Thursday, September 6, 2012

TCL.A - Transcontinental Inc. increases its revenues by 8% in the third quarter and pursues the integration of Quad/Graphics Canada, Inc. (CAD 0.145)

Company: Transcontinental Inc. Cl A Sv
Stock Name: TCL.A
Amount: CAD 0.145
Announcement Date: 06/09/2012
Record Date: 27/09/2012

Dividend Detail:




Highlights






































































(in millions of dollars, except per share data)

Q3-12

Q3-11

%

YTD

2012

YTD

2011

%

Revenues

$517.0

$479.4

8%

$1,527.0

$1,467.7

4%

Adjusted operating income (1)

49.9

57.1

(13%)

148.8

166.6

(11%)

Adjusted net income applicable to participating shares (1)

24.9

32.5

(23%)

87.5

100.8

(13%)

Per share

0.31

0.40

(23%)

1.08

1.24

(13%)

Net income applicable to participating shares

8.1

31.5

(74%)

(131.4)

89.9

---

Per share

0.10

0.39

(74%)

(1.62)

1.11

---


Note 1��: Please refer to the table "��Reconciliation of Non-IFRS
financial measures" in this press release.




  • Ongoing development of digital advertising representation with the
    acquisition of a majority stake in Redux Media and a partnership with
    Glacier Media.


  • Acquisition of all outstanding shares of the newspaper M��tro Montr��al.


  • Withdrawal of Transcontinental Inc. from the one- and two-colour book
    market through the sale of the assets of two printing plants:
    Transcontinental Gagn�� and Transcontinental M��trolitho.


  • Extension to 2019 of contracts to print Rogers' marketing products and
    magazines for a value of up to $250��million.


  • Start of TC��Media's television production activity with the morning show
    ��a commence bien!


  • Net income applicable to participating shares declined 74% mainly due to
    restructuring, integration and acquisition costs related to the
    acquisition of Quad/Graphics Canada, Inc., to net income from
    discontinued operations and to the reduction in adjusted operating
    income.



MONTREAL, Sept. 6, 2012 /CNW Telbec/ - Transcontinental's Inc. (TSX:
TCL.A TCL.B TCL.PR.D) revenues grew 8% in the third quarter, from
$479.4��million to $517.0��million. This growth was driven primarily by
the acquisition of ��Quad/Graphics Canada, Inc. and Redux Media, among
others, the volume generated from new printing contracts and the
launches of new community newspapers in Quebec. It was, however,
mitigated by the expected reduction in sales in the Educational Book
Publishing Group, due mainly to the end of the school reform in Quebec,
the incentives granted at the renewal of certain printing contracts and
the decrease in national advertising in community newspapers outside
Quebec. Excluding acquisitions, divestitures and closures, the impact
of the exchange rate and the paper component variance, organic revenue
growth was negative by 3% in the third quarter. The decrease originates
in the Media Sector, while the Printing Sector recorded organic growth
of 1%.



Adjusted operating income was down 13% during the same period, from
$57.1��million to $49.9��million. This decrease is mainly due to lower
volume from educational book sales, as indicated above, as well as a
soft national advertising market outside Quebec and incentives granted
at the renewal of certain contracts. This decrease was partially offset
by improved printing platform efficiency. Net income applicable to
participating shares declined 74%, from $31.5��million, or $0.39 per
share, to $8.1��million, or $0.10 per share. This decrease is mainly due
to restructuring, integration and acquisition costs related to the
acquisition of Quad/Graphics Canada, Inc., to net income from
discontinued operations namely, one- and two-colour book printing, and
to the reduction in adjusted operating income. Excluding unusual items
and discontinued operations, adjusted net income applicable to
participating shares was down 23%, from $32.5��million, or $0.40 per
share, to $24.9��million, or $0.31 per share.



"The third quarter results demonstrate the resilience of our printing
operations and the adverse impact of difficult market conditions on
some niches in the Media Sector," said Fran��ois Olivier, President and
Chief Executive Officer. "In the Printing Sector, the integration of
Quad/Graphics Canada, Inc. progressed and we are on track to generate
the anticipated synergies of more than $40 million over the next 18
months. In fact, starting in the fourth quarter, we will reap the
benefits of this acquisition more significantly. We sold our remaining
one- and two-colour book printing assets and renewed several contracts
with national retailers. We also recently extended contracts to print
Rogers' marketing products and magazines.



