The Data Group Income Fund announces full year and fourth quarter results for 2007



    
    HIGHLIGHTS
    ----------
    -   Q4 Revenues of $ 107.2 million, Q4 Gross Profit of $30.8 million and
        Q4 Net Income of $10.7 million

    -   Q4 Cash Available for Distribution of $12.8 million or $0.544 per
        unit and Cash Distributions of $6.8 million or $0.290 per unit (see
        Table 4 and "Non-GAAP Measures" below)

    -   Q4 Adjusted EBITDA of $15.3 million (see Table 3 and "Non-GAAP
        Measures" below)

    -   Full Year Revenues of $398.7 million, Full Year Gross Profit of
        $107.3 million and Full Year Net Income of $7.4 million

    -   Full Year Cash Available for Distribution of $29.9 million or
        $1.273 per unit and Cash Distributions of $27.2 million or $1.158 per
        unit (see Table 4 and "Non-GAAP Measures" below)

    -   Full Year Adjusted EBITDA of $40.8 million (see Table 3 and "Non-GAAP
        Measures" below)
    

    BRAMPTON, ON, March 6 /CNW/ - The DATA Group Income Fund (TSX: DGI.UN)
("the Fund") today announced financial and operating results for the full year
and the fourth quarter ended December 31, 2007.
    "I am delighted with our fourth quarter results. Our payout ratio of 53.2
 percent is largely due to the fact that we have generated substantially more
synergies from our Relizon Canada Acquisition than planned and that the
significant one-time costs required to achieve them and expensed in the first
three quarters of 2007 are now behind us. I believe we have demonstrated our
ability to identify, acquire and successfully integrate companies of
significant size relative to our own," said David Odell, President and Chief
Executive Officer.
    The Fund owns directly and indirectly all of the outstanding partnership
units of The Data Group Limited Partnership (the "Data Group") and all the
outstanding shares of the Data Group's general partner, Data Business Forms
Limited.
    The Data Group is a leading provider of total document management
solutions, including printed products, and operates as three segments. DATA
East and West (which provided approximately 91% of total revenue in calendar
year 2007) sells a broad range of printed products and document management
services directly to end users. Sundog (which provided approximately 5% of
total revenue in calendar year 2007) is a commercial printer specializing in
the production of high-quality annual reports, marketing materials and event
tickets. Multiple Pakfold (which provided approximately 4% of total revenue in
calendar year 2007) sells forms and labels to independent brokers and
resellers.

    FORWARD-LOOKING STATEMENTS

    Certain statements in this press release constitute "forward-looking"
statements that involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance, objectives or
achievements of the Fund, Data Business Forms Limited ("DBFL") and/or its
successor, the Data Group, or industry results to be materially different from
any future results, performance, objectives or achievements expressed or
implied by such forward-looking statements. When used in this press release,
the words such as "may", "would", "could", "will", "expect", "anticipate",
"estimate", "believe", "intend", "plan", and other similar expressions are
intended to identify forward-looking statements. These statements reflect the
Fund's current views regarding future events and operating performance, are
based on information currently available to the Fund, and speak only as of the
date of this press release. These forward-looking statements involve a number
of risks, uncertainties and assumptions and should not be read as guarantees
of future performance or results, and will not necessarily be accurate
indications of whether or not such performance or results will be achieved.
Many factors could cause the actual results, performance or achievements of
the Fund and the Data Group to be materially different from any future
results, performance or achievements that may be expressed or implied by such
forward-looking statements. The principal assumptions that the Fund made in
the preparation of these forward-looking statements include the ability of
management to achieve over $10.0 million per annum in pre-tax operating and
other synergies and cost savings, and other benefits expected to be realized,
and the timing and net present value thereof, based on the achievement of
operational synergies from restructuring, integration and other initiatives
relating to the combination of the respective businesses previously carried on
by Data Business Forms Limited and Relizon Canada Inc. ("Relizon Canada"); the
accuracy of estimated synergies in respect of expected cash flows, cost
savings and profitability from the combination of the Data Business Forms
Limited and Relizon Canada businesses; the risk that any savings, growth
prospects or other synergies from the combination of those businesses will not
be fully realized or will take longer to realize than expected; competition
from competitors supplying similar products and services; the Data Group's
ability to grow its sales or even maintain historical levels of its sales of
printed business documents; increases in the costs of paper and other raw
materials used by the Data Group; the Data Group's ability to maintain
relationships with its customers; and the application of recent changes to the
income tax treatment of certain income trusts, such as the Fund, which will,
subject the Fund to tax commencing in 2011 (assuming the Fund complies with
the "normal growth guidelines" contained in such changes), and the effect of
those proposed changes on the trading price of the Fund's units. Additional
factors are discussed under the heading "Risks and Uncertainties" in the
Fund's management's discussion and analysis ("MD&A") and in the Fund's other
publicly available disclosure documents, as filed by the Fund on SEDAR
(www.sedar.com). Should one or more of these risks or uncertainties
materialize, or should assumptions underlying the forward-looking statements
prove incorrect, actual results may vary materially from those described in
this press release as intended, planned, anticipated, believed, estimated or
expected. Unless required by applicable securities law, the Fund does not
intend and does not assume any obligation, to update these forward-looking
statements.

    NON-GAAP MEASURES

    This press release includes certain non-GAAP measures as supplementary
information. When used in this press release, EBITDA means earnings before
interest, taxes, depreciation and amortization, and Adjusted EBITDA means
EBITDA adjusted for non-cash inventory fair value allocation charges, goodwill
impairment charges, and pension plan curtailment gains. The Fund believes
that, in addition to net income, EBITDA is a useful supplemental measure in
evaluating the performance of the Data Group and/or the Fund. Cash available
for distribution (or distributable cash) means cash provided by (used in)
operating activities increased by, or reduced for, non-cash interest expense,
maintenance capital expenditures, changes in non-cash working capital, special
pension contributions, partnership conversion costs and cash income taxes.
Specifically, the Fund views cash available for distribution as a measure
generally used by Canadian income funds, investors and management as an
indicator of financial performance. EBITDA, Adjusted EBITDA and cash available
for distribution are not earnings or cash flow measures recognized by GAAP and
do not have any standardized meanings prescribed by GAAP. Therefore, EBITDA,
Adjusted EBITDA and cash available for distribution are unlikely to be
comparable to similar measures presented by other issuers.
    Investors are cautioned that EBITDA and Adjusted EBITDA should not be
construed as an alternative to net income or loss determined in accordance
with GAAP as indicators of the Data Group's or the Fund's performance and
investors are cautioned that cash available for distribution (or distributable
cash) is not an alternative to cash flows from operating, investing and
financing activities determined in accordance with GAAP as measures of
liquidity and cash flows. For a reconciliation of net income to Adjusted
EBITDA, see Table 3 below. For a reconciliation of cash provided by operating
activities to cash available for distribution, see Table 4 below.

