The DATA Group Income Fund announces first quarter results for 2010
Highlights
----------
Q1 2010
-------
- First quarter 2010 ("Q1") Revenues of $85.6 million; Q1 Gross Profit
of $20.9 million; Q1 Net Income of $3.4 million
- Q1 Cash Available for Distribution of $6.2 million or $0.263 per unit
and Cash Distributions of $6.8 million or $0.290 per unit (see Table
4 and "Non-GAAP Measures" below)
- Q1 Payout Ratio of 110.0% (See Table 4 below); Q1 Payout Ratio
(excluding one-time restructuring charges) of 107.0%
- Q1 Adjusted EBITDA of $8.2 million (See Table 3 and "Non-GAAP
Measures" below)
BRAMPTON, ON, May 6 /CNW/ - The DATA Group Income Fund (TSX: DGI.UN) ("the Fund") today announced financial and operating results for the first quarter ended March 31, 2010, which include the results of operations for The Data Group Limited Partnership (the "Data Group").
"The current economic environment, in our view, continues to be very fluid, volatile and difficult to predict. Despite occasional glimmers of hope, the first quarter of 2010 results suggest that the recovery will be slow in arriving. Consequently, we continue to manage on a more of the same basis", said David Odell, President and Chief Executive Officer.
Outlook
The first quarter of 2010 continued to be uncertain. While the Data Group continued to benefit from new business wins achieved in 2009, many of its traditional customers continued to experience lower activity levels. As a result, the Data Group experienced a 5.4% reduction in first quarter revenues compared to the same period in 2009. The Fund's Board of Trustees will continue to closely monitor the Fund's monthly distribution levels in light of the current economy and the Fund's on-going cash available for distribution and cash resources. Management believes the Data Group is well positioned to benefit from an economic recovery.
On April 27, 2010, the Fund issued $45 million aggregate principal amount of 6.00% convertible unsecured subordinated debentures (the "6.00% Convertible Debentures"). The 6.00% Convertible Debentures bear interest at a rate of 6.00% payable semi-annually, in arrears, on June 30 and December 31 in each year commencing on December 31, 2010. The 6.00% Convertible Debentures mature on June 30, 2017 and are convertible into trust units of the Fund, at the option of the holder prior to maturity or redemption at a conversion price of $12.20 per unit, subject to adjustment in certain events. The net proceeds of the offering will be used to reduce the Data Group's outstanding bank indebtedness. Principal amounts repaid by the Data Group under its credit facilities may be redrawn under those credit facilities.
Table 1 The following table sets out selected historical financial
information for the periods noted.
Consolidated Financial Information
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For the periods ended March 31, Jan. 1 to Jan. 1 to
2010 and 2009 Mar. 31, Mar. 31,
(in thousands of dollars, except 2010 2009
per unit amounts, unaudited) $ $
-------------------------------------------------------------------------
Revenues 85,564 90,417
Cost of revenues 64,654 67,275
-------------------------------------------------------------------------
Gross profit 20,910 23,142
Selling, general and administrative expenses 14,310 15,928
Gain on cancellation of convertible debentures - (2)
Amortization of intangible assets 2,566 2,649
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Income before interest and income taxes 4,034 4,567
-------------------------------------------------------------------------
Interest expense on long-term debt 1,294 1,436
-------------------------------------------------------------------------
Income before income taxes 2,740 3,131
Income tax expense (recovery)
Current (324) -
Future (315) 334
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(639) 334
-------------------------------------------------------------------------
Net income for the period 3,379 2,797
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Basic and diluted income per unit 0.14 0.12
Number of units outstanding 23,490,592 23,490,592
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As at As at
Mar. 31, Mar. 31,
2010 2009
Consolidated Balance Sheet Information $ $
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Current assets 106,733 113,537
Current liabilities 41,568 49,466
Total assets 318,852 345,507
Total long-term liabilities 122,511 128,451
Unitholders' equity 154,773 167,590
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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 March 31, Jan. 1 to Jan. 1 to
2010 and 2009 Mar. 31, Mar. 31,
(in thousands of dollars, except 2010 2009
percentage amounts, unaudited) $ $
-------------------------------------------------------------------------
Revenues
