The DATA Group Income Fund announces third quarter results for 2007



    HIGHLIGHTS
    ----------

    
    -   Q3 Revenues of $90.2 million, Q3 Gross Profit of $23.5 million and
        Net Income of $1.4 million
    -   Q3 Cash Available for Distribution of $5.4 million or $0.232 per unit
        and Cash Distributions of $6.8 million or $0.290 per unit (see
        Table 4 and "Non-GAAP Measures" below)
    -   Q3 Adjusted EBITDA of $8.1 million (see Table 3 and "Non-GAAP
        Measures" below)
    -   YTD Revenues of $291.4 million, YTD Gross Profit of $76.5 million and
        Net Loss of $3.2 million
    -   YTD Cash Available for Distribution of $17.2 million or $0.730 per
        unit and Cash Distributions of $20.4 million or $0.869 per unit (see
        Table 4 and "Non-GAAP Measures" below)
    -   YTD Adjusted EBITDA of $25.5 million (see Table 3 and "Non-GAAP
        Measures" below)
    

    BRAMPTON, ON, Nov. 6 /CNW/ - The DATA Group Income Fund (TSX: DGI.UN)
("the Fund") today announced financial and operating results for the third
quarter ended September 30, 2007.
    "I am very pleased with our progress to date in the integration of our
Relizon Canada acquisition. All planned facilities and office closures have
been completed ahead of schedule. Our focus now turns to improving
productivity and training new employees we had to recruit in a number of
facilities, particularly in the Alberta market where employment market
conditions have resulted in longer than expected lead times in securing the
people we needed. Having largely completed our integration, we believe that we
will achieve synergies of approximately $10.0 million, $3.0 million more than
our original estimate of $7.0 million per annum in pre-tax operating
synergies. Towards this end, we incurred an additional $0.6 million of
expenses in the quarter related to the integration.
    In addition, we have experienced our first success in our efforts to sell
real estate assets we acquired through the Relizon Canada acquisition. On
October 24, 2007, we completed the sale and leaseback of the Brockville,
Ontario facility, for which we received $4.5 million, less transaction costs",
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 88% of total revenue for the first
nine months of 2007) sells a broad range of printed products and document
management services directly to end users. Sundog (which provided
approximately 7% of total revenue for the first nine months of 2007) is a
commercial printer specializing in the production of high-quality annual
reports, marketing materials and event tickets. Multiple Pakfold (which
provided approximately 5% of total revenue for the first nine months of 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 approximately $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 efficiencies from restructuring, integration and
other initiatives relating to the combination of the respective businesses
previously carried on by DBFL 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 DBFL and Relizon Canada
businesses; the risk that the DBFL and Relizon Canada businesses will not be
integrated successfully; 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.
Management 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, management 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 (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 (loss) to
Adjusted EBITDA, see Table 3 below. For a reconciliation of cash provided by
(used in) 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 of $141.0 million. 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.
    As discussed in the Fund's MD&A for the year ended December 31, 2006,
management has developed a plan to integrate and restructure the Relizon
Canada business. 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 this
plan, 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 DBFL (the "Reorganization"). 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, 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 September 30, 2007 includes
              the results of operations of the Relizon Canada business. The
              period from January 1, 2006 to September 30, 2006 includes
              results of operations for the Relizon Canada business from
              August 31, 2006 to September 30, 2006.

    Consolidated Financial Information
    -------------------------------------------------------------------------
    For the periods ended              Jul. 1    Jul. 1    Jan. 1    Jan. 1
    September 30, 2007 and 2006          to        to        to        to
    (in thousands of dollars,         Sept. 30, Sept. 30, Sept. 30, Sept. 30,
     unaudited)                         2007      2006      2007      2006
                                          $         $         $         $
    -------------------------------------------------------------------------
    Revenues                            90,221    67,838   291,418   177,804
    Cost of revenues                    66,672    52,228   214,885   130,103
    -------------------------------------------------------------------------
    Gross profit                        23,549    15,610    76,533    47,701

    Selling, general and
     administrative expenses            16,930    12,790    53,505    33,167
    Integration costs                      578         -     3,997         -
    Amortization of intangible assets    2,411     1,843     7,233     5,147
    -------------------------------------------------------------------------
    Income before interest and
     income taxes                        3,630       977    11,798     9,387
    -------------------------------------------------------------------------

    Interest expense on long-term debt   1,626       938     4,733     2,048
    -------------------------------------------------------------------------
    Income before income taxes           2,004        39     7,065     7,339

    Income tax expense (recovery)
      Current                                -      (312)        -         -
      Future                               566   (14,888)   10,312   (16,215)
    -------------------------------------------------------------------------
                                           566   (15,200)   10,312   (16,215)

    -------------------------------------------------------------------------
    Net income (loss) for the period     1,438    15,239    (3,247)   23,554
    -------------------------------------------------------------------------



    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 September 30, 2007 includes
              the results of operations of the Relizon Canada business. The
              period from January 1, 2006 to September 30, 2006 includes
              results of operations for the Relizon Canada business from
              August 31, 2006 to September 30, 2006.

