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DATA Group Ltd. Announces Second Quarter Results For 2014

Highlights

Q2 2014

  •      Second quarter 2014 ("Q2") Revenues of $76.8 million, Q2 Gross Profit of $17.8 million and Q2 Net Income of $0.3 million (includes a Q2 restructuring charge of $0.9 million)
  •      Q2 Adjusted EBITDA of $4.7 million (See Table 2 and "Non-GAAP Measures" below)

YTD 2014

  • Year to Date 2014 ("YTD") Revenues of $154.7 million, YTD Gross Profit of $36.6 million and YTD Net Income of $1.0 million (includes a YTD restructuring charge of $1.7 million)
  • YTD Adjusted EBITDA of $10.1 million (See Table 2 and "Non-GAAP Measures" below)

BRAMPTON, ON, Aug. 8, 2014 /CNW/ - DATA Group Ltd. (TSX: DGI) ("DATA Group") announced its consolidated financial and operating results for the second quarter ended June 30, 2014.

We continue to make progress on our Transformation Plan and remain focused on creating long-term enterprise value appreciation for our shareholders.  In the second quarter of 2014, we continued to reduce our costs, generate significant revenue from new business in the selected growth areas management has targeted and make progress on debt reduction.  At the same time, we continued to experience challenges due to the technological changes that are having an adverse effect on financial results in our industry.

Why is a Transformation Plan Required?

Our industry has seen wholesale changes over the last number of years, mostly due to rapid technological advances.  The competitive environment in which we operate has become even more challenging as our industry transforms to more digital forms of communications and adapts to new client demands for blended print and digital solutions.  These factors adversely impacted our financial results for 2013 and the first half of 2014.  DATA Group has responded with a Transformation Plan that establishes clear goals, all of which aim to enhance shareholder value. Our Transformation Plan is beginning to show results in the three key areas we have targeted; cost reduction, debt reduction and revenue stabilization.  In summary:

Cost Reduction

We reduced our cost structure by $13 million in 2013 and anticipate eliminating another $20 - $25 million in 2014 and 2015, mostly through a further reduction in locations, raw material costs and the number of employees.  In the second quarter of 2014, we realized modest incremental cost savings while continuing to make progress on a number of initiatives that will generate significant additional savings in the future.  The cost savings we have realized since the beginning of 2013 have been offset by a reduction in revenue, changes in our product mix and pricing pressures, driven by competitive activity and the technological change described above.

Debt Reduction

We reduced our long-term indebtedness by $8.0 million since the beginning of 2013, including a $1.5 million reduction in the second quarter of 2014, and we intend to further reduce debt going forward.  At the same time, our bank overdraft increased by $2.9 million and our working capital increased by $2.6 million in the second quarter of 2014 due to an increase in order volumes.  We have also commenced a normal course issuer bid for the purchase of up to $4.476 million of our outstanding 6.00% Convertible Unsecured Subordinated Debentures due June 30, 2017.

Revenue Stabilization

Our intent in 2014 is to stabilize our revenue and position ourselves for longer term growth.  Our plan to achieve this goal is based on;

  • Adding new sales talent
  • Winning market share in our traditional print business
  • Investing in the key growth areas we have identified; labels, marketing print and digital communications
  • Bundling our digital services with our print offerings to increase the value we provide to our customers and increase the contribution these services make to our overall revenue and profitability

Our results in the second quarter reflected progress towards this goal, with strong new business development results and overall revenue similar to last year's second quarter. During the second quarter of 2014, we generated strong revenue from new business and continued to make encouraging progress on a number of new business sales opportunities in the retail, financial services and transportation markets.

The significant changes we have made to our management and sales team in the past year have given us an aggressive focus on new business development and the talent to lead our Transformation Plan.  In the second quarter we continued to make personnel changes to strengthen our sales team and to make prudent investments to expand our capabilities in the growth areas we have targeted.

