Data Group Inc. Announces Fourth Quarter Results for 2011

Highlights

Full Year 2011

• Full Year Revenues of $332.0 million, Full Year Gross Profit of $83.4 million, and Full Year Net Income of $5.4 million
• Full Year Cash Available for Distribution of $18.5 million or $0.787 per unit and Cash Distributions of $15.3 million or $0.650 per unit (see Table 4 and "Non-GAAP Measures" below)
• Full Year Payout Ratio of 82.6% (See Table 4 below)
• Full Year Adjusted EBITDA of $30.4 million (See Table 3 and "Non-GAAP Measures" below)

Q4 2011

• Fourth quarter 2011 ("Q4") Revenues of $89.8 million, Q4 Gross Profit of $22.5 million, and Q4 Net Income of $1.2 million
• Q4 Cash Available for Distribution of $4.9 million or $0.210 per unit and Cash Distributions of $3.8 million or $0.162 per unit (see Table 4 and "Non-GAAP Measures" below)
• Q4 Payout Ratio of 77.3% (See Table 4 below)
• Q4 Adjusted EBITDA of $8.6 million (See Table 3 and "Non-GAAP Measures" below)

BRAMPTON, ON, March 7, 2012 /PRNewswire/ - DATA Group Inc. (TSX: DGI) ("Data Group") announced financial and operating results of The DATA Group Income Fund ("the Fund") for the full year and the fourth quarter ended December 31, 2011.  Data Group is the successor to the Fund.

"We are pleased with our progress on our strategic growth plan and our financial results in 2011.  Going forward, we remain highly focused on the successful, ongoing execution of our plan in a prudent, well managed fashion, balancing our investment in the growth plan with the other needs of our business, such as our dividend policy and capital structure.", said Michael Suksi, President and Chief Executive Officer.

Outlook

The Data Group presented its new strategic growth plan in March of 2011.  The implementation of this plan, with its focus on stabilizing and revitalizing the Data Group's business, has been successful in year one and the Data Group is fully focused on growth in 2012.  The Data Group has implemented numerous initiatives to establish new revenue streams and to generate incremental cost savings to improve its profitability.  Data Group's accomplishments in 2011 and strategic goals for 2012 include:

1. Develop new, high growth digital products and services.  In September 2011, the Data Group launched two exciting new products: a set of integrated web-based direct marketing capabilities; and an innovative web-based digital photo book service.  Customer response has been positive and the Data Group has won new clients in the fourth quarter of 2011.  In the first two months of 2012, the Data Group has won additional new clients.  The Data Group will continue to research additional new products and services in both the digital direct marketing and the digital document management categories for future launch.
   
   
2. Complete acquisitions that are aligned with the Data Group's growth plan and that are accretive immediately.  In November 2011, the Data Group completed the acquisition (the "FSA Acquisition") of The Fulfillment Solutions Advantage Inc. and a 70% interest in FSA Datalytics Canada Inc. ("FSA").  The Data Group believes that this acquisition provides significant opportunities to enhance the Data Group's financial performance.  FSA fits extremely well with the Data Group's recently launched web based direct marketing services such as its gift card, direct mail and other marketing services.  The FSA Acquisition was immediately accretive.  The Data Group will continue to pursue additional acquisitions in the areas of digital direct marketing and digital document management.
   
   
3. Continue the Data Group's aggressive sales effort to expand its market share in its core markets of document management and marketing services in order to generate new business.  During 2011, the Data Group expanded its capability in the growing areas of short run, on demand marketing print; and retail gift card and loyalty card production.  The Data Group also expanded its sophisticated web based ordering systems for digital print solutions.  The Data Group began a number of initiatives to gain market share which included changes in its sales compensation program, additional sales resources, increased sales training, and direct marketing campaigns to promote its products and services in the marketplace.  The Data Group will continue these and other initiatives in 2012.  In 2011, the Data Group won $18 million in new business and these wins were more profitable due to a targeted approach to solutions such as document management, colour digital print, direct mail, gift cards and labels that offer the most value to the Data Group's customers.
   
