The Fund's core distribution businesses areengaged in the sale and after-sales parts and service support of mobileequipment, industrial components and power systems, through a network of112 branches across Canada. The Fund is a multi-line distributor andrepresents a number of leading worldwide manufacturers across its corebusinesses. Its customer base is diversified, spanning natural resources,construction, transportation, manufacturing, industrial processing andutilities.The Fund's strategy is to grow earnings in all segments throughcontinuous improvement of operating margins and revenue growth whilemaintaining the Fund's strong balance sheet. Revenue growth will beachieved through market share gains, new geographic territories and theaddition of new complementary product lines either organically or throughacquisitions.Forward-Looking InformationThis MD&A contains forward-looking statements. These statements relate tofuture events or future performance and reflect management's currentexpectations and assumptions. The words "anticipate", "expect","believe", "may", "should", "estimate", "project", "outlook", "forecast"or similar words are used to identify such forward looking information.Such forward-looking statements reflect management's current beliefs andare based on information currently available to management of the Fund.
Anumber of factors could cause actual events, performance or results todiffer materially from the events, performance and results discussed inthe forward-looking statements. These factors include, among otherthings, changes in laws and regulations affecting the Fund and itsbusiness operations, changes in taxation of the Fund, general businessconditions and economic conditions in the markets in which the Fund andits customers compete, fluctuations in commodity prices, the Fund'srelationship with its suppliers and manufacturers and its access toquality products, and the ability of the Fund to maintain and expand itscustomer base. Additional information on these and other factors isincluded in this MD&A and in the Fund's MD&A for the year ended December31, 2008 under the heading "Risks and Uncertainties and in other reportsfiled by the Fund with Canadian securities regulators. Such factorsshould be considered carefully and readers should not place unduereliance on the forward-looking statements. Revenue in 2009 included$10.7 million of revenue from the acquisition of Peacock.
Segment revenueincreased 1% in Power Systems while revenue in Mobile Equipment fell 20%and revenue in Industrial Components fell slightly compared to last year.Gross profitGross profit in the first quarter of 2009 decreased $4.2 million due tothe negative impact of lower revenues, offset partially by the positiveimpact of higher gross profit margins compared to last year. The grossprofit margin percentage for the quarter increased to 24.8% in 2009 from23.7% in 2008 due to a higher proportion of higher margin parts andservice volumes compared to last year.Selling and administrative expensesSelling and administrative expenses increased $5.1 million in the quarterdue mainly to the acquisition of Peacock, $1.4 million of severance costsand higher bad debt expenses in Industrial Components. These increaseswere offset partially by lower personnel costs compared to last year.Selling and administrative expenses as a percentage of revenue increasedto 20.8% in 2009 from 16.8% in 2008.Interest expenseQuarterly interest expense of $1.2 million increased $0.2 millioncompared to last year. Pursuant to the terms of theDeclaration of Trust, all income earned by the Fund is distributed to itsunitholders. Accordingly, no provision for income taxes is required onincome earned by the Fund that is distributed to its unitholders. TheFund's corporate subsidiaries are subject to tax on their taxable income.Under legislation enacted on June 22, 2007, the Fund as a publicly tradedincome trust will pay tax on its income distributed commencing in 2011 ata rate that is substantially equivalent to the general corporate incometax rate.