Fran��ois Olivier noted also that "although the Media Sector has been
affected by the exceptional events that have lowered the results of the
Educational Book Publishing Group, we continued to invest in the
development of new products and services. The scope of our digital
network was expanded through the acquisition of Redux Media and the
partnership with Glacier Media. We enriched the content of our
platforms by acquiring all outstanding shares of the newspaper M��tro Montr��al and launching several mobile apps. In addition, the
organization continues to generate significant cash flows and has a
solid financial position. Over the next 12 to 18 months, our priorities
will be to complete the integration of Quad/Graphics Canada, Inc., to
further invest in our multiplatform offering and to improve the Media
Sector's performance."



Quarter Highlights




  • Sold the assets of one- and two-colour book printing plants
    Transcontinental Gagn�� in Louiseville and Transcontinental M��trolitho
    in Sherbrooke, Quebec. Transcontinental Inc. plans to pursue its
    educational book printing activities in the four-colour web printing
    niche in the Quebec, Canada and U.S. markets.


  • Extension to 2019 of contracts to print Rogers' marketing products and
    magazines for a value of up to $250 million. These agreements follow in
    the wake of other contracts renewed since January 2012 with key
    accounts in various sectors of the retail industry in Canada. These
    contracts with retailers are valued at more than $1.5��billion and have
    terms of three to six years.


  • Ongoing development of Transcontinental Inc.'s digital and interactive
    activities with the acquisition of a majority stake in Redux Media, a
    leading online advertising network that specializes in real-time
    bidding, and by setting up a digital advertising representation
    partnership with Glacier Media, publisher of newspapers and business
    information products. In addition to expanding its digital network, the
    Corporation is providing new mobile applications, notably On the Table and P$ Mobile Service, an innovative remote parking payment solution for Stationnement de
    Montr��al.


  • Purchase of all outstanding shares of the newspaper M��tro Montr��al. 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, ��a commence bien! produced by the Corporation's television production house.


  • The Corporation has been authorized to redeem, for cancellation on the
    open market, between April��13, 2012 and April��12, 2013, up to 5% of its
    Class A Subordinate Voting Shares and its Class B Shares. In the three
    and nine months ended July 31, 2012, the Corporation redeemed 471,500
    of its Class A Subordinate Voting Shares at a weighted average price of
    $9.27 for a total cash consideration of $4.4��million, in accordance
    with its normal course issuer bid put in place on April��13, 2012.



For more detailed financial information, please see Management's Discussion and Analysis for the third quarter ended
July��31, 2012
as well as the financial statements in the "Investors" section of our
website at www.tc.tc



Highlights of the First Nine Months



For the first nine months of fiscal 2012, the revenues of
Transcontinental Inc. grew 4%, from $1,467.7��million to
$1,527.0��million. 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%, 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, or $1.11 per share, to a loss of $131.4��million, or
$1.62 per share. 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, totalling $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%, from $100.8��million, or $1.24 per share, to $87.5��million, or
$1.08 per share.



Reconciliation of Non-IFRS Financial Measures



Financial data have been prepared in conformity with IFRS. However,
certain measures used in this press release do not have any
standardized meaning under IFRS and could be calculated differently by
other companies. We believe that many readers analyze our results based
on certain non-IFRS financial measures because such measures are more
appropriate for evaluating the Corporation's operating performance.
Internally, Management uses such non-IFRS financial information as an
indicator of business performance, and evaluates management's
effectiveness with specific reference to these indicators. These
measures should be considered in addition to, not as a substitute for
or superior to, measures of financial performance prepared in
accordance with IFRS.



The following table reconciles IFRS financial measures to non-IFRS
financial measures.



��


















































































































































































































































































































































































































































































































































































Reconciliation of Non-IFRS financial measures

(unaudited)

��

��

��

��

��

��

��

��

��

��

��

��

��

Three months ended July 31

��

Nine months ended July 31

(in millions of dollars, except per share amounts)

��

2012

��

��

2011

��

��

2012

��

��

2011

Net income (loss) applicable to participating shares

$

8.1

��

$

31.5

��

$

(131.4)

��

$

89.9

Dividends on preferred shares

��

1.7

��

��

1.7

��

��

5.1

��

��

5.1

Net loss (income) related to discontinued operations (after tax)

��

5.7

��

��

(0.1)

��

��

7.1

��

��

(1.0)

Non-controlling interest

��

(0.2)