    Consolidated Financial Information
    -------------------------------------------------------------------------
    For the periods ended              Jul. 1    Jul. 1    Jan. 1    Jan. 1
    September 30, 2007 and 2006          to        to        to        to
    (in thousands of dollars,         Sept. 30, Sept. 30, Sept. 30, Sept. 30,
     except percentage amounts,         2007      2006      2007      2006
     unaudited)                           $         $         $         $

    Revenues
    -------------------------------------------------------------------------
    DATA East and West                  81,698    57,851   262,576   143,513
    Sundog                               5,939     5,742    19,584    20,270
    Multiple Pakfold                     4,279     5,740    13,866    17,487
    Intersegment                        (1,695)   (1,495)   (4,608)   (3,466)
    -------------------------------------------------------------------------
                                        90,221    67,838   291,418   177,804
    -------------------------------------------------------------------------

    Gross Profit
    -------------------------------------------------------------------------
    DATA East and West                  21,462    12,772    68,477    37,663
    Sundog                               1,765     2,022     6,529     7,201
    Multiple Pakfold                       322       816     1,527     2,837
    -------------------------------------------------------------------------
                                        23,549    15,610    76,533    47,701
    -------------------------------------------------------------------------

    Gross Profit, as a percentage
     of revenue
    -------------------------------------------------------------------------
    DATA East and West                   26.3%     22.1%     26.1%     26.2%
    Sundog                               29.7%     35.2%     33.3%     35.5%
    Multiple Pakfold                      7.5%     14.2%     11.0%     16.2%
    -------------------------------------------------------------------------
                                         26.1%     23.0%     26.3%     26.8%
    -------------------------------------------------------------------------

    Selling, general and
     administrative expenses            16,930    12,790    53,505    33,167
    -------------------------------------------------------------------------
    As a percentage of revenue           18.8%     18.9%     18.4%     18.7%
    -------------------------------------------------------------------------
    Adjusted EBITDA                      8,106     6,611    25,474    19,898
    -------------------------------------------------------------------------
    Adjusted EBITDA margin,
     as a percentage of revenue           9.0%      9.7%      8.7%     11.2%
    -------------------------------------------------------------------------
    Net income (loss)                    1,438    15,239    (3,247)   23,554
    -------------------------------------------------------------------------



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

              The period from January 1, 2007 to September 30, 2007 includes
              the results of operations of the Relizon Canada business. The
              period from January 1, 2006 to September 30, 2006 includes
              results of operations for the Relizon Canada business from
              August 31, 2006 to September 30, 2006.

    Adjusted EBITDA Reconciliation
    -------------------------------------------------------------------------
    For the periods ended              Jul. 1    Jul. 1    Jan. 1    Jan. 1
    September 30, 2007 and 2006          to        to        to        to
    (in thousands of dollars,         Sept. 30, Sept. 30, Sept. 30, Sept. 30,
     except per unit amounts,           2007      2006      2007      2006
     unaudited)                           $         $         $         $
    -------------------------------------------------------------------------
    Net income (loss) for the period     1,438    15,239    (3,247)   23,554
    -------------------------------------------------------------------------
    Net interest expense on
     long-term debt                      1,626       938     4,733     2,048
    Depreciation of property,
     plant and equipment                 2,065     1,294     6,443     2,867
    Amortization of intangible assets    2,411     1,843     7,233     5,147
    Non-cash inventory fair value
     allocation charges                      -     2,497         -     2,497
    Recovery of (provision for) income
     taxes                                 566   (15,200)   10,312   (16,215)
    -------------------------------------------------------------------------
    Adjusted EBITDA                      8,106     6,611    25,474    19,898
    -------------------------------------------------------------------------
    


    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 DBFL
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 DBFL businesses, with a view to achieving
operating and corporate synergies through the combination of those businesses.
On March 1, 2007, the Fund announced a restructuring plan designed to realize
on those synergies. See "Outlook". The following discussion and analysis
includes the results of operations of the former Relizon Canada business for
the quarter ended and the nine months ended September 30, 2007 and includes
the former Relizon Canada business for the period from August 31, 2006 to
September 30, 2006. Those operations now form part of the Data Group's DATA
East and West segment and represent the principal reason for changes in the
Fund's results of operations in 2007 compared to 2006.

