Transcontinental Releases First Quarter Results
“We continue to maintain a strong financial position with a solid balance sheet and an ability to generate significant cash flow. If the advertising markets remain stable, we expect to improve our performance in the balance of the year given the lift from the Quad/Graphics Canada acquisition, the full impact from new contracts and the benefits related to the integration of our Media and Interactive sectors. We are confident in our strategy and future prospects and as such have increased our dividends on participating shares by seven percent.”
Other Highlights of the Quarter
- On February 16, 2012, Isabelle Marcoux was elected Chair of the Board.
- Capital expenditures decreased, from $21 million to $8 million. Capital expenditures are expected to be $75 million at the most for fiscal 2012.
- Transcontinental Inc. put in place a new $400 million five-year Unsecured Revolving Credit Facility that expires in February 2017. The current credit facility will remain in place until its expiry in September 2012 but has been reduced to $200 million.
- As at January 31, 2012, the adjusted net indebtedness ratio was 1.42x, as compared to 1.44x as at October 31, 2011.
- In February 2012, the federal and provincial tax authorities informed the Corporation that it would receive notices of re-assessment estimated to be $58.0 million, including applicable interest and penalties for its fiscal years 2006 to 2010. The notices of re-assessments relate to deductions on investments in capital assets made by the Corporation, as well as the interprovincial allocation of income. The Corporation recorded a provision of $58.0 million with respect to these matters, of which $16.0 million was included in financial expenses and $42.0 million in income taxes, although it intends to contest these re-assessments. Therefore, the outcome of this dispute could favorably influence the amounts recognized in the consolidated financial statements of the Corporation.
- Continued to grow our newspaper publishing operations in Quebec by acquiring the print and Internet publishing assets of Courrier Frontenac as well as acquiring the assets of Tout Magazine. We also launched a new community newspaper, the Valleyfield Express.ca. In addition, we are now the sole shareholder of Réseau Sélect, the largest advertising network for the French-language weekly press in Canada.
- Acquired the shares of Les Éditions Caractère, the leader in the supplemental educational publishing market in Quebec and publisher of bestsellers in the trade market.
For more detailed financial information, please see Management’s Discussion and Analysis for the first quarter ended January 31, 2012 and the complete financial statements on our website at www.tc.tc, under “Investors.”