   
4. Find innovative new ways to generate incremental cost savings.  In 2011, the Data Group created a strategic sourcing department to initiate additional savings programs.  These new initiatives, along with incremental savings from equipment and real estate leases and process improvements contributed to over $4 million in cost savings during the year.  The Data Group expects continued material cost savings from these initiatives in 2012.
   
   
5. Stabilize the Fund's financial results in 2011 and position the Data Group for growth in 2012.  In the fourth quarter of 2011, the Data Group experienced growth in revenues, gross profit, adjusted EBITDA and net income compared to the fourth quarter of 2010. For 2011, the Data Group's revenues stabilized, gross profits increased and adjusted EBITDA was only slightly below 2010.

The Data Group's Board of Directors will continue to closely monitor the Data Group's progress in balancing its investment in the Data Group's growth plan with other needs of the business, including the Data Group's dividend policy and capital structure and will take actions necessary for the long term health of the business.

The Data Group will continue its strategic focus on being the leading document management service provider in Canada, while expanding in direct marketing, concentrating on providing high value-added products and services.

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

Table 2 The following table provides a reconciliation of net income (loss) to Adjusted EBITDA for the periods noted.  See "Non-GAAP Measures".

RESULTS OF OPERATIONS

THE DATA GROUP INCOME FUND

Revenues

For the quarter ended December 31, 2011, the Fund recorded revenues of $89.8 million, an increase of $4.8 million or 5.7% compared with the same period in 2010.  The net increase, before intersegment revenues, was the result of a $5.8 million increase in the DATA East and West segment, offset by a $0.2 million or 5.8% decrease in the Multiple Pakfold segment.  Beginning November 1, 2011, the results of FSA are included in the DATA East and West segment.  For the year ended December 31, 2011, the Fund recorded revenues of $332.0 million, a decrease of $0.2 million or 0.1% compared with the same period in 2010.  The net decrease, before intersegment revenues was the result of a $0.4 million or 2.7% decrease in the Multiple Pakfold segment, offset by a $0.5 million or 0.2% increase in the DATA East and West segment.

Cost of Revenues and Gross Profit

For the quarter ended December 31, 2011, cost of revenues increased to $67.3 million from $63.7 million for the same period in 2010.  Gross profit for the quarter ended December 31, 2011 was $22.5 million, which represented an increase of $1.3 million or 6.0% from $21.2 million for the same period in 2010.  The net increase in gross profit was primarily attributable to a gross profit increase in the DATA East and West segment of $1.3 million, which was due to better capacity utilization as a result of the higher revenues recorded by the segment and the higher profit margins related to revenues from FSA. Gross profit as a percentage of revenues increased to 25.1% for the quarter ended December 31, 2011 compared to 25.0% for the same period in 2010.  For the year ended December 31, 2011, cost of revenues decreased to $248.6 million from $251.4 million for the same period in 2010.  Gross profit for the year ended December 31, 2011 was $83.4 million, which represented an increase of $2.6 million or 3.2% from $80.9 million in the same period of 2010.  The increase in gross profit for the year ended December 31, 2011 was attributable to a gross profit increases of $2.3 million in the DATA East and West segment and of $0.3 million in the Multiple Pakfold segment, respectively.  Gross profit as a percentage of revenues increased to 25.1% for the year ended December 31, 2011 from 24.3% for the same period in 2010.

