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Newalta Reports Strong Second Quarter 2014 Results

CALGARY, ALBERTA -- (Marketwired) -- 08/06/14 -- Newalta Corporation ("Newalta") (TSX: NAL) today reported results for the three and six months ended June 30, 2014.

FINANCIAL HIGHLIGHTS(1) (2)


                         Three months
                                ended            Six months ended
                             June 30,                    June 30,
($000s except per                             %                           %
 share data)            2014     2013  Increase     2014     2013  Increase
(unaudited)                           (Decrease)                  (Decrease)
----------------------------------------------------------------------------
Revenue              213,114  196,138         9  440,894  367,485         9
Gross profit          53,683   45,377        18   95,335   83,212        15
  - % of revenue          25%      23%        9       24%      23%        4
Net earnings(2)       (8,183)   4,944       n/m   (1,680)  19,103      (109)
  - per share ($) -
   basic               (0.15)    0.09       n/m    (0.03)    0.35      (109)
  - per share ($) -
   diluted             (0.14)    0.09       n/m    (0.03)    0.35      (109)
Adjusted net
 earnings(3)          11,842   11,894         -   22,210   17,646        26
  - per share ($) -
   basic(3)             0.21     0.22        (5)    0.40     0.32        25
Adjusted EBITDA(3)    46,042   38,350        20   78,093   66,070        18
  - per share ($)(3)    0.83     0.70        19     1.40     1.21        16
Cash from (used in)
 operating
 activities           25,221   29,560       (15)  36,858   10,558       n/m
  - per share ($)       0.45     0.54       (17)    0.66     0.19       n/m
Funds from
 operations(3)        26,698   27,644        (3)  50,801   51,343        (1)
  - per share ($)(3)    0.48     0.50        (4)    0.91     0.94        (3)
Maintenance capital
 expenditures(3)       9,986    5,178        93   13,797    8,849        56
Growth capital
 expenditures(3)      22,831   29,793       (23)  46,115   46,663        (1)
Dividends declared     6,979    6,051        15   13,107   11,525        14
  - per share ($)(3)   0.125     0.11        14    0.235     0.21        12
Dividends paid         4,980    3,708        34    9,439    8,019        18
Book value per
 share, June 30,       11.91    12.12        (2)   11.91    12.12        (2)
Weighted average
 shares outstanding   55,780   54,928         2   56,650   54,721         4
Shares outstanding,
 June 30,(4)          55,828   55,006         1   55,828   55,006         1
----------------------------------------------------------------------------
(1) Newalta's unaudited Condensed Consolidated Financial Statements are
    attached. References to Generally Accepted Accounting Principles
    ("GAAP") are synonymous with IFRS and references to unaudited Condensed
    Consolidated Financial Statements are synonymous with Financial
    Statements.
(2) n/m indicates the percentage change is not meaningful.
(3) These financial measures do not have any standardized meaning prescribed
    by GAAP and are therefore unlikely to be comparable to similar measures
    presented by other issuers. Non-GAAP financial measures are identified
    and defined later in this document.
(4) Newalta has 55,900,974 shares outstanding as at August 6, 2014.

Management Commentary

"In the second quarter, Adjusted EBITDA was up 20 percent compared to last year, primarily driven by contributions from our growth investments," said Al Cadotte, President and CEO of Newalta.

"We continue to expect 20 percent growth in Adjusted EBITDA for the year, driven by our growth capital investments and market activity. We are making solid progress on the strategic review of our Industrial Division. At the same time, we are evaluating our organization capacity and investment opportunities to accelerate our growth plans in both the Oilfield and New Markets Divisions.

"We remain well positioned to deliver attractive returns for our shareholders for many years ahead."

Consolidated Overview

Second quarter revenue was up 9% to $213.1 million. Adjusted EBITDA increased 20% to $46 million compared to the prior year. Adjusted EBITDA as a percentage of revenue was 22%, up from 20% in 2013. Returns from growth capital investments in New Markets and Oilfield, coupled with the savings realized from the Rationalization Plan in Industrial and favourable commodity prices drove growth.

Year-to-date, Adjusted EBITDA was $78.1 million, up 18% over the prior year. Year-to-date results reflect the same factors as the quarter and were tempered by the impact of extreme weather on first quarter results. Revenue from contracts generated 16% of consolidated revenue on a trailing-twelve month (TTM) basis compared to 11% in TTM Q2 2013. The net loss in earnings for the quarter and for the year of $8.2 million and $1.7 million, respectively, was driven by higher stock-based compensation expense, restructuring related costs and higher finance charges associated with the early redemption of the Series 1 Senior Unsecured Debentures.

