TORONTO, ONTARIO--(Marketwired - May 14, 2014) -

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Tuckamore Capital (TSX:TX)(TSX:TX.DB.B) today announced its results for three months ended March 31, 2014.

First Quarter Results

($ millions, except per share amounts)	2014		2013
Revenue	172.5		142.9
Gross profit	36.7		27.6
Selling, general & administrative expenses	25.5		23.4
Net Income (loss)	2.1		(5.9	)
EBITDA	12.5		6.1
Adjusted EBITDA	12.7		6.3
Income (loss) per share, basic	0.03		(0.08	)

Revenue for the three-month period ended March 31, 2014 was $172.5 million, an increase of 20.7% from $142.9 million in the first quarter of 2013. The increase was largely driven by the improved results at the Fabrication and Wear divisions of ClearStream. Gross profit increased by 33.0% to $36.7 million for the period ended March 31, 2014 representing a gross profit margin of 21.3%. In the first quarter of 2013, Tuckamore reported gross profit of $27.6 million representing a gross profit margin of 19.3%. The margin increase was primarily related to improvements at Quantum Murray and the Wear division of ClearStream.

Non-cash items that impacted the results were depreciation and amortization, deferred income taxes and non-cash interest expense. Significant items were as follows:

(i)

The depreciation and amortization expense was $5.0 million for the three months ended March 31, 2014 compared to $6.6 million for the same period in the prior year.

Adjusted EBITDA which excludes the above noted items increased to $12.7 million versus $6.3 million for the same quarter in the prior year.

The net income for the first quarter of 2014 was $2.1 million versus a net loss of $5.9 million in the first quarter of 2013.

PORTFOLIO REVIEW

INDUSTRIAL SERVICES

ClearStream's results for the three months ended March 31, 2014 reflect robust demand for the products and services provided by the Fabrication and Wear divisions. These divisions experienced increased business volumes over the same period in the prior year.

Quantum Murray had a positive quarter, producing results that were improved over the same quarter in the prior year. Quantum Murray's results in the first quarter of 2013 were adversely affected by a lower backlog, inclement weather and losses on legacy projects. In 2014, remaining costs on legacy projects are not significant and new projects are operating at favourable margins.

MARKETING

Gemma's poor results in the first quarter of 2014 were a result of unexpected one-time costs. Gemma recorded a provision resulting from a claim made by one customer. Management is currently working with the customer to resolve the issue.

IC Group's first quarter results were slightly behind the same period in the prior year. One of IC Group's clients in the financial services industry has postponed some project work and another client is considering the internalization of some marketing functions.

OTHER

Overall the business volumes of Titan and Gusgo for the first quarter of 2014 have been relatively consistent with the same period in the prior year.

SECOND QUARTER 2014 OUTLOOK

ClearStream is making progress in increasing its project work, and the wear and fabrication divisions are currently busy. Margin compression remains a risk in the maintenance services business as clients look to generate optimum value from their service providers. Growth will be carefully planned and monitored, and Tuckamore and ClearStream management will work closely to address the working capital needs of the business.

At Quantum Murray there will be a continued focus on project bidding and cost management at the demolition division. While margins remain tight, revenue backlogs are encouraging and there is a healthy pipeline of bid opportunities. There are large industrial abatement and demolition projects to be won, particularly in Alberta.

In the Marketing segment, the outlook is for improved results. At Gemma, a strategic review has underlined the need for a significant increase in efforts to attract new clients and diversify the existing base. At IC Group, the core client base has suffered from some program losses and IC Group will continue to try to stabilize this base as well as develop new clients.

In the Other segment, Titan should benefit from continued strong business activity in Alberta in both the construction and oil and gas sectors, and Gusgo is expecting consistent business volumes from its stable customer base, and looking to improve its margins.

Management continues to look to create value through the improvement of the operations of Tuckamore's assets and, in some cases, may look to realize value through the sale of certain of its assets.

About Tuckamore Capital Management Inc.

Tuckamore has investments in 7 businesses representing a diverse cross-section of the Canadian economy.

