Exchange Industrial announces 2009 first quarter results


    WINNIPEG, May 15 /CNW/ - Exchange Industrial Income Fund (TSX: EIF.UN)
(the "Fund" or "Exchange Industrial"), a diversified, acquisition-oriented
income trust, focused on opportunities in the transportation sectors and
industrial products, today reported its financial results for the three month
period ended March 31, 2009.

    Highlights for the Quarter Ended March 31, 2009

    -  Revenue increased 8% to $37.2 million from $34.4 million in the same
       period in 2008
    -  EBITDA(1) increased 7% to $4.1 million from $3.8 million in the same
       period in 2008
    -  Distributable cash for the quarter totaled $2.7 million, or $0.46 per
       basic unit and $0.43 per fully diluted unit, an increase of 15% and
       13%, respectively, over the same period in 2008
    -  Distributions paid to unitholders were $2.3 million, or $0.39 per
       unit, an increase of 4% over the same period in 2008
    -  2009 payout ratio of 85% per basic unit or 91% per fully diluted unit
       represents a decline from 94% and 99%, respectively, in the same
       period in 2008
    -  Announced and subsequent to the quarter-end closed the acquisition of
       Calm Air International Ltd ("Calm Air") for approximately
       $59.3 million, the Fund's largest acquisition to date
    -  Filed a prospectus to raise a total of $25 million in a combination of
       units of the Fund and convertible debentures. Subsequent to the
       quarter-end, closed the prospectus raising gross proceeds of
       $26.9 million consisting of the sale of $22.8 million in units of the
       Fund and $4.1 million in convertible debentures. Of this total,
       $1.9 million was issued pursuant to the agent's over-allotment option.

    "The first quarter of 2009 was a very exciting time for the Fund" stated
CEO Mike Pyle. "We announced that we had entered into a letter of intent to
acquire Calm Air and then went through the challenging process of attempting
to raise the approximately $60 million needed to close the transaction. In
spite of arguably the most turbulent capital markets in decades, with the
support of our banking syndicate and our syndicate of investment bankers, we
were able to fund the transaction very early in the second quarter. On the
operating front we were able to deliver our 7th consecutive quarter of
increased distributable cash both in absolute and per unit terms, when
compared to the same period in the preceding year."
    "The first quarter of the year is seasonally the most difficult for the
Fund" explained CFO Adam Terwin. "And while the economy has certainly slowed
in the last part of 2008 and into 2009, our diverse portfolio of aviation and
manufacturing companies was able to continue to grow. Our first quarter
revenues, EBITDA and distributable cash are all improved over 2008. While the
quarter was not without its operating challenges, the strength of our business
model and our discipline in executing it has enabled us to increase our actual
distributions by 4% over the same period in 2008, while reducing our payout

    Results for the Three Months ended March 31, 2009

    Revenue for the quarter ended March 31, 2009 increased 8% to $37.2
million compared to $34.4 million for the same period in 2008. The Fund had no
new investments in the first quarter of 2009 versus the comparable period in
2008. Accordingly the increased revenues were purely the result of organic
growth in the Fund's subsidiary companies. EBITDA increased in line with sales
by growing 7% to $4.1 million when compared to the same period in 2008.

    Distributable Cash Table          Three Months Ended  Three Months Ended
    ($000's except per unit data)       March 31, 2009      March 31, 2008
      Aviation                             $ 20,133            $ 17,767
      Manufacturing                          17,063              16,653
                                           $ 37,196            $ 34,420

      Direct Operating                     $ 24,751            $ 23,054
      General & Administrative                8,359               7,535
                                           $ 33,110            $ 30,589

    EBITDA                                 $  4,086            $  3,831
      Interest on bank debt                     371                 791
      Interest on debentures                    235                   -
      Interest on convertible debentures        289                 288
      Maintenance capital expenditures          317                 352
      Cash taxes                                159                  65
    Distributable Cash                     $  2,715            $  2,335

    Distributable Cash per unit
      Basic                                $   0.46            $   0.40
      Diluted                              $   0.43            $   0.38

    Distributions declared per unit        $   0.39            $  0.375

    Payout Ratio
      Basic                                      85%                 94%
      Diluted                                    91%                 99%

