Versacold Income Fund Reports 2006 Fourth Quarter and Fiscal Year-End Results



    Increased Size and Diversification Leads to Enhanced Financial
    Performance

    Versacold Income Fund will hold a conference call and webcast to discuss
    its fourth quarter and year-to-date results on Thursday, March 15, 2007
    at 8:30 a.m. Pacific Time (11:30 a.m. Eastern). The call can be accessed
    by dialing: 1-866-898-9626 or 416-340-2216. A replay will be available
    through March 29, 2007 at: 1-800-408-3053 or 416-695-5800,
    Passcode:3213213 followed by the number sign.

    The live and archived webcast can be accessed at 
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1723040 or on
Versacold's website at http://www.versacold.com/.

    The 2006 fourth quarter and year-end MD&A and financial statements are
    expected to be filed on SEDAR and be available on Versacold's website at
    www.versacold.com on or about Thursday, March 15, 2007.

    
    TRADING SYMBOL: The Toronto Stock Exchange:
                    Versacold Income Fund - ICE.UN, ICE.DB, ICE.DB.A,
                    ICE.DB.B, ICE.DB.C
    

    VANCOUVER, March 14 /CNW/ - Versacold Income Fund (TSX Symbols ICE.UN,
ICE.DB, ICE.DB.A and ICE.DB.B, ICE.DB.C) ("the Fund") today released financial
results for the three months and twelve months ended December 31, 2006.

    
    2006 Highlights

    -   Generated distributable cash of $0.3094 per unit ($0.2604 diluted)
        for the fourth quarter of 2006, compared to $0.1379 per unit
        ($0.1378 diluted) in the fourth quarter of 2005.

    -   Generated distributable cash of $1.4426 per unit ($1.0926 diluted)
        for the twelve months ended December 31, 2006, compared to
        $0.7961 per unit ($0.7606 diluted) in the same period of 2005.

    -   Completed integration of the POCL operations, generating
        approximately $3 million in annualized G&A synergies in 2006.

    -   Increased fourth quarter revenue by $108.7 million to $178.9 million,
        and full-year revenue by $482.9 million to $693.3 million.

    -   Increased fourth quarter direct profit contribution by $18.6 million
        to $32.1 million, and full-year direct profit contribution by
        $87.9 million to $132.0 million.

    -   Increased fourth quarter EBITDA by $13.7 million to $23.9 million,
        and full-year EBITDA by $66.4 million to $101.2 million.

    -   Increased full-year net earnings by $6.6 million to $12.2 million.

    -   Completed the 2.0 million cubic foot expansion of the Great Plains
        facility in Calgary, Alberta in the fourth quarter.

    -   Completed the 11.6 million cubic foot expansion of the Gouldsboro,
        Pennsylvania facility in the fourth quarter.
    

    "2006 was an exceptional year for Versacold," said Brent Sugden,
Versacold's President and CEO. "We came into the year fresh from our
acquisition of P&O Cold Logistics (POCL), having tripled our size and greatly
expanded our geographic diversification with new operations in the U.S.,
Australia, New Zealand and Argentina. While we knew our Australian operations
would lose a major retail customer later in the year, strong economic
conditions and excellent performance showcased the power of our new assets
through most of 2006. The results were impressive, and contributed to record
results for Versacold and our unitholders."
    "As we anticipated, the fourth quarter was more challenging as contract
expiries with the Australian customer began to take effect. Direct profit
contribution from our U.S. business was also affected by the transition of
operations from a leased facility in Secaucus, New Jersey to our new facility
in Gouldsboro, Pennsylvania, which opened in the fourth quarter of 2006.
Stronger fourth quarter performance from our Canadian, New Zealand and
Argentinian operations helped to offset much of this impact and we were able
to end the year with our gains largely intact."
    "Moving into 2007, we anticipate a challenging first quarter as we feel
the full impact of contract expiries in Australia and continue to bring our
Gouldsboro facility online," added Sugden. "The recent opening of our expanded
facility in Calgary and our new warehouse in Edmonton, Alberta will create
additional start-up costs. Overall, while we expect first half financial
results to be below 2006 levels, over the balance of the year, we expect
results to improve as our new facilities ramp-up operations and contribute
greater revenue and direct profit contribution. Our 2006 results were
exceptional, and although we have some challenges, the strong economic and
operational factors contributing to last year's performance should continue
through the year."
    "Our focus in 2007 will remain on organic growth and accretive
acquisitions. We continue to see numerous consolidation opportunities in the
U.S., and with the POCL integration complete, we are well positioned to pursue
them," said Sugden.

