Richards Packaging Income Fund Announces 2009 First Quarter Results



    TORONTO, May 8 /CNW/ - Richards Packaging Income Fund (TSX: RPI.UN) (the
"Fund") announced today results for the quarter ended March 31, 2009.
    "The first quarter results were disappointing with organic revenue
shrinkage of 5.4% and EBITDA(1) as a percentage of revenue slipping to 10.8%.
Against a backdrop of economic contraction in both Canada (7.3%) and the US
(6.1%) GDP, our customers were drastically reducing inventory levels and we
followed suit with a $2.3 million reduction, or 6.1%. Total revenue was up
4.2% driven by the devalued dollar but EBITDA fell $0.4 million due to lower
production, and therefore overhead absorption, at our plants. Net income was
$0.3 million, or 3.4 cents per Unit, flat with the same period in 2008, as the
lower EBITDA and higher interest costs of $0.3 million, due to 2.0% additional
margining and 0.5% foreign currency translation, were offset by a lower
unrealized loss on financial instruments ($0.9 million)," commented Gerry
Glynn, Chief Executive Officer. "Our leverage ratio was adversely affected in
the first quarter increasing from 2.8:1 to 3.0:1, reflecting an increased
borrowing on the revolver and the revaluation of the term debt ($1.8 million)
as a result of a 2.3 cents decrease in the Canadian dollar to U.S./Cdn$0.79.
As at April 30, 2009 we have redeployed the cash diverted from distributions
to make our first US$1.0 million repayment on the term debt."
    The Fund paid monthly distributions of 9.35 cents per Unit for January
and February and suspended distributions beginning in March until a leverage
ratio of less than 2.5:1 is achieved. The Trustees of the Fund will establish
the distribution policy in the fourth quarter of this year following the
release of the third quarter results(4).
    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
on May 9, 2009.

    About Richards Packaging Income Fund

    The Fund owns 85% of Richards Packaging Inc. ("Richards Packaging"), the
leading packaging distributor in Canada, and third largest in North America.
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 interim 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
        Richards Packaging'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 information and
        statements within the meaning of applicable securities laws
        (collectively "Statements") regarding future growth potential,
        results of operations, performance and business prospects and
        opportunities of the Fund. The Statements are frequently identified
        by the use of such words as "will", "may", "could", "expect", "plan",
        "anticipate", "believe" and other similar terminology. Specifically
        this release contains Statements with respect to compliance with
        certain financial covenants and the recommencement of distributions.
        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 predicted, expressed or implied in
        the Statements. Factors that could cause such differences include,
        among other things, changes in customer and supplier relationships,
        the extent and duration of the worldwide recession 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) 670-7760, gglynn@richardspackaging.com; Enzio Di
Gennaro, Chief Financial Officer, Richards Packaging Inc., (905) 670-7760,
edigennaro@richardspackaging.com


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