News Releases

News Releases 2015

Mar 17, 2015 - 06:52 ET
Maxim Power Corp. Announces 2014 Financial and Operating Results

CALGARY, ALBERTA--(Marketwired - March 17, 2015) - Maxim Power Corp. (TSX:MXG) ("MAXIM" or the "Corporation") announced today the release of financial and operating results for the fourth quarter and year ended December 31, 2014. The audited consolidated financial statements, accompanying notes and Management Discussion and Analysis will be available on SEDAR and on MAXIM's website on March 17, 2015. All figures reported herein are Canadian dollars unless otherwise stated.

Three Months Ended
December 31
Twelve Months Ended
December 31
($ in thousands except per share amounts) 2014 2013 2014 2013
Revenue $ 30,437 $ 36,807 $ 142,915 $ 173,740
Adjusted EBITDA (1) (1,401 ) (3,633 ) 14,998 39,599
Adjusted net income (loss) (1) (7,117 ) (9,812 ) (9,054 ) 10,583
Per share - basic and diluted $ (0.13 ) $ (0.18 ) $ (0.17 ) $ 0.20
Net income (loss) attributable to shareholders (6,860 ) (9,082 ) (9,113 ) 9,590
Per share - basic and diluted $ (0.13 ) $ (0.17 ) $ (0.17 ) $ 0.18
FFO (2) (90 ) (3,867 ) 13,600 37,266
Per share - basic and diluted $ (0.00 ) $ (0.07 ) $ 0.25 $ 0.69
Electricity Deliveries (MWh) 249,252 257,025 999,388 1,091,053
Net Generation Capacity (MW) (3) 776 785 776 785
Average Alberta power price - market ($ per MWh) $ 30.47 $ 48.60 $ 49.42 $ 80.19
Average Alberta power price - Milner realized ($ per MWh) $ 36.49 $ 50.30 $ 64.10 $ 106.92
Average US power price - Northeast U.S. realized (US$ per MWh) $ 81.78 $ 150.62 $ 139.51 $ 136.30
(1) Select financial information was derived from the audited consolidated financial statements and is prepared in accordance with IFRS, except adjusted EBITDA and adjusted net income (loss). 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. Adjusted net income (loss) is used to compare MAXIM's results among reporting periods without consideration of unrealized gains and losses and to evaluate MAXIM's performance. Adjusted EBITDA and adjusted net income (loss) do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.
(2) Funds from operating activities before changes in working capital ("FFO") 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 fluctuations.
(3) Generation capacity is manufacturer's nameplate capacity net of minority ownership interests of third parties.


During the fourth quarter of 2014, revenue decreased as a result of a decline in the Alberta pool price, lower weather based demand in the northeastern United States, lower dispatches and therefore lower generation in France and the sale of Vancouver Landfill in the third quarter of 2014.

Adjusted EBITDA and FFO increased in the fourth quarter of 2014 when compared to the fourth quarter of 2013. The increase in these measures is primarily due to non-recurring costs associated with MAXIM reviewing strategic alternatives for U.S. and France operating segments in 2013, partially offset by the revenue factors above. Further increasing FFO is a tax recovery from 2013 tax returns.

Net loss attributable to shareholders in the fourth quarter of 2014 has decreased when compared to the same period in 2013. The decrease is primarily due to the factors above, higher depreciation in the fourth quarter in 2013 for the Corporation's US operations which were reclassified from discontinued operations in 2013 to continuing operations in 2014 and insurance recoveries related to legal fees associated with the Federal Energy Regulatory Commission ("FERC") inquiry in the fourth quarter of 2014.

On a year to date basis, revenue, adjusted EBITDA, adjusted net income (loss), net income (loss) attributable to shareholders and FFO decreased in 2014 when compared to 2013. The decrease in these financial measures is primarily due to lower Alberta power prices throughout 2014 as well as lower generation in the Northeast U.S. in 2014.


On January 20, 2015, the AUC rendered its decision on Module A of Phase 2 of the Corporation's complaint related to the Alberta Electric Systems Operator ("AESO") Line Loss Rule for contravening the Transmission Regulations and being unjust, unreasonable, unduly preferential, arbitrarily or unjustly discriminatory and inconsistent with or in contravention of the 2003 Electric Utilities Act (AUC Decision 2014-110). The decision states that the AESO has the requisite authority to grant such relief and that monetary relief will be granted to the Corporation for the period January 1, 2006 to the date a new rule takes effect. MAXIM anticipates that these proceedings will establish compensation to MAXIM as early as the fourth quarter of 2015. As at the date of this press release, an estimate of this amount cannot be made.


The Corporation, as previously reported, has been responding to the FERC inquiry since the latter part of 2013. On November 3, 2014, FERC issued a Notice of Alleged Violations ("Notice") concerning the Office of Enforcement ("OE") inquiry. On February 2, 2015, FERC issued an Order to Show Cause ("Order") concerning certain offers to supply electricity occurring during July and August of 2010. The preliminary findings of the OE, the Notice and the Order do not constitute findings of FERC. FERC notes in the Order that the issuance of the Order does not indicate Commission adoption or endorsement of the OE staff report. MAXIM and its external legal counsel strongly disagree with the preliminary findings of OE, the Notice and the Order.