DATA East and West 78,073 82,381
Sundog 4,838 5,331
Multiple Pakfold 3,744 3,710
Intersegment (1,091) (1,005)
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85,564 90,417
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Gross profit
DATA East and West 18,986 21,228
Sundog 1,268 1,478
Multiple Pakfold 656 436
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20,910 23,142
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Gross profit, as a percentage of revenues
DATA East and West 24.3% 25.8%
Sundog 26.2% 27.7%
Multiple Pakfold 17.5% 11.8%
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24.4% 25.6%
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Selling, general and administrative expenses 14,310 15,928
-------------------------------------------------------------------------
As a percentage of revenues 16.7% 17.6%
-------------------------------------------------------------------------
Adjusted EBITDA (see Table 3) 8,239 9,096
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Adjusted EBITDA margin, as a percentage of
revenues 9.6% 10.1%
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Net income for the period 3,379 2,797
-------------------------------------------------------------------------
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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 March 31, Jan. 1 to Jan. 1 to
2010 and 2009 Mar. 31, Mar. 31,
(in thousands of dollars, unaudited) 2010 2009
$ $
-------------------------------------------------------------------------
Net income for the period 3,379 2,797
-------------------------------------------------------------------------
Net interest expense on long-term debt 1,294 1,436
Depreciation of property, plant and equipment 1,639 1,882
Amortization of intangible assets 2,566 2,649
Gain on cancellation of convertible debentures - (2)
Current income tax recovery (324) -
Future income tax (recovery) expense (315) 334
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Adjusted EBITDA 8,239 9,096
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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 91% of total revenues for the first quarter of 2010) sells a broad range of printed products and document management services directly to end users. Sundog (which provided approximately 5% of total revenues for the first quarter of 2010) sells commercial printing products, document management services and event tickets. Multiple Pakfold (which provided approximately 4% of total revenues for the first quarter of 2010) sells forms and labels to independent brokers and resellers.
Revenues
During the first three months of 2010, the Data Group continued to encounter weakness in the domestic economic environment, which negatively impacted the Fund's revenues over that period. The decline in revenues was partially offset by revenues from new business. For the quarter ended March 31, 2010, the Fund recorded revenues of $85.6 million, a decrease of $4.9 million or 5.4% compared with the same period in 2009. The decrease, before intersegment revenues, was primarily the result of a $4.3 million decrease in the DATA East and West segment and a $0.5 million decrease in the Sundog 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 March 31, 2010, cost of revenues decreased to $64.7 million from $67.3 million for the same period in 2009. Gross profit for the quarter ended March 31, 2010 was $20.9 million, which represented a decrease of $2.2 million or 9.6% from $23.1 million for the same period in 2009. The decrease in gross profit for the quarter ended March 31, 2010 was attributable to a gross profit decrease of $2.2 million in the DATA East and West segment, a gross profit decrease of $0.2 million in the Sundog segment and was offset by a gross profit increase of $0.2 million in the Multiple Pakfold segment. Gross profit as a percentage of revenues decreased to 24.4% for the quarter ended March 31, 2010 compared to 25.6% for the same period in 2009.
Selling, General and Administrative Expenses and Restructuring Expenses
Selling, general and administrative ("SG&A") expenses, including administrative expenses of the Fund, for the quarter ended March 31, 2010 decreased $1.6 million to $14.3 million compared to $15.9 million in the same period of 2009. The decrease in SG&A expenses was the result of the Data Group's on-going productivity improvements and cost reduction initiatives. As a percentage of revenues, these costs were 16.7% of revenues for the quarter ended March 31, 2010 compared to 17.6% of revenues for the same period in 2009. For the quarters ended March 31, 2010 and 2009, the Data Group incurred $0.2 million and $0.1 million of severance expenses, respectively. These costs were included in SG&A and were related to the Data Group's on-going productivity improvement initiatives.
