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Maxim Power Corp. Announces 2012 Third Quarter Financial and Operating Results

CALGARY, ALBERTA -- (Marketwire) -- 11/09/12 -- Maxim Power Corp. (TSX:MXG) ("MAXIM" or the "Corporation") announced today the release of financial and operating results for its third quarter ended September 30, 2012. The unaudited financial statements, accompanying notes and Management Discussion and Analysis will be available on SEDAR and on MAXIM's website on November 9, 2012. All figures reported herein are Canadian dollars unless otherwise stated.

FINANCIAL HIGHLIGHTS                                                        
                                Three Months Ended         Nine Months Ended
                                     September 30,             September 30,
($ in thousands except                                                      
 per share amounts)              2012         2011         2012         2011
Net revenue (1)            $   41,620   $   37,593   $  105,454   $  110,474
Adjusted EBITDA (1)            16,612       13,690       25,259       27,523
Adjusted net income (1)         9,765        5,404        9,946        5,973
Net income                      8,343       17,787        2,253       16,871
 Per share - basic and                                                      
  diluted                  $     0.15   $     0.33   $     0.04   $     0.31
Funds from operations                                                       
 (2)                           16,700       13,618       25,666       27,313
 Per share - basic and                                                      
  diluted                  $     0.31   $     0.24   $     0.47   $     0.50
Electricity Deliveries                                                      
 (MWh)                        354,976      335,268      834,992      907,808
Net Generation Capacity                                                     
 (MW) (3)                         788          809          788          809
Average Alberta Power                                                       
 Prices ($ per MWh)        $    78.09   $    94.69   $    59.48   $    76.26
Average Milner Realized                                                     
 Electricity Price                                                          
($ per MWh)                $   134.70   $    95.41   $    87.48   $    76.91
(1) Select financial information was derived from the unaudited condensed   
consolidated interim financial statements and is prepared in accordance with
Part 1 of the Canadian Institute of Chartered Accountants Handbook ("GAAP"),
except net revenue, adjusted EBITDA, and adjusted net income. Net revenue is
provided to highlight revenue net of any gains or losses realized on        
commodity swaps. Adjusted EBITDA is provided to assist management and       
investors in determining the Corporation's approximate operating cash flows 
before interest, income taxes, and depreciation and amortization and certain
other income and expenses, and adjusted net income is used to compare       
MAXIM's results among reporting periods without consideration of unrealized 
gains and losses and to evaluate MAXIM's performance. Net revenue, adjusted 
EBITDA, and adjusted net income do not have any standardized meaning        
prescribed by GAAP and may not be comparable to similar measures presented  
by other companies.                                                         
(2) Funds from operations is an Additional GAAP measure provided to assist  
management and investors in determining the Corporation's cash flows        
generated by operations before the cash impact of working capital           
(3) Generation capacity is manufacturer's nameplate capacity net of minority
ownership interests of third parties.                                       


Net revenue, adjusted EBITDA, and funds from operations increased in the third quarter of 2012 when compared to the third quarter of 2011. The increase in these financial measures is primarily due to higher generation and pricing at MAXIM's Pittsfield facility in the Northeast US as well as higher realized prices at Milner due to greater price volatility with Milner remaining predominantly unhedged to commodity prices in the third quarter of 2012.

Net income in the third quarter of 2012 was favourably affected by the aforementioned factors, partially offset by an unrealized (non-cash) loss on a derivative coal contract in 2012 as compared to an unrealized gain in 2011.

On a year to date basis, net revenue, adjusted EBITDA, net income and funds from operations have decreased from the prior year. The decrease in these financial measures is primarily due to a decline in Alberta power prices which had led to lower generation and impacted Milner results. Net income further decreased because of the previously mentioned unrealized loss on a derivative coal contract, which was partially offset by a gain from the sale of the APP facility.


On November 8, 2012, the Corporation, through a subsidiary, amended one of its long-term coal supply agreements. The amended agreement will expire in 2015 and based on the current prices in the amended agreement, the purchase commitment remaining decreases by $20.1 million.


Deerland Peaking Station ("D1")

MAXIM is actively pursuing commercial arrangements that will allow for the construction of the 190 MW D1 Station to commence during 2013. MAXIM received regulatory approvals in 2008 to construct and operate D1. The D1 site is located near Bruderheim in Alberta's Industrial Heartland, and it is in close proximity to the entry point of the proposed Gateway pipeline and adjacent to the existing Deerland high voltage substation. This area is expected to experience significant growth in electrical demand. D1 is the only permitted peaking development project in the province of Alberta as at the date of this press release. This project is attractive due to an anticipated contraction of reliable base load supply in the Alberta power market. As such, MAXIM expects peaking requirements across Alberta to continue to grow to meet increasing demand and to provide firm backup for additional intermittent wind resources. During the second quarter of 2012, MAXIM entered into an agreement to secure firm natural gas transportation services for D1.

Summit Coal Limited Partnership ("SUMMIT") Mine 14 Project

SUMMIT is wholly owned by MAXIM and was formed in 2011 to advance the Mine 14 Project. SUMMIT has achieved certain key milestones essential to commencing commercial operations of Mine 14. In 2011, the ERCB granted the license to commence underground mining of the Mine 14 coal reserve. SUMMIT has firm terminal capacity and terminal processing services to enable the majority of Mine 14's proposed coal production to access the valuable seaborne coking coal market commencing January 1, 2015. SUMMIT has also secured firm 2013 delivery dates for critical mining equipment, including continuous miners and shuttle cars. The field work for the 2012 exploration program was recently completed and MAXIM anticipates providing an updated Technical Report during the first quarter of 2013, which will contribute to the advancement of a strategic review related to SUMMIT's Mine 14 project.

