Maxim Power Corp. Announces 2016 Financial and Operating Results

CALGARY, ALBERTA -- (Marketwired) -- Mar 16, 2017 -- Maxim Power Corp. ("MAXIM" or the "Corporation") (TSX: MXG) announced today the release of financial and operating results for the fourth quarter and year ended December 31, 2016. The audited consolidated financial statements, accompanying notes and Management Discussion and Analysis ("MD&A") will be available on SEDAR and on MAXIM's website on March 16, 2017. All figures reported herein are Canadian dollars unless otherwise stated.

The Financial Highlights below include the results from Comax France S.A.S. ("COMAX") to December 2, 2016, the date the segment was sold, and Maxim Power (USA), Inc. ("MUSA") to December 31, 2016, both of which are recorded as discontinued operations in MAXIM's financial statements. Refer to MAXIM's audited consolidated financial statements and MD&A for further details.

FINANCIAL HIGHLIGHTS


----------------------------------------------------------------------------
                                  Three Months Ended    Twelve Months Ended 
                                      December 31           December 31     
($ in thousands except per share                                            
 amounts)                             2016       2015       2016       2015 
----------------------------------------------------------------------------
Revenue                          $  21,149  $  32,792  $  94,558  $ 123,045 
Adjusted EBITDA (1)                 (2,878)     8,219      2,232     19,501 
Net loss attributable to                                                    
 shareholders                      (17,411)   (65,155)   (53,800)   (77,418)
  Per share - basic and diluted  $   (0.32) $   (1.20) $   (0.99) $   (1.43)
FFO (1)                             (3,367)     4,444     (6,507)    10,263 
  Per share - basic and diluted  $   (0.06) $    0.08  $   (0.12) $    0.19 
Net Generation Capacity (MW) (2)       603        778        603        778 
Average Alberta market power                                                
 price ($ per MWh)               $   22.03  $   21.19  $   18.28  $   33.34 
Average Milner realized power                                               
 price ($ per MWh)               $   34.58  $   22.52  $   30.23  $   64.33 
Average Northeast US realized                                               
 power price (US$ per MWh)       $   47.22  $   41.83  $   41.44  $   61.85 
(1) Select financial information was derived from the unaudited condensed   
 consolidated interim financial statements and is prepared in accordance    
 with GAAP, except adjusted earnings before interest, taxes, depreciation   
 and amortization ("EBITDA") and adjusted net loss. Adjusted EBITDA is      
 provided to assist management and investors in determining the             
 Corporation's approximate operating cash flows before interest, income     
 taxes, and depreciation and amortization and certain other income and      
 expenses. Funds from operating activities before changes in working        
 capital ("FFO") is provided to assist management and investors in          
 determining the Corporation's cash flows generated from operations before  
 the cash impact of working capital fluctuations. Adjusted EBITDA and FFO   
 do not have any standardized meaning prescribed by GAAP and may not be     
 comparable to similar measures presented by other companies.               
(2) Generation capacity is manufacturer's nameplate capacity net of         
 minority ownership interests of third parties and uncontacted capacity on  
 contracted generating facilities.                                          

OPERATING RESULTS

During the fourth quarter of 2016, revenue decreased primarily as a result of the sale of COMAX closing on December 2, 2016. Adjusted EBITDA decreased primarily as a result of a prior year sale of SO2 environmental credits in the Canadian segment, which did not recur in 2016, and an increase in costs related to strategic alternatives in 2016 in addition to the lower revenues noted above. FFO decreased primarily from lower revenues and an increase in costs related to strategic alternatives in the current year. Net loss attributable to shareholders was negatively impacted by all of these factors, however was lower in 2016 primarily due to impairments recognized in the Canadian segment in the prior year.

On a year-to-date basis, revenue, adjusted EBITDA and FFO have decreased and net loss attributable to shareholders improved when compared to 2015. The decrease in revenue is primarily due to lower Alberta pool prices, lower realized Northeast U.S. power price and the sale of COMAX as noted above. In addition to these unfavorable revenue items, amounts owing relating to the FERC Settlement Agreement, a prior year sale of SO2 environmental credits and an increase in costs related to strategic alternatives have caused a decrease in adjusted EBITDA and FFO. Net loss attributable to shareholders was lower in 2016 primarily due to impairments recognized in the Canadian segment in the prior year, partially offset by the unfavorable factors noted above.

AGREEMENT TO SELL COMAX

As previously reported on December 2, 2016, the Corporation announced that it had closed the sale of 100% of its ownership interest in COMAX to Vine Luxembourg SARL ("Vine"), an affiliate of Basalt Infrastructure Partners LP, for immediate net sales proceeds of approximately EUR17 million after accounting for debt and transaction costs. The agreement with Vine provides for a contingent payment of up to a further EUR6 million upon certain future events occurring. MAXIM will advise going forward, as applicable, on developments related to receipt of this contingent consideration.

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