Refreshed Governance

As part of our Transformation Plan, earlier this year we began recruiting to refresh our board with new directors who could assist in our progress and represent the best interests of all shareholders.  After a thorough process, in June we were pleased to have four eminently qualified new board nominees, who replaced three retiring directors, join our board; Michael Blair, Rod Philips, Harinder S. Takhar and J.R. Kingsley Ward.  Our four new directors join Tom Spencer (Chairman), Bill Albino and Michael Suksi on our refreshed board.

RESULTS OF OPERATIONS

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"), as issued by the International Accounting Standards Board ("IASB") for publicly accountable entities, unless otherwise noted.

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

         
For the periods ended June 30, 2014 and 2013
(in thousands of Canadian dollars, except per share amounts, unaudited)
Apr. 1 to
June 30,
2014
$
Apr. 1 to
June 30,
2013
$
Jan. 1 to
June 30,
2014
$
Jan. 1 to
June 30,
2013
$
Revenues 76,773 77,822 154,676 160,685
Cost of revenues 58,936 58,066 118,036 119,191
Gross profit 17,837 19,756 36,640 41,494
         
Selling, general and administrative expenses 14,407 15,315 29,087 31,001
Restructuring expenses 869 5,247 1,734 6,014
Amortization of intangible assets 479 2,311 958 4,621
         
Income (loss) before finance costs and income taxes 2,082 (3,117) 4,861 (142)
         
Finance costs        
  Interest expense 1,539 1,635 3,088 3,273
  Interest income (4) (6) (9) (8)
  Amortization of transaction costs 140 147 279 290
  1,675 1,776 3,358 3,555
         
Income (loss) before income taxes 407 (4,893) 1,503 (3,697)
         
Income tax expense (recovery)        
  Current - 281 - 1,553
  Deferred 153 (1,512) 453 (2,437)
  153 (1,231) 453 (884)
         
Net income (loss) for the period 254 (3,662) 1,050 (2,813)
         
Net income (loss) attributable to common shareholders 254 (3,652) 1,050 (2,799)
Basic and diluted earnings (loss) per share 0.01 (0.16) 0.04 (0.12)
Number of common shares outstanding 23,490,592  23,490,592  23,490,592  23,490,592
         
As at June 30, 2014 and December 31, 2013
(in thousands of Canadian dollars, unaudited)
As at
June 30,
2014
$
As at
Dec. 31,
2013
$
   
Current assets 80,853 78,717    
Current liabilities 45,369 42,545    
         
Total assets 165,326 166,597    
Total non-current liabilities 103,023 105,977    
         
Shareholders' equity 16,934 18,075    
       

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

Adjusted EBITDA Reconciliation

                 
For the periods ended June 30, 2014 and 2013
(in thousands of Canadian dollars, unaudited)
  Apr. 1 to
June 30,
2014
$
  Apr. 1 to
June 30,
2013
$
  Jan. 1 to
June 30,
2014
$
  Jan. 1 to
June 30,
2013
$
Net income (loss) for the period   254   (3,662)   1,050   (2,813)
Interest expense   1,539   1,635   3,088   3,273
Interest income   (4)   (6)   (9)   (8)
Amortization of transaction costs   140   147   279   290
Current income tax expense   -   281   -   1,553
Deferred income tax expense (recovery)   153   (1,512)   453   (2,437)
Depreciation of property, plant and equipment   1,244   1,323   2,552   2,651
Amortization of intangible assets   479   2,311   958   4,621
EBITDA   3,805   517   8,371   7,130
Restructuring expenses   869   5,247   1,734   6,014
Adjusted EBITDA   4,674   5,764   10,105   13,144


