Impax Energy Services Income Trust
TSX : MPX.UN

Impax Energy Services Income Trust

November 09, 2006 17:09 ET

Impax Energy Services Income Trust Releases Financial Results for the Third Quarter Ended September 30, 2006

TORONTO, ONTARIO--(CCNMatthews - Nov. 9, 2006) - Impax Energy Services Income Trust (TSX:MPX.UN)("Impax" or the "Trust") today announced its financial results for the third quarter and 109-day period ended September 30, 2006.

On June 14, 2006, Impax completed its initial public offering (IPO), which included the concurrent closing of the acquisitions of four oilfield service companies. The operations and financial results of Impax include operating activities for the third quarter of 2006 and 109-day period from June 14, 2006 through September 30, 2006. Impax's financial results do not include comparative information because quarterly financial information for the prior periods is not available. In addition, the acquired companies were all private companies with different accounting periods.

During the third quarter, Impax recorded revenue of $16.8 million, EBITDA(1) of $7.7 million and net earnings of $3.4 million. Basic earnings were $0.30 per unit (diluted - $0.29).



IMPAX ENERGY SERVICES INCOME TRUST
HIGHLIGHTS

Three months ended
September 30, 2006
------------------
In 1000's of Dollars

Revenue $ 16,803
Net earnings $ 3,435
EBITDA(1) $ 7,713
Distributable cash(1) $ 6,600
Total assets $ 162,361
Earnings per unit - basic $ 0.30
- diluted $ 0.29


At September 30, 2006, the Trust's assets were $162.4 million and long-term debt was $37.7 million. The working capital as at September 30, 2006 was $3.3 million, comprised of current assets of $16.6 million and current liabilities of $13.3 million.

Total distributions to unitholders for the quarter ended September 30, 2006 of $0.31875 per unit were previously announced.

"We are pleased that the four businesses acquired this year continue to perform extremely well and are tracking the revenue and EBITDA growth disclosed in our earlier releases. We expect to see this strong track record of growth continue for the remainder of this fiscal year and to sustain the current distribution per unit for the foreseeable future. At the time of the IPO, this level of distribution was projected, based on the prior year's results, to represent an 80% payout ratio. However, due to the strong performance of the businesses, the same level of distribution can be achieved with a payout ratio of only 65%. This provides a considerable level of operating flexibility." said Impax President & Chief Executive Officer, Scott Delaney.

On October 31, 2006, the federal government announced its intention to change the way income trusts are taxed. If the proposed changes are enacted as currently drafted, they will not affect the taxation of the Trust until January 2011. The Trust is currently reviewing the possible impact of these proposed tax measures on the Trust. "We remain focused on the growth of our operations as we are confident that we will continue to deliver an attractive investment proposition to our unit holders" said Mr. Delaney.

Impax Energy Services Income Trust is an open-ended trust, providing oilfield services in western Canada. The Trust indirectly owns a 55.3% 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 from time to time in the Trust's May 30, 2006 prospectus 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) References to "EBITDA" are to net earnings before interest expense, income taxes, amortization and unit based compensation and references to "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. 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 distributable cash as cash flow from operations before non-cash working capital changes for the periods less purchases of maintenance capital property and equipment. Changes in non-cash working capital items have been excluded from cash flows from operations so as to remove the effects of timing differences in cash receipts and cash disbursements, which generally reverse themselves and can vary significantly between fiscal quarters.


Additional Financial Information

The full quarterly report including the unaudited interim 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
    or
    Impax Energy Services Income Trust
    John R. Anderson
    Chief Financial Officer
    (416) 913-3684