UE Waterheater Income Fund
TSX : UWH.UN

UE Waterheater Income Fund

April 30, 2007 17:31 ET

UE Waterheater Income Fund Announces Financial Results for the First Quarter Ended March 31, 2007

TORONTO, ONTARIO--(CCNMatthews - April 30, 2007) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES.

UE Waterheater Income Fund (TSX:UWH.UN), today released financial results for the first quarter ended March 31, 2007. The management discussion and analysis and interim consolidated financial statements for the quarter may be viewed at www.sedar.com. Highlights for the quarter are as follows:

- Total revenue increased $7.7 million, or 10%, over the first quarter of 2006, with Water Heater and HVAC segment revenues increasing $5.9 million, and Security segment revenues increasing $1.8 million

- EBITDA increased $3.5 million, or 10%, over the first quarter of 2006, with the Water Heater and HVAC segment contributing $3.3 million of the increase, and the Security segment contributing $0.2 million of the increase

To view a graph comparing the gross revenue for the first quarters for 2005, 2006 and 2007, please visit the following link: http://www.ccnmatthews.com/docs/uewif-graph.pdf

Commenting on the Fund's performance for the quarter, Chief Executive Officer Roger Rossi said, "We are very pleased with our first quarter results. Revenues are up 10% over the same quarter last year, and EBITDA is up 10%. We experienced strong growth in our rental HVAC, Comfort Protection Plan, and Security businesses, in addition to more modest growth in our rental water heater business. Distributable cash increased 27% over the first quarter of 2006 to $19.8 million. Despite higher distributions per unit in the first quarter of 2007, distributions as a ratio of distributable cash decreased to 66% from 76% in the same period last year."



SELECTED FINANCIAL INFORMATION
(in thousands of dollars, except for unit information)
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Three months ended March 31
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2007 2006
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Revenue $ 85,431 $ 77,762
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Cost of sales, general and administration 45,665 41,503
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Depreciation and amortization 19,710 19,071
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Operating income 20,056 17,188
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Change in fair value of interest rate
contracts 85 73
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Finance and interest charges 4,738 4,749
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Income before income taxes 15,233 12,366
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Income and large corporations taxes - 222
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Net income $ 15,233 $ 12,144
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Cash provided by operating activities $ 22,489 $ 27,000
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Cash used in financing activities (12,967) (11,630)
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Cash used in investing activities (16,897) (22,233)
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Unitholder cash distributions declared 13,048 11,853
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Unitholder cash distributions paid 13,041 11,594
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Earnings before finance and interest charges,
taxes, depreciation and amortization
(EBITDA) 39,766 36,259
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Total assets $ 1,011,158 $ 1,000,224
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Unit Analysis
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Total outstanding units at March 31 49,321,590 49,246,365
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Weighted average units outstanding
for the period 49,275,568 49,233,000
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Earnings per unit - basic and diluted $ 0.31 $ 0.25
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EBITDA per unit - basic and diluted $ 0.81 $ 0.74
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Distributions declared per unit - basic
and diluted $ 0.26 $ 0.24
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ABOUT UE WATERHEATER INCOME FUND

UE Waterheater Income Fund is an unincorporated, open-ended, limited purpose trust established under the laws of Ontario that indirectly holds, through UE Waterheater Operating Trust, the water heater rental business of Union Energy Limited Partnership ("Union Energy LP") and its related commercial activities as well as the security monitoring business of Protectron Limited Partnership ("Protectron LP"). Each unit of the Fund represents an indirect ownership interest in Union Energy LP and Protectron LP, which own and operate the businesses.

The Fund reports its operations in two segments: the "Water Heater and HVAC" segment and the "Security" segment.

The Water Heater and HVAC segment rents and services a portfolio of more than one million residential and commercial water heaters in Ontario. The residential water heater portfolio is Canada's second largest and was initiated in the 1960s. In addition, this segment has related commercial activities that complement the water heater rental business: being the retail sale, rental, service and maintenance, and financing of heating, ventilation and air-conditioning ("HVAC") equipment. The segment operates under the Union Energy, UEI Financial, Reliance Home Comfort, and Reliance Commercial Services brand names.

The Security segment operations began July 15, 2005 with the acquisition of Protectron Holdings Inc. ("Protectron"). This segment provides electronic security system sales, installation, rental, service, monitoring, and related commercial activities, serving approximately 196,000 customers across Canada, under the Protectron Security Systems and Reliance Protectron Security Services brand names. The Security segment has its head office, a call centre and monitoring station in Montreal, a call centre and monitoring station in Ottawa, monitoring stations in Quebec City and Vancouver, and branch offices across Canada. The segment also maintains a network of authorized dealers throughout Canada.

Products of both segments are also marketed under the Reliance brand, providing consumers integrated home comfort and security solutions.

Caution regarding forward-looking statements

This communication may contain forward-looking statements about the objectives, financial condition, results of operations and business of the Fund. These statements are "forward-looking," as they are based on current expectations about the Fund's business and the markets the Fund operates in and on various estimates and assumptions.

- Forward-looking statements in this communication describe the Fund's expectations on April 30, 2007.

- Actual results could be materially different from the Fund's expectations if known and unknown risks affect the Fund's business or if the Fund's estimates or assumptions turn out to be inaccurate. As a result, the Fund cannot guarantee that any forward-looking statement will materialize.

- Forward-looking statements do not take into account the effect that transactions or non-recurring items announced or occurring after the statements are made have on the Fund's business.

- The Fund disclaims any intention or obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.

- Risks that could cause actual results to differ from the Fund's current expectations include the risks discussed under the heading "Risks and Uncertainties" of the Fund's annual information form filed on www.sedar.com.

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