    REVENUES

    For the quarter ended September 30, 2007, the Fund recorded revenues of
$90.2 million, an increase of 33.0% or $22.4 million compared with the same
period in 2006. The revenue increase, before intersegment revenues, was
substantially the result of a $23.8 million increase in the DATA East and West
segment resulting from the acquisition of Relizon Canada. The increase in DATA
East and West and the increase of $0.2 million in the Sundog segment was
partially offset by the decline of $1.5 million in the Multiple Pakfold
segment. For the nine months ended September 30, 2007, the Fund recorded
revenues of $291.4 million, an increase of $113.6 million or 63.9% compared
with the same period in 2006. The increase, before intersegment revenues, was
the net result of a $119.1 million increase in the DATA East and West segment,
a $0.7 million decrease in the Sundog segment and a $3.6 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. 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 September 30, 2007, cost of revenues increased to
$66.7 million from $52.2 million for the same period in 2006. The increase was
a result of a $15.2 million increase in the DATA East and West segment
resulting substantially from the acquisition of Relizon Canada. This resulted
in a gross profit in the third quarter of 2007 of $23.5 million, which
represented an increase of $7.9 million or 50.9% from $15.6 million in the
third quarter of 2006. The increase in gross profit was attributable to a
$8.7 million increase in the DATA East and West segment resulting
substantially from the acquisition of Relizon Canada. In the third quarter of
2006, a charge of $2.5 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 decreased to
26.1% from 26.7% compared to the same period in 2006 due to the lower margin
in the Relizon Canada business. A more detailed discussion of the results of
operations of each of the Fund's reporting segments is set out below.
    For the nine months ended September 30, 2007, cost of revenues increased
from $130.1 million for the same period in 2006 to $214.9 million in 2007.
This resulted in a gross profit for the nine months ended September 30, 2007
of $76.5 million this represented an increase of $28.8 million or 60.4% from
$47.7 million in the same period of 2006 which included the Relizon Inventory
Allocation charge of $2.5 million. After excluding the Relizon Inventory
Allocation, gross profit as a percentage of revenues decreased for the nine
months ended September 30, 2007 to 26.3% from 28.2%. A more detailed
discussion of the results of operations of each of the Fund's reporting
segments is set out below.

    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 September 30, 2007
were $16.9 million compared to $12.8 million in the same period of 2006. SG&A
expenses for the third quarter of 2007 were higher due to costs incurred in
connection with the acquisition of the Relizon Canada business. As a
percentage of revenues, these costs are consistent with the same period in
2006. In the third quarter of 2007, the Data Group incurred $0.6 million of
costs related to the integration of the DBFL and Relizon Canada businesses,
which primarily consisted of severance and moving expenses. SG&A expenses for
the nine months ended September 30, 2007 were $53.5 million as compared to
$33.2 million in the same period of 2006. SG&A expenses for the nine months
ended September 30, 2007 were higher due to costs incurred in connection with
the acquisition of the Relizon Canada business. As percentage of revenues,
these costs are consistent with the same period in 2006. In the nine months
ended September 30, 2007 the Data Group incurred $4.0 million of costs related
to the integration of the DBFL 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.

    ADJUSTED EBITDA

    For the quarter ended September 30, 2007, Adjusted EBITDA was
$8.1 million, or 9.0% of revenue. Adjusted EBITDA for the quarter ended
September 30, 2007 increased $1.5 million or 22.6% from the same period in the
prior year and the Adjusted EBITDA margin for the quarter, as a percentage of
revenue, decreased from 9.7% of revenue in 2006 to 9.0% of revenue in 2007.
Adjusted EBITDA for the nine months ended September 30, 2007 was $25.5 million
or 8.7%. As compared to the same period in 2006, Adjusted EBITDA for the nine
months ended September 30, 2007 increased $5.6 million or 28.0% from the same
period in the prior year and the Adjusted EBITDA margin for the nine month
period, as a percentage of revenue, decreased from 11.2% of revenue in 2006 to
8.7% of revenue in 2007. The decrease as a percentage of revenue was
substantially attributable to the costs incurred in the integration of the
DBFL and Relizon Canada businesses. The Adjusted EBITDA margin in the quarter
would have been 9.6% and 10.1% in the nine months ended September 30, 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 $1.6 million for the quarter ended September 30,
2007 compared to $0.9 million for the same period in 2006. Net interest
expense was $4.7 million for the nine months ended September 30, 2007 compared
to $2.0 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 59 days in the third quarter of 2007
compared to the same period in 2006.
    Interest income of $0.1 million and $0.2 million earned during the three
and nine month periods ended September 30, 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 nine month periods ended
September 30, 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, became law.
As a result, under Canadian GAAP, the Fund commenced accounting for tax
changes in its June 30, 2007 interim reporting. A net long term future income
tax liability of $9.8 million has been recognized for the quarter ended
September 30, 2007 with a $0.6 million charge to the Fund's income for the
quarter ended September 30, 2007 and a $10.3 million charge to the Fund's
income for the nine months ended September 30, 2007. The future income tax
liability represents estimated temporary differences at September 30, 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. For the quarter
ended September 30, 2006, the Fund reported a recovery of future income taxes
of $14.9 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 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. For the
nine months ended September 30, 2006, the Fund reported a recovery of future
income taxes of $16.2 million.

    NET INCOME (LOSS)