Asset Sale
During the three months ended March 31, 2010, the Data Group completed the sale of its Orangeville, Ontario property for gross proceeds of $2.2 million.
Adjusted EBITDA
For the quarter ended March 31, 2010, Adjusted EBITDA was $8.2 million, or 9.6% of revenues. Adjusted EBITDA for the quarter ended March 31, 2010 decreased $0.9 million or 9.4% from the same period in the prior year and the Adjusted EBITDA margin for the quarter, as a percentage of revenues, decreased from 10.1% of revenues in 2009 to 9.6% of revenues in 2010.
Interest Expense
Net interest expense on long-term debt relating to the Data Group's credit facilities and the Fund's outstanding $34.8 million aggregate principal amount of 6.75% convertible debentures was $1.3 million for the quarter ended March 31, 2010 compared to $1.4 million for the same period in 2009.
Income Taxes
The Fund reported income before income taxes of $2.7 million, a current income tax recovery of $0.3 million and a future income tax recovery of $0.3 million for the quarter ended March 31, 2010. The current income tax recovery represents the final adjustment related to the amount payable by the Data Group to settle reassessments by the Canada Revenue Agency and certain provincial tax authorities that, in each case, adjust the pricing of transactions between Relizon Canada and its former parent company prior to its acquisition by the Fund. The future income tax recovery was due to a change in estimates of future reversals of temporary differences.
The Fund reported income before income taxes of $3.1 million and a future income tax expense of $0.3 million for the quarter ended March 31, 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.
Net Income
Net income for the quarter ended March 31, 2010 was $3.4 million compared to a net income of $2.8 million for the quarter ended March 31, 2009. The increase in comparable profitability for the quarter ended March 31, 2010 was substantially due to cost savings from on-going productivity improvement and cost reduction initiatives, a current income tax recovery, and a future income tax recovery in the first quarter of 2010 compared to a future income tax expense in the same period in 2009. Profitability improvements were offset by lower gross profit in 2010 as a result of lower revenues due to generally poor economic conditions as discussed above.
DATA EAST AND WEST
Revenues at the Data Group's DATA East and West segment for the quarter ended March 31, 2010 decreased $4.3 million or 5.2% to $78.1 million from $82.4 million for the same period in the prior year.
Revenues for the three months ended March 31, 2010 decreased due to lower spending from customers in the government and direct mail industries as a result of continuing generally poor economic conditions in Canada. In addition, revenues from lotteries during the first quarter of 2010 were lower than the same period in 2009. In the first quarter of 2010, the segment experienced revenue gains from new business, which partially offset declines in revenues from existing customers.
For the quarter ended March 31, 2010, gross profit decreased $2.2 million to $19.0 million from $21.2 million for the same period in 2009. Gross profit as a percentage of revenues for the quarter ended March 31, 2010 decreased to 24.3% from 25.8% for the same period in 2009. The decrease in gross profit as a percentage of revenues during the quarter ended March 31, 2010 was due to lower revenues and was offset by realized savings from on-going productivity improvements and cost reduction initiatives.
SUNDOG
Revenues at the Data Group's Sundog segment for the quarter ended March 31, 2010 decreased $0.5 million or 9.2% to $4.8 million from $5.3 million for the same period in the prior year. The decrease in revenues for the three months ended March 31, 2010 was due to a highly competitive printing market in Alberta and to poor economic conditions in that province, which continue to negatively affect demand for commercial printing in that market, primarily marketing materials. First quarter of 2010 revenues were also impacted by lower annual report volumes.
For the quarter ended March 31, 2010, gross profit decreased $0.2 million to $1.3 million from $1.5 million for the same period in 2009. Gross profit as a percentage of revenues for the quarter ended March 31, 2010 decreased to 26.2% from 27.7% for the same period in 2009. The decrease in gross profit as a percentage of revenues for the three months ended March 31, 2010 was principally due to lower revenues and was offset by realized savings from cost reduction initiatives.
