The DATA Group Income Fund announces second quarter results for 2009



    
    Highlights
    ----------

    Q2 2009
    -------

    -   Second quarter ("Q2") 2009 Revenues of $84.3 million, Q2 Gross Profit
        of $21.3 million, Q2 Net Income of $0.7 million
    -   Q2 Cash Available for Distribution of $5.8 million or $0.249 per unit
        and Cash Distributions of $6.8 million or $0.290 per unit
        (see Table 4 and "Non-GAAP Measures" below)
    -   Q2 Payout Ratio of 116.5% (See Table 4 below)
    -   Q2 Adjusted EBITDA of $7.4 million (See Table 3 and "Non-GAAP
        Measures" below)

    YTD 2009
    --------

    -   Year to Date ("YTD") 2009 Revenues of $174.7 million, YTD Gross
        Profit of $44.5 million, YTD Net Income of $3.6 million
    -   YTD Cash Available for Distribution of $12.0 million or $0.513 per
        unit and Cash Distributions of $13.6 million or $0.580 per unit (see
        Table 4 and "Non-GAAP Measures" below)
    -   YTD Payout Ratio of 113.1% (See Table 4 below)
    -   YTD Adjusted EBITDA of $16.5 million (See Table 3 and "Non-GAAP
        Measures" below)
    

    BRAMPTON, ON, Aug. 7 /CNW/ - The DATA Group Income Fund (TSX: DGI.UN)
("the Fund") today announced financial and operating results for the second
quarter ended June 30, 2009, which include the results of operations for The
Data Group Limited Partnership (the "Data Group").

    OUTLOOK

    Many of the Data Group's customers have been impacted by the current
economic environment and, as a result, have reduced spending. Those factors
have negatively affected the Fund's revenues through the first six months of
2009. This decline in revenues has resulted in lower cash available for
distribution and a payout ratio in excess of 100% for the first and second
quarters of 2009. In response, the Data Group has initiated workforce
reductions, changes to its pension plan and its employee group benefit plans
and other measures to reduce costs. These measures are expected to lower the
Data Group's operating expenses by approximately $15.0 million annually. In
addition, over the past nine months, the Data Group has secured new business
which is expected to generate approximately $15.0 million in revenues over the
next 12 months. Based upon the Data Group's currently projected cash flow from
operations, including expected revenues from new business wins, lower
anticipated operating expenses as a result of recent cost reductions, and its
current liquidity and existing cash resources, the Fund intends to maintain
its monthly distributions on the units at current levels for the foreseeable
future. The Fund's Board of Trustees will continue to closely monitor the
Fund's monthly distribution level in light of the Fund's cash available for
distribution and cash resources.

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

    Consolidated Financial Information
    -------------------------------------------------------------------------
    For the periods ended
     June 30, 2009 and 2008
    (in thousands of
     dollars, except per
     unit amounts,
     unaudited)

                            Apr. 1 to    Apr. 1 to    Jan. 1 to    Jan. 1 to
                              June 30,     June 30,     June 30,     June 30,
                                 2009         2008         2009         2008
                                    $            $            $            $
    -------------------------------------------------------------------------
    Revenues                   84,269       93,733      174,686      194,759
    Cost of revenues           62,938       67,785      130,213      140,424
    -------------------------------------------------------------------------
    Gross profit               21,331       25,948       44,473       54,335

    Selling, general and
     administrative
     expenses                  15,693       17,330       31,621       35,584
    Gain on cancellation
     of convertible
     debentures                     -            -           (2)           -
    Cease use charge              866            -          866            -
    Amortization of
     intangible assets          2,649        2,744        5,298        5,488
    -------------------------------------------------------------------------
    Income before interest
     and income taxes           2,123        5,874        6,690       13,263
    -------------------------------------------------------------------------

    Interest expense
     on long-term debt          1,253        1,471        2,689        3,069
    -------------------------------------------------------------------------
    Income before
     income taxes                 870        4,403        4,001       10,194

    Future income
     tax expense                  121          400          455          600
    -------------------------------------------------------------------------
    Net income for
     the period                   749        4,003        3,546        9,594
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted
     income per unit             0.03         0.17         0.15         0.41
    Number of units
     outstanding           23,490,592   23,490,592   23,490,592   23,490,592
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                As at        As at
                              June 30,     June 30,
    Consolidated Balance         2009         2008
     Sheet Information              $            $
    -----------------------------------------------
    Current assets            103,446      116,392
    Current liabilities        39,436       49,285

    Total assets              330,536      371,130
    Total long-term
     liabilities              129,132      127,400

    Unitholders' equity       161,968      194,445
    -----------------------------------------------
    -----------------------------------------------



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

    Consolidated Financial Information
    -------------------------------------------------------------------------
    For the periods
     ended June 30,
     2009 and 2008
    (in thousands
     of dollars,            Apr. 1 to    Apr. 1 to    Jan. 1 to    Jan. 1 to
     except percentage        June 30,     June 30,     June 30,     June 30,
     amounts, unaudited)         2009         2008         2009         2008
                                    $            $            $            $
    -------------------------------------------------------------------------
    Revenues
      DATA East and West       77,289       85,160      159,670      176,739
      Sundog                    4,699        5,650       10,030       12,128
      Multiple Pakfold          3,211        3,962        6,921        8,007
      Intersegment               (930)      (1,039)      (1,935)      (2,115)
    -------------------------------------------------------------------------
                               84,269       93,733      174,686      194,759
    -------------------------------------------------------------------------