Q2 2014 Adjusted SG&A improved to 10.0% of revenue from 10.8% in 2013, primarily due to overhead reductions in the quarter as part of the rationalization plan initiated in the first quarter focused primarily on our Industrial Division (Rationalization Plan).

Capital expenditures for the three and six months ended June 30, 2014 were $32.8 million and $59.9 million, respectively, focused primarily on growth projects in New Markets and Oilfield. We remain on track to execute our capital expenditures program of approximately $145 million in growth capital and $35 million in maintenance capital this year.

Operational Overview

New Markets revenue and gross profit in the quarter increased 27% and 19%, respectively, to $71.1 million and $22.3 million compared to prior year. Improved performance was primarily driven by strong returns from our growth capital investments, particularly our mature fine tailings (MFT) contracts and U.S. satellites. Year-to-date, revenue and gross profit increased by 31% and 18%, respectively, to $127.2 million and $36.9 million compared to prior year, driven by Heavy Oil and U.S satellites.

Oilfield revenue and gross profit in the quarter increased 15% and 18%, respectively, to $45.3 million and $16.9 million compared to prior year. Performance was driven by returns from our growth capital investments, increased drilling activity, and improved commodity prices. Year-to-date, revenue and gross profit increased by 13% and 10%, respectively, to $99.6 million and $37.5 million compared to prior year. Results were impacted by the same factors as the quarter and were tempered by the impact of extreme weather on operating costs in the first quarter of 2014.

Industrial revenue decreased by 4% to $96.7 million while gross profit increased by 18% to $14.5 million. Year-to-date, revenue decreased 5% to $174.1 million while gross profit increased by 16% to $20.9 million, compared to prior year. Savings realized from the Rationalization Plan and gains from favorable commodity prices were partially offset by lower waste receipts at the Stoney Creek Landfill (SCL).

Recent Developments

During the first quarter, we initiated the Rationalization Plan associated with the comprehensive review announced in December 2013 focused on our Industrial Division. To date, we have closed four facilities, reduced overhead in associated support functions and have redirected lines of business.

In Q2, we engaged RBC Capital Markets to conduct a review of a full range of potential alternatives for our Industrial Division, including a potential sale, IPO or spin-off of the division, in whole or in parts (Strategic Review). We are committed to optimizing value from this division. While this review is underway, we are developing our 2015 to 2018 business plan excluding the Industrial Division. We are allocating resources towards our highest growth areas in both the Oilfield and New Markets Divisions, to accelerate and expand our organic growth.

To date, we realized approximately $4.0 million in savings associated with the Rationalization Plan and remain on track to realize approximately $10 million in annualized cash savings. Including costs associated with the Strategic Review, we incurred approximately $5.5 million in one-time restructuring costs and anticipate incurring an additional $1.0 million before year end. We will assess and update savings and cost estimates throughout the year.

In addition to the Rationalization Plan discussed above, we are assessing our cost structure across all divisions, including SG&A. We have identified areas to better align resources with our business needs and have intiated steps to realize additional cost savings.

Other Highlights

Newalta's Board of Directors declared a second quarter dividend of $0.125 per share ($0.50 per share annualized), paid July 15, 2014, to shareholders on record as at June 30, 2014. This higher dividend rate established earlier this year reflects our positive outlook for the business.

On April 1, 2014, we issued $150 million Series 3 Senior Unsecured Debentures with a seven-year term, bearing interest at the rate of 5.875% per annum. Proceeds from the offering were used to redeem our $125 million 7.675% Series 1 Senior Unsecured Debentures and to repay a portion of outstanding debt on our credit facility.

During the quarter we also secured a contract with Shell Canada Limited (Shell) for construction services to build a new MFT plant at Shell's Jackpine Mine. We began work on this contract in the second quarter and expect work to continue into the first quarter of 2015. This contract is in addition to the contract awarded in 2013.

In July we were awarded a contract with Syncrude Canada Ltd (Syncrude) for commissioning its full-scale centrifugation facility that will process MFT at Syncrude's Mildred Lake operations near Fort McMurray, Alberta. This contract builds on our relationship with Syncrude over the past four years.

Outlook

We expect to deliver Adjusted EBITDA growth of 20% over 2013. Growth capital investments combined with improved commodity prices, the rationalization initiatives focused primarily on the Industrial Division and reductions in SG&A, will drive strong returns and improved results over prior year.


