TORONTO, Sept. 16 /CNW/ - Connors Bros. Income Fund (TSX: CBF.UN)
(the "Fund"), whose subsidiaries market consumer food products under brands
such as Bumble Bee(R), Clover Leaf(R), Brunswick(R), Castleberry's(R) and
Sweet Sue(R), today announced it had entered into a transaction agreement to
sell the Castleberry's(R) red meats business. The transaction is expected to
close later this week. Terms of this sale were not announced.
The Fund concluded the strategic review of its meats business, resulting
in its sale to Aunt Kitty's Foods, Inc., a subsidiary of Hanover Foods.
Hanover will acquire the Castleberry's brand, inventory and certain equipment
related to the chili, stew, hash, and other meats products. Hanover currently
operates its own factory in New Jersey. As a result, the Augusta, Georgia
factory will be closed following an approximately 60-day transition period.
The Fund will continue to market its shelf-stable poultry, chicken and
dumplings, and sausage product lines sold under the Sweet Sue and Bryan brand
names and will source these products from contract packers.
"Following a strategic review of the meats business, we recognized that
these products did not align with the core competencies of the company and
were inconsistent with the rest of our portfolio," said Chris Lischewski,
president and chief executive officer of the Fund's operating subsidiaries.
Lischewski explained, "Selling this business and, consequently, having to
close the factory was a difficult decision to make particularly as the
employees in Augusta have worked very hard over the past year." The company
will assist employees with job outplacement services, provide severance
packages and continue to pursue a potential purchaser for the factory.
For the six months ended June 28, 2008, the red meats business generated
revenue of approximately US$23 million and the contribution to overall company
EBITDA was not material. As a result, the Company maintains its full year
guidance for EBITDA to be down about 5% versus 2007 Adjusted EBITDA of
$91.2 million. Proceeds from the sale will be used to pay down debt.
Forward Looking Statements
Certain statements contained or incorporated by reference in this news
release constitute forward-looking statements. The use of any of the words
"anticipate," "continue," "estimate," "expect," "may," "will," "project,"
"should," "believe" and similar expressions are intended to identify
forward-looking statements. These statements are based on, but not limited to,
management's assessment of such factors as expected consumer demand, resource
supply, and competitive environment. These statements involve known and
unknown risks, uncertainties and other factors, including those described in
the Annual Information Form of the Fund under Risk Factors that may cause
actual results or events to differ materially from those anticipated in such
forward-looking statements. The Fund believes the expectations reflected in
the forward-looking statements are reasonable but no assurance can be given
that these expectations will prove to be correct and such forward-looking
statements included in, or incorporated by reference into, this news release
should not be unduly relied upon. These statements speak only as of the date
of this news release. In particular, this news release contains
forward-looking statements pertaining to distributable cash and distributions
per unit. The Fund does not undertake any obligation to publicly update or
revise any forward-looking statements, except as required by securities laws.
About Connors Bros. Income Fund
Connors Bros. Income Fund indirectly owns, through its subsidiaries, a
100% interest in Clover Leaf Seafoods, L.P. and Bumble Bee Foods, LLC.
Together, these two operating companies comprise North America's largest
branded seafood company, offering a full line of canned tuna, salmon, sardine
and specialty seafood products, marketed under leading brands including Clover
Leaf(R), Bumble Bee(R), Brunswick(R), Snow's(R) and Beach Cliff(R), as well as
a full-line of canned chicken and canned meat products in the U.S. under the
American Originals(TM), Castleberry's(R), and Sweet Sue(R) brand names. For
further information, please visit the Fund's website at www.connors.ca.
For further information:
For further information: Kent McNeil, Executive Vice President & Chief
Financial Officer, Connors Bros., Ltd., (858) 715-4076; Media Contact: For
media inquiries, please contact Della Sweetman or Jamie Marie Leicht,
Fleishman-Hillard, (619) 237-7700, Ext. 721 or 711