Specialty Foods Group Income Fund Announces Financial Results for 2008



    TORONTO, April 24 /CNW/ - Specialty Foods Group Income Fund (the "Fund")
(NEX: HAM.UN.H) today announced financial results for the year ended December
27, 2008. The Fund indirectly holds an interest in Specialty Foods Group, Inc.
("SFG" or the "Company").
    EBITDA from Continuing Operations for the fourth quarter of 2008 was $4.3
million compared with $3.6 million in the fourth quarter of 2007. For the
year, EBITDA from continuing operations was $15.6 million compared to $17.1
million in 2007.
    Operating results from Continuing Operations for the fourth quarter of
2008 were income of $2.7 million compared with a loss of $0.5 million for the
fourth quarter of 2007. Net sales from continuing operations for the fourth
quarter of 2008 were $65.8 million compared with $59.5 million in the fourth
quarter of 2007, a $6.3 million or 10.6% increase. This increase was primarily
due to a $0.20 per pound increase in average selling price, with sales volume
unchanged from the fourth quarter of 2007.
    Operating income from Continuing Operations for 2008 was $8.8 million
compared with $6.1 million for 2007. Net sales from continuing operations for
the year were $257.6 million compared with $251.3 million for 2007, a $6.3
million or 2.5% increase. Average selling price increased by $0.11 per pound
year over year; however, sales volume decreased 4.5 million pounds or 3.2%.
This decrease in sales pounds is due to a reduction in private label sales.
    The Humboldt business unit was sold in the first quarter 2008 for a gain
of approximately $13.6 million. The Company used a portion of the proceeds
from the sale to pay off all amounts outstanding under the CIT Group credit
facility. The sale of the Humboldt Business Unit requires that its results for
2008 and 2007 be presented as Discontinued Operations and assets to be
classified as held for sale on the Consolidated Statements of Operations and
Balance Sheets, respectively.
    On July 28, 2008, the Company reinstated the interest payments to the
holders of the convertible subordinated debentures ("CSDs"). All interest due
in 2008 ($3.5 million) was paid. The Company had $8.1 million accrued interest
as of December 27, 2008. Included in this amount was the 4th quarter interest
payment made in January 2009 plus the interest accrued prior to 2008 ($6.9
million), which will be paid as conditions allow.
    On April 24, 2009, the Company entered into a $15 million revolving
credit agreement with Harris Bank, N.A., replacing its previous revolving
credit and term loan agreement with The CIT Group / Business Credit, Inc. The
new credit line will allow the Company improved access to borrowing and
flexibility over the prior facility.
    Nathans and SMG are still operating under the agreement and Order of the
Court, which prevented Nathan's termination from taking effect on July 31,
2008. SFG continues to abide by the existing contract with Nathan's Famous
Systems Inc. ("NFSI"). We have been taking all appropriate steps to protect
our rights under the existing License Agreement and intend to continue to do
so.
    A recap of the selected financial and operating information follows.

    Results of Continuing Operations for the Years Ended December 27, 2008
and December 29, 2007.

    
    Consolidated Statement of Operations            Year Ended    Year Ended
                                                   December 27,  December 29,
    (in thousands of U.S. dollars)                        2008          2007
    -------------------------------------------------------------------------
    Net Sales                                       $  257,616    $  251,265
    Cost of Goods Sold                                 215,715       207,430
    -------------------------------------------------------------------------
      Gross Profit                                      41,901        43,835
    Selling, General and Administrative Expenses        26,366        26,763
    Amortization                                         5,125         5,418
    Restructuring                                        1,649         5,551
    -------------------------------------------------------------------------
      Operating Income                                   8,761         6,103
    Loss on Sale of Fixed Assets                           (55)            -
    Gain / (Loss) on Foreign Currency
     Translation & Transactions                         22,194       (16,237)
    Gain on Sale of Investments                             27             -
    Amortization of Deferred Financing Fees
     and Debt Discount                                  (2,670)       (2,900)
    Interest Expense                                   (13,385)      (13,150)
    -------------------------------------------------------------------------
      Income / (Loss) from Continuing Operations
       before Income Taxes                              14,872       (26,184)
    Income Taxes                                           145           145
    -------------------------------------------------------------------------
      Income / (Loss) from Continuing Operations
       before Non-Controlling Interest                  14,727       (26,329)
    Non-Controlling Interest in Continuing
     Operations                                          1,664        (3,085)
    -------------------------------------------------------------------------
    Income / (Loss) from Continuing Operations      $   13,063   $   (23,244)
      Income from Discontinued Operations
       before Non-Controlling Interest                  12,289         3,015
    Non-Controlling Interest in Discontinued
     Operations                                          3,364         1,039
    -------------------------------------------------------------------------
    Income from Discontinued Operations             $    8,925   $     1,976

      Net Income / (Loss)                           $   21,988   $   (21,268)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Calculation of EBITDA from Continuing Operations:
    ------------------------------------------------

    Net Income / (Loss) from Continuing
     Operations                                     $   13,063   $   (23,244)
    Non-Controlling Interest in Continuing
     Operations                                          1,664        (3,085)
    Amortization                                         5,125         5,418
    Loss on Sale of Fixed Assets                            55             -
    (Gain) / Loss on Foreign Currency
     Translation & Transactions                        (22,194)       16,237
    Restructuring                                        1,649         5,551
    Amortization of Deferred Financing
     Fees and Debt Discount                              2,670         2,900
    Income Taxes                                           145           145
    Interest Expense                                    13,385        13,150
    -------------------------------------------------------------------------
    EBITDA from Continuing Operations - U.S. $      $   15,562   $    17,072
    EBITDA from Continuing Operations - Cdn $       $   16,572   $    18,210
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    The full report for the Fund has been filed with the Canadian securities
regulatory authorities and is available on the internet at the System for
Electronic Document Analysis and Retrieval (SEDAR) website (www.sedar.com) and
may be downloaded from the company's website (www.sfgtrust.com).

    Specialty Foods Group Income Fund is an open-ended, limited purpose trust
established under the laws of the Province of Ontario, which indirectly holds
an interest in SFG. SFG is a leading independent U.S. producer and marketer of
premium branded and private-label processed meat products. SFG sells a wide
variety of products such as franks, hams, bacon, luncheon meats, and
delicatessen meats. These products are sold to a diverse customer base in the
retail (e.g. supermarkets) and foodservice (e.g., restaurants) sectors. SFG
sells products under a number of leading national and regional brands, such as
Nathan's, Field, Fischer's, Mickelberry's, and Scott Petersen as well as on a
private-label basis.

    This news release contains forward-looking statements. Such statements
involve known and unknown risks, uncertainties and other factors outside of
management's control. The Fund does not assume responsibility for the accuracy
and completeness of those forward-looking statements and does not undertake
the obligation to publicly revise these forward-looking statements to reflect
subsequent events or circumstances.

    
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.
    

    %SEDAR: 00018733E




For further information:

For further information: Steve Wright, Chief Financial Officer, Tel:
(757) 952-1200, Email: investorrelations@sfgtrust.com, Website:
www.sfgtrust.com

Organization Profile

SPECIALTY FOODS GROUP INCOME FUND

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890