Primary Energy Recycling Corporation announces fourth quarter and year-end 2008 results
Summary
- Operating income for the year ended December 31, 2008 improved over
the year ended December 31, 2007 by $10.2 million
- The negative revenue impact of the fourth quarter downturn in the
global steel industry, including in the USA, was limited to
$2.5 million, due to the strength of the Company's host's operations
and the high fixed payment provisions of the Company's contracts
- The amended Harbor Coal agreement continues to yield favorable
results.
- The Company paid a total distribution of Cdn$0.80 per enhanced income
security ("EIS") during 2008 which resulted in a payout ratio of
97.1%.
- Board of Directors initiated a sale process that could result in the
sale of the Company or Primary Energy Recycling Holdings, LLC
("PERH") and retained Credit Suisse Securities (USA) LLC ("Credit
Suisse") and Genuity Capital Markets ("Genuity") as financial
advisors. The process is on-going with select bidders performing
detailed due diligence.
- The Board also launched a financing initiative to replace the
Company's existing term debt that expires in August 2009. Credit
Suisse was retained to lead the refinancing.
“In 2008, the Company’s facilities generally performed well with no repeat of the major unplanned outages experienced in 2007. Since our facilities serve high quality, low cost steel producers, we did not experience any shutdown of our operations due to steel industry production curtailments during the fourth quarter. We serve strong mills and have contracts that provide large fixed fee payments, thus our economic impact was somewhat mitigated. This was a stress test of our risk thesis which proved that our strategy of providing services to premier steel facilities is sound,” said
“As previously announced, the Board of Directors retained Credit Suisse and Genuity to facilitate a process that could result in the sale of the Company or PERH. The process is on-going with select bidders performing detailed due diligence, including site visits to facilities. The Board has also engaged Credit Suisse to arrange a new credit facility to replace the Company’s existing term debt which matures in August of this year. The Company and its advisors are carefully coordinating their efforts on the refinancing to provide for both the on-going operations of the Company and, in the event of a sale of the Company or PERH, to assist potential buyers at the appropriate time and to the event required for their acquisition financing.”
In the fourth quarter of 2008, the Company earned revenue of
Total operating and maintenance expense for the fourth quarter of 2008 was
General and administrative expense for the fourth quarter of 2008 was
Depreciation and amortization expense in 2008 was
Operating income in 2008 was
At
Distributable Cash for 2008 was
Distributable Cash Summary
(in 000's of US$, except per share data and as otherwise indicated)
For the Years Ended
December 31,
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2008 2007
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Distributable Cash $ 26,183 $ 20,500
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Per Common and equivalent Common Share $ 0.70 $ 0.55
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Interest on EIS Subordinated Notes $ 7,776 $ 7,776
Distributions on Common Shares 13,400 14,290
Distributions on non-controlling Class B
preferred interest 1,520 1,520
Distributions on non-controlling Class B
common interest 2,740 2,921
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Total distributions $ 25,436 $ 26,507
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Per Common and equivalent Common Share $ 0.68 $ 0.71
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Hedge rate (Cdn$ per US$) $ 1.1712 $ 1.1698
Distributable Cash (Cdn$) $ 30,666 $ 23,981
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Per Common and equivalent Common Share (Cdn$) $ 0.82 $ 0.64
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Hedge rate (Cdn$ per US$) $ 1.1712 $ 1.1698
Total distributions (Cdn$) $ 29,791 $ 31,008
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Per Common and equivalent Common Share (Cdn$) $ 0.80 $ 0.83
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Excess (shortfall) distributable cash (Cdn$) $ 875 $ (7,027)
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Per Common and equivalent Common Share (Cdn$) $ 0.02 $ (0.19)
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Payout Ratio 97.1% 129.3%
The Company’s full financial statements and Management’s Discussion and Analysis, are available at www.sedar.com or the Company’s website at www.primaryenergyrecycling.com.
Conference Call and Webcast
Management will also host a conference call to further discuss the fourth quarter and full year results on
Non-GAAP Measures
Distributable Cash and EBITDA are not recognized measures under U.S. GAAP or Canadian GAAP and do not have standardized meanings prescribed by U.S. GAAP or Canadian GAAP. Therefore, Distributable Cash and EBITDA may not be comparable to similar measures presented by other companies. See the definitions of Distributable Cash and EBITDA 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 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, except as required by applicable securities laws.
About Primary Energy Recycling Corporation
Primary Energy Recycling Corporation owns a majority interest in Primary Energy Recycling Holdings LLC (“PERH”). PERH, headquartered in
SOURCE Primary Energy Recycling Corporation