DATA Group Ltd. Announces Fourth Quarter and Year End Results For 2014

HIGHLIGHTS

Q4 2014

  • Fourth quarter 2014 ("Q4") Revenues of $80.4 million, Q4 Gross Profit of $18.7 million and Q4 Net Income of $1.6 million
  • Q4 Adjusted EBITDA of $6.2 million (See Table 2 and "Non-GAAP Measures" below)

2014

  • 2014 ("YTD") Revenues of $313.2 million, YTD Gross Profit of $74.6 million and YTD Net Income of $4.5 million
  • YTD Adjusted EBITDA of $22.5 million (See Table 2 and "Non-GAAP Measures" below)

 

BRAMPTON, ON, March 5, 2015 /CNW/ - DATA Group Ltd. (TSX: DGI) ("DATA Group") announced its consolidated financial and operating results for the fourth quarter and the year ended December 31, 2014.

DATA Group earned net income of $4.5 million or $0.19 per share in the year ended December 31, 2014 versus a loss in the prior year.  DATA Group is encouraged by its results in the second half of 2014 as revenue increased by 1.4% and Adjusted EBITDA stabilized compared to the same period in 2013.

Debt Reduction
During the year, DATA Group repaid $6.5 million of debt, bringing its total debt including its convertible debentures to $90.1 million.  During the fourth quarter, we extended the term of our senior debt credit facilities to August 31, 2016.

Revenue Stabilization/Growth
Our intent in 2014 was to stabilize our revenue and position ourselves for longer term revenue growth.  During 2014, DATA Group had revenues of $313.2 million, a 1.2% decline from 2013.  Our revenues included strong growth from our U.S. customers.  During the second half of 2014 overall revenue grew by 1.4% compared to the same period in 2013.  We continue with our plans to;

  • Add new sales talent
  • Win market share in our traditional print business
  • Invest in the key growth areas we have identified; labels, marketing print and digital communications
  • Bundling our digital services with our print offerings
  • Expand our U.S. revenue

In the fourth quarter we made a number of investments in this regard, highlighted by new sales leadership in Western Canada, the creation of a dedicated, new Marketing function and a decision to upgrade our print capability at our new Calgary facility that will come on-line in early 2015.

Cost Reduction
We are reducing our costs to balance productive capacity with demand in declining markets while investing selectively in growth areas.  When we started the restructuring process in 2013, we had a target to take out 35% of our manufacturing floor space and 20% of our headcount at all levels.  We are well advanced in achieving our targets.  By the middle of 2015 we will have reduced our manufacturing floor space by 26% and our headcount by 20%.  While doing this, we have successfully sublet three of the exited facilities in which we had ongoing lease commitments.  We are continuing with these initiatives and look forward to reporting further progress.

Last fall we announced plans for the consolidation of four existing manufacturing locations in Western Canada into one new, modern print and marketing communications centre located in Calgary, Alberta.  We are on schedule to finish this project by the end of the first quarter of 2015 as originally planned.  Since last fall, we have identified further savings opportunities we expect to act on in the first half of 2015.  These savings will come from the reorganization of several locations, process improvements and strategic sourcing initiatives.  Including the previously announced Western Canadian consolidations, we anticipate annual savings of $9.0 million to $11.0 million as a result of these actions, with associated restructuring charges in the first half of 2015 of $5.5 million to $6.0 million.  The majority of these actions will take place in the first quarter of 2015.

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 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.  DATA Group has responded with a Transformation Plan that establishes clear goals, all of which aim to enhance shareholder value.  Our Transformation Plan is showing results in the three key areas we have targeted; cost reduction, debt reduction and revenue stabilization/growth.

2015 Outlook
For 2015, DATA Group expects to report higher net income and continued reductions in total indebtedness.  To support this, our revenue growth and cost reduction strategies will continue.  The associated restructuring expenses will be more than offset by efficiency gains.  Management has set the following financial targets for 2015:

  • Net income of at least $6.0 million;
  • Debt reduction of at least $10.0 million;
  • Revenues equal to or better than 2014; and,
  • Return on Shareholders' equity of at least 25% after taxes.

