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Brampton Brick Reports Results for the Second Quarter Ended June 30, 2014

BRAMPTON, ONTARIO -- (Marketwired) -- 08/08/14 --

(All amounts are stated in thousands of Canadian dollars, except per share amounts.)

Brampton Brick Limited (TSX:BBL.A) today reported net income of $772, or $0.07 per Class A Subordinate Voting share and Class B Multiple Voting share, for the three month period ended June 30, 2014 compared to net income of $2,102 or $0.19 per share, for the same period in 2013. The aggregate weighted average number of Class A Subordinate Voting shares and Class B Multiple Voting shares outstanding for the second quarter of each of 2014 and 2013 was 10,940,354.

DISCUSSION OF OPERATIONS

Three months ended June 30, 2014

Revenues for the second quarter of 2014 increased by 11% to $33,066 compared to $29,910 for the same period in 2013. Increases in revenues were due to expanded products portfolios in both the landscape and masonry market segments, the additional sales volume gained from new production facilities located in Hillsdale and Brockville, Ontario, and the catch-up of building projects that were delayed due to extreme winter conditions in the first quarter of this year.

For the quarter ended June 30, 2014, cost of sales amounted to $26,206, compared to $22,129 for the same period in 2013. The increase in cost of sales was due to the following:


--  higher shipping volumes in the current quarter; 
--  natural gas costs, which represent one of the largest components in the
    cost of manufacturing, increased from the prior period by approximately
    35%; 
--  start-up costs related to commissioning of the two concrete
    manufacturing plants located in Hillsdale and Brockville, Ontario. These
    plants operated well below capacity because of initial trial production
    runs associated with several new products, and consequently the low
    production volumes resulted in higher fixed costs per unit sold. These
    manufacturing plants are expected to be fully operational during the
    third quarter of the current year; and 
--  a number of one-time operating costs in the quarter related to improving
    plant efficiencies which contributed to the higher cost of sales. During
    the quarter, the Company began consolidating its concrete plants in
    order to improve capacity utilization levels and associated plant costs.
    This consolidation process is expected to be completed in the third
    quarter. 

Selling expenses increased to $2,337 in the second quarter of 2014 from $1,996 in the same quarter of 2013. This increase was due to an increase in personnel costs and advertising expenses related to the additional plant facilities and expanded products' portfolios.

General and administrative expenses amounted to $1,641 for the second quarter ended June 30, 2014 compared to $1,646 for the corresponding quarter in 2013.

Loss on disposal of property, plant and equipment increased to $1,588 for the second quarter of 2014 compared to $354 for the corresponding period in 2013 due to the write-off of certain production equipment amounting to $1,600. This will permit the Company to reallocate production volumes throughout its plant network, improving capacity utilization levels at each plant and increasing logistics and production efficiencies.

Operating income for the quarter ended June 30, 2014, amounted to $1,508 compared to $3,799 for the second quarter of 2013.

The decrease in the provision for income taxes to $133 for the second quarter of 2014 compared to $981 for the same period in 2013 was a result of a decrease in operating results of the Canadian operations. The income tax provision in both periods relates to the pre-tax income of the Company's Canadian operations. The Company has not recorded a deferred tax asset with respect to the potential deferred tax benefit pertaining to losses incurred by its U.S. operations.

Six months ended June 30, 2014

For the six months ended June 30, 2014, the Company recorded a net loss of $7,083, or $0.65 per share, compared to a net loss of $472, or $0.04 per share, for the first half of 2013. The aggregate weighted average number of Class A Subordinate Voting shares and Class B Multiple Voting shares outstanding for the six months ended June 30, of each of 2014 and 2013 was 10,940,354.

Revenues grew 7% to $45,678 for the six months ended June 30, 2014, compared to $42,799 for the same period in 2013 due to increases in shipments of both masonry concrete products and landscape products.

Cost of sales for the six months ended June 30, 2014, amounted to $40,625, compared to $33,903 for the same period in 2013. The increase in cost of sales was due to higher shipments, significantly lower production volumes in both the Masonry Products and Landscape Products business segments and the reasons noted above under the caption "Three months ended June 30, 2014". Additionally, the extreme winter conditions during the first quarter of 2014 significantly impacted operations at the Company's concrete products plants, resulting in higher costs and reduced production volumes.

