OAK BROOK, IL, July 23 /PRNewswire-FirstCall/ -- Primary Energy Recycling Corporation (TSX: PRI.UN) (the "Company" ) today released its financial results for the three and six month periods ended June 30, 2008. All amounts are in U.S. dollars unless otherwise indicated.
Key Points - The Company demonstrated solid financial performance and improved
operational stability for the second consecutive quarter following
implementation of an amended agreement with the site host at Harbor
Coal. - The payout ratio improved to 89.2% compared to 187.4% for the second
quarter of 2007. For the first six months of 2008, the payout ratio
improved to 87.5% compared to 202.5% for the same period in 2007. - Distributable cash generated for the second quarter and the first six
months of 2008 was Cdn$8.3 million or Cdn$0.22 per Enhanced Income
Security ("EIS") and Cdn$17.0 million or Cdn$0.46 per EIS,
respectively. - Operating income for the second quarter of 2008 was $1.5 million,
compared to an operating loss of $3.0 million for the second quarter
of 2007. The $4.5 million improvement is primarily due to the amended
agreement at Harbor Coal and the non recurrence of the 2007 outage at
the North Lake facility.
"The Company experienced solid financial performance driven by the ratification of the amended agreement with the site host at the Harbor Coal facility reached earlier this year," said V. Michael Alverson, Interim President and Chief Financial Officer of EPCOR USA Ventures, LLC (the "Manager"). "This has created a new environment of greater operational stability as well as more reliable and sustainable cash flow." In the second quarter of 2008, the Company earned revenue of $15.6Â million, a decrease of 12.8% from the second quarter of 2007. For the first six months of 2008, the Company earned revenue of $31.8 million, a decrease of 8.1%, from the same period in the prior year. The decrease in revenue for the three and six month periods is primarily due to a decline in Energy service revenue at the Company's Harbor Coal facility as a result of 2008 revenue being computed under an amended partnership agreement. Operating and maintenance expense for the second quarter of 2008 was $2.7 million, down 67.7% from the second quarter of 2007. For the first six months of 2008, operating and maintenance expense was $5.5 million down 62.5% from the same period in the prior year. The decline for both the three and six month periods is primarily due to a decline in maintenance expenses at the Company's Harbor Coal facility as a result of the amended partnership agreement which allocates the majority of operating and maintenance expenses to Harbor Coal's partner.
General and administrative expense for the second quarter of 2008 was $3.0 million, an increase of 21.2% compared to the second quarter of 2007, primarily due to additional property tax expenses of $0.2 million and $0.3Â million in other general and administrative expenses. For the first six months of 2008, general and administrative expense was $5.8 million, an increase of 7.2% due to $0.4 million of additional other general and administrative expenses.
Distributable Cash for the second quarter and the first six months of 2008 was Cdn$8.3 million or Cdn$0.22 per EIS, and Cdn$17.0 million or Cdn$0.46, respectively. Distributions declared in the quarter and six-month period were Cdn$7.4 million or Cdn$0.20 per EIS and Cdn$14.9 million or Cdn$0.40 per EIS, respectively.
The payout ratio for the second quarter of 2008 improved to 89.2% compared to 187.4% for the second quarter of 2007. For the first six months of 2008, the payout ratio improved to 87.5% compared to 202.5% for the same period in 2007.
At the end of the second quarter 2008, the Company had cash on-hand of $11.1 million and $15.0 million of undrawn revolver capacity. During the second quarter, a cash payment of $3.0 million was made to bring the outstanding revolver balance to zero.
The Company's previously announced review of strategic options as well as discussions with EPCOR Power LP. continue.