    OVERVIEW

    On August 31, 2006, the Fund acquired from The Relizon Company (the
"Relizon Canada Acquisition") all of the shares of Relizon Canada for a
purchase price (the "Purchase Price") of $141.0 million, subject to a working
capital adjustment. The Purchase Price consisted of a cash payment of
$112.0 million and 2,964,328 trust units of the Fund. The Purchase Price was
adjusted down by $1.0 million based on the closing calculation of the working
capital of Relizon Canada. At the time of the Relizon Canada Acquisition,
Relizon Canada was a provider of outsourcing solutions in Canada, helping
organizations to improve the efficiency and effectiveness of their printed and
electronic communications, both internally with employees, and externally with
customers, vendors and prospects.
    Following the completion of the Relizon Canada Acquisition, the Data
Group undertook a series of initiatives to integrate the former Data Business
Forms Limited and Relizon Canada businesses in order to achieve operational
and corporate synergies and other benefits from the combination of those
businesses. On March 1, 2007, the Fund announced a restructuring plan
resulting in the closure of four plants, the elimination of 121 jobs and the
transfer of 99 jobs to other facilities. During the second and third quarters
of 2007, the Data Group closed its plants located in Dorval, Quebec;
Hemmingford, Quebec; Orangeville, Ontario; and Medicine Hat, Alberta. The
plants had ceased operations as of September 30, 2007. As a result of those
initiatives, the Data Group has recognized restructuring costs and provisions
relating to the termination of certain employees of the acquired business and
for other costs to exit or terminate specific leases and contracts which the
Data Group intends to modify or terminate.
    On September 30, 2006, the Fund reorganized its structure to carry on in
a limited partnership (being the Data Group) the business previously carried
on by Data Business Forms Limited (including the Relizon Canada business) (the
"Reorganization"). In connection with the Reorganization, Data Business Forms
Limited became the general partner of the Data Group Limited Partnership. The
purpose of the Reorganization was to establish a "flow-through" organizational
structure which will enable the Fund to maximize cash available for
distribution and provide a more flexible legal and operating structure,
including future expansion opportunities. In light of the enactment of the
"SIFT" rules described below under "Outlook", this flow-through structure will
effectively end by 2011.

    
    Table 1   The following table sets out selected historical financial
              information for the periods noted.

              The period from January 1, 2007 to December 31, 2007 includes
              the results of operations of the Relizon Canada business. The
              period from January 1, 2006 to December 31, 2006 includes the
              results of operations for the Relizon Canada business from
              August 31, 2006 to December 31, 2006.

    Consolidated Financial Information
    -------------------------------------------------------------------------
    For the periods ended               Oct. 1    Oct. 1    Jan. 1    Jan. 1
     December 31, 2007 and 2006             to        to        to        to
    (in thousands of dollars           Dec. 31,  Dec. 31,  Dec. 31,  Dec. 31,
     except per unit amounts,             2007      2006      2007      2006
     unaudited)                              $         $         $         $
    -------------------------------------------------------------------------
    Revenues                           107,235   108,846   398,653   286,650
    Cost of revenues                    76,430    81,530   291,315   211,633
    -------------------------------------------------------------------------
    Gross profit                        30,805    27,316   107,338    75,017

    Selling, general and
     administrative expenses            17,227    18,588    70,732    51,754
    Integration costs                      312       164     4,309       164
    Amortization of intangible assets    3,363     2,411    10,596     7,558
    Curtailment gain                    (1,461)        -    (1,461)        -
    Impairment of goodwill               1,900         -     1,900         -
    -------------------------------------------------------------------------
    Income before interest and
     income taxes                        9,464     6,153    21,262    15,541
    -------------------------------------------------------------------------

    Interest expense on long-term debt   1,622     1,817     6,355     3,865
    -------------------------------------------------------------------------
    Income before income taxes           7,842     4,336    14,907    11,676

    Future income tax (recovery)
     expense                            (2,830)        -     7,482   (16,215)
    -------------------------------------------------------------------------
    Net income for the period           10,672     4,336     7,425    27,891
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Basic income per unit                 0.45      0.18      0.32      1.57
    -------------------------------------------------------------------------
    Diluted income per unit               0.45      0.19      0.32      1.57
    -------------------------------------------------------------------------



    Table 2   The following table sets out selected historical financial
              information by business segment for the periods noted.

              The period from January 1, 2007 to December 31, 2007 includes
              the results of operations of the Relizon Canada business. The
              period from January 1, 2006 to December 31, 2006 includes the
              results of operations for the Relizon Canada business from
              August 31, 2006 to December 31, 2006.

    Consolidated Financial Information
    -------------------------------------------------------------------------
    For the periods ended               Oct. 1    Oct. 1    Jan. 1    Jan. 1
     December 31, 2007 and 2006             to        to        to        to
    (in thousands of dollars           Dec. 31,  Dec. 31,  Dec. 31,  Dec. 31,
     except percentage                    2007      2006      2007      2006
     amounts, unaudited)                     $         $         $         $

    Revenues
    -------------------------------------------------------------------------
    DATA East and West                  98,852    98,278   361,428   241,791
    Sundog                               5,470     6,029    25,054    26,299
    Multiple Pakfold                     4,078     5,711    17,944    23,198
    Intersegment                        (1,165)   (1,172)   (5,773)   (4,638)
    -------------------------------------------------------------------------
                                       107,235   108,846   398,653   286,650
    -------------------------------------------------------------------------

    Gross Profit
    -------------------------------------------------------------------------
    DATA East and West                  28,766    24,291    97,243    61,954
    Sundog                               1,642     1,953     8,171     9,154
    Multiple Pakfold                       397     1,072     1,924     3,909
    -------------------------------------------------------------------------
                                        30,805    27,316   107,338    75,017
    -------------------------------------------------------------------------

    Gross Profit, as a percentage
     of revenue
    -------------------------------------------------------------------------
    DATA East and West                   29.1%     24.7%     26.9%     25.6%
    Sundog                               30.0%     32.4%     32.6%     34.8%
    Multiple Pakfold                      9.7%     18.8%     10.7%     16.9%
    -------------------------------------------------------------------------
                                         28.7%     25.1%     26.9%     26.2%
    -------------------------------------------------------------------------

    Selling, general and administrative
     expenses                           17,227    18,588    70,732    51,754
    -------------------------------------------------------------------------
    As a percentage of revenue           16.1%     17.1%     17.7%     18.1%
    -------------------------------------------------------------------------
    Adjusted EBITDA                     15,330    13,213    40,804    33,111
    -------------------------------------------------------------------------
    Adjusted EBITDA margin, as a
     percentage of revenue               14.3%     12.1%     10.2%     11.6%
    -------------------------------------------------------------------------
    Net income                          10,672     4,336     7,425    27,891
    -------------------------------------------------------------------------



    Table 3   The following table provides a reconciliation of Adjusted
              EBITDA to net income for the periods noted. See "Non-GAAP
              Measures".

              The period from January 1, 2007 to December 31, 2007 includes
              the results of operations of the Relizon Canada business. The
              period from January 1, 2006 to December 31, 2006 includes the
              results of operations for the Relizon Canada business from
              August 31, 2006 to December 31, 2006.

    Adjusted EBITDA Reconciliation
    -------------------------------------------------------------------------
    For the periods ended               Oct. 1    Oct. 1    Jan. 1    Jan. 1
     December 31, 2007 and 2006             to        to        to        to
    (in thousands of dollars,          Dec. 31,  Dec. 31,  Dec. 31,  Dec. 31,
     unaudited)                           2007      2006      2007      2006
                                             $         $         $         $
    -------------------------------------------------------------------------
    Net income for the period           10,672     4,336     7,425    27,891
    -------------------------------------------------------------------------
    Net interest expense on long-term
     debt                                1,622     1,817     6,355     3,865
    Depreciation of property, plant
     and equipment                       2,064     2,228     8,507     5,094
    Amortization of intangible assets    3,363     2,411    10,596     7,558
    Impairment of goodwill               1,900         -     1,900         -
    Curtailment gain                    (1,461)        -    (1,461)        -
    Non-cash inventory fair value
     allocation charges                      -     2,421         -     4,918
    (Recovery of) provision for income
      taxes                             (2,830)        -     7,482   (16,215)
    -------------------------------------------------------------------------
    Adjusted EBITDA                     15,330    13,213    40,804    33,111
    -------------------------------------------------------------------------
    



    RESULTS OF OPERATIONS

    THE DATA GROUP INCOME FUND

    OVERVIEW

    On August 31, 2006, the Fund completed the Relizon Canada Acquisition. At
the time of the Relizon Canada Acquisition, both Relizon Canada and Data
Business Forms Limited operated primarily within the same market segments.
Since the date of the Relizon Canada Acquisition, the Data Group has been
engaged in the integration of the former Relizon Canada and Data Business
Forms Limited businesses, with a view to achieving operational and corporate
synergies through the combination of those businesses. The following
discussion and analysis includes the results of operations of the former
Relizon Canada business for the year ended December 31, 2007 and for the
period from August 31, 2006 to December 31, 2006. Those operations now form
part of the Data Group's DATA East and West segment.