Revenues

For the quarter ended June 30, 2014, DATA Group recorded revenues of $76.8 million, a decrease of $1.0 million or 1.3% compared with the same period in 2013.  The decrease, before intersegment revenues, was the result of a $1.4 million decrease in the DATA East and West segment and was partially offset by a $0.5 million increase in the Multiple Pakfold segment.  For the six months ended June 30, 2014, DATA Group recorded revenues of $154.7 million, a decrease of $6.0 million or 3.7% compared with the same period in 2013.  The decrease, before intersegment revenues, was the result of a $6.6 million decrease in the DATA East and West segment and was partially offset by a $0.7 million increase in the Multiple Pakfold segment. The decrease in revenues for the three and six months ended June 30, 2014 in the DATA EAST and West segment was primarily due to orders from existing customers for print-related products and services which did not repeat in 2014, aggressive pricing by DATA Group's competitors supplying similar products and services and a change in product mix.  The segment continued to experience revenue gains from new business, which partially offset declines in revenues from existing customers due to non-repeating orders, technological change and competitive activity.  The increase in revenues for the three and six months ended June 30, 2014 in the Multiple Pakfold segment was attributable to new business which arose as a result of the bankruptcy of a competitor.

Cost of Revenues and Gross Profit

For the quarter ended June 30, 2014, cost of revenues increased to $58.9 million from $58.1 million for the same period in 2013.  Gross profit for the quarter ended June 30, 2014 was $17.8 million, which represented a decrease of $2.0 million or 9.7% from $19.8 million for the same period in 2013.  The decrease in gross profit for the quarter ended June 30, 2014 was attributable to a gross profit decrease of $2.0 million in the DATA East and West segment and was partially offset by a gross profit increase of $0.2 million in the Multiple Pakfold segment.  Gross profit as a percentage of revenues decreased to 23.2% for the quarter ended June 30, 2014 compared to 25.4% for the same period in 2013.  For the six months ended June 30, 2014, cost of revenues decreased to $118.0 million from $119.2 million for the same period in 2013.  Gross profit for the six months ended June 30, 2013 was $36.6 million, which represented a decrease of $4.9 million or 11.7% from $41.5 million for the same period in 2013.  The decrease in gross profit for the six months ended June 30, 2014 was attributable to a gross profit decrease of $5.0 million in the DATA East and West segment and was partially offset by a gross profit increase of $0.1 million in the Multiple Pakfold segment.  Gross profit as a percentage of revenues decreased to 23.7% for the six months ended June 30, 2014 compared to 25.8% for the same period in 2013.

Selling, General and Administrative Expenses and Restructuring Expenses

Selling, general and administrative ("SG&A") expenses, excluding amortization of intangible assets, for the quarter ended June 30, 2014 decreased $0.9 million to $14.4 million compared to $15.3 million in the same period in 2013.  As a percentage of revenues, these costs were 18.8% of revenues for the quarter ended June 30, 2014 compared to 19.7% of revenues for the same period in 2013.  SG&A expenses, excluding amortization of intangible assets, for the six months ended June 30, 2014 decreased $1.9 million to $29.1 million compared to $31.0 million for the same period of 2013.  As a percentage of revenues, these costs were 18.8% of revenues for the six months ended June 30, 2014 compared to 19.3% of revenues for the same period in 2013.  The decrease in SG&A expenses for the three and six months ended June 30, 2014 was attributable to cost saving initiatives implemented in 2013. For the three and six months ended June 30, 2014, DATA Group incurred restructuring expenses related to headcount reductions of $0.9 million and $1.7 million, respectively, as part of its ongoing restructuring initiatives.  For the three and six months ended June 30, 2013, DATA Group incurred restructuring expenses related to headcount reductions and lease exit charges of $5.2 million and $6.0 million, respectively, as part of its 2013 restructuring initiatives.  The restructuring initiatives included closing facilities in Brockville, Ontario and Anjou, Québec and transferring the operations of The Fulfillment Solutions Advantage Inc. from Markham, Ontario to DATA Group's existing facility in Mississauga, Ontario.