On July 17, 2014, MAXIM closed the sale of its wholly-owned subsidiary, Maxim Power (B.C.) Inc. ("Maxim BC") to Village Farms International, Inc. Maxim BC owned and operated the Vancouver Landfill Power Project, a 7.4 MW electrical and 9.1 MW thermal energy landfill gas cogeneration project in Delta, BC. Proceeds from the sale of $5.2 million were utilized for strategic corporate purposes. This transaction concluded the sale of MAXIM's investments in British Columbia, with the sale of MAXIM's other B.C. asset, the Hartland Generating Facility, in 2013. The sale of these two investments resulted in a net gain of $105 thousand.


During 2014, COMAX secured debt financing of $11.6 million (8.3 million Euro) for five renovation projects. The terms of the loans are favorable with leverage ranging from 80% to 91% of the project investment and fixed interest rates ranging from 3.0% to 4.5%. Total capital expenditures related to the 2014 renovation program in COMAX were $11.8 million (8.4 million Euro). The Corporation estimates that the remaining capital costs will be $1.8 million (1.3 million Euro). COMAX has deferred two additional renovation projects, originally included in the 2014 renovation program scope, to 2015.


Milner Expansion 3 ("M3")

On February 12, 2015, MAXIM received approval from the AUC to construct and operate M3. MAXIM is proposing to enhance the Milner site energy output by building M3 which will comprise two new gas-fired turbines located next to Milner. M3 will increase generating capacity at the Milner site while reducing total greenhouse gases and air emissions. The existing infrastructure at the Milner site allows MAXIM to leverage benefits including electrical connection, fuel delivery, water licenses, and a skilled operations team.

Exhaust energy from M3's gas turbines will be converted to steam and utilized to generate electricity in the existing Milner steam turbine, displacing coal-sourced steam. The generating capacity at the site will increase by 86 MWs to 236 MWs. Total emissions of carbon dioxide, nitrogen oxides, sulfur oxides and particulates at the Milner site will decrease compared to running the existing Milner coal facility.

Milner Expansion 2 ("M2")

On June 4, 2014, the AUC approved MAXIM's application to convert the fuel source for M2 from coal to natural gas and to increase the generating capacity of the proposed expansion from 500 MW to 520 MW. The M2 facility is to be located adjacent to the existing 150 MW Milner generating facility.

Forked River

MAXIM has submitted an application to PJM to increase the output at the Forked River site by up to 100 MW. New Jersey Central Light and Power, the local utility, is currently undertaking the required studies to determine the feasibility of introducing incremental capacity at the site. An expansion in the facility will provide additional capacity to participate in future capacity auctions and realize cost savings per MWh because this expansion project will be on the existing Forked River site. MAXIM is also evaluating the feasibility of developing a 500 MW combined cycle generating facility on its land adjacent to the existing Forked River site.

Summit Coal Limited Partnership ("SUMMIT")

SUMMIT is MAXIM's development initiative located north of Grande Cache, Alberta that owns metallurgical coal leases for M14 and M16S. Current estimates for M14 are 18.9 million tonnes of low-mid volatile metallurgical coal reserves with a mine life of 17 years based on the NI 43-101 Technical Report filed on SEDAR on March 21, 2013. M16S is located 30 kilometers northwest of M14 and represents 1,792 hectares or 29% of SUMMIT's total area of coal leases. A NI 43-101 Technical Report has not been prepared for M16S.

M14 is permitted for a run-of-mine production rate of up to 1,300,000 tonnes per year. MAXIM has also received approval from the Alberta Energy Regulator to construct and operate a Coal Beneficiation Plant. These approvals provide SUMMIT with all of the requisite government and regulatory approvals to construct and operate M14. In November 2014, MAXIM received delivery of five pieces of mine equipment including two continuous miners and three shuttle cars. The units are in storage awaiting development of SUMMIT. The Corporation expects that the long-run average price forecast for metallurgical coal will allow for the economically viable development of SUMMIT.

Deerland Peaking Station ("D1")

MAXIM has received regulatory approvals 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.

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. 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 expected new provincial greenhouse gas legislation.


MAXIM will host a conference call for analysts and investors on Thursday, March 19, 2015 at 11:00 am MDT. The call will be hosted by John Bobenic, MAXIM's President and Chief Executive Officer, and by Mike Mayder, Senior Vice President, Finance and Chief Financial Officer. To participate in this conference call please dial (877) 291-4570 or (647) 788-4919 in the Toronto area and refer to Maxim Power Corp.'s Q4 Results call. It is recommended that participants call at least ten minutes prior to start time.

A recording of the conference call will be available from March 19 to March 26, 2015. To access the replay dial (800) 585-8367 or (416) 621-4642 followed by conference ID 4338508. In addition, the recording will be available commencing March 19, 2015 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 39 power plants in Alberta, the United States and France, having 776 MW of electric 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
Senior Vice President, Finance and CFO
(403) 750-9311