    Gross profit
      DATA East and West       19,905       23,939       41,133       49,987
      Sundog                    1,187        1,653        2,665        3,585
      Multiple Pakfold            239          356          675          763
    -------------------------------------------------------------------------
                               21,331       25,948       44,473       54,335
    -------------------------------------------------------------------------

    Gross profit, as a
     percentage of revenues
      DATA East and West         25.8%        28.1%        25.8%        28.3%
      Sundog                     25.3%        29.3%        26.6%        29.6%
      Multiple Pakfold            7.4%         9.0%         9.8%         9.5%
    -------------------------------------------------------------------------
                                 25.3%        27.7%        25.5%        27.9%
    -------------------------------------------------------------------------

    Selling, general
     and administrative
     expenses                  15,693       17,330       31,621       35,584
    -------------------------------------------------------------------------
    As a percentage
     of revenues                 18.6%        18.5%        18.1%        18.3%
    -------------------------------------------------------------------------

    Adjusted EBITDA
     (see Table 3)              7,430       10,668       16,526       22,872
    -------------------------------------------------------------------------
    Adjusted EBITDA margin,
     as a percentage
     of revenues                  8.8%        11.4%         9.5%        11.7%
    -------------------------------------------------------------------------

    Net income                    749        4,003        3,546        9,594
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



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

    Adjusted EBITDA Reconciliation
    -------------------------------------------------------------------------
    For the periods
     ended June 30,
     2009 and 2008
    (in thousands
     of dollars,            Apr. 1 to    Apr. 1 to    Jan. 1 to    Jan. 1 to
     unaudited)               June 30,     June 30,     June 30,     June 30,
                                 2009         2008         2009         2008
                                    $            $            $            $
    -------------------------------------------------------------------------
    Net income for
     the period                   749        4,003        3,546        9,594
    -------------------------------------------------------------------------
    Net interest expense
     on long-term debt          1,253        1,471        2,689        3,069
    Depreciation of
     property, plant
     and equipment              1,792        2,050        3,674        4,121
    Amortization of
     intangible assets          2,649        2,744        5,298        5,488
    Gain on cancellation
     of convertible
     debentures                     -            -           (2)           -
    Cease use charge              866            -          866            -
    Future income tax expense     121          400          455          600
    -------------------------------------------------------------------------
    Adjusted EBITDA             7,430       10,668       16,526       22,872
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    RESULTS OF OPERATIONS

    THE DATA GROUP INCOME FUND

    Overview
    

    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 90% of total revenues for the
second quarter of 2009) sells a broad range of printed products and document
management services directly to end users. Sundog (which provided
approximately 6% of total revenues for the second quarter of 2009) 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 revenues for the second quarter of 2009)
sells forms and labels to independent brokers and resellers.

    Revenues

    The most significant challenge that the Data Group faced in the first six
months of 2009 was the current domestic and global economic environment, which
has weakened significantly since 2008 and negatively impacted the Fund's
revenues over that period. For the quarter ended June 30, 2009, the Fund
recorded revenues of $84.3 million, a decrease of $9.5 million or 10.1%
compared with the same period in 2008. The decrease, before intersegment
revenues, was the result of a $7.9 million decrease in the Data East and West
segment, a $1.0 million decrease in the Sundog segment and a $0.8 million
decrease in the Multiple Pakfold segment. For the six months ended June 30,
2009, the Fund recorded revenues of $174.7 million, a decrease of $20.1
million or 10.3% compared with the same period in 2008. The decrease, before
intersegment revenues, was the result of a $17.1 million decrease in the DATA
East and West segment, a $2.1 million decrease in the Sundog segment and a
$1.1 million decrease in the Multiple Pakfold segment. A more detailed
discussion of the results of operations of each of the Fund's reporting
segments is set out below.

    Cost of Revenues and Gross Profit

    For the quarter ended June 30, 2009, cost of revenues decreased to $62.9
million from $67.8 million for the same period in 2008. Gross profit for the
quarter ended June 30, 2009 was $21.3 million, which represented a decrease of
$4.6 million or 17.8% from $25.9 million for the same period in 2008. The
decrease in gross profit for the quarter ended June 30, 2009 was attributable
to gross profit decreases of $4.0 million in the DATA East and West segment,
$0.5 million in the Sundog segment and $0.2 million in the Multiple Pakfold
segment. Gross profit as a percentage of revenues decreased to 25.3% for the
quarter ended June 30, 2009 compared to 27.7% for the same period in 2008. For
the six months ended June 30, 2009, cost of revenues decreased to $130.2
million from $140.4 million for the same period in 2008. Gross profit for the
six months ended June 30, 2009 was $44.5 million, which represented a decrease
of $9.9 million or 18.2% from $54.3 million in the same period of 2008. The
decrease in gross profit for the six months ended June 30, 2009 was
attributable to gross profit decreases of $8.9 million in the DATA East and
West segment, $0.9 million in the Sundog segment and $0.1 million in the
Multiple Pakfold segment. Gross profit as a percentage of revenue decreased to
25.5% for the six months ended June 30, 2009 compared to 27.9% for the same
period in 2008.