Adjusted EBITDA

For the quarter ended June 30, 2014, Adjusted EBITDA was $4.7 million, or 6.1% of revenues.  Adjusted EBITDA for the quarter ended June 30, 2014 decreased $1.1 million or 18.9% from the same period in the prior year and the Adjusted EBITDA margin for the quarter, as a percentage of revenues, decreased from 7.4% of revenues in 2013 to 6.1% of revenues for the same period in 2014.  Adjusted EBITDA for the six months ended June 30, 2014 was $10.1 million, or 6.5% of revenues. Adjusted EBITDA for the six months ended June 30, 2014 decreased $3.0 million or 23.1% from the same period in the prior year and the Adjusted EBITDA margin for the six month period, as a percentage of revenues, decreased from 8.2% of revenues in 2013 to 6.5% of revenues for the same period in 2014.  The decrease in Adjusted EBITDA during the three and six months ended June 30, 2014 was due to the continued investment in DATA Group's growth strategy and a decline in revenues due to pricing concessions and changes in product mix, and was partially offset by cost savings realized as a result of its restructuring initiatives.  These costs included SG&A expense related to investments to launch new products and services.

Interest Expense

Interest expense on long-term debt outstanding under DATA Group's credit facilities, DATA Group's outstanding $45.0 million aggregate principal amount of 6.00% Convertible Debentures, certain unfavourable lease obligations related to closed facilities and DATA Group's employee benefit plans was $1.5 million for the three months ended June 30, 2014 compared to $1.6 million for the same period in 2013, and was $3.1 million for the six months ended June 30, 2014 compared to $3.3 million for the same period in 2013.

Income Taxes

DATA Group reported income before income taxes of $0.4 million and a deferred income tax expense of $0.2 million for the three months ended June 30, 2014 compared to loss before income taxes of $4.9 million, current income tax expense of $0.3 million and a deferred income tax recovery of $1.5 million for the three months ended June 30, 2013.  DATA Group reported income before income taxes of $1.5 million and a deferred income tax expense of $0.5 million for the six months ended June 30, 2014 compared to a loss before income taxes of $3.7 million, a current income tax expense of $1.6 million and a deferred income tax recovery of $2.4 million for the six months ended June 30, 2013.  The decrease in the current income tax expense during the three and six months ended June 30, 2014 was due to the reduction in taxable income as the result of the use of non-capital loss carry-forwards.  The increase in the deferred income tax expense during the three and six months ended June 30, 2014 was due to a change in estimates of future reversals of temporary differences.

Net Income

Net income for the three and six months ended June 30, 2014 was $0.3 million and $1.0 million, respectively, compared to a net loss of $3.7 million and $2.8 million, respectively, for same periods in 2013.  The increase in comparable profitability for the three and six months ended June 30, 2014 was due to lower SG&A expense, restructuring expenses, amortization of intangibles and current income tax expense during the second quarter and first half of 2014, respectively.  The increase in comparable profitability during the second quarter and first half of 2014, respectively, were partially offset by lower gross profit as a result of lower revenues and a larger deferred income tax expense during 2014.

INVESTING ACTIVITIES

Capital expenditures for the three months ended June 30, 2014 of $0.2 million related primarily to maintenance capital expenditures, which were financed by cash flow from operations.  For the six months ended June 30, 2014, DATA Group incurred capital expenditures of $0.8 million related primarily to maintenance capital expenditures, which were financed by cash flow from operations.

FINANCING ACTIVITIES

During the three and six months ended June 30, 2014, DATA Group repaid $1.5 million and $3.5 million, respectively, of the principal amount outstanding under its Revolving Bank Facility.

About DATA Group Ltd.

DATA Group Ltd. is a managed business communications services company specializing in customized document management and marketing solutions.  DATA Group develops, manufactures, markets and supports integrated web and print-based communications, information management and direct marketing products and services that help its customers reduce costs, increase revenues, maintain brand consistency and simplify their business processes.  DATA Group's expertise and resources enable it to address any document requirement of its customers, from a simple mail-out to an enterprise-wide document management or direct marketing initiative.  We have approximately 1,670 employees working from 35 locations across Canada and the United States to accomplish this.