MULTIPLE PAKFOLD
Revenues at the Data Group's Multiple Pakfold segment for the quarter ended March 31, 2010 remained largely unchanged from the same period in the prior year at $3.7 million.
For the quarter ended March 31, 2010, gross profit increased $0.2 million to $0.6 million from $0.4 million for the same period in 2009. Gross profit as a percentage of revenues for the quarter ended March 31, 2010 increased to 17.5% from 11.8% for the same period in 2009. The improvement in the gross profit as a percentage of revenues for the three months ended March 31, 2010 was due to the cost reduction initiatives undertaken in prior periods by the segment to improve operating efficiencies.
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".
Cash Available for Distribution Reconciliation
-------------------------------------------------------------------------
For the periods ended March 31,
2010 and 2009 Jan. 1 to Jan. 1 to
(in thousands of dollars, except Mar. 31, Mar. 31,
percentages and per unit amounts, 2010 2009
unaudited) $ $
-------------------------------------------------------------------------
Cash provided by (used in) operating activities 12,846 9,922
Capital adjustments
Maintenance capital expenditures(1) (250) (1,139)
Purchase of convertible debentures - (6)
Other adjustments including discretionary items:
Changes in non-cash working capital(2) (7,489) (2,692)
Pension plan wind-up contributions(3) 1,260 -
Other(4) (178) 107
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Cash available for distribution 6,189 6,192
-------------------------------------------------------------------------
Distributions to unitholders(5) 6,805 6,805
-------------------------------------------------------------------------
Shortfall of cash available for distribution
over actual distributions (616) (613)
-------------------------------------------------------------------------
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Per unit(6)
-------------------------------------------------------------------------
Cash available for distribution per unit(6) 0.263 0.264
-------------------------------------------------------------------------
Distributions to unitholders per unit(6) 0.290 0.290
-------------------------------------------------------------------------
Shortfall of cash available for distribution
per unit over actual distributions per unit (0.027) (0.026)
-------------------------------------------------------------------------
Payout ratio(7) 110.0% 109.9%
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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 (used in) 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 income tax related expenses and other amounts that do not
reflect the ongoing operations of the Data Group's business.
(4) Excludes pension plan wind-up contributions to the Data Group's
Relizon Canada defined benefit pension plan. During the three months
ended March 31, 2010, the Data Group made its 2010 annual
contribution of $0.6 million and an additional wind-up contribution
prepayment of $0.6 million to that pension plan. It is currently
expected that the wind-up benefit obligations will be substantially
settled within this fiscal year. The outstanding wind-up deficiency
will be estimated and funded by the Data Group in advance of the
benefit settlement, as required under applicable pension regulations.
(5) Distributions are in respect of the distributions declared.
(6) Per unit calculations are based upon the number of units outstanding
at the end of each month consistent with the number of units upon
which distributions are declared or paid and not the weighted average
number of units outstanding. As at March 31, 2010 and 2009,
23,490,592 units were outstanding.
(7) 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 (used in) operating activities to cash available for distribution for the three month periods ended March 31, 2010 and 2009, respectively, and the amounts discussed below. For the quarter ended March 31, 2010, the Fund generated $6.2 million or $0.263 per unit of cash available for distribution compared to $6.2 million or $0.264 per unit for the same period in 2009. Cash available for distribution for the quarter ended March 31, 2010 was calculated by deducting from cash provided by (used in) operating activities of $12.8 million, maintenance capital expenditures of $0.3 million, changes in non-cash working capital of $7.5 million and other non-cash items of $0.2 million, respectively, and adding back pension plan wind-up contributions of $1.3 million. Cash available for distribution for the quarter ended March 31, 2009 was calculated by deducting from cash provided by (used in) operating activities of $9.9 million, maintenance capital expenditures of $1.1 million and changes in non-cash working capital of $2.7 million, respectively, and adding back other non-cash items of $0.1 million.
