The DATA Group Income Fund Announces third quarter results for 2009

    
    Highlights
    ----------

    Q3 2009
    -------

    -   Third quarter ("Q3") 2009 Revenues of $84.4 million, Q3 Gross Profit
        of $22.0 million, Q3 Net Income of $3.3 million
    -   Q3 Cash Available for Distribution of $6.7 million or $0.285 per
        unit, an increase of 9.3% over Q3 2008 and Cash Distributions of
        $6.8 million or $0.290 per unit (see Table 4 and "Non-GAAP Measures"
        below)
    -   Q3 Payout Ratio of 101.7% (See Table 4 below)
    -   Q3 Adjusted EBITDA of $8.6 million (See Table 3 and "Non-GAAP
        Measures" below)

    YTD 2009
    --------

    -   Year to Date ("YTD") 2009 Revenues of $259.1 million, YTD Gross
        Profit of $66.5 million, YTD Net Income of $6.8 million
    -   YTD Cash Available for Distribution of $18.7 million or $0.798 per
        unit and Cash Distributions of $20.4 million or $0.870 per unit (see
        Table 4 and "Non-GAAP Measures" below)
    -   YTD Payout Ratio of 109.0% (See Table 4 below)
    -   YTD Adjusted EBITDA of $24.3 million (See Table 3 and "Non-GAAP
        Measures" below)
    

BRAMPTON, ON, Nov. 5 /CNW/ - The DATA Group Income Fund (TSX: DGI.UN) ("the Fund") today announced financial and operating results for the third quarter ended September 30, 2009, which include the results of operations for The Data Group Limited Partnership (the "Data Group").

OUTLOOK

During the quarter, the Fund has made progress as a result of the initiatives executed in this and previous quarters. Consequently, the Fund currently intends to maintain its monthly distributions at existing levels, based upon the Data Group's third quarter results and currently projected cash flow from operations, including expected revenues from new business wins, lower anticipated operating expenses as a result of previous and recent cost reductions, and its current liquidity and existing cash resources. The Fund's Board of Trustees will continue to closely monitor the Fund's monthly distribution levels in light of the current economic volatility and the Fund's on-going cash available for distribution and cash resources. The current economic environment continues to be very fluid, volatile and difficult to predict. Management will continue to manage on a "more of the same basis". Management believes the Fund is well positioned to benefit from an economic recovery.

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

    Consolidated Financial Information
    -------------------------------------------------------------------------
    For the periods ended
     September 30, 2009 and
     2008

    (in thousands of dollars,
     except per unit amounts,
     unaudited)             Jul. 1 to    Jul. 1 to    Jan. 1 to    Jan. 1 to
                             Sept. 30,     Sept 30,    Sept. 30,    Sept. 30,
                                 2009         2008         2009         2008
                                    $            $            $            $
    -------------------------------------------------------------------------
    Revenues                   84,443       89,205      259,129      283,964
    Cost of revenues           62,411       66,220      192,624      206,644
    -------------------------------------------------------------------------
    Gross profit               22,032       22,985       66,505       77,320

    Selling, general and
     administrative
     expenses                  15,130       16,749       46,751       52,333
    Gain on cancellation of
     convertible
     debentures                     -            -           (2)           -
    Lease exit charge               -            -          866            -
    Write down of assets held
     for sale                       -          927            -          927
    Amortization of
     intangible assets          2,649        2,744        7,947        8,232
    -------------------------------------------------------------------------
    Income before interest
     and income taxes           4,253        2,565       10,943       15,828
    -------------------------------------------------------------------------

    Interest expense on
     long-term debt             1,292        1,500        3,981        4,569
    -------------------------------------------------------------------------
    Income before income
     taxes                      2,961        1,065        6,962       11,259

    Future income tax
     (recovery) expense          (300)         (82)         155          518
    -------------------------------------------------------------------------
    Net income for the
     period                     3,261        1,147        6,807       10,741
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted income
     per unit                    0.14         0.05         0.29         0.46
    Number of units
     outstanding           23,490,592   23,490,592   23,490,592   23,490,592
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                As at        As at
                             Sept. 30,    Sept. 30,
    Consolidated Balance         2009         2008
     Sheet Information              $            $
    -----------------------------------------------
    Current assets            106,731      111,451
    Current liabilities        42,631       44,675