��

��

-

��

��

-

��

��

0.8

Unusual adjustments to income taxes

��

-

��

��

-

��

��

42.0

��

��

-

Income tax expenses

��

10.8

��

��

12.9

��

��

6.5

��

��

26.3

Expenses related to long-term debt prepayment

��

-

��

��

-

��

��

-

��

��

5.8

Financial expenses related to unusual adjustments to income taxes

��

-

��

��

-

��

��

16.0

��

��

-

Financial expenses

��

9.0

��

��

9.9

��

��

22.7

��

��

29.3

Gain on business acquisition

��

-

��

��

-

��

��

(31.7)

��

��

-

Impairment of assets

��

-

��

��

0.4

��

��

180.8

��

��

3.9

Restructuring and integration expenses and acquisition costs

��

14.8

��

��

0.8

��

��

31.7

��

��

6.5

Adjusted operating income

$

49.9

��

$

57.1

��

$

148.8

��

$

166.6

Amortization

��

28.7

��

��

29.2

��

��

85.0

��

��

88.8

Adjusted operating income before amortization

$

78.6

��

$

86.3

��

$

233.8

��

$

255.4

Net income (loss) applicable to participating shares

$

8.1

��

$

31.5

��

$

(131.4)

��

$

89.9

Net loss (income) from discontinued operations (after tax)

��

5.7

��

��

(0.1)

��

��

7.1

��

��

(1.0)

Unusual adjustments to income taxes (after tax)

��

-

��

��

-

��

��

42.0

��

��

-

Expenses related to long-term debt prepayment (after tax)

��

-

��

��

-

��

��

-

��

��

4.2

Financial expenses related to unusual adjustments to income taxes (after
tax)

��

-

��

��

-

��

��

16.0

��

��

-

Gain on business acquisition (after tax)

��

-

��

��

-

��

��

(31.7)

��

��

-

Impairment of assets (after tax)

��

-

��

��

0.4

��

��

162.7

��

��

2.9

Restructuring and integration expenses and acquisition costs (after tax)

��

11.1

��

��

0.7

��

��

22.8

��

��

4.8

Adjusted net income applicable to participating shares

$

24.9

��

$

32.5

��

$

87.5

��

$

100.8

Average number of participating shares outstanding

��

80.9

��

��

81.0

��

��

81.0

��

��

81.0

Adjusted net income applicable to participating shares per share

$

0.31

��

$

0.40

��

$

1.08

��

$

1.24

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

As at July 31,

2012

��

��

As at October 31,

2011

Long-term debt

��

��

��

��

��

��

$

205.5

��

$

292.5

Current portion of long-term debt

��

��

��

��

��

��

��

330.1

��

��

271.9

Cash and cash equivalents

��

��

��

��

��

��

��

(28.5)

��

��

(75.0)

Net indebtedness

��

��

��

��

��

��

$

507.1

��

$

489.4

Amount to be paid to Quad/Graphics following the closing of the
transaction to acquire the shares of Quad/Graphics Canada

��

��

��

��

��

��

��

-

��

��

50.0

Adjusted net indebtedness

��

��

��

��

��

��

$

507.1

��

$

539.4

Adjusted operating income before amortization (last 12 months)

��

��

��

��

��

��

$

343.8

��

$

365.4

Net indebtedness ratio

��

��

��

��

��

��

��

1.47x

��

��

1.34x

Adjusted net indebtedness ratio

��

��

��

��

��

��

��

1.47x

��

��

1.48x





Dividend



At its September 6, 2012 meeting, the Corporation's Board of Directors
declared a quarterly dividend of $0.145 per Class A Subordinate Voting
Shares and Class B Shares. This dividend is payable on October 19, 2012
to participating shareholders of record at the close of business on
October 1, 2012. On an annual basis, this represents a dividend of
$0.58 per share. Furthermore, at the same meeting, the Board also
declared a quarterly dividend of $0.4242 per share on cumulative 5-year
rate reset first preferred shares, series D. This dividend is payable
on October 15, 2012. On an annual basis, this represents a dividend of
$1.6875 per preferred share.



Additional Information



Upon releasing its third quarter results, Transcontinental Inc. will
hold a conference call for the financial community today at 4:15 p.m.
The dial-in numbers are (514) 807-9895 or (647) 427-7450 or
1-888-231-8191 and the access code is: 86643033. Media may hear the
call in listen-only mode or tune in to the simultaneous audio broadcast
on the Corporation's Web site, which will then be archived for 30��days.
For media requests for information or interviews, please contact Nancy
Bouffard
, Director, Internal and External Communications of TC
Transcontinental, at 514 954-2809.