    Net income for the quarter ended September 30, 2007 was $1.4 million
compared to net income of $15.2 million for the quarter ended September 30,
2006. Net loss for the nine months ended September 30, 2007 was $3.2 million
compared to net income of $23.6 million for the nine months ended
September 30, 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 Relizon Canada business for
the nine months ended September 30, 2007 and for the period from August 31,
2006 to September 30, 2006. In the three months ended September 30, 2007
revenue at the Data Group's DATA East and West segment increased $23.8 million
or 41.2% to $81.7 million from $57.9 million for the same period in the prior
year. Revenue for the nine months ended September 30, 2007 increased
$119.1 million or 83.0% to $262.6 million from $143.5 million for the same
period in the prior year.
    The increase in revenue in the quarter was primarily due to the
acquisition of Relizon Canada on August 31, 2006. July and August were slower
than expected, particularly in Western Canada. However, activity levels
improved significantly in September. Two new contracts in Western Canada which
were to start in August were delayed, with one to commence mid December and
the other to commence mid December or mid January. We have also begun the
process of reviewing products and services which generate low margins with the
intent of increasing prices to acceptable levels or discontinuing them.
    Gross profit in the quarter ended September 30, 2007 increased
$8.7 million to $21.5 million from $12.8 million in the same period of 2006.
After adjusting for the Relizon Inventory Allocation of $2.5 million, the
gross profit for quarter ended September 30, 2006 would have been $15.3
million. The gross profit as a percentage of revenues increased to 26.3% from
22.1% for the same period in 2006. After adjusting for the Relizon Inventory
Allocation, the gross profit as a percentage of revenues would have been
26.4%. For the nine months ended September 30, 2007, gross profit increased
$30.8 million to $68.5 million from $37.7 million in the same period of 2006.
After adjusting for the Relizon Inventory Allocation of $2.5 million, the
gross profit for nine months ended September 30, 2006 would have been $40.2
million. The gross profit as a percentage of revenues decreased to 26.1% from
26.2% for the same period in 2006. After adjusting for the Relizon inventory
Allocation, the gross profit as a percentage of revenues would have been
28.0%.
    The decline in the gross profit as a percentage of revenues during the
three months and the nine months ended September 30, 2007 are due to two
principal factors. Primarily, margins within the acquired Relizon Canada
business were lower than those realized in the former DBFL business.
Consequently, we have begun a review of low margin business within this
segment as discussed above. Secondarily, necessary recruiting and relocation
in the Alberta marketplace has resulted in increased expense (approximately
$0.3 million) and was slower than required. This resulted in increased
overtime, training costs and reduced productivity. With all but a small number
of positions filled and having completed plant closures and the realignment of
assets within continuing facilities, management is now focused upon fine
tuning equipment, training new employees and taking steps to improve
productivity and efficiencies to historical DBFL levels and beyond.
    As part of the Fund's restructuring plan announced on March 1, 2007, the
Fund closed plants within the Data East and West segment located in
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 quarter and production resumed with no
adverse effects to consumer relationships. These plant closures are expected
to reduce excess production capacity, improve operating efficiencies and
profitability within the DATA East and West segment following the combination
of the former Relizon Canada and DBFL businesses.

    SUNDOG

    Revenues at the Data Group's Sundog segment grew $0.2 million from
$5.7 million in the third quarter of 2006 to $5.9 million in 2007 in spite of
a generally soft local market. The increase in revenue in the quarter was due
to the completion of a major project for a large customer. Generally, the
business continues to be affected by tighter local market demand and some
increased competitiveness. Revenue for the nine months ended September 30,
2007 decreased $0.7 million or 3.4% to $19.6 million from $20.3 million for
the same period in the prior year. The decrease in revenue for the nine months
ended September 30, 2007 is due to softer market and competitive conditions
previously outlined.
    For the quarter ended September 30, 2007, gross profit decreased 12.7% to
$1.8 million from $2.0 million in the same period of 2006. Gross profit as a
percentage of revenues decreased to 29.7% from 35.2% in the comparable period
of 2006. The gross profit declined in the quarter was due to the market
conditions outlined above, which resulted in higher labour costs as a
percentage of revenues. In addition, the Sundog segment experienced gross
profit declines on United States based ticket and speciality clients as a
result of the strengthening Canadian dollar. For the nine months ended
September 30, 2007, gross profit decreased $0.7 million to $6.5 million from
$7.2 million in the same period of 2006. The gross profit as a percentage of
revenues was 33.3% compared to 35.5% for the same period in 2006. 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.

    MULTIPLE PAKFOLD

    Revenue at the Data Group's Multiple Pakfold segment decreased
$1.5 million to $4.3 million in the third quarter of 2007 from $5.8 million in
the same period of 2006. Revenue for the nine months ended September 30, 2007
decreased $3.6 million or 20.7% to $13.9 million from $17.5 million for the
same period in the prior year.
    While a decline in revenue was expected as a result of closing the Dorval
facility as part of its restructuring plan announced on March 1, 2007, the
decline in revenue was greater than expected. The revenue decrease in the
Multiple Pakfold segment came as a result of the closure of the Dorval
facility which caused interruptions in Multiple Pakfold segment's ability to
meet customer delivery requirements. In addition, the setup of the equipment,
recruiting and the training of staff have taken significantly longer than
planned. As a result, subsequent to the quarter end, management changes were
made.
    For the quarter ended September 30, 2007, gross profit decreased by
$0.5 million to $0.3 million from the same period in 2006. The gross profit as
a percentage of revenues was 7.5% compared to 14.2% for the same period in
2006. For the nine months ended September 30, 2007, gross profit decreased
$1.3 million to $1.5 million from $2.8 million in the same period of 2006. The
gross profit as a percentage of revenues was 11.0% compared to 16.2% for the
same period in 2006. In each case, the decline was due to the reasons stated
above.

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

              The period from January 1, 2007 to September 30, 2007 includes
              results of operations of the Relizon Canada business. The
              period from January 1, 2006 to September 30, 2006 includes
              results of operations for the Relizon Canada business from
              August 31, 2006 to September 30, 2006.

