CANADREAM CORPORATION
TSX VENTURE : CDN

CANADREAM CORPORATION

July 27, 2005 14:01 ET

CanaDream Corporation Reports Financial Results for Fiscal 2005

CALGARY, ALBERTA--(CCNMatthews - July 27, 2005) - CanaDream Corporation (TSX VENTURE:CDN) today announced financial results for the year ended April 30, 2005, as follows:

Revenues were $11.15 million, down 10.34% from last year, Cash Flow from Operations was $2.45 million ($0.15 per share), down 16.5% from last year and Net Earnings were $5,000 ($0.000 per share), compared to $635,000 ($0.037 per share) last year.

For the three months ended April 30, 2005 (the Company's Q4), Revenues of $227,000 were down from last year's $273,000, however Net Earnings and Cash Flow from Operations both showed improvements over last year's results.

The Company encourages interested parties to access CanaDream Corporation's MD&A on the SEDAR website, www.sedar.com, for a more detailed discussion of these results.



Summarized results for the year ended April 30, 2005 are as follows:

2005 2004 % Change
----------- ------------- ----------

Revenue $11,145,830 $12,431,066 (10.3)%

Revenue Less Direct
Expenses $ 6,686,018 $ 7,094,924 (5.8)%

Earnings Before Tax $ 51,466 $ 915,508 (94.4)%

Net Earnings $ 5,466 $ 594,508 (99.1)%

Earnings and Fully
Diluted EPS 0.03 cents 3.51 cents

Common Shares outstanding
at April 30 16,695,542 16,955,542 (1.5)%
Weighted Average number of
Common Shares outstanding 16,838,983 16,946,616 (0.6)%


The reduction in revenues resulted primarily from the Company's decision to lease 100 fewer trucks that transport the Company's campers and fifth wheels, due to unusually high lease costs attributable to the stronger CDN$.

The reduction in revenues also resulted in lower Gross Margins (referred to above as Revenue less Direct Expenses), however improvements in the ratio of Direct Expenses to revenues resulted in a slightly higher gross margin percentage for the year (60% compared to 57% last year). Major contributors to this improvement were lower fleet insurance costs, with particularly good results in the Company's self-insured loss pool, with lower operating lease expenses and lower numbers of fleet contributing to the reductions. Gains on sales of rental fleet increased to $376,000 from last year's $110,000 primarily as a result of the sale of $1.7 million of rental fleet to an Associate Dealer in February 2005 that resulted in a gain of approximately $250,000. Amortization on Rental Fleet increased 7.3% to $1.78 million ($1.65 million last year) while Amortization on Rental Units held for Sale totaled $335,000 compared to $121,000 last year. Amortization of Capital and Other Assets increased by $156,000 (34%) to $617,000. Interest on Fleet Debt reduced 12.4% to $800,000 ($914,000 last year), while interest on non-fleet debt increased from $62,000 to $308,000 as a result of interest on the Convertible Debenture issued February 27, 2004. Selling, General & Administrative Expenses increased to $3.13 million from $3.03 million last year.

It should be noted that the Company's core business, rental of recreational vehicles, is seasonal in nature, with the majority of its revenue being earned during the May to October period, its first and second quarters. The majority of the company's direct expenses are incurred in that same period. Most of the fleet sales occur between November and May As a result of ongoing interest, amortization and general and administrative expenses, the last two quarters of the fiscal year normally produce operating losses.

The financial data included in this release has been prepared in accordance with Canadian generally accepted accounting principles (GAAP), except for the term cash flow from operations. Cash flow from operations as presented does not have any standardized meaning under Canadian GAAP and therefore, it may not be comparable with the calculation of similar measures for other entities. Cash flow from operations has been presented for information purposes only, and should not be considered an alternative to, or more meaningful than, cash flow from operating activities, as determined in accordance with GAAP. All references to cash flow from operations in this release are based on cash flow before changes in non-cash working capital.

CanaDream is a Canadian tourism company that is utilizing its proprietary business-to-business web-enabled system, (www.canadasbest.com), and its business-to-consumer on-line Internet reservation system, (www.canadream.com), to operate and expand its network of RV rental locations in Canada. CanaDream maintains six Company-operated locations in Calgary, Vancouver, Whitehorse, Toronto, Montreal, and Halifax. The Company is also leveraging its proprietary technology to build a franchised network of associate dealers that are fully interconnected to CanaDream's e-commerce systems. CanaDream currently has three associate dealer franchisees in Edmonton Alberta, and Kelowna and Victoria, British Columbia.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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