Profile



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.



Transcontinental Inc. (TSX: TCL.A, TCL.B, TCL.PR.D), known by the brands
TC Transcontinental, TC Media and ��TC Transcontinental Printing, has
approximately 10,000 employees in Canada and the United States, and
reported revenues of C$2.0 billion in 2011. For more information about
the corporation, please visit www.tc.tc



Forward-looking Statements



This press release contains certain forward-looking statements
concerning the future performance of the Corporation. Such statements,
based on the current expectations of management, inherently involve
numerous risks and uncertainties, known and unknown. We caution that
all forward-looking information is inherently uncertain and actual
results may differ materially from the assumptions, estimates or
expectations reflected or contained in the forward-looking information,
and that actual future performance will be affected by a number of
factors, many of which are beyond the Corporation's control, including,
but not limited to, the economic situation, structural changes in its
industries, exchange rate, availability of capital, energy costs,
increased competition, as well as the Corporation's capacity to engage
in strategic transactions and integrate acquisitions into its
activities. The risks, uncertainties and other factors that could
influence actual results are described in the Management's Discussion and Analysis (MD&A) for the fiscal year ended on October 31st, 2011 and in the Annual Information Form and have been updated in the MD&A for the third ��quarter ended July 31st, 2012.



The forward-looking information in this release is based on current
expectations and information available as at September 6, 2012. The
Corporation's management disclaims any intention or obligation to
update or revise any forward-looking statements unless otherwise
required by the Securities Authorities.



















































































































































































































































































































































































































































































































CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Unaudited��

��

��

Three months ended

��

Nine months ended

��

July 31

��

July 31

(in millions of Canadian dollars, except per share data)

2012

��

2011

��

2012

��

2011

��

��

��

��

��

��

��

��

��

��

��

��

Revenues

$

517.0

��

$

�� 479.4

��

$

1,527.0

��

$

�� 1,467.7

Operating expenses

��

438.4

��

��

393.1

��

��

1,293.2

��

��

1,212.3

Restructuring, integration and acquisition costs

��

14.8

��

��

0.8

��

��

31.7

��

��

6.5

Impairment of assets

��

-

��

��

0.4

��

��

180.8

��

��

3.9

Gain on business acquisition

��

-

��

��

-

��

��

(31.7)

��

��

-

��

��

��

��

��

��

��

��

��

��

��

��

Operating income before amortization

��

63.8

��

��

85.1

��

��

53.0

��

��

245.0

Amortization

��

28.7

��

��

29.2

��

��

85.0

��

��

88.8

��

��

��

��

��

��

��

��

��

��

��

��

Operating income (loss)

��

35.1

��

��

55.9

��

��

(32.0)

��

��

156.2

Financial expenses

��

9.0

��

��

9.9

��

��

38.7

��

��

35.1

��

��

��

��

��

��

��

��

��

��

��

��

Income (loss) before income taxes

��

26.1

��

��

46.0

��

��

(70.7)

��

��

121.1

Income taxes

��

10.8

��

��

12.9

��

��

48.5

��

��

26.3

��

��

��

��

��

��

��

��

��

��

��

��

Net income (loss) from continuing operations

��

15.3

��

��

33.1

��

��

(119.2)

��

��

94.8

Net income (loss) from discontinued operations

��

(5.7)

��

��

0.1

��

��

(7.1)

��

��

1.0

��

��

��

��

��

��

��

��

��

��

��

��

Net income (loss)

��

9.6

��

��

33.2

��

��

(126.3)

��

��

95.8

Non-controlling interests

��

(0.2)

��

��

-

��

��

-

��

��

0.8

Net income (loss) attributable to shareholders of the Corporation

��

9.8

��

��

33.2

��

��

(126.3)

��

��

95.0

Dividends on preferred shares, net of related taxes

��

1.7

��

��

1.7

��

��

5.1

��

��

5.1

Net income (loss) attributable to participating shares

$

8.1

��

$��

31.5

��

$

�� (131.4)

��

$

89.9

��

��

��

��

��

��

��

��

��

��

��

��

Net income (loss) per participating share - basic and diluted

��

��

��

��

��

��

��

��

��

��

��

��

Continuing operations

$

0.17

��

$

0.39

��

$

(1.53)