    Total assets              329,887      360,674
    Total long-term
     liabilities              128,488      127,257

    Unitholders' equity       158,768      188,742
    -----------------------------------------------



    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
     September 30, 2009
     and 2008

    (in thousands of dollars,
     except percentage
     amounts, unaudited)    Jul. 1 to    Jul. 1 to    Jan. 1 to    Jan. 1 to
                             Sept. 30,     Sept 30,    Sept. 30,    Sept. 30,
                                 2009         2008         2009         2008
                                    $            $            $            $
    -------------------------------------------------------------------------

    Revenues
      DATA East and West       77,727       81,973      237,397      258,712
      Sundog                    4,829        5,063       14,859       17,191
      Multiple Pakfold          3,488        3,931       10,409       11,938
      Intersegment             (1,601)      (1,762)      (3,536)      (3,877)
    -------------------------------------------------------------------------
                               84,443       89,205      259,129      283,964

    Gross profit
      DATA East and West       20,125       21,373       61,258       71,360
      Sundog                    1,450        1,167        4,115        4,752
      Multiple Pakfold            457          445        1,132        1,208
    -------------------------------------------------------------------------
                               22,032       22,985       66,505       77,320
    -------------------------------------------------------------------------

    Gross profit, as a
     percentage of revenues
      DATA East and West        25.9%        26.1%        25.8%        27.6%
      Sundog                    30.0%        23.0%        27.7%        27.6%
      Multiple Pakfold          13.1%        11.3%        10.9%        10.1%
    -------------------------------------------------------------------------
                                26.1%        25.8%        25.7%        27.2%
    -------------------------------------------------------------------------

    Selling, general and
     administrative
     expenses                  15,130       16,749       46,751       52,333
    -------------------------------------------------------------------------
    As a percentage of
     revenues                   17.9%        18.8%        18.0%        18.4%
    -------------------------------------------------------------------------

    Adjusted EBITDA (see
     Table 3)                   8,648        8,219       25,174       31,091
    -------------------------------------------------------------------------
    Adjusted EBITDA margin,
     as a percentage of
     revenues                   10.2%         9.2%         9.7%        10.9%
    -------------------------------------------------------------------------

    Net income for the
     period                     3,261        1,147        6,807       10,741
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    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
     September 30, 2009
     and 2008

