Renewable Energy Developers Inc. Announces 2013 Second Quarter Results

• Continued significant renewable energy production increases resulting in operating revenue growth of 25% for the quarter and 47% for the six months ended June 30, 2013
• EBITDA from assets under management increases 245% for the quarter and 273% for the six months ended June 30, 2013
• Completion of strategic review and announcement of arrangement agreement with Capstone on July 3, 2013
• Transition to internal management completed on July 31, 2013

TORONTO, Aug. 8, 2013 /CNW/ - Renewable Energy Developers Inc. (TSX:RDZ) (TSX:RDZ.DB) ("ReD" or the "Company"), a developer, owner and operator of renewable energy projects, today announced its results for the three and six months ended June 30, 2013.

"We achieved two critical goals immediately subsequent to the end of the quarter; the transition to internal management and the completion of the strategic review via an arrangement agreement with Capstone.  Operationally, our various value creation initiatives have contributed to growth in revenues and EBITDA from assets under management," said Jeff Jenner, CEO of ReD.  "These initiatives include the completion of the Amherst I Project in 2012 and the acquisition of Glen Dhu and Fitzpatrick Mountain in late 2012, which helped grow EBITDA from assets under management for the three and six months ended June 30, 2013 to $6.9 million and $15.3 million, respectively.  We look forward to working with Capstone to complete our merger and to advance our growth plans in 2013 and beyond for the benefit of our combined shareholders."

Operational and Growth Highlights

• The Company's operating assets under management performed as expected, producing approximately 97.1 gigawatt hours ("GWhrs") and 215.2 GWhrs of electricity during the three and six months ended June 30, 2013, respectively, which represents increases of approximately 14% and 20% from the 2012 comparable periods.

	3 Months Ended June 30 - Gross GWhs produced				6 Months Ended June 30 - Gross GWhs produced
	2013^(2)		2012^(2)		2013^(2)		2012^(2)
Ontario	14.3		12.3		32.8		31.3
Nova Scotia^(1)	82.8		72.8		182.4		147.3
Total Generation (GWhs)	97.1		85.1		215.2		178.6

(1)			Certain Nova Scotia projects previously owned by Shear Wind Inc. ("Shear Wind") prior to November 23, 2012.
(2)			GWhs shown represent quarterly production results for acquired assets prior to the acquisition by the Company.  The 2012 production numbers include partial production from Amherst and from Glace Bay II as both these assets were placed on line during the periods.

• During the quarter, the Company continued to advance contracted wind power development projects representing 77.5 megawatts ("MW's") of capacity that are subject to letters of intent and/or security agreements, including advancing the projects through the Renewable Energy Approvals process. The Company, along with a financial partner, continues to move forward to acquiring these projects, subject to customary terms and due diligence, including any required consent from the Ontario Power Authority ("OPA") and the approval of the board of directors of the Company (the "Board").

• On June 4, 2013, ReD announced that it has executed a term sheet with the Batchewana First Nation that would provide Batchewana First Nation with a 49% partnership interest in the 25 MW Goulais Wind Farm located just north of Sault Ste Marie, Ontario.  The Goulais Wind Farm is a 25-megawatt renewable energy project that will be built along the Mile Hill approximately two kilometers from the end of the current Prince Wind Farm operation in Ontario. ReD, through a wholly-owned subsidiary, has a 20-year Feed-in-Tariff contract with the OPA for the generation of power. It is expected that the Goulais Wind Farm will begin construction in the fall of 2013 and will be operational next summer.

• Subsequent to quarter end, on July 15, 2013, ReD entered into a binding agreement with Natenco, LLC to acquire the Ontario wind project known as Grey Highlands Clean Energy.  The project is located in Grey County, Ontario, has a 20-year PPA with the OPA, and represents up to 18.5 MW of capacity.  ReD has actively participated in development of the project since January 2013 and will be providing additional development funding prior to closing.  The Company expects to complete the acquisition and build and own the project with a financial partner along with the current owner.

Corporate Highlights

• During the six months ended June 30, 2013, the Company announced that the Board had initiated a process to identify, examine and consider a range of strategic options available to the Company with a view to finding additional capital to fund its growth and enhancing shareholder value, including a possible sale of the Company (the "Strategic Review").  Subsequent to the end of the quarter, on July 3, 2013, ReD and Capstone Infrastructure Corporation ("Capstone") entered into a definitive agreement whereby Capstone will acquire all the outstanding shares of ReD (the "Transaction") by way of a share exchange.  Under the terms of the Transaction, shareholders of ReD will receive 0.26 of a Capstone common share and $0.001 in cash.  Upon completion of the Transaction, existing ReD shareholders will own approximately 20% of the common shares of the combined company. 

• Subsequent to quarter end, on July 24, 2013, ReD, with its partner, Genera Avante Holdings Canada Inc., announced that they had refinanced all existing long term debt of the 62.1 MMW Glen Dhu wind farm ("Glen Dhu"), the largest wind farm in Nova Scotia.  The partners have entered into a senior secured, long term, non-recourse debt facility (the "Facility") of $114.7 million.  The refinancing replaces the previous floating rate debt facility with a fully amortizing facility that bears interest at a fixed rate of 5.33%.  In addition, the financing frees up significant capital for the partners, approximately $8.0 million of which is attributable to ReD, thereby reducing its cost of the Shear Wind acquisition.

• On July 31, 2013, ReD announced it has successfully completed its previously announced transition to internal management and had terminated its Management Services Agreement ("MSA") with Sprott Power Consulting Limited Partnership ("SPCLP"), the outsourced management firm on which it has been relying for management services.  Upon termination of its MSA with SPCLP on July 31, 2013, the Company issued 7.5 million common shares at a price of $1.05 per share to SPCLP and to certain employees and management of the Company.