��

$

1.10

��

Discontinued operations

��

(0.07)

��

��

-

��

��

(0.09)

��

��

0.01

��

$

0.10

��

$

0.39

��

$

(1.62)

��

$

1.11

��

��

��

��

��

��

��

��

��

��

��

��

Weighted average number of shares outstanding - basic (in millions)

��

80.9

��

��

81.0

��

��

81.0

��

��

81.0

��

��

��

��

��

��

��

��

��

��

��

��

Weighted average number of shares outstanding - diluted (in millions)

��

80.9

��

��

81.1

��

��

81.0

��

��

81.1
































































































































































































































































































































































































































































CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Unaudited

��

��

Three months ended

��

Nine months ended

��

July 31

��

July 31

(in millions of Canadian dollars)

2012

��

2011

��

2012

��

2011

��

��

��

��

��

��

��

��

��

��

��

��

Net income (loss)

$

9.6

��

$

33.2

��

$

(126.3)

��

$

95.8

��

��

��

��

��

��

��

��

��

��

��

��

Other comprehensive loss

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

Items that will be reclassified to net income (loss):

��

��

��

��

��

��

��

��

��

��

��

��

Net change related to cash flow hedges

��

��

��

��

��

��

��

��

��

��

��

��

��

Net change in the fair value of derivatives designated as cash flow
hedges

��

(0.4)

��

��

(0.9)

��

��

(2.0)

��

��

4.4

��

��

Reclassification of the net change in the fair value of derivatives
designated as cash flow

hedges in prior periods, recognized in net income (loss) during the
period

��

(0.5)

��

��

(1.0)

��

��

4.4

��

��

(2.6)

��

��

Related income taxes

��

(1.8)

��

��

(0.4)

��

��

1.0

��

��

0.8

��

��

0.9

��

��

(1.5)

��

��

1.4

��

��

1.0

��

��

��

��

��

��

��

��

��

��

��

��

��

Cumulative translation differences

��

��

��

��

��

��

��

��

��

��

��

��

��

Net gains (losses) on the translation of the financial statements of
foreign operations

��

0.8

��

��

0.2

��

��

0.7

��

��

(5.3)

��

��

��

��

��

��

��

��

��

��

��

��

Items that will not be reclassified to net income (loss):

��

��

��

��

��

��

��

��

��

��

��

��

Changes in actuarial gains and losses of defined benefit pensions plans

��

��

��

��

��

��

��

��

��

��

��

��

��

Actuarial losses of defined benefit pension plans

��

(49.4)

��

��

(29.4)

��

��

(79.7)

��

��

(18.0)

��

��

Related income taxes

��

(13.3)

��

��

(7.8)

��

��

(22.1)

��

��

(4.8)

��

��

(36.1)

��

��

(21.6)

��

��

(57.6)

��

��

(13.2)

��

��

��

��

��

��

��

��

��

��

��

��

Other comprehensive loss

��

(34.4)

��

��

(22.9)

��

��

(55.5)

��

��

(17.5)

Comprehensive income (loss)

$

(24.8)

��

$

10.3

��

$

(181.8)

��

$

78.3

��

��

��

��

��

��

��

��

��

��

��

��

Attributable to:

��

��

��

��

��

��

��

��

��

��

��

��

Shareholders of the Corporation

$

(24.6)

��

$

10.3

��

$

(181.8)

��

$

77.5

��

Non-controlling interests

��

(0.2)

��

��

-

��

��

-

��

��

0.8

��

$

(24.8)

��

$

10.3

��

$

(181.8)

��

$

�� 78.3



















































































































































































































































































































































































































































































































CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Unaudited





(in millions of Canadian dollars)

��

��

��

��

��

��

��

��

��

��

��

��

Attributable to shareholders of the Corporation

��

��

��

��

��

��

��

Share capital

��

Contributed

surplus

��

Retained

earnings

��

Accumulated

other

comprehensive

loss

��

Total

��

Non-

controlling

interests

��

Total equity

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

Balance as at October 31, 2011

$

478.1

��

$

1.8

��

$

754.1

��

$

(28.1)

��

$

1,205.9

��

$

0.8

��

$

1,206.7

Net loss

��

-

��

��

-

��

��

(126.3)

��

��

-

��

��

(126.3)