    CASH AVAILABLE FOR DISTRIBUTION
    -------------------------------------------------------------------------
    For the periods ended              Jul. 1    Jul. 1    Jan. 1    Jan. 1
    September 30, 2007 and 2006          to        to        to        to
    (in thousands of dollars,         Sept. 30, Sept. 30, Sept. 30, Sept. 30,
     except per unit amounts,           2007      2006      2007      2006
     unaudited)                           $         $         $         $
    -------------------------------------------------------------------------
    Cash provided by (used in)
     operating activities                1,358    (2,490)   13,990     9,337
    Capital adjustments
      Maintenance capital
       expenditures(1)                  (1,404)     (927)   (4,156)   (1,673)

    Other adjustments including
     discretionary items:
      Non-cash interest expense(2)          42       106       128       259
      Trust reorganization costs(3)          -       651         -       651
      Changes in non-cash working
       capital and other(4)              5,445     2,483     7,195     2,099
      Non-cash inventory fair value
       allocation charges                    -     2,497         -     2,497
      Pension contribution in excess
       of expense(5)                         -     3,000         -     3,000
    -------------------------------------------------------------------------
      Cash available for distribution    5,441     5,320    17,157    16,170
    -------------------------------------------------------------------------
    Distributions to Unitholders(6)      6,804     5,969    20,406    14,579
    -------------------------------------------------------------------------
    Excess (shortfall) of cash
     available for distribution over
     actual distributions               (1,363)     (649)   (3,249)    1,591
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Per unit(7)
    Cash available for distribution
     per unit(7)                         0.232     0.258     0.730     0.964
    -------------------------------------------------------------------------
    Distributions to Unitholders per
     unit(7)(8)                          0.290     0.290     0.869     0.870
    -------------------------------------------------------------------------
    Excess (shortfall) of cash
     available for distribution
     per unit over actual
     distributions per unit             (0.058)   (0.032)   (0.139)    0.094
    -------------------------------------------------------------------------
    Payout ratio                        125.1%    112.2%    118.9%     90.2%
    -------------------------------------------------------------------------

    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) Non-cash interest expense is interest expense calculated in
        accordance with GAAP associated with accretion of convertible
        debentures and the unfavourable lease obligation.
    (3) 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.
    (4) 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 and the
        impact of cash payments related to the restructuring liabilities
        assumed in the Relizon acquisition.
    (5) Represents a special contribution of $3.0 million to Data Group's
        defined benefit pension plan made in the third quarter of 2006.
    (6) Distributions are in respect of the distributions declared and paid.
    (7) 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 September 30, 2007,
        23,490,592 units were outstanding and 14,861,333 units were
        outstanding as at September 30, 2006.
    (8) 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 September 30, 2007, the Fund generated $5.4 million
or $0.232 per unit of cash available for distribution compared to $5.3 million
or $0.254 per unit for the same period in the prior year. Cash available for
distribution for the three months ended September 30, 2007 was calculated by
adding back the changes in non-cash working capital of $5.4 million and
deducting maintenance capital expenditures of $1.4 million from cash provided
by operating activities of $1.4 million. Cash available for distribution for
the three months ended September 30, 2006 was calculated by adding back the
changes in non-cash working capital of $2.5 million, deducting maintenance
capital expenditures of $0.9 million, adding back a special contribution of
$3.0 million to the Relizon Canada defined benefit pension plan, adding back
the Relizon Inventory Allocation of $2.5 million and adding back the
$0.7 million of costs incurred to reorganize the structure of the Fund from
cash provided used in operating activities of $2.5 million. For the nine
months ended September 30, 2007, the Fund generated $17.2 million or $0.731
per unit of cash available for distribution compared to $16.2 million or
$0.964 per unit in the prior year. Cash available for distribution for the
nine months ended September 30, 2007 was calculated by adding the changes in
non-cash working capital of $7.2 million and deducting the maintenance capital
expenditures of $4.2 million from cash provided by operating activities of
$14.0 million. See Table 4 above for a breakdown of these figures for the
periods from January 1, 2007 to September 30, 2007 and January 1, 2006 to
September 30, 2006, respectively, and the three months ended September 30,
2007 and 2006, respectively.
    During the three months ended September 30, 2007, the Data Group incurred
integration costs of $0.6 million and maintenance capital expenditures of
$1.0 million in each case related to the integration of the former DBFL 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 the restructuring costs incurred in the first, second and third
quarters of 2007, are non-recurring as they are restricted to the March 1
restructuring and the integration of the former DBFL and Relizon Canada
businesses. During the three and nine month periods ended September 30, 2007,
the Fund made cash payments of $2.6 million and $6.7 million, respectively for
restructuring and 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.
    For the quarter ended September 30, 2007, the Fund declared distributions
of $6.8 million or $0.290 per unit. Actual distributions exceeded the
calculation of cash available for distribution by $1.4 million or $0.058 per
unit for the quarter ended September 30, 2007. For the same period in 2006,
the calculation of cash available for distribution exceeded actual
distributions by $0.6 million or $0.032 per unit. This shortfall was
principally due to the payment by the Data Group of severance costs during the
third quarter of 2007 in connection with the March 1 restructuring. For the
nine months ended September 30, 2006, the Fund declared distributions of
$20.4 million or $0.869 per unit. Actual distributions exceeded the
calculation of cash available for distribution by $3.3 million or $0.138 per
unit. For the same period in 2006, the calculation of cash available for
distribution exceeded actual distributions by $1.6 million or $0.094 per unit.
The shortfall for the nine months ended September 30, 2007 was principally due
to the payment of severance costs, moving expenses and capital expenditures
associated with the integration of the former DBFL and Relizon Canada
businesses. See Table 4 above for a breakdown of these figures for the periods
from January 1, 2007 to September 30, 2007 and January 1, 2006 to
September 30, 2006, respectively, and the three months ended September 30,
2007 and 2006, respectively.
    Management considers the integration costs and additional capital
expenditures to be non-recurring costs and expenditures incurred in connection
with the restructuring and integration of the Relizon Canada business and
believes that providing the cash available for distribution excluding these
items will assist the reader in understanding the sustainable level of cash
available for distribution. If the integration costs of $0.6 million and the
capital expenditures of $1.0 million related to the integration and incurred
for the three months ended September 30, 2007 were excluded, cash available
for distribution would have exceeded actual distributions by $0.2 million or
$0.008 per unit. If the integration costs of $4.0 million and the capital
expenditures of $2.0 million related to the integration and incurred for the
nine months ended September 30, 2007 were excluded, cash available for
distribution would have exceeded actual distributions by $2.7 million or
$0.116 per unit.

