OKOTOKS, AB, April 28 /CNW/ - (TSX-MTL.UN) Mullen Group Income Fund ("Mullen" and/or the "Fund") reported its financial and operating results for the period ended March 31, 2009 with comparisons to the same period last year. For the three month period ended March 31, 2009, the Fund generated consolidated revenue of $312.0 million and operating income of $73.4 million. The Fund generated $31.1 million of funds from operations, which were supplemented by $44.8 million of non-cash working capital items. These funds were mainly used to fund distributions of $24.2 million, repay long-term debt of $45.1 million and fund net capital expenditures of $1.7 million. The Fund's revenue of $312.0 million for the three month period ended March 31, 2009, was a decrease of $46.1 million or 12.9 percent over the $358.1 million generated for the same period last year. This decrease in consolidated revenue was mainly attributable to a decline in revenue in the Oilfield Services segment which experienced a significant drop in demand for core drilling services. Demand in the segment for its other drilling related services also weakened due to the significant year over year decline in oil and natural gas drilling activity in western Canada. The decline in segment revenue was somewhat offset by new revenue generated by R.E. Line Trucking (Coleville) Ltd. and the Transport Division of Essential Energy Services Trust. The Trucking/Logistics segment also experienced a decline in revenue due to the current economic environment and its impact on demand for freight services especially in western Canada. "The Fund is relatively pleased with the overall financial performance of its business units in the first quarter, especially considering the severe decline in oil and natural gas drilling activity in western Canada. It was satisfying to see our overall operating margin improve slightly despite an overall decrease in revenue of $46.1 million on a year over year basis. This ability to hold our operating margin was attributable to the cost control measures which were implemented by our business units in 2008," stated Mr. Stephen Lockwood, President and Co-Chief Executive Officer. The Fund generated operating income for the quarter of $73.4 million, a decrease of $10.2 million or 12.2 percent over the same period last year. The decrease in operating income was almost entirely attributable to the Oilfield Services segment. Operating income in the Trucking/Logistics segment only decreased slightly despite lower revenue as higher margins were generated by virtue of utilizing specialized equipment to perform larger oversized loads, performing project work, and due to an increase in U.S. dollar sales coupled with a weakening CDN. dollar. For the period ended March 31, 2009, the Fund generated funds from operations of $31.1 million, a decrease of $46.8 million or 60.1 percent over the $77.9 million generated for the same period last year. The decrease was mainly due to a $34.5 million reclass from future income tax to current income tax by virtue of a restructuring of the Fund's corporate structure to facilitate the proposed conversion of the Fund to a corporation. To a lesser extent, the decrease was also due to a decline in net income of $18.8 million. At March 31, 2009, the Fund had $119.0 million of working capital and had access to approximately $130.0 million of unused bank lines of credit. For the period ended March 31, 2009, the Fund generated net income of $31.0 million ($0.38 per unit), a decrease of $18.8 million, or 37.8 percent over the $49.8 million ($0.62 per unit) generated for the same period last year. The decrease was mainly attributable to the $10.2 million decline in operating income and a year over year increase of $3.9 million in unrealized foreign exchange loss. To a lesser extent, net income was negatively impacted by a $1.3 million increase to both interest on long-term debt, and the loss on sale of property, plant and equipment. A summary of the Fund's results for the quarter ended March 31, 2009, along with revenues and operating results by segment are as follows:------------------------------------------------------------------------- SUMMARY Three Months Ended March 31 ---------------------------------- ------------------------------------------------------------------------- 2009 2008 Change ------------------------------------------------------------------------- (Unaudited) ($ millions, except per unit amounts) $ $ % Revenue 312.0 358.1 (12.9) Operating income(1) 73.4 83.6 (12.2) Net income 31.0 49.8 (37.8) Earnings per unit(2) $0.38 $0.62 (38.7) Funds from operations(3) 31.1 77.9 (60.1) Funds from operations per unit (dollars)(4) $0.39 $0.97 (59.8) Distributions declared per unit $0.225 $0.45 (50.0) ------------------------------------------------------------------------- Note: ------------------------------------------------------------------------- (1) Operating income is defined as net income before interest, income taxes, depreciation on property, plant and equipment, amortization on intangible assets, earnings or losses from equity investments, unrealized gains or losses on foreign exchange and investment and gains or losses on sale of property, plant and equipment and investments. (2) Earnings per unit is based on weighted average number of units outstanding for the period. (3) Funds from operations is defined as cash flow from operating activities before changes in non-cash working capital items. (4) Funds from operations per unit is calculated by dividing funds from operations by the weighted average number of units outstanding for the period. Operating income, funds from operations and funds from operations per unit are not recognized measures under Canadian generally accepted accounting principles ("GAAP"). Management believes these measures are useful supplemental measures. Operating income provides an indication of the results generated by the Fund's principal business activities prior to financing activities, amortization of assets, or taxation in various jurisdictions. Funds from operations indicate the Fund's ability to generate funds from its operations without the seasonality effect on its working capital. References to operating income, funds from operations and funds from operations per unit are not measures recognized by GAAP and do not have standardized meanings prescribed by GAAP. Investors should be cautioned that these indicators should not replace net earnings as an indicator of GAAP performance. ------------------------------------------------------------------------- ------------------------------------------------------------------------- SEGMENTED RESULTS Three Months Ended March 31 ---------------------------------- ------------------------------------------------------------------------- 2009 2008 Change ------------------------------------------------------------------------- (Unaudited) ($ millions) $ $ % Revenues Oilfield Services 209.1 242.7 (13.8) Trucking/Logistics 104.6 115.7 (9.6) Other 0.5 1.1 - Intersegment eliminations Oilfield Services (1.7) (0.6) - Trucking/Logistics (0.5) (0.8) - ------------------------------------------------------------------------- Totals 312.0 358.1 (12.9) Operating income Oilfield Services 57.8 68.4 (15.5) Trucking/Logistics 16.9 17.2 (1.7) Other (1.3) (2.0) - ------------------------------------------------------------------------- Totals 73.4 83.6 12.2 -------------------------------------------------------------------------This press release may contain forward-looking statements that are subject to risk factors associated with the oil and natural gas business and the overall economy. The Fund believes that the expectations reflected in this press release are reasonable, but results may be affected by a variety of variables. The Fund relies on litigation protection for "forward-looking" statements. Mullen is an open-ended income fund that owns a network of independently operated businesses. Today the Mullen Group is recognized as the largest provider of specialized transportation and related services to the oil and natural gas industry in western Canada and as one of the leading suppliers of trucking and logistics services in Canada - two sectors of the economy in which the Fund has strong business relationships and industry leadership. Administration of the Fund is delegated to Mullen Group Inc. which, in addition to managing the Fund, provides management and financial expertise, technology and systems support to its independent businesses. Additional information on the Fund, including the First Quarter Interim Report, which includes the Management's Discussion and Analysis for the period ended March 31, 2009, is available on our website at www.mullen-group.com and on www.sedar.com. The above is provided to unitholders and interested parties on an information only basis. Mullen is a publicly traded income trust listed on the Toronto Stock Exchange under the symbol "MTL.UN". Additional information is available on our website at www.mullen-group.com. %SEDAR: 00022408E