Selling, General and Administrative Expenses and Severance Expenses

Selling, general and administrative ("SG&A") expenses, including administrative expenses of the Fund but excluding amortization of identifiable intangible assets, for the quarter ended December 31, 2011 increased $1.2 million to $15.5 million compared to $14.3 million in the same period of 2010.  As a percentage of revenues, these costs were 17.2% of revenues for the quarter ended December 31, 2011 compared to 16.8% of revenues for the same period in 2010.  SG&A expenses for the three months ended December 31, 2011 were higher due to the Data Group's investments to launch its new products and services initiatives of $0.2 million, higher sales costs of approximately $0.3 million incurred to generate new business and were offset by cost savings realized from the Data Group's on-going productivity improvement and cost reduction initiatives. For the quarter ended December 31, 2010, the Data Group incurred $0.3 million of severance expenses charged to restructuring expense as a result of its on-going productivity improvement initiatives.  SG&A expenses for the year ended December 31, 2011 increased $3.0 million or 5.5% to $58.8 million compared to $55.7 million for the same period of 2010.  The increase in SG&A expenses for the year ended December 31, 2011 was the result of the Data Group's investments to launch its new products and services initiatives of approximately $0.9 million including an increase in information technology costs, and higher sales costs of approximately $0.7 million incurred to generate new business.  As a percentage of revenues, these costs were 17.7% of revenues for the year ended December 31, 2011 compared to 16.8% of revenues for the same period in 2010.  For the year ended December 31, 2011, the Data Group incurred $0.6 million of severance costs included in SG&A related to productivity improvement and cost reduction initiatives.  For the year ended December 31, 2010, the Data Group incurred $0.6 million of severance costs charged to restructuring expense related to those on-going productivity improvement initiatives.

Acquisition costs, Corporate conversion costs and Other

During the year ended December 31, 2011, the Fund incurred total professional fees of $0.4 million related to the FSA Acquisition and of $0.6 million related to the Fund's conversion to a corporation on January 1, 2012, respectively.  During the year ended December 31, 2010, the Fund recorded a gain on the settlement of a pension plan of $0.6 million related to the wind-up of a predecessor's pension plan and completed the sale of its Orangeville, Ontario property for gross proceeds of $2.2 million.

Impairment of goodwill

During the fourth quarter of 2011, the Fund performed its annual review for impairment of goodwill and concluded that, no goodwill impairment charges associated with any of its reporting segments were necessary.

During the fourth quarter of 2010, the Fund performed its annual review for impairment of goodwill by comparing the fair value of each of its reporting segments to the segment's carrying value on the Fund's books.  The Fund determined the fair value of each cash generating unit ("CGU")'s by discounting expected future cash flows in accordance with recognized valuation methods.  The process of determining those fair values required the Fund to make a number of estimates and assumptions such as projected future revenues, costs of revenues, market conditions well into the future, and discount rates.  As a result of that review, the Fund concluded that due to a highly competitive printing market in Alberta and to the continued uncertain economic conditions in that province, the fair value of its Sundog CGU was less than its carrying value.  Accordingly, the Fund recognized an impairment of goodwill charge of $4.3 million related to the Sundog CGU in 2010.

Adjusted EBITDA

For the quarter ended December 31, 2011, Adjusted EBITDA was $8.6 million, or 9.6% of revenues.  Adjusted EBITDA for the quarter ended December 31, 2011 increased $0.6 million or 6.9% from the same period in the prior year and the Adjusted EBITDA margin for the quarter, as a percentage of revenues, increased from 9.5% of revenues in 2010 to 9.6% of revenues in 2011.  Adjusted EBITDA for the year ended December 31, 2011 was $30.4 million, or 9.2% of revenues. Adjusted EBITDA for the year ended December 31, 2011 decreased $0.3 million or 1.1% from the same period in the prior year and the Adjusted EBITDA margin for the twelve month period, as a percentage of revenues, remained unchanged from 2010 at 9.2% of revenues in 2011.

Interest Expense and Finance Costs

Interest expense on long-term debt relating to the Data Group's credit facilities and the Fund's $45.0 million aggregate principal amount of 6.00% Convertible Unsecured Subordinated Debentures (the  "6.00% Convertible Debentures") was $1.5 million for the three months ended December 31, 2011 compared to $1.8 million for the same period in 2010.  Interest expense on long-term debt relating to the Data Group's credit facilities and the Fund's $45.0 million aggregate principal amount of 6.00% Convertible Debentures was $5.7 million for the year ended December 31, 2011 compared to $6.5 million for the same period in 2010.  The decrease in interest expense was due to the issuance of the 6.00% Convertible Debentures on April 27, 2010 which was partially offset by higher interest rates charged on the Data Group's outstanding borrowings under its credit facilities during the three and twelve months ended December 31, 2011 and the redemption of all of its 6.75% Extendible Convertible Unsecured Subordinated Debentures on December 31, 2010 compared to the same periods in 2010, respectively.

