Swiss Water Decaffeinated Coffee, Inc. TSX:SWP
Swiss Water Decaffeinated Coffee Income Fund reports 2005 fourth quarter and fiscal year-end results
TRADING SYMBOL: The Toronto Stock Exchange - SWS.UN
Swiss Water Decaffeinated Coffee Income Fund will hold a conference call
and webcast to discuss its fourth quarter and year-end 2005 financial
results on Wednesday, March 15, 2006 at 8:00 a.m. Pacific Time
(11:00 a.m. Eastern). The call can be accessed by dialing: 1-800-796-7558
or 416-644-3423.
A replay will be available through March 29, 2006 at: 1-877-289-8525 or
416-640-1917. Passcode: 21179924 followed by the number sign.
The live and archived webcast can be accessed at
http://www.vcall.com/IC/CEPage.asp?ID(equal sign)102225 or on the Fund's
website at www.swisswater.com
VANCOUVER, March 14 /CNW/ - The Swiss Water Decaffeinated Coffee Income
Fund ("the Fund") today reported its financial results for the three months
and fiscal year ended December 31, 2005. The Fund holds all 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.
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Operating Results
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In $000 except per unit amounts Three Months ended Fiscal Year ended
December 31 December 31
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2005 2004 2005 2004
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Sales 7,531 6,685 25,820 24,817
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Gross Profit 3,583 3,461 11,250 13,354
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EBITDA(1) 2,720 2,205 7,918 8,875
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Net Income 2,497 1,792 6,916 7,012
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Distributable Cash generated(1) 2,804 2,176 7,962 8,590
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Distributions paid 2,173 2,172 8,691 8,294
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Per unit amounts(2):
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Net Income .37 0.27 1.04 1.10
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Distributable Cash generated .42 0.33 1.19 1.34
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Distributions paid .33 0.33 1.30 1.30
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(1) EBITDA and Distributable Cash are non-GAAP financial measures that
are defined in the Management's Discussion and Analysis available at
SEDAR (www.sedar.com) on March 15, 2006.
(2) Per unit amounts are calculated on a weighted average basis, taking
into account the private placement of 1,220,000 additional units on
March 23, 2004.
In 2005, the Fund generated $7.918 million of EBITDA, which was down by
$957,000 or 11%, from the results achieved in 2004. The decline in EBITDA
resulted from the following factors:
- An overall decline of 7.5% in the volume of coffee processed. This
decline resulted from customers curtailing order levels in
response to large increases in the wholesale price of green
coffee.
- Lost production in the third quarter as a result of a 13-day plant
shutdown caused by an equipment malfunction, as well as delays in
the delivery of incoming green coffee due to a truckers' strike at
the Port of Vancouver.
- The negative impact of the year-over-year strengthening of the
Canadian dollar on revenues.
- Reduced margins as a result of tactical pricing changes in
response to increased competition.
For the full year, the Fund generated distributable cash of
$7.962 million and paid distributions of $8.691 million to unitholders in
2005.
For the three months ended December 31, 2005, the Fund recorded EBITDA of
$2.720 million, generated distributable cash of $2.804 million, and paid
distributions of $2.173 million to unitholders. The strong earnings and cash
flow growth in the fourth quarter resulted from several positive factors.
These included key customer growth, seasonal demand, and customer inventory
rebalancing, as well as a carryover of customer orders from the third quarter.
At year-end, the construction of a second production line at the
company's SWISS WATER(R) Process facility in Burnaby, BC was nearing
completion. This project, which is now producing product for sale, will be
completed on budget and on schedule. The expansion project increased the
plant's production capacity by approximately 65%. Funding for the new line was
raised via a March 23, 2004 private placement of 1,220,000 trust units. With a
further investment of an estimated $2 million, the project has the capability
of doubling total production capacity from pre-expansion levels.
"2005 was a challenging year, but we are satisfied with how we managed
through a difficult period. The year ended with the company well positioned to
take advantage of the new plant capacity that is now coming on stream," said
Frank Dennis, President and CEO of SWDCC and a Fund Trustee. "The specialty
coffee market continues to gain velocity, and underlying consumer growth in
the decaffeinated coffee category is boosting demand for our products. With
the completion of our plant expansion, we have met our intermediate goal of
positioning ourselves to meet this new demand. As we go forward, we expect
that our additional capacity and the strength of our brand will solidify our
position as the preferred supplier of quality decaffeinated coffee to our
customers."
"I am very saddened to announce that our Chief Financial Officer, Burt
Dennis, is no longer able to perform his role as CFO due to a serious
illness," added Frank Dennis. "I, along with Corporate Controller Dave Wong,
have temporarily assumed his responsibilities with the support of the Audit
Committee and an external financial advisor. A search for a new CFO has
commenced."
"Burt Dennis made a very significant contribution to SWDCC and to the
Fund as CFO. We sincerely thank him for his efforts. Our thoughts are with
Burt and his family as he fights his battle with cancer."
Company Profile
SWDCC is the world's only consumer branded chemical-free coffee
decaffeinator, and is certified organic by the OCIA (Organic Crop Improvement
Association).
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 58% of the company's revenue comes from the U.S., 32% from
Canada and the balance from international markets, including the United
Kingdom, Japan and Australia.
FORWARD-LOOKING STATEMENTS
This news release may contain forward-looking statements. Such statements
involve known and unknown risks, uncertainties and other factors outside
management's control that could cause actual results to differ materially from
those expressed in the forward-looking statements. The Fund does not assume
responsibility for the accuracy and completeness of the forward-looking
statements and does not undertake any obligation to publicly revise these
forward-looking statements to reflect subsequent events or circumstances.
For a more detailed discussion of the Fund's financial results, please
refer to the Management's Discussion and Analysis and financial statements,
which will be posted at SEDAR (www.sedar.com) on March 15, 2006.
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%SEDAR: 00017658E