DirectCash Income Fund announces results of operations for the three months ended March 31, 2009



    TSX: DCI.UN

    CALGARY, May 14 /CNW/ - DirectCash Income Fund ("DirectCash" or the
"Fund") today announced consolidated financial results for the three months
ended March 31, 2009. The Fund's consolidated financial statements for the
three months ended March 31, 2009 and Management's Discussion & Analysis, as
well as additional information about the Fund are available on SEDAR
(www.sedar.com).

    
      Q1 2009 Financial and Operational Highlights compared to Q1 2008:
      -----------------------------------------------------------------

    -   Increased EBITDA 16% to $7.1 million
    -   Increased EBITDA margin from 28% to 30%
    -   Increased distributable cash flow 22% to $6.3 million
    -   Distributable cash flow payout ratio has been reduced to 68% from 83%
    -   Mexican ATM financial operational results reported for the first time
        in Q1
    -   Increased the number of active ATM's by 613 or 11%
    

    Management's Commentary

    "The first quarter of 2009 has generated strong financial results for
DirectCash with significant improvements in EBITDA and Distributable Cash Flow
over the same period last year. We are very pleased with our early results in
2009 as we have seen positive gain in all our business segments and are
especially proud of our new ATM business in Mexico," said Jeffrey Smith,
DirectCash's President and Chief Executive Officer. The primary drivers for
the improvements over the prior year period are the addition of the
contributions from Mexican ATM operations, the year over year impact of the
2008 ATM acquisitions, and the higher year over year activity in prepaid cash
card activations and transactions. The ATM business, which is the backbone of
DirectCash's business, continues to generate consistent performance while
strong growth has also been seen from DirectCash's prepaid products
businesses.
    DirectCash's focus for the balance of 2009 is to continue growth in a
sustainable manner via organic means and through additional accretive
acquisitions as opportunities arise. DirectCash's stable, contracted revenue
stream, dominant market positions, and continued growth will continue to
provide consistent cash distributions to DirectCash's Unitholders.
    For purposes of comparison, DirectCash provides the following selected
operational and financial data:

    
    -------------------------------------------------------------------------
                                                           Three months
                                                          ended March 31
                                                        2009         2008
    -------------------------------------------------------------------------
    Operational Highlights                           (unaudited)  (unaudited)
    Number of machines - end of period
      ATM terminals - active in past 30 days(1)           5,983        5,370
      Debit terminals - active in past 30 days(1)         2,995        2,980

    Number of transactions for the period
      ATM transactions                                7,010,856    6,883,577
      Debit terminal transactions                     2,270,879    2,040,381
      Prepaid cash card activations                     816,598      661,458
      Prepaid cash card transactions                  2,212,995    1,798,697
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) DirectCash has included statistics only for sites that recorded a
        transaction in the past calendar month.
    

    On a year over year basis, the number of DirectCash active ATMs increased
by 613. The year over year net increase is a result of the acquisitions made
in 2008 and the addition of Mexico operations in the first quarter of 2009.
ATM transactions for the three month period ended March 31, 2009 are up 1.8%
compared to Q1 2008. The increase in ATM transactions reflects the impact of
the reporting of the Mexican ATM business in the first quarter of 2009 and the
impact on a year over year comparison of the 2008 ATM acquisitions. ATM
revenues per transaction increased in the first quarter of 2009 when compared
to the first quarter of 2008 as a result of the above. ATM transactions in
Canada declined in the network on a per ATM basis from Q1 2008 as DirectCash
continues to see the impact of a maturing ATM market in Canada and a decline
in discretionary spending by consumers. As more ATMs are added to the Canadian
market place there has been no corresponding increase in overall transactions.
DirectCash's focus in the ATM business is to continue to add sites and grow
aggregate transactions both organically and through accretive acquisitions and
to maximize site profitability through cost and quality control. In addition,
DirectCash is considering new geographic markets, such as DirectCash's
recently started Mexican operation which is now adding to DirectCash's
recurring services revenue growth and gross profit margins.
    The year over year increase in DirectCash's debit terminal count is 15.
In the first quarter of 2009 one of DirectCash's major debit terminal
customers went into receivership, which impacted 185 debit terminal sites.
Given the impact on the number of active debit terminal sites for the period
ended March 31, 2009 the existing sites still posted an 11.3% increase in
transactions. DirectCash continues to pursue organic growth in this business
segment and to grow market share by providing retailers with unique products
and services to enhance the business viability of the debit terminal for the
retailer.
    The 23.4% growth in cash card activations for the three months ended
March 31, 2009 is a result of new customer relationships and growth within
existing relationships. The prepaid MasterCard program continues to find
traction and displace some debit card activations. The 23.0% increase in
prepaid cash card transactions for the three months ended March 31, 2009 is
due to the same reasons noted above for the increase in prepaid cash card
activations as well as an increase in transactions per card as prepaid
products continue to gain consumer acceptance and confidence. Activation and
transaction figures include both prepaid debit and prepaid credit cards.
    The following table presents a summary of the Fund's selected financial
information for the three months ended March 31, 2009 and 2008:

