Exchange Industrial Income Fund reports record results for the year ended December 31, 2006


    WINNIPEG, April 5 /CNW/ - Exchange Industrial Income Fund (TSX V: EIF.UN)
("EIIF" or the "Fund") today reported its financial results for its year ended
December 31, 2006.

    Highlights for the Year Ended December 31, 2006

    Increased financial performance:
    -   Revenue increased 49%
    -   EBITDA increased 69%
    -   Earnings increased 64%
    Growth in per unit earnings generated:
    -   Distributable Cash per unit increased 16%
    -   Earnings per unit increased 11%
    Decrease in payout ratio while growing Distributions:
    -   Monthly distributions per unit increased twice during the year
    -   Monthly distributions per unit increased 20%
    -   Payout ratio decreased to 43%
    Fund Growth:
    -   Completed the acquisition of Overlanders Manufacturing in October
    -   Closed a private placement of $7 million in Convertible Debentures in
    -   Announced a Letter of Intent to acquire the Water Blast Group in
        Edmonton. Acquisition closed in early 2007

    "We are very pleased with the progress that was made on our business plan
in 2006," said CEO Mike Pyle. "All of the key performance metrics of the Fund,
from sales to earnings to distributable cash, showed considerable growth both
in absolute terms and more importantly on a per unit basis. As an income fund
that invests in acquisitions on a regular basis, it is important that these
acquisitions are accretive to our unitholders. Growing for the sake of growth
simply dilutes your equity holders. We believe that our discipline in buying
good companies at the right price is evident in these results."
    CFO Adam Terwin stated, "The year was not without its challenges as the
government surprised the income trust markets on October 31st with its
announcement that the tax treatment for income trusts would be dramatically
altered. This is a risk that the Fund had previously identified and I am
pleased that our low payout ratio and our conservative balance sheet placed us
in a very strong position to handle this change. The outstanding performance
of the Fund in 2006 further strengthens our position. EIIF's business strategy
was never based on any potential tax arbitrage and we are pleased that the
market has recognized this. This is exemplified by the recovery of our unit
price after the October 31st announcement, as well as the successful $15
million equity issuance in early 2007."

    Results for the Year Ended December 31, 2006

    For the year ended December 31, 2006 the Fund reported revenue of
$85.5 million, up 49% from the $57.3 million reported in fiscal 2005. EBITDA
and earnings grew by 69% and 64% to $11.9 million and $5.0 million
    Distributable cash per unit grew to $2.96 ($2.31 fully diluted) in 2006
from $2.55 ($2.02 fully diluted) in 2005. Earnings per unit grew by 11% to
$1.91 per unit ($1.64 fully diluted) in 2006 from the $1.72 ($1.48 fully
diluted) in 2005. Total distributions equaled $1.26 per unit in 2006 versus
$1.14 in 2005. Monthly distributions were increased from $0.10 per unit to
$0.11 in August and increased again in December to $0.12.

    Results for the Three-month Period Ended December 31, 2006.

    For the three-month period ended December 31, 2006 revenue increased by
11% to $22.9 million versus the $20.7 million generated in the same period of
2005. Earnings increased to $1.0 million or $0.38 per unit ($0.35 fully
diluted) in 2006 from $0.3 million ($0.13 per unit, $0.13 fully diluted) in
2005. Distributable cash per unit increased by $0.17 from $0.45 ($0.39 fully
diluted) in 2005 to $0.62 ($0.49 fully diluted) 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 sector consists of Perimeter Aviation Ltd. and
Keewatin Air Limited and the specialty manufacturing sector consists of Jasper
Tank Ltd., Overlanders Manufacturing LP and Water Blast Manufacturing LP.

    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 fiscal year ended December 31, 2006 and
December 31, 2005 is summarized in the chart below.


    $000's (except per unit data)                             2006      2005

    Earnings before income tax                               5,381     3,483
    Depreciation & amortization                              3,655     2,181
    Interest expense                                         2,828     1,357
    EBITDA                                                  11,864     7,021
    Interest on bank debt                                    1,496       579
    Interest on debentures                                   1,144       678
    Maintenance CapEx                                        1,243     1,087
    Cash taxes                                                 181       136
    Distributable cash                                       7,800     4,541

    Distributable cash per unit
      Basic                                                   2.96      2.55
      Diluted                                                 2.31      2.02

    Distributions declared                                    1.26      1.14

    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, 509 - 167 Lombard Avenue, Winnipeg, MB R3B 0V3, Phone: (204) 982-1850,
Fax: (204) 982-1855, E-mail:

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