    REVENUES

    For the quarter ended December 31, 2007, the Fund recorded revenues of
$107.2 million, a decrease of 1.5% or $1.6 million compared with the same
period in 2006. The revenue decrease, before intersegment revenues, was
substantially the result of a $1.6 million decrease in the Multiple Pakfold
segment. For the year ended December 31, 2007, the Fund recorded revenues of
$398.7 million, an increase of $112.0 million or 39.1% compared with the same
period in 2006. The full year increase, before intersegment revenues, was the
net result of a $119.6 million increase in the DATA East and West segment, a
$1.2 million decrease in the Sundog segment and a $5.3 million decrease in the
Multiple Pakfold segment. The revenue from the former Relizon Canada business
is now integrated into the DATA East and West segment.

    COST OF REVENUES AND GROSS PROFIT

    For the quarter ended December 31, 2007, cost of revenues decreased to
$76.4 million from $81.5 million for the same period in 2006. The decrease was
a result of a $3.9 million increase in the DATA East and West segment
resulting substantially from realized cost savings from the Data Group's
restructuring activities. This resulted in a gross profit in the fourth
quarter of 2007 of $30.8 million, which represented an increase of
$3.5 million or 12.8% from $27.3 million in the fourth quarter of 2006. The
increase in gross profit was attributable to a $4.5 million increase in the
DATA East and West segment from the realized cost savings from the Data
Group's restructuring activities. In the fourth quarter of 2007, the Data
Group also focused upon improving the operation of equipment transferred as
part of the restructuring and integration, training new employees and taking
steps to improve productivity and efficiencies. In the fourth quarter of 2006,
a charge of $2.4 million relating to a portion of the fair value allocated to
the inventory acquired pursuant to the Relizon Canada Acquisition (the
"Relizon Inventory Allocation") increased cost of revenues and was allocated
to the DATA East and West segment. After adjusting for the Relizon Inventory
Allocation, gross profit as a percentage of revenues increased to 28.7% from
27.3% compared to the same period in 2006 due to the lower margin in the
Relizon Canada business.
    For the year ended December 31, 2007, cost of revenues increased from
$211.6 million for the same period in 2006 to $291.3 million in 2007. This
resulted in a gross profit for the year ended December 31, 2007 of
$107.3 million, which represented an increase of $32.3 million or 43.1% from
$75.0 million in the same period of 2006 which included the Relizon Inventory
Allocation charge of $2.4 million. After excluding the Relizon Inventory
Allocation, gross profit as a percentage of revenues decreased for the year
ended December 31, 2007 to 26.9% from 27.9%.

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES AND INTEGRATION COSTS

    Selling, general and administrative ("SG&A") expenses, including
administrative expenses of the Fund, for the quarter ended
December 31, 2007 were $17.2 million compared to $18.6 million in the same
period of 2006. SG&A expenses for the fourth quarter of 2007 were lower due to
realized cost savings from the Data Group's restructuring activities. As a
percentage of revenues, these costs decreased to 16.1% of revenues for the
quarter ended December 31, 2007 compared to 17.1% of revenues for the same
period in 2006. In the fourth quarter of 2007, the Data Group incurred
$0.3 million of costs related to the integration of the Data Business Forms
Limited and Relizon Canada businesses, which primarily consisted of severance
and moving expenses. SG&A expenses for the year ended December 31, 2007 were
$70.7 million as compared to $51.8 million in the same period of 2006. SG&A
expenses for the year ended December 31, 2007 were higher due to costs
incurred in connection with the acquisition of the Relizon Canada business. As
a percentage of revenues, these costs decreased to 17.7% of revenues for the
year ended December 31, 2007 compared to 18.1% of revenues for the same period
in 2006. During the year ended December 31, 2007, the Data Group incurred
$4.3 million of costs related to the integration of the Data Business Forms
Limited and Relizon Canada businesses, which primarily consisted of severance
and moving expenses incurred in connection with the restructuring announced by
the Fund on March 1, 2007. Those integration costs were attributable primarily
to the DATA East and West segment, by virtue of the fact that the former
Relizon Canada business forms part of that segment, with the balance of the
integration costs attributable to the Multiple Pakfold segment.

    CURTAILMENT GAIN

    The Data Group maintains defined benefit and defined contribution pension
plans for certain of its employees, which were previously maintained by Data
Business Forms Limited (the "DBFL Plan") and Relizon Canada (the "Relizon
Canada Plan"), respectively. Effective January 1, 2008, the Data Group amended
the DBFL Plan such that no further service credits will accrue under the
defined benefit provision of the DBFL Plan after December 31, 2007, although
pensionable earnings on and after January 1, 2008 will be factored into the
determination of a participant's final average earnings. The Data Group issued
a notice to wind-up the Relizon Canada Plan effective December 31, 2008, such
that no benefits will accrue under the Relizon Canada Plan after
December 31, 2008. An amendment to the Relizon Canada Plan to this effect has
been adopted by the Data Group. It is expected that the wind-up of the Relizon
Canada Plan, will take several years to complete, including receipt of
requisite approvals from applicable pension regulatory authorities.
    The changes to the DBFL Plan during 2007 did not result in a curtailment
gain or loss. The Data Group has recorded a curtailment gain of $1.5 million,
including the recognition of unamortized actuarial losses of $0.3 million in
the year ended December 31, 2007 as result of the changes made to the Relizon
Canada Plan.

    IMPAIRMENT OF GOODWILL

    During the fourth quarter of 2007, the Data Group performed its annual
review for impairment of goodwill by comparing the fair value of the reporting
segment to its carrying value on the Data Group's books. The Data Group
determines fair value of each reporting segment by discounting expected future
cash flows in accordance with recognized valuation methods. The process of
determining those fair values requires the Data Group to make a number of
estimates and assumptions such as projected future revenues, costs of
revenues, market conditions, and discount rates. As a result of that review,
the fair value of the Multiple Pakfold segment was determined to be less than
its carrying value. Accordingly, the Data Group has recognized an impairment
of goodwill charge of $1.9 million related to that segment.

    ADJUSTED EBITDA

    See Table 3 for the reconciliation of Adjusted EBITDA to net income for
the periods noted. For the quarter ended December 31, 2007, Adjusted EBITDA
was $15.3 million or 14.3% of revenues. Adjusted EBITDA for the quarter ended
December 31, 2007 increased $2.1 million or 16.0% from the same period in the
prior year and the Adjusted EBITDA margin for the quarter, as a percentage of
revenues, increased from 12.1% of revenues in 2006 to 14.3% of revenues in
2007. Adjusted EBITDA for the year ended December 31, 2007 was $40.8 million
or 10.2% of revenues. As compared to the same period in 2006, Adjusted EBITDA
for the year ended December 31, 2007 increased $7.7 million or 23.2% from the
same period in the prior year and the Adjusted EBITDA margin for the year
ended December 31, 2007, as a percentage of revenues, decreased from 11.6% of
revenues in 2006 to 10.2% of revenues in 2007. The decrease as a percentage of
revenues was substantially attributable to the costs incurred in the
integration of the Data Business Forms Limited and Relizon Canada businesses.
The Adjusted EBITDA margin would have been 14.6% in the fourth quarter of
2007 and 11.3% in the year ended December 31, 2007 without these integration
costs.