    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 September 30, 2007 of
$1.4 million related primarily to maintenance capital expenditures. Capital
expenditures for the nine months ended September 30, 2007 of $4.2 million
related primarily to maintenance capital expenditures, and included
$1.0 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 is
not expected to recur. The level of capital expenditures for the balance of
2007 is expected to be approximately $0.8 million.

    FINANCING ACTIVITIES

    For the quarter ended September 30, 2007, the Fund paid cash
distributions of $6.8 million to its Unitholders. The Fund has a bank
overdraft of $4.0 million which consists of financing provided by its
suppliers in the form of outstanding cheques of $4.9 million offset by cash of
$0.9 million. For the nine months ended September 30, 2007, the Fund paid cash
distributions of $20.4 million to its Unitholders.
    Subsequent to the quarter, 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 will lease back to the
Data Group the Brockville, Ontario facility. The term of the lease is 10 years
and the Data Group will have 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 $374,536 per
year for the first five years, $421,353 per year during the following five
year period, and $468,170 per year during the five year renewal period, if
applicable.

    OUTLOOK

    Management believes that the Fund 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 does not
currently anticipate increasing distributions to Unitholders based on the
contribution of the Relizon Canada Acquisition, but will continue to monitor
the Fund's cash available for distributions and its payout ratio.
    In addition to the plan announced on March 1, management 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. The Fund believes substantial all of the
restructuring charges have been incurred in the nine months ended
September 30, 2007. The Data Group will continue to rationalize sales and
operations as a result of the Relizon Canada Acquisition and other
initiatives. Additional unanticipated costs may also be incurred to integrate
the Relizon Canada business. Any costs relating to the closure of facilities
leased by the Data Group prior to the acquisition have been expensed as
incurred. These expenses have resulted in some variability in the Fund's
quarterly operating results in 2007.
    Management currently believes that the Data Group's restructuring,
integration and other initiatives relating to the combination of the former
DBFL and Relizon Canada businesses will achieve synergies and cost savings of
approximately $10.0 million.
    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 in entitles 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").
    Management 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 effect on the income trust sector as a
whole, all with a view to adopting a strategy that will maximize value to
Unitholders going forward.
    Management believes that the acquisition of Relizon Canada has introduced
a marginal amount of seasonality into the business. The gift card business as
well as the buying pattern of a major customer appear to indicate that the
fourth quarter may have higher revenues and profit than the other three
quarters.
    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
company 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)                    September 30,   December 31,
                                                         2007           2006
                                                          $              $
    -------------------------------------------------------------------------
    Assets
    Current assets
      Cash and cash equivalents                             -          4,767
      Accounts receivable                              50,576         55,010
      Inventories                                      42,458         46,331
      Prepaid expenses and other current assets         4,723          3,788
      Income taxes recoverable                          1,017          2,056
      Asset held for sale                               2,372              -
                                                  ---------------------------
                                                      101,146        111,952

    Property, plant and equipment                      48,760         53,497
    Goodwill                                          152,194        152,570
    Intangible assets                                  69,129         76,362
    Future income taxes                                     -            183
    Deferred finance fees                                   -          2,601
                                                  ---------------------------
                                                      371,229        397,165
                                                  ---------------------------
                                                  ---------------------------
    Liabilities
    Current liabilities
      Bank overdraft                                    4,017              -
      Accounts payable and accrued liabilities         35,393         44,895
      Accrued restructuring and integration
       provisions                                       7,073         10,473
      Deferred revenue                                  5,269          7,585
      Distribution payable                              2,267          2,267
                                                  ---------------------------
                                                       54,019         65,220

