COLABOR INCOME FUND
TSX : CLB.UN

COLABOR INCOME FUND

February 25, 2009 17:39 ET

Colabor Income Fund: Record Financial Results

Annual Distribution per Unit of $1.08 Considered at 100% as a Return of Capital

BOUCHERVILLE, QUEBEC--(Marketwire - Feb. 25, 2009) - FOR DISTRIBUTION IN CANADA ONLY. NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Colabor Income Fund (TSX:CLB.UN) today reports its results for its fiscal year ended December 31, 2008, the best in its history, and the results of its fourth quarter.

It should be recalled that Colabor Income Fund is a taxed fund, accordingly its distributions to unitholders are taxed as a dividend rather than investment income. Moreover, the distributions include a significant return of capital.

Highlights of the 2008 year compared to 2007:

- Sales up 36.8%

- EBITDA up 31.8%

- Organic growth of 6.7%

- 2008 unit value: December 31: $8.38; High: $11.00; Lows: $5.90

- 2008 average annual unit trading price: $9.41

- Annual distribution per unit: $1.08

- Average annual return: 11.5%

- Distribution considered as a return of capital at 100% (2007: considered as a dividend at 49% and as return of capital at 51%)

- Standardized distributable cash after current income taxes up 8.9%

- Ratio of distributable cash after current income taxes to distributed cash of 73.3%

- Actual ratios compared with lending institution requirements: Total debt (excluding the debentures) to EBITDA: 1.18:1.00 (prescribed: less than 3.00:1.00); EBITDA to interest expenses: 5.32:1.00 (prescribed: greater than 3.50:1.00)

Highlights for the 116-day period ended December 31, 2008 (4th quarter) compared with the 114-day period for 2007:

- Sales up 42.6%;

- EBITDA up 21.1%;

- Organic growth of 9.4%.

- Ratio of distributable cash after current income taxes to distributed cash of 66.5%


Results of Operations

The results of operations below should be read taking the following into account:

- Results subsequent to the Bruce Edmeades acquisition (March 17, 2008) are included for the quarter and the year without a comparison to 2007;

- Results subsequent to the Bertrand Distributeur en alimentation acquisition (April 28, 2008) are included for the quarter and the year, also without a comparison to 2007.

Consolidated Earnings (in thousands of dollars, except per unit amounts)



2008-12-31 2007-12-31
(366 days) (365 days) Variance
---------------------------------------------------------------------------
$ $ $ %
Sales 1,146,102 100.00% 838,068 100.00% 308,034 36,76%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Earnings
before
financial
expenses and
amortization
and income
taxes 40,269 3.51% 30,548 3.65% 9,721 31.82%
---------------------------------------------------------------------------
Financial
expenses 7,263 0.63% 6,731 0.80% 532 7,90%
Amortization of
property, plant
and equipment 4,039 0.35% 3,354 0.40% 685 20.42%
Amortization of
intangible
assets 8,706 0.76% 6,993 0.83% 1,713 24.50%
---------------------------------------------------------------------------
20,008 1.74% 17,078 2.03% 2,930 17.16%
---------------------------------------------------------------------------
Earnings before
income taxes
and
non-controlling
interest 20,261 1.77% 13,470 1.62% 6,791 50.42%
---------------------------------------------------------------------------

Income taxes
Current 4,405 0.38% 2,715 0.32% 1,690 62.25%
Future 863 0.08% 6,290 0.75% (5,427) -86.28%
---------------------------------------------------------------------------
5,268 0.46% 9,005 1.07% (3,737) -41.50%
---------------------------------------------------------------------------
Earnings before
non-controlling
interest 14,993 1.31% 4,465 0.55% 10,528 235.79%
Non-controlling
interest 6,618 0.58% 4,650 0.55% 1,968 42.32%
---------------------------------------------------------------------------
Net earnings 8,375 0.73% (185) 0.00% 8,560 -4627.03%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Basic and diluted
earnings per
unit $0.64 $(0.02)
---------------------------------------------------------------------------
---------------------------------------------------------------------------