    (in thousands of
     dollars, unaudited)    Jul. 1 to    Jul. 1 to    Jan. 1 to    Jan. 1 to
                             Sept. 30,     Sept 30,    Sept. 30,    Sept. 30,
                                 2009         2008         2009         2008
                                    $            $            $            $
    -------------------------------------------------------------------------
    Net income for the
     period                     3,261        1,147        6,807       10,741
    -------------------------------------------------------------------------
    Net interest expense on
     long-term debt             1,292        1,500        3,981        4,569
    Depreciation of
     property, plant and
     equipment                  1,746        1,983        5,420        6,104
    Write down of assets
     held for sale                  -          927            -          927
    Amortization of
     intangible assets          2,649        2,744        7,947        8,232
    Gain on cancellation of
     convertible debentures         -            -           (2)           -
    Lease exit charge               -            -          866            -
    Future income tax
     (recovery) expense          (300)         (82)         155          518
    -------------------------------------------------------------------------
    Adjusted EBITDA             8,648        8,219       25,174       31,091
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    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 third 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 third 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 third 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 nine months of 2009 was the weakness in the domestic and global economic environment, which negatively impacted the Fund's revenues over that period. The decline in revenues was partially offset in the third quarter by revenues from new business. For the quarter ended September 30, 2009, the Fund recorded revenues of $84.4 million, a decrease of $4.8 million or 5.3% compared with the same period in 2008. The decrease, before intersegment revenues, was the result of a $4.2 million decrease in the Data East and West segment, a $0.2 million decrease in the Sundog segment and a $0.4 million decrease in the Multiple Pakfold segment. For the nine months ended September 30, 2009, the Fund recorded revenues of $259.1 million, a decrease of $24.8 million or 8.7% compared with the same period in 2008. The decrease, before intersegment revenues, was the result of a $21.3 million decrease in the DATA East and West segment, a $2.3 million decrease in the Sundog segment and a $1.5 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 September 30, 2009, cost of revenues decreased to $62.4 million from $66.2 million for the same period in 2008. Gross profit for the quarter ended September 30, 2009 was $22.0 million, which represented a decrease of $1.0 million or 4.1% from $23.0 million for the same period in 2008. The decrease in gross profit for the quarter ended September 30, 2009 was attributable to a gross profit decrease of $1.2 million in the DATA East and West segment offset by a gross profit increase of $0.3 million in the Sundog segment. Gross profit as a percentage of revenues increased to 26.1% for the quarter ended September 30, 2009 compared to 25.8% for the same period in 2008. For the nine months ended September 30, 2009, cost of revenues decreased to $192.6 million from $206.6 million for the same period in 2008. Gross profit for the nine months ended September 30, 2009 was $66.5 million, which represented a decrease of $10.8 million or 14.0% from $77.3 million in the same period of 2008. The decrease in gross profit for the nine months ended September 30, 2009 was attributable to gross profit decreases of $10.1 million in the DATA East and West segment, $0.6 million in the Sundog segment and $0.1 million in the Multiple Pakfold segment. Gross profit as a percentage of revenue decreased to 25.7% for the nine months ended September 30, 2009 compared to 27.2% 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 September 30, 2009 decreased $1.6 million to $15.1 million compared to $16.7 million in the same period of 2008. SG&A expenses for the three months ended September 30, 2009 decreased as the result of the Data Group's on-going productivity improvements and cost reduction initiatives. As a percentage of revenues, these costs were 17.9% of revenues for the quarter ended September 30, 2009 compared to 18.8% of revenues for the same period in 2008. For the quarters ended September 30, 2009 and 2008, the Data Group incurred $0.9 million and $0.1 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 nine months ended September 30, 2009 decreased by $5.5 million to $46.8 million compared to $52.3 million in the same period of 2008. SG&A expenses for the nine months ended September 30, 2009 decreased as a result of the Data Group's on-going productivity improvements and cost reduction initiatives. As a percentage of revenues, these costs were 18.0% of revenues for the nine months ended September 30, 2009 compared to 18.4% of revenues for the same period in 2008. For the nine month periods ended September 30, 2009 and 2008, the Data Group incurred $1.3 million and $0.6 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 nine months ended September 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 lease exit charge of $0.9 million, representing the liability for remaining lease costs under the lease agreement net of sublease income. During the nine months ended September 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 September 30, 2009, Adjusted EBITDA was $8.6 million, or 10.2% of revenues. Adjusted EBITDA for the quarter ended September 30, 2009 increased $0.4 million or 5.2% from the same period in the prior year and the Adjusted EBITDA margin for the quarter, as a percentage of revenues, increased from 9.2% of revenues in 2008 to 10.2% of revenues in 2009. For the nine months ended September 30, 2009, Adjusted EBITDA was $25.2 million or 9.7% of revenues. Adjusted EBITDA for the nine months ended September 30, 2009 decreased $5.9 million or 19.0% from the same period in the prior year and the Adjusted EBITDA margin for the nine month period, as a percentage of revenues, decreased from 10.9% of revenues in 2008 to 9.7% 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 September 30, 2009 compared to $1.5 million for the same period in 2008. Net interest expense on long-term debt was $4.0 million for the nine months ended September 30, 2009 compared to $4.6 million for the same period in 2008.

For the quarter ended September 30, 2008, interest income of $0.1 million was earned. This interest income was substantially related to the cash and cash equivalents held by the Data Group. Interest income of $0.3 million was earned during the nine month periods ended September 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 $3.0 million and a future income tax recovery of $0.3 million for the quarter ended September 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 $1.1 million and a future income tax recovery of $0.1 million for the quarter ended September 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 $7.0 million and a future income tax expense of $0.2 million for the nine months ended September 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 $11.3 million and a future income tax expense of $0.5 million for the nine months ended September 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 September 30, 2009 was $3.3 million compared to a net income of $1.1 million for the quarter ended September 30, 2008. Net income for the nine months ended September 30, 2009 was $6.8 million compared to a net income of $10.7 million for the nine months ended September 30, 2008. The increase in comparable profitability for the quarter ended September 30, 2009 was substantially due to cost savings from on-going productivity improvement and cost reduction initiatives and revenues from new business, which increased capacity utilization and contributed to a strong product mix with higher value added and margin. The decrease in comparable profitability for the nine months ended September 30, 2009 was substantially due to lower gross profit as a result of lower revenues due to generally poor economic conditions, a lease exit charge and offset by realized cost savings from on-going productivity improvement and cost reduction initiatives.