--  In New Markets, we expect growth to be driven by our onsite contracts as
    well as continued progress in the U.S. expansion. We continue to work on
    securing new contracts, including MFT processing in the oil sands, and
    on the development of our Fort McMurray facility. In 2014, we plan to
    establish three additional satellites in the U.S.
--  In Oilfield, we expect growth to be driven by our satellite program and
    steady drilling activity. Operations at our satellites commissioned in
    the second quarter will ramp up in the second half of 2014. In 2014, we
    plan to establish two additional satellites.
--  In Industrial, we expect improved returns from steady activity levels
    and initiatives implemented under the Rationalization Plan. Full year
    activity levels at Ville Ste-Catherine (VSC) and SCL are expected to be
    in line with 2013.

We continue to focus on growing our portfolio of longer term contracts, strengthening our foundation of stable cash flow, and maximizing returns from our existing assets.

Quarterly Conference Call

Management will hold a conference call on Thursday, August 7, 2014 at 11:00 a.m. (ET) to discuss Newalta's performance for the quarter ended June 30, 2014. To participate in the teleconference, please call 416-340-8010 or 866-226-1792. To access the simultaneous webcast, please visit www.newalta.com. For those unable to listen to the live call, a taped broadcast will be available at www.newalta.com and, until midnight on Thursday, August 14, 2014 by dialing 800-408-3053 and entering passcode 3240258 followed by the pound sign.

About Newalta

Newalta is North America's leading provider of innovative, engineered environmental solutions that enable customers to reduce disposal, enhance recycling and recover valuable resources from industrial residues. We serve customers onsite directly at their operations and through a network of 85 locations in Canada and the U.S. Our proven processes, portfolio of more than 250 operating permits and excellent record of safety make us the first choice provider of sustainability enhancing services to oil, natural gas, petrochemical, refining, lead, manufacturing and mining markets. With a skilled team of more than 2,100 people, two decade track record of profitable expansion and commitment to commercializing new solutions, Newalta is positioned for sustained future growth and improvement. Newalta trades on the TSX as NAL. For more information, visit www.newalta.com.

The press release contains certain statements that constitute forward-looking information. Please refer to the section below "Forward-Looking Information", for further discussion of assumptions and risks relating to this forward looking information. The unaudited interim Condensed Consolidated Financial Statements and MD&A, which contain additional notes and disclosures, are available on our website at www.newalta.com under Investor Relations/Financial Reports.