    Selling, General and Administrative Expenses and Restructuring Costs

    Selling, general and administrative ("SG&A") expenses, including
administrative expenses of the Fund, for the quarter ended June 30, 2009
decreased $1.6 million to $15.7 million compared to $17.3 million in the same
period of 2008. SG&A expenses for the three months ended June 30, 2009
decreased as the result of the Data Group's on-going productivity improvements
initiatives. As a percentage of revenues, these costs were 18.6% of revenues
for the quarter ended June 30, 2009 compared to 18.5% of revenues for the same
period in 2008. For the quarters ended June 30, 2009 and 2008, the Data Group
incurred $0.3 million of severance costs, respectively. These costs were
included in SG&A and were related to the Data Group's on-going productivity
improvement initiatives. SG&A expenses for the six months ended June 30, 2009
decreased by $4.0 million to $31.6 million compared to $35.6 million in the
same period of 2008. SG&A expenses for the six months ended June 30, 2009
decreased as a result of the Data Group's on-going productivity improvements
initiatives. As a percentage of revenues, these costs were 18.1% of revenues
for the six months ended June 30, 2009 compared to 18.3% of revenues for the
same period in 2008. For the six month periods ended June 30, 2009 and 2008,
the Data Group incurred $0.3 million and $0.5 million of severance costs,
respectively. These costs were included in SG&A and were related to the Data
Group's on-going productivity improvement initiatives.

    Asset Sale and Other

    During the quarter ended June 30, 2009, the Data Group completed a sublet
agreement in respect of its Dorval, Québec facility for the remainder of the
lease term and incurred a cease use charge of $0.9 million, which represented
the liability for remaining lease costs under the lease agreement net of
sublease income. During the six months ended June 30, 2009, the Data Group
completed the sale of its Hemmingford, Québec property for gross proceeds of
$0.7 million and recorded a pre-tax gain on disposal of $0.1 million.

    Adjusted EBITDA

    For the quarter ended June 30, 2009, Adjusted EBITDA was $7.4 million, or
8.8% of revenues. Adjusted EBITDA for the quarter ended June 30, 2009
decreased $3.2 million or 30.4% from the same period in the prior year and the
Adjusted EBITDA margin for the quarter, as a percentage of revenues, decreased
from 11.4% of revenues in 2008 to 8.8% of revenues in 2009. For the six months
ended June 30, 2009, Adjusted EBITDA was $16.5 million or 9.5% of revenues.
Adjusted EBITDA for the six months ended June 30, 2009 decreased $6.3 million
or 27.7% from the same period in the prior year and the Adjusted EBITDA margin
for the six month period, as a percentage of revenues, decreased from 11.7% of
revenues in 2008 to 9.5% of revenues in 2009.

    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
outstanding convertible debentures was $1.3 million for the quarter ended June
30, 2009 compared to $1.5 million for the same period in 2008. Net interest
expense on long-term debt was $2.7 million for the six months ended June 30,
2009 compared to $3.1 million for the same period in 2008.
    For the quarter ended June 30, 2009, interest income of $0.2 million was
earned compared to $0.1 million earned for the same period in 2008. This
interest income was substantially related to the cash and cash equivalents and
other receivables held by the Data Group. Interest income of $0.2 million was
earned during the six month periods ended June 30, 2009 and 2008,
respectively. This interest income was substantially related to the cash and
cash equivalents and other receivables held by the Data Group.

    Income Taxes

    The Fund reported income before income taxes of $0.9 million and a future
income tax expense of $0.2 million for the quarter ended June 30, 2009. The
future income tax expense was due to a change in estimates of future reversals
of temporary differences. The Fund reported income before income taxes of $4.4
million and a future income tax expense of $0.4 million for the quarter ended
June 30, 2008. The future income tax expense was due to a change in estimates
of future reversals of temporary differences.
    The Fund reported income before income taxes of $4.0 million and a future
income tax expense of $0.4 million for the six months ended June 30, 2009. The
future income tax expense was due to a change in estimates of future reversals
of temporary differences and changes to substantively enacted income tax
rates. The Fund reported income before income taxes of $10.2 million and a
future income tax expense of $0.6 million for the six months ended June 30,
2008. The future income tax expense was due to a change in estimates of future
reversals of temporary differences.

    Net Income

    Net income for the quarter ended June 30, 2009 was $0.7 million compared
to a net income of $4.0 million for the quarter ended June 30, 2008. Net
income for the six months ended June 30, 2009 was $3.6 million compared to a
net income of $9.6 million for the six months ended June 30, 2008. The
decrease in comparable profitability for the three and six months ended June
30, 2009 was substantially due to lower gross profit as a result of lower
revenues due to generally poor economic conditions, a cease use charge and
offset by realized cost savings from on-going productivity improvement
initiatives.

