Mr. Gerry Glynn reports

RICHARDS PACKAGING INCOME FUND ANNOUNCES 2014 THIRD QUARTER RESULTS

Richards Packaging Income Fund has released its results for the quarter ended Sept. 30, 2014.

Third quarter performance was disappointing, with organic revenue shrinkage of 0.9 per cent due to large customer churn. Total revenue was up 1.7 per cent, mainly from a U.S.-Canadian five-cent weakening of the dollar. EBITDA (earnings before interest, taxes, depreciation and amortization) was down $100,000, or 0.9 per cent, due to the foreign currency loss on Richards Canada U.S.-denominated working capital. Net income was up $1.8-million to $2.7-million, or 25.2 cents per unit, mainly due to lower intangible amortization and a mark-to-market loss on the exchangeable shares and the absence of patent defence legal costs.

The $1-million of free cash flow generated in the third quarter was used to pay down $500,000 of debt and invest in working capital. Inventory was up $2.8-million in the third quarter, on the fund's expectation for higher revenue growth in the third and fourth quarters. As this did not materialize, the fund's focus will turn to reducing inventory levels. Cash on hand of $800,000 is set aside to pay $700,000 of income tax payable.

The fund paid monthly distributions of 7.35 cents per unit during the third quarter, which represented an annualized yield of 6.6 per cent on the Sept. 30 closing price of $13.33 per unit. The payout ratio for the third quarter was 73 per cent.

Details of the fund's results are currently available on Richards Packaging's website and on SEDAR.

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