Arrowhead Water Products Ltd.
TSX VENTURE : AWP.A

Arrowhead Water Products Ltd.

January 31, 2007 14:19 ET

Arrowhead Water Announces Fiscal 2006 Year End Results

CALGARY, ALBERTA--(CCNMatthews - Jan. 31, 2007) - Arrowhead Water Products Ltd. ("Arrowhead" or the "Company") (TSX VENTURE:AWP.A) is pleased to report its consolidated financial and operating results for the fiscal year ended September 30, 2006. The following are the highlights for fiscal 2006 compared to the previous fiscal year.



Audited Audited
September 30, September 30,
2006 2005
(restated)
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$ $
Sales 8,871,385 7,855,842
Cost of Sales 5,534,409 4,986,082
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Gross Profit 3,336,976 2,869,760
Total expenses 3,530,060 3,850,966
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Loss before taxes (193,084) (981,206)
Future income taxes (recovery) - (142,535)
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Net loss (193,084) (838,671)
Retained earnings, beginning of year (462,096) 492,921
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Deficit end of year (655,180) (462,096)
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For complete disclosure of Arrowhead's September 30, 2006 year-end financial results and Management Discussion & Analysis, please go to www.SEDAR.com and view documents listed under Arrowhead Water Products Ltd.

About Our Business

The water industry in Canada continues to provide many opportunities for growth and advancement. Arrowhead is engaged in the production, distribution and sales of large format (15 litre and 18.9 litre) bottles of drinking water. Arrowhead's distribution channels include the Western Canadian retail grocery market and the residential and office market in Alberta. Arrowhead's revenues are derived from two main channels: Retail water sales (71% of total revenue) and Home and Office (29% of total revenue). For the last few years, the North American bottled water industry has experienced declining revenues associated with the Home and Office channel, while the revenue derived from the retail water channel has experienced double digit growth.

By focusing on the retail channel, it is Management's view that the Company can significantly improve sales, cash flow and profitability by executing on this strategy. Arrowhead has embarked upon a number of new initiatives for the year, driving the Company as an innovator and leader in the bottled water business in Western Canada. The Company is on track to integrate these changes, poised for solid growth and increased cash flow for fiscal 2007 and beyond.

Highlights for the Year

- Sales increased 13% to $8,871,385 from $7,855,842;

- Over the last three years, sales have increased more than 100% from $4,272,652 in 2003;

- Net loss of $193,084, compared to a net loss of $838,671 for fiscal 2005, an improvement of $645,587;

- Total expenses decreased 9% to $3,537,578 from $3,870,206, an improvement of $332,628;

- Cash flow from operations increased to $923,324 from $(6,755), an improvement of $930,079;

- Launched a new innovative product - a 15 litre recyclable bottle, with sales beginning in Q1 of 2007;

- The Company purchased a new Siappi Blow molding machine to manufacture the new 15 litre bottles; and

- Upgraded bottling equipment and added a second washer/filler line dedicated to 15 litre production.

Future Outlook

Going forward, the Company's focus will again be first and foremost on improving its profitability through revenue growth and cost controls. As a result of new products being available for sale and an expanding sales territory in Western Canada, Arrowhead is forecasting sales growth to increase substantially year over year. In the first quarter of 2007, Arrowhead has introduced its new 15 litre product into the market place and from the initial reactions this should be a very exciting year for the Company.

Annual Meeting

The Company also announces that its Annual Meeting will be held on Wednesday, March 14, 2007 at the offices of Burstall Winger LLP located at 1600 Dome Tower, 333 - 7th Avenue SW, Calgary, Alberta, commencing at 9:00 a.m.(Calgary Time).

About Arrowhead

Arrowhead is Canada's largest Canadian owned, publicly traded water company which is engaged in the production, sales and distribution of large format bottled drinking water through two distinct channels, which are the Western Canadian retail market and the direct delivery to homes and offices in Alberta. Arrowhead produces and delivers bottles of reverse osmosis, distilled and natural spring water as well as providing bottled water coolers. Arrowhead remains committed to continually improve its level of service to its customers and to provide positive returns to its shareholders.

ADVISORY:

Certain information regarding Arrowhead Water Products Ltd. including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve risks associated with production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, environment risks, competition from other producers and ability to assess sufficient capital from internal and external source. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.

Issued and Outstanding Shares: 30,832,530

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Arrowhead Water Products Ltd.
    Dan DeMaere, President and CFO
    4372 - 97 Street, Edmonton, Alberta T6E 5R9
    (780) 486-2467 ext 224
    (780) 486-2878 (FAX)
    Email: dandemaere@arrowheadwater.ca
    or
    Arrowhead Water Products Ltd.
    Russell Rogers, General Manager
    5730 Burbank Road S.E., Calgary, Alberta T2H 1Z4
    (403) 692-8260
    (403) 243-1485 (FAX)
    Email: rrogers@arrowheadwater.ca