XSC.UN XS Cargo Income Fd

XS Cargo Income Fund (TSX VENTURE:XSC.UN) (the "Fund") today announced its
results for the three and nine month periods ended September 30, 2010. The
Fund's interim 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.


For the third quarter of 2010, the Fund reported sales of $24.5 million and a
net loss of $57 thousand. Earnings from operations were unchanged from 2009 at
$1.6 million.


Third quarter sales increased $1.5 million or 6.7% compared to 2009. Same store
sales increased 4.4%.


Gross margin percentage for the quarter decreased by 1.5% from 40.8% to 39.3% of
sales compared to the same period in 2009. The decrease is the result of higher
freight costs due to increased shipping rates for overseas inventory purchases.


During the quarter the Fund opened one new store in Ottawa, Ontario.

Michael McKenna, President and Chief Executive Officer of the Fund stated, "We
continue to focus our efforts on expanding our product offering and improving
the presentation of those products in our stores to build on the sales and
earnings momentum year-to-date. However, management expects a challenging period
ahead for same store sales growth based on the trailing twelve months
performance and less than robust consumer confidence heading into the holiday
shopping season."


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
    References to "EBITDA" are to earnings before inter est and foreign
    exchange, income taxes, depreciation and amortization and references to
    "di stributable cash" are to cash available for distribution to
    Unitholders in accordance with the distribution policies of the Fund.
    EBITDA is calculated as Net Earnings (loss) plus non-controlling
    interest, plus future income tax expense, plus impairment of goodwill,
    plus impairment of intangible assets, plus interest on term,
    subordinated and operating loans, plus amortization of intangible assets
    and amortization of property and equipment. Management believes that, in
    addition to income or loss, EBITDA is a useful supplemental measure of
    performance and cash available for distribution before debt service,
    changes in working capital, capital expenditures and income taxes.
    Distributable cash of the Fund is a measure generally used by open-
    ended trusts as an indicator of financial performance. As one of the
    factors that may be considered relevant by prospective investors is the
    cash distributed by the Fund relative to the price of the Units,
    management believes that distributable cash of the Fund is a useful
    supplemental measure that may assist prospective investors in assessing
    an investment in the Fund. 



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.


EBITDA, distributable cash, earnings from operations and payout ratio are not
earnings measures recognized by GAAP and do not have standardized meanings
prescribed by GAAP. Investors are cautioned that EBITDA, distributable cash and
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 EBITDA,
distributable cash, earnings from operations and payout may differ from the
methods used by other issuers and may not be comparable to similar measures
presented by other issuers.


FORWARD LOOKING STATEMENTS

This press release contains forward-looking statements. All statements other
than statements of historical fact contained in this press release are
forward-looking statements. You can identify many of these statements by looking
for words such as "believe", "expects", "will", "intends", "projects",
"anticipates", "estimates", "continues" or similar words or the negative
thereof. These forward-looking statements include statements with respect to the
amount and timing of the payment of distributions of the Fund. There can be no
assurance that the plans, intentions or expectations upon which these
forward-looking statements are based will occur. Forward-looking statements are
subject to risks, uncertainties and assumptions, including, but not limited to,
those discussed elsewhere in the press release. There can be no assurance that
such expectations will prove to be correct.


Some of the factors that could affect future results and could cause results to
differ materially from those expressed in the forward-looking statements
contained herein include, but are not limited to, those discussed under "Risk
Factors" in the Fund's MD&A a nd in the Fund's Annual Information Form.


The forward-looking statements contained herein are expressly qualified in their
entirety by this cautionary statement. The forward-looking statements included
in this press release are made as of the date of this press release and, except
as required by law, the Fund assumes no obligation to update or revise them to
reflect new events or circumstances.

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