TRADING SYMBOL: The Toronto Stock Exchange - SWS.UN
Swiss Water Decaffeinated Coffee Income Fund will hold a conference call
and webcast to discuss 2006 fourth quarter and year-end results on
March 13, 2007 at 8:00 am Pacific Time (11:00 am Eastern). The call can
be accessed by dialing: 1-800-731-6941 or 416-644-3427. A replay will be
available through March 27, 2007 at: 1-877-289-8525 or 416-640-1917
(Passcode: 21221224 followed by the number sign). The live and archived
webcast can be accessed at:
VANCOUVER, March 12 /CNW/ - Swiss Water Decaffeinated Coffee Income Fund
("the Fund") today reported financial results for the three and twelve months
ended December 31, 2006, which represents its fiscal year-end. The Fund also
announced a 5.9% increase in its monthly distribution to unitholders effective
with the March 2007 distribution to be paid in mid-April 2007.
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 $000 except per unit amounts 3 months ended Year Ended
December 31 December 31
2006 2005 2006 2005
Sales 7,640 7,531 31,353 25,820
Gross Profit 2,921 3,582 12,079 11,250
EBITDA(1) 1,952 2,720 7,745 7,918
Net Income 571 2,497 4,606 6,916
Distributable Cash(1) 1,723 2,805 7,051 7,963
Distributions paid 1,417 2,173 5,671 8,691
Per unit amounts:
Net Income per unit 0.086 0.374 0.690 1.036
Distributable Cash generated per
unit(1) 0.258 0.420 1.056 1.193
Distributions paid per unit(1) 0.212 0.326 0.850 1.302
(1) EBITDA, Distributable Cash, Distributable Cash per unit and Net
Income per unit are non-GAAP financial measures that are defined in
the Management's Discussion and Analysis, as posted on SEDAR.
In the three months ended December 31, 2006, SWDCC recorded a modest
year-over-year increase in sales and a 24% increase in processing volumes. For
the 2006 fiscal year, sales were up by 21% and processing volumes grew by 27%
The year-over-year sales increase was driven by several factors,
including the processing of an order backlog from the fourth quarter of 2005
and an 18% increase in the number of new customers in 2006. SWDCC also saw
business with existing customers grow as a result of its successful
implementation of a competitive pricing strategy. This lowered unit prices but
significantly increased the volume of business from most customer segments.
EBITDA for the three months was down by 28% year-over-year as the effect
of the increased volume was offset by foreign exchange, lower processing rates
due to competitive strategic pricing implemented in 2006, a shift in mix to
lower revenue business, and increased variable operating expenses. For the
fiscal year, EBITDA was down by 2% over 2005.
Fourth quarter net income was down by 77% year-over-year, due mainly to
increased depreciation costs following the Q1 activation of the company's
second production line. The impact of foreign exchange on US dollar revenues
and $0.7 million in marked to market losses on derivative financial
instruments used to manage US dollar exposure and coffee futures also played a
role. The Company uses these instruments as economic hedges but chooses not to
account for them under hedge accounting rules due to the onerous requirements
these impose without incremental financial benefit. Consequently, SWDCC
records unrealized gains/losses on its derivative financial instruments in the
period even though they relate to future anticipated transactions, and are
based on currency rates and commodity prices that could fluctuate
significantly before the hedges are liquidated. For the fiscal year, net
income was down by 33% over 2005, due primarily to the same factors.
Distributions to unitholders in the fourth quarter were maintained at the
level set in December 2005. In Q4 2006, the Fund generated distributable cash
of $1.7 million and paid $1.4 million in distributions to unitholders. In the
12 months of 2006, the Fund generated distributable cash of $7.1 million and
paid $5.7 million in distributions. The distribution increase announced today
raises the per-unit distribution amount to $0.075 monthly, or $0.90 on an
"We have managed through three years of turbulence brought on by a
continually strengthening Canadian dollar relative to the US dollar, while
also funding, building and commissioning a second production line and
successfully dealing with a host of competitive incursions on our business,"
said Frank Dennis, President and CEO of SWDCC and a Trustee of the Fund.
"Consequently, we have entered 2007 with a strengthened business base and
improving cash flow. We are currently exceeding our operational targets in
terms of both the quality and quantity of coffee processed, and have ample
capacity to meet our customer's increasing demands for SWISS WATER(R) Process
chemical free coffee for the foreseeable future."
"We believe that our cash flows, while slightly weaker than a year ago
due to increased working capital requirements, are sufficient and sustainable
enough to warrant the increase in our monthly cash distribution to
unitholders," Dennis concluded.
A more detailed discussion of the Fund's financial results can be found
in its year-end Management's Discussion and Analysis, which is to be posted
with the financial statements on SEDAR (www.sedar.com) on or before March 13,
SWDCC is the world's only consumer branded chemical-free coffee
decaffeinator, and is certified organic by both the OCIA (Organic Crop
Improvement Association) and Aurora Certified Organic.
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 54% of SWDCC's revenue comes from the US, about 27% from
Canada and the balance from international markets, including the United
Kingdom, Japan and Australia.
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: email@example.com, Website: www.swisswater.com