2008-12-31 2007-12-31
(116 days) (114 days)
(unaudited) (unaudited) Variance
---------------------------------------------------------------------------
$ $ $ %
Sales 398,906 100.00% 279,703 100.00% 119,203 42.62%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Earnings before
financial
expenses and
amortization
and income
taxes 15,472 3.88% 12,776 4.57% 2,696 21.10%
---------------------------------------------------------------------------
Financial
expenses 2,399 0.60% 2,019 0.72% 380 18.82%
Amortization of
property, plant
and equipment 1,543 0.39% 1,053 0.38% 490 46.53%
Amortization of
intangible
assets 3,613 0.91% 2,179 0.78% 1,434 65.81%
---------------------------------------------------------------------------
7,555 1.90% 5,251 1.88% 2,304 43.88%
---------------------------------------------------------------------------
Earnings before
income taxes
and
non-controlling
interest 7,917 1.98% 7,525 2.69% 392 5.21%
---------------------------------------------------------------------------

Income taxes
Current 1,862 0.47% 2,715 0.97% (853) -31.42%
Future (627) -0.16% 6,290 2.25% (6,917) -109.97%
---------------------------------------------------------------------------
1,235 0.31% 9,005 3.22% (7,770) -86.29%
---------------------------------------------------------------------------
Earnings before
non-controlling
interest 6,682 1.67% (1,480) -0.53% 8,162 -551.49%
Non-controlling
interest 2,356 0.59% 2,510 0.90% (154) -6.14%
---------------------------------------------------------------------------
Net earnings 4,326 1.08% (3,990) -1.43% 8,316 -208.42%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Basic and diluted
earnings per
unit $0.33 $(0.41)
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---------------------------------------------------------------------------


Sales

Sales consist of:

For the Wholesale Segment, gross sales to customers from the Boucherville warehouse and direct sales to affiliated wholesalers, less rebates of 3% of the affiliated-wholesalers' sales, as provided in the agreement between Colabor LP and the affiliated-wholesalers.

For the Distribution Segment, gross sales to customers from the London, Mississauga, Ottawa, Cambridge, Levis and Saguenay warehouses less rebates, as provided in individual agreements with these customers.

Inter-segment sales are then eliminated.



2008-12-31 2007-12-31
(366 days) (365 days)
-------------------------------------------------------------------------
(Post-
(Comparable acquisition (Total (Comparable
sales) sales) sales) sales)
-------------------------------------------------------------------------
$ $ $ $
Wholesale Segment
Retail 138,763 - 138,763 130,633
Foodservice 346,452 - 346,452 297,516
-------------------------------------------------------------------------
485,215 485,215 428,149
Distribution Segment
Foodservice 424,185 301,040 725,225 411,400
-------------------------------------------------------------------------
909,400 301,040 1,210,440 839,549
Inter-segment
elimination (15,281) (49,057) (64,338) (1,481)
-------------------------------------------------------------------------
894,119 251,983 1,146,102 838,068
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Variance Variance
(Comparable (Total
sales) sales)
-------------------------------------------------------------------------
$ % $ %
Wholesale Segment
Retail 8,130 6.2% 8,130 6.2%
Foodservice 48,936 16.4% 48,936 16.4%
-------------------------------------------------------------------------
57,066 13.3% 57,066 13.3%
Distribution Segment
Foodservice 12,785 3.1% 313,825 76.3%
-------------------------------------------------------------------------
69,851 8.3% 370,891 44.2%
Inter-segment
elimination (13,800) N/A (62,857) N/A
-------------------------------------------------------------------------
56,051 6.7% 308,034 36.8%
-------------------------------------------------------------------------
-------------------------------------------------------------------------