SELECTED FINANCIAL INFORMATION


                         Three months
                                ended            Six months ended
                             June 30,                    June 30,
($000s, except where                          %                           %
 otherwise noted)       2014     2013  Increase     2014     2013  Increase
(unaudited)                           (Decrease)                  (Decrease)
----------------------------------------------------------------------------
New Markets(1)
Revenue               71,099   56,120        27  127,208   96,978        31
Gross Profit          22,308   18,751        19   36,935   31,242        18
- % of revenue            31%      33%       (6)      29%      32%       (9)
Revenue by Business
 Unit
  Heavy Oil               71%      74%       (4)      71%      68%        4
  U.S.                    29%      26%       12       29%      32%       (9)
Divisional EBITDA(2)  27,924   22,953        22   46,271   37,911        22
Assets Employed(3)                               305,152  239,279        28
Oilfield(1)
Revenue               45,269   39,501        15   99,597   88,133        13
Gross Profit          16,925   14,346        18   37,537   34,048        10
- % of revenue            37%      36%        2       38%      39%       (3)
Divisional EBITDA(2)  20,140   17,324        16   44,199   40,003        10
Assets Employed(3)                               391,538  360,055         9
Industrial
Revenue               96,746  100,517        (4) 174,089  182,374        (5)
Gross Profit          14,450   12,280        18   20,863   17,920        16
- % of revenue            15%      12%       23       12%      10%       20
Revenue by Business
 Unit
  Western Industrial      23%      23%        -       24%      23%        4
  Eastern Industrial      77%      77%        -       76%      77%       (1)
  VSC as a percent
   of Industrial
   Division               37%      33%       12       36%      36%        -
Divisional EBITDA(2)  19,291   19,185         1   29,742   30,377        (2)
Assets Employed(3)                               399,952  426,990        (6)
Capital Expenditures
Maintenance capital
 expenditures
  New Markets          3,154      640       n/m    4,209      892       n/m
  Oilfield             1,936    2,254       (14)   3,179    4,106       (23)
  Industrial           3,435    1,426       141    4,283    2,265        89
Growth capital
 expenditures
  New Markets         10,772   15,998       (33)  22,762   21,321         7
  Oilfield             6,439    5,779        11   12,961   11,021        18
  Industrial           2,137    3,268       (35)   4,016    6,105       (34)
----------------------------------------------------------------------------
(1) For comparative purposes, Cost of sales for the three and six months
    ended June 30, 2013 has been restated for a reclassification of $563 and
    $1,090, respectively, from Oilfield to New Markets reflecting a change
    in reporting structure.
(2) Divisional EBITDA does not have any standardized meaning prescribed by
    GAAP.
(3) Assets employed is provided to assist management and investors in
    determining the effectiveness of the use of the assets at a divisional
    level. Assets employed is the sum of capital assets, intangible assets
    and goodwill allocated to each division. Assets employed as defined does
    not include capital assets held by corporate. Corporate assets include
    information technology, leasehold improvements, and technical
    development.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited - Expressed in thousands of Canadian Dollars)
                                                                December 31,
                                                June 30, 2014           2013
----------------------------------------------------------------------------
Assets
Current assets
  Cash                                                  4,676              -
  Accounts and other receivables                      155,586        148,998
  Inventories                                          53,971         57,037
  Prepaid expenses and other assets                    14,812         14,441
  Assets held for sale                                 10,129          2,450
----------------------------------------------------------------------------
                                                      239,174        222,926
Non-current assets
  Property, plant and equipment                     1,040,601      1,011,921
  Permits and other intangible assets                  49,711         52,595
  Other long-term assets                               16,954         24,632
  Goodwill                                             96,067         96,167
----------------------------------------------------------------------------
TOTAL ASSETS                                        1,442,507      1,408,241
----------------------------------------------------------------------------
Liabilities
Current liabilities
  Bank indebtedness                                         -          1,321
  Accounts payable and accrued liabilities            177,420        217,283
  Dividends payable                                     6,979          6,087
----------------------------------------------------------------------------
                                                      184,399        224,691
Non-current liabilities
  Senior secured debt                                 170,149        117,136
  Senior unsecured debentures                         270,600        246,970
  Other liabilities                                     2,073          2,537
  Deferred tax liability                               83,856         80,646
  Decommissioning liability                            66,733         61,099
----------------------------------------------------------------------------
TOTAL LIABILITIES                                     777,810        733,079
----------------------------------------------------------------------------
Shareholders' Equity
Shareholders' capital                                 419,096        409,894
Contributed surplus                                    10,351         15,251
Retained earnings                                     231,047        245,834
Accumulated other comprehensive income                  4,203          4,183
----------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY                            664,697        675,162
----------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY          1,442,507      1,408,241
----------------------------------------------------------------------------

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited - Expressed in thousands of Canadian Dollars except per share
data)
                                          For the three
                                                 months  For the six months
                                         ended June 30,      ended June 30,
                                         2014      2013      2014      2013
----------------------------------------------------------------------------
Revenue                               213,114   196,138   400,894   367,485
Cost of sales                         159,431   150,761   305,559   284,273
----------------------------------------------------------------------------
Gross profit                           53,683    45,377    95,335    83,212
----------------------------------------------------------------------------
  Selling, general and
   administrative                      28,574    24,739    58,792    47,905
  Restructuring related costs           1,666         -     6,048         -
----------------------------------------------------------------------------
Earnings before finance charges and
 income taxes                          23,443    20,638    30,495    35,307
----------------------------------------------------------------------------
  Finance charges                      13,830     7,010    20,479    13,603
  Embedded derivative loss (gain)      14,883     6,931     8,327      (137)
----------------------------------------------------------------------------
Net financing charges expense          28,713    13,941    28,806    13,466
----------------------------------------------------------------------------
(Loss) earnings before income taxes    (5,270)    6,697     1,689    21,841
----------------------------------------------------------------------------
Income tax expense                      2,913     1,753     3,369     2,738
----------------------------------------------------------------------------
Net (loss) earnings                    (8,183)    4,944    (1,680)   19,103
----------------------------------------------------------------------------
Net (loss) earnings per share           (0.15)     0.09     (0.03)     0.35
Diluted (loss) earnings per share       (0.14)     0.09     (0.03)     0.35
----------------------------------------------------------------------------

