Arctic Glacier Posts 48% First Quarter Sales Gain
Acquisitions push Q1 revenues to record level

WINNIPEG, May 14, 2004 – The Arctic Glacier Income Fund (TSX-AG.UN) today announced results for the three months ended March 31, 2004.

Highlights:

• Increased sales to a record $11.2 million, up $3.6 million or 48% compared to first quarter of 2003
  
• Acquired assets of ice products division of A.T. Reynolds & Sons, Inc. of Kiamesha Lake, New York in March 2004
  
• Declared distributions totaling $6.2 million ($0.2676 per unit) compared to $4.2 million ($0.2676 per unit) for first quarter of 2003
  
• Loss per unit (basic and diluted) of $0.13 per unit, down 38% compared to a loss of $0.21 per unit for first quarter of 2003
  

"Arctic Glacier’s vigorous and disciplined growth over the past year was evident in the Fund’s first quarter results," said Robert Nagy, President and CEO of Arctic Glacier Inc., the Fund’s operating company.  "Our recent acquisitions are accretive to distributable cash and will reinforce the Fund’s capacity to deliver stable monthly cash distributions to unitholders."

Mr. Nagy added:  "The Fund has more than $40 million of equity proceeds and debt financing available to invest during 2004.  We are continuing to pursue strategic acquisition opportunities."

Sales increased 48% over the first quarter of 2003, primarily due to acquisitions of packaged-ice producers in the northeastern U.S. during 2003.  Adding to the Fund’s top line growth in the first quarter of 2004 was the acquisition of the assets of the ice products division of A.T. Reynolds & Sons, Inc. of Kiamesha Lake, New York.  The business, which operates under the trade name of Leisure Time Ice, is the market leader in its area and is one of the largest producers and distributors of packaged ice in the northeastern U.S.

Overall results for the first quarter were consistent with expectations that costs would outpace revenues.  "The seasonality of the packaged ice business means that during the winter months, Arctic Glacier incurs approximately 25% of annual fixed costs, but less than 10% of annual sales," said Keith McMahon, Executive Vice President and Chief Financial Officer of Arctic Glacier.  "As a result, first quarter results normally show lower sales compared to the summer season, negative EBITDA and a net loss."

First Quarter Financial Review

Sales in the first quarter of 2004 totaled $11.2 million, an increase of $3.6 million or 48% from the same period in 2003.  Most of the gain was due to acquisitions made during 2003 and early 2004 in the Pennsylvania and New York markets, which contributed $3.7 million to sales during the first quarter.  In addition, sales in previously serviced markets increased $0.5 million or 8% from the first quarter of 2003 due to higher volumes and more favorable pricing.

EBITDA during the quarter was negative $4.1 million, compared to negative $3.6 million in the same period last year.  Historically, as Arctic Glacier has grown by acquisition, negative EBITDA for the first quarter has grown in relative proportion to increased sales.  In 2004, sales increased by 48% while negative EBITDA increased by only 14%.

Net loss for the quarter totaled $3.1 million or $0.13 per unit, an improvement of $0.3 million compared to $3.4 million or $0.21 per unit for the same period in 2003. 

The first quarter of 2004 ended with a distributable cash deficiency of $5.4 million or $0.23 per unit, compared to a deficiency of $4.8 million or $0.31 per unit for the same period in 2003.

"Our recent acquisitions give Arctic Glacier a solid base of operations to grow from in the key northeastern U.S. market," said Mr. McMahon.  "Because of the timing of the acquisitions, their contribution to distributable cash for 2003 was minimal.  In 2004, the Fund will benefit from the full impact of the accretive nature of these strategic acquisitions."

The Fund declared distributions to unitholders totaling $6.2 million or $0.2676 per unit during the quarter.  This equates to an annual rate of $1.07 per unit.

The Fund ended the first quarter of 2004 in a very strong financial position.  Arctic Glacier has more than $21 million remaining available for investment from the October 2003 equity offering.  When combined with debt financing available, the total capital available for accretive acquisitions exceeds $40 million.  Total debt at March 31, 2004 was $49.3 million, down from $51.6 million at March 31, 2003.

The Fund’s net debt to trailing 12-month EBITDA ratio at quarter end was 1.9:1, versus 2.0:1 at the same time last year.  The improvement was due to EBITDA generated by acquisitions in the latter half of 2003 and the use of proceeds from an equity financing in October 2003 to reduce debt. 

Arctic Glacier is in a strong position to continue making accretive acquisitions.  The Fund’s current focus remains the northeastern U.S., the most densely populated region of North America.  The Fund’s penetration of this key market continues to be a strategic priority.  Management is currently considering a number of prospects and will remain vigilant for additional opportunities as they arise.

Arctic Glacier Income Fund, through its operating company, Arctic Glacier Inc., is a leading producer, marketer and distributor of high-quality packaged ice in North America under the brand name of Arctic Glacier® Premium Ice.  Arctic Glacier operates 22 production plants and 34 distribution facilities across Canada and the central and northeastern United States servicing more than 40,000 retail accounts.

Arctic Glacier Income Fund trust units are listed on the Toronto Stock Exchange under the trading symbol AG.UN.  There are 23.3 million trust units outstanding.

This news release contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions.  A number of factors could cause actual results to differ materially from the results discussed in these forward-looking statements, and there is no assurance that actual results will be consistent with these forward-looking statements.  These forward-looking statements are made as at the date of this news release, and the Fund assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances.

EBITDA and distributable cash are not recognized measures under Canadian generally accepted accounting principles (GAAP).  EBITDA is defined as earnings before interest, taxes, amortization and non-recurring expenses, including acquisition integration charges that are one-time costs unique to each individual acquisition.  EBITDA is a performance metric used by many investors to provide an indication of cash available for distribution from ongoing operations prior to debt service, capital expenditures and income taxes and is often used to compare companies and Income Funds on the basis of ability to generate cash from ongoing operations.  Distributable cash is a performance metric used by many investors to summarize the funds available for distribution to unitholders in an Income Fund.  Investors should be cautioned that EBITDA and distributable cash should not be construed as alternatives to net income, cash from operations or other financial measures determined in accordance with GAAP as indicators of the Fund’s performance.  The Fund’s method of calculating EBITDA and distributable cash may differ from other companies and Income Funds and, accordingly, may not be comparable to measures used by them.

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For further information, call Arctic Glacier Inc. TOLL FREE at 1-888-573-9237 or log on at www.arcticglacierinc.com

(Signed) On behalf of the Board of Trustees of Arctic Glacier Income Fund, Robert Nagy, President & CEO.

The Toronto Stock Exchange does not approve or disapprove of the adequacy or accuracy of this release.

ARCTIC GLACIER INCOME FUND
Interim Consolidated Balance Sheets
As at March 31, 2004 and 2003 (unaudited) and December 31, 2003 (audited)

ARCTIC GLACIER INCOME FUND
Interim Consolidated Statements of Operations
Three months ended March 31, 2004 and 2003 (unaudited)

Interim Consolidated Statements of Cumulative Earnings (Deficit)
Three months ended March 31, 2004 and 2003 (unaudited)

ARCTIC GLACIER INCOME FUND
Interim Consolidated Statements of Cash Flows
Three months ended March 31, 2004 and 2003 (unaudited)

ARCTIC GLACIER INCOME FUND
Interim Schedule of Distributable Cash
Three months ended March 31, 2004 and 2003 (unaudited)