    INTEREST EXPENSE

    Net interest expense on long-term debt relating to the Data Group's
credit facilities and the Fund's $34.8 million aggregate principal amount of
Convertible Debentures was $1.7 million for the quarter ended
December 31, 2007 compared to $1.9 million for the same period in 2006. The
decrease was due to a decrease of $0.2 million in the outstanding balance of
Convertible Debentures in the fourth quarter of 2007 when compared to the same
period in 2006. Net interest expense was $6.7 million for the year ended
December 31, 2007 compared to $4.3 million for the same period in 2006. Net
interest expense increased due to the additional interest expense on the
$30.0 million drawn under the Data Group's credit facilities and the issuance
of the Convertible Debentures, in each case to fund the Relizon Canada
Acquisition. These debt instruments were outstanding for an additional 243
days during 2007 compared to the same period in 2006.
    Interest income of $0.1 million and $0.2 million earned during the three
and twelve month periods ended December 31, 2007 respectively, were consistent
with the applicable prior periods with interest income of $0.1 million and
$0.3 million earned during the three and twelve month periods ended
December 31, 2006 respectively. This interest income was substantially related
to the cash and cash equivalents held by the Data Group.

    INCOME TAXES

    On June 22, 2007, Bill C-52, which contained the SIFT rules (described
below under the heading "Outlook") became law. As a result, under GAAP, the
Fund commenced accounting for tax changes in its reporting for the quarter
ended June 30, 2007. A net long-term future income tax liability of
$6.7 million has been recognized at the quarter ended December 31, 2007 with a
recovery of $2.8 million in the Fund's income for the quarter ended
December 31, 2007 and a $7.5 million charge to the Fund's income for the year
ended December 31, 2007. The future income tax expenses and recoveries were as
a result of tax changes, changes in estimates of future reversals of temporary
differences, the impact of the deferred gain on the sale and leaseback of the
Brockville, Ontario printing facility and changes to substantially enacted
income tax rates. The future income tax liability represents estimated
temporary differences at December 31, 2007 that are expected to reverse
starting in fiscal year 2011. Future income tax liabilities and assets will be
assessed each quarter and any changes will be recognized on the Fund's
consolidated statement of operations and comprehensive income. For the year
ended December 31, 2006, the Fund reported a recovery of future income taxes
of $16.2 million as a result of the reorganization of the legal structure of
the Fund described above. Prior to the enactment of SIFT rules, the Data Group
and the Fund did not expect to pay income taxes as a result of the change in
its structure and, accordingly, did not recognize future income tax assets and
liabilities on temporary differences or recognize unused tax losses or credits
relating to the Data Group.

    NET INCOME

    Net income for the quarter ended December 31, 2007 was $10.7 million
compared to net income of $4.3 million for the quarter ended December
31, 2006. Net income for the year ended December 31, 2007 was $7.4 million
compared to net income of $27.9 million for the year ended December 31, 2006.
The decrease in comparable profitability was due to the provision for future
income taxes in 2007 and the recovery of income taxes in 2006 in addition to
the factors discussed above.

    DATA EAST AND WEST

    This segment includes the operations of the former Relizon Canada
business for the year ended December 31, 2007 and for the period from
August 31, 2006 to December 31, 2006. In the three months ended December 31,
2007 revenues at the Data Group's DATA East and West segment increased
$0.6 million or 0.6% to $98.9 million from $98.3 million for the same period
in 2006. Revenues for the year ended December 31, 2007 increased
$119.6 million or 49.5% to $361.4 million from $241.8 million for the same
period in the prior year.
    Revenues in the quarter were relatively flat as compared to the same
period in 2006. The factors affecting revenues were increased sales of
variable imaging, laser cut sheets and fulfillment warehousing services offset
by a decline in traditional business forms. In addition, the Data Group
continued the process of reviewing products and services which generate low
margins with the intent of increasing prices to levels which generate
acceptable margins or discontinuing them.
    Gross profit in the quarter ended December 31, 2007 increased
$4.5 million to $28.8 million from $24.3 million in the same period of 2006.
After adjusting for the Relizon Inventory Allocation of $2.4 million, the
gross profit for the quarter ended December 31, 2006 would have been
$26.7 million. The gross profit as a percentage of revenues increased to 29.1%
from 24.7% for the same period in 2006. After adjusting for the Relizon
Inventory Allocation, the gross profit as a percentage of revenues in 2006
would have been 27.2%. The increase in gross profit as a percentage of
revenues during the three months was due to the Relizon Inventory Allocation
in 2006 and integration and restructuring savings as well as productivity
improvements in our Western Canada facilities.
    For the year ended December 31, 2007, gross profit increased
$35.2 million to $97.2 million from $62.0 million in the same period of 2006.
After adjusting for the Relizon Inventory Allocation of $4.9 million, the
gross profit for the year ended December 31, 2006 would have been
$66.9 million. The gross profit as a percentage of revenues decreased to 26.9%
from 25.6% for the same period in 2006. After adjusting for the Relizon
Inventory Allocation, the gross profit as a percentage of revenues in 2006
would have been 27.7%. The decline in gross profit as a percentage of revenues
for the year after adjusting for the Relizon Inventory Allocation in 2006 was
due to two principal factors. Primarily, margins within the acquired Relizon
Canada business were lower than those realized in the former Data Business
Forms Limited business. Consequently, the Data Group has begun a review of low
margin business within this segment as discussed above. Secondarily, necessary
recruiting and relocation within the Alberta marketplace resulted in increased
overtime, training costs and reduced productivity. In the fourth quarter of
2007, the Data Group focused upon improving the operation of equipment
transferred as part of the restructuring and integration, training new
employees and taking steps to improve productivity and efficiencies.
    As part of the Fund's restructuring plan announced on March 1, 2007, the
Data Group closed plants within the DATA East and West segment located in
Dorval, Quebec; Hemmingford, Quebec; Orangeville, Ontario; and Medicine Hat,
Alberta. In addition, certain assets were realigned within continuing plant
operations to consolidate and focus on improving efficiencies. The closure of
these plants and the movement of equipment into and between continuing plant
operations was completed at the beginning of the third quarter of 2007 and
production resumed with no material adverse effects to customer relationships.
These plant closures, together with related workforce reductions, reduced
excess production capacity and improved operating efficiencies and
profitability within the DATA East and West segment.

    SUNDOG

    Revenues at the Data Group's Sundog segment decreased $0.5 million from
$6.0 million in the fourth quarter of 2006 to $5.5 million. The revenues
decrease was due to a weaker local market and some increased competition in
the Alberta market. Revenues for the year ended December 31, 2007 decreased
$1.2 million or 4.7% to $25.1 million from $26.3 million for the same period
in 2006. The decrease in revenues for the year ended December 31, 2007 was due
to softer market and competitive conditions previously outlined.
    For the quarter ended December 31, 2007, gross profit decreased 15.9% to
$1.6 million from $2.0 million in the same period of 2006. Gross profit as a
percentage of revenues decreased to 30.0% from 32.4% for the same period in
2006. The gross profit decline in the quarter was due to the market conditions
outlined above which resulted in higher labour costs as a percentage of
revenues. A strengthening of sales management, the addition of new sales
representatives and tighter cost controls are expected to help mitigate the
impact of current market conditions, including gross profit declines on United
States based ticket and speciality clients as a result of the strengthening
Canadian dollar. For the year ended December 31, 2007, gross profit decreased
$1.0 million to $8.1 million from $9.1 million in the same period of 2006. The
gross profit as a percentage of revenues was 32.6% compared to 34.8% for the
same period in 2006.