    Distributable cash increased by 16% to $2.7 million for the quarter ended
March 31, 2009. On a percent basis distributable cash rose by 15% and 13% to
$0.46 and $0.43 fully diluted, respectively, over the same period in 2008.
Distributions declared per unit increased 4% to $0.39 for the first quarter of
2009 from $0.375 for the same period in 2008. Distributions declared increased
to $2.3 million for the first quarter of 2009 from $2.2 million in the same
period in 2008.
    Earnings before income taxes increased to $1.4 million for the first
quarter of 2009, up 23% or $0.3 million from the same period in 2008. Net
earnings for the period was flat at $1.4 million or $0.24 per unit basic and
fully diluted with the comparable period in 2008. Income tax expense for the
first quarter of 2009 increased by $0.3 million mainly as a result of the mix
of where taxable income was earned, as losses were incurred by entities that
do not recognize future income tax assets.

    Liquidity & Capital Resources

    As at March 31, 2009, the Fund had working capital of $25.7 million,
including cash and cash equivalents of $5.0 million, compared to working
capital of $25.9 million, including cash and cash equivalents of $4.0 million
as at December 31, 2008. As at March 31, 2009, $32.4 million of its Canadian
facility and $7.5 million of its USD facility was drawn against its senior
debt facility of $66.0 million, consisting of a $55.7 million Canadian dollar
facility and a $10.3 million US dollar facility, which was the same as at
December 31, 2008.

    (1) Non-GAAP measures references to "EBITDA" are to earnings before
        interest, income taxes, foreign exchange gains or losses, asset
        impairment, depreciation, and amortization and to "distributable
        cash" which is a performance measure used to summarize the funds
        available to unitholders of an income fund. Management believes that,
        in addition to net income or loss, EBITDA and distributable cash are
        useful supplemental measures in evaluating its performance.
        Specifically, management believes that EBITDA is the appropriate
        measure from which to make adjustments to determine the Fund's
        distributable cash. EBITDA and distributable cash are not measures
        recognized by Canadian generally accepted accounting principles
        ("GAAP") and do not have a standardized meaning prescribed by GAAP.
        Management cautions investors that EBITDA and distributable cash
        should not replace net income or loss as an indicator of performance,
        or cash flows from operating, investing, and financing activities as
        a measure of the Fund's liquidity and cash flows. The Fund's method
        of calculating EBITDA and cash distributions may differ from the
        methods used by other issuers.

    Caution concerning forward-looking statements

    The statements contained in this news release that are forward-looking
are based on current expectations and are subject to a number of uncertainties
and risks, and actual results may differ materially. These uncertainties and
risks include, but are not limited to, the dependence of Exchange Industrial
Income Fund on the operations and assets currently owned by it, the degree to
which its subsidiaries are leveraged, the fact that cash distributions are not
guaranteed and will fluctuate with the Fund's financial performance, dilution,
restrictions on potential future growth, the risk of unitholder liability,
competitive pressures (including price competition), changes in market
activity, the cyclicality of the industries, seasonality of the businesses,
poor weather conditions, and foreign currency fluctuations, legal proceedings,
commodity prices and raw material exposure, dependence on key personnel, and
environmental, health and safety and other regulatory requirements. Further
information about these and other risks and uncertainties can be found in the
disclosure documents filed by Exchange Industrial Income Fund with the
securities regulatory authorities, available at

     The Toronto Stock Exchange has neither approved nor disapproved the
                       contents of this press release.

    About Exchange Industrial

    Exchange Industrial is a diversified, acquisition-oriented income trust,
focused on opportunities in the industrial products and transportation sectors
which are ideally suited for public markets except for their size. The
strategy of the Fund is to invest in profitable, well-established companies
with strong cash flows operating in niche markets in Canada and/or the United
States. The Fund is currently operating in two niche business segments:
aviation and specialty manufacturing. The aviation segment consists of
Perimeter Aviation Ltd. and Keewatin Air Limited and the specialty
manufacturing segment consists of Jasper Tank Ltd., Overlanders Manufacturing
LP, Water Blast Manufacturing LP, and Stainless Fabrication, Inc.

For further information:

For further information: Mike Pyle, Chief Executive Officer, Exchange
Industrial Income Fund, Phone: (204) 982-1850, Fax: (204) 982-1855; Alice
Dunning, Investor Relations, The Equicom Group, Phone: (416) 815-0700 Ext.

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