CANADREAM CORPORATION
TSX VENTURE : CDN

CANADREAM CORPORATION

September 06, 2005 08:00 ET

CanaDream Corporation: Reports Record First Quarter Earnings of $1.5 Million or 9.0 Cents/Share

CALGARY, ALBERTA--(CCNMatthews - Sept. 6, 2005) - Mr. Brian Gronberg, President and CEO of CanaDream Corporation (TSX VENTURE:CDN) is pleased to report the Company's financial results for the three months ended July 31, 2005, the Company's first quarter (Q1) of Fiscal 2006

Revenues of $6.7 million were $1.14 million or 20.5% higher than last year's $5.5 million, while earnings increased 63.5% to $1.5 million compared to $922,000 last year. Increased revenues resulted from higher levels of rental fleet, coupled with better utilization and pricing. Direct expenses of $2.28 million were roughly the same as last year, resulting in Gross Margins (Revenue less Direct Expenses) of $4.4 million, an increase of $1.13 million (34.6%). Interest and depreciation expenses were higher as a result of higher levels of fleet investment and related fleet debt, while Selling, General and Administrative expenses increased by 5.5% to $911,000. Earnings per Share increased by 67% to 8.99 cents per share while Cash Flow from Operations was $3.13 million, 47% higher than last year's $2.13 million.



Highlights
July 31, 2005 July 31, 2004
---------------------------------

Revenue $ 6,693,619 $ 5,554,746
Revenue Less Direct Expenses $ 4,412,284 $ 3,277,791
Earnings Before Tax $ 2,317,142 $ 1,417,417
Net Earnings $ 1,504,892 $ 922,167
Cash Flow from Operations $ 3,128,914 $ 2,128,535
Earnings per Share - Basic 9.02 cents 5.44 cents
- Fully Diluted 8.99 cents 5.39 cents
Cash Flow Per Share 18.7 cents 12.6 cents

Common Shares outstanding at
End of Quarter 16,679,542 16,872,042

Weighted Average Number of
Common Shares Outstanding 16,692,803 16,944,325
---------------------------------
---------------------------------


Investment in Rental Fleet was $24.2 million at July 31, 2005, an increase of $6.15 million (34.0%) over last July and an increase of $9.35 million (62.9%) over year-end levels, while the investment in Rental Units Held for Sale (Ex-Rental units) was $3.24 million at July 31, 2005, a decrease of $813,000 (20.1%) from year-end and a decrease of $542,000 (14.3%) from last July.

Term Debt outstanding on the Company's inventories of Rental Fleet and Rental Units Held for Sale increased to $21.83 million, some $7.7 million more than last July and $9.0 million more than the $12.8 million at year-end.

The Company's short-term liquidity position (Cash and cash equivalents plus accounts receivable, minus accounts payable and accrued liabilities) increased by almost $3.1 million to $4.99 million compared to $1.9 million last July.

The Company's Future Income Tax liability increased to $1.4 million at July 31 2005, compared to $1,075,000 last July and 610,000 at April 30, 2005. As previously noted, the Company does not expect to pay income taxes (other than capital taxes) for the foreseeable future.

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 rental 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. Losses incurred in the last two quarters of the fiscal year may exceed profits earned in the first two quarters.

We encourage interested parties to access copies of the Company's First Quarter MD&A on the SEDAR website at www.sedar.com

The information in this news release includes certain information and statements about management's views of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by those forward looking statements. Although CanaDream Corporation believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward looking statements will prove to be correct. CanaDream disclaims any intention, and assumes no obligation, to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise.

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 now 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.

Contact Information