    MULTIPLE PAKFOLD

    Revenues at the Data Group's Multiple Pakfold segment decreased
$1.6 million to $4.1 million in the fourth quarter of 2007 from $5.7 million
in the same period of 2006. Revenues for the year ended December 31, 2007
decreased $5.3 million or 22.8% to $17.9 million from $23.2 million for the
same period in the prior year.
    While a decline in revenues was expected as a result of closing the Data
Group's Dorval facility, as part of its restructuring plan announced on
March 1, 2007, the decline in revenues for the quarter and the year ended
December 31, 2007 was greater than expected. The set up of the equipment
transferred from the Dorval facility and related recruiting and training of
staff at the Multiple Pakfold's Mississauga, Ontario facility took
significantly longer than planned. These factors caused interruptions in the
Multiple Pakfold segment's ability to meet customer delivery requirements and
caused a loss of business in the Quebec and Ontario markets. As a result,
management changes were made in the fourth quarter of 2007 and additional
changes were made in the first quarter of 2008.
    For the quarter ended December 31, 2007, gross profit decreased by
$0.7 million to $0.4 million from the same period in 2006. The gross profit as
a percentage of revenues was 9.7% compared to 18.8% for the same period in
2006. For the year ended December 31, 2007, gross profit decreased
$2.0 million to $1.9 million from $3.9 million in the same period of 2006. The
gross profit as a percentage of revenues was 10.7% compared to 16.9% for the
same period in 2006. In each case, the decline was due to the revenue losses
noted above.

    
    Table 4   The following table provides a reconciliation of cash provided
              by operating activities to cash available for distribution for
              the periods noted. See "Non-GAAP Measures".

              The period from January 1, 2007 to December 31, 2007 includes
              the results of operations of the Relizon Canada business. The
              period from January 1, 2006 to December 31, 2006 includes the
              results of operations for the Relizon Canada business from
              August 31, 2006 to December 31, 2006.

    Cash Available for Distribution Reconciliation
    -------------------------------------------------------------------------
    For the periods ended               Oct. 1    Oct. 1    Jan. 1    Jan. 1
     December 31, 2007 and 2006             to        to        to        to
    (in thousands of dollars,          Dec. 31,  Dec. 31,  Dec. 31,  Dec. 31,
     except per unit amounts,             2007      2006      2007      2006
     unaudited)                              $         $         $         $
    -------------------------------------------------------------------------
    Cash provided by operating
     activities                         12,440    11,147    26,430    20,484
    Capital adjustments
      Maintenance capital
       expenditures(1)                  (1,112)   (1,912)   (5,268)   (3,585)

    Other adjustments including
     discretionary items:
      Trust reorganization costs(2)          -         -         -       651
      Changes in non-cash working
       capital and other(3)              1,460    (4,355)    8,739    (2,002)
      Non-cash inventory fair value
       allocation charges                    -     2,420         -     4,918
      Pension contribution in excess
       of expense(4)                         -     1,000         -     4,000
    -------------------------------------------------------------------------
      Cash available for distribution   12,788     8,300    29,901    24,466
    -------------------------------------------------------------------------
    Distributions to Unitholders(5)      6,805     6,801    27,211    21,380
    -------------------------------------------------------------------------
    Excess of cash available for
     distribution over actual
     distributions                       5,983     1,499     2,690     3,086
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Per unit(7)

    Cash available for distribution
     per unit(6)                         0.544     0.354     1.273     1.326
    -------------------------------------------------------------------------
    Distributions to Unitholders
     per unit(6)(7)                      0.290     0.290     1.158     1.159
    -------------------------------------------------------------------------
    Excess of cash available for
     distribution per unit over actual
     distributions per unit              0.255     0.064     0.115     0.167
    -------------------------------------------------------------------------
    Payout ratio                         53.2%     81.9%     91.0%     87.4%
    -------------------------------------------------------------------------

    Notes:
    (1)   Maintenance capital expenditures are additions, replacements or
          improvements to property, plant and equipment to maintain the Data
          Group's business operations. These expenditures involve the
          replacement of printing and digital equipment, computers and
          software, and leasehold improvements.
    (2)   Costs directly incurred to reorganize the organizational structure
          of the Fund into a "flow-through" entity have been added back as
          they represent a non-recurring cost with expected future benefit to
          the Fund's Unitholders.
    (3)   Cash provided by operating activities has been adjusted for changes
          in non-cash working capital so as to remove the impact of timing
          differences in cash receipts and cash disbursements, which
          generally reverse themselves but can vary significantly across
          quarters. In 2007, a significant portion of the change in non-cash
          working capital is due to the impact of cash payments related to
          the integration costs expensed and restructuring liabilities
          assumed as part of the Relizon Canada Acquisition.
    (4)   Represents special contributions to the defined benefit pension
          plans of the Data Group (as successor to Relizon Canada Inc. and
          Data Business Forms Limited) of $4.0 million in 2006. If the
          calculation of cash available for distribution for the period from
          January 1, 2006 to December 31, 2006 had included special pension
          contributions of $4.0 million to the defined benefit pension plan
          of the former Relizon Canada Inc. funded from the net proceeds
          raised to fund the Relizon Canada Acquisition, the Fund's cash
          available for distribution for that period would have decreased by
          $4.0 million or $0.170 per unit.
    (5)   Distributions are in respect of the distributions declared.
    (6)   Per unit calculations are based upon the number of units
          outstanding at the end of each month consistent with the number of
          units upon which distributions are declared and paid and not the
          weighted average number of units outstanding. As at
          December 31, 2007, 23,490,592 units were outstanding and
          23,475,659 units were outstanding at December 31, 2006.
    (7)   The Fund declared $0.8 million of distributions on the
          8.6 million units issued on August 31, 2006, upon the exchange of
          subscription receipts for units of the Fund, for the month of
          August while no corresponding Adjusted EBITDA was earned by the
          Fund from the operations of the Relizon Canada business other than
          the one business day of August 31, 2006.
    

