Associated Brands Income Fund
TSX : ABF.UN

Associated Brands Income Fund

January 20, 2006 17:08 ET

Associated Brands Terminates Long Term Contract Manufacturing Agreement

TORONTO, ONTARIO--(CCNMatthews - Jan. 20, 2006) - Associated Brands Income Fund (TSX:ABF.UN) announced today that it has terminated the previously announced contract manufacturing agreement with a leading North American consumer packaged goods firm.

Under the terms of the agreement, Associated Brands was to finance, design, construct and operate a manufacturing and warehousing facility for a range of products under a long-term supply agreement. The supply agreement was subject to certain conditions, including Associated Brands obtaining project financing for the new facility on terms that were beneficial to Unitholders.

In making its decision to end the agreement, management determined that financing for the project could not be obtained on terms that would result in the project being accretive to Unitholders.

"Financial discipline is one of our key operating imperatives, and in evaluating the financing alternatives currently available to Associated Brands in connection with this project, it became apparent that this transaction could not be financed on terms that would deliver the appropriate returns," commented Rob Dougans, President and CEO.

"Contract manufacturing remains an important element of our growth strategy, and going forward we will continue to leverage our strong reputation for high quality products and best-in-class manufacturing processes to bring incremental new contract business into our existing facilities," Mr. Dougans concluded.

About Associated Brands Income Fund

Associated Brands Income Fund (TSX:ABF.UN), through its operating subsidiaries, is a leading North American manufacturer and supplier of private-label dry blend food products, including artificial sweeteners. Since beginning operations in 1985, Associated Brands has grown to become one of the three largest suppliers of a diverse range of private-label dry-blend food products in North America, producing over eleven million cases annually across multiple product categories currently sold to 44 of the 50 largest North American food retailers. Associated Brands plans to build unitholder value by leveraging its solid presence in the U.S. private-label market, expanding its product offerings to current and new customers and adding additional contract manufacturing business, and through accretive acquisitions that meet its strict operating and strategic criteria. More information can be obtained at www.associatedbrands.com.

Certain statements in this press release may include "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of Associated Brands Income Fund to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this press release, such statements use such words as "may", "will", "expect", "anticipate", "project", "believe", "plan", and other similar terminology. The risks and uncertainties are detailed from time to time in reports filed by the Fund with the securities regulatory authorities in all of the provinces and territories of Canada. New risk factors may arise from time to time and it is not possible for management to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual results, performance and achievements of the Fund to be materially different from those contained in forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

Contact Information

  • Associated Brands Income Fund
    Rob Dougans
    President and CEO
    (416) 503-7012