TRADING SYMBOL: The Toronto Stock Exchange - SWS.UN
VANCOUVER, March 11 /CNW/ - Swiss Water Decaffeinated Coffee Income Fund
("the Fund") today reported financial results for the three and 12 months
ended December 31, 2007. The three-month period represents the fourth quarter
of its 2007 fiscal year. The Fund holds all of the outstanding securities of
Swiss Water Decaffeinated Coffee Company, Inc. ("SWDCC" or "the company") and
its results are dependent on the operating results of SWDCC.
In $000s except per unit amounts 3 months ended 12 months ended
December 31 December 31
2007 2006 2007 2006
Sales 8,680 7,640 31,064 31,353
Gross profit 2,860 2,920 10,800 12,079
EBITDA(1) 1,869 1,955 6,808 7,745
Net income 837 571 5,180 4,606
Adjusted distributable cash(1) 2,155 1,745 7,109 7,141
Distributions paid 1,502 1,417 5,924 5,671
Per unit amounts:
Net Income per unit 0.125 0.086 0.776 0.690
Adjusted distributable cash
generated per unit(1) 0.323 0.261 1.065 1.070
Distributions paid per unit(1) 0.225 0.212 0.887 0.850
(1) EBITDA, adjusted distributable cash and adjusted distributable cash
per unit are non-GAAP financial measures that are defined in the
Management's Discussion and Analysis to be posted on SEDAR on or
before March 11, 2008.
During the fourth quarter of 2007, SWDCC's revenues grew by 13.6% over
the same period of 2006. Processing volumes declined by 10.8% during the
quarter, primarily due to the inability of a major customer to deliver its
Colombian coffees on schedule. This was partially offset by growing specialty
coffee and mainstream coffee volumes, which were up by 30% compared to the
same quarter in 2006.
SWDCC's annual and quarterly revenue performance was affected by the
continued strengthening of the Canadian dollar relative to the US dollar.
Sales generated in US dollars represented approximately 87% of the company's
fourth quarter revenues and 83% of its 2007 revenues. While SWDCC enters into
foreign exchange contracts to reduce its estimated net exposure to currency
fluctuations on a 12-month rolling basis, these contracts only manage to
dampen, not eliminate, the negative effect of a continually strengthening
Canadian dollar. As the majority of SWDCC's sales were earned in US dollars,
lower foreign exchange offset the positive effects of a more favourable
product mix and a modest price increase, pushing 12-month processing revenue
rates down by 2%.
SWDCC's gross profit for the quarter declined by 2% over Q4 2006 despite
a 10.8% year-over-year decrease in fourth quarter sales volumes. For the
12 months ended December 31, 2007, gross profit fell by 10.6% compared to the
same period in 2006. This was primarily due to the negative impact of the
strengthening Canadian dollar, a 5% decrease in year-over-year processing
volumes, and higher labour and distribution costs. Fourth quarter EBITDA was
down by 4%, while 12-month EBITDA fell by 12%.
During the fourth quarter of 2007, SWDCC's net income grew by 46.7% over
Q4 2006. This was due to the recording of unrealized derivative gains,
partially offset by lower margins on lower volumes.
On a year-over-year basis, the company's 12-month net income was up by
12.5%, as lower processing volumes and lower tax recoveries were more than
offset by the recording of unrealized derivative gains.
Distributions to unitholders in the fourth quarter were maintained at the
new higher level set in March 2007, when the per-unit monthly distribution was
increased by 5.9% to $0.075. On an annualized basis, the new level of monthly
distributions equals $0.90 per unit. In the fourth quarter, the Fund generated
adjusted distributable cash of $2.2 million, and paid $1.5 million in
distributions to unitholders. During the 12 months ended December 31, 2007,
the Fund generated adjusted distributable cash of $7.1 million and paid
$5.9 million to unitholders.
"We are pleased with the gains we made from higher-margin specialty
coffee volumes this quarter even though we were disappointed by a major
customer's inability to deliver its coffee for tolling as planned," said Frank
Dennis, President and CEO of SWDCC and a Trustee of the Fund. "Our 2007
volumes were close to the record levels achieved in 2006. We believe that the
strong Canadian dollar, having attained parity with the US dollar in late 2007
has stabilized somewhat. We also believe that growing consumer interest in
knowing how their food is processed will be a strong business driver for us
with new and existing customers."
A more detailed discussion of the Fund's financial results can be found
in its fourth quarter Management's Discussion and Analysis, which is to be
posted with the Fund's audited financial statements on SEDAR (www.sedar.com)
on or before March 11, 2008.
SWDCC is the world's only consumer-branded chemical-free coffee
decaffeinator, and is certified organic by the OCIA (Organic Crop Improvement
SWDCC decaffeinates customer-owned coffees, including organically
certified coffees, for a toll fee. The company also purchases high-quality
green coffees from more than 10 different countries, decaffeinates them and
markets them to the green coffee trade. These two revenue streams are known as
the company's "toll" and "non-toll" businesses, respectively.
Approximately 65% of SWDCC's revenue comes from the US, 26% from Canada
and the balance from international markets, including the United Kingdom,
Japan and Australia. Consistent with most global, commodity based businesses,
the bulk of the Fund's revenues are earned in US dollars as noted above.
For further information:
For further information: Stan Thompson, Chief Financial Officer, Swiss
Water Decaffeinated Coffee Company Inc., Phone: (604) 444-8780, Fax: (604)
420-8711, Email: firstname.lastname@example.org, Website: www.swisswater.com