2008-09-06 2007-12-31
(116 days) (114 days)
(unaudited) (unaudited)
-------------------------------------------------------------------------
(Post-
(Comparable acquisition (Total (Comparable
sales) sales) sales) sales)
-------------------------------------------------------------------------
$ $ $ $
Wholesale Segment
Retail 52,594 - 52,594 48,690
Foodservice 127,816 - 127,816 100,424
-------------------------------------------------------------------------
180,410 - 180,410 149,114
Distribution Segment
Foodservice 138,724 116,927 255,651 131,711
-------------------------------------------------------------------------
319,134 116,927 436,061 280,825
Inter-segment
elimination (13 227) (23,928) (37,155) (1,122)
-------------------------------------------------------------------------
305,907 92,999 398,906 279,703
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Variance Variance
(Comparable (Total
sales) sales)
-------------------------------------------------------------------------
$ % $ %
Wholesale Segment
Retail 3,904 8.0% 3,904 8.0%
Foodservice 27,392 27.3% 27,392 27.3%
-------------------------------------------------------------------------
31,296 21.0% 31,296 21.0%
Distribution Segment
Foodservice 7,013 5.3% 123,940 94.1%
-------------------------------------------------------------------------
38,309 13.6% 155,236 55.3%
Inter-segment
elimination (12,105) N/A (36,033) N/A
-------------------------------------------------------------------------
26,204 9.4% 119,203 42.6%
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Wholesale Segment

The Wholesale Segment continues to experience significant sustained organic growth 13.3% for the year and 21% for the quarter. Organic growth in 2007 was about 6.6%.

Retail

The 2008 fiscal year was marked by a significant increase in sales to the retail market, up 6.2% for the year and 8% for the quarter. The 2008 organic growth is primarily attributable to the recruitment of two new major customers by one of the affiliated wholesalers in the third quarter of 2007, the acquisition of a competitor by an affiliated-wholesaler in the Maritimes and, in the fourth quarter of 2008, conclusion of a major distribution agreement between another affiliated-wholesaler and an integrated oil company. In addition to the previous reasons, the significant growth in the fourth quarter is attributable to the delivery of seasonal products to a customer that had postponed delivery from the third quarter to the fourth.

Foodservice

Organic growth in the affiliated-wholesalers' foodservice sales of 16.4% for the year and 27.3% for the quarter is well above industry levels, which, according to the Canadian Restaurant and Foodservices Association (CRFA) stood at 4.9% in October 2008 (the most recent statistic). This is a clear indication that affiliated-wholesalers are continuing to increase their market share compared with their competitors.

The increase is partially attributable to the acquisition, by an affiliated-wholesaler serving the Gaspe and Lower St. Lawrence region in Quebec, of the activities of its main competitor.

Distribution Segment

2007 comparable sales:

Only sales in the Summit Division are comparable. Sales for the first week of January 2008, of approximately $7.5 million are not included in the comparison for the cumulative period, since the acquisition occurred on January 8, 2007. The 5.3% increase in sales during the fourth quarter over the prior year's sales is comparable with the CFRA's growth of 4.9%, despite the economic difficulties in Ontario. The year nevertheless posted growth of 3.1% despite a difficult first quarter attributable to the economic situation in Ontario and a severe winter.

Sales attributable to acquisitions:



4th Quarter Cumulative
-----------------------------------------------------------
Bruce Edmeades $65.2M $172.7M
Bertrand $51.8M 120.9M
Summit (1st week of January 2008) 7.5M


Bertrand continues to benefit from its significant market share in the Quebec City and Saguenay region. During the fiscal year, the festivities surrounding the 400th anniversary of the founding of Quebec City contributed to increasing its sales.

Inter-segment elimination

Eliminated sales are sales by the Wholesale Segment to the Summit and Bertrand divisions of the Distribution Segment.

Earnings Before Financial Expenses, Income Taxes and Amortization (EBITDA)

Gross Profit and Synergies

Gross Profit:

Gross profit is composed of the following items:

- Wholesale Segment: profit on gross warehouse sales only, which consists primarily of a profit margin on private brand-name products and profit on inventory held. No profit margin is recognized on direct sales. Income is attributed on such sales for purposes of rebates from suppliers only.
Distribution Segment: Product acquisition cost with a percentage mark-up that is market-driven or negotiated in current agreements.