    CASH AVAILABLE FOR DISTRIBUTION

    For the quarter ended December 31, 2007, the Fund generated $12.8 million
or $0.544 per unit of cash available for distribution compared to $8.3 million
or $0.354 per unit for the same period in 2006. Cash available for
distribution for the three months ended December 31, 2007 was calculated by
adding back the changes in non-cash working capital and other non-cash items
of $1.5 million and deducting maintenance capital expenditures of $1.1 million
from cash provided by operating activities of $12.4 million. Cash available
for distribution for the three months ended December 31, 2006 was calculated
by deducting the changes in non-cash working capital and other non-cash items
of $4.3 million, deducting maintenance capital expenditures of $1.9 million,
adding back a special contribution of $1.0 million to the Relizon Canada
defined benefit pension plan and adding back the Relizon Inventory Allocation
of $2.4 million from cash provided by operating activities of $11.1 million.
For the year ended December 31, 2007, the Fund generated $29.9 million or
$1.273 per unit of cash available for distribution compared to $24.5 million
or $1.326 per unit for the same period in 2006. Cash available for
distribution for the year ended December 31, 2007 was calculated by adding
back the changes in non-cash working capital and other non-cash items of
$8.7 million and deducting maintenance capital expenditures of $5.3 million
from cash provided by operating activities of $26.4 million. Cash available
for distribution for the year ended December 31, 2006 was calculated by adding
back the changes in non-cash working capital of $2.0 million, deducting
maintenance capital expenditures of $3.6 million, adding back a special
contribution of $4.0 million to the Relizon Canada defined benefit pension
plan, adding back the Relizon Inventory Allocation of $4.9 million and adding
back the $0.7 million of costs incurred to reorganize the structure of the
Fund from cash provided by operating activities of $20.5 million. See Table 4
above for a breakdown of these figures for the periods from January 1, 2007 to
December 31, 2007, from January 1, 2006 to December 31, 2006, respectively.
    For the quarter ended December 31, 2007, the Fund declared distributions
of $6.8 million or $0.290 per unit. The calculation of cash available for
distribution exceeded actual distributions by $6.0 million or $0.255 per unit
for the quarter ended December 31, 2007. For the same period in 2006, the
calculation of cash available for distribution exceeded actual distributions
by $1.5 million or $0.064 per unit. For the year ended December 31, 2007, the
Fund declared distributions of $27.2 million or $1.158 per unit. Cash
available for distribution exceeded actual distributions by $2.7 million or
$0.115 per unit for the year ended December 31, 2007. Cash available for
distributions for the year ended December 31, 2007 increased despite the
payment of severance costs, moving expenses and capital expenditures
associated with the integration of the former Data Business Forms Limited and
Relizon Canada businesses.
    During the three months ended December 31, 2007, the Data Group incurred
integration costs of $0.3 million related to the integration of the former
Data Business Forms Limited and Relizon Canada businesses. The integration
costs consisted primarily of severance payments to former employees of the
Data Group and moving expenses in connection with the restructuring announced
on March 1, 2007, which were funded from cash flows from operations and
existing cash resources. The Fund believes that those integration costs and
restructuring-related capital expenditures incurred during 2007 are
non-recurring as they are restricted to the restructuring and the integration
of the former Data Business Forms Limited and Relizon Canada businesses.
During the year ended December 31, 2007, the Data Group incurred integration
costs of $4.3 million and maintenance capital expenditures of $2.0 million, in
each case related to the restructuring and integration of the former Data
Business Forms Limited and Relizon Canada businesses. The integration costs
consisted primarily of severance payments to former employees of the Data
Group and moving expenses in connection with the restructuring announced on
March 1, 2007, which were funded from cash flows from operations and existing
cash resources. The Fund believes that those integration costs and
restructuring-related capital expenditures incurred during 2007 are
non-recurring as they are restricted to the restructuring and the integration
of the former Data Business Forms Limited and Relizon Canada businesses.
During the year ended December 31, 2007, the Data Group made cash payments of
$9.2 million for the restructuring costs accrued as part of the purchase price
accounting for the Relizon Canada Acquisition and for the integration costs,
consisting of primarily severance payments and moving costs. These cash
payments have been funded by cash generated from operations and proceeds from
asset dispositions. The restructuring and integration costs have been deducted
in determining cash available for distribution.
    Given the non-recurring nature of these integration costs and
restructuring related capital expenditures, the Fund believes that presenting
the cash available for distribution excluding these items will assist the
reader in understanding the sustainable level of cash available for
distribution. If the $3.7 million cash payments related to the integration
costs of $4.3 million and the capital expenditures of $2.0 million related to
the integration and incurred for the year ended December 31, 2007 were
excluded, cash available for distribution would have exceeded actual
distributions by $8.4 million or $0.358 per unit.
    For the year ended December 31, 2006, the Fund declared distributions of
$21.4 million or $1.159 per unit. The Fund declared in respect of the month of
August, 2006, $0.8 million of distributions on the 8.6 million units of the
Fund issued on August 31, 2006 upon the exchange of Subscription Receipts,
while no corresponding EBITDA was earned by the Fund from the operations of
Relizon Canada during that month, other than the one business day of
August 31, 2006. The calculation of cash available for distribution exceeded
actual distributions by $3.1 million or $0.159 per unit. See Table 4 above for
a breakdown of these figures for the periods from January 1, 2007 to
December 31, 2007, from January 1, 2006 to December 31, 2006, respectively.

    INVESTING ACTIVITIES

    The Data Group takes a disciplined approach to monitoring its
investments, whereby material capital expenditures are subjected to rigorous
analysis and ongoing measurement and comparison against budgets to ensure a
return on the investment. The Data Group's maintenance capital expenditures
consist of replacement of existing capital assets to sustain cash flows, and
typically include furniture, fixtures, computer equipment, printing equipment,
and leasehold improvements. The Data Group's growth capital expenditures
consist of purchases of capital assets to generate new cash flows, and
typically include the purchase of new furniture, fixtures, computer equipment
and printing equipment to support new business and organic business growth. In
addition to maintenance and growth capital expenditures, the Data Group incurs
recurring repair and maintenance expense that are expensed as they are
incurred and not included in capital expenditures.
    Capital expenditures for the quarter ended December 31, 2007 of
$1.1 million related primarily to maintenance capital expenditures. Capital
expenditures for the year ended December 31, 2007 of $5.3 million related
primarily to maintenance capital expenditures, and included $2.0 million of
maintenance capital expenditures for leasehold improvements required for the
installation and upgrading of equipment transferred in connection with the
closure of four plants. These capital expenditures were incurred in connection
with the integration of the Relizon Canada business and are not expected to
recur. The Fund expects the Data Group's level of maintenance capital
expenditures to be approximately $4.8 million in 2008.
    During the quarter ended December 31, 2007, the Data Group completed the
sale of its Brockville, Ontario printing facility to Capital Wapiti Inc.
("Capital Wapiti") for a purchase price of approximately $4.5 million.
Concurrently with the closing of the sale of the facility, the Data Group and
Capital Wapiti entered into a lease pursuant to which Capital Wapiti has
leased back to the Data Group the Brockville, Ontario facility. The term of
the lease is 10 years and the Data Group has the option to renew the lease for
an additional term of five years upon not less than 12 months' prior notice to
Capital Wapiti. The net rent payable by the Data Group under the lease is
$0.4 million per year for the first five years, $0.4 million per year during
the following five-year period, and $0.5 million per year during the five-year
renewal period, if applicable.

    FINANCING ACTIVITIES

    For the quarter ended December 31, 2007, the Fund paid cash distributions
of $6.8 million to its Unitholders. During the quarter ended
December 31, 2007, the Fund repaid the bank overdraft of $4.0 million. For the
year ended December 31, 2007, the Fund paid cash distributions of
$27.2 million to its Unitholders.

    OUTLOOK

    The Fund believes that it will continue to meet its objectives,
continuing to meet its monthly per unit distributions to Unitholders of
$0.09656 for the foreseeable future. The Fund's Board of Trustees will
continue to monitor the Fund's cash available for distributions and its payout
ratio.
    The Fund currently believes that the Data Group's restructuring,
integration and other initiatives relating to the combination of the former
Data Business Forms Limited and Relizon Canada businesses will achieve pre-tax
operating and other synergies and cost savings of over $10.0 million per
annum. The Fund believes that substantially all of the restructuring charges
related to the integration of the Data Business Forms Limited and Relizon
Canada businesses were incurred in the twelve months ended December 31, 2007.
    In addition to the restructuring plan announced on March 1, 2007, the
Data Group has completed other initiatives to reduce management, sales and
administration expenses. These restructuring and related liabilities are based
on contractual obligations and management's best estimates and have been
recognized as assumed liabilities in the purchase price allocation as they
were contemplated at the time of the Relizon Canada Acquisition, and were
therefore included in the underlying net identifiable assets acquired. The
Data Group will continue to review its operations and undertake restructuring
initiatives to maintain a competitive cost structure. These initiatives may
result in the further consolidation of facilities, and the Data Group may
incur additional severance costs, accelerated further depreciation expense,
impairment charges related to property, plant and equipment, goodwill, and
costs attributable to the termination of contracts for leases, supplier
arrangements and other contractual obligations.
    On June 22, 2007, Bill C-52 received Royal Assent. As a result, publicly
traded Canadian resident trusts (a "SIFT"), including the Fund, will be
subject to tax on the "non-portfolio earnings" distributed to its Unitholders
at a rate similar to the combined federal and provincial corporate rates.
"Non-portfolio earnings" of a SIFT are generally income of the SIFT
attributable to a business carried on by the SIFT in Canada or income from, or
capital gains from the disposition of "non-portfolio properties".
"Non-portfolio properties" of a SIFT include securities of a "subject entity"
if the SIFT holds securities of the subject entity that have a fair market
value greater than 10% of the subject entity's equity value, or if the SIFT
holds securities of the subject entity that, together with securities held by
the SIFT and entities affiliated with the subject entity, have a total fair
market value greater than 50% of the equity value of the SIFT. A subject
entity is a corporation resident in Canada, a trust resident in Canada, a
Canadian resident partnership, or a non-resident person or partnership if the
principal source of income is from one or more sources in Canada. If a SIFT
has "non-portfolio earnings" that are considered to have become payable to its
beneficiaries in the year, this amount will be deemed to be a taxable dividend
paid by a taxable Canadian corporation to the beneficiaries, which will be
eligible for the enhanced tax credit if paid to an individual resident in
Canada. Generally, there will be a four-year transition period for a SIFT,
such as the Fund, the units of which were publicly listed on October 31, 2006,
and such SIFT will not be subject to the tax imposed under these rules until
2011, provided the Fund does not exceed its "normal growth", as determined by
reference to the "normal growth" guidelines issued by the Department of
Finance on December 15, 2006, as amended from time to time (the "Guidelines").
    The Fund expects that the tax changes will, all other things being equal,
likely result in a reduction of cash available for distribution from the Fund
commencing in 2011. With respect to the limitations on equity unit issuances
under the Guidelines, the Fund believes that it should be able to fund its
currently identified growth plan without exceeding its "normal growth".
However, with the current uncertainty in the capital markets resulting from
the tax changes, there can be no assurance that sufficient capital to fund
further acquisitions or expansion projects will be available on terms
acceptable to the Fund, or at all. The Fund, with input from external legal
and financial advisors, is closely monitoring the SIFT rules and carefully
assessing their impact on the business and financial outlook of the Fund and
the Data Group and its broader affect on the income trust sector as a whole,
all with a view to adopting a strategy that will maximize value to Unitholders
going forward.
    Sales of some of the Data Group's products are subject to seasonal
fluctuations in demand. Certain elements of the gift card and direct mail
businesses and the buying pattern of certain major customers of the Data Group
generate higher revenues and profit in the fourth quarter than the other three
quarters.
    The Data Group will continue to fund necessary maintenance capital
expenditures by utilizing cash flow from operations. It is anticipated that
maintenance capital expenditures in 2008 will be approximately $4.8 million.
    The Data Group will continue its strategic focus on being the leading
document management service provider in Canada, concentrating on providing
high value-added products and services. The Data Group will also pursue
acquisition opportunities within its existing business segments.