    
    Selected financial information
    -------------------------------------------------------------------------
    (thousands of Canadian dollars,                        Three Months
     except per unit amounts)                             Ended March 31
                                                        2009         2008
    -------------------------------------------------------------------------
    Financial Highlights                             (unaudited)  (unaudited)
    Revenue
      Recurring services revenue                    $    17,980  $    15,070
      Products revenue                                    5,589        6,771
      Interest income                                        53          168
    -------------------------------------------------------------------------
    Total revenue                                   $    23,622  $    22,009
    -------------------------------------------------------------------------

    Gross profit - Recurring services and interest  $    10,262  $     8,569
      Gross profit margin                                  56.9%        56.2%
    Gross profit - products                                 356          559
      Gross profit margin                                   6.4%         8.3%
    -------------------------------------------------------------------------
    Total gross profit                              $    10,618  $     9,128
      Total gross profit margin                            45.0%        41.5%

    Expense and other income:
      Selling, general and administrative                 3,211        2,747
      Long-term incentive plan                              305          260
      Interest                                              301          523
      Depreciation of equipment                             712          586
      Amortization of intangible assets                   3,793        4,598
    -------------------------------------------------------------------------
                                                          8,322        8,714
    Net earnings before income taxes                      2,296          414
      Income taxes                                          100            -
    Net earnings                                          2,196          414
    -------------------------------------------------------------------------
      Net earnings per unit                         $      0.18  $      0.03
    -------------------------------------------------------------------------
    Add back:
      Interest                                              301          523
      Depreciation of equipment                             712          586
      Amortization of intangible assets                   3,793        4,598
      Income taxes                                          100            -
    -------------------------------------------------------------------------
    EBITDA                                          $     7,102  $     6,121
      EBITDA margin                                        30.1%        27.8%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Total assets at March 31                        $   116,582  $   121,807
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total debt at March 31                          $    37,628  $    32,162
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total debt net of cash at March 31              $    18,732  $    20,874
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Results of Operations for the Three Months Ended March 31, 2009

    Revenue

    On an aggregate basis, revenues have increased by 7.3% for the three
months ended March 31, 2009, as compared to Q1 2008. Revenue by line of
business, which includes both recurring services and products revenue, is as
follows:

    -------------------------------------------------------------------------
    Revenue by Line of Business             Three months ended March 31
     (thousands)                           2009        % change      2008
    -------------------------------------------------------------------------
    (unaudited)

    ATM Business                       $    10,085         13.2% $     8,912
    Prepaid products business               13,104          3.2%      12,702
    Debit terminal business                    433          9.6%         395
    -------------------------------------------------------------------------
    Total Revenue                      $    23,622          7.3% $    22,009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Revenue by type (thousands)
    Recurring services                 $    17,980         19.3% $    15,070
    Products                                 5,589        -17.5%       6,771
    Interest                                    53        -68.5%         168
    -------------------------------------------------------------------------
    Total Revenue                      $    23,622          7.3% $    22,009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Revenue - Recurring Services

