TORONTO (CP) Cinram International Income Fund (TSX:CRW.UN) said Wednesday that promising movie titles for the busy Christmas season and the company’s recent foray into the telecommunications industry bode well for the CD and DVD maker’s future despite disappointing second-quarter results.

"Based on what our customers are currently forecasting for the second half, we expect to see another strong fourth-quarter finish to the year, driven by a slate of titles that are performing well at the box office," CEO Dave Rubenstein said during a conference call with analysts.

"Excluding any new business, we expect a slight increase in DVD volumes for the year, the impact of which will be offset by lower average selling prices."

The company’s upcoming video titles include "300," "Die Hard 4," "The Simpsons Movie," "Ocean’s 13," "Hairspray" and "Harry Potter and the Order of the Phoenix."

But Rubenstein added that music CD sales are likely to continue their downward trend, after sagging 24 per cent in the second quarter from a year ago to US$46.2 million.

"While the outlook for DVDs is stable we are working on breathing new life into Cinram with the addition of business in the telecommunication sector to reduce our dependence on home video as DVDs approach maturity," he said.

"I believe we have tapped into a phenomenal opportunity with Motorola to showcase our talents in a new industry _ one that thrives on technological change."

In June, Cinram announced a multi-year supply agreement with cellphone provider Motorola Inc. to package and deliver phones and accessories to the North American market. Cinram will also test cellphones and parts, as well as program, assemble, package and ship the final products.

This deal was "an important first step of many we expect to take in the telecommunications industry," Rubenstein told analysts.

"With global handset shipments expected to rise 45 per cent to 1.4 billion units to 2010 . . . we are very bullish about the opportunities in this space."

Investors seemed less optimistic, sending Cinram units down 9.45 per cent or $2.15 to close at C$20.61 on the Toronto Stock Exchange.

The trust, which reports in U.S. dollars, announced a second-quarter loss of $27 million or 45 cents per unit late Tuesday, compared with a loss of $67 million or $1.17 per unit in the second quarter of 2006.

Revenues were down to $376 million from $399 million, due to lower prices and a decline in DVD and CD volumes.

RBC Dominion Securities analyst Steve Arthur said in a note that while the quarter was expected to be seasonally soft, results were "materially below" expectations.

But, he added, Cinram’s "relatively aggressive use of buyback implies confidence in management’s outlook for the seasonally strong second half of the year and Cinram’s ability to support distributions."

Cinram has plants in Canada, the U.S., Europe and Latin America that supply prerecorded videocassettes, CDs, audio cassettes, CD-ROMs and DVDs.

The fund disclosed that Randall Yasny has resigned after a year as a trustee because of "personal and work obligations.’

TORONTO (CP) _ Cinram International Income Fund (TSX:CRW.UN) is considering a possible sale, more acquisitions, unit repurchases and changes to its income trust structure and distribution policy as part of a new strategic review.

CEO Dave Rubenstein said Friday that an outright sale of the DVD and CD maker "is certainly not off the table," but "we do not intend at this time to solicit interest from prospective bidders."

Nevertheless, the fact that Cinram remains open to a potential sale appeared to be an about-face to its recent hardline stance.

In September, the fund’s board sparred publicly with its largest investor by refusing calls to put Cinram up for sale. At that time, Cinram’s board stated it had "no intention of selling, or exploring the possibility of selling" despite a call to do so by Amaranth Advisors, a U.S. investment fund that owns about 15 per cent of Cinram.

As for potential acquisitions, Rubenstein said Friday management continues to pursue "selected, tactical" opportunities.

"Several of these acquisition initiatives are progressing nicely," he told a conference call with analysts.

"However, from a timing standpoint, we do not anticipate making any announcements prior to the end of the year."

The Toronto-based fund is also considering moves such as a unit repurchase, which would likely boost its unit price, along with possible changes to its business structure and distribution policy in the wake of changes in federal tax rules for income trusts announced Oct. 31.

"In light of the government’s recent announcement regarding income trusts, which to date do not appear to directly impact Cinram, we need to evaluate the market valuation on income producing securities including any impact on Cinram’s expected valuation," Rubenstein said.

Cinram _ the world’s largest provider of pre-recorded music, video and software on DVDs and CDs _ announced the strategic review late Thursday as it reported weaker sales and profits in the third quarter. Lower DVD and CD sales cut revenue to US$477.2 million, compared with US$544.7 million a year earlier.

Earnings fell by nearly half to US$18.4 million, down from US$35.5 million. On a per unit basis, earnings declined to 32 cents from 62 cents. Cinram units were up 37 cents to C$22.15 Friday morning on the Toronto Stock Exchange.

TORONTO, Sept. 20 /CNW/ – Cinram International Income Fund (the "Fund")(TSX: CRW.UN) announced today that it has declared a cash distribution of $0.2708 per unit. This distribution will be paid on or about October 16, 2006 to unitholders of record at the close of business on September 29, 2006.

Cinram International Limited Partnership (the "Partnership") also announced that it will be making a cash distribution of $0.2708 per Class B limited partnership unit. This distribution will also be paid on or about October 16, 2006 to unitholders of record at the close of business on September 29, 2006.

The distribution policy of both the Fund and the Partnership is that unitholders of record at the close of business on the last business day of each calendar month will receive a distribution on or about the 15th day of the following month. The monthly distribution will be $0.2708 per unit,representing $3.25 per unit on an annualized basis.

All references to dollar amounts in this announcement are in Canadian funds.

TORONTO, Sept. 19 /CNW/ – Cinram International Income Fund (the "Fund")(TSX: CRW.UN) announced today that it has responded to the letter received from Amaranth Advisors (Canada) ULC, on behalf of Amaranth Canada Trust, by letter dated September 19, 2006, a copy of which is attached as Schedule "A".

Schedule "A"

VIA EMAIL, ORIGINAL BY COURIER September 19, 2006

Dear Mr. Vourkoutiotis:

Dave Rubenstein has forwarded to me, and the other members of the Board of Trustees of Cinram International Income Fund (the "Fund"), your e-mail letter of September 18, 2006.

As you readily acknowledge in your letter, the selling pressure on the Fund’s units that day was attributable to problems within the Amaranth organization, and was in no way caused by the Fund, which remains on track with its business plans and progress. While we are unaware of, and therefore cannot comment on, your intentions in sending, and publicly disclosing, the letter, I do wish to respond to its suggestion that the Board retain a financial advisor to explore a sale of the Fund. For the record, the Board has no intention of selling, or exploring the possibility of selling, the Fund or any of its operating subsidiaries or their respective businesses. Having said that, I further wish to emphasize that the Board, as it and its predecessors have consistently done, will continue to explore opportunities and strategies for growth and value maximization, with a view to protecting and furthering the long term interests of the Fund and its unit holders, as well of those of its operating subsidiaries and their employees, customers and other stakeholders.

Yours truly,

Henri Aboutboul

Chairman, Board of Trustees

Cinram International Income Fund
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