Energy Services Master Limited Partnership, which indirectly acquired and now operates through its subsidiaries the businesses of McClelland Oilfield Rentals Limited Partnership, EGOC Enviro Group Limited Partnership, Denray Rathole Drilling Limited Partnership and Dwayne Hommy Trucking Limited Partnership. These businesses provide services in the areas of oilfield rental, specialized equipment rental, access mat rental, waste management services, rat hole drilling and specialty fluid hauling.

This news release may contain forward-looking statements relating to expected future events and financial and operating results of the Trust that involve risks and uncertainties. Actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons, including market and general economic conditions and the risks and uncertainties detailed in the Trust's March 28, 2008 Annual Information Form filed with the Canadian securities regulatory authorities. Due to the potential impact of these factors, the Trust disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

Notes:

(1) As discussed in the Management's Discussion and Analysis, EBITDA is not an earnings measurement recognized by GAAP and does not have a standardized meaning prescribed by GAAP. References to "EBITDA" are to net earnings before interest expense, income taxes, amortization, impairment charges, unit based compensation and non-controlling interest. Management believes that, in addition to net earnings, EBITDA is a useful supplemental measure of both performance and cash available for distribution before debt service, changes in working capital, capital expenditures and income taxes.

Additional Financial Information

The full annual report, including the audited consolidated financial statements with accompanying notes and Management's Discussion and Analysis will be filed on SEDAR.

Contact Information

  • Impax Energy Services Income Trust
    John Anderson
    Chief Financial Officer
    (416) 913-3684
    or
    Impax Energy Services Income Trust
    Raymond P. Cej
    Chairman
    (587) 888-1900
    or
    Impax Energy Services Income Trust
    Stephen T. Moore
    Trustee
    (416) 815-2278
    www.impaxenergy.com