Finance costs for the three month periods ended December 31, 2011 and 2010 included a charge of $0.4 million and of $1.0 million, respectively, related to the change in the fair value of the Fund's conversion options.  Finance costs for the years ended December 31, 2011 and 2010 included a recovery of $0.7 million and $1.2 million, respectively, related to the change in the fair value of the Fund's conversion options.  The conversion option is the conversion feature in each of the Fund's outstanding convertible debentures, which is measured at fair value at each reporting date.

Income Taxes

The Fund reported income before income taxes of $1.9 million, a current income tax expense of $0.5 million and a deferred income tax expense of $0.2 million for the three months ended December 31, 2011 compared to loss before income taxes of $3.4 million and a deferred income tax recovery of $3.8 million for the three months ended December 31, 2010.  The Fund reported income before income taxes of $8.0 million, a current income tax expense of $1.8 million and a deferred income tax expense of $0.8 million for the year ended December 31, 2011 compared to income before income taxes of $4.2 million, a current income tax recovery of $0.3 million and a deferred income tax recovery of $3.0 million for the year ended December 31, 2010.  The current income tax expense was related to the income tax payable on the Fund's estimated taxable income for the three and twelve month periods ended December 31, 2011. Beginning January 1, 2011, the Fund is subject to income tax at a rate similar to the combined federal and provincial corporate rate applicable to a taxable Canadian corporation.  The deferred income tax expense was due to a change in estimates of future reversals of temporary differences for the three and twelve month periods ended December 31, 2011. The current income tax recovery for the year ended December 31, 2010 represents the final adjustment related to the amount payable by the Fund to settle reassessments by Canada Revenue Agency and certain provincial tax authorities that, in each case, adjust the pricing between Relizon Canada Inc. ("Relizon Canada") and its former parent company prior to its acquisition by the Fund.  The deferred income tax recovery was due to a change in estimates of future reversals of temporary differences and new temporary differences that arose during the three and twelve month periods ended December 31, 2010.

Net Income

Net income for the quarter ended December 31, 2011 was $1.2 million compared to a net income of $0.4 million for the quarter ended December 31, 2010.  The increase in comparable profitability for the quarter ended December 31, 2011 was substantially was substantially due to higher gross profit in 2011 as a result of the higher revenues and realized cost savings from on-going productivity improvement and cost reduction initiatives realized in 2011.  The increase in profitability was partially offset by higher SG&A expenses due to the investments to launch new products and services initiatives, acquisition costs, corporate conversion costs, higher current and deferred income taxes and a goodwill impairment charge in 2010 that did not re-occur in 2011.

Net income for the year ended December 31, 2011 was $5.4 million compared to a net income of $7.6 million for the year ended December 31, 2010.  The decrease in comparable profitability for the year ended December 31, 2011 was substantially due to higher SG&A expenses due to the investments to launch its new products and services initiatives, acquisition costs, corporate conversion costs, and higher current and deferred income taxes during 2011.  The decrease in profitability was offset by the gain on the settlement of a pension plan of $0.6 million related to the wind-up of a predecessor's plan, a goodwill impairment charge of $4.3 million related to the Sundog CGU during 2010 that did not re-occur in 2011 and lower interest expense and higher gross profit in 2011 discussed above.

Table 3 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".

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 working capital so as to remove the impact of timing differences in cash receipts and cash disbursements, which generally reverse themselves but can vary significantly across quarters.
3. Excludes pension plan wind-up contributions to the Data Group's Relizon Canada defined benefit pension plan.  During the year ended December 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. In addition, during the year ended December 31, 2010, the final outstanding wind-up deficiency of $0.8 million was funded by the Data Group in advance of the benefit settlement, as required under applicable pension regulations. The wind-up of the Relizon Canada defined benefit plan was substantially completed in 2010.
4. Includes other amounts that do not reflect the ongoing operations of the Data Group's business.
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 December 31, 2011 and 2010, 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 3 above for a reconciliation of cash provided by (used in) operating activities to cash available for distribution for the three and twelve month periods ended December 31, 2011 and 2010, respectively, and the amounts discussed below.