Selling expenses for the six month period of 2014 increased to $4,487 from $3,781 for the same period of 2013. This increase is due to similar factors as discussed above under the caption "Three months ended June 30, 2014".

General and administrative expenses increased to $3,342 for the first half of 2014 from $3,204 for the corresponding period in 2013 due to an increase in the provision for bad debts.

The increase in loss on disposal of property, plant and equipment of $1,594 for the six month period in 2014 compared to $349 in the corresponding prior period was due to the write-off of certain production equipment as described above under the caption "Three months ended June 30, 2014".

As a result, for the six month period ended June 30, 2014, the operating loss increased to $4,269, compared to operating income of $1,415 for the same period in 2013.

On January 3, 2014, the Company finalized a new $40,000 demand revolving reducing term loan with its banker. The amount of $36,595 drawn down on this loan was utilized to finance the purchase of the Atlas Block assets, and to repay the outstanding balance of $22,500 on the then existing term loan and the associated prepayment of future interest in the amount of $3,305.

As a result, for the first six months of 2014, finance expense increased to $4,640 from $1,380 for the same period in 2013. Also included in the expense for the period were the remaining unamortized transaction costs in the amount of $200 related to the replaced term loan.

A recovery of income taxes of $1,826 was recorded for the first half of 2014 compared to a provision of $507 for the same period in 2013. The income tax recovery (provision) in both periods relates to the Company's Canadian operations. The Company has not recorded a deferred tax asset with respect to the potential deferred tax benefit pertaining to losses incurred by its U.S. operations.

A more detailed discussion with respect to each operating business segment follows:

MASONRY PRODUCTS

Revenues of the Masonry Products business segment increased to $21,987 for the quarter ended June 30, 2014 compared to $21,123 for the same period in 2013. Revenues increased because of higher shipments across most of the masonry product lines. Increases in costs were due to the commissioning of production equipment at the Hillsdale and Brockville plants which continued into the second quarter, certain one-time costs to improve plant efficiencies and higher energy costs. As a result, operating income amounted to $923 for the current quarter compared to $2,146 in the prior period.

For the six month period ended June 30, 2014, revenues increased to $34,009 from $33,435 in the corresponding period of 2013 due to an increase in sales of masonry products, as residential construction gained momentum in the second quarter, both from anticipated seasonal activity as well as the completion of building projects affected by the extreme winter conditions during the first quarter of 2014.

Cost of sales increased to $31,167 from $26,205 in the corresponding period in 2013. Due to the relatively high-fixed cost nature of the Company's manufacturing facilities, large fluctuations in production levels have a material impact on per unit manufacturing costs. As production volumes decrease, the average production cost per unit increases, because fixed plant overhead is apportioned over a lower number of production units, thus increasing cost of sales. In addition, higher energy costs, yard and delivery expenses, certain non-recurring expenses and commissioning costs associated with the Hillsdale and Brockville plants contributed to the unfavourable cost variances.

For the six month period ended June 30, 2014, the operating loss was $2,918 compared to operating income of $2,152 for the same period in 2013.

LANDSCAPE PRODUCTS

Revenues of the Landscape Products business segment for the three month period ended June 30, 2014, increased by 26% to $11,079 from $8,787 in the corresponding period of 2013 reflecting relatively favourable year over year weather conditions and, in part, the additional business generated at the Hillsdale and Brockville plants. For the second quarter of 2014, an operating income of $585 was recorded compared to $1,653 for the same period in 2013. The decrease was primarily due to recognition of a non-recurring loss on disposal of property, plant and equipment relating largely to this business segment as noted earlier. Additionally, commissioning costs of the new plants at Hillsdale and Brockville related to this business segment were incurred during the current quarter.

For the six month period ended June 30, 2014, revenues increased to $11,669 from $9,364 in the corresponding period of 2013. The operating loss increased to $1,351 from $579 for the same period in 2013. The increase in revenues for the six month period were largely from sales transactions recorded during the second quarter of 2014. Similarly, the increase in operating loss was due to the non-recurring loss on disposal of property, plant and equipment recorded in the second quarter of 2014. Additionally, commissioning costs of the new plants at Hillsdale and Brockville for the six month period in 2014 were higher than costs of equipment overhaul and new equipment commissioning costs incurred in the first half of 2013.