    DATA EAST AND WEST

    Revenues at the Data Group's DATA East and West segment for the quarter
ended June 30, 2009 decreased $7.9 million or 9.2% to $77.3 million from $85.2
million for the same period in the prior year. Revenues for the six months
ended June 30, 2009 decreased $17.1 million or 9.7% to $159.7 million from
$176.7 million for the same period in the prior year.
    Revenues for the three and six months ended June 30, 2009 decreased due
to lower spending from customers in the financial, government and direct mail
industries as a result of generally poor economic conditions in the fourth
quarter of 2008 and the first six months of 2009. During the second quarter,
this segment experienced declines in Western Canada similar to those
encountered by the segment in Eastern Canada at the end of 2008 and during the
first six months of 2009.
    For the quarter ended June 30, 2009, gross profit decreased $4.0 million
to $19.9 million from $23.9 million for the same period in 2008. Gross profit
as a percentage of revenues for the quarter ended June 30, 2009 decreased to
25.8% from 28.1% for the same period in 2008. The decrease in gross profit as
a percentage of revenues during the quarter ended June 30, 2009 was due to
lower revenues as discussed above. This segment continues to be focused upon
improving productivity and efficiencies in the operation of its equipment.
    For the six months ending June 30, 2009, gross profit decreased $8.9
million to $41.1 million from $50.0 million in the same period of 2008. Gross
profit as a percentage of revenues for the six months ended June 30, 2009
decreased to 25.8% from 28.3% for the same period in 2008. The decrease in the
gross profit as a percentage of revenues during the six months ended June 30,
2009, was due to lower revenues as discussed above. This segment continues to
be focused upon improving productivity and efficiencies in the operation of
its equipment.

    SUNDOG

    Revenues at the Data Group's Sundog segment for the quarter ended June
30, 2009 decreased $1.0 million or 16.8% to $4.7 million from $5.7 million for
the same period in the prior year. Revenues for the six months ended June 30,
2009 decreased $2.1 million or 17.3% to $10.0 million from $12.1 million for
the same period in the prior year. The decrease in revenues for the three and
six months ended June 30, 2009 was due to poor economic conditions in Alberta,
which continue to negatively affect demand for commercial printing in that
market, primarily marketing materials.
    For the quarter ended June 30, 2009, gross profit decreased $0.5 million
to $1.2 million from $1.7 million for the same period in 2008. Gross profit as
a percentage of revenues for the quarter ended June 30, 2009 decreased to
25.3% from 29.3% for the same period in 2008. For the six months ended June
30, 2009, gross profit decreased $0.9 million to $2.7 million from $3.6
million for the same period in 2008. Gross profit as a percentage of revenues
for the six months ended June 30, 2009 decreased to 26.6% from 29.6% for the
same period in 2008. The decrease in gross profit as a percentage of revenues
for the three and six months ended June 30, 2009 was principally due to the
revenue shortfall as noted above.

    MULTIPLE PAKFOLD

    Revenues at the Data Group's Multiple Pakfold segment for the quarter
ended June 30, 2009 decreased $0.8 million or 19.0% to $3.2 million from $4.0
million for the same period in the prior year. Revenues for the six months
ended June 30, 2009 decreased $1.1 million or 13.6% to $6.9 million from $8.0
million for the same period in the prior year.
    The decline in revenues for the three and six months ended June 30, 2009
was attributable to the poor economic conditions, which have resulted in a
decline in quoting activity, smaller order quantities and extended reorder
cycles.
    For the quarter ended June 30, 2009, gross profit decreased $0.2 million
to $0.2 million from $0.4 million for the same period in 2008. Gross profit as
a percentage of revenues for the quarter ended June 30, 2009 was 7.4% compared
to 9.0% for the same period in 2008. The decrease in gross profit as a
percentage of revenues was due to poor economic conditions causing downward
pricing pressures on this segment's products. For the six months ended June
30, 2009, gross profit decreased $0.1 million to $0.7 million from $0.8
million for the same period of 2008. Gross profit as percentage of revenues
for the six months ended June 30, 2009 was 9.8% compared to 9.5% for the same
period in 2008. The improvement in the gross profit as a percentage of
revenues for the first six months of 2009 was due to the initiatives
undertaken in 2008 to improve operating efficiencies.

    
    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".

    Cash Available for Distribution Reconciliation
    -------------------------------------------------------------------------
    For the periods
     ended June 30,
     2009 and 2008
    (in thousands
     of dollars,
     except percentages     Apr. 1 to    Apr. 1 to    Jan. 1 to    Jan. 1 to
     and per unit             June 30,     June 30,     June 30,     June 30,
     amounts, unaudited)         2009         2008         2009         2008
                                    $            $            $            $
    -------------------------------------------------------------------------
    Cash provided by
     operating activities       3,952        11,294      13,874       22,991
    Capital adjustments
      Maintenance capital
       expenditures(1)           (167)         (721)     (1,306)      (1,467)
      Purchase of
       convertible
       debentures                   -             -          (6)           -

