Gienow Windows & Doors Income Fund
TSX : GIF.UN

Gienow Windows & Doors Income Fund

November 14, 2005 16:01 ET

Gienow Windows & Doors Income Fund Announces the Results of Operations for the Three and Nine Months Ended September 30, 2005 and Corporate Appointments

CALGARY, ALBERTA--(CCNMatthews - Nov. 14, 2005) -

NOT FOR DISTRIBUTION IN THE United States OR TO U.S. CITIZENS

Gienow Windows & Doors Income Fund (TSX:GIF.UN) (the "Fund") is pleased to provide the results of operations for the three and nine months ended September 30, 2005. The Fund's interim consolidated financial statements and Management's Discussion and Analysis ("MD&A") for the three and nine months ended September 30, 2005 are available on the Fund's website at www.gienowincomefund.ca and filed to sedar at www.sedar.com. All numbers are expressed in thousands of dollars except per unit information.

Since the Fund commenced operations on October 19, 2004, there are no comparative figures representing the operations of the Fund in prior periods in the interim consolidated financial statements of the Fund.

Highlights and Major Events for the Period

- Cash distributions of $0.30 per unit matched our forecast for the quarter.

- During the quarter, the cumulative cash available for distributions shortfall was decreased to $0.08 from $0.17.

- The Fund's backlog, defined as committed orders and signed contracts expected to be delivered within the next 12 months, has grown to over $30 million, and provides strong visibility into the next two quarters. As a result, the Fund is committed to maintaining its fourth quarter distributions of $0.10 per unit per month.

- Total sales for the quarter ended September 30, 2005, were $57,708 up from $52,815 in the second quarter and represented a 12.0% increase over the third quarter of fiscal year 2004.

- Gross profit for the quarter ended September 30, 2005, was 31.0 % down slightly from 32.0% in the second quarter as a result of a stronger than expected Western Canadian labor market and lower margin sales from the recently acquired Chantecler business.

- Selling and G&A expenses were down 1.9% when compared to second quarter and down 8.1% when compared to the third quarter of fiscal year 2004.

- EBITDA for the three months ended September 30, 2005 was up 10.4% from the second quarter and up 11.6% over the third quarter of fiscal year 2004.

- On July 15th, the Fund completed the indirect acquisition of the operating assets and related obligations of Chantecler Windows and Doors, Inc. / Portes et Fenetres Chantecler, Inc. giving the Fund a beachhead into the eastern Canada new construction market.

Outlook

"We continue to experience strong positive economic indicators including housing starts, employment rates and renovation spending within our core markets" said David Munro, President and Chief Executive Officer. "That being said, we have experienced a Western Canadian economy that in the construction industry has reached its capacity levels. As such, industry wide lead times are being pushed out and this is evidenced by the growth in our backlog to over $30 million at the end of the quarter.

The growth in our backlog is a positive indication that the markets for our products and services remain strong. However, that strength is being tempered by throughput issues in the broader construction industry. We are optimistic that during our fourth and first quarter that the non-peak construction periods will allow us to take advantage of our inherent excess capacities and reduce our backlog to historical levels."

"In the 3rd quarter, we generated $0.39 per unit of distributable cash which allowed us to reduce our year to date shortfall from $0.17 per unit to $0.08 per unit," said Richard Boyer, Chief Financial Officer. "Based upon our record backlog levels and current visibility we are fully committed to maintaining our fourth quarter distributions of $0.10 per month per unit."

Conclusion

Mr. Munro concluded that "we are seeing strong organic growth from our divisions and expect this trend to continue throughout the balance of the year and into fiscal year 2006. Our sales are up approximately 9% year to date when compared to the same previous period and our year over year EBITDA is up better than 7% for the same period. Our key operating metrics continue to perform well and we have seen continued demand for our products and services as evidenced by our current backlog levels. As such, we remain committed to delivering a $1.20 to our unitholders for fiscal 2005."

Management will host a conference call today at 3:30 PM (MDT) to discuss the Fund's financial results for the quarter ended September 30, 2005. The conference call dial-in number is 1-800-440-1782. A replay of the conference call will be available by dialing either 1-416-626-4100 or 1-800-558-5253, pass-code 21268325#, until 5:00 p.m. (MST) on Friday November 18, 2005 or by listening to it at the Fund's website www.gienowincomefund.ca.

Corporate Appointments

The Fund also announced today that effective January 1, 2006 the Fund has appointed Mr. Boyer, C.A., to the role of President for the Gienow Windows & Doors division. Mr. Boyer has been employed at Gienow for the past six years in the role of Vice-President Finance and Chief Financial Officer and has a background in both the finance and business operations disciplines.

Mr. Weder will assume the role of Vice President Finance and Chief Financial Officer for the Fund. Mr. Weder has been employed with the Fund for the past year and prior to that spent the previous five years as the Chief Financial Officer of a TSX listed wireless data company. Mr. Weder brings with him a wealth of experience in public market domain, as well as a broad background in finance and administration. Mr. Munro will remain in his capacity of Chief Executive Officer of the Fund.

"These appointments will allow the Fund to continue to capitalize on the strategic opportunities that will become available to it, while at the same time ensures that we have the required leadership in place to meet our currently stated objectives", stated Mr. Munro. "The appointment of Messrs. Boyer and Weder was a natural progression in the leadership of the Fund and one that meets both the short-term and long-term leadership needs of the Fund"

Federal Government's Consultation Process on Income Trusts

On September 8, 2005, the federal government issued its consultation paper regarding the treatment of income trusts. The possibility that the government may impose additional taxes or other types of restrictions on income trusts has created wide spread uncertainty. The creation of new taxes on income trusts could potentially lead to reduction in distributions, capital programs or both and further downward pressure on unit values and total unitholder return.

The Fund strongly encourages its securityholders that are concerned with this issue to participate in the consultative process and express their views.

For electronic submission, please e-mail: trusts-fiducies@fin.gc.ca

The contact information for the Minister of Finance is:



The Honorable Ralph Goodale
Department of Finance
140 O'Connor Street
Ottawa, Ontario K1A 0A6
Phone: 613-996-4743
Fax: 613-996-9790
e-mail: goodale.R@parl.gc.ca


To contact your Member of Parliament go to www.canada.gc.ca/directories/direct_e.html

This news release contains forward looking information. Certain statements contained in this release constitute forward-looking statements. The use of any of the words "anticipate", "continue", "expect", "estimate", "may", "will", "project", "should", "believe", and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risk, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Management believes the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this release should not be unduly relied upon. These statements speak only as of the date of this release. In particular, this release contains forward-looking statements pertaining to distributable cash and distributions per unit. The actual results could differ materially from those anticipated in these forward-looking statements.


Contact Information

  • Gienow Windows & Doors Income Fund
    Richard L. Boyer
    Chief Financial Officer
    (403) 203-8200 or toll free at (800) 297-6102
    or
    Gienow Windows & Doors Income Fund
    Mark Weder
    Corporate Controller
    (403) 203-8200 or toll free at (800) 297-6102
    Email: info@gienowincomefund.ca
    Website: www.gienowincomefund.ca