Primary Energy Recycling Corporation announces first quarter 2009 results

    OAK BROOK, IL, April 21 /CNW/ - Primary Energy Recycling Corporation
(TSX: PRI.UN) (the "Company" or "PERC") today released its financial results
for the three months ended March 31, 2009. All amounts are in U.S. dollars
unless otherwise indicated.


    -   For the period ended March 31, 2009, PERC operating income was
        $0.4 million, a significant improvement of $1.5 million over the
        quarter ended December 31, 2008.
    -   The Company paid distributions of Cdn$7.4 million or $0.20 per
        enhanced income security ("EIS") in the first quarter of 2009,
        resulting in a payout ratio of 96.3%.
    -   The sale process that could result in the sale of the Company or
        Primary Energy Recycling Holdings, LLC ("PERH") initiated by the
        Board of Directors in September 2008 and the initiative to replace
        the existing term debt that expires in August 2009 are ongoing.

    "In the first quarter of 2009, the Company saw improved operations at the
hosts' steel plants and at PERC's facilities relative to the last quarter of
2008," said V. Michael Alverson, Interim President and Chief Financial
Officer. "Stronger than anticipated host performance and fixed payment
provisions for a significant portion of Company revenue yielded positive
operating results and $6.6 million (Cdn$7.7 million) of distributable cash in
a challenging market. Performance for the steel industry for the balance of
the year remains unclear and we are unable to predict when operations will
return to normal."
    "The sale process being conducted by Credit Suisse Securities (USA) LLC
("Credit Suisse") and Genuity Capital Markets ("Genuity") continues with a
group of select bidders nearing the end of the due diligence phase. Credit
Suisse also continues to work with the Board to arrange a new Credit Facility
to replace the existing term debt which will mature in August 2009 and to
assist potential purchasers in meeting their acquisition financing needs."
    In the first quarter of 2009, the Company earned revenue of $14.7
million, a decrease of 9.3% from the first quarter of 2008 primarily due to a
decline in the variable portion of Energy Service revenue. Market conditions
in the steel industry constrained production when compared to the same period
in 2008.
    Total operating and maintenance expense for the quarter was $2.6 million,
down 6.9% from the first quarter of 2008 due to a decline in maintenance
expenses of $0.3 million at the Company's Harbor Coal facility.
    General and administrative expense for the quarter was $3.2 million, an
increase of 15.3% from the same period in the prior year, primarily due to
additional professional fees incurred in 2009 related to the proposed sale and
refinancing processes.
    Depreciation and amortization expense totaled $8.5 million for the first
quarter of 2009 and was essentially flat when compared with the same period in
the prior year.
    Operating income of the first quarter of 2009 was $0.4 million compared
with the $2.1 million for the first quarter in 2008, a decrease of $1.7
million as a result of the net effect of the items discussed above.
    At the end of the first quarter 2009, the Company maintained a cash
balance of $10.8 million. The Company has $135.0 million of debt outstanding
under its Credit Facility that comes due in August 2009. Management is
currently pursuing refinancing options to cure the working capital deficiency
created by the reclassification of the credit facility as short term debt. As
firm commitments for replacement financing have not yet been obtained, the
Company has included "Going Concern" disclosure in its financial statements as
required under Canadian GAAP.
    Distributable Cash for the first quarter of 2009 was Cdn$7.7 million or
Cdn$0.21 per EIS. Distributions declared in the quarter were Cdn$7.4 million
or Cdn$0.20 per EIS. The payout ratio was 96.3% compared to 85.9% in the same
period in the prior year.

