Acquisitions Drive Transcontinental’s Revenue Gains for the Quarter
Purchase of all outstanding shares of the newspaper Métro Montréal. With this transaction the weekday paper will become a provider of local, national and international information across the various TC Transcontinental platforms, including the new morning show, Ça commence bien! produced by the Corporation’s television production house.
Highlights of the First Nine Months
For the first nine months of fiscal 2012, the revenues of Transcontinental Inc. grew 4 percent, from $1,47 billion to $1.52 billion. This increase is mainly due to the acquisition of Quad/Graphics Canada, Inc. and Redux Media, among others, to new contracts, notably with Canadian Tire, and to community-newspaper acquisitions in Quebec.
It was mitigated by the lower volume from the non-recurring revenue from the printing contract for the Canadian Census last year, by the erosion of demand in the Educational Book Publishing Group due to the end of the school reform in Quebec, by the soft national advertising market which affected community newspapers outside Quebec and by the incentives granted at the renewal of certain printing contracts.
Adjusted operating income was down 11 percent, from $166.6 million to $148.8 million, primarily due to the above-noted reasons, and to margin erosion stemming from competitive pressures in the local solutions market. Net income applicable to participating shares decreased, from $89.9 million to a loss of $131.4 million. This decrease is mainly due to an impairment of assets of $180.8 million, which is non-cash and non-operational.
The notices of re-assessment received from the federal and provincial tax authorities last February, totaling $58 million, which the Corporation is currently contesting, and the restructuring, integration and acquisition costs to integrate Quad/Graphics Canada, Inc. also contributed to the decrease. Excluding unusual items and discontinued operations, adjusted net income applicable to participating shares was down 13 percent, from $100.8 million to $87.5 million.
About TC Transcontinental
TC Transcontinental creates marketing products and services that allow businesses to attract, reach and retain their target customers. The Corporation is the largest printer in Canada and the fourth-largest in North America. As the leading publisher of consumer magazines and French-language educational resources, and of community newspapers in Quebec and the Atlantic provinces, it is also one of Canada's major media groups. TC Transcontinental is also the leading door-to-door distributor of advertising material in Canada through its Publisac network in Quebec and Targeo in the rest of Canada. Thanks to a wide digital network of more than 3,500 websites, the Corporation reaches over 18.7 million unique visitors per month in Canada. TC Transcontinental also offers interactive marketing products and services that use new communication platforms supported by marketing strategy and planning services, database analytics, premedia, e-flyers, email marketing, custom communications and mobile solutions.