    Recurring services revenue relates to revenue earned from transaction
processing activities, including ATM, debit terminal and prepaid product
transactions. For the three months ended March 31, 2009 recurring services
revenue increased by $2.9 million (19.3%) over Q1 2008.
    The increase in recurring services revenue is primarily attributable to
both the ATM and prepaid products line of businesses. The increase in ATM
recurring services revenue is related to the revenues generated from Mexico in
the first quarter of 2009 and the year over year impact of the ATM
acquisitions made during 2008. The increase in prepaid products recurring
services revenue comes from both prepaid debit card and MasterCard cash card
products as customers show greater acceptance and use of these products. The
respective 23.4% increase in card activations and 23.0% increase in prepaid
cash card transactions on a year over year comparison attests to the growth
potential in this business segment. DirectCash's prepaid card merchant
customers are also continuing to expand their customer base through the growth
of their retail locations.
    There is historic seasonality in processing transaction volumes, with the
highest ATM transaction activity typically occurring in the second and third
quarters of the year. The first and fourth quarters are traditionally
DirectCash's weakest quarters in terms of processing transactions and gross
profitability. The Fund has eliminated the impact of seasonal fluctuations in
cash flows to Unitholders by equalizing monthly cash distributions. This
seasonality is considered when determining levels of available cash at the end
of each reporting period.

    Revenue - Products

    Product revenue includes sales of ATMs and related parts, debit terminals
and related parts, and prepaid products, which includes the sale of cash cards
(debit and credit) and prepaid telecommunications products, both physical
("hard cards") and electronic ("virtual vouchers").
    For the three months ended March 31, 2009 revenue from product sales was
down $1.2 million or 17.5% from Q1 2008. The primary reason for the lower
revenues on a year over year comparison is due the decline in the
telecommunications sales of virtual vouchers and hard cards. The Fund has seen
a reduction in sales in long-distance telephone and cellular cards in Alberta,
where a number of clients are dependent upon the transient oil and gas work
force which has been reduced in recent months. ATM and debit terminals sales
were flat on a year over year comparison as the business model for this
component of the business continues to lean towards full placement and rental
units versus sales.

    Interest Income

    Interest income declined significantly on a quarter over quarter basis as
a result of the impact of lower interest rates that can be realized on funds
held in short term deposits.

    Gross Profits

    On an aggregate basis, gross profits have increased by 16.3% for the
three months ended March 31, 2009, as compared to Q1 2008. Gross profit by
line of business, which includes both recurring services and products revenue,
is as follows:

    
    -------------------------------------------------------------------------
    Gross profit by Line of Business        Three months ended March 31
     (thousands)                           2009        % change      2008
    -------------------------------------------------------------------------
    (unaudited)

    ATM Business                       $     6,076         15.6% $     5,255
      gross profit margin                     60.3%                     59.0%
    Prepaid products business                4,223         15.8%       3,647
      gross profit margin                     32.2%                     28.7%
    Debit terminal business                    319         40.4%         227
      gross profit margin                     73.7%                     57.4%
    -------------------------------------------------------------------------
    Total Gross Profit                 $    10,618         16.3% $     9,128
      gross profit margin                     45.0%                     41.5%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Gross profit by type (thousands)
    Recurring services and interest    $    10,262         19.8% $     8,569
      gross profit margin                     56.9%                     56.2%
    Products                                   356        -36.3%         559
      gross profit margin                      6.4%                      8.3%
    -------------------------------------------------------------------------
    Total Gross Profit                 $    10,618         16.3% $     9,128
      gross profit margin                     45.0%                     41.5%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Gross Profitability - Recurring Services

    Total gross profits from recurring services revenue and interest income
for the three months ended March 31, 2009 was $1.7 million or 19.8% higher
than Q1 2008. The increase in gross profitability for recurring services can
be attributed to the following factors: (a) the recognition in the quarter of
the positive gross margin contributions from the Mexican ATM operations, (b)
the year over year impact of the ATM acquisitions made during 2008, and (c)
the higher year over year activity in Prepaid cash card activations and
transactions.
    Gross profit margins on a year over year comparison are slightly higher
at 56.9% for the three months ended March 31, 2009 as compared to 56.2% for Q1
2008. The ATM recurring services gross margins improved on a year over year
comparison basis as a result of the strong performance from the Mexican ATM
operations and the impact of the 2008 Canadian acquisitions resulting in more
total active sites and a overall higher revenue per transaction. The increase
in overall activation and transaction levels continues to be reflected in the
overall aggregate increase in gross profit contributions from the recurring
services business segment.