    Distributable Cash Summary
    (in 000's of US$, except per share data and as otherwise indicated)

                                                       Three Months Ended
                                                            March 31,
                                                          2009          2008
                                                   ------------ -------------
    Distributable Cash                             $     6,600   $     7,404
                                                   ------------ -------------
                                                   ------------ -------------
    Per Common and equivalent Common Share         $      0.18   $      0.20
                                                   ------------ -------------
                                                   ------------ -------------

    Interest on EIS Subordinated Notes             $     1,944   $     1,944
    Distributions on Common Shares                       3,350         3,350
    Distributions on non-controlling Class B
     preferred interest                                    380           380
    Distributions on non-controlling Class B
     common interest                                       685           685
                                                   ------------ -------------
    Total distributions                            $     6,359   $     6,359
                                                   ------------ -------------
                                                   ------------ -------------
    Per Common and equivalent Common Share         $      0.17   $      0.17
                                                   ------------ -------------
                                                   ------------ -------------

    Hedge rate (Cdn$ per US$)                      $    1.1712   $    1.1712
    Distributable Cash (Cdn$)                      $     7,730   $     8,672
                                                   ------------ -------------
                                                   ------------ -------------
    Per Common and equivalent Common Share (Cdn$)  $      0.21   $      0.23
                                                   ------------ -------------
                                                   ------------ -------------

    Hedge rate (Cdn$ per US$)                      $    1.1712   $    1.1712
    Total distributions (Cdn$)                     $     7,448   $     7,448
                                                   ------------ -------------
                                                   ------------ -------------
    Per Common and equivalent Common Share (Cdn$)  $      0.20   $      0.20
                                                   ------------ -------------
                                                   ------------ -------------

    Excess (shortfall) distributable cash (Cdn$)   $       282   $     1,224
                                                   ------------ -------------
                                                   ------------ -------------
    Per Common and equivalent Common Share (Cdn$)  $      0.01   $      0.03
                                                   ------------ -------------
                                                   ------------ -------------
    Payout Ratio                                         96.3%         85.9%

    The Company's full financial statements and Management's Discussion and
Analysis, are available at or the Company's website at

    Conference Call and Webcast

    Management will also host a conference call to further discuss the first
quarter results on Wednesday, April 22, 2009 at 11:00 a.m. (ET). Following
management's presentation, there will be a question and answer session. To
participate in the conference call, please dial 416-646-3097 or
1-800-594-3790. A conference call replay will be available until 12 a.m. on
April 29, 2009. The replay can be accessed by dialing 416-640-1917 or
1-877-289-8525 and entering passcode 21303896 followed by the number sign. A
webcast replay will also be available for 90 days by accessing a link through
the Investor Information section at

    Non-GAAP Measures

    Distributable Cash and EBITDA are not recognized measures under U.S. GAAP
or Canadian GAAP and do not have standardized meanings prescribed by U.S. GAAP
or Canadian GAAP. Therefore, Distributable Cash and EBITDA may not be
comparable to similar measures presented by other companies. See the
definitions of Distributable Cash and EBITDA in the Company's MD&A.

    Forward-Looking Statements

    When used in this news release, the words "anticipate", "expect",
"project", "believe", "estimate", "forecast" and similar expressions are
intended to identify forward-looking statements. Such statements are subject
to certain risks, uncertainties and assumptions pertaining, but not limited,
to operating performance, regulatory parameters, weather and economic
conditions and the factors discussed in the Company's public filings available
on SEDAR at These forward-looking statements are made as of the
date of this press release and the Company assumes no obligation to update or
revise them to reflect new events or circumstances except as required by
applicable securities laws.

    About Primary Energy Recycling Corporation

    Primary Energy Recycling Corporation owns a majority interest in Primary
Energy Recycling Holdings LLC ("PERH"). PERH, headquartered in Oak Brook,
Illinois, indirectly owns and operates four recycled energy projects and a 50
per cent interest in a pulverized coal facility (collectively, the
"Projects"). The Projects have a combined electrical generating capacity of
283 megawatts and a combined steam generating capacity of 1.8 MMlbs/hour. PERH
creates value for its customers by capturing and recycling waste energy from
industrial and electric generation processes and converting it into reliable
and economical electricity and thermal energy for its customers' use. For more
information, please see

For further information:

For further information: V. Michael Alverson, Interim President & Chief
Financial Officer, EPCOR USA Ventures LLC, (630) 371-0505,

Organization Profile

Primary Energy Recycling Corporation

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890