Coast Wholesale Appliances Income Fund

Coast Wholesale Appliances Income Fund

October 22, 2008 20:18 ET

Coast Wholesale Appliances Income Fund Declares October Cash Distribution, Amount Reduced in Light of Market Conditions

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 22, 2008) - Coast Wholesale Appliances Income Fund (the "Fund") (TSX:CWA.UN) today announced a cash distribution of $0.0833 per unit for the period from October 1, 2008 to October 31, 2008. This amount represents an 18.7% reduction from the previous monthly distribution of $0.1025 per unit. This equates to an annualized distribution of $1.00 per unit, which is down by $0.23 from the previous payout of $1.23 per unit. The distribution is to be paid November 17, 2008 to unitholders of record on October 31, 2008. This is the Fund's fortieth consecutive monthly cash distribution to public unitholders. In addition, the 35% non-controlling interest will be paid a cash distribution of $0.0833 per unit for the period from October 1, 2008 to October 31, 2008 by Coast Wholesale Appliances LP on November 17, 2008.

The Fund also reported that it will be recording a write-off of approximately $1.2 million in the third quarter of 2008 related to uncollectible accounts receivable as a result of financial improprieties committed by an employee at one of its stores. These financial improprieties were detected in a corporate review of internal financial controls and were restricted to the one store. Blain Lawson, Coast's President and CEO said that, after a rigorous investigation to determine the scope and source of the loss, the matter has now been turned over to the local police authorities for investigation. While Coast is pursuing all possible civil remedies, it is uncertain whether any material amount of the loss will be recovered. Coast has implemented new organization-wide internal controls and protocols for financial monitoring and reporting.

"Given the current worldwide economic uncertainty and the magnitude of the accounts receivable write-down, the Trustees have determined that it is prudent to reduce our cash distributions to an amount that we believe will be sustainable going forward," said Ken Crump, Chairman of the Board of Trustees. "The new distribution level should also enable us to maintain the balance sheet strength we need to pursue our growth strategy while both keeping our payout ratio in an appropriate range and continuing to give our unitholders a significant return on their investment."

The Fund will release its third quarter results on November 3, 2008.

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 (Coast), 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 15 stores and four warehouse distribution centres across the four western provinces.

Forward-looking statements

This news release contains forward-looking statements based on assumptions considered reasonable at the time they were prepared. Any statements that are contained herein that are not statements of historical fact may be deemed to be forward-looking statements. These statements speak only to the conditions in existence as of the date of this news release, and the Fund maintains no obligation to update such statements.

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; changes to planning and supply chain processes; changes in consumer preferences; 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.

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