DATA EAST AND WEST

Revenues at the Data Group's DATA East and West segment for the quarter ended September 30, 2009 decreased $4.2 million or 5.2% to $77.7 million from $81.9 million for the same period in the prior year. Revenues for the nine months ended September 30, 2009 decreased $21.3 million or 8.2% to $237.4 million from $258.7 million for the same period in the prior year.

Revenues for the three and nine months ended September 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 nine 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 nine months of 2009. In the third quarter, the segment experienced revenue gains from new business which partially offset declines in revenues from existing customers.

For the quarter ended September 30, 2009, gross profit decreased $1.2 million to $20.1 million from $21.4 million for the same period in 2008. Gross profit as a percentage of revenues for the quarter ended September 30, 2009 decreased to 25.9% from 26.1% for the same period in 2008. The decrease in gross profit as a percentage of revenues during the quarter ended September 30, 2009 was due to lower revenues. However, the improvement in gross profit as a percentage from the first two quarters of 2009 was due to an increase in capacity utilization and lower costs as a result of on-going productivity improvement initiatives. As noted above, the new business revenues generated during the quarter contributed to a strong product mix with higher value added and margin.

For the nine months ending September 30, 2009, gross profit decreased $10.1 million to $61.3 million from $71.4 million in the same period of 2008. Gross profit as a percentage of revenues for the nine months ended September 30, 2009 decreased to 25.8% from 27.6% for the same period in 2008. The decrease in the gross profit as a percentage of revenues during the nine months ended September 30, 2009, was due to lower revenues offset by an increase in capacity utilization and lower costs as a result on-going productivity improvement initiatives as discussed above.

SUNDOG

Revenues at the Data Group's Sundog segment for the quarter ended September 30, 2009 decreased $0.2 million or 4.6% to $4.8 million from $5.0 million for the same period in the prior year. Revenues for the nine months ended September 30, 2009 decreased $2.3 million or 13.6% to $14.9 million from $17.2 million for the same period in the prior year. The decrease in revenues for the three and nine months ended September 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 September 30, 2009, gross profit increased $0.3 million to $1.5 million from $1.2 million for the same period in 2008. Gross profit as a percentage of revenues for the quarter ended September 30, 2009 increased to 30.0% from 23.0% for the same period in 2008. For the nine months ended September 30, 2009, gross profit decreased $0.6 million to $4.1 million from $4.7 million for the same period in 2008. Gross profit as a percentage of revenues for the nine months ended September 30, 2009 increased to 27.7% from 27.6% for the same period in 2008. The increase in gross profit as a percentage of revenues for the three and nine months ended September 30, 2009 was principally due to an increase in higher value added and lower costs as a result on-going productivity improvement initiatives.

Multiple Pakfold

Revenues at the Data Group's Multiple Pakfold segment for the quarter ended September 30, 2009 decreased $0.4 million or 11.3% to $3.5 million from $3.9 million for the same period in the prior year. Revenues for the nine months ended September 30, 2009 decreased $1.5 million or 12.8% to $10.4 million from $11.9 million for the same period in the prior year.