    
    Financial Highlights

    (expressed in thousands of dollars except per unit amounts)
    -------------------------------------------------------------------------
                             Three         Three        Twelve        Twelve
                            months        months        months        months
                             ended         ended         ended         ended
                       December 31,  December 31,  December 31,  December 31,
                              2006          2005          2006          2005
    -------------------------------------------------------------------------
    Revenue                178,933        70,205       693,271       210,352
    -------------------------------------------------------------------------
    Direct Profit
     Contribution           32,051        13,415       132,045        44,195
    -------------------------------------------------------------------------
    EBITDA                  23,898        10,190       101,248        34,873
    -------------------------------------------------------------------------
    Net earnings (loss)     (1,727)       (3,682)       12,158         5,597
    -------------------------------------------------------------------------
    Net earnings (loss)
     per unit, basic         (0.04)        (0.15)         0.38          0.24
    -------------------------------------------------------------------------
    Net earnings (loss)
     per unit, diluted       (0.04)        (0.15)         0.37          0.24
    -------------------------------------------------------------------------
    Total distributable
     cash generated         12,749         3,557        47,946        19,570
    -------------------------------------------------------------------------
    Distributable cash
     per unit, basic        0.3094        0.1379        1.4426        0.7961
    -------------------------------------------------------------------------
    Distributable cash
     per unit, diluted      0.2604        0.1378        1.0926        0.7606
    -------------------------------------------------------------------------
    Distributions
     declared per unit      0.2500        0.2383        1.0000        0.9358
    -------------------------------------------------------------------------
    Weighted average
     units outstanding
     for distributable
     cash, basic        41,200,269    25,801,606    33,234,764    24,582,153
    -------------------------------------------------------------------------
    Weighted average
     units outstanding
     for distributable
     cash, diluted      61,399,310    25,818,899    53,412,848    32,349,408
    -------------------------------------------------------------------------
    

    The number of outstanding units at January 31, 2007 and February 28, 2007
were 41,607,507 and 42,081,637, respectively.

    Fourth Quarter Operating Results

    For the three months ended December 31, 2006, Versacold increased revenue
to $178.9 million, from $70.2 million in the fourth quarter of 2005. Direct
profit contribution grew to $32.1 million, from $13.4 million, and EBITDA
increased to $23.9 million, from $10.2 million in the fourth quarter of 2005.
Results in 2006 include 12 months operations of the former POCL assets,
compared to two weeks of operations in 2005.
    Of the $108.7 million revenue increase, $107.1 million came from the
former POCL operations, with the balance provided by Versacold's
pre-acquisition operations.
    The $18.6 million increase in direct profit contribution includes the
addition of $18.1 million of contribution from the former POCL operations and
a $0.5 million increase in direct profit contribution from Versacold's
pre-acquisition operations.