For the three months ended December 31, 2011, the Fund generated $4.9 million or $0.210 per unit of cash available for distribution compared to $6.3 million or $0.269 per unit for the same period in 2010.  Cash available for distribution for the three months ended December 31, 2011 was calculated by deducting from cash provided by (used in) operating activities of $8.6 million, maintenance capital expenditures of $0.8 million, changes in working capital of $3.5 million and adding back other non-cash items of $0.1 million, acquisition costs of $0.4 million, and corporate conversion costs of $0.1 million, respectively.  Cash available for distribution for the three months ended December 31, 2010 was calculated by deducting from cash provided by (used in) operating activities of $5.6 million, maintenance capital expenditures of $0.4 million and adding back changes in working capital of $1.0 million and other non-cash items of $0.1 million, respectively.

For the year ended December 31, 2011, the Fund generated $18.5 million or $0.787 per unit of cash available for distribution compared to $21.7 million or $0.925 per unit for the same period in 2010.  Cash available for distribution for the year ended December 31, 2011 was calculated by deducting from cash provided by operating activities of $20.1 million, maintenance capital expenditures of $2.2 million, changes in working capital of $0.8 million and adding back other non-cash items of $0.3 million, acquisition costs of $0.4 million, and corporate conversion costs of $0.6 million, respectively.  Cash available for distribution for the year ended December 31, 2010 was calculated by deducting from cash provided by operating activities of $30.7 million, maintenance capital expenditures of $1.8 million, changes in working capital of $9.4 million and adding back pension plan wind-up contributions of $2.1 million and other non-cash items of $0.1 million, respectively.

For the three months ended December 31, 2011, the Fund declared distributions of $3.8 million or $0.162 per unit.  Cash available for distribution exceeded actual distributions by $1.1 million or $0.048 per unit for the three months ended December 31, 2011.  For the year ended December 31, 2011, the Fund declared distributions of $15.3 million or $0.650 per unit.  Cash available for distribution exceeded actual distributions by $3.2 million or $0.137 per unit for the year ended December 31, 2011.  During the three and twelve months ended December 31, 2011, the Data Group made cash payments of $0.1 million and $0.9 million, respectively, for the provisions related to the various severance costs incurred which were charged to restructuring expense and SG&A incurred in relation to its on-going productivity improvement and cost reduction initiatives, under taken in 2011 and prior periods.  These cash payments were funded by cash generated from operations and existing cash resources.  The restructuring costs paid during the three and twelve month periods have been deducted in determining cash available for distribution as these payments are included in cash provided by (used in) operating activities.

For the three months ended December 31, 2010, the Fund declared distributions of $6.8 million or $0.290 per unit.  Actual distributions exceeded cash available for distribution by $0.5 million or $0.021 per unit for the three months ended December 31, 2010.  During the quarter ended December 31, 2010, the Data Group made cash payments of $0.2 million for the 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 entirely by cash generated from operations and existing cash resources.  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 year ended December 31, 2010, the Fund declared distributions of $27.2 million or $1.160 per unit.  Actual distributions exceeded cash available for distribution by $5.5 million or $0.235 per unit for the year ended December 31, 2010.  During the year ended December 31, 2010, the Data Group made cash payments of $1.7 million for the restructuring costs accrued as part of the purchase price accounting for the Relizon Canada acquisition and for the related integration costs, consisting primarily of severance payments and moving costs and provisions related to various severance costs which were charged to restructuring expense incurred in relation to its on-going productivity improvements initiatives undertaken in 2010 and prior periods.  These cash payments were funded by cash generated from operations, the net proceeds from the sale of the Data Group's former facility in Orangeville Ontario and existing cash resources.  The restructuring expenses paid during the year 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 December 31, 2011 of $0.8 million related primarily to maintenance capital expenditures and were financed by cash flow from operations. Capital expenditures for the year ended December 31, 2011 of $2.2 million related primarily to maintenance capital expenditures and were financed by cash flow from operations.

In November 2011, a subsidiary of the Fund paid cash of $12.2 million for all of the shares of FSA, net of cash acquired.

FINANCING ACTIVITIES

For the three and twelve months ended December 31, 2011, the Fund paid or declared aggregate cash distributions of $3.8 million and $15.3 million, respectively, to its unitholders.

