Spinrite Reports Second Quarter Results for 2007

Spinrite Income Fund (TSX: SNF.UN), today announced its financial results for the 13 weeks and 26 weeks ended June 30, 2007.

"The craft yarn industry continues to show signs of increasing stability as we move closer to the key fall and winter selling seasons," said Dario Margve, President and Chief Executive Officer. "Our second quarter results are evidence of this trend and indicative of our improved market position."

"Internally, we continued to make progress on our productivity enhancement initiative during the second quarter," continued Mr. Margve. "The efforts of all Spinrite employees in this area resulted in a substantial improvement in the gross margin rate."

Second Quarter Results

Sales of $12.5 million for the second quarter increased by $1.2 million, or 11.1%, from $11.3 million for the prior year quarter. The increase was due to stronger sales at the retail level, where unit sales of Spinrite products at key accounts were up 6.0% over the prior year.

The gross profit rate for the second quarter improved to 29.5% from 14.0% in the prior year. The increase was due to improvements in production efficiency and to the absence of production issues that were encountered on new product launches in 2006.

As a result of increased sales and higher gross margin, Adjusted EBITDA(i) of $2.5 million for the second quarter increased substantially from the prior year period when Adjusted EBITDA(i) was $34,000. Adjusted EBITDA(i) includes foreign exchange gains of $1.2 million and $1.0 million for the 13-week periods ended June 30, 2007 and July 1, 2006, respectively.

As a result of changes to the Canadian Income Tax Act regarding the taxation of income trusts, the Fund was required to recognize a future tax expense of $3.6 million. This expense will not have any impact on the Fund's cash flow prior to 2011, the year in which the tax changes take effect. Beginning in 2011, the impact should be gradual.

Year to Date Results

Sales of $29.8 million for the 26 weeks ended June 30, 2007 were down $1.9 million, or 6.1%, from the prior year as a result of a large liquidation sale in the first quarter of 2006 that was not repeated.

Gross profit was up $2.2 million, or 29.4%, despite the decrease in sales. Gross profit rate for this period was 32.1%, which represented an improvement over the prior year result of 23.3%. Adjusted EBITDA(i) of $5.9 million increased $2.3 million, or 64.9%, from the prior year. Foreign exchange gains of $1.5 million are included in Adjusted EBITDA(i) for both the 26 weeks ended June 30, 2007 and July 1, 2006.

Conference Call and Webcast

Management will host a conference call and webcast at 11 a.m. ET on Wednesday, August 1, 2007 to discuss the results. The call can be accessed by calling 416-641-6130 or 1-866-226-1792.

The Fund's financial statements, notes to financial statements and management's discussion and analysis are available at www.sedar.com and www.spinriteincomefund.com .

About Spinrite Income Fund

Spinrite Income Fund (TSX: SNF.UN) is the largest producer and marketer of craft yarn in Canada and one of the largest in the United States. Established in 1952, Spinrite researches, develops, manufactures and markets a broad variety of consumer craft yarns. The company also supports its market with patterns that provide customers with creative ideas for knitted products. Spinrite has approximately 470 employees at its fully integrated manufacturing and distribution centre in Listowel, Ontario.

(i) Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization after making adjustments for pre-funded management arrangements which is a non-recurring item.

Forward-Looking Statements

This press release may contain forward-looking statements relating to expected future events and financial and operating results of the Fund that involve risks and uncertainties. Actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons, including market and general economic conditions and the risks and uncertainties detailed from time to time in the Fund's prospectus filed with the Canadian securities regulatory authorities. Due to the potential impact of these factors, the Fund disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

Contacts: Spinrite Income Fund Ryan Newell Chief Financial Officer (519) 291-3780 Email: rnewell@spinriteyarns.com Website: www.spinriteincomefund.com