    Other adjustments
     including
     discretionary items:
      Changes in non-cash
       working capital(2)       1,937       (2,499)        (755)      (3,312)
      Other(3)                    117          107          224          213
    -------------------------------------------------------------------------
    Cash available
     for distribution           5,839        8,181       12,031       18,425
    -------------------------------------------------------------------------
    Distributions to
     unitholders(4)             6,805        6,805       13,610       13,610
    -------------------------------------------------------------------------
    Excess (shortfall)
     of cash available
     for distribution
     over actual
     distributions               (966)       1,376       (1,579)       4,815
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Per unit(5)
    -------------------------------------------------------------------------
    Cash available
     for distribution
     per unit(5)                0.249        0.349        0.513        0.785
    -------------------------------------------------------------------------
    Distributions to
     unitholders
     per unit(5)                0.290        0.290        0.580        0.580
    -------------------------------------------------------------------------
    Excess (shortfall)
     of cash available
     for distribution
     per unit over actual
     distributions
     per unit                  (0.041)       0.059       (0.067)       0.205
    -------------------------------------------------------------------------
    Payout ratio(6)             116.5%        83.2%       113.1%        73.9%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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) Cash provided by operating activities has been adjusted for changes
        in non-cash working capital and other items 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.
    (3) Includes other amounts that do not reflect the ongoing operations of
        the Data Group's business.
    (4) Distributions are in respect of the distributions declared.
    (5) 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 or paid and not the weighted average
        number of units outstanding. As at June 30, 2009 and 2008, 23,490,592
        units were outstanding.
    (6) The payout ratio represents the distributions paid or declared to
        unitholders as a percentage of the cash available for distribution,
        in each case for the relevant period.

    CASH AVAILABLE FOR DISTRIBUTION
    

    See Table 4 above for a reconciliation of cash provided by operating
activities to cash available for distribution for the three and six month
periods ended June 30, 2009 and 2008, respectively and the amounts discussed
below. For the quarter ended June 30, 2009, the Fund generated $5.8 million or
$0.249 per unit of cash available for distribution compared to $8.2 million or
$0.349 per unit for the same period in 2008. Cash available for distribution
for the quarter ended June 30, 2009 was calculated by deducting from cash
provided by operating activities of $4.0 million, maintenance capital
expenditures of $0.2 million and adding back changes in non-cash working
capital of $1.9 million and other non-cash items of $0.1 million. Cash
available for distribution for the quarter ended June 30, 2008 was calculated
by deducting from cash provided by operating activities of $11.3 million,
maintenance capital expenditures of $0.7 million and changes in non-cash
working capital of $2.5 million, and adding back other non-cash items of $0.1
million.
    For the six months ended June 30, 2009, the Fund generated $12.0 million
or $0.513 per unit of cash available for distribution compared to $18.4
million or $0.785 per unit for the same period in 2008. Cash available for
distribution for the six months ended June 30, 2009 was calculated by
deducting from cash provided by operating activities of $13.9 million,
maintenance capital expenditures of $1.3 million and changes in non-cash
working capital of $0.8 million, and adding back other non-cash items of $0.2
million. Cash available for distribution for the six months ended June 30,
2008 was calculated by deducting from cash provided by operating activities of
$23.0 million, maintenance capital expenditures of $1.5 million and changes in
non-cash working capital of $3.3 million, and adding back other non-cash items
of $0.2 million.
    For the quarter ended June 30, 2009, the Fund declared distributions of
$6.8 million or $0.290 per unit. Actual distributions exceeded cash available
for distribution by $1.0 million or $0.041 per unit for the quarter ended June
30, 2009. During the quarter ended June 30, 2009, the Data Group made cash
payments of $0.7 million for the restructuring costs accrued as part of the
purchase price accounting for the acquisition of Relizon Canada Inc. ("Relizon
Canada") and for the related integration costs, consisting primarily of
severance payments and moving costs and accrued restructuring provisions
related to severance costs incurred as part of the Data Group's on-going
productivity improvement initiatives charged to restructuring expense in 2008.
These cash payments were funded by cash generated from operations. The
restructuring and integration costs paid during the quarter have been deducted
in determining cash available for distribution.
    For the quarter ended June 30, 2008, the Fund declared distributions of
$6.8 million or $0.290 per unit. Cash available for distribution exceeded
actual distributions by $1.4 million or $0.059 per unit for the quarter ended
June 30, 2008. During the quarter ended June 30, 2008, the Data Group made
cash payments of $0.6 million for the restructuring costs accrued as part of
the purchase price accounting for the Relizon Canada acquisition and for the
related integration costs, consisting primarily of severance payments and
moving costs. These cash payments were funded by cash generated from
operations and the net proceeds from asset dispositions. The restructuring and
integration costs paid during the quarter have been deducted in determining
cash available for distribution.
    For the six months ended June 30, 2009, the Fund declared distributions
of $13.6 million or $0.580 per unit. Actual distributions exceeded cash
available for distribution by $1.6 million or $0.067 per unit for the six
months ended June 30, 2009. During the six months ended June 30, 2009, the
Data Group made cash payments of $1.9 million for the restructuring costs
accrued as part of the purchase price accounting for the Relizon Canada
acquisition and for the related integration costs, consisting primarily of
severance payments and moving costs and accrued restructuring provisions
related to severance costs incurred as part of the Data Group's on-going
productivity improvement initiatives charged to restructuring expense in 2008.
These cash payments were funded by cash generated from operations and the net
proceeds from asset dispositions. The restructuring and integration costs paid
during the period have been deducted in determining cash available for
distribution.
    For the six months ended June 30, 2008, the Fund declared distributions
of $13.6 million or $0.580 per unit. Cash available for distribution exceeded
actual distributions by $4.8 million or $0.205 per unit for the six months
ended June 30, 2008. During the six months ended June 30, 2008, the Data Group
made cash payments of $1.7 million for the restructuring costs accrued as part
of the purchase price accounting for the Relizon Canada acquisition and for
the related integration costs, consisting primarily of severance payments and
moving costs. These cash payments were funded by cash generated from
operations and the net proceeds from asset dispositions. The restructuring and
integration costs paid during the quarter have been deducted in determining
cash available for distribution.

