Maxim Power Corp.

Maxim Power Corp.

March 29, 2007 17:08 ET

MAXIM Reports Record Financial and Operating Results for 2006

CALGARY, ALBERTA--(CCNMatthews - March 29, 2007) - Maxim Power Corp. (TSX:MXG) ("MAXIM" or the "Corporation") is pleased to announce the release of financial and operating results for its fourth quarter and year ended December 31, 2006. The audited financial statements, accompanying notes and MD&A will be available later today on SEDAR and on MAXIM's website. All figures reported herein are Canadian dollars unless otherwise stated.

Financial Highlights
Three Months Ended Twelve Months Ended
December 31 December 31
2006 2005 2006 2005
($ in thousands except
per share amounts)
Revenue $ 40,470 $ 39,907 $ 111,237 $ 73,999
EBITDA(1) 17,893 20,530 39,088 26,269
Operating Income(1) 14,726 18,343 30,528 21,950
Net Income 10,553 10,663 19,906 11,567
Per share-basic and diluted $ 0.24 $ 0.30 $ 0.45 $ 0.33
Funds from Operations(1) 12,969 19,975 33,443 24,852
Per share-basic and diluted $ 0.29 $ 0.56 $ 0.76 $ 0.70

Electricity Deliveries (MWh)(2) 311,312 336,222 1,094,304 942,477
Net Generation Capacity (MW)(3) 482 374 482 374
Average Alberta Prices ($ per
MWh) $ 117 $ 117 $ 80 $ 70

(1) Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA"),Operating Income and Funds from 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.
(2) Excludes discontinued operations.
(3) Excludes discontinued operations and includes Soffimat acquisition of
37 MW.

Non-GAAP measures ($ in thousands)

Income before the following items,
as reflected in the Consolidated
Statements of Operations and
Retained Earnings $ 14,726 $ 18,343 $ 30,528 $ 21,950
Depreciation and amortization 3,167 2,187 8,560 4,319
EBITDA 17,893 20,530 39,088 26,269
Cash flow from continuing
operations, as reflected in
the Consolidated Statements of
Cash Flows 12,969 19,975 33,443 24,852
Change in non-cash working capital (5,141) (5,276) (9,670) (4,081)
Cash flow from continuing
operations 7,828 14,699 23,773 20,771

Substantial Growth in 2006

During 2006, MAXIM continued its strategy of growth through the acquisition of 80 MW of capacity, including the CDECCA facility in Hartford, Connecticut, and the acquisition of two additional facilities in France, Balleycourt and Canteleu. In addition, MAXIM successfully commissioned the greenfield Basin Creek project in Montana and expanded the Vancouver Landfill. MAXIM's acquisition strategy continued during the fourth quarter and culminated with the acquisition in France of an additional six cogeneration facilities, totaling 37 MW, on February 26, 2007.

Operating Results

With this substantial growth in 2006, MAXIM earned revenue from electricity sales of $111.2 million versus $74.0 million for 2005. EBITDA was $39.1 million compared to $26.3 million in 2005. Net income for 2006 was $19.9 million or $0.45 per share compared to net income of $11.6 million or $0.33 per share for 2005. Funds from operations for 2006 were $33.4 million or $0.76 per share compared to $24.9 million or $0.70 per share in 2005.

For the fourth quarter of 2006, MAXIM recorded revenue of $40.5 million compared to $39.9 million for 2005 and EBITDA was $17.9 million versus $20.5 million in 2005.

Maxim capitalized on its strategy to shift Milner's 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. The benefit to MAXIM from this strategy was crystallized with Alberta power prices averaging $106/MWh during the second half of 2006, compared to an average Alberta power price of only $55/MWh in the first half. With the shift of Milner's annual turnaround, Milner produced 526,951 MWh (60% of its total generation) during the last six months of 2006. The shift in timing of the turnaround, along with improved pricing, accounted for a significant portion of the increase in MAXIM's revenue during 2006.

Milner produced 253,867 MWh during the fourth quarter of 2006 compared to 248,740 MWh for the same period of 2005. For the year, Milner produced 886,512 MWh compared to 836,852 MWh during 2005, an increase of 49,660 MWh or 6%. The average Alberta spot price for 2006 was $80 per MWh compared to $70 for 2005.

