TORONTO, March 8 /CNW/ - Richards Packaging Income Fund (TSX: RPI.UN) (the "Fund") announced today results for the quarter and year ended December 31, 2009.
"Performance rebounded in the fourth quarter with organic revenue growth of 6.8%, as our customers replenished inventories drawn down during the first quarter, and gross margin was at a record 18.2% of sales when compared with the same period in 2008. EBITDA for the fourth quarter reflected the increase in gross profit margin by 1.2% of sales, as a result in the improvement in our customer mix, which fully offset the impact of foreign currency adjustments", commented Gerry Glynn, Chief Executive Officer.
"The 2009 results mirrored 2008 with revenue growth of 1.0% and EBITDA(1) up $0.1 million despite the recession and the packaging industry down 10%. We experienced a $2 million contraction with our top 60 customers as the higher freight costs and Canadian dollar hampered their ability to compete. More than offsetting this setback was the success of our sales team in generating new small customers which resulted in $4 million of additional sales from 700 new customers. EBITDA(1) as a percent of sales was at 11.7%. Net income was $13.8 million, or $1.37 per Unit, up $15.5 million from the same period in 2008 which mainly reflects non-cash foreign currency translation gain on our U.S. dollar denominated debt" added Mr. Glynn.
Richards Packaging made a $1.0 million payment on the term debt in the fourth quarter. Accumulated cash on hand at yearend of $2.0 million was available to ensure that limited seasonal borrowing is required during the first quarter of 2010.(4)
The Fund paid monthly distributions of 6.55 cents per Unit for October through December, which represents an annualized yield of 11.0% on the December 31st closing price of $7.15 per Unit. The payout ratio(3) for the fourth quarter was 74%. During the fourth quarter, 43,006 Units were purchased at an average price of $6.98 per Unit under the normal course issuer bid.
Details of the Fund's results are currently available on Richards Packaging's website at www.richardspackaging.com and on March 9th on SEDAR at www.sedar.com.
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 97 years and currently serves over 10,000 regional food, wine and spirits, cosmetic, specialty chemical, pharmaceutical and other companies from 20 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 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
SOURCE Richards Packaging Income Fund
For further information: For further information: Gerry Glynn, Chief Executive Officer, Richards Packaging Inc., (905) 670-7760, firstname.lastname@example.org; Enzio Di Gennaro, Chief Financial Officer, Richards Packaging Inc., (905) 670-7760, email@example.com