Richards Packaging Income Fund Announces 2007 Fourth Quarter and Annual Results



    TORONTO, March 6 /CNW/ - Richards Packaging Income Fund (TSX: RPI.UN)
(the "Fund") announced today results for the quarter and year ended
December 31, 2007. The Fund owns 85% of Richards Packaging Inc. ("Richards
Packaging"), the leading packaging distributor in Canada, and third largest in
North America.
    Richards Packaging delivered strong results for the fourth quarter with
organic and acquisition growth of 4.7%, and gross margin up 1.4% from the
prior year. EBITDA(1) for the fourth quarter closed up $0.5 million from the
same period in 2006, representing a 1.3% increase to 12.2% of sales. These
results are 1.0% ahead of the performance of the first three quarters of the
year and reflect the successful execution of our profit improvement plan and
the addition of the McKernan organization. Net income for the quarter was
$2.0 million, which represented 17.3 cents per unit on a diluted basis. Also,
during the fourth quarter the Fund purchased 25,300 units at an average price
of $9.25/unit under its normal course issuer bid.
    "The 2007 year results were flat, however we consider this a success
given that economic conditions created a "perfect storm" with the currency
hitting an all time high of U.S./Cdn.$1.10, oil at $100/bbl., a weakening US
economy and a recession in the Canadian manufacturing sector. Richards
Packaging's performance is a testimony to the management team's ability to
manage through turbulent times. Net income for the year was $11.3 million,
which represented $1.08 per unit on a diluted basis. The distribution for the
year at $1.122 per unit represents an annual yield of 12.1% on a $9.25 price
per unit and a payout ratio(3) of 96%," commented Gerry Glynn, Chief Executive
Officer.
    Significant achievements in the year included the acquisition of the
McKernan organization on October 31st. McKernan is a successful direct mail,
catalogue and telemarketing packaging distributor and the largest provider of
surplus packaging in the United States. We expect the addition of the McKernan
operation to be accretive by $1.0 million for 2008(4). The funding for this
acquisition included a U.S. $10 million issue of exchangeable shares and
$2 million of exchangeable shares purchased by the CEO and the President.
    Details of the Fund's results are currently available on Richards
Packaging's website at www.richardspackaging.com and on March 7th 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 95 years and currently serves over 9,000 regional food, wine
and spirits, cosmetic, specialty chemical, pharmaceutical and other companies
from 19 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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