    About The DATA Group Income Fund
    --------------------------------
    The DATA Group Income Fund owns a 100% interest in The DATA Group Limited
Partnership ("The DATA Group"). The DATA Group is a leading provider of
document management solutions including printed products. Founded in 1959, the
Data Group operates numerous facilities in 11 regions across Canada and has a
leading market share in the total document management services segment.
    Additional information relating to The DATA Group Income Fund is
available on the System for Electronic Document Analysis and Retrieval (SEDAR)
at www.sedar.com and www.datagroupincomefund.com.



    
    CONSOLIDATED BALANCE SHEETS
    -------------------------------------------------------------------------
    (in thousands of dollars, unaudited)     December 31,        December 31,
                                                    2007                2006
                                                       $                   $
    -------------------------------------------------------------------------
    Assets
    Current assets
      Cash and cash equivalents                    5,315               4,767
      Accounts receivable                         57,417              55,010
      Inventories                                 42,266              46,331
      Prepaid expenses and other
       current assets                              3,649               3,788
      Income taxes recoverable                       837               2,056
                                             --------------------------------
                                                 109,484             111,952

    Property, plant and equipment                 47,528              53,497
    Goodwill                                     151,206             152,570
    Intangible assets                             65,766              76,362
    Future income taxes                                -                 183
    Deferred finance fees                              -               2,601
                                             --------------------------------
                                                 373,984             397,165
                                             --------------------------------
                                             --------------------------------
    Liabilities
    Current liabilities
      Accounts payable and accrued
       liabilities                                40,014              44,895
      Accrued restructuring and
       integration provisions                      5,245              10,473
      Deferred revenue                             6,886               7,585
      Distribution payable                         2,269               2,267
                                             --------------------------------
                                                  54,414              65,220

    Revolving bank facility                       70,000              70,000
    Convertible debentures                        34,159              34,155
    Future income taxes                            6,655                   -
    Deferred gain                                  1,920                   -
    Unfavourable lease obligation                  1,251               1,355
    Deferred lease inducement                      1,103                 459
    Pension obligation                             9,668              10,619
    Post-employment benefits                       2,153                 700
                                             --------------------------------
                                                 181,323             182,508
                                             --------------------------------
    Unitholders' Equity
    Units                                        215,336             215,164
    Conversion option                                898                 902
    Accumulated other comprehensive loss             (66)                  -
    Deficit                                      (23,507)             (1,409)
                                             --------------------------------
                                                 192,661             214,657
                                             --------------------------------
                                                 373,984             397,165
                                             --------------------------------
                                             --------------------------------



    CONSOLIDATED STATEMENTS OF INCOME AND
    COMPREHENSIVE INCOME
    -------------------------------------------------------------------------
    (in thousands of dollars, except       For the three       For the three
     per unit amounts, unaudited)           months ended        months ended
                                             December 31,        December 31,
                                                    2007                2006
                                                       $                   $
    -------------------------------------------------------------------------
    Revenues                                     107,235             108,846

    Cost of revenues
     (including depreciation of $1,877
     and $2,051, respectively)                    76,430              81,530
                                             --------------------------------

    Gross profit                                  30,805              27,316
                                             --------------------------------

    Expenses
    Selling, commissions and expenses             10,143              11,020
    General and administration (including
     depreciation of $187 and $177,
     respectively)                                 7,084               7,567
    Integration costs                                312                 164
    Amortization of intangible assets              3,363               2,411
    Curtailment gain                              (1,461)                  -
    Impairment of goodwill                         1,900                   -
                                             --------------------------------
                                                  21,341              21,162
                                             --------------------------------

    Income before interest and income taxes        9,464               6,154
                                             --------------------------------

    Interest expense on long-term debt
     (net of interest income of $108 and $83,
     respectively)                                 1,622               1,817
                                             --------------------------------

    Income before income taxes                     7,842               4,337

    Future income tax recovery                    (2,830)                  -
                                             --------------------------------

    Net income for the period                     10,672               4,337
                                             --------------------------------
                                             --------------------------------

    Loss on cash flow hedges                         397

                                             ------------
    Comprehensive income for the period           10,275
                                             ------------
                                             ------------

    Basic income per unit                           0.45                0.19
                                             --------------------------------

    Diluted income per unit                         0.45                0.18
                                             --------------------------------

    Weighted average units outstanding        23,490,592          23,475,659
                                             --------------------------------



    CONSOLIDATED STATEMENTS OF INCOME AND
    COMPREHENSIVE INCOME
    -------------------------------------------------------------------------
    (in thousands of dollars, except        For the year        For the year
     per unit amounts, unaudited)                  ended               ended
                                             December 31,        December 31,
                                                    2007                2006
                                                       $                   $
    -------------------------------------------------------------------------
    Revenues                                     398,653             286,650

    Cost of revenues (including
     depreciation of $7,812 and $4,640,
     respectively)                               291,315             211,633
                                             --------------------------------

    Gross profit                                 107,338              75,017
                                             --------------------------------

    Expenses
    Selling, commissions and expenses             41,465              30,525
    General and administration (including
     depreciation of $695 and $455,
     respectively)                                29,267              21,229
    Integration costs                              4,309                 164
    Amortization of intangible assets             10,596               7,558
    Curtailment gain                              (1,461)                  -
    Impairment of goodwill                         1,900                   -
                                             --------------------------------
                                                  86,076              59,476
                                             --------------------------------

    Income before interest and income taxes       21,262              15,541
                                             --------------------------------

    Interest expense on long-term debt
     (net of interest income of $328 and
     $415, respectively)                           6,355               3,865
                                             --------------------------------