    
    Fourth quarter revenue and direct profit contribution by geographic
    market were as follows:

    Fourth
     Quarter 2006
    (in thousands   United                           New
     of dollars)    States  Australia   Canada   Zealand  Argentina    Total
    -------------------------------------------------------------------------
    Revenue         89,491    39,560    39,873     7,729     2,280   178,933
    -------------------------------------------------------------------------
    Direct Profit
     Contribution   15,810     5,096     7,906     2,451       788    32,051
    -------------------------------------------------------------------------
    

    Fourth quarter EBITDA of $23.9 million reflects the higher direct profit
contribution. Corporate general and administrative (G&A) expenses increased by
$4.9 million due to the significant increase in Versacold's size and the
subsequent increase in staff at corporate head office to manage the larger
enterprise.
    Fourth-quarter EBITDA, expressed as a percentage of revenue, decreased to
approximately 13.4% from 14.5% in 2005. This reflects the impact of a higher
proportion of leased facilities on expenses. Versacold currently has 17 leased
facilities, compared to two leased facilities prior to the POCL acquisition.
As a percentage of revenue, fourth quarter G&A expenses remained the same at
4.6% in 2006 and 2005.
    Versacold reported a net loss of $1.7 million in the fourth quarter of
2006, compared to a net loss of $3.7 million in the same period in 2005. The
fourth quarter net loss of $1.7 million is primarily the result of a
$2.9 million loss on financial instruments. The decrease in the net loss in
the fourth quarter of 2006 compared to the same period in 2005, primarily
reflects the $13.7 million increase in EBITDA and a $3.6 million decrease in
other expense, partially offset by a $5.0 million increase in interest
expense, a $6.8 million increase in amortization expense and a $3.4 million
increase in income tax expense.
    For the three months ended December 31, 2006, the Fund generated
distributable cash of $12.7 million, or $0.3094 per unit ($0.2604 per diluted
unit), and declared cash distributions of $10.4 million ($0.2500 per unit).
During the fourth quarter of 2005, the Fund generated $3.6 million or
$0.1379 per unit ($0.1378 per diluted unit) of distributable cash and declared
distributions of $6.1 million ($0.2383 per unit). The improvement in
distributable cash generation reflects higher EBITDA and efficiencies
resulting from the POCL integration. The increase in distributable cash
declared reflects the distribution increase to $1.00 per unit on an annualized
basis ($.08333 per month), compared to $0.9300 per unit ($0.0775 per month) in
2005, as well as a significant increase in the number of units outstanding in
the 2006 period, due to the conversion of debentures during 2006.

    Full-Year Operating Results

    For the 12 months ended December 31, 2006, Versacold increased revenue to
$693.3 million, from $210.4 million in 2005. Direct profit contribution grew
to $132.0 million, from $44.2 million, and EBITDA increased to $101.2 million,
from $34.9 million in 2005. The significant improvement in year-over-year
financial results was due to the full-year contribution of the former POCL
operations in 2006, compared to 2 weeks in 2005.
    The increase in revenue reflects $481.5 million of revenue from the
former POCL operations, as well as an additional $1.4 million of revenue from
Versacold's pre-acquisition operations, compared to 2005.
    The $87.9 million increase in direct profit contribution includes the
addition of $88.5 million of direct profit contribution from the former POCL
operations, partially offset by a $0.7 million decrease in direct profit
contribution from Versacold's pre-acquisition operations.

    
    Full-year revenue and direct profit contribution by geographic market
    were as follows:

    -------------------------------------------------------------------------
    Twelve Months
     of 2006
    (in thousands   United                          New
     of dollars)    States  Australia   Canada   Zealand  Argentina    Total
    -------------------------------------------------------------------------
    Revenue        347,210   155,661   153,171    28,950     8,279   693,271
    Direct Profit
     Contribution   65,505    23,828    31,335     8,801     2,576   132,045
    -------------------------------------------------------------------------
    

