XS Cargo Income Fund Reports 2011 Fourth Quarter Results

XS Cargo Income Fund (the "Fund") (TSX VENTURE:XSC.UN) today announced its
results for the three and twelve month periods ended December 31, 2010. The
Fund's interim and annual financial statements and Management's Discussion and
Analysis ("MD&A") can be found on XS Cargo's website at www.xscargo.com and on
SEDAR at www.sedar.com.


Fourth quarter sales declined $3.0 million or 7.2% compared to 2009. Same store
sales declined 9.1%. Fourth quarter results were impacted by a decrease in store
traffic and sales conversion.


Fourth quarter earnings from operations(1) decreased 37.4% to $3.7 million from
$5.9 million in 2009. Gross margin percentage decreased by 3.1% from 39.2% to
36.1% of sales.


Annual sales increased by $4.7 million or 4.4%. Earnings from operations(1) for
the year were $6.7 million, an increase of $0.9 million from 2009. Gross margins
as a percentage of sales were unchanged for the year at 37.5%.


Michael McKenna, President and Chief Executive Officer of the Fund stated, "We
are disappointed with the fourth quarter results. We continue in our efforts to
increase product selection to produce a sustainable positive sales result."


One new store is scheduled to open in April and management is actively pursuing
additional store locations.


The Fund has entered into a definitive agreement with a wholly-owned subsidiary
of KarpReilly LLC ("KarpReilly") whereby XS Cargo has agreed to sell to
KarpReilly all of its 51% interest in its two operating subsidiaries, XS Cargo
Limited Partnership and XS Cargo GP Inc. A separate press release containing
particulars of that proposed transaction will be filed concurrently with this
press release.


Business of the Fund

The Fund owns a 51% indirect interest in XS Cargo LP which operates 42 closeout
retail stores in Alberta, British Columbia, Manitoba, Saskatchewan, Ontario,
Newfoundland, Nova Scotia and New Brunswick.


(1) Non-GAAP Measures

Earnings from operations have been derived by adding interest, amortization of
property and equipment and intangible assets, future income taxes, impairment of
goodwill and intangible assets, foreign exchange gain or loss, unit-based
compensation and non-controlling interest to net earnings for the period.
Earnings from operations is not a measure recognized by GAAP and does not have a
standardized meaning prescribed by GAAP. Investors are cautioned that earnings
from operations should not replace net income or loss (as determined in
accordance with GAAP) as an indicator of the Fund's performance, of its cash
flows from operating, investing and financing activities or as a measure of its
liquidity and cash flows. The Fund's methods of calculating earnings from
operations may differ from the methods used by other issuers and may not be
comparable to similar measures presented by other issuers.

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