Swiss Water Decaffeinated Coffee Income Fund Reports Third Quarter Results

6th November, 2007 : Vancouver (Website)

VANCOUVER, BC, November 5, 2007/CNW/ Swiss Water Decaffeinated Coffee Income Fund (“the Fund”) today reported financial results for the three and nine months ended September 30, 2007. The three-month period represents the third quarter of its 2007 fiscal year. The Fund holds all of the outstanding securities of Swiss Water Decaffeinated Coffee Company, Inc. (“SWDCC” or “the company”) and its results are dependent on the operating results of SWDCC.

Operating Results
(Unaudited)

In $000s except per unit amounts	3 months ended September 30		9 months ended September 30
	2007	2006	2007	2006
Sales	7,705	6,124	22,384	23,484
Gross profit	2,541	2,112	7,940	8,929
EBITDA(1)	1,518	1,113	4,939	5,792
Net income	1,240	596	4,343	4,034
Adjusted distributable cash(1)	1,606	960	4,827	5,329
Distributions paid	1,502	1,418	4,422	4,254
Per unit amounts:
Net Income per unit	0.186	0.089	0.651	0.604
Adjusted distributable cash generated per unit(1)	0.241	0.144	0.723	0.798
Distributions paid per unit(1)	0.225	0.212	0.662	0.637

(1) EBITDA, adjusted distributable cash and adjusted distributable cash per unit are non-GAAP financial measures that are defined in the third quarter Management’s Discussion and Analysis to be posted on SEDAR on or before November 5, 2007.

During the third quarter of 2007, SWDCC’s revenues grew by 25.8% over the same period of 2006. Processing volumes rose 35% during the quarter, substantially narrowing the year-over-year decrease in the company’s sales volumes from 15.3% at June 30, 2007 to 2.2% at September 30, 2007. Sales volumes for the third quarter were stronger across all segments of the business and included initial orders from a new significant customer. Additionally, much of the backlog of late arriving customer coffee from Brazil and Colombia experienced in Q2 2007 was processed in Q3 2007.

SWDCC’s revenue performance was affected by the continued strengthening of the Canadian dollar relative to the US dollar. Sales revenues generated in US dollars represented approximately 83% of the company’s total revenues in the third quarter and 82% of its total revenues in the nine months ended September 30, 2007. While SWDCC enters into foreign exchange contracts to reduce its estimated net exposure to currency fluctuations on a 12-month rolling basis, these contracts only manage to dampen, not eliminate, the negative effect of a continually strengthening Canadian dollar. As the majority of sales are earned in US dollars, the nine-month processing revenue rates were down by 10%, due to the stronger Canadian dollar.

The year-over-year increase in third quarter sales volumes helped boost SWDCC’s gross profit, which rose by 20.3% over the third quarter of 2006. For the first nine months of 2007, gross profit fell by 11.1% compared to the same period last year. This was due to the negative impact of the strengthening Canadian dollar which reduced currency exchange realized from US dollar sales, the slight decrease in year-over-year processing volumes and higher labour and distribution costs. Third quarter EBITDA was up by 36%, while nine-month EBITDA fell by 15%.

During the third quarter of 2007, SWDCC’s net income grew by 108% over the previous year. This was due to increased margins on higher volumes and the recording of unrealized derivative gains, partially offset by lower tax recoveries.

On a year-over-year basis, the company’s nine-month net income was up by 7.7% as 2% lower volumes and lower tax recoveries were more than offset by the recording of unrealized derivative gains.

Distributions to unitholders in the third quarter were maintained at the level set in March 2007, when the per-unit monthly distribution was increased by 5.9% to $0.075. On an annualized basis, the new level of monthly distributions equals $0.90 per unit. In the third quarter, the Fund generated adjusted distributable cash of $1.6 million, and paid $1.5 million in distributions to unitholders. In the first nine months of 2007, adjusted distributable cash of $4.8 million was generated and $4.4 million was paid to unitholders.

“We are pleased with our solid performance and the gains we’ve made this quarter,” said Frank Dennis, President and CEO of SWDCC and a Trustee of the Fund. “Our 2007 volumes are close to the record levels achieved in 2006 and showing potential to surpass them by the end of the year. While we believe the strong Canadian dollar will continue to put pressure on our margins in the coming months, we also feel favourable market conditions will ultimately support the growth of our business with existing and new customers.”

A more detailed discussion of the Fund’s financial results can be found in its third quarter Management’s Discussion and Analysis, which is to be posted with the financial statements on SEDAR (www.sedar.com) on or before November 5, 2007.

Company Profile

SWDCC is the world’s only consumer branded chemical-free coffee decaffeinator, and is certified organic by the OCIA (Organic Crop Improvement Association).

SWDCC decaffeinates customer-owned coffees, including organically certified coffees, for a toll fee. The company also purchases high-quality green coffees from more than 10 different countries, decaffeinates them and markets them to the green coffee trade. These two revenue streams are known as the company’s “toll” and “non-toll” businesses, respectively.

Approximately 65% of SWDCC’s revenue comes from the US, about 25% from Canada and the balance from international markets, including the United Kingdom, Japan and Australia.

For more information, please contact:

Stan Thompson, Chief Financial Officer
Swiss Water Decaffeinated Coffee Company Inc.,
Phone: 604.444.8780 Fax: 604.420.8711
Email: sthompson@swisswater.com
Website: www.swisswater.com