    Revolving bank facility                            70,000         70,000
    Convertible debentures                             34,115         34,155
    Unfavourable lease obligation                       1,278          1,355
    Deferred lease inducement                           1,133            459
    Pension obligation                                 10,997         10,619
    Post-employment benefits                              656            700
    Future income taxes                                 9,840              -
                                                  ---------------------------
                                                      182,038        182,508
                                                  ---------------------------
    Unitholders' Equity
    Units                                             215,336        215,164
    Conversion option                                     898            902
    Accumulated other comprehensive income                331              -
    Deficit                                           (27,374)        (1,409)
                                                  ---------------------------
                                                      189,191        214,657
                                                  ---------------------------

                                                      371,229        397,165
                                                  ---------------------------
                                                  ---------------------------



    CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
    -------------------------------------------------------------------------
    (in thousands of dollars, except            For the three  For the three
     per unit amounts, unaudited)                months ended   months ended
                                                 September 30,  September 30,
                                                         2007           2006
                                                          $              $
    -------------------------------------------------------------------------
    Revenues                                           90,221         67,838


    Cost of revenues (including depreciation
     of $1,909 and $1,182, respectively)               66,672         52,228
                                                  ---------------------------

    Gross profit                                       23,549         15,610
                                                  ---------------------------

    Expenses
    Selling, commissions and expenses                   9,689          7,487
    General and administration (including
     depreciation of $156 and $112,
     respectively)                                      7,241          5,303
    Integration costs                                     578              -
    Amortization of intangible assets                   2,411          1,843
                                                  ---------------------------
                                                       19,919         14,633
                                                  ---------------------------

    Income before interest and income taxes             3,630            977
                                                  ---------------------------

    Interest expense on long-term debt
     (net of interest income of $67 and $137,
     respectively)                                      1,626            938
                                                  ---------------------------

    Income before income taxes                          2,004             39
                                                  ---------------------------

    Income tax expense (recovery)
      Current                                               -           (312)
      Future                                              566        (14,888)
                                                  ---------------------------
                                                          566        (15,200)
                                                  ---------------------------

    Net income for the period                           1,438         15,239
                                                  ---------------------------
                                                  ---------------------------

    Loss on cash flow hedges                             (412)

                                                  ------------
    Comprehensive income for the period                 1,026
                                                  ------------
                                                  ------------

    Basic income per unit                                0.06           0.86
                                                  ---------------------------

    Diluted income per unit                              0.06           0.82
                                                  ---------------------------

    Weighted average units outstanding             23,486,891     17,795,884
                                                  ---------------------------



    CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
    -------------------------------------------------------------------------
    (in thousands of dollars, except             For the nine   For the nine
     per unit amounts, unaudited)                months ended   months ended
                                                 September 30,  September 30,
                                                         2007           2006
                                                          $              $
    -------------------------------------------------------------------------
    Revenues                                          291,418        177,804

    Cost of revenues (including depreciation
     of $5,934 and $2,589, respectively)              214,885        130,103
                                                  ---------------------------

    Gross profit                                       76,533         47,701
                                                  ---------------------------

    Expenses
    Selling, commissions and expenses                  31,322         19,505
    General and administration (including
     depreciation of $509 and $278, respectively)      22,183         13,662
    Integration costs                                   3,997              -
    Amortization of intangible assets                   7,233          5,147
                                                  ---------------------------
                                                       64,735         38,314
                                                  ---------------------------

    Income before interest and income taxes            11,798          9,387
                                                  ---------------------------

    Interest expense on long-term debt
     (net of interest income of $220 and $332,
     respectively)                                      4,733          2,048
                                                  ---------------------------

    Income before income taxes                          7,065          7,339
                                                  ---------------------------

    Income tax expense (recovery)
      Future                                           10,312        (16,215)
                                                  ---------------------------

    Net (loss) income for the period                   (3,247)        23,554
                                                  ---------------------------
                                                  ---------------------------

    Gain on cash flow hedges                              273

                                                  ------------
    Comprehensive loss for the period                  (2,974)
                                                  ------------
                                                  ------------


    Basic (loss) income per unit                        (0.14)          1.49
                                                  ---------------------------

    Diluted (loss) income per unit                      (0.14)          1.47
                                                  ---------------------------

    Weighted average units outstanding             23,479,417     15,843,113
                                                  ---------------------------



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

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

    Distributions declared         -         -         -   (14,579)  (14,579)

    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
     period                        -         -         -    23,554    23,554
                            -------------------------------------------------

    Balance as at
     September 30, 2006      215,164       902         -     1,055   217,121
                            -------------------------------------------------
                            -------------------------------------------------


    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         -         -         -   (20,406)  (20,406)

    Gain on cash flow
     hedges                        -         -       273         -       273

    Conversion of
     convertible debentures      172        (4)        -         -       168

    Net loss for the period        -         -         -    (3,247)   (3,247)
                            -------------------------------------------------

    Balance as at
     September 30, 2007      215,336       898       331   (27,374)  189,191
                            -------------------------------------------------
                            -------------------------------------------------



