The results of operations and related distributions to Davis + Henderson unitholders for the company’s first quarter “have met the expectations of management. To date we have made or announced monthly distributions of $0.1083 per unit, which is equivalent to an annualized distribution of $1.30 per unit.”

The fund’s ownership of the Davis + Henderson business has increased from 45.4%, as of the fund’s initial public offering on December 20, 2001, to 100% as of April 2, 2002. Prior to December 20, 2001, the Davis + Henderson business operated as a division of MDC Corporation Inc. On December 20, 2001, the business was transferred to Davis + Henderson LP. The accompanying financial statements of the fund present the consolidated operations of the business for the period December 20, 2001 to December 31, 2001 and for the three-month period January 1, 2002 to March 31, 2002.

The results for the period ended March 31, 2002 were consistent with management’s expectations and the normal operations of the business. Sales for the period amounted to $59.9 million. Gross profit as a percentage of sales of approximately 42% was consistent with historical results. Operating income for the period of $17.4 million, or 29% of sales, was consistent with historical results and management’s expectations.

Interest expense of $1.1 million recorded during the period ended March 31, 2002 related primarily to the term loan of $80 million. During the period, the company implemented a hedging strategy, which has fixed the interest rate on $48 million of the company’s borrowings for periods ranging from two years to four years. The balance of the borrowings incur interest on a short-term, floating-rate basis.

Amortization expense of $4.6 million was consistent with expectations. The company recorded $0.3 million of current tax expense related entirely to large corporation tax. An expense for future taxes of $0.4 million was recorded for the period and arose from the recognition of timing differences between accounting amortization and deductible claims for tax purposes.

During the period ended March 31, 2002, the company expensed $7.4 million of paid and accrued distributions to MDC, which the fund reflects on the financial statements as non-controlling interests. As a result of the fund’s purchase of the balance of the Davis + Henderson business from MDC on April 2, 2002, no further distributions will accrue to MDC. Net income for the period ended March 31, 2002 was $3.6 million.