��

��

-

��

��

(126.3)

Other comprehensive loss

��

-

��

��

-

��

��

-

��

��

(55.5)

��

��

(55.5)

��

��

-

��

��

(55.5)

Shareholders' contributions and distributions to shareholders

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

Redemption of participating shares

��

(2.6)

��

��

-

��

��

(1.8)

��

��

-

��

��

(4.4)

��

��

-

��

��

(4.4)

��

Exercise of stock options

��

0.6

��

��

(0.1)

��

��

-

��

��

-

��

��

0.5

��

��

-

��

��

0.5

��

Dividends

��

-

��

��

-

��

��

(39.5)

��

��

-

��

��

(39.5)

��

��

-

��

��

(39.5)

��

Stock-option based compensation

��

-

��

��

0.6

��

��

-

��

��

-

��

��

0.6

��

��

-

��

��

0.6

Balance as at July 31, 2012

$

476.1

��

$

�� 2.3

��

$

�� 586.5

��

$

�� (83.6)

��

$��

981.3

��

$��

0.8

��

$��

982.1

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

Balance as at November 1, 2010

$

477.9

��

$��

1.1

��

$��

673.1

��

$��

(4.5)

��

$��

1,147.6

��

$��

0.8

��

$��

1,148.4

Net income

��

-

��

��

-

��

��

95.0

��

��

-��

��

��

95.0

��

��

0.8

��

��

95.8

Other comprehensive loss

��

-

��

��

-

��

��

-

��

��

(17.5)

��

��

(17.5)

��

��

-

��

��

(17.5)

Shareholders' contributions and distributions to shareholders

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

Exercise of stock options

��

0.2

��

��

-

��

��

-

��

��

-

��

��

0.2

��

��

-

��

��

0.2

��

Dividends

��

-

��

��

-

��

��

(33.8)

��

��

-

��

��

(33.8)

��

��

(0.8)

��

��

(34.6)

��

Stock-option based compensation

��

-

��

��

0.5

��

��

-

��

��

-

��

��

0.5

��

��

-

��

��

0.5

Balance as at July 31, 2011

$

478.1

��

$��

1.6

��

$

�� 734.3

��

$��

(22.0)

��

$��

1,192.0

��

$��

0.8

��

$��

1,192.8































































































































































































































































































































































































CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Unaudited





��

��

��

��

��

��

(in millions of Canadian dollars)

As at

July 31,

2012

��

As at

October 31,

2011

��

��

��

��

��

��

Current assets

��

��

��

��

��

��

Cash and cash equivalents

$

28.5

��

$

�� 75.0

��

Accounts receivable

��

370.9

��

��

425.5

��

Income taxes receivable

��

26.2

��

��

14.7

��

Inventories

��

78.5

��

��

77.2

��

Prepaid expenses and other current assets

��

15.9

��

��

18.1

��

Assets from discontinued operations

��

-

��

��

14.0

��

��

520.0

��

��

624.5

��

��

��

��

��

��

Property, plant and equipment

��

664.1

��

��

680.4

Intangible assets

��

194.3

��

��

149.6

Goodwill

��

516.9

��

��

679.2

Deferred income taxes

��

197.9

��

��

197.7

Other assets

��

34.0

��

��

20.2

Assets from discontinued operations

��

-

��

��

13.5

��

$

2,127.2

��

$

2,365.1

��

��

��

��

��

��

Current liabilities

��

��

��

��

��

��

Accounts payable and accrued liabilities

$

256.0

��

$

288.0

��

Provisions

��

17.4

��

��

8.6

��

Income taxes payable

��

43.7

��

��

33.5

��

Deferred subscription revenues and deposits

��

36.0

��

��

32.5

��

Current portion of long-term debt

��

330.1

��

��

271.9

��

Assets from discontinued operations

��

-

��

��

7.6

��

��

683.2

��

��

642.1

��

��

��

��

��

��

Long-term debt

��

205.5

��

��

292.5

Deferred income taxes

��

39.5

��

��

127.2

Provisions

��

19.5

��

��

8.7

Other liabilities

��

197.4

��

��

87.9

��

��

1,145.1

��

��

1,158.4

��

��

��

��

��

��

Equity

��

��

��

��

��

��

Share capital

��

476.1

��

��

478.1

��

Contributed surplus

��

2.3

��

��

1.8

��

Retained earnings

��

586.5

��

��

754.1

��

Accumulated other comprehensive loss

��

(83.6)