Additional information relating to DATA Group Ltd. is available on www.datagroup.ca, and in the disclosure documents filed by DATA Group Ltd. on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.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 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 DATA Group's current views regarding future events and operating performance, are based on information currently available to 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 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 DATA Group made or took into account in the preparation of these forward-looking statements include the risk that DATA Group will not be successful in reducing the size of its legacy print business, reducing costs, reducing or refinancing its long-term debt and growing its digital communications business; the risk that DATA Group may not be successful in managing its organic growth; DATA Group's ability to invest in, develop and successfully market new products and services; competition from competitors supplying similar products and services; 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 DATA Group's businesses; risks associated with acquisitions by DATA Group; increases in the costs of paper and other raw materials used by DATA Group; and 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 DATA Group's management's discussion and analysis and in DATA Group's other publicly available disclosure documents, as filed by 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, 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 and six months ended June 30, 2014 and 2013 means EBITDA adjusted for restructuring expenses, respectively.  DATA Group believes that, in addition to net income (loss), EBITDA and Adjusted EBITDA are useful supplemental measures in evaluating the performance of DATA Group and its predecessors.  EBITDA and Adjusted EBITDA are not earnings measures recognized by IFRS and do not have any standardized meanings prescribed by IFRS.  Therefore, EBITDA and Adjusted EBITDA are unlikely to be comparable to similar measures presented by other issuers.

Investors are cautioned that neither EBITDA nor Adjusted EBITDA should be construed as an alternative to net income (loss) determined in accordance with IFRS as an indicator of DATA Group's performance.  For a reconciliation of net income (loss) to Adjusted EBITDA, see Table 2 above.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

         
(in thousands of Canadian dollars, unaudited)   June 30, 2014
$
  December 31, 2013
$
Assets        
Current assets        
  Cash and cash equivalents   -   478
  Trade receivables   36,971   36,551
  Inventories   39,617   37,585
  Prepaid expenses and other current assets   4,217   3,929
  Income taxes receivable   48   174
    80,853   78,717
Non-current assets        
  Deferred income tax assets   1,991   1,687
  Property, plant and equipment   15,491   17,266
  Pension asset   1,706   2,684
  Intangible assets   8,219   9,177
  Goodwill   57,066   57,066
    165,326   166,597
Liabilities        
Current liabilities        
  Bank overdraft   4,167   -
  Current portion of Revolving bank facility   3,500   4,000
  Trade payables   25,525   26,061
  Provisions   2,599   2,369
  Deferred revenue   9,578   10,115
    45,369   42,545
Non-current liabilities        
  Provisions   1,640   2,368
  Revolving bank facility   46,200   49,109
  Convertible debentures   43,206   42,909
  Other non-current liabilities   677   858
  Pension obligations   8,554   8,102
  Other post-employment benefit plans   2,746   2,631
    148,392   148,522
Equity        
Shareholders' equity        
  Shares   215,336   215,336
  Conversion options   516   516
  Accumulated other comprehensive income   31   30
  Deficit   (198,949)   (197,807)
    16,934   18,075
    165,326   166,597
         
     

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

         
(in thousands of Canadian dollars, except per share amounts, unaudited)   For the three
months ended
June 30, 2014
  For the three
months ended
June 30, 2013
    $   $
Revenues   76,773   77,822
         
Cost of revenues   58,936   58,066
         
Gross profit   17,837   19,756
         
Expenses        
       Selling, commissions and expenses   8,797   9,073
       General and administration expenses excluding amortization
   of intangible assets
  5,610   6,242
  Restructuring expenses   869   5,247
       Amortization of intangible assets   479   2,311
         
    15,755   22,873
         
Income (loss) before finance costs and income taxes   2,082   (3,117)
         
Finance costs        
       Interest expense   1,539   1,635
      Interest income   (4)   (6)
      Amortization of transaction costs   140   147
         
    1,675   1,776
         
Income (loss) before income taxes   407   (4,893)
         
Income tax expense (recovery)        
       Current   -   281
       Deferred   153   (1,512)
         
    153   (1,231)
         
Net income (loss) for the period   254   (3,662)
         
         
Net income (loss) attributable to:        
       Common shareholders   254   (3,652)
      Non-controlling interest   -   (10)
    254   (3,662)
         
