March 01, 2011 23:52 ET

TerraVest Income Fund Releases 2010 Financial Results

VEGREVILLE, ALBERTA--(Marketwire - March 1, 2011) - TerraVest Income Fund (TSX:TI.UN) today released its financial results for the year ended December 31, 2010.

For 2010, the Fund reported:

    2010   2009
Sales from continuing operations $ 88,655 $ 97,184
Gross profit from continuing operations   14,916   12,608
Loss from continuing operations   (1,590)   (57)
Earnings from discontinued operations   9,408   4,466
Net earnings $ 7,818   4,409
Loss, per Unit, basic and diluted continuing operations $ (0.08) $ -
Earnings per Unit, basic and diluted, discontinued operations $ 0.48 $ 0.22
Earnings per Unit, basic and diluted $ 0.40 $ 0.22
Total assets $ 113,135 $ 143,715

On a segmented basis sales for the continuing operations for the years ended December 31, 2010 and 2009 were as follows:

    2010   2009
RJV $ 22,402 $ 18,835
Diamond   24,327   19,566
Beco   37,954   53,848
Don Park USA   3,972   4,935
  $ 88,655 $ 97,184

As previously announced, the Fund's management continues to evaluate each of the portfolio businesses in order to determine fair value. The board of trustees and management have also reviewed the future strategic direction of the Fund, and, as a result of this review, the board of trustees has determined that it is appropriate that management continue the on-going process of testing the value of each remaining portfolio business. This process may result in the future sale of one or more portfolio businesses or the assets thereof. Subject to the Fund's cash requirements at the relevant times, the Fund plans to use proceeds received from the sale of portfolio businesses to pay one or more special distributions to unitholders.

As a result of the value testing process described above, in 2010 the Fund sold the assets and business operations of Stylus and Don Park Canada. On February 7, 2011, the fund announced the sale of the assets and business operations of Ezee-On Manufacturing ("Ezee-On"). The results of these three operations have been shown as Discontinued Operations for 2010. Continuing operations reflect the results of RJV, Diamond, Beco and Don Park USA. 

Included in total assets at December 31, 2010 is a note receivable of $5,916 related to the sale of the Don Park Canada assets which is expected to be received in the second quarter of 2011. The Fund also expects to receive $7,250 in the first quarter of 2011 as payment of the note issued on the sale of the Ezee-On assets and business operations in addition to the proceeds of $7,250 received in February 2011 on closing.

Net earnings for the year ended December 31, 2010 include earnings from discontinued operations of $9,408, whereas net earnings for the year ended December 31, 2009 include earnings from discontinued operations of $4,466 and a gain on acquisition of RNCI of $2,528.

The loss from continuing operations for the year ended December 31, 2010 of $1,590 compared to the loss from continuing operations of $57 in the year ended December 31, 2009, is largely due to weaker operating performance for the year from RJV as a result of weak fundamentals in the natural gas industry.

As a result of the sale of Don Park in December 2010, the sale of Ezee-on in February 2011 and the refinancing of Diamond as previously announced, the Fund repaid its operating loan in full in February 2011 and the Fund's existing credit facility was retired.

The Fund's consolidated financial statements and MD&A are available on SEDAR at www.sedar.com and on the Fund's website at www.terravestincomefund.com.

About TerraVest Income Fund

The Fund has investments in four portfolio businesses:

RJV Gas Field Services ("RJV"), one of Canada's largest providers of wellhead processing equipment for the natural gas industry in western Canada;

Diamond Energy Services ("Diamond"), a market leader in providing well servicing to the oil and natural gas sector in south-western Saskatchewan, with a growing presence in Alberta;

Beco Industries ("Beco"), one of Canada's largest designers and importers of home textile products; and 

Don Park USA ("Don Park USA"), a small US manufacturer and supplier of heating, ventilation and air conditioning products.

Caution Regarding Forward-Looking Statements

This news release includes forward-looking statements. All statements, other than statements of historical fact, contained in this news release are forward-looking statements, including, without limitation, statements regarding our strategic direction and evaluation of the portfolio businesses, the sale of Don Park and Ezee-On, the potential sale of other portfolio businesses or assets thereof, the credit facility, special distributions, tax horizon, capital investments, financial position and results, cash flow, operations, and other plans and objectives of or involving the Fund. Readers can identify many of these statements by looking for words such as "expects", "plans", "will", "anticipates", "continues" and similar words or the negative thereof. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

By their nature, forward-looking statements require us to make assumptions and, accordingly, forward-looking statements are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements concerning the sale of Dan Park and Ezee-On and other forward-looking statements will not prove to be accurate. We caution readers of this news release not to place undue reliance on our forward-looking statements because a number of factors may cause actual future circumstances, results, conditions, actions or events to differ materially from the plans, expectations or estimates expressed in the forward-looking statements and the assumptions underlying them.

Assumptions about payment for Don Park and Ezee-On and assumptions and analysis about the performance of the Fund, as a whole, and the performance, prospects and value of the portfolio businesses and the markets in which they compete are considered in evaluating the portfolio businesses, the Fund's ability to pay distributions and the Fund's tax horizon, in setting the business plan for the Fund, in forecasting the Fund's expected future financial position and results, cash flow, operations, and other plans and objectives of or involving the Fund and in making related forward-looking statements. Should any of these factors or assumptions vary, actual results may differ materially from the forward-looking statements.

The information set forth under "Risk Factors" in the Fund's annual information form dated March 1, 2011 and under "Financial Instruments" in the Fund's MD&A for the year ended December 31, 2010 identifies risk factors that could affect the operating results and performance of the Fund and its portfolio businesses. We caution that the lists of factors discussed in the Fund's annual information form and MD&A are not exhaustive and that, when relying on forward-looking statements to make decisions with respect to the Fund, investors and others should carefully consider the factors discussed, as well as other uncertainties and potential events, and the inherent risks and uncertainties of forward-looking statements. The forward-looking statements herein are made based on the assumption that the Fund will not be affected by such risks or other factors referred to above, but that, if the Fund is affected by any of such risks or factors, the forward-looking statements may become inaccurate.

The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this news release are made as of the date of this news release. Except as required by applicable securities laws, the Fund does not undertake to update any such forward-looking statements.

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