Forward-looking information

This press release contains certain forward-looking information. Certain information included in this press release may constitute forward-looking information within the meaning of securities laws. In some cases, forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative of these terms or other similar expressions concerning matters that are not historical facts. Forward-looking information may relate to management's future outlook and anticipated events or results and may include statements or information regarding the future plans or prospects of Tuckamore or the Operating Partnerships and reflects management's expectations and assumptions regarding the growth, results of operations, performance and business prospects and opportunities of Tuckamore and the Operating Partnerships. Without limitation, information regarding the future operating results and economic performance of Tuckamore and the Operating Partnerships constitute forward-looking information. Such forward-looking information reflects management's current beliefs and is based on information currently available to management of Tuckamore and the Operating Partnerships.
Forward-looking information involves significant risks and uncertainties. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking information including risks related to investments, conditions of capital markets, economic conditions, dependence on key personnel, limited customer bases, interest rates, regulatory change, ability to meet working capital requirements and capital expenditures needs of the Operating Partners, factors relating to the weather and availability of labour. These factors should not be considered exhaustive. In addition, in evaluating this information, investors should specifically consider various factors, including the risks outlined under "Risk Factors," which may cause actual events or results to differ materially from any forward-looking statement. In formulating forward-looking information herein, management has assumed that business and economic conditions affecting Tuckamore and the Operating Partnerships will continue substantially in the ordinary course, including without limitation with respect to general levels of economic activity, regulations, taxes and interest rates. Although the forward- looking information is based on what management of Tuckamore and the Operating Partnerships consider to be reasonable assumptions based on information currently available to it, there can be no assurance that actual events or results will be consistent with this forward-looking information, and management's assumptions may prove to be incorrect. This forward-looking information is made as of the date of this press release, and Tuckamore does not assume any obligation to update or revise it to reflect new events or circumstances except as required by law. Undue reliance should not be placed on forward-looking information. Tuckamore is providing the forward-looking financial information set out in this press release for the purpose of providing investors with some context for the "Second Quarter Outlook" presented. Readers are cautioned that this information may not be appropriate for any other purpose.

Non-standard measures

The terms "EBITDA" and "adjusted EBITDA" (collectively the "Non-GAAP measures") are financial measures used in this press release that are not standard measures under International Financial Reporting Standards ("IFRS"). Tuckamore's method of calculating Non-GAAP measures may differ from the methods used by other issuers. Therefore, Tuckamore's Non-GAAP measures, as presented may not be comparable to similar measures presented by other issuers.

EBITDA refers to net earnings determined in accordance with IFRS, before depreciation and amortization, interest expense and income tax expense (recovery). EBITDA is used by management and the directors of Tuckamore (the "Directors") as well as many investors to determine the ability of an issuer to generate cash from operations. Management also uses EBITDA to monitor the performance of Tuckamore's reportable segments and believes that in addition to net income or loss and cash provided by operating activities, EBITDA is a useful supplemental measure from which to determine Tuckamore's ability to generate cash available for debt service, working capital, capital expenditures, income taxes and distributions. Tuckamore has provided a reconciliation of income to EBITDA in its Management's Discussion and Analysis.

Adjusted EBITDA refers to EBITDA excluding the interest, taxes, depreciation and amortization of long-term investments. Tuckamore has used Adjusted EBITDA as the basis for the analysis of its past operating financial performance. Adjusted EBITDA is used by Tuckamore and management believes it is a useful supplemental measure from which to determine Tuckamore's ability to generate cash available for debt service, working capital, capital expenditures, and income taxes. Adjusted EBITDA is a measure that management believes facilitates the comparability of the results of historical periods and the analysis of its operating financial performance which may be useful to investors.

Investors are cautioned that the Non-GAAP Measures are not alternatives to measures under IFRS and should not, on their own, be construed as an indicator of performance or cash flows, a measure of liquidity or as a measure of actual return on the shares. These Non-GAAP Measures should only be used in conjunction with the financial statements included in the press release and Tuckamore's annual audited financial statements available on SEDAR at www.sedar.com or www.tuckamore.ca.

TUCKAMORE CAPITAL MANAGEMENT INC.