CASH FLOWS

Cash flow used for operating activities increased to $5,521 for the six month period ended June 30, 2014 compared to $3,097 for the same period in 2013 due to the decline in operating results.

Cash utilized for purchases of property, plant and equipment totaled $10,059 in the first half of 2014, compared to $1,646 for the corresponding period in 2013. On January 7, 2014, the Company acquired substantially all of the property, plant and equipment of Atlas Block, a concrete masonry and landscape products company for an aggregate purchase price of $11,366, including $2,494 by way of finance leases.

During the six months ended June 30, 2014, Universal Resource Recovery Inc. ('Universal'), the Company's 50% owned joint venture, generated sufficient cash inflows to meet its obligations as they became due and consequently, the Company made no advances to Universal. Loans advanced to Universal during the comparative period in 2013 were $1,375.

On January 3, 2014, the Company drew down an amount of $36,595 on the new $40,000 demand revolving reducing term loan as noted above under the caption "Discussion of Operations".

FINANCIAL CONDITION

The Company's Masonry Products and Landscape Products business segments are seasonal in nature. The Landscape Products business is affected to a greater degree than the Masonry Products business. As a result of this seasonality, operating results are impacted accordingly and cash requirements are generally expected to increase through the first half of the year and decline through the second half of the year.

As at June 30, 2014, bank operating advances were $17,931 compared to $11,641 as at December 31, 2013.

Trade payables totaled $15,426 at June 30, 2014 compared to $11,514 at December 31, 2013.

The ratio of total liabilities to shareholders' equity was 0.71:1 at June 30, 2014 compared to 0.49:1 at December 31, 2013. The increase in this ratio from December 2013 to June 2014 was primarily due to a higher debt balance outstanding and lower retained earnings resulting from a decline in operating results in the first six months of 2014.

As at June 30, 2014, excluding the new demand revolving reducing term loan classified as a current liability, the adjusted working capital1) was $10,985, representing an adjusted working capital ratio1) of 1.27:1 compared to working capital and a working capital ratio at December 31, 2013 of $7,766 and 1.25:1, respectively. The increase in adjusted working capital1) was due to an increase in inventories, primarily related to the Atlas Block acquisition as well as higher trade and other receivables offset, in part, by higher bank operating advances and trade payables. Cash and cash equivalents totaled $1,231 at June 30, 2014 compared to $1,200 at December 31, 2013.


1) "Adjusted working capital" and "adjusted working capital ratio" are non- 
IFRS financial measures. See the section "Non- IFRS Measures" below for a   
definition of such measures and for a quantitative reconciliation of such   
measures to the most directly comparable IFRS measures.                     

The Company's demand operating facility provides for borrowings of up to $22,000 based on margin formulae for trade receivables, certain other qualified receivables and inventories, less priority claims and the mark-to-market exposure on swap contracts, if applicable. It is a demand facility secured by a general security agreement over all assets. The agreement also contains certain financial covenants.

As at June 30, 2014, the borrowing limit was $22,000. The utilization was $17,234 and was comprised of a $15,000 banker's acceptance 90 day note, a current account balance of $1,969, and outstanding letters of credit of $265.

As previously discussed, on January 3, 2014, the Company finalized a new $40,000 demand revolving reducing term loan with its banker. The term of the new loan is nine years and requires monthly interest payments for the duration of the loan. Principal repayments of $500 per month will be paid from July 2015 to November 2022, but only during the months of July to November inclusive, for a total of $2,500 per annum, and a balloon payment of the then remaining principal will be paid in November 2022. The rate of interest is floating at the bank's prime rate plus a credit spread of 0.70% or at Banker's Acceptance rates plus a credit spread of up to 2.50%. The Company's credit spread is variable and determined by its fixed charge coverage ratio. This loan is secured primarily by real estate and production equipment of the Company's Masonry Products and Landscape Products business segments in both Canada and the U.S.

This liability has been classified as current on the condensed interim consolidated balance sheet. Notwithstanding the classification of the loan as a current liability, the Company's new debt affords it many benefits including a lower interest rate, flexibility to have interest rates at either floating or fixed and flexibility to accelerate principal repayments without any penalty. The Company is also permitted to redraw under the loan for the purchase of capital assets.

