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Transcontinental Posts ‘Best Operating Performance in Its History’

December 8, 2010
MONTREAL—Dec. 8, 2010—Transcontinental increased its profitability in the fourth quarter compared to a solid fourth quarter in 2009 and, for fiscal 2010 as a whole, had the best operating performance in its history. This brings to six the number of consecutive quarters in which the corporation has improved its operating income, excluding unusual items, year over year. It also achieved positive organic growth in revenues and profits on an annual basis.

Highlights for fiscal 2010

• Growth of 16.3 percent in adjusted operating income, from $217.1 million to $252.5 million, and organic growth of 14.9 percent.

• Remarkable growth in net income applicable to participating shares, from a loss of $82.3 million to income of $166.6 million.

• Growth of 18.7 percent in adjusted net income applicable to participating shares, from $133.5 million to $158.5 million.

“I am very proud of our results for the fourth quarter and all of fiscal 2010, as they clearly show that we have the strategy, the disciplined management, the financial foundation and the people we need to continue our growth,” said François Olivier, president and CEO. “In the past year we have strengthened our core business and invested in new services that meet the emerging needs of our customers, while also improving synergies and generating greater profitability.

“I am very optimistic about the future,” Olivier continued. “Having started printing The Globe and Mail on our new Canada-wide network of hybrid presses in October, the three major capital projects in which we have invested some $700 million since 2007 are now fully operational. This will lead to significant cash inflows in 2011 and thereafter. We will use this to further reduce our debt levels and continue investing in the development of new digital and interactive marketing services.”

Financial Highlights

In the fourth quarter ended October 31, 2010, Transcontinental’s consolidated revenues were stable at $570 million despite a strong fourth quarter in 2009, with organic growth of 1.3 percent. Adjusted operating income was up 3.8 percent, from $85.0 million to $88.2 million, with organic growth of 7.3 percent.

Net income applicable to participating shares rose from $43.1 million in 2009 to $44.5 million in 2010. Adjusted net income applicable to participating shares, which excludes unusual items, was up 20 percent, from $52.4 million to $62.9 million.

For the 12-month period ended Oct. 31, 2010, the corporation reported organic growth in revenues of 1.2 percent. This growth stems from new printing contracts and a recovery in advertising spending in its newspapers and magazines. Consolidated revenues were down 3.6 percent, from $2.2 billion to $2.1 billion, mainly due to divestitures or closures of plants and publications, the impact of the exchange rate and the paper effect.

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