During the year, the Company repurchased and cancelled 899,700 common shares at an average price of $.97 under a normal course issuer bid launched June 27, 2005. The Company has the ability to repurchase and cancel up to 1,400,000 common shares at market prices during the year ended June 26, 2006.

Management Commentary

"At the bottom line, PLM finished 2005 on a strong note," said Barry N. Pike, Chairman and CEO. "By reducing expenses, we were able to substantially increase profitability in the fourth quarter, even in the absence of growth in sales. While we see this as a partial victory in that our goal is to grow at both the top and bottom lines, we are content with the fact that we continue to enjoy strong customer relationships and we are building the PLM franchise which will benefit future periods. In the fourth quarter, and throughout 2005, we successfully strengthened our existing customer relationships as well as developing many exciting new ones."

"PLM was able to contain expenses in the fourth quarter and will focus going forward on more permanent efficiencies while still providing the necessary resources to support the business in a very competitive environment. In 2005, beyond controlling costs, we also sought to increase our operational effectiveness and expand our capabilities," said David Stuart, President and COO, "and I believe we've done both. In fact, investments made in the fourth quarter in an innovative digital flatbed printer as well as a digital felxographic plate setter have strengthened our Optium brand and positioned us for new digital and pre-media assignments. We're also benefiting from the experience and innovative ideas of our new VP of Sales at Optium, as well as from organizational improvement activities in other parts of PLM. Through these actions, we believe we will sustain our market leadership and deliver an even more unique, integrated communication solution in our marketplace."

Said Peter Bradley, Executive Vice President and CFO: "Looking at our year end balance sheet, one of the key highlights of 2005 was the fact that we made principal repayments of $6.7 million on our long-term debt. This means our long-term debt is lower than it's been at any point in the last 10 years. This gives us excellent financial strength and flexibility for the future. During 2005, we also made good use of our cash, through investments at Optium, and the repurchase and cancellation of 900,000 shares of PLM's common shares."

Conclusion

PLM expects the printing industry to remain intensely competitive in 2006, making it imperative for the Company to continue to focus on strategic marketing and sales, expense management, operational efficiency gains and maximization of the value of recent investments.

"We don't expect 2006 to be any less challenging than 2005," said Mr. Pike. "But then again, I believe we are up to the challenge in that our company is stronger than it was a year ago. We have more capabilities to offer to customers, a more efficient cost structure, and lower debt. We're more prepared than ever to compete for new work, increase our market share, deliver customer value and build on what we started at the bottom line in the fourth quarter. "

About PLM Group

PLM Group Ltd. (TSX: PGL) is one of Canada's largest commercial printers providing single source web and sheet-fed print, visual, graphics and display services to leading companies in a number of industries, including retail, consumer products, financial services, automotive, pharmaceutical, healthcare and communications. Visit the Company's web site at www.plmgroup.com

This document contains certain forward-looking statements that are subject to known and unknown risks and uncertainties. PLM makes no assurance that these forward-looking statements, denoted by words such as "expect", "should" and other similar qualifiers, will prove to be accurate and cautions readers to review the risks and uncertainties sections of its recent filings with securities administrators. PLM disclaims any obligation to update these forward-looking statements should the assumptions underlying them prove to be inaccurate. This document also contains reference to gross margin, which does not have standard meanings prescribed by GAAP and may, therefore, not be comparable to similar measures presented by other issuers.

PLM GROUP LTD.

--------------

Consolidated Statement of Earnings

----------------------------------

Audited ($000's)

Year Ended December 31

----------------------

2005 2004

---- ----

Sales $117,186 $117,266

Cost of Sales $82,558 $82,114

------------- -------------

Gross Margin $34,628 $35,152

29.55% 29.98%

Selling and Administrative Expenses $19,844 $20,050

------------- -------------

Net Margin $14,784 $15,102

12.62% 12.88%

Write off of Goodwill (Note 2) $2,863 $0

Depreciation and Amortization $9,047 $7,733

------------- -------------

Pre-tax earnings before interest, sale of

capital assets and foreign exchange gains $2,874 $7,369

Loss on sale of Capital Assets $188 $41

Foreign Exchange Loss $105 $199

------------- -------------

Pre-tax earnings before interest expense $2,581 $7,129

Interest Expense $1,651 $1,764

------------- -------------

Earnings before income taxes $930 $5,365

Current Income Tax Expense $2,386 $2,450

Future Income Tax (Recovery) Expense ($588) $7

------------- -------------

Net Earnings (Loss) ($868) $2,908

------------- -------------

Earnings/(Loss) per share

Net earnings (loss) - basic and diluted (3 cents) 10 cents

Certain of the comparative figures have been restated to conform to the

presentation of PLM's audited consolidated financial statements

PLM GROUP LTD.