    CONSOLIDATED STATEMENT OF CASH FLOWS
    -------------------------------------------------------------------------
    (in thousands of dollars, unaudited)        For the three  For the three
                                                 months ended   months ended
                                                 September 30,  September 30,
                                                         2007           2006
                                                          $              $
    -------------------------------------------------------------------------
    Cash provided by (used in)
    Operating activities
    -------------------------------------------------------------------------
    Net income for the period                           1,438         15,239
    Items not involving cash
    Depreciation of property, plant and equipment       2,065          1,294
    Amortization of intangible assets                   2,411          1,843
    Pension expense                                     1,015            397
    Contributions made to pension plans                  (697)        (3,895)
    Amortization of deferred financing fees                 -            108
    (Gain) loss on disposal of property,
     plant and equipment                                   (5)             3
    Accretion of convertible debentures                    42             14
    Unfavourable lease obligations                        (26)             -
    Amortization of lease inducement                      (31)             -
    Post-employment benefits                              (55)            (5)
    Future income taxes                                   566        (14,888)
                                                  ---------------------------
                                                        6,723            110
    Changes in non-cash items relating to
     operating activities                              (5,365)        (2,600)
                                                  ---------------------------
                                                        1,358         (2,490)
                                                  ---------------------------

    Investing activities
    -------------------------------------------------------------------------
    Purchase of property, plant and equipment          (1,404)          (927)
    Proceeds on disposal of property, plant and
     equipment                                            706              -
    Acquisition of Relizon Canada Inc. - net of
     cash acquired of $1,888                                -       (112,466)
                                                  ---------------------------
                                                         (698)      (113,393)
                                                  ---------------------------

    Financing activities
    -------------------------------------------------------------------------
    Proceeds from issuance of trust units - net
     of expenses                                            -         50,990
    Proceeds from issuance of convertible debentures        -         33,600
    Proceeds from revolving bank facility                   -         30,000
    Bank overdraft                                      4,017              -
    Financing costs                                         -           (667)
    Distributions to Unitholders                       (6,804)        (5,137)
                                                  ---------------------------
                                                       (2,787)       108,786
                                                  ---------------------------
    Decrease in cash and cash equivalents during
     the period                                        (2,127)        (7,097)
    -------------------------------------------------------------------------
    Cash and cash equivalents - beginning of
     period                                             2,127         11,004
    -------------------------------------------------------------------------
    Cash and cash equivalents - end of period               -          3,907
    -------------------------------------------------------------------------
    Supplemental cash flow information
      Interest paid                                     2,211            849
    Non-cash investing and financing activities
      Units issued in consideration with
       business acquisition                                 -         27,243



    CONSOLIDATED STATEMENT OF CASH FLOWS
    -------------------------------------------------------------------------
    (in thousands of dollars, unaudited)         For the nine   For the nine
                                                 months ended   months ended
                                                 September 30,  September 30,
                                                         2007           2006
                                                          $              $
    -------------------------------------------------------------------------
    Cash provided by (used in)
    Operating activities
    -------------------------------------------------------------------------
    Net (loss) income for the period                   (3,247)        23,554
    Items not involving cash
    Depreciation of property, plant and
     equipment                                          6,443          2,867
    Amortization of intangible assets                   7,233          5,147
    Pension expense                                     2,507          1,085
    Contributions made to pension plans                (2,129)        (5,007)
    Amortization of deferred financing fees                 -            261
    Loss on disposal of property, plant and
     equipment                                             56              1
    Accretion of convertible debentures                   128             14
    Unfavourable lease obligations                        (77)             -
    Amortization of lease inducement                      (92)             -
    Post-employment benefits                              (44)            (5)
    Future income taxes                                10,312        (16,215)
                                                  ---------------------------
                                                       21,090         11,702
    Changes in non-cash items relating to
     operating activities                              (7,100)        (2,365)
                                                  ---------------------------
                                                       13,990          9,337
                                                  ---------------------------
    Investing activities
    -------------------------------------------------------------------------
    Purchase of property, plant and equipment          (4,156)        (1,673)
    Proceeds on disposal of property, plant and
     equipment                                            788              4
    Acquisition of business - net of cash acquired
     of $323                                                -           (374)
    Acquisition of Relizon Canada Inc. - net of
     cash acquired of $1,888                            1,000       (112,466)
                                                  ---------------------------
                                                       (2,368)        (1,116)
                                                  ---------------------------
    Financing activities
    -------------------------------------------------------------------------
    Proceeds from issuance of trust units - net
     of expenses                                            -         50,990
    Proceeds from issuance of convertible
     debentures                                             -         33,600
    Proceeds from revolving bank facility                   -         30,000
    Bank overdraft                                      4,017              -
    Financing costs                                         -           (667)
    Distributions to Unitholders                      (20,406)       (13,747)
                                                  ---------------------------
                                                      (16,389)       100,176
                                                  ---------------------------
    Decrease in cash and cash equivalents during
     the period                                        (4,767)        (4,996)
    -------------------------------------------------------------------------
    Cash and cash equivalents - beginning of
     period                                             4,767          8,903
    -------------------------------------------------------------------------
    Cash and cash equivalents - end of period               -          3,907
    -------------------------------------------------------------------------
    Supplemental cash flow information
      Interest paid                                     5,134          2,047
      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, Data
Business Forms Limited, Tel: (905) 791-3151; Mr. Paul O'Shea, Chief Financial
Officer, Data Business Forms Limited, 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