Richards Packaging Income Fund Announces 2006 Fourth Quarter and Annual Results



    TORONTO, March 9 /CNW/ - Richards Packaging Income Fund (TSX: RPI.UN)
(the "Fund") announced today results for the quarter and year ended
December 31, 2006. The Fund owns 95% of Richards Packaging Inc. ("Richards
Packaging"), the leading packaging distributor in Canada, and third largest in
North America.
    "Fourth quarter results exceeded our expectations with organic growth of
4.1%, strong acquisition integration performance and gross margin up 0.3%,
when compared with the same period in 2005. EBITDA(1) for the fourth quarter
closed up $0.4 million from the same period in 2005, representing a 1.0%
increase to 10.9% of sales. These results are in line with the performance of
the first three quarters and reflect the execution of our profit improvement
plan. Net income for the fourth quarter was $1.4 million, which represented
$0.135 per unit on a diluted basis," commented Gerry Glynn, Chief Executive
Officer.
    "Richards Packaging delivered strong results for the 2006 year with gross
margin up 2.3% and EBITDA(1) up $2.6 million. Overall, income exceeded
management's target improvement plan by $0.8 million with EBITDA up by 2.0% to
11.2% of sales. After a year of pause to fully integrate the acquisitions from
2004 and 2005 and to optimize our business model, we believe that Richards
Packaging has now established a strong platform from which to grow
profitability and the timing is right to explore acquisition opportunities(4).
Net income for the 2006 year was $8.5 million, which represented $0.830 per
unit on a diluted basis. The distribution for the 2006 year at $1.122 per unit
represents an annual yield of 12.5% on a $9 price per unit and a payout
ratio(3) of 93%," added Mr. Glynn.
    Details of the Fund's results are currently available on Richards
Packaging's website at www.richardspackaging.com and on SEDAR at
www.sedar.com.

    About Richards Packaging

    Richards Packaging is a full-service packaging distributor targeting
small- and medium-sized North American businesses. Richards Packaging has
operated for over 90 years and currently serves over 7,000 regional food, wine
and spirits, cosmetic, specialty chemical, pharmaceutical and other companies
from 17 locations throughout North America.

    
    (1) Management defines EBITDA as earnings before amortization, interest,
        unrealized gain / loss on financial instruments and taxes. EBITDA is
        the same as income before under noted items, income taxes and non-
        controlling interests as outlined in the annual consolidated
        financial statements. Management believes that in addition to net
        income, EBITDA is a useful supplemental measure for investors of
        earnings available for distribution prior to debt service, capital
        expenditures and taxes. Management uses this measure as a starting
        point in the determination of earnings available for distribution to
        unitholders and exchangeable shareholders. In addition, EBITDA is
        intended to provide additional information on the Fund's operating
        performance. This earnings measure should not be construed as an
        alternative to net income or as an alternative to cash flow from
        operating, investing and financing activities as a measure of the
        Fund's liquidity and cash flows. EBITDA does not have a standardized
        meaning prescribed by GAAP and therefore the Fund's method of
        calculating EBITDA may not be comparable to similar measures
        presented by other companies or income trusts.
    (2) Management defines distributable cash flow, in accordance with the
        Company's credit agreement, as EBITDA less interest, cash income tax
        expense, maintenance capital expenditures and loan payments. The
        objective of presenting this measure is to calculate the amount which
        is available for distribution to unitholders and exchangeable
        shareholders. Investors are cautioned that distributable cash flow
        should not be construed as an alternative to cash flow from
        operating, investing and financing activities as a measure of the
        Fund's liquidity and cash flows. Distributable cash flow does not
        have a standardized meaning prescribed by GAAP and therefore the
        Fund's method of calculating distributable cash flow may not be
        comparable to similar measures presented by other income trusts.
    (3) Management defines payout ratio as distributions and dividends
        declared over distributable cash flow(2). The objective of presenting
        this measure is to calculate the percentage of actual distributions
        in comparison to the amount available for distribution. Payout ratio
        does not have a standardized meaning prescribed by GAAP. The Fund's
        method of calculating the payout ratio may not be comparable to
        similar measures presented by other income trusts.
    (4) This release contains certain forward looking statements (the
        "Statements") regarding future growth potential, results of
        operations, performance and business prospects and opportunities of
        the Fund. These Statements reflect management's current beliefs and
        are based on information currently available to the management of
        Richards Packaging. A number of factors could cause actual events or
        results to differ materially from those discussed in the forward-
        looking statements. Factors that could cause such differences
        include, among other things, changes in customer and supplier
        relationships and the impact on order volumes and pricing,
        competition in the industry, inventory obsolescence, trade risks in
        respect to foreign suppliers and fluctuations in foreign exchange and
        interest rates. Although the Statements contained in this release are
        based upon what management believes to be reasonable assumptions,
        there can be no assurance that actual results will be consistent with
        these Statements. These Statements are made as of the date of this
        release and the Fund assumes no obligation to update or revise them
        to reflect new events or circumstances.
    




For further information:

For further information: Gerry Glynn, Chief Executive Officer, Richards
Packaging Inc., (905) 624-3391, gglynn@richardspackaging.com; Enzio Di
Gennaro, Chief Financial Officer, Richards Packaging Inc., (416) 245-8230,
edigennaro@richardspackaging.com


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