    Investing Activities

    Capital expenditures for the quarter ended June 30, 2009 of $0.2 million
related primarily to maintenance capital expenditures and were financed by
cash flow from operations. Capital expenditures for the six months ended June
30, 2009 of $1.3 million related primarily to maintenance capital expenditures
and were financed by cash flow from operations and net proceeds from asset
dispositions. During the quarter ended June 30, 2009, the Data Group sold and
leased back printing equipment having a value of $0.6 million. During the six
months ended June 30, 2009, the Data Group sold its former Hemmingford, Québec
facility for gross proceeds of $0.7 million.

    Financing Activities

    For the quarter ended June 30, 2009, the Fund paid or declared aggregate
cash distributions of $6.8 million to its unitholders. For the six months
ended June 30, 2009, the Fund paid cash distributions of $13.6 million to its
unitholders.

    
    About The DATA Group Income Fund
    --------------------------------
    

    The Fund owns directly and indirectly all of the outstanding partnership
units of The Data Group Limited Partnership (the "Data Group") and all of the
outstanding shares of the Data Group's general partner, Data Business Forms
Limited. 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.

    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 and/or 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, 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 and risks that the Fund made or took into account in the
preparation of these forward-looking statements include the impact of the
weakened domestic and global economic conditions on the Data Group's
businesses; the Data Group's efforts to reduce its operating costs may not
become effective as quickly as the Data Group expects, thereby impacting the
Data Group's profitability and cash available for distribution; should the
Data Group's revenues decline further than expected, the cost reduction
measures taken by the Data Group in response to the current economic
environment may not be sufficient and further reductions may be necessary; the
Data Group's ability to maintain and grow historical levels of its sales of
product and services including 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; the accuracy of
estimated synergies in respect of expected cash flows, cost savings and
profitability from the combination of the former Data Business Forms Limited
and Relizon Canada Inc. 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; 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 elsewhere in this press release
and under the heading "Risks and Uncertainties" in the Fund's management's
discussion and analysis 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 for the
three and six months ended June 30, 2009 means EBITDA adjusted for gains on
cancellation of convertible debentures and cease use charges. The Fund
believes that, in addition to net income (loss), EBITDA and Adjusted EBITDA
are useful supplemental measures in evaluating the performance of the Data
Group and/or the Fund. Cash available for distribution means cash provided by
(used in) operating activities increased by, or reduced for, maintenance
capital expenditures, purchases of convertible debentures, changes in non-cash
working capital and other non-cash items. 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 Canadian generally accepted accounting
principles ("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 (loss) determined in accordance with
GAAP as indicators of the Data Group's or the Fund's performance, nor is cash
available for distribution 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 above. For a reconciliation of cash provided by
operating activities to cash available for distribution, see Table 4 above.

    
    CONSOLIDATED BALANCE SHEETS
    -------------------------------------------------------------------------
    (in thousands of dollars, unaudited)                June 30, December 31,
                                                           2009         2008
                                                              $            $
    -------------------------------------------------------------------------
    Assets
    Current assets
      Cash and cash equivalents                          11,680       11,492
      Accounts receivable                                36,666       47,106
      Inventories                                        48,029       47,583
      Prepaid expenses and other current assets           7,071        7,684
                                                     ------------------------
                                                        103,446      113,865

    Property, plant and equipment                        36,392       39,909
    Goodwill                                            141,206      141,206
    Intangible assets                                    49,492       54,790
                                                     ------------------------

                                                        330,536      349,770
                                                     ------------------------
                                                     ------------------------
    Liabilities
    Current liabilities
      Accounts payable and accrued liabilities           27,321       32,224
      Accrued restructuring and integration provisions    1,771        3,627
      Income taxes payable                                1,385        4,022
      Deferred revenue                                    6,690        7,861
      Distributions payable                               2,269        2,269
                                                     ------------------------
                                                         39,436       50,003

