Alliance Grain Traders Income Fund announces 2009 second quarter results; Update on proposed conversion from income trust to corporation

TORONTO, Aug. 19 /CNW/ - Alliance Grain Traders Income Fund (TSX-V: AGT-UN.V) (the "Fund") is pleased to announce its financial results for the three and six months ended June 30, 2009. The Fund is an income trust which derives its income from the operations of its operating subsidiary, Alliance Pulse Processors Inc. ("Alliance"). Alliance is engaged in the business of sourcing and processing specialty crops such as lentils and peas, primarily to export markets.

Alliance's sales performance during the quarter ended June 30, 2009 met management expectations despite challenging market conditions. Since lentil inventories remaining on farms in Canada from the 2008-2009 crop year were at very low levels by the second quarter of 2009, management anticipated that the volumes processed during the quarter would be reduced and that product mix would move away from traditional lentil sales into other specialty crops (peas and canary seed). Nonetheless, thanks to its strategy of diversifying markets coupled with a continued push on product mix diversification, the Fund was still able to deal relatively well with the crop shortage of this quarter.

The Fund's sales were $72,951,127 for the three months ended June 30, 2009, compared to sales of $72,314,047 for the three months ended June 30, 2008, and $86,818,020 for the three months ended March 31, 2009. When comparing the results for the second quarter of 2009 to those for the first quarter of 2009, sales volume decreased by approximately 16%, EBITDA decreased by 53.5%, and cost of sales decreased by 11%. This reflects the higher raw material costs (particularly for lentils, due to the reduced supply of lentils) for the second quarter of 2009. EBITDA was $5,109,983 for the three months ended June 30, 2009 compared to $10,990,994 for the three months ended March 31, 2009 and $7,766,527 for the three months ended June 30, 2008. The improvement in results in the first half of 2009 over the first half of 2008 is attributable primarily to the additional processing capacity acquired by the Fund in the second half of 2008. The June 30, 2009 year to date EBITDA is $16,100,977. A four quarter trailing EBITDA from July 1, 2008 to June 30, 2009 shows EBITDA of $38,317,000.

The financial statements and management discussion and analysis for the three and six months ended June 30, 2009 are available under the Fund's profile on www.sedar.com and have been posted on the Fund's web site at www.alliancegraintraders.com. All amounts are reported in Canadian dollars.

"Canada had a record export year for pulse crops, leaving available stocks on farm at near zero levels. This affected our ability to execute our Q2 sales program with limited lentil inventory available for processing. However positive price performance in the past year has fueled a record acreage planting of lentils and peas in Canada and the USA. Harvest is upon us and we are optimistic that a record crop will bring positive results to Alliance shareholders" said Murad Al-Katib, President and CEO of Alliance and Chairman of the Board of Trustees of the Fund. "With the proposed acquisition of the Arbel Group and positive crop forecasts for Australia, Alliance is well positioned to continue on its path of growth."

Update on Conversion to Dividend Paying Corporation

The Fund today obtained a final order of the Ontario Superior Court of Justice approving the proposed conversion of the Fund on a tax deferred basis from an open-ended unit trust to a dividend-paying corporation by means of a plan of arrangement between the Fund and AGTI under the Business Corporations Act (Ontario) (the "Conversion"). This court order was one of the regulatory approvals which were required for the completion of the Conversion. The completion of the Conversion, and of the acquisition of the Arbel Group Companies referred to in the Fund's press release dated August 14, 2009 (the "Acquisition"), is subject to various other conditions, including receipt of all requisite regulatory approvals. The Fund currently expects the completion of the Conversion and the Acquisition to take place on or about September 10, 2009.

Cautionary Statements

Certain statements in this press release are forward-looking statements. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by the Fund at the time of preparation, may prove to be incorrect.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Fund (including its operating subsidiaries) to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the actual results of harvests, fluctuations in the price of lentils and other crops, failure of plant, equipment or processes to operate as anticipated, accidents or labour disputes, risks relating to the integration of acquisitions or to international operations, as well as those factors referred to in the section entitled "Risk Factors" in the prospectus of the Fund dated December 30, 2004 which is available on SEDAR at www.sedar.com, and which should be reviewed in conjunction with this document. Although the Fund has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

EBITDA (Earnings Before Interest, Income Taxes, Depreciation and Amortization) is a financial measure used by many investors to compare companies on the basis of operating results, asset value and the ability to incur and service debt. EBITDA is not a recognized earnings measures under Canadian Generally Accepted Accounting Principles ("GAAP") and does not have a standardized meaning prescribed by GAAP. It is not intended to represent cash flow or results of operations in accordance with GAAP. Therefore, EBITDA may not be comparable to similar measures presented by other issuers. Investors are cautioned that EBITDA should not be construed as an alternative to net income or loss determined in accordance with GAAP as an indicator of the Fund's performance or to cash flows from operating, investing and financing activities of liquidity and cash flows.

    
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Contacts

Murad Al-Katib
Chairman of the Board of Trustees
President and CEO
Alliance Pulse Processors
Tel: (306) 525-4490
Email: trade@saskcan.com