Distributable Cash Summary
(in 000s of US$, except per share data and as otherwise indicated) Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
Distributable Cash $ 7,129 $ 3,895 $ 14,533 $ 8,137
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Per Common and equivalent
Common Share $ 0.19 $ 0.10 $ 0.39 $ 0.22
----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- Interest on EIS
Subordinated Notes $ 1,944 $ 1,944 $ 3,888 $ 3,888
Distributions on Common
Shares 3,350 4,131 6,700 9,824
Distributions on
non-controlling Class B
preferred interest 380 380 760 760
Distributions on
non-controlling Class B
common interest 685 844 1,370 2,008
----------- ----------- ----------- -----------
Total distributions $ 6,359 $ 7,299 $ 12,718 $ 16,480
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Per Common and equivalent
Common Share $ 0.17 $ 0.20 $ 0.34 $ 0.44
----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- Hedge rate (Cdn$ per US$) $ 1.1712 $ 1.1712 $ 1.1712 $ 1.1689
Distributable Cash (Cdn$) $ 8,349 $ 4,562 $ 17,021 $ 9,511
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Per Common and equivalent
Common Share (Cdn$) $ 0.22 $ 0.12 $ 0.46 $ 0.26
----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- Hedge rate (Cdn$ per US$) $ 1.1712 $ 1.1712 $ 1.1712 $ 1.1689
Total distributions (Cdn$) $ 7,448 $ 8,549 $ 14,896 $ 19,263
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Per Common and equivalent
Common Share (Cdn$) $ 0.20 $ 0.23 $ 0.40 $ 0.52
----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- Excess (shortfall)
distributable cash (Cdn$) $ 901 $ (3,987) $ 2,125 $ (9,752)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Per Common and equivalent
Common Share (Cdn$) $ 0.02 $ (0.11) $ 0.06 $ (0.26)
----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- Payout Ratio 89.2% 187.4% 87.5% 202.5% The Company's full financial statements and Management's Discussion and Analysis, are available at http://www.sedar.com/ or the Company's website at http://www.primaryenergyrecycling.com/.
Conference Call and Webcast Management will also host a conference call to further discuss the first quarter results on Thursday, July 24, at 11:00 a.m. (ET). Following management's presentation, there will be a question and answer session. To participate in the conference call, please dial 416-644-3414 or 1-800-733-7560. A conference call replay will be available until 12 a.m. on July 31, 2008 (ET). The replay can be accessed by dialing 416-640-1917 or 1-877-289-8525 and entering passcode 21276863 followed by the number sign. A webcast replay will also be available for 90 days by accessing a link through the Investor Information section at http://www.primaryenergyrecycling.com/.
Non-GAAP Measures Distributable Cash is not a recognized measure under U.S. GAAP or Canadian GAAP and does not have a standardized meaning prescribed by U.S. GAAP or Canadian GAAP. Therefore, Distributable Cash may not be comparable to similar measures presented by other companies. See the definitions of Distributable Cash in the Company's MD&A.
Forward-Looking Statements When used in this news release, the words "anticipate", "expect", "project", "believe", "estimate", "forecast" and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks, uncertainties and assumptions pertaining, but not limited, to operating performance, regulatory parameters, weather and economic conditions and the factors discussed in the Company's public filings available on SEDAR at http://www.sedar.com/. These forward-looking statements are made as of the date of this press release and the Company assumes no obligation to update or revise them to reflect new events or circumstances.
About Primary Energy Recycling Corporation Primary Energy Recycling Corporation owns a majority interest in Primary Energy Recycling Holdings LLC ("PERH"). PERH, headquartered in Oak Brook, Illinois, indirectly owns and operates four recycled energy projects and a 50% interest in a pulverized coal facility (collectively, the "Projects"). The Projects have a combined electrical generating capacity of 283 megawatts and a combined steam generating capacity of 1.8 MMlbs/hour. PERH creates value for its customers by capturing and recycling waste energy from industrial and electric generation processes and converting it into reliable and economical electricity and thermal energy for its customers' use. For more information, please see http://www.primaryenergyrecycling.com/. DATASOURCE: Primary Energy Recycling Corporation CONTACT: V. Michael Alverson, Interim President & Chief Financial Officer, Primary Energy Recycling Corporation, (630) 371-0639,
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