Transcontinental Reports Organic Growth in All Three Market Sectors
MONTREAL—March 9, 2011—Transcontinental’s revenues increased 4 percent in the first quarter of 2011, from $511.6 million to $530.1 million. This increase was primarily due to a number of new printing contracts, including the impact from the expanded relationship with The Globe and Mail, as well as an increase in volume from its Local Solutions Group, which includes its distribution and newspaper publishing operations. Excluding acquisitions, divestitures and closures, the impact of the exchange rate and the paper component variance, organic revenue growth was 3 percent, with all three sectors contributing.
Similarly, adjusted operating income increased 5 percent, from $47.3 million to $49.8 million, representing the seventh consecutive quarter of year-over-year growth, while the adjusted operating income margin increased from 9.2 percent to 9.4 percent. This increase was mainly due to the contribution from new contracts and continued efficiency improvement initiatives in the printing sector, partially compensated by continued strategic investments in the Media and Interactive sectors.
Net income applicable to participating shares was stable at $26.2 million, as impairment of assets and restructuring costs were higher than in the first quarter last year. Excluding these unusual items, adjusted net income applicable to participating shares increased 10 percent, from $27.1 million to $29.9 million.
In addition, Transcontinental improved its financial condition by optimizing its debt portfolio, increasing its financial flexibility and reducing its capital expenditures.
“Our first quarter results continue to reflect the execution of our strategy: strengthening our existing assets and developing new digital products and services.” said Francois Olivier, president and CEO. “Our printing sector is reaping the benefits from our recent investments by leveraging its most productive assets to gain synergies as well as market share. The new Canadian Tire win is one example of this.
“Our media and interactive sectors, for their part, are continuing to make strategic investments in the digital area. The launch of our group buy websites LaMegaPrise.com and TheMegaCatch.com, our Website design services as well as search engine marketing services, for small- and medium-sized businesses, are just a few examples of this.” continued Olivier. “I am very pleased with our first quarter results, especially the organic revenue growth we were able to generate, and look forward to the future with confidence as we are responding to our customers' evolving needs.”