The Company was in compliance with all financial covenants under its term financing agreement and operating credit facility as at June 30, 2014 and anticipates that it will maintain compliance throughout the year.

The Company expects that future cash flows from operations, cash and cash equivalents on hand and the unutilized balance of its operating credit facility will be sufficient to satisfy its obligations as they become due.

On January 7, 2014, the Company acquired substantially all of the property, plant and equipment from the court appointed receiver of Atlas Block, a concrete masonry and landscape products company located in the province of Ontario, for an aggregate purchase price of $11,366. Of the total assets purchased, $2,494 were acquired through a finance lease arrangement. These assets form part of two concrete masonry and landscape products manufacturing plants located in Hillsdale and Brockville, Ontario.

NON-IFRS MEASURES

In addition to the International Financial Reporting Standards ("IFRS") measures, this MD&A contains certain financial measures that do not have any standardized meaning prescribed by IFRS. Therefore, these financial measures may not be comparable to similar measures presented by other issuers. These measures are listed and defined below.

The Company uses the non-IFRS measure "adjusted working capital" and "adjusted working capital ratio". "Adjusted working capital" is defined by management as current assets less adjusted current liabilities, where adjusted current liabilities are current liabilities excluding the new demand revolving reducing term loan classified as a current liability. Management believes adjusted working capital is more indicative of the Company's working capital position pending the outcome of on-going discussions to revise the terms of the demand loan. Adjusted working capital does not have a standardized meaning prescribed by IFRS. Readers are cautioned that adjusted working capital should not be construed as an alternative to working capital determined in accordance with IFRS as a measure of the Company's liquidity or cash flows. The Company's method of calculating adjusted working capital may differ from that of other issuers or companies operating in similar sectors and, accordingly, may not be comparable to similar measures presented by other issuers. Management's calculation of adjusted working capital is provided in the table below:


--------------------------------------------------------------------------
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Adjusted working capital                                    June 30, 2014 
--------------------------------------------------------------------------
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Current assets                                           $         51,367 
------------------------------------------------------------------------- 
  Current liabilities                                              76,977 
------------------------------------------------------------------------- 
  Less: Demand revolving reducing term loan                       (36,595)
--------------------------------------------------------------------------
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Less: Adjusted current liabilities                       $         40,382 
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Adjusted working capital                                 $         10,985 
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FORWARD-LOOKING STATEMENTS

Certain statements contained herein constitute "forward-looking statements". All statements that are not historical facts are forward-looking statements, including, among others, statements regarding the expected repayment of the loan receivable from Universal and the expected self-sufficiency on a cash basis of Universal, forecasts of sufficient cash flows from operations and other sources of financing, anticipated compliance with financial covenants under debt agreements, anticipated sales of masonry and landscape products, and other statements regarding future plans, objectives, results, business outlook and financial performance. There can be no assurance that such forward-looking statements will prove to be accurate.

Such forward-looking statements are based on information currently available to management, and are based on assumptions and analyses made by management in light of its experience and its perception of historical trends, current conditions and expected future developments, including, among others, assumptions regarding pricing, weather and seasonal expectations, production efficiency, and there being no significant disruptions affecting operations or other material adverse changes.

Such forward-looking statements also involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward- looking statements. Such risks and uncertainties include, among others: changes in economic conditions, including the demand for the Company's primary products and the level of new home, commercial and other construction; large fluctuations in production levels; fluctuations in energy prices and other production costs; changes in transportation costs; foreign currency exchange and interest rate fluctuations; legislative and regulatory developments; as well as those assumptions, risks, uncertainties and other factors identified and discussed under "Risks and Uncertainties" in the

2013 annual MD&A included in the Company's 2013 Annual Report and those identified and reported in the Company's other public filings (including the Annual Information Form for the year ended December 31, 2013), which may be accessed at www.sedar.com.

The forward-looking information contained herein is made as of the date hereof. Other than as specifically required by law, the Company undertakes no obligation to update or revise any forward- looking information, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on forward-looking statements.