Milner Expansion ("M2")

The AUC has granted MAXIM approval to develop a 500 MW generating facility adjacent to the existing 150 MW generating facility ("M1"). A lengthy public consultation and regulatory process culminated in the project's final approval by the AUC on August 10, 2011. On September 12, 2012 the Government of Canada enacted new greenhouse gas legislation that limits the amount of carbon dioxide emitted by coal-fired generation facilities. MAXIM is examining ways to meet the new standards including development of a natural gas-fired facility. All aspects are presently being studied to determine the most viable and effective course of action.

Buffalo Atlee ("B1")

MAXIM acquired the B1 Power Project, situated near Brooks, Alberta, through an amalgamation with EarthFirst Canada Inc. This project has the potential for development of over 200 MW of wind generation capacity. Wind data has been collected on the site for approximately five years and supports project development based on higher power prices than those realized during recent months. MAXIM holds an exploratory Crown land permit with a term of five years, expiring on January 1, 2016. The addition of wind generation to MAXIM's existing portfolio of assets will diversify MAXIM's generation fuel types and provide the potential to offset the impact of the new greenhouse gas legislation.


2012 Guidance

MAXIM's results are significantly impacted by Alberta spot power prices. In preparing its guidance, management uses Alberta forward electricity prices as a proxy for Alberta spot electricity prices. The market for forward contracts is relatively illiquid and forward prices may not be a good predictor of settled prices as they may not factor in events such as unplanned outages that can cause a significant increase in settled power prices. Notwithstanding, MAXIM prepares its guidance using forward electricity price from independent sources.

MAXIM is updating guidance that was provided on August 9, 2012 as follows:

($ in thousands except per share amounts)                                   
                                    Guidance provided on        Updated 2012
Select guidance KPI's                     August 9, 2012            Guidance
Adjusted EBITDA                                   34,300              37,200
Funds from operations                             34,900              37,700
Funds from operations per share -                                           
 basic and diluted ($ per share)                    0.65                0.70
Adjusted net income                               11,600              14,200
Adjusted net income per share -                                             
 basic and diluted ($ per share)                    0.21                0.26
Net income                                         6,100               8,000
Net income per share- basic and                                             
 diluted ($ per share)                              0.11                0.15

MAXIM's revised 2012 guidance reflects an increase in all of its guidance KPI's. The increase is primarily due to improved performance at the Pittsfield facility during the third quarter as well as greater volatility in Alberta spot prices during the third quarter and beginning of the fourth quarter.

These projections are based on MAXIM`s existing portfolio of assets, do not include the impact of possible acquisitions or the commercialization of development initiatives, and are based on the following assumptions:

                                    Guidance provided on        Updated 2012
Guidance Assumptions                      August 9, 2012            Guidance
Electricity deliveries (MWh):                                               
 HR Milner                                       722,227             645,550
 Other facilities                                532,942             557,898
 Total electricity deliveries                  1,255,169           1,203,448
Net generation capacity at year end                                         
 (MW)                                                796                 796
Capital expenditures (excluding                                             
 France repowering and peaking                                              
  facilities                                       9,300               9,100
 Development projects                             12,500               8,900
 Other assets                                      3,400               3,500
 HR Milner                                         1,600               2,100
 Total capital expenditures                       26,800              23,600
Average Alberta spot electricity                                            
 price ($/MWh)                                     64.80               63.86
Average annual foreign exchange                                             
 C$/USD                                             1.00                1.00
 C$/Euro                                            1.27                1.25
Weighted average shares outstanding                                         
 - basic (000's)                                  54,084              54,084
Weighted average shares outstanding                                         
 - diluted (000's)                                54,086              54,085

The decrease in Milner generation from 722,227 MWh per August 9, 2012 guidance to 645,550 MWh is a result of reduced generation during periods of lower power prices during the third quarter, which is expected to continue in the fourth quarter. This is partially offset by an increase in generation in the Northeast US during the third quarter, primarily due to transmission constraints and weather based demand at the Pittsfield facility.

Forecasted capital expenditures have decreased primarily to reflect a deferral in the construction timeline for Deerland from 2012 to 2013.


MAXIM will host a conference call for analysts and investors on Friday November 9, 2012 at 11:30 am MT. The call will be hosted by John Bobenic, MAXIM's President and Chief Executive Officer, and by Mike Mayder, Vice President, Finance and Chief Financial Officer. To participate in this conference call, please dial (866) 696-5910 or (416) 340-2217 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 November 9, 2012 to November 16, 2012. To access the replay, dial (800) 408-3053 or (905) 694-9451 followed by the passcode 6805469. In addition, the recording will be available commencing November 9, 2012 in the Investor Relations section of MAXIM's website at


Based in Calgary, Alberta, MAXIM is an independent power producer, which acquires or develops, owns and operates innovative and environmentally responsible power and power related projects. MAXIM currently owns and operates 40 power plants in western Canada, the United States and France, having 788 MW of electric and 111 MW of thermal net generating capacity. 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.

Maxim Power Corp.
John R. Bobenic
President and CEO
(403) 750-9300

Maxim Power Corp.
Michael R. Mayder
Vice President, Finance and CFO
(403) 750-9311

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