XS Cargo Income Fund

XS Cargo Income Fund

December 17, 2007 21:00 ET

XS Cargo Income Fund Announces Suspension of Cash Distributions

EDMONTON, ALBERTA--(Marketwire - Dec. 17, 2007) - XS Cargo Income Fund (the "Fund") (TSX:XSC.UN) announced today that it will suspend its monthly cash distributions effective December 2007.

The Fund's policy has been to pay cash distributions in equal monthly amounts based on the estimated distributable cash (1) for the year. The business of the Fund is seasonal in nature with approximately 40% of annual distributable cash (1) generated in the fourth quarter. After the implementation of a new inventory management system on October 1, it has taken longer than expected to achieve the throughput required in the company's distribution centres to meet sales targets. As a result, it is unlikely that sufficient cash will be generated in the fourth quarter to cover the excess of distributions declared over distributable cash (1) for the first nine months of the year. Any excess cash generated during December 2007 and the first quarter of 2008 will be used to reduce the Fund's outstanding debt.

Michael McKenna, President and Chief Executive Officer stated: "Although it is taking longer than expected to realize the benefits of our new point-of-sale and inventory management system, we remain confident that it is the right solution for our business and remain optimistic about the outlook for 2008."

The Fund is an open-ended trust that holds, indirectly, a 51% interest in XS Cargo Limited Partnership ("XS Cargo LP"). XS Cargo LP is one of the largest broadline closeout retailers in Canada with 40 stores in the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, Ontario, Newfoundland, Nova Scotia and New Brunswick. The Fund's trust units are listed on the Toronto Stock Exchange under the symbol "XSC.UN".

Additional information about XS Cargo Income Fund is available at www.sedar.com and the Fund's website at www.xscargo.com.

Contact Information

  • XS Cargo Income Fund
    Michael McKenna
    President and Chief Executive Officer
    (780) 413-4296
    Website: www.xscargo.com