Algo Group announces second quarter results and reschedules annual meeting of shareholders to September 27, 2007



    MONTREAL, Aug. 15 /CNW Telbec/ - Algo Group Inc. (TSX: AO) today
announced results for its second quarter ended June 30, 2007 and the new date
of its annual meeting on September 27, 2007.
    Sales from continuing operations for the three months ended June 30, 2007
amounted to $3.0 million compared with $6.4 million in 2006, a decrease of
$3.4 million. Sales for the six months ended June 30, 2007 amounted to
$9.1 million compared with $14.3 million in 2006, a decrease of $5.2 million.
The decrease relates primarily to lower sales in the Ladies Fashion and the
Sportswear divisions. The sales results from Home Furnishings were also lower
due to timing differences and should improve in future periods.
    The net loss for the quarter was reduced to $1.2 million ($0.01 per
share) from $2.3 million ($0.01 per share) for the same period in 2006. For
the six months ended June 30, 2007, the net loss was $2.4 million ($0.01 per
share) compared with a loss of $3.5 million ($0.02 per share) in 2006.
    The net loss from continuing operations for the latest quarter was also
lower than last year's loss of $3.1 million ($0.02 per share) compared to the
current loss of $1.4 million ($0.01 per share). For the six month period, the
loss from continuing operations was $2.5 million ($0.01 per share) compared to
$3.7 million in 2006 ($0.02 per share).
    Discontinued operations generated a small profit in both the latest
quarter and the six months ended June 30, 2007 related primarily to the
reversal of certain provisions and foreign exchange gains.

    
    SELECTED ANNUAL AND QUARTERLY CONSOLIDATED FINANCIAL INFORMATION
    (Thousands of dollars except per share amounts)

    -------------------------------------------------------------------------
                                 For the 6 months          For the 3 months
                                   ended June 30             ended June 30
    -------------------------------------------------------------------------
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------
    Sales                    $  9,146     $ 14,343     $  2,991     $  6,425
    -------------------------------------------------------------------------
    Loss from continuing
     operations                (2,545)      (3,674)      (1,372)      (3,069)
    -------------------------------------------------------------------------
    Profit from
     discontinued
     operations                   176          211          127          782
    -------------------------------------------------------------------------
    Net loss                   (2,369)      (3,463)      (1,245)      (2,287)
    -------------------------------------------------------------------------
    Net loss per share
     basic and diluted
     from continuing
     operations              $  (0.01)    $  (0.02)    $  (0.01)    $  (0.02)
    -------------------------------------------------------------------------
    Net loss per share
     basic and diluted       $  (0.01)    $  (0.02)    $  (0.01)    $  (0.01)
    -------------------------------------------------------------------------
    Weighted average
     number of shares
     outstanding          170,258,995  155,258,995  170,258,995  155,258,995
    -------------------------------------------------------------------------

    Cost of sales and expenses for the six months ended June 30, 2007
decreased to $11.0 million in 2007, compared to $16.6 million in 2006. The
cost of sales and expenses for the quarter decreased to $4.8 million from
$8.4 million. This is mainly the result of lower sales volume.


    Sector Review

    As at June 30, 2007, the Company had three reporting business units:

    - Ladies Fashion Apparel sales for the six months ended June 30, 2007
      decreased from $4.6 million in 2006 to $2.1 million in 2007. During the
      prior year, the sales during the second quarter were $2.1 million
      compared to $0.4 million this year;

    - Sportswear sales for the six months ended June 30, 2007 were lower than
      the prior year at $6.6 million as compared with $8.8 million in 2006.
      During the latest quarter, the sales were $2.6 million, or $1.2 million
      lower than the same period in the prior year. Notwithstanding the
      decrease in sales, the Sportswear division continued to contribute to
      the overall performance of the Company;

    - Home Furnishings contributed $455,000 to sales during the first half of
      2007, down from $968,000 for the same period last year. The variance is
      expected to reverse in upcoming months.
    

    TRANSACTIONS WITH PRIMARY LENDER

    On June 8, 2007, Algo announced that it had entered into an agreement
with its primary lenders which should result in a significant decrease to its
shareholders' deficiency. The agreement calls for a combination of debt
repayment and cancellation of revolving and non - revolving bank facilities
within specified terms which shall, together with the private placement
proceeds of $3 million previously announced, decrease Algo's shareholders'
deficiency by approximately $16 million. This agreement will replace, and is
in lieu of, the agreement previously reached between Algo and its primary
lenders as was detailed in various press releases issued by Algo commencing on
November 23, 2006.
    As at the date of this report, all payments due to its former primary
lender in respect of the agreement on the revolving loan facility had been
received and the revolving loan facility fully paid.
    Algo is currently in discussions with a potential lender in order to
secure new sources of funding.
    We refer you to the press release dated June 8, 2007 for further
information concerning this matter.

    ANNUAL MEETING RESCHEDULED

    Algo Group Inc. announced today that its Annual Meeting of Shareholders
has been rescheduled and will now be held at 10:00 am on Thursday,
September 27, 2007, at 5555 Cypihot Street, Montreal, Québec H4S 1R3. The
record date for notice of the meeting and for voting at the meeting, remains
July 30, 2007.
    Algo is currently in discussions with potential candidates to serve on
its board of directors. Algo has decided to delay its annual meeting until
September 27, 2007 in order so that shareholders who vote by proxy at the
meeting will be given the opportunity to vote on any candidates who may have
agreed within the next two weeks to serve on Algo's board.

    ALGO GROUP PROFILE
    ------------------

    Algo Group Inc is a Canadian importer of ladies' fashion apparel, as well
as men's, boy's and children's sportswear that is marketed throughout North
America. The Company also imports home furnishings Fashions that it markets to
retailers in North America, and holds licenses to sell various brand Fashions
including Levi's Home in Canada and the United States.

    Forward-looking statement

    Except for historical information provided herein, this press release may
contain information and statements of a forward-looking nature concerning the
future performance of the Company. These statements are based on suppositions
and uncertainties as well as on management's best possible evaluation of
future events. Such factors may include, without excluding other
considerations, fluctuations in quarterly results, evolution in customer
demand for the Company's Fashions and services, the impact of price pressures
exerted by competitors, and general market trends or economic changes. As a
result, readers are advised that actual results may differ from expected
results.




For further information:

For further information: Algo Group Inc.: Ken Labelle, C.A., Chief
Financial Officer, (514) 908-7804; Investor Relations: Rick Leckner, Maison
Brison, (514) 731-0000

Organization Profile

ALGO GROUP INC.

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