Transcontinental Ends Fiscal 2013 with a Steady Performance
In the fiscal year ended October 31, 2013, the Corporation recorded an asset impairment charge of $170 million, of which $160 million is related to goodwill, mainly as a result of the difficult market conditions in the Media Sector that continue to adversely affect the advertising revenues of certain business groups.
TC Transcontinental's revenues for the fourth quarter declined from $585.1 million in 2012 to $566.3 million in 2013, mainly as a result of the difficult market conditions that affected our magazine and book printing operations. This decrease is also attributable to the soft advertising market that continued to impact our Media Sector, mostly in local markets, and to the end of the contract to print and distribute Zellers flyers after its store closures. The decrease was partially offset by new contracts in the Printing Sector.
In the fourth quarter, adjusted operating income decreased by 10.7 percent, from $96.4 million to $86.1 million. The main reason for this decline is the share-price variance in the fourth quarter of 2013, which increased the stock-based compensation expense, as well as the favorable non-recurring items recorded in the fourth quarter of 2012. The combined results of the two operating sectors were relatively stable. The Printing Sector delivered an increase of 12 percent, or $7 million, in adjusted operating income as a result of synergies generated from the integration of Quad/Graphics Canada, Inc.'s operations as well as a decrease in our costs arising from the optimization of our platform. Adjusted operating income in our Media Sector declined by 28 percent, or $9 million, during the fourth quarter mostly due to the soft local advertising market.
Net income applicable to participating shares decreased from a loss of $51.9 million, or $0.65 per share, to a loss of $92.2 million, or $1.19 per share, mainly due to an increase in the asset impairment charge, partially offset by the favorable effect of the write-down of tax assets recorded in the fourth quarter of 2012. Adjusted net income applicable to participating shares was down 6.0 percent, from $61.9 million to $58.2 million, mostly as a result of the decrease in our results explained above, partially offset by a decrease in income taxes and financial expenses. On a per share basis, it declined from $0.77 to $0.75.