Exchange Industrial Income Fund reports record earnings for the 3rd quarter of 2007 & increases distributions

    WINNIPEG, Nov. 7 /CNW/ - Exchange Industrial Income Fund (TSX V: EIF.UN)
("EIIF" or the "Fund") today reported its financial results for the third
quarter of 2007.

    Highlights of the Third Quarter of 2007

    -   Revenue increased 28%
    -   EBITDA increased 28%
    -   Earnings increased 44%
    -   Completed the acquisition of MCS Industries Ltd. in September
    -   Employee Unit Purchase Plan was implemented

    Distribution Increase

    -   Distributions increase 4.2% to 12.5 cents per month, effective
        November 30, 2007
    -   Annualized distribution becomes $1.50 per year

    Mike Pyle, the CEO of EIIF stated, "we executed on two important
initiatives in the third quarter of 2007. In September, EIIF acquired MCS
Industries as a further expansion to our Water Blast group of companies. The
acquisition of MCS Industries enabled us to gain exclusive distribution rights
for Hotsy products in the Province of British Columbia. This is very exciting
as we can now offer our custom manufactured Water Blast product and the Hotsy
product into the BC marketplace, both of which are expected to generate
significant organic growth. Of equal importance was the introduction of an
Employee Unit Purchase Plan in the third quarter. Sourcing and retaining high
quality staff is one of the most important challenges in today's marketplace.
Our EUPP will align the interests of our employees with those of our
unitholders and helps us maintain employees throughout the Fund."

    Results for the Three-month Period Ended September 30, 2007

    For the three-month period ended September 30, 2007 revenue increased by
28% to $26.6 million versus the $20.7 million generated in the same period of
2006. Earnings increased to $2.1 million ($0.46 per unit or $0.43 fully
diluted) from $1.5 million ($0.56 per unit, or $0.46 fully diluted) in the
same period of 2006. Distributable cash per unit was $0.65 ($0.56 fully
diluted) down from $0.93 ($0.69 fully diluted) in the comparable period in
    "Management is pleased with the third quarter results, especially given
that net earnings is the highest the Fund has generated since inception",
commented Adam Terwin, EIIF's CFO. "The manufacturing sector experiences
seasonal weakness in the summer months and the aviation sector continues to
face increased competition in its scheduled service. Despite these temporary
challenges in the quarter, the Fund was able to generate distributable cash of
$0.65 per unit, which results in a payout ratio of 55%. The Fund's ability to
continually generate strong levels of distributable cash and low payout
ratios, even in quarters when there are significant challenges gave the
directors and management the confidence to increase the monthly distributions.
The half cent increase to distributions per month results in an annualized
increase of 6 cents and increases distributions by 4.2%."

    Results for the Nine-month Period Ended September 30, 2007

    For the nine-month period ended September 30, 2007 revenue increased by
22% to $76.6 million versus the $62.6 million generated in the same period of
2006. Earnings increased to $5.2 million ($1.25 per unit or $1.17 fully
diluted) from $4.0 million ($1.53 per unit, $1.30 fully diluted) in the same
period of 2006. Distributable cash per unit was $1.80 ($1.53 fully diluted)
down from $2.35 ($1.84 fully diluted) in the comparable period in 2006.
    Further information about these results can be found in disclosure
documents filed by the Fund with the securities regulatory authorities
available at

    Company Profile

    The Fund 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. It 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 and Water Blast Manufacturing
LP, which includes Water Blast Grande Prairie Ltd. and Water Blast
Manufacturing B.C. Ltd.

    Non-GAAP measures references to "EBITDA" are to earnings before interest,
income taxes, 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. A reconciliation of these non-GAAP measures to
earnings before income tax for the three and nine month periods ended
September 30, 2007 and September 30, 2006 is summarized in the chart below.

                                     Three months ended    Nine months ended
                                           September 30         September 30
    $000's (except per unit data)         2007     2006        2007     2006
    Earnings before income tax           2,179    1,671       5,335    4,713
    Depreciation & amortization          1,036      889       2,966    2,499
    Interest expense                     1,008      751       2,878    2,011
    EBITDA                               4,223    3,311      11,179    9,223
    Interest on bank debt                  579      405       1,433    1,114
    Interest on debentures                 278      298         943      771
    Maintenance CapEx                      417      194       1,262      955
    Cash taxes                             (31)     (36)         24      269
    Distributable cash                   2,980    2,450       7,517    6,114

    Distributable cash per unit
      Basic                               0.65     0.93        1.80     2.35
      Diluted                             0.56     0.69        1.53     1.84

    Distributions declared per unit       0.36     0.32        1.08     0.92

    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 TSX Venture Exchange has neither approved nor disapproved the
    contents of this press release.

For further information:

For further information: Mike Pyle, CEO, Exchange Industrial Income
Fund, 1067 Sherwin Road, Winnipeg, MB, R3H 0T8, Phone: (204) 982-1850, Fax:
(204) 982-1855, E-mail:

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