    Income before income taxes                    14,907              11,676

    Future income tax expense (recovery)           7,482             (16,215)
                                             --------------------------------

    Net income for the year                        7,425              27,891
                                             --------------------------------
                                             --------------------------------

    Loss on cash flow hedges                         124

                                             ------------
    Comprehensive income for the year              7,301
                                             ------------
                                             ------------

    Basic income per unit                           0.32                1.57
                                             --------------------------------

    Diluted income per unit                         0.32                1.54
                                             --------------------------------

    Weighted average units outstanding        23,482,264          17,772,218
                                             --------------------------------



    CONSOLIDATED STATEMENTS OF UNITHOLDERS' EQUITY
    -------------------------------------------------------------------------
    (in thousands of dollars,                 Accumulated
     unaudited)                                   other                Total
                                       Conver-   compre-               Unit-
                                          sion   hensive             holders'
                               Units    option    income   Deficit    Equity
                                   $         $         $         $         $
    -------------------------------------------------------------------------

    Balance as at
     December 31, 2005       137,519         -         -    (7,920)  129,599

    Distributions declared         -         -         -   (21,380)  (21,380)

    Issued in connection
     with acquisition         27,243         -         -         -    27,243

    Issued for cash upon
     conversion of
     subscription receipts    50,402       902         -         -    51,304

    Net income for the year        -         -         -    27,891    27,891

                            -------------------------------------------------
    Balance as at
     December 31, 2006       215,164       902         -    (1,409)  214,657
                            -------------------------------------------------
                            -------------------------------------------------

    Balance as at
     December 31, 2006       215,164       902         -    (1,409)  214,657

    Accounting policy change       -         -        58    (2,312)   (2,254)

                            -------------------------------------------------
    Balance as at
     January 1, 2007         215,164       902        58    (3,721)  212,403

    Distributions declared         -         -         -   (27,211)  (27,211)

    Loss on cash flow hedges       -         -      (124)        -      (124)

    Conversion of convertible
     debentures                  172        (4)        -         -       168

    Net income for the year        -         -         -     7,425     7,425
                            -------------------------------------------------

    Balance as at
     December 31, 2007       215,336       898       (66)  (23,507)  192,661
                            -------------------------------------------------
                            -------------------------------------------------



    CONSOLIDATED STATEMENT OF CASH FLOWS
    -------------------------------------------------------------------------
    (in thousands of dollars,              For the three       For the three
     unaudited)                             months ended        months ended
                                             December 31,        December 31,
                                                    2007                2006
                                                       $                   $
    -------------------------------------------------------------------------
    Cash provided by (used in)
    Operating activities
    -------------------------------------------------------------------------
    Net income for the period                     10,672               4,337
    Items not involving cash
    Depreciation of property,
     plant and equipment                           2,064               2,228
    Amortization of intangible assets              3,363               2,411
    Pension expense                                  829                 578
    Contributions made to pension plans             (697)             (3,039)
    Curtailment gain                              (1,461)                  -
    Amortization of deferred financing fees            -                 191
    Gain on disposal of property,
     plant and equipment                            (204)                 (4)
    Impairment of goodwill                         1,900                   -
    Amortization of deferred gain                    (33)                  -
    Accretion of convertible debentures               44                  43
    Unfavourable lease obligations                   (27)                (55)
    Amortization of lease inducement                 (30)                  -
    Post-employment benefits                         230                 (31)
    Future income taxes                           (2,830)                  -
                                             --------------------------------
                                                  13,820               6,659
    Changes in non-cash items relating
     to operating activities                      (1,380)              4,488
                                             --------------------------------
                                                  12,440              11,147
                                             --------------------------------
    Investing activities
    -------------------------------------------------------------------------
    Purchase of property, plant and equipment     (1,112)             (1,912)
    Proceeds on disposal of property,
     plant and equipment                           4,809                  30
    Acquisition of Relizon Canada Inc.
     - net of cash acquired of $1,888                  -                (631)
                                             --------------------------------
                                                   3,697              (2,513)
                                             --------------------------------
    Financing activities
    -------------------------------------------------------------------------
    Cash payments for expenses
     of issuing trust units                            -                (588)
    Bank overdraft                                (4,017)                  -
    Financing costs                                    -                (385)
    Distributions to Unitholders                  (6,805)             (6,801)
                                             --------------------------------
                                                 (10,822)             (7,774)
                                             --------------------------------
    Increase in cash and cash
     equivalents during the period                 5,315                 860
    -------------------------------------------------------------------------
    Cash and cash equivalents
     - beginning of period                             -               3,907
    -------------------------------------------------------------------------
    Cash and cash equivalents - end of period      5,315               4,767
    -------------------------------------------------------------------------

    Supplemental cash flow information
      Interest paid                                2,298               1,004



    CONSOLIDATED STATEMENT OF CASH FLOWS
    -------------------------------------------------------------------------
    (in thousands of dollars,               For the year        For the year
     unaudited)                                    ended               ended
                                             December 31,        December 31,
                                                    2007                2006
                                                       $                   $
    -------------------------------------------------------------------------
    Cash provided by (used in)
    Operating activities
    -------------------------------------------------------------------------
    Net income for the year                        7,425              27,891
    Items not involving cash
    Depreciation of property,
     plant and equipment                           8,507               5,095
    Amortization of intangible assets             10,596               7,558
    Pension expense                                3,336               1,663
    Contributions made to pension plans           (2,826)             (8,046)
    Curtailment gain                              (1,461)                  -
    Amortization of deferred financing fees            -                 452
    Gain on disposal of property,
     plant and equipment                            (148)                 (3)
    Impairment of goodwill                         1,900                   -
    Amortization of deferred gain                    (33)                  -
    Accretion of convertible debentures              172                  57
    Unfavourable lease obligations                  (104)                (55)
    Amortization of lease inducement                (122)                  -
    Post-employment benefits                         186                 (36)
    Future income taxes                            7,482             (16,215)
                                             --------------------------------
                                                  34,910              18,361
    Changes in non-cash items relating
     to operating activities                      (8,480)              2,123
                                             --------------------------------
                                                  26,430              20,484
                                             --------------------------------
    Investing activities
    -------------------------------------------------------------------------
    Purchase of property, plant and equipment     (5,268)             (3,585)
    Proceeds on disposal of property,
     plant and equipment                           5,597                  34
    Acquisition of business
     - net of cash acquired of $323                    -                (374)
    Acquisition of Relizon Canada Inc.
     - net of cash acquired of $1,888              1,000            (113,097)
                                             --------------------------------
                                                   1,329            (117,022)
                                             --------------------------------
    Financing activities
    -------------------------------------------------------------------------
    Proceeds from issuance of trust units
     - net of expenses                                 -              50,402
    Proceeds from issuance of
     convertible debentures                            -              33,600
    Proceeds from revolving bank facility              -              30,000
    Financing costs                                    -              (1,052)
    Distributions to Unitholders                 (27,211)            (20,548)
                                             --------------------------------
                                                 (27,211)             92,402
                                             --------------------------------
    Increase (decrease) in cash and cash
     equivalents during the year                     548              (4,136)
    Cash and cash equivalents
     - beginning of year                           4,767               8,903
    -------------------------------------------------------------------------
    Cash and cash equivalents - end of year        5,315               4,767
    -------------------------------------------------------------------------

    Supplemental cash flow information
      Interest paid                                7,432               3,052
      Non cash lease inducement                      766                   -
    Non-cash investing and financing activities
      Units issued in consideration
       with business acquisition                       -              27,243
    

    %SEDAR: 00021422E




For further information:

For further information: Mr. David Odell, President and CEO, The Data
Group Limited Partnership, Tel: (905) 791-3151; Mr. Paul O'Shea, Chief
Financial Officer, The Data Group Limited Partnership, Tel: (905) 791-3151

Organization Profile

THE DATA GROUP INCOME FUND

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