    Twelve-month EBITDA increased $66.4 million from 2005. As a percentage of
revenue, EBITDA decreased to approximately 14.6% from 16.6% in 2005,
reflecting higher lease expense related to the increase to 17 leased
facilities, from just two prior to the POCL acquisition.
    General and administrative (G&A) expenses increased by $21.5 million due
to G&A expenses related to the POCL operations and an increase in staff at
corporate head office to manage the larger enterprise. As a percentage of
revenue, total G&A expenses for the 12 months remained at 4.4% in 2006 and
2005.
    Net earnings were $6.6 million higher in 2006 than in 2005. The increase
in net earnings primarily reflects the $66.4 million increase in EBITDA and a
$2.7 million decrease in other expense, partially offset by a $26.4 million
increase in interest expense, a $28.0 million increase in amortization expense
and a $7.9 million increase in tax expense.
    For the 12 months ended December 31, 2006, the Fund generated
distributable cash of $47.9 million, or $1.4426 per unit ($1.0926 per diluted
unit), and declared cash distributions of $34.1 million ($1.0000 per unit).
During the same period in 2005, the Fund generated $19.6 million or
$0.7961 per unit ($0.7606 per diluted unit) of distributable cash and declared
distributions of $22.9 million ($0.9358 per unit). The improvement in
distributable cash generation reflects higher EBITDA, as well as efficiencies
resulting from the POCL integration. The increase in distributable cash
declared reflects the distribution increase to $1.00 per unit on an annualized
basis ($0.08333 per month), compared to $0.9300 per unit ($0.0775 per month)
in 2005, as well as the significant increase in the number of units
outstanding during 2006.

    Corporate Finance Developments

    On December 12, 2006, Versacold received unanimous lender consent to
extend the term of its $49.8 million Credit C bridge equity loan for an
additional six months to December 13, 2007.

    Outlook

    Versacold's outlook remains positive. The PRW industry is large, stable
and growing. Versacold enjoys a strong position in the industry with an
asset-backed business, a high degree of market and geographic diversification,
and a large North American platform that enables the company to serve a
variety of customers. This established base also positions Versacold to act as
a consolidator in the fragmented US market. Versacold continues to review
accretive acquisition opportunities, primarily in the United States.
    Robust economic performance in Versacold's key markets should continue
during the year and Versacold anticipates relatively high levels of occupancy
at their facilities. Performance over the year will also benefit from the
expansion plan undertaken the previous year, although there will be a one-time
downward effect on results over the next two quarters as Versacold transitions
its business from the Secaucus, New Jersey facility to the new large warehouse
in Gouldsboro, Pennsylvania.
    Versacold anticipates a decrease in the Australian revenue and profit
contribution in 2007 as a result of contract expiries in late 2006 with a
major retail customer in Australia. Versacold was aware of these contract
changes when POCL was acquired and factored the impact into the purchase
price. The customer has subsequently retained Versacold to provide a portion
of its freezer storage business in Queensland and New South Wales. Together
with other new business wins, Versacold have now succeeded in replacing
approximately one third of the affected business, which puts Versacold ahead
of expectations.
    Versacold is continuing to strengthen their existing operations.
Versacold has begun a $6.0 million expansion to the Lynden, Washington
facility to accommodate that region's growing berry production. In conjunction
with the decommissioning of the aging Hamilton leased facility in Australia,
Versacold also plans to expand the more modern Murarrie facility in
Queensland. This $9.7 million expansion will partially offset capacity lost as
a result of the Hamilton closure. Both facilities will be completed by the
third quarter of this year, and in total, Versacold plans to invest
$46.9 million into facility expansions and upgrades in 2007.
    The Fund's distributions declared as a percentage of distributable cash
is expected to be higher through the first half of 2007 as the issues noted
above will impact results over the next two quarters. In addition, there have
been a significant number of debentures convert during the second half of
2006. While the conversion from debt to equity has strengthened the equity
component of the capital structure, the increased number of units outstanding
also results in a higher amount of distributions being paid. Versacold expects
the payout ratio to improve by the third quarter of 2007.

