Business
Second Cup Royalty Income Fund announces third quarter 2005 results
Second Cup Royalty Income Fund announces third quarter 2005 results.
About this update from Aegis Brands Inc
[{"type":"text","content":"\n\n\n\n\nMISSISSAUGA, ON, Nov. 4 /CNW/ - Second Cup Royalty Income Fund\n(the \"Fund\") reported today financial results for the third quarter ended\nSeptember 30, 2005. As the Fund went public on December 2, 2004, there are no\nyear-over-year comparables for the period. The Fund's units are traded on the\nToronto Stock Exchange under the symbol \"SCU.UN\".\nSystem sales of the Royalty Pool CafDes during the quarter were\n$43.7 million and same cafDe sales growth was 4.6%. System sales growth\nbenefited from a price increase implemented in the first quarter. The increase\nwas applied to certain product offerings and accounted for approximately\n3.0 percentage points of the same cafDe sales growth for the third quarter.\nSystem sales have also benefited from an improvement in sales mix, driven by\nstronger premium beverage sales. In addition, a high-volume cafDe situated in a\nmajor Toronto-area retail center was temporarily closed during the quarter due\nto a major mall renovation. This adversely impacted system sales by 0.6%\nduring the quarter. Year-to-date sales reflect the seasonality of the business\nand continue to be in line with management's expectations.\nThe source of revenue for the Fund is through its ownership in Second Cup\nTrade-Marks Inc. (MarksCo) which, in turn, receives royalty income from The\nSecond Cup Ltd. (Second Cup) under a Royalty and Licence Agreement (the\n\"Agreement\"). For the quarter, MarksCo earned total royalty revenue of\n$2,858,000 and paid $2,391,000 in interest and $60,000 in dividends up to the\nFund. The Fund incurred total operating expenses of $74,000, excluding\n$273,000 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 $2,464,000 or 25.70 cents per unit for the quarter.\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 $2,515,000, or\n26.24 cents per unit compared to distributions declared of $2,395,000 or\n24.99 cents per unit for the quarter.\nDuring the quarter, two addition...