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 December 31, 2014 and 2013

Oct. 1 to
Dec. 31,
2014


Oct. 1 to
Dec. 31,
2013


Jan. 1 to
Dec. 31,
2014


Jan. 1 to
Dec. 31,
2013

(in thousands of Canadian dollars, except per share amounts, unaudited)

$


$


$


$

Revenues

80,371



82,147



313,175



316,961


Cost of revenues

61,627



61,257



238,563



236,879


Gross profit

18,744



20,890



74,612



80,082














Selling, general and administrative expenses

13,715



14,175



57,074



59,826


Restructuring expenses

769



396



2,804



7,034


Impairment of goodwill



25,000





44,000


Gain on cancellation of convertible debentures

(43)





(103)




Amortization of intangible assets

479



1,617



1,916



8,370


Income (loss) before finance costs and income taxes

3,824



(20,298)



12,921



(39,148)














Finance costs













Interest expense

1,486



1,691



6,124



6,657



Interest income

(6)



(2)



(21)



(15)



Amortization of transaction costs

175



134



591



568



1,655



1,823



6,694



7,210


Income (loss) before income taxes

2,169



(22,121)



6,227



(46,358)














Income tax expense (recovery)













Current

36



1,055



69



2,916



Deferred

553



(312)



1,679



(3,432)



589



743



1,748



(516)


Net income (loss) for the period

1,580



(22,864)



4,479



(45,842)














Net income (loss) attributable to common shareholders

1,580



(22,868)



4,479



(45,831)


Basic and diluted earnings (loss) per share

0.07



(0.97)



0.19



(1.95)


Number of common shares outstanding

23,490,592



23,490,592



23,490,592



23,490,592


























As at December 31, 2014 and 2013

As at
Dec. 31,
2014


As at
Dec. 31,
2013







(in thousands of Canadian dollars, unaudited)

$


$







Current assets

83,619



78,717








Current liabilities

46,176



42,545




















Total assets

164,977



166,597








Total non-current liabilities

100,388



105,977




















Shareholders' equity

18,413



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 December 31, 2014 and 2013


Oct. 1 to
Dec. 31,
2014


Oct. 1 to
Dec. 31,
2013


Jan. 1 to
Dec. 31,
2014


Jan. 1 to
Dec. 31,
2013

(in thousands of Canadian dollars, unaudited)



$



$



$



$

Net income (loss) for the period



1,580




(22,864)




4,479




(45,842)



















Interest expense



1,486




1,691




6,124




6,657


Interest income



(6)




(2)




(21)




(15)


Amortization of transaction costs



175




134




591




568


Current income tax expense



36




1,055




69




2,916


Deferred income tax expense (recovery)



553




(312)




1,679




(3,432)


Depreciation of property, plant and equipment



1,186




1,356




4,940




5,330


Amortization of intangible assets



479




1,617




1,916




8,370



















EBITDA



5,489




(17,325)




19,777




(25,448)


Restructuring expenses



769




396




2,804




7,034


Gain on cancellation of convertible debentures



(43)







(103)





Impairment of goodwill






25,000







44,000


Adjusted EBITDA



6,215




8,071




22,478




25,586


 

Revenues

For the quarter ended December 31, 2014, DATA Group recorded revenues of $80.4 million, a decrease of $1.8 million or 2.2% compared with the same period in 2013.  The decrease, before intersegment revenues, was the result of a $2.2 million decrease in the DATA East and West segment and was partially offset by a $0.4 million increase in the Multiple Pakfold segment.  For the year ended December 31, 2014, DATA Group recorded revenues of $313.2 million, a decrease of $3.8 million or 1.2% compared with the same period in 2013.  The decrease, before intersegment revenues, was the result of a $5.4 million decrease in the DATA East and West segment and was partially offset by a $1.8 million increase in the Multiple Pakfold segment.  The decrease in revenues in the DATA East and West segment occurred primarily in the first, second and fourth quarters and 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, technological change and a change in product mix.  Third quarter revenues increased as a result of an increase in sales to existing customers, an improvement in product mix and price increases passed through to customers for increased material costs.  The segment generally 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 in the Multiple Pakfold segment was primarily due to new business which arose as a result of the bankruptcy of a competitor.