    Gross Profitability - Products

    Gross profit from product revenues for the three months ended March 31,
2009 declined by 36.3% or $203 thousand from Q1 2008. The decline can be
explained primarily by a combination of lower margin contributions on the
sales of ATMs and debit terminals as the business model continues to lean
towards full placement and the rental of units; lower margin contributions
from the telecommunication hard cards as revenues declined on a quarter over
quarter basis; and there was a higher inventory obsolescence write down in the
first quarter of 2009 compared to last year.
    DirectCash has a strategic focus of keeping ATM and debit terminal
purchase prices as low as possible for the DirectCash customer in order to
maximize the number of machines that can be placed. By maintaining this
strategy for this part of the business, DirectCash believes that this will
assist DirectCash in acquiring additional long-term revenue generating
services contracts.

    Selling, General & Administrative Expenses ("SG&A")

    For the three months ended March 31, 2009 SG&A expenses increased by $465
thousand or 16.9% from Q1 2008. The increase on a quarter over quarter basis
is the result of higher salaries and benefits incurred as the Mexican ATM
operation is now accounted for in the first quarter of 2009 as well as the
addition of some key staff members brought on to assist in DirectCash's
growth. General and administrative costs were also up on a year over year
basis principally as a result of higher legal fees as a result of litigation
costs incurred relating to the ATM business. As a percentage of gross profits,
SG&A was 30.2% during the three months ended March 31, 2009 compared to 30.1%
for the same period last year.

    Long-term incentive plan ("LTIP")

    Pursuant to the LTIP, DirectCash sets aside a pool of funds based upon
the amount by which the Fund's per Unit distributable cash flow exceeds
certain defined threshold amounts as described below:

    
    -------------------------------------------------------------------------
    Percentage by which distributable  Maximum proportion of excess
     cash flow per Unit exceeds base    distributable cash available for
     threshold(1)                       LTIP payments
    -------------------------------------------------------------------------
    5% or less                         0%
    -------------------------------------------------------------------------
    greater than 5% and up to 10%      10% of any excess over 5%
    -------------------------------------------------------------------------
    greater than 10% and up to 20%     10% of any excess over 5% to 10%, plus
                                        20% of any excess over 10% to 20%
    -------------------------------------------------------------------------
    greater than 20%                   10% of any excess over 5% to 10%, plus
                                        20% of any excess over 10% to 20%,
                                        plus 30% of any excess over 20%
    -------------------------------------------------------------------------
    (1) $1.44 per Unit per fiscal year (2008 - $1.44 per Unit).
    

    For the three months ended March 31, 2009, total LTIP expense was
estimated at $304,750 (2008 - $260,315), comprised of $304,750 (2008 -
$260,315) related to financial performance, less net proceeds of $ nil (2008 -
$ nil) from unvested Units sold in the open market in the first three months
of 2009. Unvested Units are not reallocated to other participants. The LTIP
base threshold will be periodically reviewed for appropriateness relative to
the market and compensation requirements.

    EBITDA

    For the three months ended March 31, 2009, EBITDA increased by 16.0% over
Q1 2008, which is slightly lower than the 16.3% increase in gross profits.
This reflects the higher gross profit contributions and lower interest expense
offset in part by the higher SG&A and LTIP costs. As a percentage of revenue,
EBITDA was 30.1% as compared to 27.8% during Q1 2008.

    Interest Expense

    For the three months ended March 31, 2009 interest expense has decreased
$223 thousand or 42.6% over Q1 2008. DirectCash is benefitting from the lower
interest rate environment as the Bank of Canada has aggressively reduced
interest rates. DirectCash's use of DirectCash's revolving credit facility is
relatively flat when compared to Q1 2008 (see "Liquidity and Capital
Resources"). All DirectCash debt is currently on floating interest rates. A
one percent change in interest rates would result in an approximate $376
thousand annual change in interest expense based upon current debt levels.

    Net Earnings

    Net earnings for the three months ended March 31, 2009 was $2,195,557
versus net earnings of $413,788 during Q1 2008. Amortization of intangible
assets is $804,914 lower for the three months ended March 31, 2009 as compared
to Q1 2008 as the amortization period for certain intangible assets has been
completed.
    The disparity between net earnings and cash distributions is primarily
due to amortization of intangible assets related to ATM, debit terminal and
prepaid product contracts. Typically, these contracts include automatic
renewals for a further minimum five-year period (new contracts are six years)
unless the customer terminates the contract within a specified time period and
includes a right of first refusal to match a competitor's bona fide offer on
renewal, which DirectCash believes could result in the assets having a longer
life than the period they are amortized over.