During the year ended December 31, 2011, the Data Group increased its borrowings under its existing credit facility by $7.5 million, which was used with existing cash resources to fund the purchase of FSA.  By December 31, 2011, the Data Group used a portion of cash on hand to pay down $2.0 million of the Data Group's outstanding borrowings under its credit facility.

About DATA Group Inc.

DATA Group is a leading provider of document management and marketing solutions.  We provide integrated web and print based communications, information management and associated professional services.  We differentiate ourselves and provide value to our customers by focusing on innovative, high value solutions and on exceptional performance at delivering on our promises and commitments.  We have over 1,903 employees working from 34 locations across Canada.

Additional information relating to the DATA Group is available on www.datagroup.ca, and the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

All financial information in this press release is presented in Canadian dollars and in accordance with generally accepted accounting principles ("GAAP") measured under International Financial Reporting Standards ("IFRS") for publicly accountable entities effective January 1, 2011, unless otherwise noted.

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 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 Data Group's current views regarding future events and operating performance, are based on information currently available to the Data Group, 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, objectives or achievements of the Data Group to be materially different from any future results, performance, objectives or achievements that may be expressed or implied by such forward-looking statements.  The principal factors, assumptions and risks that the Data Group made or took into account in the preparation of these forward-looking statements include the risk that the Data Group may not be successful in growing its business or in managing its organic growth; the Data Group's ability to develop and successfully market new products and services; competition from competitors supplying similar products and services; the Data Group's ability to grow its sales or even maintain historical levels of its sales of printed business documents; the impact of economic conditions on the Data Group's businesses; risks associated with acquisitions by the Data Group; increases in the costs of paper and other raw materials used by the Data Group; and the Data Group's ability to maintain relationships with its customers.  Additional factors are discussed elsewhere in this press release and under the heading "Risks and Uncertainties" in the Data Group's management's discussion and analysis and in the Data Group's other publicly available disclosure documents, as filed by the Data Group 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 Data Group 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 and finance costs, taxes, depreciation and amortization.  Adjusted EBITDA for the three months and the year ended December 31, 2011 means EBITDA adjusted for acquisition costs and corporate conversion costs, respectively.  Adjusted EBITDA for the three months ended December 31, 2010 means EBITDA adjusted for gains on the cancellation of convertible debentures and a goodwill impairment charge.  Adjusted EBITDA for the year ended December 31, 2010 means EBITDA adjusted for a gain on the settlement of a pension plan, gains on the cancellation of convertible debentures and a goodwill impairment charge.  The Data Group 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 its predecessors.  Cash available for distribution for the three months and the year ended December 31, 2011 means cash provided by (used in) operating activities increased by, or reduced for, maintenance capital expenditures, changes in working capital, other non-cash items, acquisition costs, corporate conversion costs, financing costs, and non controlling interests, respectively.  Cash available for distribution for the three months ended December 31, 2010 means cash provided by (used in) operating activities increased by, or reduced for, maintenance capital expenditures, changes in working capital, and other non-cash items. Cash available for distribution for the year ended December 31, 2011 means cash provided by (used in) operating activities increased by, or reduced for, maintenance capital expenditures, pension plan wind-up contributions, changes in working capital and other non-cash items.  Specifically, the Data Group views cash available for distribution as a measure generally used by Canadian income funds such as the Fund, investors and management as an indicator of financial performance.  EBITDA, Adjusted EBITDA and cash available for distribution are not earnings or cash flow measures recognized by GAAP and do not have any standardized meanings prescribed by GAAP.  Therefore, EBITDA, Adjusted EBITDA and cash available for distribution are unlikely to be comparable to similar measures presented by other issuers.

Investors are cautioned that EBITDA and Adjusted EBITDA should not be construed as an alternative to net income (loss) determined in accordance with IFRS as an indicator of the Data Group'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 (loss) to Adjusted EBITDA, see Table 2 above.  For a reconciliation of cash provided by (used in) operating activities to cash available for distribution, see Table 3 above.

 

 

SOURCE DATA Group Inc.

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