--------------

Consolidated Statement of Earnings

----------------------------------

Unaudited ($000's)

3 Months Ended December 31

--------------------------

2005 2004

---- ----

Sales $32,698 $33,026

Cost of Sales $23,077 $22,888

------------- -------------

Gross Margin $9,621 $10,138

29.42% 30.70%

Selling and Administrative Expenses $3,967 $5,100

------------- -------------

Net Margin $5,654 $5,038

17.29% 15.25%

Depreciation and Amortization $2,070 $2,144

------------- -------------

Pre-tax earnings before interest, sale of

capital assets and foreign exchange gains $3,584 $2,894

Loss on sale of Capital Assets $8 $38

Foreign Exchange Loss $33 $209

------------- -------------

Pre-tax earnings before interest expense $3,543 $2,647

Interest Expense $383 $443

------------- -------------

Earnings before income taxes $3,160 $2,204

Current Income Tax Expense $2,321 $1,611

Future Income Tax Expense (Recovery) ($765) ($367)

------------- -------------

Net Earnings $1,604 $960

------------- -------------

Earnings per share

Net earnings - basic and diluted 7 cents 3 cents

Certain of the comparative figures have been restated to conform to the

presentation of PLM's audited consolidated financial statements

PLM GROUP LTD.

--------------

Consolidated Statement of Cash Flows

------------------------------------

Audited ($000's)

Year Ended December 31

----------------------

2005 2004

---- ----

Operating Activities

Net earnings (loss) ($868) $2,908

Items not affecting cash:

Depreciation $8,824 $7,311

Loss on disposal of capital assets $188 $41

Amortization of deferred charges and other

intangibles $223 $423

Foreign exchange gain on future tax asset ($3) $8

Stock based compensation $0 $86

Future income taxes ($588) $7

Goodwill write off $2,863 $0

Other $440 $258

------------- -------------

$11,079 $11,042

Net change in non-cash operating

working capital ($763) ($968)

------------- -------------

Cash from operating activities $10,316 $10,074

Investing

Purchase of capital assets ($3,675) ($4,684)

Proceeds on disposal of capital assets $247 $5

Other assets ($71) $0

------------- -------------

Cash used in investing activities ($3,499) ($4,679)

Financing

Increase (decrease) in bank financing ($328) $2,454

Proceeds from exercised stock options $399 $52

Purchase of shares for cancellation ($869) ($177)

Equipment Refinancing $660 $0

Repayment of long term debt ($6,679) ($7,724)

------------- -------------

Cash used in financing activities ($6,817) ($5,395)

Net change in cash and cash equivalents $0 $0

Cash and cash equivalents, beginning of period $0 $0

------------- -------------

Cash and cash equivalents, end of period $0 $0

------------- -------------

Certain of the comparative figures have been restated to conform to the

presentation of PLM's audited consolidated financial statements

PLM GROUP LTD.

--------------

Consolidated Statement of Cash Flows

------------------------------------

Unaudited ($000's)

3 Months Ended December 31

--------------------------

2005 2004

---- ----

Operating

Net earnings $1,604 $960

Items not affecting cash:

Depreciation $2,013 $1,985

Loss on disposal of capital assets $8 $38

Amortization of deferred charges and other

intangibles $57 $159

Foreign exchange gain on future tax asset $0 $42

Stock options expensed/(credited) ($90) $86

Future income taxes ($765) ($367)

Other $38 $151

------------- -------------

$2,865 $3,054

Net change in non-cash operating

working capital ($2,438) ($3,534)

------------- -------------

Cash from operating activities $427 ($480)

Investing

Purchase of capital assets ($269) ($1,002)

Other assets $0 $4

Proceeds on disposal of capital assets $32 $0

------------- -------------

Cash used in investing activities ($237) ($998)

Financing

Increase in bank financing $1,241 $3,368

Proceeds from exercised stock options $386 $23

Purchase of shares for cancellation ($136) $0

Repayment of long term debt ($1,681) ($1,913)

------------- -------------

Cash provided (used) in financing activities ($190) $1,478

Net change in cash and cash equivalents $0 $0

Cash and cash equivalents, beginning of period $0 $0

------------- -------------

Cash and cash equivalents, end of period $0 $0

------------- -------------

Certain of the comparative figures have been restated to conform to the

presentation of PLM's audited consolidated financial statements

PLM Group Ltd.