The decline in revenues for the three and nine months ended September 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 quarters ended September 30, 2009 and 2008, gross profit was $0.5 million and $0.4 million, respectively. Gross profit as a percentage of revenues for the quarter ended September 30, 2009 was 13.1% compared to 11.3% for the same period in 2008. For the nine months ended September 30, 2009, gross profit decreased $0.1 million to $1.1 million from $1.2 million for the same period of 2008. Gross profit as a percentage of revenues for the nine months ended September 30, 2009 was 10.9% compared to 10.1% for the same period in 2008. The improvement in the gross profit as a percentage of revenues for the three and nine months ended September 30, 2009 was due to the cost reduction initiatives undertaken in 2008 and 2009 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
     September 30, 2009 and
     2008

    (in thousands of dollars,
     except percentages and
     per unit amounts,
     unaudited)             Jul. 1 to    Jul. 1 to    Jan. 1 to    Jan. 1 to
                             Sept. 30,     Sept 30,    Sept. 30,    Sept. 30,
                                 2009         2008         2009         2008
                                    $            $            $            $
    -------------------------------------------------------------------------
    Cash provided by
     operating activities       6,390        6,341       20,264       29,332
    Capital adjustments
      Maintenance capital
       expenditures(1)           (547)        (692)      (1,853)      (2,159)
      Purchase of
       convertible
       debentures                   -            -           (6)           -

    Other adjustments
     including
     discretionary items:
      Changes in non-cash
       working capital(2)         708          363          (47)      (2,949)
      Other(3)                    139          107          363          320
    -------------------------------------------------------------------------
    Cash available for
     distribution               6,690        6,119       18,721       24,544
    -------------------------------------------------------------------------
    Distributions to
     unitholders(4)             6,805        6,805       20,415       20,415
    -------------------------------------------------------------------------
    Excess (shortfall) of
     cash available for
     distribution over
     actual distributions        (115)        (686)      (1,694)       4,129
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Per unit(5)
    -------------------------------------------------------------------------
    Cash available for
     distribution per
     unit(5)                    0.285        0.260        0.798        1.045
    -------------------------------------------------------------------------
    Distributions to
     unitholders per
     unit(5)                    0.290        0.290        0.870        0.870
    -------------------------------------------------------------------------
    Excess (shortfall) of
     cash available for
     distribution per unit
     over actual
     distributions per unit    (0.005)      (0.030)      (0.072)       0.175
    -------------------------------------------------------------------------
    Payout ratio(6)            101.7%       111.2%       109.0%        83.2%
    -------------------------------------------------------------------------

    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)    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 September 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 nine month periods ended September 30, 2009 and 2008, respectively and the amounts discussed below. For the quarter ended September 30, 2009, the Fund generated $6.7 million or $0.285 per unit of cash available for distribution compared to $6.1 million or $0.260 per unit for the same period in 2008. Cash available for distribution for the quarter ended September 30, 2009 was calculated by deducting from cash provided by operating activities of $6.4 million, maintenance capital expenditures of $0.5 million and adding back changes in non-cash working capital of $0.7 million and other non-cash items of $0.1 million. Cash available for distribution for the quarter ended September 30, 2008 was calculated by deducting from cash provided by operating activities of $6.3 million, maintenance capital expenditures of $0.7 million and adding back changes in non-cash working capital of $0.4 million and other non-cash items of $0.1 million.

For the nine months ended September 30, 2009, the Fund generated $18.7 million or $0.798 per unit of cash available for distribution compared to $24.5 million or $1.045 per unit for the same period in 2008. Cash available for distribution for the nine months ended September 30, 2009 was calculated by deducting from cash provided by operating activities of $20.3 million, maintenance capital expenditures of $1.9 million and changes in non-cash working capital of $0.1 million, and adding back other non-cash items of $0.4 million. Cash available for distribution for the nine months ended September 30, 2008 was calculated by deducting from cash provided by operating activities of $29.3 million, maintenance capital expenditures of $2.1 million and changes in non-cash working capital of $3.0 million, and adding back other non-cash items of $0.3 million.

For the quarter ended September 30, 2009, the Fund declared distributions of $6.8 million or $0.290 per unit. Actual distributions exceeded cash available for distribution by $0.1 million or $0.005 per unit for the quarter ended September 30, 2009. During the quarter ended September 30, 2009, 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 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 September 30, 2008, the Fund declared distributions of $6.8 million or $0.290 per unit. Cash available for distribution exceeded actual distributions by $0.7 million or $0.030 per unit for the quarter ended September 30, 2008. During the quarter ended September 30, 2008, the Data Group made cash payments of $0.4 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 nine months ended September 30, 2009, the Fund declared distributions of $20.4 million or $0.870 per unit. Actual distributions exceeded cash available for distribution by $1.7 million or $0.072 per unit for the nine months ended September 30, 2009. During the nine months ended September 30, 2009, the Data Group made cash payments of $2.5 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, the net proceeds from asset dispositions and existing cash resources. The restructuring and integration costs paid during the period have been deducted in determining cash available for distribution.