    
    Standardized Distributable Cash Flow and Distributable Cash Flow per Unit
    -------------------------------------------------------------------------
    (thousands, except for per unit          Three months ended March 31
     amounts)                             2009          2008    Cumulative(1)
    -------------------------------------------------------------------------

    Per consolidated financial
     statements:
    Net earnings/(loss)                $     2,196  $       414  $     8,155
    Add/(Deduct):
    Minority interest                            -            -          838
    Depreciation of equipment                  712          586        8,526
    Amortization of intangible and
     other assets                            3,794        4,598       72,356
    Changes in non-cash working capital      1,152         (463)        (229)
    -------------------------------------------------------------------------
    Cash provided by operations:       $     7,853  $     5,135  $    89,645
    Productive capacity maintenance           (361)        (388)      (4,504)
    -------------------------------------------------------------------------
    Standardized distributable
     cash flow                         $     7,492  $     4,747  $    85,141
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Per unit                           $    0.6009  $    0.3806  $    6.8283
    Changes in non-cash working capital     (1,152)         463          229
    Deferred rent expense                       (7)          (7)         (60)
    -------------------------------------------------------------------------
    Distributable Cash Flow            $     6,334  $     5,203  $    85,311
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Per Unit                           $    0.5080  $    0.4172  $    6.8465
    Distributions declared             $     4,302  $     4,303  $    68,001
    Distributions declared per unit    $    0.3450  $    0.3450  $    5.3386
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Standardized Distributable Cash
     Flow Payout ratio                        57.4%        90.6%        79.9%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Distributable Cash Flow
     Payout Ratio                             67.9%        82.7%        79.7%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Since the Fund's initial public offering in December, 2004.
    

    Distributions typically exceed net earnings as a result of non-cash
expenses, such as depreciation of equipment and amortization of intangible
assets. These non-cash expenses result in a reduction to net earnings, with no
impact on cash flow from operating activities. DirectCash's policy is to
distribute all available cash from operations after cash required to maintain
productive capacity, debt repayments, growth opportunities, working capital
reserves and other reserves as considered advisable by DirectCash Management
Inc.'s board, which reflects the difference between distributions declared and
distributable cash flow. The lower distributable cash flow payout ratio in the
first quarter of 2009 versus 2008 reflects the higher distributable cash flows
being generated by the Fund without a corresponding increase in cash
distribution levels. Since inception, the Fund has distributed 79.7% of its
distributable cash flow to holders of units, exchangeable partnership units
and Class B subordinated partnership units.
    Cash distributions and productive maintenance capital programs have been
historically funded via cash from operations, while growth capital
expenditures have primarily been funded with debt. Over time, additional
borrowing and equity issues may be required to increase productive capacity.
    Neither standardized distributable cash flow nor distributable cash flow
can be assured. See "Key Business Risks" for a list of factors which could
negatively impact cash flows. DirectCash intends to utilize DirectCash's
credit facilities as part of its capital structure in order to fund future
capital growth, operating within the covenants of DirectCash's credit
facility, thus enhancing distributable cash flow from operations.
    Since inception, 100% of the Fund's distributions declared are considered
other income by Unitholders. The consolidated excess of the carrying value of
the Fund's equipment, intangible and other assets over their tax basis is
approximately $727 thousand.

    
    Capital Expenditures
    -------------------------------------------------------------------------
                                                           Three months
                                                          ended March 31
                                                        2009         2008
    -------------------------------------------------------------------------
    Per consolidated financial statements:
    Acquisitions                                    $         -  $     1,670
    Other capital expenditures                            1,053          431
    Other intangible expenditures                           499           30
    -------------------------------------------------------------------------
                                                    $     1,552  $     2,131
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Split between growth and maintenance:
    Growth capital                                  $     1,191  $     1,743
    Productive capital maintenance                          361          388
    -------------------------------------------------------------------------
                                                    $     1,552  $     2,131
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Growth capital expenditures relate to acquisitions and other expenditures
that increase DirectCash's productive capacity, while productive capital
maintenance expenditures maintain productive capacity at existing levels.
Productive capital maintenance expenditures are expected to trend slightly
higher in 2009 due to increased security infrastructure expenditure
requirements. Growth capital expenditures can vary widely between reporting
periods due to the volatility of acquisition opportunities.