--------------

Consolidated Balance Sheet

--------------------------

Audited ($000's)

December 31, December 31,

2005 2004

---- ----

CURRENT ASSETS

Accounts receivable (net) $29,112 $28,193

Inventories $3,920 $3,362

Prepaids $834 $573

Income taxes receivable $42 $0

Future income taxes $0 $173

------------- -------------

Total Current Assets $33,908 $32,301

CAPITAL ASSETS (net) $43,357 $48,565

OTHER ASSETS $248 $633

DEFERRED CHARGES AND OTHER INTANGIBLES $561 $713

GOODWILL (Note 2) $737 $3,600

------------- -------------

Total Assets $78,811 $85,812

------------- -------------

CURRENT LIABILITIES

Bank Indebtedness $9,466 $9,794

Payables and accruals $15,566 $15,130

Income taxes payable $221 $39

Deferred revenue $1,245 $859

Current portion of long term debt $3,676 $6,579

------------- -------------

Total Current Liabilities $30,174 $32,401

LONG TERM DEBT (Note 4) $13,814 $16,931

DEFERRED PAYABLE $699 $254

FUTURE INCOME TAXES $6,995 $7,759

SHARE CAPITAL (Note 7) $4,606 $4,347

CONTRIBUTED SURPLUS $443 $443

RETAINED EARNINGS $22,080 $23,677

------------- -------------

Total Liabilities and Shareholders' Equity $78,811 $85,812

------------- -------------

Certain of the comparative figures have been restated to conform to the

presentation of PLM's audited consolidated financial statements

Consolidated Statement of Retained Earnings

-------------------------------------------

Audited($000's) December 31, December 31,

2005 2004

---- ----

Opening retained earnings, as previously

reported $23,677 $21,278

Impact of implementing new accounting

standard related to stock compensation $0 ($357)

------------- -------------

As restated $23,677 $20,921

Premium on the purchase of shares for

cancellation ($729) ($152)

Net earnings/(loss) for the period ($868) $2,908

------------- -------------

Retained earnings, end of the period $22,080 $23,677

------------- -------------

Certain of the comparative figures have been restated to conform to the

presentation of PLM's audited consolidated financial statements

PLM GROUP Ltd.

Notes to the Interim Consolidated Financial Statements

December 31, 2005

1. Basis of Presentation

The unaudited interim consolidated financial statements have been

prepared by the Company in accordance with accounting principles

generally accepted in Canada. The preparation of the financial statements

is based on accounting policies and practices consistent with those used

in the preparation of the audited annual consolidated financial

statements.

Certain information and disclosures normally required to be included in

notes to annual consolidated financial statements have been condensed or

omitted. The unaudited interim consolidated financial statements should

be read in conjunction with the consolidated financial statements and the

notes thereto for the year ended December 31, 2004.

2. Goodwill

Under the requirements recently issued by the Canadian Institute of

Chartered Accountants, companies are required to evaluate goodwill

recorded on their balance sheet on an annual basis to ascertain if there

has been a permanent impairment in the value of goodwill. If so, the

value of the impairment is to be reflected as an operating cost in the

financial statements during the period when the impairment is first

recognized.

During the third quarter, PLM completed a review of the value of the

goodwill recorded as a result of recent acquisitions. As a result of this

review, the company has reduced the carrying value of goodwill by

$2.9 million, which amount was recorded as a charge to operating cost

during the third quarter.

This amount is not tax deductible at this time and therefore no

offsetting tax recovery has been recorded in the income statement.

3. Segmented Information

PLM is a provider of integrated print related communication solutions for

its customers. The Company has two reportable segments: commercial

printing, which includes prepress, print, bindery and digital services;

and premedia and large format digital printing.

The accounting policies of the segments are the same as those described

in the summary of accounting policies in the annual financial statements.

The Company evaluates performance based on pre-tax earnings from

operations before interest.

Transactions between reportable segments are minimal.

