/NOT FOR DISTRIBUTION IN THE UNITED
STATES OR OVER UNITED
STATES WIRE SERVICES/
BRAMPTON, ON, May 25, 2015 /CNW/ - DATA Group Ltd. (TSX:
DGI) ("DATA Group" or the "Company") announced today that the
previously announced rights offering (the "Rights Offering") to the
holders of common shares ("Common Shares") of the Company has been
cancelled and will not proceed. The standby commitment from, and
potential private placement of Common Shares to, Michael Sifton in connection with the Rights
Offering will similarly not proceed.
The Company's decision to cancel the Rights Offering was taken
as part of its ongoing review of DATA Group's capital structure,
the Company's results of operations and the recent decline in the
price of the Company's Common Shares. In connection with that
review, the Company is considering a range of alternatives intended
to improve DATA Group's financial flexibility and its capital
structure in order to better position the Company for long-term
growth. Initiatives relating to strengthening the Company's
balance sheet may include re-financing or redeeming the Company's
outstanding 6.00 % convertible unsecured subordinated debentures,
re-financing the Company's bank borrowings and equity
issuances. No decision with respect to any such alternative
has been taken by the Company. DATA Group believes that its
existing cash resources and projected cash flows from operations
and will be sufficient to fund its currently projected operating
requirements and that it will continue to remain compliant with its
covenants and other obligations under its credit facilities.
The Company also announced that management has revised its
financial targets for 2015 in light of its year to date and
projected results of operations for the remainder of 2015.
The Company is withdrawing its outlook regarding 2015 net income
and return on shareholders' equity. The Company's targeted
revenues for 2015 are largely consistent with its 2014 consolidated
revenues. Targeted debt reduction remains consistent at
approximately $10 million.
"As the Company continues its capital structure review, we feel
that it is important to focus on alternatives that will position
the Company for long-term growth and our Board and senior
management team remain committed to that process", said
Michael Sifton, President and Chief
Executive Officer of DATA Group.
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 1,585 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, as well as those
factors set out 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.
SOURCE DATA Group Ltd.