The capacity of MAXIM's Vancouver Landfill Facility in British Columbia was successfully expanded in 2006, with a fourth genset added to the facility. This addition is forecasted to contribute an additional 14GWh of production per year.

MAXIM's USA operations contributed significantly to the overall production increase, as Pawtucket was available for the full year of 2006. MAXIM's other two USA facilities, CDECCA and Basin Creek, are compensated for available capacity, and are not included in the overall production figures in the following table.

The French facilities not operating under cogeneration contracts were dispatched by Electricite de France to produce significantly more power in 2006. Coupled with the acquisitions of the Balleycourt and Canteleu facilities, which were able to contribute two months of production during 2006, MAXIM's France-based production more than doubled over 2005.

Overall production in 2006 reflects the inclusion of the operating results from MAXIM's other projects as follows:

Twelve Months Ended December 31
2006 2005
($ in thousands) MWh Revenue MWh Revenue

Milner 886,512 $ 69,526 836,852 $ 58,610
MAXIM's other facilities(1)
Alberta 34,275 2,751 27,643 2,217
British Columbia 47,067 2,786 37,299 2,265
USA 17,222 2,863 - 220
France 109,228 24,898 40,683 8,855
Sub-total 207,792 $ 33,298 105,625 $ 13,557
Capacity based revenue(1) and other - 8,413 - 1,832
Total 1,094,304 $ 111,237 942,477 $ 73,999

(1) These production figures exclude Basin Creek, CDECCA, and 25MW Alberta
Power Project ("APP") as these facilities provide capacity in exchange
for monthly capacity payments, or capacity based revenue

Accelerated Milner Annual Turnaround

MAXIM also reports that the annual turnaround at its HR Milner Generating Plant ("Milner"), which had previously been scheduled to occur in April, 2007, has been advanced and has commenced as of March 17. The plant is expected to be back online the first week of April. As the duration of the turnaround and the work to be done are not materially different from the original turnaround plan, there is no expected adverse financial impact; however, costs that would have been reflected in Q2 will now be incurred in Q1.


With the acquisition of the Soffimat facilities in France, MAXIM has 482 MW electric and 95 MW thermal of generating capacity. From its total net capacity, 133 MW is exposed to Alberta spot prices. For 2007, Milner has contracted 25 MW of its generation at a fixed power price on a unit contingent basis. The unit contingent agreement will expire on December 31, 2007. In addition, 127 MW of peaking power from the Pawtucket and CDECCA facilities can be elected to be bid into the New England power market, while still eligible for forward capacity payments.

For the balance of 2007, Alberta average power prices are forecasted to be in the range of $76 to $81/MWh, with 2008 prices forecasted to be in the range of $80 to $84/MWh.

Coal for the Milner facility continues to be purchased under a long-term supply agreement. For long term security of supply and pricing, Milner will continue development of the Mine 14 lease during 2007 including seeking the required permits. The development of the coal reserves could serve as the source of fuel for Milner and any future expansion of that facility, as the coal reserves are estimated to contain in excess of 13 million tonnes of recoverable coal.

The six cogeneration plants acquired in France on February 26, 2007 should contribute additional annual EBITDA of between $5.5 and $6.0 million. The acquisition of the six plants was effective January 1, 2007 and MAXIM will benefit from these facilities from this date. With this acquisition, MAXIM has ownership of 18 French power facilities with combined net electrical generation of 114 MW and thermal generation of 65 MW. MAXIM will continue to target France as a country in which to pursue its acquisition strategy.

Conference Call and Webcast for 2006 results

MAXIM will host a conference call for analysts and investors on Tuesday, April 3, 2007 at 9:00 a.m. MDT (11:00 a.m. EDT). 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 (800) 733-7571 or (416) 644-3416 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. EDT) on Tuesday, April 3, 2007 until Wednesday, April 11, 2007 at 9:59 p.m. MDT (11:59 p.m. EDT). To access this replay, please dial (877) 289-8525 or (416) 640-1917 followed by the passcode 21223969#. In addition, the webcast will be available commencing April 4, 2007 in the Investor Relations section of MAXIM's web site at

About MAXIM Power Corp.

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 30 power plants in Western Canada, United States and France, having 482 MW of electric and 103 MW of thermal 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

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 and will update such forward looking statements as required pursuant to applicable securities laws.

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

Contact Information

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