Specialty Foods Group Income Fund Announces Financial Results for the Third Quarter And First Nine Months of 2007



    TORONTO, Nov. 20 /CNW/ - Specialty Foods Group Income Fund (the "Fund")
(NEX: HAM.UN.H) today announced financial results for the quarter and nine
months ended September 29, 2007. The Fund indirectly holds an interest in
Specialty Foods Group, Inc. ("SFG" or the "Company"), which is consolidated in
the Fund's financial results.
    Operating results for the quarter continued the favorable trends reported
for the first six months of the year. Operating income for the third quarter
of 2007 was $4.4 million compared with a loss of $1.3 million for the third
quarter of 2006. Net sales for the quarter declined to $69.6 million from
$73.4 million in the third quarter of 2006 due primarily to a reduction in
private label business. Average Selling price on the remaining volume is
higher as a result of this reduction.
    For the first nine months of 2007, operating income improved
substantially to $10.7 million from a loss of $0.9 million in the same period
of 2006. Net sales declined from $236.9 million for the first nine months of
2006 to $219.6 million in 2007, due largely to the disposition of the Mosey's
brand.
    On October 12, 2007, the Fund announced the appointment of Steven P.
Wright as Chief Financial Officer of Specialty Foods Group, Inc. ("SFG" or the
"Company"). Mr. Wright was previously the Corporate Controller at SFG and has
been a key contributor to the Company's financial reporting and internal
control processes. Dave Shapland, the former CFO, resigned to be able to spend
more time with his family. We thank him for all his contributions during a
difficult period for the Company and wish him continued success.
    The Company is pleased with the operating results to date, which would
not have been possible without the dedication of our employees and the
continued support of our valued customers.

    SELECTED FINANCIAL DATA

    Results of Operations for the Quarters and Nine Months Ended
September 29, 2007 and September 30, 2006

    
                                                            Nine        Nine
    Consolidated Statement       Quarter     Quarter      Months      Months
     of Operations                 Ended       Ended       Ended       Ended
    (in thousands of           September   September   September   September
     U.S. dollars)              29, 2007    30, 2006    29, 2007    30, 2006
    -------------------------------------------------------------------------
    Net Sales                  $  69,623   $  73,360   $ 219,594   $ 236,885
    Cost of Goods Sold            57,367      66,182     184,229     212,121
    -------------------------------------------------------------------------
      Gross Profit                12,256       7,178      35,365      24,764
    Selling, General and
     Administrative Expenses       5,174       6,763      17,257      20,668
    Restructuring                  1,174           -       2,917           -
    Amortization                   1,480       1,715       4,522       4,980
    -------------------------------------------------------------------------
      Operating Income (loss)      4,428      (1,300)     10,669        (884)
    Goodwill Impairment                -           -           -         (22)
    Gain/(Loss) on Foreign
     Currency Translation
     and Transactions             (6,430)          4     (14,450)     (4,483)
    Debt Forgiveness                   -           -           -      17,670
    Amortization of Deferred
     Financing Fees and Debt
     Discount                       (745)     (1,161)     (2,229)     (2,637)
    Interest Expense              (3,963)     (4,190)    (11,662)    (13,946)
    -------------------------------------------------------------------------
      Income/(Loss) before
       Income Taxes               (6,710)     (6,647)    (17,672)     (4,302)
    Income Taxes                       -           -           -           -
    -------------------------------------------------------------------------
      Income/(Loss) before
       Non-Controlling Interest   (6,710)     (6,647)    (17,672)     (4,302)
    Non-Controlling Interest        (361)     (1,328)     (1,284)     (3,225)
    -------------------------------------------------------------------------
      Net Income/(Loss)        $  (6,349)  $  (5,319)  $ (16,388)  $  (1,077)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Calculation of EBITDA:
    ----------------------
    Net income/(loss)          $  (6,349)  $  (5,319)  $ (16,388)  $  (1,077)
    Non-controlling interest        (361)     (1,328)     (1,284)     (3,225)
    Amortization                   1,480       1,715       4,522       4,980
    Goodwill Impairment                -           -           -          22
    (Gain)/Loss on Foreign
     Currency Translation
     and Transactions              6,430          (4)     14,450       4,483
    Debt Forgiveness                   -           -           -     (17,670)
    Restructuring                  1,174           -       2,917           -
    Amortization of Deferred
     Financing Fees and Debt
     Discount                        745        1,161      2,229       2,637
    Interest Expense               3,963        4,190     11,662      13,946
    -------------------------------------------------------------------------
    EBITDA - U.S. $            $   7,082   $      415  $  18,108   $   4,096

    EBITDA - Cdn $             $   7,405   $      465  $  19,786   $   4,628
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    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 Specialty Foods Group, Inc. ("SFG"). SFG is a leading
independent U.S. producer and marketer of premium branded and private-label
processed meat products. SFG produces a wide variety of products such as
franks, hams, luncheon meats, dry sausage 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,
Liguria, 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 that could cause actual results to differ materially from
those described in the forward-looking statements. 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

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