Supplementary information:
Amortization included within cost of
 sales                                 13,672    14,085    24,877    25,081
Amortization included within
 selling, general and administrative    3,785     3,608     7,158     7,002
----------------------------------------------------------------------------
Total amortization                     17,457    17,693    32,035    32,083
----------------------------------------------------------------------------
----------------------------------------------------------------------------

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited - Expressed in thousands of Canadian Dollars)

                                          For the three
                                                 months  For the six months
                                         ended June 30,      ended June 30,
                                         2014      2013      2014      2013
----------------------------------------------------------------------------
Net (loss) earnings                    (8,183)    4,944    (1,680)   19,103
Other comprehensive (loss) income:
  Exchange difference on translating
   foreign operations                  (4,113)    4,505        47     6,866
  Unrealized (loss) on available for
   sale investment                        (54)        -       (27)      (32)
----------------------------------------------------------------------------
Other comprehensive (loss) income      (4,167)    4,505        20     6,834
----------------------------------------------------------------------------
Total comprehensive (loss) income     (12,350)    9,449    (1,660)   25,937
----------------------------------------------------------------------------
----------------------------------------------------------------------------

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Unaudited - Expressed in thousands of Canadian Dollars)
                                                       Accumulated
                                                             other
                  Shareholders' Contributed Retained comprehensive
                        capital     surplus earnings        income    Total
----------------------------------------------------------------------------
Balance, December
 31, 2012               394,048       2,881  247,565        (3,054) 641,440
----------------------------------------------------------------------------
Changes in equity
 for the six
 months ended June
 30, 2013
Exercise of
 options                  7,832           -        -             -    7,832
Reduction of 2012
 share issuance
 costs                      124           -        -             -      124
Shares issued
 under dividend
 reinvestment plan        2,881           -        -             -    2,881
Dividends declared            -           -  (11,525)            -  (11,525)
Other
 comprehensive
 income                       -           -        -         6,834    6,834
Net earnings for
 the period                   -           -   19,103             -   19,103
----------------------------------------------------------------------------
Balance, June 30,
 2013                   404,885       2,881  255,143         3,780  666,689
----------------------------------------------------------------------------
Changes in equity
 for the six
 months ended
 December 31, 2013
Expense related to
 vesting of
 options                      -         235        -             -      235
Reclassification
 of equity settled
 options                      -      12,598        -             -   12,598
Exercise of
 options                  2,802        (463)       -             -    2,339
Issuance of shares        2,207           -        -             -    2,207
Dividends declared            -           -  (12,146)            -  (12,146)
Other
 comprehensive
 income                       -           -        -           403      403
Net earnings for
 the period                   -           -    2,837             -    2,837
----------------------------------------------------------------------------
Balance, December
 31, 2013               409,894      15,251  245,834         4,183  675,162
----------------------------------------------------------------------------
Changes in equity
 for the six
 months ended June
 30, 2014
Expense related to
 vesting of
 options                      -       1,294        -             -    1,294
Exercise of
 options                  6,426      (6,194)       -             -      232
Issuance of shares        2,776           -        -             -    2,776
Dividends declared            -           -  (13,107)            -  (13,107)
Other
 comprehensive
 income                       -           -        -            20       20
Net loss for the
 period                       -           -   (1,680)            -   (1,680)
----------------------------------------------------------------------------
Balance, June 30,
 2014                   419,096      10,351  231,047         4,203  664,697
----------------------------------------------------------------------------