Cost of Revenues and Gross Profit

For the quarter ended December 31, 2014, cost of revenues increased to $61.6 million from $61.3 million for the same period in 2013.  Gross profit for the quarter ended December 31, 2014 was $18.7 million, which represented a decrease of $2.1 million or 10.3% from $20.9 million for the same period in 2013.  The decrease in gross profit for the quarter ended December 31, 2014 was attributable to a gross profit decrease of $2.2 million in the DATA East and West segment and was partially offset by a $0.1 million increase in the Multiple Pakfold segment.  Gross profit as a percentage of revenues decreased to 23.3% for the quarter ended December 31, 2014 compared to 25.4% for the same period in 2013.  For the year ended December 31, 2014, cost of revenues increased to $238.6 million from $236.9 million for the same period in 2013.  Gross profit for the year ended December 31, 2014 was $74.6 million, which represented a decrease of $5.5 million or 6.8% from $80.1 million for the same period in 2013.  The decrease in gross profit for the year ended December 31, 2014 was attributable to a gross profit decrease of $5.8 million in the DATA East and West segment and was partially offset by a gross profit increase of $0.4 million in the Multiple Pakfold segment.  Gross profit as a percentage of revenues decreased to 23.8% for the year ended December 31, 2014 compared to 25.3% for the same period in 2013.  The decrease in gross profit was attributable to lower revenues and the impact of competitive pricing and changes in product mix in the DATA East and West segment.  The decrease in gross profit was partially offset by higher revenues in the Multiple Pakfold segment and by cost savings in each segment.  These cost savings included headcount reductions, the closure of certain manufacturing locations, and the renegotiation of agreements for a number of raw material input costs.

Selling, General and Administrative Expenses and Restructuring Expenses

Selling, general and administrative ("SG&A") expenses, excluding amortization of intangible assets, for the quarter ended December 31, 2014 decreased $0.5 million or 3.2% to $13.7 million compared to $14.2 million in the same period in 2013.  As a percentage of revenues, these costs were 17.1% of revenues for the quarter ended December 31, 2014 compared to 17.3% of revenues for the same period in 2013.  SG&A expenses, excluding amortization of intangible assets, for the year ended December 31, 2014 decreased $2.8 million or 4.6% to $57.1 million compared to $59.8 million for the same period of 2013.  As a percentage of revenues, these costs were 18.2% and 18.9% of revenues for the years ended December 31, 2014 and 2013, respectively.  The decrease in SG&A expenses for the quarter ended and year ended December 31, 2014 was attributable to the benefits realized from cost saving initiatives implemented in 2013 and 2014 which included simplifying DATA Group's organizational structure and centralizing a number of functions.  For the quarter ended and year ended December 31, 2014, DATA Group incurred restructuring expenses related to headcount reductions, management changes, consulting fees and the closure a manufacturing location of $0.8 million and $2.8 million, respectively, as part of its 2014 restructuring initiatives.  For the quarter ended and year ended December 31, 2013, DATA Group incurred restructuring expenses related to headcount reductions, the closure and downsizing of certain manufacturing locations and warehouses, and lease exit charges of $0.4 million and $7.0 million, respectively, as part of its 2013 restructuring initiatives.  The restructuring initiatives included a number of changes in DATA Group's sales management and executive teams, closing facilities in Brockville, Ontario and Anjou, Québec, downsizing two other production facilities and transferring certain operations from Markham, Ontario to DATA Group's existing facility in Mississauga, Ontario.

Impairment of Goodwill

During the fourth quarter of 2014, DATA Group performed its annual review for impairment of goodwill by comparing the fair value of each cash generating unit ("CGU") to the CGU's carrying value.  DATA Group determined the fair value of each CGU by discounting expected future cash flows in accordance with recognized valuation methods.  The process of determining those fair values required DATA Group to make a number of estimates and assumptions such as projected future revenues, costs of revenues, operating margins, market conditions well into the future, and discount rates.  As a result of that review, DATA Group concluded no goodwill impairment charges were required.

