Primary Energy Recycling Corporation announces year end results for 2006

    OAK BROOK, IL, March 7 /CNW/ - Primary Energy Recycling Corporation (TSX:
PRI.UN) (the "Company") today released its financial results for the annual
period ended December 31, 2006.
    The Company is providing financial information for the full year ended
December 31, 2006 compared to the 130 day period from August 24, 2005 to
December 31, 2005 for which the company was public (see Consolidated Financial
Statements filed on SEDAR). Pro forma results for the year ended December 31,
2005 are presented, for comparative purposes, in Management's Discussion and
Analysis, available on SEDAR. All amounts are in US dollars unless otherwise

    2006 Highlights:
    -   Revenue of $87.1 million, Operating Expenses of $81.1 million and
        Operating Income of $6.0 million for the year.
    -   Financial performance was below expectations, principally because of
        higher commodity volumes and prices at Harbor Coal and an extended
    -   Declared total distributions of Cdn$1.13 per Common and Equivalent
        Common Share for year.
    -   Generated Distributable Cash amounting to $33.8 million resulting in
        an effective payout ratio of 107.1% for 2006 and 99.5% since

    "While most of our projects are performing well, Harbor Coal continues to
underperform and accounts for the majority of our failure to meet expectations
this year," said John Prunkl, President of Primary Energy Ventures LLC (the
"Manager"). "We experienced an increase in the prices of input commodities and
in the volume of those commodities at Harbor Coal over the course of year. On
the other hand, overall production levels and associated revenues were up
compared to the prior year."
    Harbor Coal results for the year were also affected by a negative revenue
adjustment of $3.2 million associated with coke inventory maintained by the
host. This adjustment was recorded in the fourth quarter of 2006 upon
completion of the host's annual inventory adjustment. At the request of the
Manager, there will be semi-annual inventory surveys and associated inventory
adjustments to provide more transparency into the performance of Harbor Coal
and the partnership as a whole.
    "One of our other facilities also experienced an outage in the fourth
quarter coupled with boiler control issues with our customer's boilers,
negatively impacting revenue," continued Mr. Prunkl.
    For the year, the Company's Projects generated earnings before interest,
taxes, depreciation and amortization ("EBITDA" (see non-GAAP Measures below))
of $46.4 million. Distributable Cash was $33.8 million or $0.91 (Cdn$1.06) per
fully diluted EIS. The Company declared total distributions of $36.2 million
or $0.97 (Cdn$1.13) per EIS.

    Summary of Distributable Cash
    (US$ thousands except per share data)

                                                                  August 24,
                                                    Year Ended      2005 to
                                                   December 31,  December 31,
                                                       2006          2006
                                                   ------------  ------------
    Cash Provided by Operating Activities               31,774        41,372
    Interest on EIS Subordinated Notes                   7,776        10,535
    Interest Income                                     (1,027)       (1,082)
    Accretion of Asset Retirement Obligations             (202)         (269)
    Changes in Operating Assets and Liabilities         (4,558)       (1,755)
                                                   ------------  ------------
    Distributable Cash                                  33,763        48,801
    Hedge Rate (Cdn$/US$)                               1.1687        1.1695
    Distributable Cash (Cdn$)                           39,459        57,073
    Distributable Cash (Cdn$) per Common and
     Equivalent Common Share                              1.06          1.53
    Distributable Cash Declared (Cdn$) per
     Common and Equivalent Common Share                   1.13          1.52
    Excess Distributable Cash Earned (Cdn$) per
     Common and Equivalent Common Share                  (0.07)         0.01
    Payout Ratio                                         107.1%         99.5%

    At December 31, 2006, the Company had liquidity of $30.6 million of which
$15.6 million was cash and cash equivalents and $15.0 million was an unused
credit facility.
    The full financial statements and Management's Discussion and Analysis,
are available at or the Company's website

    Conference Call and Webcast
    Management will also host a conference call to further discuss the fourth
quarter results on Thursday, March 8, 2007 at 10:00 a.m. (ET). Following
management's presentation, there will be a question and answer session.
    To participate in the conference call, please dial (416) 644-3418 or
1-800-814-4861. A conference call replay will be available until 12 a.m. on
March 15, 2007. The replay can be accessed by dialing (416) 640-1917 or
1-877-289-8525 and entering passcode 21216228 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.

    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 (MW) and a combined steam generating capacity of 1,851Mlbs/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: Mark C. Hall, (630) 371-0573,

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