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited - Expressed in thousands of Canadian Dollars)
                                          For the three
                                                 months  For the six months
                                         ended June 30,      ended June 30,
                                         2014      2013      2014      2013
----------------------------------------------------------------------------
Cash provided by (used for):
Operating Activities
Net (loss) earnings                    (8,183)    4,944    (1,680)   19,103
Adjustments for:
  Amortization                         17,457    17,693    32,035    32,083
  Income tax expense                    2,913     1,753     3,369     2,738
  Income tax recovered (paid)              25       364        (7)      157
  Non-cash stock-based compensation
   expense (recovery)                   1,630      (332)    4,845    (4,645)
  Net financing charges                28,713    13,941    28,806    13,466
  Finance charges paid                (15,989)  (10,942)  (16,847)  (11,948)
  Other                                   132       223       280       389
----------------------------------------------------------------------------
Funds from Operations                  26,698    27,644    50,801    51,343
(Increase) decrease in non-cash
 working capital                         (491)    2,788   (11,244)  (38,885)
Decommissioning costs incurred           (986)     (872)   (2,699)   (1,900)
----------------------------------------------------------------------------
Cash from Operating Activities         25,221    29,560    36,858    10,558
----------------------------------------------------------------------------
Investing Activities
  Additions to property, plant and
   equipment                          (36,652)  (29,626)  (97,439)  (69,408)
  Other                                   945       463       548    (3,182)
----------------------------------------------------------------------------
Cash used in Investing Activities     (35,707)  (29,163)  (96,891)  (72,590)
----------------------------------------------------------------------------
Financing Activities
  Issuance of shares                      232       714       232     2,361
  Issuance of Series 3 Senior
   Unsecured Debentures               147,069         -   147,069         -
  Redemption of Series 1 Senior
   Unsecured Debentures              (125,000)        -  (125,000)        -
  (Decrease) increase in senior
   secured debt                        (1,746)    3,499    53,013    53,000
  (Decrease) increase in bank
   indebtedness                          (739)   (1,630)   (1,321)   13,137
  Dividends paid                       (4,980)   (3,708)   (9,439)   (8,019)
----------------------------------------------------------------------------
Cash from (used in) Financing
 Activities                            14,836    (1,125)   64,554    60,479
----------------------------------------------------------------------------
Effect of foreign exchange on cash        326       728       155     1,144
----------------------------------------------------------------------------
Change in cash                          4,676         -     4,676      (409)
Cash, beginning of period                   -         -         -       409
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash, end of period                     4,676         -     4,676         -
----------------------------------------------------------------------------
----------------------------------------------------------------------------

FORWARD-LOOKING INFORMATION

Certain statements contained in this document constitute "forward-looking information" as defined under applicable securities laws. When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "potential", "strategy", "target", and similar expressions, as they relate to Newalta Corporation and the subsidiaries of Newalta Corporation, or their management, are intended to identify forward-looking information. In particular, forward-looking information included or incorporated by reference in this document include statements with respect to:


--  future operating and financial results;
--  business prospects and strategy including related timelines;
--  capital expenditure programs and other expenditures;
--  realization of anticipated benefits of growth capital investments,
    acquisitions and our technical development initiatives;
--  realization of anticipated benefits from our Rationalization Plan and in
    particular the anticipated value and sustainability of the cash savings
    from such initiatives;
--  anticipated industry activity levels;
--  expected demand for our services;
--  the amount of dividends declared or payable in the future;
--  our projected cost structure; and
--  expectations and implications of changes in legislation.

Our strategic objectives for the Business Plan period 2014 to 2017, including anticipated growth capital investments and our action plan for 2014 and 2015, are set out under "Strategy" on page 33 in our Annual Report for the year ended December 31, 2013.

Such information reflects our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, including, without limitation:


--  general market conditions of the industries we service;
--  strength of the oil and gas industry, including drilling activity;
--  fluctuations in commodity prices for oil and the price we received for
    our recovered oil;
--  fluctuations in commodity prices for lead including the price
    differential we pay for lead feedstock and the price we receive for our
    lead products;
--  fluctuations in base oil prices including the price differential we pay
    for used oil and the price we receive for our finished lube oil
    products;
--  fluctuations in interest rates and exchange rates;
--  supply of waste lead acid batteries as feedstock to support direct lead
    sales;
--  demand for our finished lead products by the battery manufacturing
    industry;
--  our ability to secure future capital to support and develop our
    business, including the issuance of additional common shares;
--  the highly regulated nature of the environmental services and waste
    management business in which we operate;
--  dependence on our senior management team and other operations management
    personnel with waste industry experience;
--  the competitive environment of our industry in Canada and the U.S.;
--  success of our growth, acquisition and technical development strategies
    including integration of businesses and processes into our operations
    and potential liabilities from acquisitions;
--  potential operational and safety risks and hazards, obtaining insurance
    for such risks and hazards on reasonable financial terms, and potential
    failure of meeting customer safety standards;
--  the seasonal nature of our operations;
--  costs associated with operating our landfills and reliance on third
    party waste volumes;
--  risk of pending and future legal proceedings;
--  risk to our reputation;
--  our ability to attract, retain, and integrate skilled employees and
    maintain positive labour union relationships;
--  open access for new industry entrants and the general unprotected nature
    of technology used in the waste industry;
--  possible volatility of the price of, and the market for, our common
    shares, and potential dilution for shareholders in the event of a sale
    of additional shares;
--  financial covenants in our debt agreements that may restrict our ability
    to engage in transactions or to obtain additional financing; and
--  such other risks or factors described from time to time in reports we
    file with securities regulatory authorities.