- Rebates from suppliers

A significant portion of Colabor's gross profit is derived from rebates from suppliers. These rebates consist of: (i) agreements with suppliers relating principally to distribution agreements, central billing, truck load allowances and other incentives, (ii) rebates received from suppliers based on buying volumes, (iii) cash discounts on purchases based on terms of sale, and (iv) net advertising funds received in connection with promotional activities.

EBITDA increased by 31.82% for the year, slightly less than the 36.76% sales growth. The $9.7 million increase is attributable to:

- Significant organic growth in the Wholesale Segment which generated better agreements with suppliers.

- The Bertrand acquisition, which has already made it possible to generate a number of purchasing synergies.

These factors helped to offset the negative effect of the following on EBITDA:

- Skyrocketing fuel prices during most of the fiscal year. While the Summit division was able to recover fuel costs from its clients, additional net costs attributable to rising fuel costs were almost $228,000 for the quarter and $708,000$ for the year, compared to 2007.

- Bruce Edmeades' approximate $1.7 million operating loss since its acquisition on March 17, 2008.

- The economic situation in Ontario, which deteriorated in the last quarter, has let to intense competition among food distributors to attract customers that are not affiliated with restaurant chains.

Income taxes

The acquisition of the assets of Summit Food Service Distributors Inc. was finalized and carried out on January 8, 2007. Under the new tax regime for "specified investment flowthrough" ("SIFT") entities, also called listed income trusts and partnerships, SIFTs are now subject to a similar tax treatment as corporations. This new tax treatment is applicable as of fiscal year 2007. However, existing SIFTs on October 31, 2006 could benefit from certain transitional rules and would not be taxable under the new rules until 2011, provided they had not undergone an "undue expansion". As indicated in its decision rendered at the end of 2007, the Department of Finance considered the Summit acquisition transaction as an undue expansion. Accordingly, the Fund does not benefit from the transitional rules and is therefore subject to the new SIFT tax regime as of the 2007 taxation year.

Readers should exercise caution with these analyses and consider the fact that the total amount of income taxes for the entire the year was recognized in the fourth quarter of 2007 only whereas, in 2008, the taxes were recognized in each quarter. As a result, the basis for comparison of income taxes in the fourth quarter of 2008 differs from that in the fourth quarter of 2007.

Moreover, in 2007, future income taxes included items that had to be taken into consideration since the initial public offering on June 28, 2005, as a result of the Finance Department's decision to tax the Fund.



Balance Sheets
Consolidated Balance Sheets
December 31, 2008 and 2007
(in thousands of dollars)

2008 2007
-------------------------------------------------------------------------
$ $
ASSETS
Current assets
Accounts receivable 80,804 52,074
Inventory 73,233 48,404
Prepaid expenses 1,664 725
-------------------------------------------------------------------------
155,701 101,203
Deferred financing expenses 279 164
Investment at cost 6,159 -
Property, plant and equipment 15,029 10,892
Intangible assets 143,319 117,049
Goodwill 69,574 33,979
-------------------------------------------------------------------------
390,061 263,287
-------------------------------------------------------------------------
-------------------------------------------------------------------------

LIABILITIES
Current liabilities
Bank overdraft 7,714 9,773
Accounts payable and accrued liabilities 85,945 52,026
Income taxes payable 1,855 605
Balances of purchase price payable 10,103 -
Distributions payable to unitholders 1,307 888
Distributions payable to holders of
exchangeable Colabor LP units 456 456
Rebates payable 15,166 13,453
Deferred revenue 1,115 459
Instalments on long-term debt 707 468
-------------------------------------------------------------------------
124,368 78,128
Bank loan 47,501 23,376
Balance of purchase price, payable in 2010, 4.5% 3,750 -
Long-term debt 942 1,209
Debentures 45,725 45,235
Accrued benefit liability for employee benefits 772 752
Future income taxes 17,414 6,290
Non-controlling interest 29,713 29,187
-------------------------------------------------------------------------
270,185 184,177
-------------------------------------------------------------------------
UNITHOLDERS' EQUITY
Unitholders' capital account 135,323 88,905
Option to convert debentures 2,315 2,337
Contributed surplus 349 189
Units held for the long-term incentive plan (875) (524)
Deficit (17,236) (11,797)
-------------------------------------------------------------------------
119,876 79,110
-------------------------------------------------------------------------
390,061 263,287
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Intangible assets and goodwill from the Bruce Edmeades and Bertrand acquisitions were determined by an independent valuation firm.