For the quarter ended March 31, 2010, the Fund declared distributions of $6.8 million or $0.290 per unit. Actual distributions exceeded cash available for distribution by $0.6 million or $0.027 per unit for the quarter ended March 31, 2010. During the quarter ended March 31, 2010, the Data Group made cash payments of $0.7 million for the accrued restructuring provisions related to severance costs incurred as part of the Data Group's on-going productivity improvement initiatives charged to restructuring expense. These cash payments were funded by cash generated from operations and the net proceeds from the sale of the Data Group's former facility in Orangeville Ontario. The restructuring costs paid during the quarter have been deducted in determining cash available for distribution as these payments are included in cash provided by (used in) operating activities.
For the quarter ended March 31, 2009, the Fund declared distributions of $6.8 million or $0.290 per unit. Actual distributions exceeded cash available for distribution by $0.6 million or $0.026 per unit for the quarter ended March 31, 2009. During the quarter ended March 31, 2009, the Data Group made cash payments of $1.2 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 and accrued restructuring provisions related to severance costs incurred as part of the Data Group's on-going productivity improvements initiatives charged to restructuring expense. 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 as these payments are included in cash provided by (used in) operating activities.
Investing Activities
Capital expenditures for the quarter ended March 31, 2010 of $0.3 million related primarily to maintenance capital expenditures and were financed by cash flow from operations and net proceeds from asset dispositions. During the three months ended March 31, 2010, the Data Group sold its former Orangeville, Ontario facility for gross proceeds of $2.2 million.
Financing Activities
For the quarter ended March 31, 2010, the Fund paid or declared aggregate cash distributions of $6.8 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.
All financial information in this press release is presented in Canadian dollars and in accordance with Canadian generally accepted accounting principles ("GAAP"), unless specified otherwise.
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 risk that 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 risk that, 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 grow its sales or even maintain 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; 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, and the effect of those 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. Adjusted EBITDA for the three months ended March 31, 2010 means EBITDA with no adjustments. Adjusted EBITDA for the three months ended March 31, 2009 means EBITDA adjusted for gains on cancellation of convertible debentures. 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 for the three months ended March 31, 2010 means cash provided by (used in) operating activities increased by, or reduced for, maintenance capital expenditures, pension plan wind-up contributions, changes in non-cash working capital and other non-cash items. Cash available for distribution for the three months ended March 31, 2009 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 an indicator 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 (used in) operating activities to cash available for distribution, see Table 4 above.
CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------------
(in thousands of dollars, March 31, December 31,
unaudited) 2010 2009
$ $
-------------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents 19,601 11,736
Accounts receivable 36,126 44,930
Inventories 45,849 47,449
Prepaid expenses and other current assets 5,157 4,192
Assets held for sale - 2,085
--------------------------
106,733 110,392
Property, plant and equipment 29,174 30,672
Goodwill 141,206 141,206
Intangible assets 41,739 44,305
--------------------------
318,852 326,575
--------------------------
--------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 28,946 29,663
Accrued restructuring and integration
provisions 997 1,556
Income taxes payable 112 1,059
Deferred revenue 9,244 8,971
Distributions payable 2,269 2,269
--------------------------
41,568 43,518
Revolving bank facility 70,000 70,000
Convertible debentures 34,529 34,488
Future income taxes 5,703 6,018
Deferred gain 1,481 1,530
Unfavourable lease obligation 994 1,025
Deferred lease inducement 827 858
Lease exit accrual 758 793
Pension obligations 6,068 8,003
Post-employment and post-retirement benefits 2,151 2,143
--------------------------
164,079 168,376
--------------------------
Unitholders' Equity
Units 215,336 215,336
Conversion options 897 897
Deficit (61,460) (58,034)
--------------------------
154,773 158,199
--------------------------
318,852 326,575
--------------------------
--------------------------
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
