Business
Second Cup Royalty Income Fund announces 2006 results
Second Cup Royalty Income Fund announces 2006 results.
About this update from Aegis Brands Inc
[{"type":"text","content":"\n\n\n\n\nMISSISSAUGA, ON, March 7 /CNW/ - Second Cup Royalty Income Fund (the\n\"Fund\") reported today financial results for the year ended December 31, 2005.\nAs the Fund went public on December 2, 2004, there are no year-over-year\ncomparables for the period. The Fund's units are traded on the Toronto Stock\nExchange under the symbol \"SCU.UN\".\nSame cafDe sales growth, a key metric of growth for the Fund, was 4.6% for\nthe year. System sales were $177.5 million and benefited from a price increase\nimplemented in the first quarter. The increase was applied to certain product\nofferings and accounted for approximately 3.0 percentage points of the same\ncafDe sales growth for the year. System sales have also benefited from an\nimprovement in sales mix, driven by stronger premium beverage sales. In\naddition, a high-volume cafDe situated in a major Toronto-area retail center\nwas temporarily closed during the second half of 2005 due to a major mall\nrenovation. This adversely impacted system sales by 0.3% for the year.\nThe source of revenue for the Fund is its subsidiary, Second Cup \nTrade-Marks Inc. (\"MarksCo\") which, in turn, receives royalty income from The\nSecond Cup Ltd. (\"Second Cup\") under a Licence and Royalty Agreement (the\n\"Agreement\"). For the year, MarksCo earned total royalty revenue of\n$11,606,000 and paid $9,487,000 in interest and $575,000 in dividends up to\nthe Fund. The Fund incurred total operating expenses of $301,000, excluding\n$441,000 incurred by MarksCo. Operating expenses of the Fund and MarksCo are\nlimited to general and administrative expenses, term loan interest expense,\nand amortization of deferred financing fees, and were in line with\nmanagement's expectations. Net earnings of the Fund before any cash\ndistribution were $10,036,000 or $1.0473 per unit for the year.\nDistributable cash, a non-GAAP measurement, represents net earnings of\nthe Fund adjusted for future income taxes and non-cash amortization expenses\nof the Fund and its wholly-owned subsidiary, MarksCo, and was $10,242,000, or\n$1.0688 per unit compared to distributions declared of $9,583,000 or $1.00 per\nunit for the year. The tax treatment of 2005 distributions is 16.8% return of\ncapital and 83.2% income.\n\nHighlights\n\nThe following table sets out selected financial information and other\ndata of the Fund and sh...