During the third quarter of 2013, market factors, including the trading price of DATA Group's common shares and changes in revenue trends and forecasted profits indicated that DATA Group's assets may be impaired.  As a result of this new information, DATA Group performed an impairment analysis by comparing the fair value of each cash CGU to the CGU's carrying value.  As a result of that review and market factors, DATA Group concluded that the fair value of its DATA East and West CGU was less than its carrying value.  Accordingly, DATA Group recognized an impairment of goodwill charge of $19.0 million related to the DATA East and West CGU during the third quarter of 2013.  During the fourth quarter of 2013, DATA Group performed its annual review for impairment of goodwill and concluded that the fair value of its DATA East and West CGU was less than its carrying value.  Accordingly, DATA Group recognized an impairment of goodwill charge of $25.0 million related to the DATA East and West CGU in fourth quarter of 2013.

Gain On Cancellation Of Convertible Debentures

For the year ended December 31, 2014, DATA Group began a Normal Course Issuer Bid ("NCIB") to purchase a portion of its outstanding 6.00 % Convertible Debentures and record a gain of $0.1 million related to the cancellation of debentures purchased under the NCIB.

Adjusted EBITDA

For the quarter ended December 31, 2014, Adjusted EBITDA was $6.2 million, or 7.7% of revenues.  Adjusted EBITDA for the quarter ended December 31, 2014 decreased $1.9 million or 23.0% from the same period in the prior year and the Adjusted EBITDA margin for the quarter, as a percentage of revenues, decreased from 9.8% of revenues in 2013 to 7.7% of revenues in 2014.  For the year ended December 31, 2014, Adjusted EBITDA was $22.5 million, or 7.2% of revenues.  Adjusted EBITDA for the year ended December 31, 2014 decreased $3.1 million or 12.1% from the same period in the prior year and the Adjusted EBITDA margin for the year, as a percentage of revenues, decreased from 8.1% of revenues in 2013 to 7.2% of revenues in 2014.  The decrease in Adjusted EBITDA for the quarter ended and the year ended December 31, 2014 was attributable to the continued investment in new products and services, declines in revenues in the first half and the fourth quarter of 2014 due to pricing concessions and changes in product mix, and was partially offset by cost savings realized as a result of prior restructuring initiatives.

Interest Expense

Interest expense on long-term debt outstanding under DATA Group's credit facilities, the 6.00% Convertible Debenture, certain unfavourable lease obligations related to closed facilities and DATA Group's employee benefit plans was $1.5 million for the quarter ended December 31, 2014 compared to $1.7 million for the same period in 2013, and was $6.1 million for the year ended December 31, 2014 compared to $6.7 million for the same period in 2013.  Interest expense for the quarter ended and the year ended December 31, 2014 were lower than the same periods in the prior year primarily as a result of reductions in discount rates used to measure DATA Group's employee benefit plans and reductions in the long-term debt outstanding under DATA Group's credit facilities, respectively.

Income Taxes

DATA Group reported income before income taxes of $2.2 million and a deferred income tax expense of $0.6 million for the quarter ended December 31, 2014 compared to a loss before income taxes of $22.1 million, a current income tax expense of $1.1 million and a deferred income tax recovery of $0.3 million for the quarter ended December 31, 2013.  DATA Group reported income before income taxes of $6.2 million, a current income tax expense of $0.1 million and a deferred income tax expense of $1.7 million for the year ended December 31, 2014 compared to a loss before income taxes of $46.4 million, a current income tax expense of $2.9 million and a deferred income tax recovery of $3.4 million for the year ended December 31, 2013.  The current tax expense was primarily related to the income tax payable on DATA Group's estimated taxable income for the years ended December 31, 2014 and 2013, respectively.  The decrease in the current income tax expense for the year ended December 31, 2014 was primarily due to the use of tax non-capital loss carry-forwards.  The deferred income tax expense and deferred income tax recovery were due to changes in estimates of future reversals of temporary differences and new temporary differences that arose during the years ended December 31, 2014 and 2013.

