Transcontinental Reports Gains for Fiscal Year Despite Q4 Loss

MONTREAL—December 11, 2008—Transcontinental kept its momentum in the fourth quarter and ended fiscal 2008 with adjusted earnings per share of $1.73, compared to $1.50 in 2007, up an appreciable 15%. Adjusted net income, which excludes asset impairment, restructuring costs and unusual adjustments to income taxes, is a good indicator of the Corporation’s operating performance. Excluding the negative impact of the foreign exchange rate, adjusted earnings per share would have been $1.78, an increase of 19% over 2007. The good performance of most of the Corporation’s business segments, along with a decrease in the tax rate and interest rates, largely offset the negative impact of the financial crisis on the Corporation’s direct mail operations in the United States, the average rise in the Canadian dollar compared to its U.S. counterpart, and strategic investments in the Media sector.

“I am proud of our 2008 results, which again demonstrate our ability to grow in tough economic times,” said François Olivier, President and Chief Executive Officer of Transcontinental. “We are now reaping the benefits from our investments in our network of printing plants over the past several years, from the development of our brands and their deployment on our digital platforms, as well as from our efforts to continually improve efficiency and reduce costs.”

“I am convinced that we have the assets, organizational capability, growth strategy, values and people to stay in the top ranks of our industry in North America. Conditions look difficult for 2009, but we will benefit from the start of our contracts to print Rogers Communications’ magazines and the San Francisco Chronicle daily, as well as from the full-year impact of the Shoppers Drug Mart-Pharmaprix flyer-printing contract, acquisitions made in 2008 and the launch of new products in the Media sector. I have also asked our people to immediately identify ways we could reduce our production capacity if the economic situation demands it and our action plan is ready.”