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Incap Corporation

Stock Exchange Release 15thMay 2014 at 11.30 a.m.


Incap Group today issues the following Interim Management Statement for the
period from 1stJan 2014 to 15thMay 2014. Unless otherwise stated, trends and
figures highlighted below refer to the first quarter of year 2014 and the
corresponding period last year.

Revenue developed according to the estimates. EBIT and net loss compared to
last year's figures improved as a result of Turnaround program. Negotiations
with Finnish bank reached a successful end.

Financial highlights in January-March 2014

* The Group's revenue was EUR 5.5 million, down approximately 51%
year-on-year (Q1/2013: EUR 10.7 million) due to the decreased manufacturing
volumes in the company's factories in Europe. The revenue was according to
the estimate. Incap is expecting the revenue for 2014 to be significantly
smaller than in 2013 when the revenue amounted to EUR 36.8 million.
* Despite the decrease in revenue the operating result (EBIT) was improving
year-on-year (EUR -1.4 million in Q1/2013) being EUR -0.2 million as a
result of activities improving cost-efficiency.
* Net profit was also improving remarkably year-on-year (EUR -1.9 million in
Q1/2013) being EUR -0.4 million.

Incap Group's key figures

|Quarterly comparison 1-3 / 10-12/ 7-9/ 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/ |
| |
| 2014 2013 2013 2013 2012 2012 2012 2012 |
|(EUR thousands) 2013 |
|Revenue 5,460 8,014 8,206 9,883 10,654 14,498 15,701 18,378 15,564 |
|Operating profit/loss (EBIT) -191 -3,682 -331 -415 -1,432 -628 280 13 -345 |
|Net profit/loss -374 -3,990 -1,481 -1,172 -1,885 -4,616 44 352 -711 |
|Earnings per share, EUR -0.003 -0.06 -0.03 -0.05 -0.09 -0.23 0.00 0.02 -0.04 |
Key events of the period

As announced on 2 January 2014 Inission AB did not exercise its option to
combine the operations of Inission AB with Incap Corporation in line with the
respective agreement. As Inission later on indicated to the Board its
continued interest on the merger, the Board of Directors of Incap started
evaluating strategic options for further development of the company's
business. The respective assessment of eventual strategic alliances is

When evaluating the efficiency of the actions in the Turnaround program, which
was launched earlier in 2013, the Board of Directors noted that the main
objectives of the program were met. The delivery accuracy improved
significantly, the operational efficiency was enhanced both in manufacturing
units and in support functions, the group organisation was streamlined to
cover only essential functions and the production capacity was adjusted to
meet with the actual demand. The organisation structure was renewed and the
manufacturing units now operate as self-sufficient profit centres having full
responsibility of their own operations and sales.

Incap reached in April a new financing agreement with its Finnish bank
regarding the loan instalment plan and the covenants related to financing.
The re-negotiated schedule decreased the loan instalments to a half of the
previous plan during the second half of the year 2014. The financial
covenants were mitigated and include only the EBITDA of the last 6 months.
The targeted EBITDA level on 30 June 2014 is EUR 66,000 and on 31 December
2014 EUR 613,000. Based on the re-negotiated financing agreement Incap
changed the estimate in regard to the sufficiency of working capital
announcing on 10thApril 2014 that the company's working capital for next 12
months is on a sufficient level.

Incap held its Annual General Meeting on Thursday 10thApril 2014. The Annual
General Meeting decided that no dividend will be distributed and that the
loss for the financial year will be recognised in equity. The Annual General
Meeting also decided to change the paragraph of Articles of Association
regarding the number of the Board members so that the minimum number of the
members of the Board will be three (3) and maximum seven (7). The Annual
General Meeting re-elected the previous members of the Board and adopted the
proposal of the Board of Directors to decrease the fees of the members of the
Board of Directors.

The company continued to adjust the operations to meet with the customer
demand. As announced on 9 May 2014, the personnel number in the Vaasa factory
will be reduced through termination of job contracts as well as through
temporary lay-offs.

