Sun-Rype reports increased sales in Q2 2007



    KELOWNA, BC, Aug. 8 /CNW/ - Sun-Rype Products Ltd. (TSX:SRF) today
released its financial results for the second quarter ended June 30, 2007.
    Sun-Rype's net sales for the second quarter of 2007 were $35.0 million,
an increase of $4.0 million or 12.9% over the same quarter in 2006. For the
six months ended June 30, 2007, the Company's net sales were $72.6 million, an
increase of $7.5 million or 11.5% over the same period in 2006.
    "I am pleased that we accelerated our sales growth since the introduction
of our new innovative food and beverage product initiatives", says Eric
Sorensen, President and Chief Executive Officer. "These initiatives emphasize
Sun-Rype's continued commitment to innovation and to providing simple,
nutritious products that make it easier for today's busy families to
incorporate healthy eating into their active lives."
    The Company's net earnings for the second quarter of 2007 were
$1.2 million or $0.11 per share, compared to $1.4 million or $0.13 per share
in 2006. For the six-month period ended June 30, 2007, the Company's net
earnings were $3.7 million or $0.34 per share, compared to $4.2 million or
$0.39 per share for the same period in 2006. The increase in net sales during
the period was offset by increases in cost of sales, selling, general and
administrative expenses, and foreign exchange loss compared to the same period
in 2006.
    Sales from contract manufacturing (co-packing or manufacturing food and
beverage products for other companies) during the second quarter of 2007
increased by 55.5% from 2006. For the six-month period ended June 30, 2007,
contract manufacturing sales increased 8.8% over the same period of 2006.
    Sun-Rype's gross profit margin for the second quarter of 2007 was 30.4%
of net sales, compared to 33.2% in the same period in 2006. For the six-month
period ended June 30, 2007, the Company's gross profit margin was 33.1% of net
sales, compared to 35.5% for the same period in 2006. The Company's gross
profit margin for the year ended December 31, 2006, was 34.6%. Significant
items impacting cost of sales in 2007 include increased freight costs for
inventory transfers and higher raw materials costs.
    Cash provided by operating activities before changes in non-cash working
capital items for the second quarter of 2007 was $3.1 million compared to
$2.8 million for the same period in 2006. A net increase in cash invested in
working capital items of $4.8 million during the period (2006 - $1.4 million)
was due to the increase in inventories of $2.9 million and a decrease in
accounts payable of $3.5 million, offset by a reduction in accounts receivable
of $1.6 million.
    Cash expenditures in the second quarter of 2007 for property, plant and
equipment totalled $1.6 million for a total of $4.1 million for the six-month
period ended June 30, 2007. These investments were largely in connection with
the continuation of the installation of new food processing equipment started
in 2006.
    At June 30, 2007, Sun-Rype's working capital was $14.6 million (December
31, 2006 - $14.2 million).
    On August 7, 2007, the Company declared a quarterly dividend of $0.04 per
common share, for a total of approximately $433,000, payable on September 15,
2007, to shareholders of record at the close of business on August 31, 2007.
    The foregoing are financial highlights only. Management's Discussion and
Analysis, financial statements and accompanying notes of Sun-Rype Products
Ltd. for the period ended June 30, 2007, are available on the Canadian
Securities Administrator's website at www.sedar.com and on the Company's
website at www.sunrype.com.
    Additional information relating to Sun-Rype's operations can be found in
the Company's Annual Information Form, filed with all applicable Canadian
securities commissions and available for viewing on the Canadian Securities
Administrator's website at www.sedar.com and on the Company's website at
www.sunrype.com.
    Sun-Rype Products Ltd., based in Kelowna, BC, is a manufacturer and
marketer of 100% juices and 100% fruit snacks under the Sun-Rype brand.
Sun-Rype is a publicly traded Canadian company with its common shares listed
on the Toronto Stock Exchange under the symbol SRF.

    Forward Looking Statements

    Statements contained in this press release, which are not based on
historical fact, including without limitation, statements containing the words
"may", "will", "plans", "intends", "expects", "anticipates", "believes",
"estimate", "continue" and similar expressions, constitute "forward looking
information" within the meaning of applicable Canadian securities laws. 
Forward looking statements contained in this document may involve, but are not
limited to, statements relating to the Company's objectives, priorities,
strategies, actions, targets, expectations and outlook. Forward looking
statements are necessarily based upon assumptions and predictions with respect
to the future, including but not limited to the factors referred to below. As
a result, forward looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, events or
developments to be materially different from any future results, events or
developments expressed or implied thereby.  These risks, uncertainties and
other factors include, but are not limited to, changes in the consumer
packaged goods industry and external market factors, as well as the factors
referred to in the Company's Annual Information Form dated February 28, 2007,
and its other filings with the applicable Canadian securities regulatory
authorities. In light of these uncertainties, assumptions and risks, readers
are cautioned not to place undue reliance on such forward looking statements. 
Except as required by law, the Company assumes no obligation to update or
revise such information to reflect later events or developments.



    
                           SUN-RYPE PRODUCTS LTD.
                STATEMENTS OF EARNINGS AND RETAINED EARNINGS
             (in thousands of dollars except per share amounts)
                                 (unaudited)


                                    Three months ended      Six months ended
                                           June 30               June 30
                                   --------------------  --------------------
                                       2007       2006       2007       2006
                                   ---------  ---------  ---------  ---------

    Net sales                      $ 35,046   $ 31,044   $ 72,625   $ 65,117
    Cost of sales                    24,384     20,740     48,610     41,970
                                   ---------  ---------  ---------  ---------
    Gross profit                     10,662     10,304     24,015     23,147
                                   ---------  ---------  ---------  ---------

    Selling, general and
     administrative expenses          6,977      7,145     15,459     15,055
    Amortization                        980        960      1,962      1,925
    Interest expense                     39         10         48         19
    Loss (gain) on disposal of
     property, plant and equipment       13         (3)        29         22
    Foreign exchange loss               806        198        965         64
                                   ---------  ---------  ---------  ---------
                                      8,815      8,310     18,463     17,085
                                   ---------  ---------  ---------  ---------

    Earnings before income taxes      1,847      1,994      5,552      6,062
    Income taxes                        626        593      1,853      1,860
                                   ---------  ---------  ---------  ---------
    Net earnings                      1,221      1,401      3,699      4,202


    Retained earnings, beginning
     of period                       21,466     15,820     19,310     29,585
    Dividends paid                     (433)      (325)      (755)   (16,891)
                                   ---------  ---------  ---------  ---------
    Retained earnings, end of
     period                        $ 22,254   $ 16,896   $ 22,254   $ 16,896
                                   ---------  ---------  ---------  ---------
                                   ---------  ---------  ---------  ---------


    Per share information
      Basic and diluted earnings
       per share                   $   0.11   $   0.13   $   0.34   $   0.39
      Dividends per share              0.04       0.03       0.07       1.56
    

    %SEDAR: 00001572E




For further information:

For further information: please contact: Gary Pearson, Chief Financial
Officer, Sun-Rype Products Ltd., 1165 Ethel Street, Kelowna, BC, V1Y 2W4, Tel:
(250) 860-7973, Fax: (250) 762-3611, cfo@sunrype.com or Eric Sorensen, Chief
Executive Officer, Sun-Rype Products Ltd., 1165 Ethel Street, Kelowna, BC, V1Y
2W4, Tel: (250) 860-7973, Fax: (250) 762-3611, ceo@sunrype.com,
www.sunrype.com


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