Net Income (Loss)

Net income for the quarter ended December 31, 2014 was $1.6 million compared to a net loss of $22.9 million for the quarter ended December 31, 2013.  The increase in comparable profitability for the quarter ended December 31, 2014 was substantially due to cost savings realized as a result of prior restructuring initiatives that led to a decline in SG&A expenses, the absence of any goodwill impairment charges, a reduction in amortization of intangible assets and current income tax expense during the quarter ended December 31, 2014.  The increase in comparable profitability was partially offset by lower gross profit as a result of lower revenues, higher restructuring expenses, and a larger deferred tax expense during the quarter ended December 31, 2014.

Net income for the year ended December 31, 2014 was $4.5 million compared to a net loss of $45.8 million for the year ended December 31, 2013.  The increase in comparable profitability for the year ended December 31, 2014 was substantially due to cost savings realized as a result of prior restructuring initiatives that led to a decline in SG&A expenses, the absence of any goodwill impairment charges, a reduction in restructuring expenses, amortization of intangible assets and current income tax expense during the year ended December 31, 2014, respectively.  The increase in comparable profitability was partially offset by lower gross profit as a result of lower revenues and a larger deferred tax expense during the year ended December 31, 2014.

INVESTING ACTIVITIES

Capital expenditures for the three months ended December 31, 2014 of $1.4 million related primarily to maintenance capital expenditures and the consolidation of manufacturing facilities.  For the year ended December 31, 2014, DATA Group incurred capital expenditures of $3.2 million related primarily to maintenance capital expenditures and the consolidation of manufacturing facilities.  These capital expenditures were financed by cash flow from operations.

FINANCING ACTIVITIES

During the quarter and the year ended December 31, 2014, DATA Group repaid $0.8 million and $6.3 million of the principal amount outstanding under its credit facilities, respectively.

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 1,640 employees working from 34 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 may not be successful 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 months and year ended December 31, 2014 means EBITDA adjusted for restructuring expenses and gains on the cancellation of convertible debentures.  Adjusted EBITDA for the three months and year ended December 31, 2013 means EBITDA adjusted for restructuring expenses and goodwill impairment charges.  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)

December 31, 2014
$



December 31, 2013
$








Assets







Current assets








Cash and cash equivalents

812




478



Trade receivables

37,175




36,551



Inventories

40,045




37,585



Prepaid expenses and other current assets

5,587




3,929



Income taxes receivable




174



83,619




78,717


Non-current assets








Deferred income tax assets

1,508




1,687



Property, plant and equipment

15,523




17,266



Pension asset




2,684



Intangible assets

7,261




9,177



Goodwill

57,066




57,066










164,977




166,597


Liabilities







Current liabilities








Current portion of Credit facilities

3,500




4,000



Trade payables

29,061




26,061



Provisions

2,042




2,369



Income taxes payable

154






Deferred revenue

11,419




10,115



46,176




42,545


Non-current liabilities








Provisions

1,361




2368



Credit facilities

43,382




49,109



Convertible debentures

43,222




42,909



Deferred income tax liabilities

50






Other non-current liabilities

548




858



Pension obligations

8,949




8,102



Other post-employment benefit plans

2,876




2,631



146,564




148,522


Equity







Shareholders' equity








Shares

215,336




215,336



Conversion options

513




516



Accumulated other comprehensive income

92




30



Deficit

(197,528)




(197,807)



18,413




18,075










164,977




166,597













 

CONSOLIDATED STATEMENTS OF INCOME (LOSS)










(in thousands of Canadian dollars, except per share amounts,
unaudited)


For the three
months ended
December 31, 2014


For the three
months ended
December 31, 2013




$



$










Revenues



80,371




82,147











Cost of revenues



61,627




61,257











Gross profit



18,744




20,890











Expenses










Selling, commissions and expenses



8,854




8,904



General and administration expenses excluding amortization
of intangible assets



4,861




5,271



Restructuring expenses



769




396



Impairment of goodwill






25,000



Gain on cancellation of convertible debentures



(43)






Amortization of intangible assets



479




1,617





14,920




41,188











Income (loss) before finance costs and income taxes



3,824




(20,298)











Finance costs










Interest expense



1,486




1,691



Interest income



(6)




(2)



Amortization of transaction costs



175




134





1,655




1,823











Income (loss) before income taxes



2,169




(22,121)











