Mainframe Entertainment, Inc.

Mainframe Entertainment, Inc.

June 28, 2005 16:00 ET

Mainframe Entertainment Reports Year End 2005 Result

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 28, 2005) -

Revenues increase by 29 percent

Gross Profit doubles to 29 percent

EBITDA margin increases to 16 percent

Mainframe Entertainment, Inc. ("Mainframe") (TSX:MFE), Canada's leading computer generated (CG) animation production company, today announced its year-end financial results for the period ended March 31, 2005.

For the year-ended March 31, 2005, the Company reported a 29 percent increase in revenues to $19.1 million versus $14.8 million during the same period in 2004. Gross profit nearly doubled during the period to $5.5 million, or 29 percent of revenues, compared to a gross profit of $2.3 million, or 16 percent of revenues, for the same period in 2004. Earnings before interest, taxation, depreciation and amortization increased to $3.0 million, or 16 percent of revenues, compared to a loss of $700,000 for the same period in 2004. Net loss for the year significantly reduced to $14,000, or $0.00 per share compared to a net loss of $2.1 million or $0.06 per share for the same period in 2004.

As at March 31, 2005, Mainframe's total number of common shares outstanding was 70,751,098, compared to 70,573,216 in 2004.

"I am very pleased with our accomplishments on a year-over-year basis. We continue to focus on growth while managing our costs," noted Rick Mischel, Chief Excecutive Officer of Mainframe. "Given our opportunities, we are confident in maintaining this profitable growth trajectory and delivering superior value to our shareholders."

Recent Business Highlights:

January 11, 2005 - Thunderbird Films and Mainframe agree to co-distribute Season I and II of the popular YTV series ZIXX.

February 1, 2005 - Mainframe and WizKids team up to bring MechWarrior to DVD in 3D animation.

February 8, 2005 - Mainframe and Mattel announce the production of 'Barbie Fairytopia' DVD feature.

April 5, 2005 - Mainframe's 'ReBoot' to be available on demand from CinemaNow.

June 7, 2005 - Mainframe annouces the completion of animation for Sony Pictures Entertainment's 'Stuart Little 3'.

June 16, 2005 - Mainframe announces co-production and international distribution for upcoming 3D animated feature based on Marc Brown's 'Arthur' children's property.

About Mainframe

Mainframe Entertainment Inc. is the industry leader in computer generated (CG) animation for television and direct-to-video/DVD family entertainment. Mainframe has produced over 256 half hours of CG animated television as well as ten CG animated direct-to-video/DVD feature films and two one-hour CG animated television specials. Mainframe's CG animation expertise is also being used in the production of theatrical feature films, interactive games and commercials. Established in 1993, Mainframe continues to grow its library of proprietary productions, and has received many prestigious awards for its work on such international brands as "Barbie", "Hot Wheels", "Spider-Man", "Casper" and "Popeye". The Company is recognized as a CG animation pioneer having developed the groundbreaking internationally distributed television series "ReBoot". Mainframe clients include Sony, Mattel, Lions Gate Home Entertainment, Electronic Arts (Canada) and MTV. Mainframe's majority shareholder, IDT Corporation, is a NYSE-listed multinational telecommunications and entertainment company.

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