Transcontinental Releases First Quarter Results
MONTREAL—March 13, 2012—Transcontinental’s Inc. revenues decreased by four percent in the first quarter, from $514.8 million to $495.9 million, driven primarily by the sale of its black and white book printing business, destined for U.S. exports, completed last September, which was part of the asset swap transaction in which it acquired Quad/Graphics Canada on March 1st. Revenues were also impacted by lower volume from the non-recurring revenue from the printing contract for the Canadian Census last year and to a lesser extent, the printing of magazines and books. This first quarter decrease was mitigated by the Media sector, most notably from the growth of its digital media and community newspaper businesses, as a result of recent investments. Consolidated revenues are expected to return on a growth path over the next year given the contribution from the Quad/Graphics Canada acquisition as well as other contracts such as Canadian Tire.
For this same period, adjusted operating income decreased 12 percent, from $48.7 million to $43.0 million, driven primarily by the Media sector due to a softer advertising environment coupled with continued competitive pressures in the local solutions marketplace and to a lesser extent by lower first quarter volume in the Printing sector. Net income applicable to participating shares decreased from $25.7 million, or $0.32 per share, to a loss of $33.3 million, or $0.41 per share. This decrease is mainly due to a tax provision of $58.0 million related to notices of re-assessment, which the Corporation intends to contest, pertaining to deductions on investments in capital assets made by the Corporation, as well as interprovincial allocation of income. Excluding unusual items, adjusted net income applicable to participating shares decreased six percent, from $28.8 million, or $0.36 per share, to $27.1 million, or $0.33 per share.
“The acquisition of the Canadian assets of Quad/Graphics is an important milestone in our development, said François Olivier, President and Chief Executive Officer of TC Transcontinental. It strengthens our print business going forward given the industry dynamics and it allows us to extend our integrated marketing activation offering to many new customers. In fact, our transformation continues to ramp up with the growth of our digital and interactive revenues again this quarter.