Incap also launched the recruitment of a new permanent CEO in April. The
recruitment process is still in progress and it is estimated to be finalised
in June 2014 at the latest.

Risks and factors of uncertainty

General risks related to the company's business operations and sector include
the development of customer demand, price competition in contract
manufacturing, ability to acquire new customers, availability and price
development of raw material and components, sufficiency of funding, liquidity
and exchange rate fluctuations. Of these, the most significant risks at the
moment are the development of revenue and the sufficiency of funding.

Based on the successful financing negotiations with the company's Finnish
bank, the financial position of Incap Group has improved. The loan
instalments have been postponed so that the previously estimated instalments
for the second half of the year were decreased to a half. Further, the
covenants were re-negotiated and include now only the EBITDA for the last 6
months. As the company is tracking plan on the revenue, profitability and
working capital the company estimates that the covenants are met in the next
testing date on 30 June 2014.

The Group's equity ratio on 31 March 2014 was 2,9%. The parent company's
equity was EUR 10.2 million, representing 49,6% of the share capital.

Based on April 2014 reporting the parent company's equity is less than one
half of the share capital. Therefore the Board of Directors of Incap has
started the actions according to the Limited Liability Companies Act: The
Board of Directors will immediately start the preparation to draw up
financial statements and annual report in order to ascertain the financial
position of the company. If according to the balance sheet the equity of the
company is less than one half of the share capital, the Board of Directors
shall without delay convene a General Meeting to consider measures to remedy
the financial position of the company. The extraordinary general meeting
shall be held within three months of the date of the financial statements.

Outlook for 2014

Incap's estimates for future business development are based both on its
customers' forecasts and on the company's own assessments. The business
environment will remain challenging in 2014 as the economic growth worldwide
is forecasted to be low. The company's sector, contract manufacturing, is
highly competitive, and there are major pressures on cost level management.
The high-class service for current customers as well as the acquisition of
new customers is of high importance in reaching the targets for 2014.

Thanks to the improved efficiency gained in the Turnaround program the
company's profitability is expected to improve in 2014 and the actions of the
program are estimated to reflect in the result in full in the latter part of
the year 2014.

The company keeps its financial guidance for 2014 unchanged: The company
estimates that the Group's revenue in 2014 will be significantly smaller than
in 2013 when the revenue amounted to EUR 36.8 million. The company estimates
that the full-year operating result (EBIT) is positive. In 2013, the result
was negative amounting to EUR -5.9 million.

Fredrik Berghel, President and CEO of Incap Group:

"The first months of 2014 have been full of activities to improve our
operations. The factory level has been focusing on daily operations and
achieved good results for example in improving the delivery accuracy and
productivity. Also small but very important savings in daily activities have
been found. The company's top management has been focusing on improving the
sufficiency of funding and the good relationships with customers and other
stakeholders. There still is a lot to do but I am sure that after all the
changes and improvements we are in a good position to reach our targets for
this year."

Helsinki, 15thMay 2014

Fredrik Berghel

For additional information, please contact:
Fredrik Berghel, President and CEO, tel. +46 73 202 2210
Kirsti Parvi, CFO, tel. +358 50 517 4569

NASDAQ OMX Helsinki Ltd
Principal media
The company's home


Incap Corporation is an international contract manufacturer whose
comprehensive services cover the entire life-cycle of electromechanical
products from design and sourcing to actual manufacture and further to
maintenance services. Incap's customers are leading suppliers of
high-technology equipment in their own business segments, and Incap increases
their competitiveness as a strategic partner. Incap has operations in
Finland, Estonia, India and China. The Group's revenue in 2013 amounted to
approximately EUR 36.8 million, and the company currently employs
approximately 470 people. Incap's share has been listed on the NASDAQ OMX
Helsinki Ltd since 1997. Additional


This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Incap Oyj via Globenewswire


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