Transcontinental Reports Positive Trend in Q3 Financial Indicators
In the third quarter ended July 31, 2010, Transcontinental recorded consolidated revenues of $500.3 million compared to $504.4 million in the same quarter of 2009, down 0.8%. Excluding acquisitions, divestitures or closures of plants and publications, the paper effect and the exchange rate effect, revenues grew 3.2%. This is the second quarter in a row in which Transcontinental has generated positive organic growth in revenues.
Adjusted operating income before amortization grew 9.2%, from $82.6 million in 2009 to $90.2 million in 2010, and operating income margin rose from 16.4% to 18.0%. This dual increase is mainly due to the impact of the rationalization measures in 2009, to the contribution from new printing contracts, and to the higher advertising spending by major retailers. During the quarter Transcontinental also recorded positive growth in adjusted operating income, which amounted to $3.2 million, up 6.0%, mainly due to the rationalization measures in 2009 and enhanced operational efficiency across the organization.
Net income applicable to participating shares rose 14.2%, from $25.3 million in 2009 to $28.9 million in 2010. The increase stems mainly from the higher operating income, partially offset by increased income taxes, a higher net loss related to discontinued operations, and by dividends on Preferred Shares.
Adjusted net income applicable to participating shares was up 8.2%, from $31.8 million in 2009 to $34.4 million.
In the first nine months of fiscal 2010, consolidated revenues amounted to $1.522 billion versus $1.600 billion in 2009, down 4.9%. Excluding acquisitions, divestitures and closures, the paper effect and exchange rates, organic growth in revenues was 1.1%. Adjusted operating income before amortization rose from $218.8 million in 2009 to $262.3 million in 2010, up an appreciable 19.9%.
Net income applicable to participating shares went from a net loss of $125.4 million in 2009 to a gain of $122.1 million in 2010. Lastly, adjusted net income applicable to participating shares rose 17.9%, from $81.1 million to $95.6 million.