    Proposed Changes to Tax Legislation Affecting Income Trusts

    On October 31, 2006, the Canadian federal government announced proposed
changes to the way in which income trusts are taxed. The proposed legislation
to effect these changes was announced on December 21, 2006. Under this
legislation, a portion of the distributions that are currently paid out and
taxed in the hands of unitholders would first be subject to tax at the trust
level. If passed into legislation, the proposed changes to the current tax
treatment of trust income and distributions will take effect in 2011 for
existing trusts such as Versacold Income Fund.
    Based on Versacold's review of the draft legislation, Versacold believes
they may not be adversely affected by the proposed tax changes for a
meaningful period of time following 2011. The reasons Versacold believes they
will not be adversely affected are three-fold:

    
    -   The proposed legislation is intended to tax Canadian source income
        only. The Fund has a significant foreign asset base, with
        approximately 76% of its direct profit contribution derived from
        foreign sources. This portion of the Fund's direct profit
        contribution should not attract the proposed tax, as it is currently
        taxed in the country of origin;
    -   The Fund's taxable Canadian subsidiaries have significant non-capital
        loss carry-forwards, which at the end of 2006 totaled approximately
        $48 million. These loss carry-forwards are available to reduce future
        taxable income; and
    -   The Fund's undepreciated capital cost on its fixed assets in Canada
        is approximately $142 million, which will provide the Fund with
        capital cost allowances that can be used to reduce future Canadian
        taxable income.
    

    These views are subject to a detailed review of the proposed legislation
when, and if, it is passed into law.
    In addition to the proposed tax changes, the Canadian federal government,
in a briefing December 15, 2006, also proposed limits on the amount of growth
funded by equity that an income trust can undertake prior to 2011. Versacold
believes that the limits, while somewhat restrictive as currently proposed,
should not significantly affect near term growth plans of the Fund.

    Management's Discussion and Analysis and Financial Statements

    Versacold's Management's Discussion and Analysis and Financial Statements
are available at Versacold's website at www.versacold.com under Investor
Relations.

    Non-GAAP Financial Measures

    Certain earnings measures namely "Direct Profit Contribution",
"Distributable Cash" and "EBITDA" (earnings before interest, income taxes,
depreciation, amortization, other income and the non-controlling interest) are
not earnings measures recognized by Canadian generally accepted accounting
principles. The Fund believes that these earnings measures are useful
supplemental measures of performance as they provide investors with an
indication of the amount of cash available for distribution to unitholders.
Investors should be cautioned, however, that Direct Profit Contribution,
EBITDA and Distributable Cash should not be construed as alternatives to using
net income as a measure of profitability or the statement of cash flows as a
measure of liquidity and cash flows. Further, the Fund's method of calculating
Direct Profit Contribution, EBITDA and Distributable Cash may not be
comparable to similarly titled amounts reported by other issuers.

    Forward-Looking Statements

    This news release includes statements about expected future events and/or
financial results that are forward looking in nature and subject to risks and
uncertainties. Versacold Income Fund cautions that actual performance will be
affected by a number of factors, many of which are beyond its control. Future
events and results may vary substantially from what the Fund currently
foresees.

    About Versacold

    Versacold Income Fund is an unincorporated, open-ended limited purpose
trust. The trust was created to invest in public refrigerated warehousing,
distribution and related businesses, initially through the acquisition of
Versacold Holdings Corp. ("Versacold").
    Versacold is one of the top three PRW companies in the North America and
in the world, with 72 facilities in the U.S., Canada, Australia, New Zealand
and Argentina. Versacold's operations provide global refrigerated storage
capacity in excess of 290 million cubic feet to a diverse group of food
producers, processors, and wholesale and retail distributors. Versacold also
provides fully integrated refrigerated distribution services.
    The Fund's units and convertible debentures trade on the Toronto Stock
Exchange under the respective symbols of ICE.UN, ICE.DB, ICE.DB.A, ICE.DB.B.,
ICE.DB.C. To find out more about Versacold (TSX: ICE.UN), visit our website at
www.versacold.com.

    %SEDAR: 00017300E




For further information:

For further information: Roger Dall'Antonia, Vice President, Treasury
and Investor Relations, Versacold Income Fund, 2115 Commissioner Street,
Vancouver, BC, V5L 1A6, Telephone: (604) 255-4656, Fax: (604) 255-4330,
www.versacold.com

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VERSACOLD INCOME FUND

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