Brampton Brick Limited is Canada's second largest manufacturer of clay brick, serving markets in Ontario, Quebec and the Northeast and Midwestern United States from its brick manufacturing plants located in Brampton, Ontario and near Terre Haute, Indiana. To complement the clay brick product line, the Company also manufactures a range of concrete masonry products, including concrete brick and block as well as stone veneer products. Concrete interlocking paving stones, retaining walls, garden walls and enviro products are manufactured in Markham, Milton, Hillsdale, Brockville and Brampton, Ontario and in Wixom, Michigan and sold to markets in Ontario, Quebec, Michigan, New York, Pennsylvania, Ohio, Kentucky, Illinois and Indiana under the Oaks(TM) trade name. The Company's products are used for residential construction and for industrial, commercial, and institutional building projects.


                       SELECTED FINANCIAL INFORMATION                       
                                                                            
(unaudited) (in thousands of dollars)                                       
----------------------------------------------------------------------------
                                                                            
                                                     June 30     December 31
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS           2014            2013
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
ASSETS                                                                      
Current assets                                                              
  Cash and cash equivalents                       $    1,231    $      1,200
  Trade and other receivables                         20,768           9,891
  Inventories                                         27,629          25,032
  Taxes recoverable                                      978             281
  Other assets                                           761           2,565
                                                 -----------  --------------
                                                      51,367          38,969
Non-current assets                                                          
  Loan receivable                                      5,200           5,200
  Property, plant and equipment                      175,275         168,095
                                                 -----------  --------------
                                                                            
Total assets                                      $  231,842    $    212,264
                                                 -----------  --------------
LIABILITIES                                                                 
Current liabilities                                                         
  Bank operating advances                         $   17,931    $     11,641
  Trade payables                                      15,426          11,514
  Current portion of debt                             40,511           5,704
  Decommissioning provisions                              50              50
  Other liabilities                                    3,059           2,294
                                                 -----------  --------------
                                                      76,977          31,203
                                                 -----------  --------------
Non-current liabilities                                                     
  Non-current portion of debt                          2,739          20,980
  Decommissioning provisions                           2,347           2,315
  Deferred tax liabilities                            13,886          15,016
                                                 -----------  --------------
Total liabilities                                 $   95,949    $     69,514
                                                 -----------  --------------
EQUITY                                                                      
Equity attributable to shareholders of Brampton                             
 Brick Limited                                                              
  Share capital                                   $   33,711    $     33,711
  Contributed surplus                                  2,207           2,078
  Accumulated other comprehensive income                 470             373
  Retained earnings                                   99,476         106,559
                                                 -----------  --------------
                                                  $  135,864    $    142,721
                                                 -----------  --------------
Non-controlling interests                                 29              29
                                                 -----------  --------------
Total equity                                      $  135,893    $    142,750
                                                 -----------  --------------
                                                                            
Total liabilities and equity                      $  231,842    $    212,264
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                       SELECTED FINANCIAL INFORMATION                       
                                                                            
(unaudited) (in thousands of dollars, except per share amounts)             
----------------------------------------------------------------------------
                                  Three months ended       Six months ended 
                                             June 30                June 30 
CONDENSED INTERIM CONSOLIDATED                                              
 STATEMENTS OF COMPREHENSIVE                                                
 INCOME (LOSS)                      2014        2013       2014        2013 
----------------------------------------------------------------------------
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Revenues                        $ 33,066   $  29,910   $ 45,678  $   42,799 
                                                                            
Cost of sales                     26,206      22,129     40,625      33,903 
Selling expenses                   2,337       1,996      4,487       3,781 
General and administrative                                                  
 expenses                          1,641       1,646      3,342       3,204 
Loss on sale of property,                                                   
 plant and equipment               1,588         354      1,594         349 
Other income                        (214)        (14)      (101)        (11)
Impairment loss on loan                                                     
 receivable                            -           -          -         158 
                              ----------- ----------- ---------- -----------
                                  31,558      26,111     49,947      41,384 
                                                                            
Operating income (loss)            1,508       3,799     (4,269)      1,415 
                                                                            
Finance expense                     (603)       (716)    (4,640)     (1,380)
                                                                            
Income (loss) before income                                                 
 taxes                               905       3,083     (8,909)         35 
                                                                            