The accrued benefit liability for employee benefits was recognized following the plan trustee's valuation.



Cash Flow
Consolidated Cash Flows (in thousands of dollars)

2008-12-31 2007-12-31 2008-12-31 2007-12-31
(116 days) (114 days) (366 days) (365 days)
(unaudited) (unaudited)
-------------------------------------------------------------------------
$ $ $ $
OPERATING ACTIVITIES
Net earnings 4,326 (3,990) 8,375 (185)
Non-cash items
Amortization of
property, plant
and equipment 1,543 1,053 4,039 3,354
Amortization of
intangible assets 3,613 2,179 8,706 6,993
Amortization of
deferred financing
expenses 38 24 110 81
Non-controlling
interest 2,356 2,510 6,618 4,650
Future income taxes (627) 6,290 863 6,290
Compensation cost
from long-term
incentive plan 126 67 384 211
Amortization of
debenture
transaction costs 286 262 910 835
-------------------------------------------------------------------------
11,661 8,395 30,005 22,229
-------------------------------------------------------------------------
Changes in operating
assets and liabilities
Accounts receivable 18,928 4,545 (1,825) 5,041
Income taxes
receivable 518 1,917 - 1,620
Inventory (9,844) (4,324) (8,492) 1,869
Prepaid expenses 2,127 1,076 20 910
Accounts receivable
and accrued
liabilities (2,885) (8,838) 14,532 (2,984)
Income taxes payable 783 605 178 605
Rebates payable 5,007 4,433 1,713 448
Deferred revenue (786) (806) 656 (280)
Accrued benefit
liability for
employee benefits 20 (53) 20 (53)
-------------------------------------------------------------------------
13,868 (1,445) 6,802 7,176
-------------------------------------------------------------------------
Cash flows from
operating activities 25,529 6,950 36,807 29,405
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Business acquisition 1,242 - (69,182) (109,048)
Property, plant and
equipment (1,462) (885) (2,340) (1,469)
-------------------------------------------------------------------------
Cash flows from
investing activities (220) (885) (71,522) (110,517)
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Bank loans (17,239) (6,920) 21,352 19,999
Financing costs - (245) (225) (245)
Distributions paid
to unitholders (5,228) (3,550) (14,011) (10,265)
Distributions paid
to holders of
exchangeable
Colabor LP units (1,825) (1,825) (5,476) (5,476)
Repayment of
long-term debt (373) (156) (779) (468)
Acquisition of units
by participants of
long-term incentive
plan - - (575) (238)
Disposal of units
held by the Fund
for long-term
incentive plan - 12 - 12
Issue of debentures - - - 48,000
Issue of units - - 38,022 24,761
Unit and debenture
issue costs (384) - (1,534) (1,404)
-------------------------------------------------------------------------
Cash flows from
financing activities (25,049) (12,684) 36,774 74,676
-------------------------------------------------------------------------
Net change in bank
overdraft 260 (6,619) 2,059 (6,436)
Bank overdraft,
beginning of year (7,974) (3,154) (9,773) (3,337)
-------------------------------------------------------------------------
Bank overdraft,
end of year (7,714) (9,773) (7,714) (9,773)
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Credit Facilities

The Company has entered into a three-year agreement with a banking syndicate for operating credit facilities for an authorized amount of $100 million secured by a first ranking hypothec on the Company's assets.

Under the terms of the credit agreement, the Fund is required to maintain (i) a prescribed ratio of total debt (excluding the debentures) to EBITDA less than 3.00:1.00 and (ii) a prescribed ratio of EBITDA to interest expenses greater than 3.50:1.00.