    Revolving bank facility                              70,000       70,000
    Convertible debentures                               34,403       34,327
    Future income taxes                                   8,901        8,446
    Deferred gain                                         1,627        1,724
    Unfavourable lease obligation                         1,084        1,142
    Deferred lease inducement                               919          980
    Cease use accrual                                       858            -
    Pension obligations                                   9,154        9,680
    Post-employment and post-retirement benefits          2,186        2,150
                                                     ------------------------
                                                        168,568      178,452
                                                     ------------------------
    Unitholders' Equity
    Units                                               215,336      215,336
    Conversion options                                      897          898
    Accumulated other comprehensive loss                   (344)      (1,059)
    Deficit                                             (53,921)     (43,857)
                                                     ------------------------
                                                        161,968      171,318
                                                     ------------------------

                                                        330,536      349,770
                                                     ------------------------
                                                     ------------------------



    CONSOLIDATED STATEMENTS OF INCOME AND
    COMPREHENSIVE INCOME
    -------------------------------------------------------------------------
    (in thousands of dollars, except                    For the      For the
     per unit amounts, unaudited)                         three        three
                                                         months       months
                                                          ended        ended
                                                        June 30,     June 30,
                                                           2009         2008
        `                                                     $            $
    -------------------------------------------------------------------------
    Revenues                                             84,269       93,733

    Cost of revenues (including depreciation
     of $1,726 and $1,932, respectively)                 62,938       67,785
                                                     ------------------------

    Gross profit                                         21,331       25,948
                                                     ------------------------

    Expenses
      Selling, commissions and expenses                   8,408        9,477
      General and administration expenses (including
       depreciation of $66 and $118, respectively)        7,285        7,853
      Cease use charge                                      866            -
      Amortization of intangible assets                   2,649        2,744
                                                     ------------------------
                                                         19,208       20,074
                                                     ------------------------

    Income before interest and income taxes               2,123        5,874
                                                     ------------------------

    Interest expense on long-term debt (net of
     interest income of $207 and $102, respectively)      1,253        1,471
                                                     ------------------------

    Income before income taxes                              870        4,403
                                                     ------------------------

    Future income tax expense                               121          400
                                                     ------------------------

    Net income for the period                               749        4,003
                                                     ------------------------
                                                     ------------------------

    Gain on cash flow hedges                               (434)        (328)
                                                     ------------------------

    Comprehensive income for the period                   1,183        4,331
                                                     ------------------------
                                                     ------------------------

    Basic income per unit                                  0.03         0.17
                                                     ------------------------

    Diluted income per unit                                0.03         0.17
                                                     ------------------------

    Units outstanding                                23,490,592   23,490,592
                                                     ------------------------
                                                     ------------------------





    CONSOLIDATED STATEMENTS OF INCOME AND
    COMPREHENSIVE INCOME
    -------------------------------------------------------------------------
    (in thousands of dollars, except                    For the      For the
     per unit amounts, unaudited)                    six months   six months
                                                          ended        ended
                                                        June 30,     June 30,
                                                           2009         2008
                                                              $            $
    -------------------------------------------------------------------------
    Revenues                                            174,686      194,759

    Cost of revenues (including depreciation
     of $3,532 and $3,871, respectively)                130,213      140,424
                                                     ------------------------

    Gross profit                                         44,473       54,335
                                                     ------------------------

    Expenses
      Selling, commissions and expenses                  17,209       19,664
      General and administration expenses (including
       depreciation of $142 and $250, respectively)      14,412       15,920
      Cease use charge                                      866            -
      Gain on cancellation of convertible debentures         (2)           -
      Amortization of intangible assets                   5,298        5,488
                                                     ------------------------
                                                         37,783       41,072
                                                     ------------------------

    Income before interest and income taxes               6,690       13,263
                                                     ------------------------

    Interest expense on long-term debt (net of
     interest income of $247 and $210, respectively)      2,689        3,069
                                                     ------------------------

    Income before income taxes                            4,001       10,194
                                                     ------------------------

    Future income tax expense                               455          600
                                                     ------------------------

    Net income for the period                             3,546        9,594
                                                     ------------------------
                                                     ------------------------

    (Gain) loss on cash flow hedges                        (715)         375
                                                     ------------------------

    Comprehensive income for the period                   4,261        9,219
                                                     ------------------------
                                                     ------------------------

    Basic income per unit                                  0.15         0.41
                                                     ------------------------

    Diluted income per unit                                0.15         0.41
                                                     ------------------------

    Units outstanding                                23,490,592   23,490,592
                                                     ------------------------
                                                     ------------------------



    CONSOLIDATED STATEMENTS OF UNITHOLDERS' EQUITY
    -------------------------------------------------------------------------
    (in thousands of dollars,                 Accumulated
     unaudited)                                  other
                                             comprehensive             Total
                                 Conversion     income           Unitholders'
                           Units    options      (loss)   Deficit     Equity
                               $          $          $          $          $
    -------------------------------------------------------------------------

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

    Accounting policy
     change                    -          -          -      6,175      6,175

                         ----------------------------------------------------
    Balance as at
     January 1, 2008     215,336        898        (66)   (17,332)   198,836

    Distributions
     declared                  -          -          -    (13,610)   (13,610)

    Loss on cash
     flow hedges               -          -       (375)         -       (375)

    Net income for
     the period                -          -          -      9,594      9,594

                         ----------------------------------------------------

    Balance as at
     June 30, 2008       215,336        898       (441)   (21,348)   194,445
                         ----------------------------------------------------
                         ----------------------------------------------------