The Company's reportable segments are strategic business units that offer

different products and services. They are managed separately because each

business requires different technology and marketing strategies.

The following tables present information about reportable segment profit

and segment assets:

Three Months Ended December 31, 2005

------------------------------------

Premedia &

Large Format

Digital

Printing Printing Total

Sales to external customers $28,443,343 $4,254,197 $32,697,540

Pre-tax earnings before interest $2,877,560 $665,623 $3,543,183

Depreciation of capital assets $1,804,005 $209,429 $2,013,434

Additions to capital assets:

Cash $198,015 $70,579 $268,594

Capital leases $0 $0 $0

Three Months Ended December 31, 2004

------------------------------------

Premedia &

Large Format

Digital

Printing Printing Total

Sales to external customers $29,092,813 $3,933,535 $33,026,348

Pre-tax earnings before interest $2,036,275 $610,529 $2,646,804

Depreciation of capital assets $1,832,648 $152,252 $1,984,900

Additions to capital assets:

Cash $717,575 $284,021 $1,001,596

Capital leases $5,620,414 $0 $5,620,414

Year Ended December 31, 2005

----------------------------

Premedia &

Large Format

Digital

Printing Printing Total

Sales to external customers $102,939,199 $14,246,951 $117,186,150

Pre-tax earnings before interest $4,313,705 ($1,733,746) $2,579,959

Depreciation of capital assets $8,075,769 $748,681 $8,824,450

Additions to capital assets:

Cash $2,510,356 $1,164,421 $3,674,777

Capital leases $0 $0 $0

Year Ended December 31, 2004

----------------------------

Premedia &

Large Format

Digital

Printing Printing Total

Sales to external customers $102,140,616 $15,125,517 $117,266,133

Pre-tax earnings before interest $5,887,875 $1,241,096 $7,128,971

Depreciation of capital assets $6,726,757 $583,906 $7,310,663

Additions to capital assets:

Cash $4,258,530 $425,167 $4,683,697

Capital leases $7,489,721 $0 $7,489,721

The following table provides information about geographic sales:

Sales for the three months ended December 31

2005 2004

---- ----

Canada $31,070,061 $30,421,092

United States 1,627,479 2,605,256

---------------------------

$32,697,540 $33,026,348

---------------------------

Sales for the year ended December 31

2005 2004

---- ----

Canada $110,595,850 $109,917,056

United States 6,590,300 7,349,077

---------------------------

$117,186,150 $117,266,133

---------------------------

All capital assets and goodwill are located in Canada.

4. Long Term Debt

Long term debt at December 31, 2004: $23,509,484

Long term debt contracts entered into during 2005:

Capital lease, repayable in blended monthly instalments

of principal and interest at 5.6%, secured by a direct

charge on specific equipment, maturing

February 2009. 660,428

Principal repayments made during 2005: (6,679,907)

-------------

Long term debt: $17,490,005

Less current portion $3,675,765

-------------

Long Term Debt at December 31, 2005 $13,814,240

-------------

5. Commitments

The Company has committed to the acquisition of certain capital assets in

the amount of $872,000. Completion of the transactions is expected to

take place in the first quarter of 2006.

6. Wind-up of Subsidiary

During the fourth quarter PLM America, Inc., a wholly owned subsidiary,

ceased to engage in operations and it is intended that the company be

wound up in fiscal 2006.

7. Capital Stock

Common Shares:

Shares Amount

------ ------

Balance, beginning of year 28,938,770 $4,347,662

Re-purchase of shares for

cancellation (899,700) ($140,664)

Stock options exercised 841,000 $399,360

---------------------------

Balance December 31, 2005 28,880,070 $4,606,358

---------------------------

Common Shares Reserved for Stock Options:

Stock Options Price

------------- -----

Balance, beginning of year 3,631,140 $0.69

Issued January to December 2005 - $0.00

Exercised January to

December 2005 (841,000) $0.48

Cancelled January to

December 2005 - $0.00

-------------

Balance December 31, 2005 2,790,140 $0.75

-------------

8. Comparative Figures

Certain of the comparative figures have been reclassified to conform to

the financial statement presentation adopted in the current period.

%SEDAR: 00003930E

For further information: Barry N. Pike, Chairman and Chief Executive Officer, (416) 848-8510; Peter Bradley, C.A., Executive Vice President and Chief Financial Officer, (416) 848-8530, Email: pbradley@plmgroup.com

Source: newswire