Income tax expense (recovery)










Current



36




1,055



Deferred



553




(312)





589




743











Net income (loss) for the period



1,580




(22,864)




















Net income (loss) attributable to:










Common shareholders



1,580




(22,868)



Non-controlling interest






4





1,580




(22,864)











Basic earnings (loss) per share



0.07




(0.97)











Diluted earnings (loss) per share



0.07




(0.97)















 

CONSOLIDATED STATEMENTS OF INCOME (LOSS)







(in thousands of Canadian dollars, except per share amounts,
unaudited)


For the year ended
 December 31, 2014


For the year ended
 December 31, 2013



$


$








Revenues


313,175



316,961









Cost of revenues


238,563



236,879









Gross profit


74,612



80,082









Expenses








Selling, commissions and expenses


35,162



36,137



General and administration expenses excluding amortization

of intangible assets


21,912



23,689



Restructuring expenses


2,804



7,034



Impairment of goodwill




44,000



Gain on cancellation of convertible debentures


(103)





Amortization of intangible assets


1,916



8,370




61,691



119,230









Income (loss) before finance costs and income taxes


12,921



(39,148)









Finance costs








Interest expense


6,124



6,657



Interest income


(21)



(15)



Amortization of transaction costs


591



568




6,694



7,210









Income (loss) before income taxes


6,227



(46,358)









Income tax expense (recovery)








Current


69



2,916



Deferred


1,679



(3,432)




1,748



(516)









Net income (loss) for the year


4,479



(45,842)
















Net income (loss) attributable to:








Common shareholders


4,479



(45,831)



Non-controlling interest




(11)




4,479



(45,842)









Basic earnings (loss) per share


0.19



(1.95)









Diluted earnings (loss) per share


0.19



(1.95)













 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)










(in thousands of Canadian dollars, unaudited)



For the three
months ended
December 31, 2014



For the three
months ended
December 31, 2013




$



$










Net income (loss) for the period



1,580




(22,864)




















Other comprehensive income (loss):


















Items that may be reclassified subsequently to net income (loss)










Foreign currency translation



29




18





29




18











Items that will not be reclassified to net income (loss)










Actuarial (losses) gains on post-employment benefit obligations



(223)




3,535



Taxes related to post-employment adjustment above



57




(928)





(166)




2,607











Other comprehensive (loss) income for the period, net of tax



(137)




2,625











Comprehensive income (loss) for the period



1,443




(20,239)




















Comprehensive income (loss) attributable to:










Common shareholders



1,443




(20,243)



Non-controlling interest






4














1,443




(20,239)















 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)










(in thousands of Canadian dollars, unaudited)



For the year ended
 December 31, 2014



For the year ended
 December 31, 2013




$



$










Net income (loss) for the year



4,479




(45,842)




















Other comprehensive income (loss):


















Items that may be reclassified subsequently to net income (loss)










Foreign currency translation



62




29





62




29











Items that will not be reclassified to net income (loss)










Actuarial (losses) gains on post-employment benefit obligations



(5,650)




9,573



Taxes related to post-employment adjustment above



1,450




(2,513)





(4,200)




7,060











Other comprehensive (loss) income for the year, net of tax



(4,138)




7,089











Comprehensive income (loss) for the year



341




(38,753)




















Comprehensive income (loss) attributable to:










Common shareholders



341




(38,742)



Non-controlling interest






(11)














341




(38,753)















 

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 year





(45,831)


(45,831)


(11)


(45,842)

Other comprehensive income for the year




29


7,060


7,089



7,089

Total comprehensive (loss) income for the year




29


(38,771)


(38,742)


(11)


(38,753)
















Acquisition of non-controlling interest





125


125


(125)


Dividends declared





(5,286)


(5,286)



(5,286)
















Balance as at December 31, 2013


215,336


516


30


(197,807)


18,075



18,075































Balance as at December 31, 2013


215,336


516


30


(197,807)


18,075



18,075
















Net income for the year





4,479


4,479



4,479

Other comprehensive (loss) income for the year




62


(4,200)


(4,138)



(4,138)

