Maxim Power Corp.
TSX : MXG

Maxim Power Corp.

November 09, 2006 19:19 ET

Maxim Power Corp. Announces Record Third Quarter Results and Further Growth Initiatives

CALGARY, ALBERTA--(CCNMatthews - Nov. 9, 2006) - Maxim Power Corp. (TSX:MSG) ("MAXIM" or the "Corporation") today announced results for the third quarter of 2006. The unaudited financial statements and MD&A will be filed November 10, 2006 on SEDAR and the documents will also be available on MAXIM's website. All figures reported herein are Canadian dollars unless otherwise stated.



FINANCIAL HIGHLIGHTS
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Three Months Ended Nine Months Ended
September 30 September 30
2006 2005 2006 2005
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($ in thousands except
per share amounts)
Revenue $ 29,521 $ 8,931 $ 70,767 $ 34,092
EBITDA (1) 17,190 (456) 21,195 5,739
Net income (loss) 10,093 (1,820) 9,353 904
Per share-basic and diluted $ 0.23 ($ 0.05) $ 0.21 $ 0.03
Funds from continuing operations 16,882 (1,022) 20,474 4,877
Per share-basic and diluted (1) $ 0.38 ($ 0.03) $ 0.47 $ 0.15

Electricity Deliveries (MWh) 300,824 173,751 782,991 633,300
Net Generation Capacity (MW) 437 318 437 318
Average Alberta Prices ($ per MWh) $ 95 $ 54 $ 69 $ 52
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For accounting purposes, the Milner Power Limited Partnership ("Milner") is considered to have acquired MAXIM under a reverse takeover ("RTO") at March 31, 2005. As a result, the 2005 operating results and funds from operations reflect those of Milner for the nine months ended September 30, 2005 plus the other operations of MAXIM for the six months ended September 30, 2005.

Certain 2005 financial comparative information has been adjusted to reflect Assets Held For Sale as well as the one for ten share consolidation in April 2006.

(1) Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") and Funds from Continuing Operations per share are not measures under Canadian Generally Accepted Accounting Principles ("GAAP") and may not be comparable to similar measures presented by other companies. Management believes that this presentation provides useful information to investors and shareholders as it provides increased predictive value and performance trends.



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Non-GAAP measures ($ in thousands)

Income (loss) before the following
items, as reflected in the
Interim Consolidated Statements
of Operations and Retained
Earnings $ 15,055 $ (1,297) $ 15,802 $ 3,607

Depreciation and amortization 2,185 841 5,393 2,132
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EBITDA 17,190 (456) 21,195 5,739
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Cash flow from continuing
operations, as reflected in
the Interim Consolidated
Statements of Cash Flows 13,195 5,798 15,945 6,072

Change in non-cash working capital 3,687 (6,820) 4,529 (1,195)
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Funds from continuing operations 16,882 (1,022) 20,474 4,877
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OPERATING RESULTS

Revenue increased significantly for the three months and nine months ended September 30, 2006 compared to the same periods in 2005. Third quarter power pricing in Alberta averaged $95/MWh, compared with an average of just $54/MWh for the second quarter of 2006. Alberta pricing for the nine months of 2006 averaged $69/MWh versus $52/MWh in 2005. Furthermore, MAXIM capitalized on its strategy to shift the Milner facility annual turnaround from the third quarter in prior years to the second quarter in 2006, when softer power pricing minimized the impact of lost production. This shift in the timing of the turnaround, along with the improved pricing, accounted for a significant portion of the increase in MAXIM's electricity revenue. The work accomplished during the turnaround at the Milner facility also favourably impacted results due to the marked improvement in the plant's reliability and availability to date.

Overall production of 782,991 MWh for the nine months ended September 30, 2006 represents a 23.6% increase over the same period in 2005. MAXIM's Milner facility, the largest in its portfolio, led MAXIM's production growth in the first three quarters with a year-over-year production increase of 7.6%. The addition of 8 plants in France and the Pawtucket facility in the United States also contributed to this overall result, as well as achieving significant geographic revenue diversification into MAXIM's strategic markets. Revenue for the nine months of 2006 reflects these improved production results as well as improved average power prices in Alberta of $69/MWh versus $52/MWh in 2005.

In summary, MAXIM's facilities reflected increased production and revenue as follows:



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Nine Months Ended September 30
2006 2005
MWh Revenue MWh Revenue
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($ in thousands)
Milner 632,645 $ 44,763 588,112 $ 30,413
MAXIM's other projects
Alberta(1) 23,894 3,494 17,728 1,976
British Columbia 35,919 2,172 27,460 1,509
United States(1) 16,280 4,420 - -
France 74,253 15,918 - 194
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Total 782,991 $ 70,767 633,300 $ 34,092

(1) The comparative figures do not include two facilities, Basin Creek and
APP, which receive monthly capacity payments.