During the second quarter, we engaged a financial advisor to conduct a Strategic Review for our Industrial Division which is ongoing. As such, forward-looking information in this document is made subject to any changes that may be implemented as a result of this Strategic Review.

By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking information will not occur. Many other factors could also 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 and readers are cautioned that the foregoing list of factors is not exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Furthermore, the forward-looking information contained in this document is made as of the date of this document and, in each case, is expressly qualified by this cautionary statement. Unless otherwise required by law, we do not intend, or assume any obligation, to update any such forward-looking information.

The information contained on our website does not form part of this press release.

RECONCILIATION OF NON-GAAP MEASURES

This Press Release contains references to certain financial measures, including some that do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS" or "GAAP") and may not be comparable to similar measures presented by other corporations or entities. These financial measures are identified and defined below:

"EBITDA", "EBITDA per share", "Adjusted EBITDA", and "Adjusted EBITDA per share" are measures of our operating profitability. EBITDA provides an indication of the results generated by our principal business activities prior to how these activities are financed, assets are amortized or impaired, or how the results are taxed in various jurisdictions. In addition, Adjusted EBITDA provides an indication of the results generated by our principal business activities prior to recognizing stock-based compensation and restructuring related costs. Adjusted EBITDA provides improved continuity with respect to the comparison of our operating results over a period of time. Stock-based compensation, a component of employee remuneration, can vary significantly with changes in the price of our common shares while restructuring costs are outside of our normal course of business. Restructuring related costs are charges primarily attributable to the Rationalization Plan and Strategic Review. EBITDA and Adjusted EBITDA are derived from the consolidated statements of operations and comprehensive income. EBITDA per share and Adjusted EBITDA per share are derived by dividing EBITDA and Adjusted EBITDA by the basic weighted average number of shares.

They are calculated as follows:


                                     Three months ended    Six months ended
                                               June 30,            June 30,
($000s)                                  2014      2013      2014      2013
----------------------------------------------------------------------------
Net (loss) earnings                    (8,183)    4,944     1,680    19,103
Add back:
  Income taxes                          2,913     1,753     3,369     2,738
  Net finance expense                  28,713    13,941    28,806    13,466
  Amortization(1)                      17,457    17,693    32,035    32,083
----------------------------------------------------------------------------
EBITDA                                 40,900    38,331    62,530    67,390
----------------------------------------------------------------------------
Add back (deduct):
  Stock-based compensation expense
   (recovery)                           3,476        19     9,515    (1,320)
  Restructuring related costs           1,666         -     6,048         -
----------------------------------------------------------------------------
Adjusted EBITDA                        46,042    38,350    78,093    66,070
----------------------------------------------------------------------------
Weighted average number of shares      55,780    54,928    55,650    54,721
----------------------------------------------------------------------------
EBITDA per share                         0.73      0.70      1.12      1.23
----------------------------------------------------------------------------
Adjusted EBITDA per share                0.83      0.70      1.40      1.21
----------------------------------------------------------------------------
(1) Includes impairment charges, non-cash gains or losses on asset disposal
    and other non-cash charges.

"Divisional EBITDA" provides an indication of the results generated by the division's principal business activities prior to how the assets are amortized, and before allocation of Selling, general and administrative costs ("SG&A"). Divisional EBITDA is the sum of gross profit and amortization for the respective division. Divisional EBITDA is derived from Gross Profit as follows:


                                     Three months ended    Six months ended
                                               June 30,            June 30,
($000s)                                  2014      2013      2014      2013
----------------------------------------------------------------------------
Gross Profit                           53,683    45,377    95,335    83,212
Add back:
  Amortization included in cost of
   sales                               13,672    14,085    34,877    25,081
----------------------------------------------------------------------------
Divisional EBITDA                      67,355    59,462   120,212   108,293
----------------------------------------------------------------------------
  New Markets(1)                       27,924    22,953    46,271    37,911
  Oilfield(1)                          20,140    17,324    44,199    40,005
  Industrial                           19,291    19,185    29,742    30,377
Deduct:
  SG&A(2)                              24,789    21,131    51,634    40,903
  Restructuring related costs           1,666         -     6,048         -
----------------------------------------------------------------------------
EBITDA                                 40,900    38,331    62,530    67,390
----------------------------------------------------------------------------
(1) New Markets and Oilfield Divisional EBITDA for the three and six months
    ended June 30, 2013 has been restated to reflect a change in reporting
    structure. New Markets was reduced and Oilfield was increased by $563
    and $1,090, in the respective periods.
(2) SG&A excludes amortization of $3,785 and $7,158 for Q2 2014 and 2014
    year-to-date, respectively, and $3,608 and $7,002 for Q2 2013 and 2013
    year-to-date, respectively.