    Liquidity and Capital Resources

    DirectCash believes that the funds generated from operations will be
sufficient to allow DirectCash to meet ongoing requirements for working
capital, maintenance capital expenditures including investments in technology
capital, interest expense, and cash distributions to Unitholders. DirectCash's
actual cash generated from operations will be dependent upon future financial
performance, which in turn will be subject to financial, tax, business and
other factors.
    As of March 31, 2009, DirectCash utilized approximately $37.6 million of
a total available credit facility of $60.0 million. A summary of DirectCash's
available credit at March 31, 2009 is as follows:

    
    -------------------------------------------------------------------------
    (thousands)                         Utilized       Limit       Available
    -------------------------------------------------------------------------
    Revolving credit facility          $     6,828  $    20,000  $    13,172
    Acquisition credit facility             30,800       40,000        9,200
    -------------------------------------------------------------------------
                                       $    37,628  $    60,000  $    22,372
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    In addition to the revolving credit facility is a US$ 1.0 million (CDN$
1,260,200) letter of credit in favour of MasterCard International. The letter
of credit pertains to DirectCash's prepaid MasterCard program. The revolving
credit facility is demand in nature and is utilized for ATM cash loading,
working capital requirements and commercial letters of credit. The revolving
credit facility bears interest at the bank's prime lending rate.
    The acquisition credit facility is utilized to facilitate acquisitions
and to fund business growth opportunities as required in new locations. The
acquisition credit facility is demand in nature and bears interest at the
bank's prime lending rate or at banker's acceptance rates plus 1.4% per annum.
Notwithstanding the demand nature of the facility, there are no scheduled
principal repayments. Depending upon interest rates and future capital
requirements, all or a portion of the acquisition credit facility could be
repaid via a public offering of DirectCash securities.
    For the three months ended March 31, 2009, DirectCash operated within
DirectCash's loan covenant limits and anticipates that DirectCash will
continue to do so in the future. Breach of DirectCash's bank loan covenants
could result in the triggering of remedies by DirectCash's lenders, which
could ultimately result in the curtailing of distribution payments.

    Additional Information

    Additional information about the Fund, including the Fund's Annual
Information Form and other public filings is available on SEDAR
(www.sedar.com) and on the Fund's website (www.directcash.net).

    Non-GAAP Measures

    There are a number of financial calculations that are not defined
performance measurements under GAAP but which DirectCash believes are useful
and accepted performance measurements utilized by the investing public in
assessing the overall financial performance of income trusts.

    Earnings before interest, taxes, depreciation and amortization ("EBITDA")

    EBITDA represents gross profits less selling, general and administrative
expenses ("SG&A") and long-term incentive plan expenses, and is not a defined
performance measure under GAAP. DirectCash believes that EBITDA is a useful
supplementary disclosure commonly used by the investing community to assess
and compare cash flows between entities. EBITDA specifically excludes
depreciation, amortization, income taxes and interest expense. The Fund's
EBITDA may differ from similar computations as reported by other issuers and,
accordingly, may not be comparable to EBITDA as reported by such issuers.

    
    Standardized distributable cash flow and standardized distributable cash
    flow per unit
    

    On July 6, 2007, the Canadian Securities Administrators ("CSA") published
revised National Policy Statement 41-201 Income Trusts and Other Direct
Offerings that includes guidance concerning distributable cash flow measures
and their related disclosure. In accordance with the interpretive release
issued by the Canadian Institute of Chartered Accountants ("CICA"), DirectCash
has calculated a distributable cash flow measure called Standardized
Distributable Cash Flow and has included it as an additional disclosure.
Standardized Distributable Cash Flow is calculated as cash flow from
operations including the effect of changes in non-cash working capital less
total capital expenditures required to preserve productive capacity, and
restrictions on distributions resulting from compliance covenants. Due to
normal course changes of non-cash working capital between periods,
Standardized Distributable Cash Flow has the potential to be volatile between
periods compared to the Fund's existing measure of Distributable Cash Flow,
which is calculated as cash flow from operations excluding the impact of
non-cash working capital changes less productive capital maintenance
requirements (see discussion below). In order to reconcile the two measures,
DirectCash has calculated Standardized Distributable Cash Flow and reconciled
it to Distributable Cash Flow.