(Provision for) recovery of                                                 
 income taxes                                                               
  Current                           (457)       (313)       695          45 
  Deferred                           324        (668)     1,131        (552)
                              ----------- ----------- ---------- -----------
                                    (133)       (981)     1,826        (507)
                              ----------- ----------- ---------- -----------
                                                                            
Net income (loss) for the                                                   
 period                         $    772   $   2,102   $ (7,083) $     (472)
                              ----------- ----------- ---------- -----------
                              ----------- ----------- ---------- -----------
                                                                            
Net income (loss) attributable                                              
 to:                                                                        
  Shareholders of Brampton                                                  
   Brick Limited                $    772   $   2,101   $ (7,083) $     (473)
                                                                  --------- 
  Non-controlling interests            -           1          -           1 
                              ----------- ----------- ----------            
Net income (loss) for the                                                   
 period                         $    772   $   2,102   $ (7,083) $     (472)
                              ----------- ----------- ---------- -----------
                              ----------- ----------- ---------- -----------
                                                                            
Other comprehensive income                                                  
 (loss)                                                                     
  Items that may be                                                         
   reclassified subsequently                                                
   to profit or loss:                                                       
  Foreign currency translation                                              
   income (loss)                $ (1,826)  $   1,695   $     97  $    2,674 
                              ----------- ----------- ---------- -----------
                                                                            
Total comprehensive income                                                  
 (loss) for the period          $ (1,054)  $   3,797   $ (6,986) $    2,202 
                              ----------- ----------- ---------- -----------
                              ----------- ----------- ---------- -----------
                                                                            
Total comprehensive income                                                  
 (loss) attributable to:                                                    
  Shareholders of Brampton                                                  
   Brick Limited                $ (1,054)  $   3,796   $ (6,986) $    2,201 
  Non-controlling interests            -           1          -           1 
                              ----------- ----------- ---------- -----------
Total comprehensive income                                                  
 (loss) for the period          $ (1,054)  $   3,797   $ (6,986) $    2,202 
                              ----------- ----------- ---------- -----------
                              ----------- ----------- ---------- -----------
Net income (loss) per Class A                                               
 Subordinate Voting share and                                               
 Class B Multiple Voting share                                              
 attributable to shareholders                                               
 of Brampton Brick Limited      $   0.07   $    0.19   $  (0.65) $    (0.04)
Weighted average Class A                                                    
 Subordinate Voting shares and                                              
 Class B Multiple Voting                                                    
 shares outstanding (000's)       10,940      10,940     10,940      10,940 
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                       SELECTED FINANCIAL INFORMATION                       
                                                                            
(unaudited) (in thousands of dollars)                                       
----------------------------------------------------------------------------
                                                                            
CONDENSED INTERIM CONSOLIDATED STATEMENTS          Six months ended June 30 
OF CASH FLOWS                                            2014          2013 
----------------------------------------------------------------------------
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Cash provided by (used for)                                                 
Operating activities                                                        
Net loss for the period                             $  (7,083)   $     (472)
Items not affecting cash and cash equivalents                               
  Depreciation                                          4,072         3,611 
  Current taxes                                          (695)          (45)
  Deferred taxes                                       (1,131)          552 
  Loss on disposal of property, plant and                                   
   equipment                                            1,594           349 
  Unrealized foreign currency exchange gain               (15)          (96)
  Impairment loss on loan receivable                        -           158 
  Net interest expense                                  4,640         1,380 
  Other                                                   129           110 
                                                 -------------  ------------
                                                        1,511         5,547 
Changes in non-cash items                                                   
  Trade and other receivables                         (10,918)       (5,896)
  Inventories                                          (2,624)       (2,754)
  Other assets                                          1,804          (203)
  Trade payables                                        4,060           756 
  Other liabilities                                       648           692 
                                                 -------------  ------------
                                                       (7,030)       (7,405)
Income tax payments                                        (2)       (1,239)
                                                 -------------  ------------
Cash used for operating activities                     (5,521)       (3,097)
                                                 -------------  ------------
Investing activities                                                        
  Purchase of property, plant and equipment           (10,059)       (1,646)
  Loan advances to Universal Resource Recovery                              
   Inc.                                                     -        (1,375)
  Proceeds from disposal of property, plant and                             
   equipment                                               57            44 
                                                 -------------  ------------
Cash used for investment activities                   (10,002)       (2,977)
                                                 -------------  ------------
Financing activities                                                        
  Increase in bank operating advances                   6,290         7,298 
  Proceeds from issuance of the demand revolving                            
   reducing term loan                                  36,595             - 
  Payment of term loans                               (22,635)          (41)
  Interest paid                                        (4,322)       (1,282)
  Payments on obligations under finance leases           (369)         (248)
                                                 -------------  ------------
Cash provided by financing activities                  15,559         5,727 
                                                 -------------  ------------
Foreign exchange on cash held in foreign                                    
 currency                                                  (5)           42 
Increase (decrease) in cash and cash equivalents           31          (305)
Cash and cash equivalents at the beginning of                               
 the period                                             1,200         1,412 
                                                 -------------  ------------
Cash and cash equivalents at the end of the                                 
 period                                             $   1,231    $    1,107 
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   SELECTED FINANCIAL INFORMATION      
                                       
