TRADING SYMBOL: Toronto Stock Exchange - GRO.UN
VANCOUVER, Feb. 3 /CNW/ - Sun Gro Horticulture Income Fund (the Fund) today reported that it has successfully completed the anticipated amendment to its debt covenants discussed in its 2009 third quarter results news release dated November 4, 2009. Due to the seasonal nature of its business, the Fund had forecast that it would likely exceed its required senior leverage ratio of 3.0 at March 31, 2010, but said that it expected a suitable modification to the covenant would be made prior to then with the lender. The covenant modification has increased the Fund's permitted senior leverage ratio at March 31, 2010 to 4.0.
"We extend our appreciation to Bank of Montreal and Prudential Capital Group for their continuing support as our financial partners," said Mitch Weaver, President and CEO, and a Trustee of the Fund. "We are confident that the modified senior leverage ratio during our busy spring period will provide sufficient financial flexibility to manage normal seasonal variations in our business as we continue to work to strengthen our balance sheet."
Weaver noted that during 2009, the Fund reduced its debt obligations by more than $13 million, including principal payments and deposits to a restricted cash account. In addition, drawings on the Fund's revolving operating facility (net of cash on hand and bank overdrafts) at the end of 2009 were reduced by $4.9 million from the 2008 year-end, due to more efficient working capital management and improved earnings.
This news release contains "forward-looking information". Forward-looking information relates to future events or future performance and reflects the Fund's expectations regarding Sun Gro's growth, results of operations, performance, business prospects, opportunities or industry performance, or trends. In some cases, forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "predict", "potential", "continue" or the negative of these terms or other comparable terminology. These statements are intended to provide investors with information that reflects management's reasonable expectations regarding the anticipated financial performance of Sun Gro and the Fund. Readers are cautioned that these statements may not be appropriate for other purposes. Any forward-looking information included in this news release reflects Sun Gro's current internal projections, expectations or beliefs and is based on information currently available. A number of factors could cause actual events or results to differ materially from those discussed in any forward-looking information. Important factors that could cause actual results to differ materially from Sun Gro's expectations include, among other things, risks associated with fluctuations in currency exchange rates and interest rates, changes in tax laws, the impact of adverse weather conditions on harvesting operations, an increase in freight rates, failure to successfully implement Sun Gro's strategies of adding mix products and targeting the professional grower market, failure of acquisitions to be accretive to unitholders or to be accretive within Sun Gro's anticipated time frames, inability to refinance acquisition debt, failure to meet certain financial covenant requirements, the impact of an increase in fuel costs, reduced consumer demand due to natural disasters and economic factors, and competitive activity. Readers should specifically consider these factors, including the risks and uncertainties described in the 2008 year-end MD&A filed on SEDAR. Although Sun Gro believes that any forward-looking information contained in this news release is based on reasonable assumptions, readers cannot be assured that actual results will be consistent with such statements. Accordingly, readers are cautioned against placing undue reliance on forward-looking information. Any forward-looking information provided in this news release is provided as of the date of the news release and Sun Gro assumes no obligation to update or revise the information to reflect new events or circumstances, except as required by law.
Income Fund Profile
Sun Gro Horticulture Income Fund was launched with the completion of an Initial Public Offering on March 27, 2002. Units of the Fund are listed for trading on the Toronto Stock Exchange. At February 3, 2010, there were 22,284,681 units of the Fund issued and outstanding.
Sun Gro is the largest producer and distributor of peat and bark-based growing mixes to professional plant growers in the US and Canada. It is also North America's largest producer and distributor of sphagnum peat moss, with approximately 65,000 acres of peat bogs under lease. Sun Gro sells its professional products primarily to greenhouse, nursery and specialty crop growers. The company also sells peat moss and potting mixes to retail customers, either by way of private label partnerships or under its own brand names. In addition, Sun Gro sells sand-based mixes to golf course developers and landscapers. The company's North America-wide production network now comprises 12 Canadian operating plants and 13 US operating plants.
SOURCE SUN GRO HORTICULTURE INCOME FUND
For further information: For further information: Bradley A. Wiens, Vice-President, Finance and CFO, Sun Gro Horticulture Income Fund, Tel: (425) 373-3603, Email: email@example.com, Website: www.sungro.com