"Adjusted net earnings" and "Adjusted net earnings per share" are measures of our profitability. Adjusted net earnings provides an indication of the results generated by our principal business activities prior to recognizing stock-based compensation recovery or expense, the gain or loss on embedded derivatives and restructuring related charges. Stock-based compensation expense, a component of employee remuneration, can vary significantly with changes in the price of our common shares. The gain on the embedded derivative is a result of the change in the trading price of the debentures and the volatility of the applicable bond market. Restructuring related costs are related to initiatives outside of our normal course of business. As such, Adjusted net earnings provides improved continuity with respect to the comparison of our results over a period of time. Adjusted net earnings per share is derived by dividing Adjusted net earnings by the basic weighted average number of shares.


                                     Three months ended    Six months ended
                                               June 30,            June 30,
($000s)                                  2014      2013      2014      2013
----------------------------------------------------------------------------
Net (loss) earnings                    (8,183)    4,944    (1,680)   19,103
Add back (deduct):
  Stock-based compensation expense
   (recovery)                           3,476        19     9,515    (1,320)
  Embedded derivative (gain)           14,883     6,931     8,327      (137)
  Restructuring related costs           1,666         -     6,048         -
----------------------------------------------------------------------------
Adjusted net earnings                  11,842    11,894    22,210    17,646
----------------------------------------------------------------------------
Weighted average number of shares      55,780    54,928    55,650    54,721
----------------------------------------------------------------------------
Adjusted net earnings per share          0.21      0.22      0.40      0.32
----------------------------------------------------------------------------

"Book value per share" is used to assist management and investors in evaluating the book value compared to the market value.


                                                         Three months ended
                                                                   June 30,
($000s)                                                 2014           2013
----------------------------------------------------------------------------
Total Equity                                         664,697        666,689
Shares outstanding, June 30,                          55,828         55,006
----------------------------------------------------------------------------
Book value per share                                   11.91          12.12
----------------------------------------------------------------------------

"Cash Basis Return on Capital" (ROC - Cash) is used to assist management and investors in measuring the returns realized at the consolidated level from capital employed. ROC - Cash is derived from Adjusted EBITDA less cash stock-based compensation, cash taxes and maintenance capital divided by Net Assets. Net Assets is an average of the beginning and ending balances of our total assets less current liabilities for the period.

"Divisional Return on Capital" is used to assist management and investors in measuring the returns realized at the Divisional level from capital employed. It is derived from Divisional EBITDA divided by the average of the beginning and ending balances of assets employed for the period.

"Funds from operations" is used to assist management and investors in analyzing cash flow and leverage. Funds from operations as presented is not intended to represent operating funds from operations or operating profits for the period, nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. Funds from operations is derived from the consolidated statements of cash flows and is calculated as follows:


                                     Three months ended    Six months ended
                                               June 30,            June 30,
($000s)                                  2014      2013      2014      2013
----------------------------------------------------------------------------
Cash from Operating Activities         25,221    29,560    36,858    10,558
Add back:
  Increase (decrease) in non-cash
   working capital                        491    (2,788)   11,244    38,885
  Decommissioning obligations
   incurred                               986       872     2,699     1,900
----------------------------------------------------------------------------
Funds from operations                  26,698    27,644    50,801    51,343
----------------------------------------------------------------------------
Weighted average number of shares      55,780    54,928    55,650    54,721
----------------------------------------------------------------------------
Funds from operations per share          0.48      0.50      0.91      0.94
----------------------------------------------------------------------------

References to EBITDA, EBITDA per share, Adjusted EBITDA, Adjusted EBITDA per share, Divisional EBITDA, Adjusted net earnings, Adjusted net earnings per share, ROC - Cash, Divisional Return on Capital, Funds from operations, and Funds from operations per share throughout this document have the meanings set out above. Adjusted SG&A is defined as SG&A adjusted for stock-based compensation and amortization.

Contacts:
Newalta Corporation
Anne M. Plasterer
Executive Director, Investor Relations
(403) 806-7019

Newalta Corporation
Stephanie MacVicar
Director, Investor Relations
(403) 806-7391

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