Based on the banking syndicate's method of calculation, the debt/EBITDA ratio is 1.18:1.00 and the interest coverage ratio is 5.32:1.00 times for the fiscal year. These ratios were 1.56:1.00 and 5.07:1.00 respectively at the time of publication of the results for the third quarter, ended on September 6, 2008.

During the quarter, the operating credit decreased by $17 million to $47.4 million.

Distributions

In management's opinion, cash flows from operating activities and the funds from operating credits are sufficient to support planned capital expenditures, working capital requirements, monthly cash distributions of $0.0897 per unit and current income taxes and will comply with the banking syndicate's ratio requirements.

Standardized Distributable Cash

Information about standardized distributable cash has been prepared, in all material respects, in accordance with National Policy 41-201 - Income Trusts and Other Indirect Offerings published by the Canadian Securities Administrator in July 2007 and in accordance with the guidelines on disclosures in management's discussion and analysis in Standardized Distributable Cash in Income Trusts and Other Flow-through Entities, also released in July 2007 by the Canadian Institute of Chartered Accountants.

Standardized distributable cash is a non-GAAP measure and is a general indication of net cash from operations, which the enterprise may distribute to unitholders, at its discretion.

Colabor's business is subject to normal industry seasonal fluctuations due to weather conditions and holiday periods. Sales are generally lower at the beginning of the year due to lower consumer spending following the Christmas holiday season. They then increase gradually during the spring and summer months as sales of food consumed away from home increase and reach their peak in the last four months of the fiscal year, following the Colabor Exhibition at the end of September for the Wholesale Segment and, for the Summit Division Distribution Segment, as a result of purchases at the Sell-A-Rama which is also held at that time.

The Fund declares monthly distributions to unitholders of record on the last day of each month and pays the distributions on or around the 15th of the following month. The annual distribution per unit is $1.076.

The following table shows the changes in standardized distributable cash and distributed distributions for the fourth quarter of 2008 and 2007 and the cumulative period. It also provides information since the creation of the Fund, that is, June 28, 2005.



Standardized Distributable Cash (in thousands of dollars)

Since the
2008-12-31 2007-12-31 2008-12-31 2007-12-31 creation of
(116 days) (114 days) (366 days) (365 days) the Fund on
(unaudited) (unaudited) 2005-06-28
--------------------------------------------------------------------------
$ $ $ $ $
Cash flows from
operating
activities 25,529 6,950 36,807 29,405 107,928
Acquisition of
property, plant
and equipment (1,462) (885) (2,340) (1,469) (4,875)
--------------------------------------------------------------------------
Standardized
distributable
cash 24,067 6,065 34,467 27,936 103,053
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Distributions
paid on units 5,228 3,550 14,011 10,265 32,832
Distributions
paid on
exchangeable
Colabor LP units 1,825 1,825 5,476 5,476 18,585
--------------------------------------------------------------------------
Distributed cash 7,053 5,375 19,487 15,741 51,417
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Ratio of
distributed cash
to standardized
distributable
cash 29.3% 88.6% 56.5% 56.3% 49.9%
--------------------------------------------------------------------------
--------------------------------------------------------------------------


The precedent table demonstrates the important ability of the Fund to generate cash flows from operating activities that are much larger than its distributed cash, which is the foundation of good management of cash, the basis of an income fund.

Subsequent to publication, in October 2008 by the Canadian Institute of Chartered Accountants of a document entitled Improved Communication with Non-GAAP Financial Measures - General Principles and Guidance for Reporting EBITDA and Free Cash Flow, the Fund's management decided to present the following table, which is in a format that is largely used by financial analysts in their evaluation of distributable cash when making recommendations to investors.

This table contains information that is a non-GAAP measure of performance, such as the concept of earnings before financial expenses, income taxes and amortization (EBITDA) and the concept of standardized distributable cash. Since these concepts are not defined in Canadian GAAP, they may not be comparable with those of other funds.