    Distributable cash flow and distributable cash flow per unit

    Distributable cash flow and distributable cash flow per unit are non-GAAP
measures generally used by Canadian open-ended income funds as an indicator of
financial performance. Readers are cautioned that distributable cash flow is
not a defined performance measure under GAAP and that distributable cash flow
cannot be assured. The Fund calculates distributable cash flow as equal to the
consolidated funds flow from operations before changes in non-cash working
capital, after provision for productive capital maintenance capital
expenditures (see discussion below). The Fund's distributable cash flow and
distributable cash flow per unit may differ from similar computations as
reported by other issuers and, accordingly, may not be comparable to
distributable cash flow and distributable cash flow per unit as reported by
such issuers.
    Unitholders receive cash distributions sourced from distributions made by
DirectCash LP indirectly to the Fund. The Fund's policy is to distribute, to
the maximum extent possible, the cash earned from operations to Unitholders,
less amounts estimated to be required for expenses, productive capital
maintenance, cash redemptions or repurchases of Units, any current tax
liability, or other obligations, debt repayments and any reasonable reserves
established. The Fund makes monthly cash distributions to Unitholders on the
last business day of each month to Unitholders of record on the last business
day of the preceding month. As of May 4, 2009, monthly distributions has
historically been paid at $0.115 per Unit per month ($1.38 per Unit
annualized). Distributions are funded from cash flows generated by the
operation of the business.

    Productive capital maintenance expenditures

    DirectCash differentiates capital expenditures between growth and
productive capital maintenance ("Maintenance Capital"). There is no such
distinction under GAAP. However, DirectCash believes it is important to
differentiate between them as maintenance capital expenditures represent a
discretionary adjustment to distributable cash flow while growth capital does
not. Maintenance capital expenditures are defined as expenditures required to
service and maintain DirectCash's existing productive capacity, while growth
capital is expended to increase DirectCash's productive capacity by adding
additional sources of revenue not currently in existence. Current measures of
productive capacity that DirectCash utilizes include ATMs and debit terminals
under contract (see "Operational Highlights"). Software and hardware upgrades
to existing infrastructure, ATM and debit terminal equipment upgrades
necessary to meet changing regulatory requirements, contract extension
incentives, and fleet vehicle purchases and upgrades are some examples of
maintenance capital expenditures. Examples of growth capital expenditures
include the acquisition of a competitor's assets, the cost of an ATM in a new
location, or technology costs related to new sources of revenue.
    Readers are cautioned that productive capital maintenance expenditure is
not a defined performance measure under GAAP. The Fund's computation of
productive maintenance capital expenditure may differ from similar
computations as reported by other issuers and, accordingly, may not be
comparable to maintenance capital expenditures as reported by such issuers.

    Forward Looking Statements

    This press release contains certain forward-looking statements relating
to future events. Forward-looking statements are subject to numerous risks and
uncertainties, certain of which are beyond the Fund's ability to control,
including the impact to the Fund's business of general economic conditions,
consumer spending and borrowing trends and regulatory changes to name a few.
Certain statements that contain words such as "could", "believe", "expects",
"expected", "will", "intends", "projects", "anticipates", "estimates",
"continues" or similar words relating to matters that are not historical facts
constitute "forward-looking information" within the meaning of applicable
Canadian securities legislation. In particular, forward-looking information
and statements contained in the press release include statements related to
the Fund's projected growth in Canada and Mexico in the ATM business,
projected growth in the prepaid and debit terminal business, accretive
acquisitions on a go forward basis, expansion of the Fund's merchant base
through new and innovative products, entry into new geographic markets,
ability to continue to acquire long-term recurring services contracts and
expected increase in capital expenditures due to regulatory mandated security
upgrade changes are all statements that have been stated or referred to
throughout this press release.
    Additional information about the Fund is available on SEDAR
(www.sedar.com) or the Fund's website at www.directcash.net.





For further information:

For further information: The officer who may be contacted for further
information is: Hendrik J. Lombard, C.F.O., DirectCash Management Inc.,
Manager of DirectCash Income Fund, Bay No.6, 1420 - 28th Street N.E., Calgary,
Alberta, T2A 7W6, Direct Telephone: (403) 387-2103, Fax: (403) 451-3003,
E-mail: hlombard@directcash.net

Organization Profile

DIRECTCASH INCOME FUND

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