Impax Energy Services Income Trust
TSX : MPX.UN

Impax Energy Services Income Trust

May 12, 2008 20:05 ET

Impax Energy Services Income Trust Releases Financial Results for the First Quarter Ended March 31, 2008

TORONTO, ONTARIO--(Marketwire - May 12, 2008) - Impax Energy Services Income Trust (TSX:MPX.UN) ("Impax" or the "Trust") today announced its financial results for the first quarter ended March 31, 2008.

During the first quarter of 2008, Impax recorded revenue of $15.2 million, EBITDA(1) of $6.4 million and net income of $2.1 million.



IMPAX ENERGY SERVICES INCOME TRUST
HIGHLIGHTS

(in 000's of Canadian dollars, Three months ended Three months ended
except per unit amounts) March 31, 2008 March 31, 2007
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Revenue $15,170 $17,338
Net income 2,109 3,521
EBITDA(1) 6,384 7,586
Standardized distributable cash(1) 2,220 3,306
Total assets 108,707 150,931
Earnings per unit - basic and
diluted $0.17 $0.30
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Revenue for the three months ended March 31, 2008 decreased by $2.1 million or approximately 13% compared to the same period in 2007, while EBITDA for the same period decreased by $1.2 million or approximately 16%. Although industry activity began recovering in the first quarter of 2008 and is expected to strengthen even more through the balance of 2008, it was still below the high activity levels experienced during the first quarter of 2007.

Outlook

As mentioned above, the first quarter of 2008 saw encouraging signs supporting potential improvements in industry conditions. These conditions relate to improvements in the fundamentals for natural gas, which include lower inventories, decreased liquefied natural gas imports compared to 2007 and recent forward gas prices above $10.00/mmbtu. U.S. gas inventories at the end of April 2008 were below the 5-year average and were 15% below equivalent levels in April 2007. Also, on April 23, 2008 the Petroleum Services Association of Canada increased its 2008 drilling forecast by approximately 14% compared to the outlook it made previously. In addition, the new deep resources programs to promote high-cost oil & gas development announced by the Alberta government on April 10, 2008 may lead to increased demand for energy services.

"While the Trust's operations will continue to be effected by the normal seasonality and cyclical nature of oil and gas operations, particularly in the second quarter due to spring break-up, we believe that the encouraging signs of industry activity improvement will continue through 2008 and 2009," commented Scott Delaney, President and CEO of Impax. "Further, as the industry momentum builds, we remain well positioned to be a preferred service provider and to deliver value to our unitholders given the inherent strength of our people, equipment and operations."

Impax Energy Services Income Trust is an open-ended trust, providing oilfield services in western Canada. The Trust indirectly owns an approximate 54% 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 and Standardized Distributable Cash are not earnings measures recognized by GAAP and do 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 and references to "Standardized Distributable Cash" are to cash available for distribution to Unitholders in accordance with the distribution policies of the Trust. 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. Standardized Distributable Cash is a measure generally used by income trusts as an indicator of financial performance and is a useful supplemental measure that may assist prospective investors in assessing an investment in the Trust. Management has calculated Standardized Distributable Cash as cash flow from operations including non-cash working capital changes less all capital expenditures net of any proceeds from sales of capital assets. The Trust suspended its distributions in December of 2007.

Additional Financial Information

The unaudited consolidated financial statements with accompanying notes and Management's Discussion and Analysis will be filed on SEDAR.

Contact Information

  • Impax Energy Services Income Trust
    Scott D. Delaney
    President and Chief Executive Officer
    (416) 304-6867
    Website: www.impaxenergy.com