(unaudited) (in thousands of dollars)  
------------------------------------------------------------------
                                                                  
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY    
------------------------------------------------------------------
------------------------------------------------------------------
                          Attributable to shareholders of Brampton
                                                     Brick Limited
                      --------------------------------------------
                                                      Accumulated 
                                                            Other 
                            Share     Contributed   Comprehensive 
                          Capital         Surplus   Income (Loss) 
------------------------------------------------------------------
                                                                  
Balance - January 1,                                              
 2013                 $    33,711   $       1,895   $      (2,655)
 Net (loss) income                                                
  for the period                                -               - 
 Other comprehensive                                              
  income (net of                                                  
  taxes, $nil)                  -               -           2,674 
                      --------------------------------------------
Comprehensive income                                              
 (loss) for the                                                   
 period                         -               -           2,674 
                      --------------------------------------------
 Share-based                                                      
  compensation                  -             110               - 
------------------------------------------------------------------
Balance - June 30,                                                
 2013                 $    33,711   $       2,005   $          19 
------------------------------------------------------------------
------------------------------------------------------------------
                                                                  
Balance - January 1,                                              
 2014                 $    33,711   $       2,078   $         373 
 Net loss for the                                                 
  period                        -               -               - 
 Other comprehensive                                              
  income (net of                                                  
  taxes, $nil)                  -               -              97 
                      --------------------------------------------
Comprehensive income                                              
 (loss) for the                                                   
 period                         -               -              97 
                      --------------------------------------------
 Share-based                                                      
  compensation                  -             129               - 
------------------------------------------------------------------
Balance - June 30,                                                
 2014                 $    33,711   $       2,207   $         470 
------------------------------------------------------------------
------------------------------------------------------------------

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CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY              
----------------------------------------------------------------------------
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                       Attributable to shareholders                         
                          of Brampton Brick Limited                         
                     -------------------------------------------------------
                                                                            
                                                            Non-            
                            Retained                 controlling      Total 
                            Earnings          Total     interest     Equity 
----------------------------------------------------------------------------
                                                                            
Balance - January 1,                                                        
 2013                  $     104,010   $    136,961  $        12  $ 136,973 
 Net (loss) income                                                          
  for the period                (473)          (473)           1       (472)
 Other comprehensive                                                        
  income (net of                                                            
  taxes, $nil)                     -          2,674            -      2,674 
                     -------------------------------------------------------
Comprehensive income                                                        
 (loss) for the                                                             
 period                         (473)         2,201            1      2,202 
                     -------------------------------------------------------
 Share-based                                                                
  compensation                     -            110            -        110 
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Balance - June 30,                                                          
 2013                  $     103,537   $    139,272  $        13  $ 139,285 
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----------------------------------------------------------------------------
                                                                            