The above excludes results from Assets Held For Sale


UPDATED OUTLOOK

Alberta Power Prices for October 2006

Power prices in Alberta rose dramatically in October 2006, with average pricing for the month of $174/MWh, the highest monthly average pool price experienced since December 2000. Milner produced 87,594 MWh in October, another month of high availability and production, to capitalize on this strong Alberta market pricing.

After giving effect to the growth initiatives discussed below, record 2006 prices obtained in October, balance of year pricing of $80 to $85/MWh, production levels experienced in Alberta subsequent to September 30, 2006, and the commencement of Forward Capacity Market payments in the New England Market, MAXIM's outlook for 2006 is currently as follows:



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MAXIM - All
Projects 2006 2006 2006 2005
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($ in 9 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended
thousands) September 30 December 31 December 31 December 31
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Electricity
Deliveries
(GWh) 783 300-330 1,083-1,113 972
Revenue $ 70,676 $ 40,000-45,000 $110,676-115,676 $ 73,999
EBITDA $ 21,195 $ 16,000-18,000 $ 37,195-39,195 $ 26,270


MAXIM's projects other than Milner are not reflected in the first quarter 2005 results due to RTO accounting. These projects not included produced 67 GWh and revenues of $6,493 in the first quarter of 2005.

The above excludes Assets Held For Sale

GROWTH INITIATIVES

MAXIM is coming out of a record breaking third quarter with a focus on sustaining growth in generation capacity as well as revenue enhancements to its existing generation portfolio. Recent developments include the following:

New England Forward Capacity Market

On October 31, 2006, the Federal Energy Regulatory Commission accepted the implementation plan for the Forward Capacity Market in the New England market. Commencing December 1, 2006, all installed generating facilities in the New England market will be eligible for a $3.05/kW per month capacity payment. This payment will escalate to $4.10/kW per month by June 1, 2009. This ruling is favourable to MAXIM's generation assets located in the New England market, which currently include the 67 MW Pawtucket Power plant in Pawtucket, Rhode Island and the 67 MW Capitol District Energy Center Cogeneration Associates ("CDECCA") power plant in Hartford, Connecticut.

MAXIM Signs Demand Response Agreement with Connecticut Light & Power

MAXIM's wholly-owned joint venture, CDECCA, has entered into a seven year capacity agreement with Connecticut Light & Power ("CL&P"). Under the terms of this agreement, CL&P will pay CDECCA monthly capacity payments which will entitle CL&P to dispatch the CDECCA facility during ISO New England system emergency events. CL&P will also act as CDECCA's agent with ISO New England. As part of the agreement, CDECCA will relinquish its right to make discretionary energy sales into the ISO New England real-time energy market and to payments under the Forward Capacity Market. However, CDECCA will retain the right to participate in and sell energy in the day-ahead market.

Acquisition of 8.0 MW Cogeneration Plant in Balleycourt, France

MAXIM, through its wholly-owned subsidiary COMAX France S.A.S., closed on October 20, 2006 the acquisition of Balleycourt Cogen, an 8.0 MW plant located in Verdun, France, The Balleycourt acquisition brings MAXIM's generation portfolio in France to 12 plants with a total of 76 MW electric and 42 MW thermal net installed generating capacity.

Consistent with MAXIM's other recent acquisitions of CDECCA and Canteleu, the Balleycourt acquisition was financed entirely from cash flow and cash on hand.

Conference Call and Webcast for the Third Quarter 2006 results

MAXIM will host a conference call for analysts and investors on Wednesday, November 15, 2006 at 9:00 a.m. MST (11:00 a.m. EST). The call will be hosted by John Bobenic, MAXIM's President and Chief Executive Officer, and by Vick Dusik, Vice-President, Finance and Chief Financial Officer.

To participate in this conference call, please dial (866) 250-4907 or (416) 644-3429 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 12:00 p.m. MDT (2:00 p.m. EST) on Wednesday, November 15, 2006 until Thursday, November 23, 2006 at 9:59 p.m. MST (11:59 p.m. EST). To access this replay, please dial (877) 289-8525 or (416) 640-1917 followed by the passcode 21207843#. In addition, the webcast will be available commencing November 15, 2006 in the Investor Relations section of MAXIM's web site at www.maximpowercorp.com.

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 owns and operates 24 power plants in Western Canada, United States, and France, having 445 MW of electric and 68 MW of thermal net generating capacity. MAXIM will continue to execute on its strategy as an Independent Power Producer and is targeting significant growth through acquisitions and development of power projects which utilize hydrocarbon based fuels and renewables in the markets of Western Canada, United States and France. 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.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of the press release.

Contact Information

  • Maxim Power Corp.
    John R. Bobenic
    President and CEO
    (403) 750-9300
    or
    Maxim Power Corp.
    Victor S. Dusik
    Vice President, Finance and CFO
    (403) 750-9319