Consolidated Interim Balance Sheets

(In thousands of Canadian dollars)

(unaudited)

As at		March 31, 2014		December 31, 2013
Assets
Current Assets:
	Cash and cash equivalents	$	18,173	$	28,883
	Cash and short-term investments held in trust		2,950		2,950
	Accounts receivable		166,630		145,858
	Inventories		14,645		12,721
	Prepaid expenses		2,705		6,753
	Other current assets		2,647		2,733
Total current assets		$	207,750	$	199,898
Property, plant and equipment			61,468		62,688
Long-term investments			28,091		28,281
Goodwill			61,128		61,128
Intangible assets			48,199		49,896
Other assets			633		633
Total assets		$	407,269	$	402,524
Liabilities and shareholders' equity
Current liabilities:
	Accounts payable and accrued liabilities		74,488		65,807
	Deferred revenue		3,059		3,048
	Current portion of obligations under finance leases		5,989		6,041
	Senior credit facility		84,518		5,481
	Unsecured debentures		-		24,819
Total current liabilities		$	168,054	$	105,196
Obligations under finance leases			10,391		11,584
Senior credit facility			-		84,354
Secured debentures			161,457		159,700
Deferred tax liability			5,631		5,650
Shareholders' equity			61,736		36,040
Total liabilities & shareholders' equity		$	407,269	$	402,524

TUCKAMORE CAPITAL MANAGEMENT INC.

Consolidated Interim Statements of Income (loss) and Comprehensive Income (loss)

(In thousands of Canadian dollars, except per share amounts)

(unaudited)

		Three months ended			Three months ended
		March 31, 2014			March 31, 2013
					Restated(1)
Revenues		$	172,537		$	142,856
Cost of revenues			(135,825	)		(115,207	)
Gross profit			36,712			27,649
Selling, general and administrative expenses			(25,518	)		(23,353	)
Amortization of intangible assets			(1,719	)		(2,707	)
Depreciation			(3,323	)		(3,877	)
Income from long-term investments			1,349			1,781
Interest expense			(8,365	)		(8,156	)
Loss before income taxes		$	(864	)	$	(8,663	)
Income tax expense - current			(7	)		(158	)
Income tax recovery - deferred			3,015			2,919
Net income (loss)		$	2,144		$	(5,902	)
Net income (loss) and comprehensive income (loss)		$	2,144		$	(5,902	)
Loss per share
Basic:
	Net income (loss)	$	0.03		$	(0.08	)
Diluted:
	Net income (loss)	$	0.03		$	(0.08	)

⁽¹⁾ Please refer to Note 8 - "Comparative Figures" in Tuckamore's March 31, 2014 consolidated financial statements for more information.

TUCKAMORE CAPITAL MANAGEMENT INC.

Consolidated Interim Statements of Cash Flows

(In thousands of Canadian dollars)

(unaudited)

			Three months ended March 31, 2014			Three months ended March 31, 2013
						Restated(1)
Cash provided by (used in):
Operating activities:
	Net income (loss) for the period		$	2,144		$	(5,902	)
	Items not affecting cash:
		Amortization of intangible assets		1,719			2,707
		Depreciation		3,323			3,877
		Deferred income tax recovery		(3,015	)		(2,919	)
		Income from long-term investments		(1,349	)		(1,781	)
		Non-cash accretion expense		3,490			3,037
		Amortization of deferred financing costs		163			163
		Stock based compensation expense		-			170
		Changes in non-cash working capital		(9,940	)		9,318
Total cash (used in) provided by operating activities			$	(3,465	)	$	8,670
Investing activities:
	Distributions from long-term investments			1,535			1,313
	Purchase of property, plant and equipment			(2,076	)		(444	)
	Net proceeds on disposal of property, plant and equipment			190			191
	Purchase of software			(25	)		-
Total cash (used in) provided by investing activities			$	(376	)	$	1,060
Financing activities:
	Repayment of senior credit facility			(5,481	)		-
	Repayment of obligations under finance leases			(1,388	)		(1,629	)
Total cash used in financing activities			$	(6,869	)	$	(1,629	)
(Decrease) increase in cash				(10,710	)		8,101
Cash, beginning of period				28,883			10,543
Cash, end of period			$	18,173		$	18,644
Supplemental cash flow information:
	Interest paid			4,032			1,330
Supplemental disclosure of non-cash financing and investing activities:
	Acquisition of property, plant and equipment through finance leases			177			2,244

⁽¹⁾ Please refer to Note 8 - "Comparative Figures" in Tuckamore's March 31, 2014 consolidated financial statements for more information.