Maxim Power Corp. Announces 2015 First Quarter Financial and Operating Results

CALGARY, ALBERTA -- (Marketwired) -- May 05, 2015 -- Maxim Power Corp. ("MAXIM" or the "Corporation") (TSX: MXG) announced today the release of financial and operating results for the first quarter ended March 31, 2015. The unaudited condensed consolidated interim financial statements, accompanying notes and Management Discussion and Analysis will be available on SEDAR and on MAXIM's website on May 5, 2015. All figures reported herein are Canadian dollars unless otherwise stated.


                                                      Three Months Ended    
                                                           March 31         
($ in thousands except per share amounts)                 2015          2014
Revenue                                            $    47,521   $    69,132
Adjusted EBITDA (1)                                      6,596        16,573
Adjusted net income (loss) (1)                          (6,153)        3,815
  Per share - basic and diluted                    $     (0.11)  $      0.07
Net income (loss) attributable to shareholders          (5,927)        3,487
  Per share - basic and diluted                    $     (0.11)  $      0.06
FFO (2)                                                  4,985        15,001
  Per share - basic and diluted                    $     (0.09)  $      0.28
Electricity Deliveries (MWh)                           238,049       338,221
Net Generation Capacity (MW) (3)                           778           785
Average Alberta power price - market ($ per MWh)   $     29.02   $     60.59
Average Alberta power price - Milner realized ($                            
 per MWh)                                          $     42.38   $     78.93
Average US power price - Northeast US realized                              
 (US$ per MWh)                                     $    157.89   $    282.28
 (1)Select financial information was derived from the unaudited condensed   
    consolidated interim financial statements and is prepared in accordance 
    with GAAP, 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         
    attributable to shareholders. Adjusted EBITDA and adjusted net income   
    (loss) do not have any standardized meaning prescribed by GAAP 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 from    
    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 and uncontacted capacity on        
    contracted generating facilities.                                       


During the first quarter of 2015, revenue, adjusted EBITDA and FFO have decreased when compared to the same period in 2014. The decrease is primarily due to lower Alberta and Northeast US power prices in the first quarter of 2015, as well as lower generation in all three geographic segments.

Adjusted net income (loss) and net income (loss) attributable to shareholders in the first quarter of 2015 have decreased when compared to the same period in 2014. The decrease is primarily due to the factors above and a coal inventory write-down, partially offset by a reversal of an impairment charge of a Northeast U.S. generating facility.


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's ("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.


As previously reported, the Corporation has been responding to the FERC inquiry since the latter part of 2013. On February 2, 2015, FERC issued an Order to Show Cause ("Show Cause Order") concerning certain offers to supply electricity occurring during July and August of 2010. The Show Cause Order did not constitute findings of FERC. Subsequent to March 31, 2015, MAXIM and its external legal counsel formally responded to the Show Cause Order. On May 1, 2015, FERC issued an Order Assessing Civil Penalties ("Penalties Order") concerning the Show Cause Order. The Penalties Order has assessed penalties of U.S. $5 million against MAXIM and U.S. $50 thousand against an employee. MAXIM has filed an election with FERC that requires FERC to initiate a judicial proceeding in which a federal district court will review the facts and the law de novo (Process for Assessing Civil Penalties, 117 FERC paragraph 61,317, at P 5 (2006)). MAXIM intends to vigorously defend itself in district court and is confident it can demonstrate that the conduct set forth in the Show Cause Order did not violate FERC's anti-manipulation rule or any other rule.

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