Basic earnings (loss) per share   0.01   (0.16)
         
Diluted earnings (loss) per share   0.01   (0.16)


CONSOLIDATED STATEMENTS OF INCOME (LOSS)

         
(in thousands of Canadian dollars, except per share amounts, unaudited)   For the six
months ended
June 30, 2014
  For the six
months ended
June 30, 2013
    $   $
Revenues   154,676   160,685
         
Cost of revenues   118,036   119,191
         
Gross profit   36,640   41,494
         
Expenses        
       Selling, commissions and expenses   17,719   18,441
       General and administration expenses excluding amortization
   of intangible assets
  11,368   12,560
       Restructuring expenses   1,734   6,014
       Amortization of intangible assets   958   4,621
         
    31,779   41,636
         
Income (loss) before finance costs and income taxes   4,861   (142)
         
Finance costs        
      Interest expense   3,088   3,273
       Interest income   (9)   (8)
  Amortization of transaction costs   279   290
         
    3,358   3,555
         
Income (loss) before income taxes   1,503   (3,697)
         
Income tax expense (recovery)        
       Current   -   1,553
       Deferred   453   (2,437)
         
    453   (884)
         
Net income (loss) for the period   1,050   (2,813)
         
         
Net income (loss) attributable to:        
       Common shareholders   1,050   (2,799)
       Non-controlling interest   -   (14)
    1,050   (2,813)
         
Basic earnings (loss) per share   0.04   (0.12)
         
Diluted earnings (loss) per share   0.04   (0.12)


CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

         
(in thousands of Canadian dollars, unaudited)   For the three
months ended
June 30, 2014
  For the three
months ended
June 30, 2013
    $   $
         
Net income (loss) for the period   254   (3,662)
         
         
Other comprehensive income (loss):        
         
Items that may be reclassified subsequently to net income (loss)        
       Foreign currency translation   (19)   1
         
    (19)   1
         
Items that will not be reclassified to net income (loss)        
       Re-measurements of post-employment benefit obligations   (526)   3,005
       Taxes related to post-employment adjustment above   121   (788)
         
    (405)   2,217
         
Other comprehensive (loss) income for the period, net of tax   (424)   2,218
         
Comprehensive loss for the period   (170)   (1,444)
         
         
Comprehensive loss attributable to:        
       Common shareholders   (170)   (1,434)
       Non-controlling interest   -   (10)
         
    (170)   (1,444)
         
         

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

         
(in thousands of Canadian dollars, unaudited)   For the six
months ended
June 30, 2014
  For the six
months ended
June 30, 2013
    $   $
         
Net income (loss) for the period   1,050   (2,813)
         
         
Other comprehensive income (loss):        
         
Items that may be reclassified subsequently to net income (loss)        
       Foreign currency translation   1   2
         
    1   2
         
Items that will not be reclassified to net income (loss)        
       Re-measurements of post-employment benefit obligations   (2,949)   4,337
       Taxes related to post-employment adjustment above   757   (1,137)
         
    (2,192)   3,200
         
Other comprehensive (loss) income for the period, net of tax   (2,191)   3,202
         
Comprehensive (loss) income for the period   (1,141)   389
         
         
Comprehensive (loss) income attributable to:        
       Common shareholders   (1,141)   403
       Non-controlling interest   -   (14)
         
    (1,141)   389
         

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

       
(in thousands of Canadian dollars, unaudited) Attributable to Shareholders    
  Shares Conversion
options
Accumulated
other
comprehensive
income
Deficit Total
Shareholders'
Equity
Non-
controlling
interest
Total Equity
  $ $ $ $ $ $ $
               
Balance as at December 31, 2012 215,336 516 1   (153,875) 61,978 136  62,114
               
Net loss for the period - - - (2,799) (2,799) (14) (2,813)
Other comprehensive income for the period - - 2 3,200 3,202 - 3,202
Total comprehensive income (loss) for the period - - 2 401 403 (14) 389
               