For the nine months ended September 30, 2008, the Fund declared distributions of $20.4 million or $0.870 per unit. Cash available for distribution exceeded actual distributions by $4.1 million or $0.175 per unit for the nine months ended September 30, 2008. During the nine months ended September 30, 2008, the Data Group made cash payments of $2.2 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 September 30, 2009 of $0.5 million related primarily to maintenance capital expenditures and were financed by cash flow from operations. Capital expenditures for the nine months ended September 30, 2009 of $1.9 million related primarily to maintenance capital expenditures and were financed by cash flow from operations and net proceeds from asset dispositions. During the nine months ended September 30, 2009, the Data Group sold and leased back printing equipment having a value of $0.6 million. During the nine months ended September 30, 2009, the Data Group sold its former Hemmingford, Québec facility for gross proceeds of $0.7 million.

FINANCING ACTIVITIES

For the quarter ended September 30, 2009, the Fund paid or declared aggregate cash distributions of $6.8 million to its unitholders. For the nine months ended September 30, 2009, the Fund paid cash distributions of $20.4 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 means EBITDA adjusted for gains on cancellation of convertible debentures, lease exit charges and write downs of assets held for sale. 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)          September 30,  December 31,
                                                          2009          2008
                                                             $             $
    -------------------------------------------------------------------------
    Assets
    Current assets
      Cash and cash equivalents                         10,718        11,492
      Accounts receivable                               41,462        47,106
      Inventories                                       48,734        47,583
      Prepaid expenses and other current assets          5,817         7,684
                                                   --------------------------
                                                       106,731       113,865

    Property, plant and equipment                       35,107        39,909
    Goodwill                                           141,206       141,206
    Intangible assets                                   46,843        54,790
                                                   --------------------------

                                                       329,887       349,770
                                                   --------------------------
                                                   --------------------------
    Liabilities
    Current liabilities
      Accounts payable and accrued liabilities          28,875        32,224
      Accrued restructuring and integration
       provisions                                        1,200         3,627
      Income taxes payable                               2,157         4,022
      Deferred revenue                                   8,130         7,861
      Distributions payable                              2,269         2,269
                                                   --------------------------
                                                        42,631        50,003

    Revolving bank facility                             70,000        70,000
    Convertible debentures                              34,445        34,327
    Future income taxes                                  8,601         8,446
    Deferred gain                                        1,579         1,724
    Unfavourable lease obligation                        1,054         1,142
    Deferred lease inducement                              888           980
    Lease exit accrual                                     828             -
    Pension obligations                                  8,889         9,680
    Post-employment and post-retirement benefits         2,204         2,150
                                                   --------------------------
                                                       171,119       178,452
                                                   --------------------------
    Unitholders' Equity
    Units                                              215,336       215,336
    Conversion options                                     897           898
    Accumulated other comprehensive loss                     -        (1,059)
    Deficit                                            (57,465)      (43,857)
                                                   --------------------------
                                                       158,768       171,318
                                                   --------------------------

                                                       329,887       349,770
                                                   --------------------------
                                                   --------------------------



    CONSOLIDATED STATEMENTS OF INCOME AND
    COMPREHENSIVE INCOME
    -------------------------------------------------------------------------
    (in thousands of dollars, except per unit
     amounts, unaudited)                               For the       For the
                                                  three months  three months
                                                         ended         ended
                                                  September 30, September 30,
                                                          2009          2008
                                                             $             $
    -------------------------------------------------------------------------
    Revenues                                            84,443        89,205

    Cost of revenues (including depreciation of
     $1,689 and $1,892, respectively)                   62,411        66,220
                                                   --------------------------

    Gross profit                                        22,032        22,985
                                                   --------------------------

