Rainmaker Income Fund
TSX : RNK.UN

Rainmaker Income Fund

August 09, 2005 19:51 ET

Rainmaker Income Fund Reports Results to June 30, 2005

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 9, 2005) - Rainmaker Income Fund (the "Fund") (TSX:RNK.UN) today reported its financial results for the three months and six months ended June 30, 2005.



Selected financial results of the Fund are as follows:

All in 000's of Canadian dollars, except per unit figures

Three months ended Six months ended
June 30, June 30,
2005 2004 2005 2004
----------------------------------------
Revenue 4,944 8,330 7,683 15,494
Operating expenses 3,408 4,758 6,513 9,648
General and
administration expenses 554 557 1,078 1,057
Net earnings (loss) 295 1,874 (1,258) 2,603
Net earnings (loss) per
unit 0.03 0.17 (0.12) 0.24


Review of operations

The second quarter of 2005 produced a significant improvement over the first quarter, however, results of operations continued to be below historical levels.

Three months ended June 30, 2005 compared with June 30, 2004

Revenue decreased 41% to $4.9 million in 2005 from $8.3 million in 2004. Revenue was down across all service lines as compared with the prior year. Revenue from visual effects was down significantly as during the current quarter did not involve any large scale projects, whereas in the prior year three significant projects were in progress. The number of projects which capture the images during production using high definition cameras instead of film continues to increase. While this change in capture format has resulted in some new services in video post, it has also resulted in a decrease in revenue from the film lab.

Operating expenses decreased 28% to $3.4 million in 2005 from $4.8 million in 2004. As a percentage of revenue operating expenses were 69% in 2005 and 57% in 2004. General and administration expenses decreased slightly to $554 thousand in 2005 from $557 thousand in 2004.

Net earnings decreased to $295 thousand in 2005 from earnings of $1.9 million in 2004.

Six months ended June 30, 2005 compared with June 30, 2004

Revenue decreased 50% to $7.7 million in 2005 from $15.5 million in 2004. Revenue was down across all service lines as the amount of production in British Columbia was down significantly during the first half of 2005 as compared with the prior year.

Operating expenses decreased 32% to $6.5 million in 2005 from $9.6 million in 2004, however, 2004 included $898 thousand relating to visual effects work outsourced with no mark up. If these expenses are excluded from the 2004 figures, operating expenses for 2005 were 85% of 2005 revenue, whereas for 2004 operating expenses were $8.8 million, which is 60% of 2004 revenue. General and administration expenses remained constant at $1.1 million.

Net earnings decreased to a loss of $1.3 million in 2005 from earnings of $2.6 million in 2004.

Outlook

Looking forward to the second half of 2005, Rainmaker LP expects the results of operations to be significantly better than the first half, although it too may be below the prior year's results, principally because we do not have a significant visual effects project in house. In addition, the acquisitions of EP Canada LP and CFC LP, which were completed on August 4, 2005, should make a significant contribution to revenue and earnings for the second half of 2005.

The Fund is an unincorporated open-ended limited purpose trust located in Vancouver, British Columbia. The Fund indirectly owns three operating limited partnerships. Rainmaker Limited Partnership ("Rainmaker LP") is one of North America's leading film and video post production organizations, providing superior service, using innovative technology and world-class talent to design, build and shape content for film, television and new media productions. EP Canada Limited Partnership ("EP Canada LP") is a leading provider of payroll services for the film and television industry across Canada. Canada Film Capital Limited Partnership provides tax credit administration services and financing of tax credits through factoring for film and television productions across Canada.

This press release and any related attachments may contain forward-looking statements that involve a number of risks and uncertainty. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are market and general economic conditions and the risk factors detailed from time to time in the periodic reports and documents filed by the Fund with The Toronto Stock Exchange and other regulatory authorities. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and the Fund undertakes no obligation to update the forward-looking statements should there be a change in conditions, or in management's estimates or opinions.

The contents of this press release have neither been approved nor disapproved by any regulatory authority.

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