Dividends declared - - - (3,524) (3,524) - (3,524)
      -        
Balance as at June 30, 2013 215,336 516 3 (156,998) 58,857 122   58,979
               
               
Balance as at December 31, 2013 215,336 516 30 (197,807) 18,075 - 18,075
               
Net income for the period - - - 1,050 1,050 - 1,050
Other comprehensive (loss) income for the period - - 1 (2,192) (2,191) - (2,191)
Total comprehensive (loss) income for the period - - 1 (1,142) (1,141) - (1,141)
               
Balance as at June 30, 2014 215,336 516 31 (198,949) 16,934 - 16,934
               

CONSOLIDATED STATEMENTS OF CASH FLOWS

         
(in thousands of Canadian dollars, unaudited)   For the three
months ended
June 30, 2014
  For the three
months ended
June 30, 2013
    $   $
Cash provided by (used in)        
Operating activities        
Net income (loss) for the period   254   (3,662)
Adjustments to net income (loss)        
   Depreciation of property, plant and equipment   1,244   1,323
       Amortization of intangible assets   479   2,311
       Pension expense   120   236
       Loss on disposal of property, plant and equipment   3   65
       Provisions   869   5,247
       Amortization of transaction costs   140   147
       Accretion of convertible debentures   74   74
       Other non-current liabilities   (79)   (95)
       Other post-employment benefit plans, net   58   45
       Income tax expense (recovery)   153   (1,231)
    3,315   4,460
Changes in working capital   (2,561)   882
Contributions made to pension plans   (891)   (782)
Provisions paid   (1,160)   (716)
Income taxes refunds (paid)   138   (1,073)
    (1,159)   2,771
Investing activities        
Purchase of property, plant and equipment   (191)   (343)
Proceeds on disposal of property, plant and equipment   2   75
    (189)   (268)
Financing activities        
Repayment of revolving bank facility   (1,500)   (500)
Finance costs   -   (11)
Finance lease payments   (6)   (3)
Dividends paid   -   (1,762)
    (1,506)   (2,276)
         
(Increase) decrease in bank overdraft during the period   (2,854)   227
Bank overdraft - beginning of period   (1,308)   (583)
Effects of foreign exchange on cash balances   (5)   2
Bank overdraft - end of period   (4,167)   (354)
         

CONSOLIDATED STATEMENTS OF CASH FLOWS

         
(in thousands of Canadian dollars, unaudited)   For the six
months ended
June 30, 2014
  For the six
months ended
June 30, 2013
    $   $
Cash provided by (used in)        
Operating activities        
Net income (loss) for the period   1,050   (2,813)
Adjustments to net income (loss)        
   Depreciation of property, plant and equipment   2,552   2,651
       Amortization of intangible assets   958   4,621
       Pension expense   241   472
       (Gain) loss on disposal of property, plant and equipment   (10)   122
       Provisions   1,734   6,014
       Amortization of transaction costs   279   290
       Accretion of convertible debentures   147   147
       Other non-current liabilities   (161)   (175)
       Other post-employment benefit plans, net   115   95
       Income tax expense (recovery)   453   (884)
    7,358   10,540
Changes in working capital   (3,816)   2,982
Contributions made to pension plans   (1,760)   (1,541)
Provisions paid   (2,232)   (1,037)
Income taxes refunds (paid)   126   (3,886)
    (324)   7,058
Investing activities        
Purchase of property, plant and equipment   (794)   (807)
Proceeds on disposal of property, plant and equipment   21   101
    (773)   (706)
Financing activities        
Repayment of revolving bank facility   (3,500)   (2,500)
Finance costs   (38)   (12)
Finance lease payments   (12)   (3)
Dividends paid   -   (3,035)
    (3,550)   (5,550)
         
(Increase) decrease in bank overdraft during the period   (4,647)   802
Bank overdraft - beginning of period   478   (1,161)
Effects of foreign exchange on cash balances   2   5
Bank overdraft - end of period   (4,167)   (354)
         


 

 

SOURCE DATA Group Ltd.

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