Total comprehensive income for the year




62


279


341



341
















Cancellation of convertible debentures



(3)




(3)



(3)
















Balance as at December 31, 2014


215,336


513


92


(197,528)


18,413



18,413

















CONSOLIDATED STATEMENTS OF CASH FLOWS








(in thousands of Canadian dollars, unaudited)



For the three
months ended
December 31, 2014



For the three
months ended
December 31, 2013





$





$













Cash provided by (used in)











Operating activities











Net income (loss) for the period




1,580





(22,864)


Adjustments to net income (loss)












Depreciation of property, plant and equipment




1,186





1,356



Amortization of intangible assets




479





1,617



Pension expense




133





221



Loss on disposal of property, plant and equipment








67



Impairment of goodwill








25,000



Gain on cancellation of convertible debentures




(43)







Provisions




769





396



Amortization of transaction costs




175





134



Accretion of convertible debentures




75





75



Other non-current liabilities




(76)





(82)



Other post-employment benefit plans, net




(40)





(118)



Income tax credits recognized




(378)





(471)



Income tax expense




589





743






4,449





6,074


Changes in working capital




892





4,152


Contributions made to pension plans




(154)





(600)


Provisions paid




(883)





(1,189)


Income taxes received (paid)




210





(333)






4,514





8,104













Investing activities











Purchase of property, plant and equipment




(1,423)





(335)


Proceeds on disposal of property, plant and equipment




21










(1,402)





(335)













Financing activities











Repayment of credit facilities




(750)





(2,000)


Repurchase of convertible debentures




(80)






Finance costs




(216)





(200)


Finance lease payments




(9)





(6)


Dividends paid








(1,762)






(1,055)





(3,968)













Decrease in bank overdraft during the period




2,057





3,801


Bank overdraft – beginning of period




(1,263)





(3,330)


Effects of foreign exchange on cash balances




18





7


Cash and cash equivalents – end of period




812





478













 

CONSOLIDATED STATEMENTS OF CASH FLOWS








(in thousands of Canadian dollars, unaudited)



For the year ended
 December 31, 2014



For the year ended
 December 31, 2013





$





$













Cash provided by (used in)











Operating activities











Net income (loss) for the year




4,479





(45,842)


Adjustments to net income (loss)












Depreciation of property, plant and equipment




4,940





5,330



Amortization of intangible assets




1,916





8,370



Pension expense




530





929



(Gain) loss on disposal of property, plant and equipment




(149)





192



Impairment of goodwill








44,000



Gain on cancellation of convertible debentures




(103)







Provisions




2,804





7,034



Amortization of transaction costs




591





568



Accretion of convertible debentures




295





298



Other non-current liabilities




(270)





(337)



Other post-employment benefit plans, net




134





22



Tax credits recognized




(378)





(471)



Income tax expense (recovery)




1,748





(516)






16,537





19,577


Changes in working capital




(445)





6,272


Contributions made to pension plans




(2,538)





(2,894)


Provisions paid




(4,138)





(3,472)


Income taxes received (paid)




637





(4,318)






10,053





15,165













Investing activities











Purchase of property, plant and equipment




(3,207)





(2,344)


Purchase of intangible assets








(7)


Proceeds on disposal of property, plant and equipment




182





103






(3,025)





(2,248)













Financing activities











Repayment of credit facilities




(6,250)





(4,500)


Repurchase of convertible debentures




(187)






Finance costs




(263)





(212)


Finance lease payments




(27)





(17)


Dividends paid








(6,559)






(6,727)





(11,288)













Increase in cash and cash equivalents and decrease in bank
overdraft during the year




301





1,629


Cash and cash equivalents (bank overdraft) – beginning of year




478





(1,161)


Effects of foreign exchange on cash balances




33





10


Cash and cash equivalents – end of year




812





478













 

SOURCE DATA Group Ltd.

For further information: Mr. Michael Suksi, President and Chief Executive Officer, DATA Group Ltd., Tel: (905) 791-3151; Mr. Paul O'Shea, Chief Financial Officer, DATA Group Ltd., Tel: (905) 791-3151

RELATED LINKS
http://www.datagroup.ca

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