    Expenses
      Selling, commissions and expenses                  8,138         8,955
      General and administration expenses
       (including depreciation of $57 and $91,
       respectively)                                     6,992         7,794
      Write down of assets held for sale                     -           927
      Amortization of intangible assets                  2,649         2,744
                                                   --------------------------
                                                        17,779        20,420
                                                   --------------------------

    Income before interest and income taxes              4,253         2,565
                                                   --------------------------

    Interest expense on long-term debt
      (net of interest income of $15 and $121,
       respectively)                                     1,292         1,500
                                                   --------------------------

    Income before income taxes                           2,961         1,065
                                                   --------------------------

    Future income tax recovery                            (300)          (82)
                                                   --------------------------

    Net income for the period                            3,261         1,147
                                                   --------------------------
                                                   --------------------------

    (Gain) loss on cash flow hedges                       (344)           45
                                                   --------------------------

    Comprehensive income for the period                  3,605         1,102
                                                   --------------------------
                                                   --------------------------

    Basic income per unit                                 0.14          0.05
                                                   --------------------------

    Diluted income per unit                               0.14          0.05
                                                   --------------------------

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



    CONSOLIDATED STATEMENTS OF INCOME AND
    COMPREHENSIVE INCOME
    -------------------------------------------------------------------------
    (in thousands of dollars, except per unit
     amounts, unaudited)                               For the       For the
                                                   nine months   nine months
                                                         ended         ended
                                                  September 30, September 30,
                                                          2009          2008
                                                             $             $
    -------------------------------------------------------------------------
    Revenues                                           259,129       283,964

    Cost of revenues (including depreciation
     of $5,221 and $5,763 respectively)                192,624       206,644
                                                   --------------------------

    Gross profit                                        66,505        77,320
                                                   --------------------------

    Expenses
      Selling, commissions and expenses                 25,347        28,619
      General and administration expenses
       (including depreciation of $199 and $341,
       respectively)                                    21,404        23,714
      Lease exit charge                                    866             -
      Gain on cancellation of convertible debentures        (2)            -
      Write down of assets held for sale                     -           927
      Amortization of intangible assets                  7,947         8,232
                                                   --------------------------
                                                        55,562        61,492
                                                   --------------------------

    Income before interest and income taxes             10,943        15,828
                                                   --------------------------

    Interest expense on long-term debt
      (net of interest income of $262 and $331,
       respectively)                                     3,981         4,569
                                                   --------------------------

    Income before income taxes                           6,962        11,259
                                                   --------------------------

    Future income tax expense                              155           518
                                                   --------------------------

    Net income for the period                            6,807        10,741
                                                   --------------------------
                                                   --------------------------

    (Gain) loss on cash flow hedges                     (1,059)          420
                                                   --------------------------

    Comprehensive income for the period                  7,866        10,321
                                                   --------------------------
                                                   --------------------------

    Basic income per unit                                 0.29          0.46
                                                   --------------------------

    Diluted income per unit                               0.29          0.46
                                                   --------------------------

    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                  -          -          -    (20,415)   (20,415)

    Loss on cash flow
     hedges                    -          -       (420)         -       (420)

    Net income for the
     period                    -          -          -     10,741     10,741
                        -----------------------------------------------------

    Balance as at
     September 30,
     2008                215,336        898       (486)   (27,006)   188,742
                        -----------------------------------------------------
                        -----------------------------------------------------

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

    Distributions
     declared                  -          -          -    (20,415)   (20,415)

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

    Gain on cash flow
     hedges                    -          -      1,059          -      1,059

    Net income for
     the period                -          -         -       6,807      6,807

                        -----------------------------------------------------
    Balance as at
     September 30,
     2009                215,336        897         -     (57,465)   158,768
                        -----------------------------------------------------
                        -----------------------------------------------------



