Coast Wholesale Appliances Income Fund

Coast Wholesale Appliances Income Fund

February 18, 2009 19:01 ET

Coast Wholesale Appliances Income Fund Declares February Cash Distribution, Amount Reduced in Light of Current Market Outlook

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 18, 2009) - Coast Wholesale Appliances Income Fund (the "Fund") (TSX:CWA.UN) today announced a cash distribution of $0.0416 per unit for the period from February 1, 2009 to February 28, 2009. This amount represents a 50% reduction from the previous monthly distribution of $0.0833 per unit. The new amount equates to an annualized distribution of $0.50 per unit, down from the previous payout of $1.00 per unit. The distribution is to be paid March 16, 2009 to unitholders of record on February 27, 2009. This is the Fund's forty-fourth consecutive monthly cash distribution to public unitholders. In addition, the 35% non-controlling interest will be paid a cash distribution of $0.0416 per unit for the period from February 1, 2009 to February 28, 2009 by Coast Wholesale Appliances LP ("Coast") on March 16, 2009.

The distribution reduction follows the 18.7% reduction in the per-unit monthly amount from $0.1025 to $0.0833 announced on October 22, 2008. Since that time, there has been a further significant deterioration in the Canadian economy. Coast's retail sales have softened considerably due to much more cautious consumer spending and its builder business is slowing as a result of the reduction in housing starts throughout Canada.

"Given the continuing worldwide and Canadian economic uncertainty, the Trustees have determined that it is prudent to reduce cash distributions further. Based on the current economic conditions, the new distribution level should enable the Fund to maintain our balance sheet strength in what has become an exceptionally challenging business environment," said Ken Crump, Chairman of the Board of Trustees.

"In response to the impact of these marketplace conditions, Coast has also undergone a rigorous review of all operating expenses to find additional cost savings," said Blain Lawson, President and CEO of Coast. "We are focused on operating as efficiently as possible, and remain confident in our ability to manage through the current difficult economic environment."

Coast Wholesale Appliances Income Fund is an unincorporated, open-ended limited purpose trust launched on June 23, 2005 with the completion of an initial public offering of 6,525,000 trust units. The Fund was created to acquire and hold a 65% indirect interest in Coast Wholesale Appliances LP, a leading independent supplier of major household appliances to developers and builders of multi-family and single-family housing, and to retail customers in Western Canada. Founded in 1978, Coast operates 16 stores, with 15 locations across the four western provinces and one new store recently acquired in the Greater Toronto Area.

Forward-looking Statements

Forward-looking statements are included in this news release, which involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "estimate", "expect", "may", "plan", "will", and similar terms and phrases, including references to assumptions. Such statements may involve, but are not limited to, comments with respect to the sustainability of our distributions and the level of our payout ratio in the future.

These statements reflect current expectations of management regarding future events and operating performance as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the following factors: sensitivity to general economic conditions; maintenance of profitability and management of growth; competition; fluctuations in fuel and commodity pricing, which may impact freight and other costs; usage of extended warranty programs and the costs to deliver these services; changes to planning and supply chain processes; changes in consumer preferences; changes in the mix of product sales; reliance on suppliers; lack of supplier agreements; reliance on key personnel; foreign exchange rates as they relate to imported products; and interest rates.

Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, Coast cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements reflect management's current beliefs and are based on information currently available to Coast. They reflect current assumptions regarding future events and operating performance including, without limitation, the following: a continuing recession in the Canadian economy, including Western Canada and the Greater Toronto Area (our current market areas); continuing access to current credit facilities; volatility in exchange rates; low and stable interest rates; difficult credit markets for our major builder customers regarding financing their current and future building activities; reduced consumer confidence in light of the recessionary environment and its impact on the willingness of consumers to purchase household appliances; and a significant reduction in new building permits compared to the last few years, and speak only as of the date of this news release. These forward-looking statements are made as of the date of this news release and Coast assumes no obligation to update or revise them to reflect new events or circumstances, other than as required by law.

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