EBITDA may be defined as follows:

EBITDA represents an indication of the entity's capacity to generate income from operations before taking into account management's financing decisions and costs of consuming tangible and intangible capital assets, which vary according to their vintage, technological currency, and management's estimate of their useful life. Accordingly, EBITDA comprises revenues less operating costs before interest expense, capital asset amortization and impairment charges, and income taxes.

The information disclosed in this table is shown directly in the Fund's financial statements, either in the consolidated statement of earnings, consolidated cash flows and notes to the consolidated financial statements.

The Fund's management also believes that the periods during which distributable cash is earned are synchronized with the same periods in which distributed cash is reported, even though such cash is not yet distributed and with the weighted average number of units issued for those periods.

Readers may also obtain information on the growth of distributable cash over the previous year, before and after income taxes, with the knowledge that the Fund did not recognize income taxes before the last quarter of the 2007 fiscal year.



Distributable cash (in thousands of dollars)

2008-12-31 2007-12-31 2008-12-31 2007-12-31
(116 days) (114 days) (366 days) (365 days)
(unaudited) (unaudited) (unaudited) (unaudited)
-------------------------------------------------------------------------
$ $ $ $
Earnings before
financial expenses,
amortization and
income taxes 15,472 12,776 40,269 30,548
Financial expenses (2,399) (2,019) (7,263) (6,731)
Plus non-monetary
item - Amortization
of debenture
transaction costs 286 262 910 835
Acquisition of
property, plant
and equipment (1,462) (885) (2,340) (1,469)
-------------------------------------------------------------------------

Distributable cash
before current
income taxes 11,897 10,134 3,1,76 23,183
Current income taxes (1,462) (2,715) (3,292) (2,715)
-------------------------------------------------------------------------

Distributable cash
after current
income taxes 10,035 7,419 28,284 20,468
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Weighted average
number of units
Units 14,490,072 9,848,537 12,992,392 9,747,732
Exchangeable
Colabor LP units 5,087,439 5,087,439 5,087,439 5,087,439
-------------------------------------------------------------------------
19,577,511 14,935,976 18,079,831 14,835,171
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Distributable
cash per unit
before current
income taxes $0.61 $0.68 $1.75 $1.56
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Variation before
current income taxes -10.4% - 11.8% -
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Distributable cash
per unit after
current income taxes $0.51 $0.50 $1.50 $1.38
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Variation after
current income taxes 3.2% - 8.9% -
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Distributions
declared - Units 5,228 2,663 14,430 7,085
Distributions
declared -
Exchangeable
Colabor LP units 1,825 1,825 5,476 5,476
Reversal of prior
period allowance (382) (358) - -
-------------------------------------------------------------------------

Distributed cash 6,671 4,130 19,906 12,561
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Excess of
distributable cash
after current income
taxes over
distributed cash 3,364 3,289 7,265 7,907
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Ratio of distributable
cash after current
income taxes to
distributed cash 66.5% 55.7% 73.3% 61.4%
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Additional Information

The Fund's MD&A, financial statements and Annual Information Form will also be available on SEDAR (www.sedar.com) following publication of this News Release. Additional information about Colabor Income Fund may also be found on SEDAR as well as on the Income Fund' s Internet site at www.colaborincomefund.com

About Colabor

Colabor is a wholesaler and distributor of food and non-food products serving the retail (grocery stores, convenience stores, etc.) and food-service (cafeterias, restaurants, hotels, restaurant chains, etc.) markets.

Caution

This News Release may contain forward-looking statements reflecting the opinions or present expectations of Colabor Income Fund or Colabor Limited Partnership concerning their performance as well as their respective business activities and future events. These statements are subject to a number of risks, uncertainties and assumptions. Actual results or events may differ.

Contact Information

  • Colabor Income Fund
    Gilles C. Lachance
    President and Chief Executive Officer
    450-449-0026, extension 265
    450-449-6180 (FAX)
    glachance@colabor.com
    or
    Colabor Income Fund
    Michel Loignon CA
    Vice President and Chief Financial Officer
    450-449-0026, extension 235
    450-449-6180 (FAX)
    mloignon@colabor.com