    CONSOLIDATED STATEMENTS OF CASH FLOWS
    -------------------------------------------------------------------------
    (in thousands of dollars, unaudited)               For the       For the
                                                  three months  three months
                                                         ended         ended
                                                  September 30, September 30,
                                                          2009          2008
                                                             $             $
    -------------------------------------------------------------------------
    Cash provided by (used in)
    Operating activities
    -------------------------------------------------------------------------
    Net income for the period                            3,261         1,147
    Items not involving cash
      Depreciation of property, plant and equipment      1,746         1,983
      Amortization of intangible assets                  2,649         2,744
      Pension expense                                      237           494
      Contributions made to pension plans                 (502)         (498)
      Write down of assets held for sale                     -           927
      Loss on disposal of property, plant and
       equipment                                            86            46
      Accretion of convertible debentures                   42            42
      Amortization of deferred gain                        (48)          (50)
      Unfavourable lease obligation                        (30)          (27)
      Amortization of lease inducement                     (31)          (30)
      Accretion of lease exit accrual                      (30)            -
      Post-employment and post-retirement benefits          18             8
      Future income tax recovery                          (300)          (82)
                                                   --------------------------
                                                         7,098         6,704
    Changes in non-cash items relating to operating
     activities                                           (708)         (363)
                                                   --------------------------
                                                         6,390         6,341
                                                   --------------------------
    Investing activities
    -------------------------------------------------------------------------
    Purchase of property, plant and equipment             (547)         (692)
    Proceeds on disposal of property, plant and
     equipment                                               -             7
                                                   --------------------------
                                                          (547)         (685)
                                                   --------------------------
    Financing activities
    -------------------------------------------------------------------------
    Distributions to unitholders                        (6,805)       (6,805)
                                                   --------------------------
                                                        (6,805)       (6,805)
                                                   --------------------------
    Decrease in cash and cash equivalents during
     the period                                           (962)       (1,149)
    -------------------------------------------------------------------------
    Cash and cash equivalents - beginning of period     11,680        14,864
    -------------------------------------------------------------------------
    Cash and cash equivalents - end of period           10,718        13,715
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental cash flow information
      Interest paid                                        870           940
      Income taxes (received) paid                        (772)            -



    CONSOLIDATED STATEMENTS OF CASH FLOWS
    -------------------------------------------------------------------------
    (in thousands of dollars, unaudited)               For the       For the
                                                   nine months   nine months
                                                         ended         ended
                                                  September 30, September 30,
                                                          2009          2008
                                                             $             $
    -------------------------------------------------------------------------
    Cash provided by (used in)
    Operating activities
    -------------------------------------------------------------------------
    Net income for the period                            6,807        10,741
    Items not involving cash
      Depreciation of property, plant and equipment      5,420         6,104
      Amortization of intangible assets                  7,947         8,232
      Pension expense                                      697         1,481
      Contributions made to pension plans               (1,488)       (1,479)
      Write down of assets held for sale                     -           927
      (Gain) loss on disposal of property, plant
       and equipment                                        (1)           31
      Gain on cancellation of convertible debentures        (2)            -
      Lease exit charge                                    866             -
      Accretion of convertible debentures                  125           126
      Amortization of deferred gain                       (145)         (147)
      Unfavourable lease obligation                        (88)          (81)
      Amortization of lease inducement                     (92)          (92)
      Accretion of lease exit accrual                      (38)            -
      Post-employment and post-retirement benefits          54            22
      Future income tax expense                            155           518
                                                   --------------------------
                                                        20,217        26,383
    Changes in non-cash items relating to operating
     activities                                             47         2,949
                                                   --------------------------
                                                        20,264        29,332
                                                   --------------------------
    Investing activities
    -------------------------------------------------------------------------
    Purchase of property, plant and equipment           (1,853)       (2,159)
    Proceeds on disposal of property, plant and
     equipment                                           1,236         1,642
                                                   --------------------------
                                                          (617)         (517)
                                                   --------------------------
    Financing activities
    -------------------------------------------------------------------------
    Repurchase of convertible debentures                    (6)            -
    Distributions to unitholders                       (20,415)      (20,415)
                                                   --------------------------
                                                       (20,421)      (20,415)
                                                   --------------------------
    (Decrease) increase in cash and cash
     equivalents during the period                        (774)        8,400
    -------------------------------------------------------------------------
    Cash and cash equivalents - beginning of period     11,492         5,315
    -------------------------------------------------------------------------
    Cash and cash equivalents - end of period           10,718        13,715
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental cash flow information
      Interest paid                                      3,411         3,791
      Income taxes (received) paid                       2,698             -
    

SOURCE THE DATA GROUP INCOME FUND

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

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THE DATA GROUP INCOME FUND

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