• The Company also announced that key employees needed to advance ReD's contracted development projects will continue with the Company as it moves to complete the Transaction with Capstone.  Mr. Jeff Jenner, President and CEO of the ReD, will assist the Corporation through the integration period with Capstone.

Financial Summary

• Revenue from energy sales for the three months ended June 30, 2013 was $5.0 million, as compared to $4.0 million, an increase of $1.0 million or 25% from the same period of 2012.  Revenue from energy sales for the six months ended June 30, 2013 was $11.0 million, as compared to $7.5 million, an increase of $3.5 million or 47% from the same period of 2012.

• Gross Revenue¹ from assets under management for the quarter ended June 30, 2013 was $9.7 million, including $4.7 million generated from Glen Dhu and Fitzpatrick, which are accounted for using equity accounting.  Gross Revenue from assets under management for the six months ended June 30, 2013 was $21.5 million, including $10.5 million generated from Glen Dhu and Fitzpatrick, which are accounted for using equity accounting.

• Earnings before interest, income taxes, depreciation and amortization ("EBITDA"¹) from assets under management for the three months ended June 30, 2013 was $6.9 million as compared to $2.0 million, a net increase of $4.9 million or 245% as compared to in the same period of 2012.  EBITDA from assets under management includes $4.0 million generated from Glen Dhu and Fitz, which are accounted for using equity accounting.  EBITDA from assets under management for the six months ended June 30, 2013 was $15.3 million as compared to $4.1 million, a net increase of $11.2 million or 273% as compared to in the same period of 2012.  EBITDA from assets under management includes $8.8 million generated from Glen Dhu and Fitz, which are accounted for using equity accounting.

• The net income attributable to the shareholders for the three months ended June 30, 2013 was $0.3 million or $0.004 per share, as compared to a loss of $1.0 million or $0.014 per share in the same period of 2012.  The net loss attributable to the shareholders for the six months ended June 30, 2013 was $10.6 million or $0.155 per share, as compared to a loss of $1.0 million or $0.001 per share in the same period of 2012.  The net loss in the six months ended June 30, 2013 was primarily the result of expenses related to the termination of the MSA and the ongoing Strategic Review costs.

• The net cash generated from operations prior to changes in working capital for the three months ended June 30, 2013 was $0.8 million, similar to the comparable period of 2012.  The net cash generated from operations prior to changes in working capital for the six months ended June 30, 2013 was $1.2 million as compared to $2.1 million in the same period of 2012.

• At June 30, 2013, the Company had working capital of $2.8 million including $13.7 million in cash and $9.4 million in short term restricted cash as compared to working capital of $17.7 million, including $17.5 million in cash and $9.8 in short term restricted cash as at December 31, 2012.  Included in working capital are liabilities of approximately $7.9 million which were satisfied through the issuance of shares subsequent to the end of the quarter.  After adjusting for this amount, the Company had working capital of $10.8 million on June 30, 2013.

• At June 30, 2013 the Company had total assets of $231.4 million as compared to $236.8 million as at December 31, 2012.  At June 30, 2013 the Company had long-term debt of $128.3 million as compared to $129.9 million as at December 31, 2012.

The Company's unaudited consolidated financial statements and Management's Discussion and Analysis for the three and six months ended June 30, 2013, can be found at www.sedar.com or the Company's website at www.red-inc.ca.

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¹ Gross Revenue and EBITDA from assets under management are terms that the Company utilizes to assess the financial performance of its business that are not measures recognized under International Financial Reporting Standards ("IFRS").  These non-IFRS measures should not be considered alternatives to performance measures determined in accordance with IFRS and may not be comparable to similar measures presented by other issuers.  See the calculations included in the June 30, 2013 Management's Discussion and Analysis of Financial Results for a discussion of these calculations.

About Renewable Energy Developers Inc. 

ReD is dedicated to the development, ownership and operation of renewable energy projects. Through project development efforts, acquisitions, partnerships and joint ventures, ReD provides its shareholders with income and growth from the renewable power generation sector of the energy industry.  On July 3, 2013 the Company announced it had entered into a definitive agreement with Capstone (TSX: CSE; CSE.PR.A; CSE.DB.A) whereby Capstone will acquire all the outstanding shares of ReD by way of a share exchange, which will result in a larger infrastructure company with power generation facilities across Canada totaling approximately net 465 megawatts of installed capacity, an attractive pipeline of contracted development opportunities in Canada representing net 79 MW of capacity, and international investments in regulated water and district heating businesses.

Forward-Looking Statements

Certain information contained in this press release may constitute "forward-looking information" which reflects the current expectations of ReD. This information reflects ReD's current beliefs with respect to future events and is based on information currently available to management.  Forward-looking information involves significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking information including the risks listed under the heading "Risk Factors" in the Company's Revised Annual Information Form dated April 2, 2013. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking information contained in this release. Although forward-looking information contained in this release is based upon what ReD believes to be reasonable   assumptions, management cannot assure investors that actual results, performance or achievements will be consistent with this forward-looking information. The forward-looking information is made as of the date of this release and ReD does not assume any obligation to update or revise it to reflect new events or circumstances, except as required by law.

SOURCE: Renewable Energy Developers Inc.

Jeff Jenner, CA, CBV
President and Chief Executive Officer
Renewable Energy Developers Inc.
[phone]
[email protected]

Ross Marshall
Investor Relations
[phone] ext. 238
[email protected]