    Balance as at
     December 31, 2008   215,336        898     (1,059)   (43,857)   171,318

    Distributions
     declared                  -          -          -    (13,610)   (13,610)

    Cancellation of
     convertible
     debentures                -         (1)         -          -         (1)

    Gain on cash
     flow hedges               -          -        715          -        715

    Net income for
     the period                -          -          -      3,546      3,546

                         ----------------------------------------------------

    Balance as at
     June 30, 2009       215,336        897       (344)   (53,921)   161,968
                         ----------------------------------------------------
                         ----------------------------------------------------





    CONSOLIDATED STATEMENTS OF CASH FLOWS
    -------------------------------------------------------------------------
    (in thousands of dollars, unaudited)                For the      For the
                                                          three        three
                                                         months       months
                                                          ended        ended
                                                        June 30,     June 30,
                                                           2009         2008
                                                              $            $
    -------------------------------------------------------------------------
    Cash provided by (used in)
    Operating activities
    -------------------------------------------------------------------------
    Net income for the period                               749        4,003
    Items not involving cash
      Depreciation of property, plant and equipment       1,792        2,050
      Amortization of intangible assets                   2,649        2,744
      Pension expense                                       230          484
      Contributions made to pension plans                  (484)        (678)
      Loss (gain) on disposal of property,
       plant and equipment                                   18         (151)
      Cease use charge                                      866            -
      Accretion of convertible debentures                    42           42
      Amortization of deferred gain                         (49)         (49)
      Unfavourable lease obligation                         (29)         (27)
      Amortization of lease inducement                      (31)         (31)
      Accretion of cease use accrual                         (8)           -
      Post-employment and post-retirement benefits           23            8
      Future income tax expense                             121          400
                                                     ------------------------
                                                          5,889        8,795
    Changes in non-cash items relating to
     operating activities                                (1,937)       2,499
                                                     ------------------------
                                                          3,952       11,294
                                                     ------------------------
    Investing activities
    -------------------------------------------------------------------------
    Purchase of property, plant and equipment              (167)        (721)
    Proceeds on disposal of property,
     plant and equipment                                    588        1,633
                                                     ------------------------
                                                            421          912
                                                     ------------------------
    Financing activities
    -------------------------------------------------------------------------
    Distributions to unitholders                         (6,805)      (6,805)
                                                     ------------------------
                                                         (6,805)      (6,805)
                                                     ------------------------
    (Decrease) increase in cash and cash
     equivalents during the period                       (2,432)       5,401
    -------------------------------------------------------------------------
    Cash and cash equivalents - beginning of period      14,112        9,463
    -------------------------------------------------------------------------
    Cash and cash equivalents - end of period            11,680       14,864
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental cash flow information
      Interest paid                                       1,865        2,033
      Income taxes paid                                   3,470            -



    CONSOLIDATED STATEMENTS OF CASH FLOWS
    -------------------------------------------------------------------------
    (in thousands of dollars, unaudited)                For the      For the
                                                     six months   six months
                                                          ended        ended
                                                        June 30,     June 30,
                                                           2009         2008
                                                              $            $
    -------------------------------------------------------------------------
    Cash provided by (used in)
    Operating activities
    -------------------------------------------------------------------------
    Net income for the period                             3,546        9,594
    Items not involving cash
      Depreciation of property, plant and equipment       3,674        4,121
      Amortization of intangible assets                   5,298        5,488
      Pension expense                                       460          987
      Contributions made to pension plans                  (986)        (981)
      Gain on disposal of property, plant and equipment     (87)         (15)
      Gain on cancellation of convertible debentures         (2)           -
      Cease use charge                                      866            -
      Accretion of convertible debentures                    83           84
      Amortization of deferred gain                         (97)         (97)
      Unfavourable lease obligation                         (58)         (54)
      Amortization of lease inducement                      (61)         (62)
      Accretion of cease use accrual                         (8)           -
      Post-employment and post-retirement benefits           36           14
      Future income tax expense                             455          600
                                                     ------------------------
                                                         13,119       19,679
    Changes in non-cash items relating to
     operating activities                                   755        3,312
                                                     ------------------------
                                                         13,874       22,991
                                                     ------------------------
    Investing activities
    -------------------------------------------------------------------------
    Purchase of property, plant and equipment            (1,306)      (1,467)
    Proceeds on disposal of property,
     plant and equipment                                  1,236        1,635
                                                     ------------------------
                                                            (70)         168
                                                     ------------------------
    Financing activities
    -------------------------------------------------------------------------
    Repurchase of convertible debentures                     (6)           -
    Distributions to unitholders                        (13,610)     (13,610)
                                                     ------------------------
                                                        (13,616)     (13,610)
                                                     ------------------------
    Increase in cash and cash equivalents during
     the period                                             188        9,549
    -------------------------------------------------------------------------
    Cash and cash equivalents - beginning of period      11,492        5,315
    -------------------------------------------------------------------------
    Cash and cash equivalents - end of period            11,680       14,864
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental cash flow information
      Interest paid                                       2,541        2,851
      Income taxes paid                                   3,470            -
    





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

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890