Mr. Vinod Patel reports

NORTHAMPTON 2014 SALES UP 7.2% WHILE EPS MORE THAN DOUBLES IN THE FOURTH QUARTER, SALES RISE 5.1% BUT COSTS UP 12.5%

Northampton Group Inc. has posted its results for the fourth quarter and fiscal year ended March 31, 2014. In the fourth quarter, Northampton reported a quarter-over-quarter sales increase of 5.1 per cent, with net income showing the impact of increased costs. In the 12 months, sales increased by 7.2 per cent while earnings rose by 115.8 per cent.

"We were pleased with the top line in both the 12 months and the typically soft fourth quarter," said Vinod Patel, president and chief executive officer of the Northampton Group. "Rising utility prices had a stronger-than-expected impact on our costs in the quarter, but in the 12 months, continued strength in corporate bookings resulted in significant increases in EBITDA, cash flow and earnings. We are still experiencing some specific challenges in different locations, but overall performance has improved. We anticipate steady performance through the coming year based on our experience to date and the positive predictions of industry experts."

Calendar 2013 in Northampton's locations saw occupancy rates increase by around a percentage point, with average daily room rates (ADRs) up more than $3 in the Greater Toronto Area, while Montreal saw a slight decrease and Ottawa was essentially flat. Revenue per available room (RevPAR) rose by 5.2 per cent in Toronto, 1.7 per cent in Montreal and less than 1 per cent in Ottawa in 2013. According to Pannell Kerr Forster Consulting, the coming year will see a 1-per-cent lift in occupancy rates and a 2- to 3-per-cent increase in ADRs. If this is borne out, Northampton may see an improvement to sales and margins.

Highlights of the year:

• In the 12 months, consolidated revenues rose 7.2 per cent to $30,614,114 from $28,568,630 for the previous fiscal year. For the fourth quarter, revenues increased 5.1 per cent to $6,380,660 from $6,068,445 in the same quarter in fiscal 2013.
• Cost of sales rose 9.5 per cent in the year and 12.5 per cent in the quarter. Adjusted for the costs of launching the aloft Vaughan Mills in fiscal 2013, the year-over-year increase was 6.4 per cent. Administrative expenses decreased 5.3 per cent in the 12 months and rose 6.1 per cent in the quarter. The decrease reflected a one-time non-cash charge made in fiscal 2013 for stock-based compensation, as well as successful realty tax appeals. The increase primarily arose from increased payroll and utility costs.
• Gross profit for fiscal 2014 rose 4.6 per cent to $14,084,752 from $13,470,777 in the prior year for gross profit margin of 46 per cent versus 47.2 per cent in the prior year, reflecting higher costs.
• EBITDA (earnings before income taxes, interest, depreciation and amortization) in the year ended March 31, 2014, increased 25.4 per cent to $8,135,412 from $6,487,987 in the prior year and decreased 18.0 per cent to $664,470 from $809,951 in the fourth quarter in the previous year.
• Net income for the fiscal year rose 115.8 per cent to $1,670,869 from $774,195 in fiscal 2013. Net income for the quarter fell to ($280,804) from ($40,213) in the previous year.
• Earnings per share in fiscal 2014 rose 115.8 per cent to 6.4 cents per share compared with 3.0 cents in the previous year. In the quarter, earnings per share decreased to (1.1 cents) from (0.2 cent) in the prior period.
• Cash flow, or net income plus amortization, increased 28.8 per cent in fiscal 2014 to $4,514,351 or 17.3 cents per share. In the quarter, cash flow decreased to $478,335 or 1.8 cents per share from $521,137 or (2.0 cents) per share in the prior period.
• Same-hotel sales rose in most of Northampton's portfolio.
• Northampton's board of directors approved the payment of a dividend of two cents per common share, payable to shareholders of record on Dec. 9, 2013, and disbursed Dec. 18, 2013.
• As announced by Northampton in a news release on July 9, 2014, Northampton received a proposal from an existing shareholder to purchase all outstanding shares of the company. The board has appointed a special committee of independent directors to evaluate this proposal.
• On July 24, 2014, the special committee retained the Commercial Capital Corp. as financial adviser to advise the special committee in respect of, among other things, this proposal.

The attached table contains a tabulated summary of Northampton's results from continuing operations.

                       FINANCIAL RESULTS

                 Three months ended        Twelve months ended
                       March 31,                  March 31,
                    2014    2013 (i)          2014     2013 (i)

Revenues      $6,380,660 $6,068,445    $30,614,114 $28,568,630
Gross profit   2,263,516  2,410,128     14,084,752  13,470,777
Pretax
profit          (534,591)  (203,825)     3,429,512   1,834,680
Profit          (332,291)  (128,325)     2,636,512   1,239,680
Net income      (280,804)   (40,213)     1,670,869     774,195
Earnings per
share             (0.011)    (0.002)         0.064       0.030

(i) Any changes in posted prior-year financial results 
arise from the company's adoption of international 
financial reporting standards 11.  

For a more complete discussion of the company's results, please see Northampton's annual filings on SEDAR or the annual management's discussion and analysis, financials, and notes to the financial statements on the company's website.

We seek Safe Harbor.