Gienow Windows & Doors Income Fund
TSX : GIF.UN

Gienow Windows & Doors Income Fund

November 08, 2006 16:01 ET

Gienow Windows & Doors Income Fund Announces the Results of Operations for the Three and Nine Months Ended September 30, 2006 &

Announces the Engagement of a Financial Advisor to Review Strategic Alternatives

CALGARY, ALBERTA--(CCNMatthews - Nov. 8, 2006) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. CITIZENS

Gienow Windows & Doors Income Fund (the "Fund") (TSX:GIF.UN) is pleased to provide the results of operations for the three and nine months ended September 30, 2006. The Fund's unaudited interim consolidated financial statements and Management's Discussion and Analysis ("MD&A") for the three and nine months ended September 30, 2006 are available on the Fund's website at www.gienowincomefund.ca. All numbers are expressed in thousands of dollars except per unit information.

Highlights and Major Events for the Quarter

- The Fund's backlog, defined as committed orders and signed contracts expected to be delivered within the next 12 months, remains at approximately $42 million, validating the continued strong demand for the Fund's products and services for the new home construction and high rise buildings.

- Total sales for the three months ended September 30, 2006, were $58,197 up from $57,708 in the previous comparable quarter and brings the YTD sales growth through the first nine months to 10.4% over the previous comparable period.

- EBITDA for the three months ended September 30, 2006 was $10,221 compared to $11,036 in previous comparable period and brings the YTD EBITDA to $24,925, a growth through the first nine months to 2.4% over the previous comparable period.

- Gross profit for the three months ended September 30, 2006 was $17,725, or 30.5% of sales, compared to $17,891, or 31.0% of sales, in previous comparable quarter and brings the YTD gross profit through the first nine months to $46,554 or 29.3% of sales.

- SG&A expenses for the three months ended September 30, 2006 were $7,458 or 12.8% of sales compared to $6,717 or 11.6% of sales in previous comparable quarter and brings the YTD SG&A expenses through the first nine months to $21,329 or 13.4% of sales compared to $19,685 or 13.7% of sales in the previous comparable period.

- During the quarter, the Fund completed its annual goodwill and intangible impairment tests and concluded that a reduction in the carrying value was required and, as a result, recorded a goodwill and intangible asset impairment charge of $118,440 during the quarter.

- Subsequent to the end of the quarter the Fund successfully renegotiated its credit agreement with its lenders to ensure if has the liquidity to pursue its business plan in the face of uncertain conditions with respect to cost inputs and revenue expectations. Previously, the Fund reduced its monthly distributions as a consequence of the same factors.

The Fund also announced today that the Board of Trustees has formed a special committee composed of independent members of the Board of Trustees and has engaged RBC Capital Markets as its exclusive financial advisor to assist the Trustees in the identification, examination and consideration of strategic alternatives available to the Fund in order to maximize unitholder value.

In commenting on the engagement of the financial advisors, David Munro, President and Chief Executive Officer of the Fund, stated: "Based upon the market conditions which include both cost input and revenue growth issues, the recent announcement by the Canadian Minister of Finance with regard to the proposed taxation of income trusts and the weakness in the Fund's unit price, we feel now is the right time to review each of our business units, our capital structure and our legal structure. We continue to believe that we have a viable business with a long history of successful and profitable operations, solid underlying fundamentals and an experienced management team. Unitholders will be kept informed as we have material developments to disclose."

In commenting on the results of the quarter ended September 30, 2006, Mr. Munro stated: "We continue to see strong demand for our products and services in Western Canada, however, that demand is being tempered by a steadily increasing cost environment in Western Canada driven primarily by increasing labor costs as a result of the continued labor shortages. Our Eastern Canadian operations are expected, in the short-term, to be affected by the broader negative economic trends in Eastern Canada and by the softening Northeastern United States housing market. As a result of these conditions, our originally projected EBITDA growth for 2006 will not materialize. Instead, the EBITDA range for 2006 is expected to be consistent with 2005."

Management will host a conference call today at 3:30 PM (MDT) to discuss the Fund's financial results for the year three and nine months ended September 30, 2006. The conference call dial-in number is 1-888-673-1862. A replay of the conference call will be available by dialing either 1-416-626-4100 or 1-800-558-5253, pass-code 21307886#, until 5:00 p.m. (MST) on Friday November 17, 2006 or by listening to it at the Fund's website at www.gienowincomefund.ca.

About Gienow Windows & Doors Income Fund

Gienow Windows & Doors Income Fund is an unincorporated, open-ended, limited-purpose trust established under, and governed by the laws of the Province of Alberta. The Fund holds a 98% limited partnership interest in the Gienow Windows & Doors Limited Partnership and the Chantecler Windows & Doors Limited Partnership and owns all of the outstanding shares of Farley Windows Inc., a window manufacturer in Alexandria, Ontario. The Fund is one of the largest Canadian window and door manufacturers and one of only two Canadian window and door manufacturers with a national manufacturing and sales presence.

To find out more about the Fund, visit our website at www.gienowincomefund.ca.


Contact Information