Exchange Industrial Income Fund reports record results for the year ended December 31, 2007

    (TSX: EIF.UN)

    WINNIPEG, March 24 /CNW/ - Exchange Industrial Income Fund (TSX: EIF.UN)
today reported its financial results for its year ended December 31, 2007.

    Highlights for the Year Ended December 31, 2007

    Increased financial performance:
    -  Revenue increased 24%
    -  Distributable cash increased 32%
    -  Net earnings increased 51%

    Distributions growth:
    -  Monthly distributions per unit increased to $1.45 in 2007 from $1.26
       in 2006, an increase of 15%

    Fund Growth:
    -  Acquired Water Blast in March 2007
    -  Completed two tuck in acquisitions for the Water Blast business
    -  Announced a Letter of Intent to acquire Stainless Fabrication Inc.
       ("Stainless") in Springfield, Missouri, which closed subsequent to
       year end on January 2, 2008
    -  Restructured EIIF to allow more flexibility in financing acquisitions
    -  Arranged a new $65 million debt facility
    -  Closed two equity offerings, including a $15 million private placement
       in February 2007 and a $10 million bought deal in December 2007

    "Management is very pleased with both the Fund's financial performance in
2007 and the progress it has made in executing its strategy of growth and
diversification" commented Mike Pyle, the CEO of the Fund. "The Fund's
performance prior to 2007 and its ability to stick to its business plan laid
the ground work for significant growth of the Fund in 2007. The acquisitions
of Water Blast in March of 2007 and Stainless in January 2008 are the two
largest acquisitions that EIIF has completed to date and both are significant
milestones. The Water Blast acquisition is exciting for EIIF as it represents
the first operational entity that is geographically scalable. EIIF has already
grown this business through two tuck in acquisitions in 2007, which doubled
the size of Water Blast's territory. The Stainless acquisition is a new
chapter in EIIF's history as it is our first acquisition in the US market."
    Adam Terwin, the Fund's CFO, stated "This major growth could not have
been accomplished without the markets' confidence in the EIIF business model.
EIIF went to both the debt and equity markets to raise funds on multiple
occasions in 2007 and each attempt was met with success. EIIF's ability to
raise these funds in difficult equity markets during December was a very
practical demonstration of the markets confidence in EIIF. The Fund now has a
market capitalization well above $100 million and has grown 2007 revenues to
over $100 million. Based on the increased size of the Fund and its continued
emphasis on acquisitions, management decided that it was time to apply to move
from the TSX Venture Exchange to the TSX Exchange. The Fund's application was
successful and it was listed on the TSX on March 17, 2008. The TSX offers
greater exposure for our Fund to both retail and institutional investors. The
continued strong financial performance of EIIF combined with these recent
milestones positions EIIF well to increase unitholder value in 2008."

    Results for the Year Ended December 31, 2007

    For the year ended December 31, 2007 the Fund reported revenue of $106.0
million, up 24% from the $85.5 million reported in fiscal 2006. EBITDA and net
earnings grew by 29% and 51% to $15.3 million and $7.6 million respectively.
    Distributable cash was $2.04 per unit fully diluted in 2007 (which
represented a fully diluted payout ratio of 71%) compared to $2.31 in the
prior year. Net earnings was $1.63 per unit fully diluted compared to $1.64
per unit in the prior year. Total distributions per unit in 2007 were $1.45
versus $1.26 in 2006. Distributions per unit were increased to $0.125 per
month in November 2007.

    Results for the Three-month Period Ended December 31, 2007

    For the three-month period ended December 31, 2007 sales increased by 28%
to $29.4 million versus the $22.9 million generated in the same period of
2006. EBITDA and net earnings grew by 56% and 130% to $4.1 million and
$2.4 million respectively.
    Distributable cash was $0.52 per unit fully diluted in 2007 (which
represented a fully diluted payout ratio of 71%) compared to $0.49 in the
prior year. Net income was $0.50 per unit fully diluted compared to $0.35 per
unit in the prior year. Distributions per unit for the quarter were $0.37 in
2007 versus $0.34 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. 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
objectives of the Fund are: (i) to provide Unitholders with stable and growing
cash distributions; (ii) to maximize Unit value through on-going active
monitoring of its subsidiaries; and (iii) the continuing acquisition of
additional companies or businesses or interests therein in order to expand and
diversify the Fund's investments.
    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, Water Blast Manufacturing
LP, which includes Water Blast Grande Prairie Ltd. and Water Blast
Manufacturing B.C. Ltd. and Stainless Fabrication, Inc.

    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, 2007 and
December 31, 2006 is summarized in the chart below.

    $000's (except per unit data)                            2007       2006
    Earnings before income tax                           $  6,861   $  5,381
    Depreciation & amortization                             4,429      3,655
    Interest expense                                        4,014      2,828
    EBITDA                                                 15,304     11,864
    Interest on bank debt                                   2,069      1,496
    Interest on debentures                                  1,220      1,144
    Maintenance CapEx                                       1,659      1,243
    Cash taxes                                                 25        181
    Distributable cash                                   $ 10,331   $  7,800

    Distributable cash per unit
      Basic                                              $   2.38   $   2.96
      Diluted                                            $   2.04   $   2.31

    Distributions declared per unit                      $   1.45   $   1.26

    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

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

    Visit us at:

For further information:

For further information: Mike Pyle, President and 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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