Balance - January 1,                                                        
 2014                  $     106,559   $    142,721  $        29  $ 142,750 
 Net loss for the                                                           
  period                      (7,083)        (7,083)           -     (7,083)
 Other comprehensive                                                        
  income (net of                                                            
  taxes, $nil)                     -             97            -         97 
                     -------------------------------------------------------
Comprehensive income                                                        
 (loss) for the                                                             
 period                       (7,083)        (6,986)           -     (6,986)
                     -------------------------------------------------------
 Share-based                                                                
  compensation                     -            129            -        129 
----------------------------------------------------------------------------
Balance - June 30,                                                          
 2014                  $      99,476   $    135,864  $        29  $ 135,893 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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With SaaS use rampant across organizations, how can IT departments track company data and maintain security? More and more departments are commissioning their own solutions and bypassing IT. A cloud environment is amorphous and powerful, allowing you to set up solutions for all of your user needs: document sharing and collaboration, mobile access, e-mail, even industry-specific applications. In his session at 16th Cloud Expo, Shawn Mills, President and a founder of Green House Data, discussed h...
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin,...
SYS-CON Events announced today that MobiDev, a software development company, will exhibit at the 17th International Cloud Expo®, which will take place November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software development company with representative offices in Atlanta (US), Sheffield (UK) and Würzburg (Germany); and development centers in Ukraine. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobi...
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. In his session at 15th Cloud Expo, Michael Meiner, an Engineering Director at Oracle, Corporation, analyzed a range of cloud offerings (IaaS, PaaS, SaaS) and discussed the benefits/challenges of migrating to each offe...
Chuck Piluso presented a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. Prior to Secure Infrastructure and Services, Mr. Piluso founded North American Telecommunication Corporation, a facilities-based Competitive Local Exchange Carrier licensed by the Public Service Commission in 10 states, serving as the company's chairman and president from 1997 to 2000. Between 1990 and 1997, Mr. Piluso served as chairman & founder of International Te...
Mobile, social, Big Data, and cloud have fundamentally changed the way we live. “Anytime, anywhere” access to data and information is no longer a luxury; it’s a requirement, in both our personal and professional lives. For IT organizations, this means pressure has never been greater to deliver meaningful services to the business and customers.
In their session at 17th Cloud Expo, Hal Schwartz, CEO of Secure Infrastructure & Services (SIAS), and Chuck Paolillo, CTO of Secure Infrastructure & Services (SIAS), provide a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. In his role as CEO of Secure Infrastructure & Services (SIAS), Hal Schwartz provides leadership and direction for the company.
In a recent research, analyst firm IDC found that the average cost of a critical application failure is $500,000 to $1 million per hour and the average total cost of unplanned application downtime is $1.25 billion to $2.5 billion per year for Fortune 1000 companies. In addition to the findings on the cost of the downtime, the research also highlighted best practices for development, testing, application support, infrastructure, and operations teams.
Puppet Labs has announced the next major update to its flagship product: Puppet Enterprise 2015.2. This release includes new features providing DevOps teams with clarity, simplicity and additional management capabilities, including an all-new user interface, an interactive graph for visualizing infrastructure code, a new unified agent and broader infrastructure support.
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner, Product Manager of the Omega DevCloud with KORE Telematics Inc., discussed the evolving requirements for developers as IoT matures and conducte...
Container technology is sending shock waves through the world of cloud computing. Heralded as the 'next big thing,' containers provide software owners a consistent way to package their software and dependencies while infrastructure operators benefit from a standard way to deploy and run them. Containers present new challenges for tracking usage due to their dynamic nature. They can also be deployed to bare metal, virtual machines and various cloud platforms. How do software owners track the usag...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Arch...
Providing the needed data for application development and testing is a huge headache for most organizations. The problems are often the same across companies - speed, quality, cost, and control. Provisioning data can take days or weeks, every time a refresh is required. Using dummy data leads to quality problems. Creating physical copies of large data sets and sending them to distributed teams of developers eats up expensive storage and bandwidth resources. And, all of these copies proliferating...
Malicious agents are moving faster than the speed of business. Even more worrisome, most companies are relying on legacy approaches to security that are no longer capable of meeting current threats. In the modern cloud, threat diversity is rapidly expanding, necessitating more sophisticated security protocols than those used in the past or in desktop environments. Yet companies are falling for cloud security myths that were truths at one time but have evolved out of existence.
Digital Transformation is the ultimate goal of cloud computing and related initiatives. The phrase is certainly not a precise one, and as subject to hand-waving and distortion as any high-falutin' terminology in the world of information technology. Yet it is an excellent choice of words to describe what enterprise IT—and by extension, organizations in general—should be working to achieve. Digital Transformation means: handling all the data types being found and created in the organizat...