-------------------------------------------------------------------------
(in thousands of dollars, except per For the For the
unit amounts, unaudited) three three
months months
ended ended
March 31, March 31,
2010 2009
$ $
-------------------------------------------------------------------------
Revenues 85,564 90,417
Cost of revenues (including depreciation of
$1,562 and $1,806, respectively) 64,654 67,275
--------------------------
Gross profit 20,910 23,142
--------------------------
Expenses
Selling, commissions and expenses 8,312 8,801
General and administration expenses
(including depreciation of $77 and $76,
respectively) 5,998 7,127
Gain on cancellation of convertible debentures - (2)
Amortization of intangible assets 2,566 2,649
--------------------------
16,876 18,575
--------------------------
Income before interest and income taxes 4,034 4,567
Interest expense on long-term debt
(net of interest income of $nil and
$40, respectively) 1,294 1,436
--------------------------
Income before income taxes 2,740 3,131
--------------------------
Income tax expense (recovery)
Current (324) -
Future (315) 334
--------------------------
(639) 334
--------------------------
Net income for the period 3,379 2,797
--------------------------
--------------------------
Gain on cash flow hedges - 281
--------------------------
Comprehensive income for the period 3,379 3,078
--------------------------
--------------------------
Basic income per unit 0.14 0.12
--------------------------
Diluted income per unit 0.14 0.12
--------------------------
Units outstanding 23,490,592 23,490,592
--------------------------
--------------------------
CONSOLIDATED STATEMENTS OF UNITHOLDERS' EQUITY
-------------------------------------------------------------------------
(in thousands of Accumulated
dollars, unaudited) other
compre- Total
hensive Unit-
Conversion income holders'
Units options (loss) Deficit Equity
$ $ $ $ $
-------------------------------------------------------------------------
Balance as at
December 31, 2008 215,336 898 (1,059) (43,857) 171,318
Distributions declared - - - (6,805) (6,805)
Cancellation of
convertible
debentures - (1) - - (1)
Gain on cash flow
hedges - - 281 - 281
Net income for the
period - - - 2,797 2,797
---------------------------------------------------
Balance as at
March 31, 2009 215,336 897 (778) (47,865) 167,590
---------------------------------------------------
---------------------------------------------------
Balance as at
December 31, 2009 215,336 897 - (58,034) 158,199
Distributions declared - - - (6,805) (6,805)
Net income for
the period - - - 3,379 3,379
---------------------------------------------------
Balance as at
March 31, 2010 215,336 897 - (61,460) 154,773
---------------------------------------------------
---------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------------------------------------------
(in thousands of dollars, unaudited) For the For the
three three
months months
ended ended
March 31, March 31,
2010 2009
$ $
-------------------------------------------------------------------------
Cash provided by (used in)
Operating activities
-------------------------------------------------------------------------
Net income for the period 3,379 2,797
Items not involving cash
Depreciation of property, plant and equipment 1,639 1,882
Amortization of intangible assets 2,566 2,649
Pension expense 367 230
Contributions made to pension plans (2,302) (502)
Loss (gain) on disposal of property,
plant and equipment 120 (105)
Gain on cancellation of convertible debentures - (2)
Accretion of convertible debentures 41 41
Amortization of deferred gain (49) (48)
Unfavourable lease obligation (31) (29)
Amortization of lease inducement (31) (30)
Accretion of lease exit accrual (35) -
Post-employment and post-retirement benefits 8 13
Future income tax (recovery) expense (315) 334
--------------------------
5,357 7,230
Changes in non-cash items relating to
operating activities 7,489 2,692
--------------------------
12,846 9,922
--------------------------
Investing activities
-------------------------------------------------------------------------
Purchase of property, plant and equipment (250) (1,139)
Proceeds on disposal of property, plant
and equipment 2,074 648
--------------------------
1,824 (491)
--------------------------
Financing activities
-------------------------------------------------------------------------
Repurchase of convertible debentures - (6)
Distributions to unitholders (6,805) (6,805)
--------------------------
(6,805) (6,811)
--------------------------
Increase in cash and cash equivalents
during the period 7,865 2,620
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Cash and cash equivalents - beginning of period 11,736 11,492
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Cash and cash equivalents - end of period 19,601 14,112
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Supplemental cash flow information
Interest paid 578 676
Income taxes paid 596 -
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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