��

��

(28.1)

��

Attributable to shareholders of the Corporation

��

981.3

��

��

1,205.9

��

Non-controlling interests

��

0.8

��

��

0.8

��

��

982.1

��

��

1,206.7

��

$

2,127.2

��

$

2,365.1









































































































































































































































































































































































































































































































































































































































































































































































































































































CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited





��

Three months ended

��

Nine months ended

��

July 31

��

July 31

(in millions of Canadian dollars)

2012

��

2011

��

2012

��

2011

��

��

��

��

��

��

��

��

��

��

��

��

Operating activities

��

��

��

��

��

��

��

��

��

��

��

��

Net income (loss)

$

�� 9.6

��

$

33.2

��

$

(126.3)

��

$

95.8

��

Less: Net income (loss) from discontinued operations

��

(5.7)

��

��

0.1

��

��

(7.1)

��

��

1.0

��

Net income (loss) from continuing operations

��

15.3

��

��

33.1

��

��

(119.2)

��

��

94.8

��

��

��

��

��

��

��

��

��

��

��

��

��

Adjustments to reconcile net income (loss) from continuing operations
and cash flows from operating activities:

��

��

��

��

��

��

��

��

��

��

��

��

��

Amortization

��

31.7

��

��

35.1

��

��

99.0

��

��

107.6

��

��

Impairment of assets

��

-

��

��

0.4

��

��

180.8

��

��

3.9

��

��

Gain on business acquisition

��

-

��

��

-

��

��

(31.7)

��

��

-

��

��

Financial expenses on long-term debt

��

6.9

��

��

7.7

��

��

20.2

��

��

25.9

��

��

Interest on tax contingencies

��

-

��

��

-

��

��

16.0

��

��

-

��

��

Expenses related to long-term debt prepayment

��

-

��

��

-

��

��

-

��

��

5.8

��

��

Net loss (gain) on disposal of assets

��

0.1

��

��

0.1

��

��

(0.2)

��

��

(0.2)

��

��

Income taxes

��

10.8

��

��

12.9

��

��

48.5

��

��

26.3

��

��

Stock-option based compensation

��

0.2

��

��

0.2

��

��

0.6

��

��

0.5

��

��

Loss (gain) on pension plans curtailment

��

0.1

��

��

-

��

��

(3.4)

��

��

-

��

��

Other

��

4.7

��

��

(0.5)

��

��

2.0

��

��

(2.6)

��

Cash flows generated by operating activities before changes in non-cash
operating items and income tax paid

��

69.8

��

��

89.0

��

��

212.6

��

��

262.0

��

Changes in non-cash operating items

��

18.5

��

��

(10.3)

��

��

(25.4)

��

��

(33.5)

��

Income taxes recovered (paid)

��

(46.0)

��

��

3.7

��

��

(50.4)

��

��

(19.4)

��

Cash flows from continuing operations

��

42.3

��

��

82.4

��

��

136.8

��

��

209.1

��

Cash flows from discontinued operations

��

0.8

��

��

(0.7)

��

��

1.2

��

��

2.2

��

��

43.1

��

��

81.7

��

��

138.0

��

��

211.3

��

��

��

��

��

��

��

��

��

��

��

��

Investing activities

��

��

��

��

��

��

��

��

��

��

��

��

Business acquisitions

��

(1.4)

��

��

-��

��

��

(59.2)

��

��

(5.4)

��

Acquisitions of property, plant and equipment

��

(9.4)

��

��

(8.6)

��

��

(26.3)

��

��

(37.1)

��

Disposals of property, plant and equipment

��

0.4

��

��

0.2

��

��

0.9

��

��

0.8

��

Increase in intangible assets and other assets

��

(7.3)

��

��

(6.4)

��

��

(16.8)

��

��

(14.5)

��

Cash flows from investments in continuing operations

��

(17.7)

��

��

(14.8)

��

��

(101.4)

��

��

(56.2)

��

Cash flows from investments in discontinued operations

��

10.0

��

��

(1.1)

��

��

10.0

��

��

(1.9)

��

��

(7.7)

��

��

(15.9)

��

��

(91.4)

��

��

(58.1)

��

��

��

��

��

��

��

��

��

��

��

��

Financing activities

��

��

��

��

��

��

��

��

��

��

��

��

Reimbursement of long-term debt

��

(8.2)

��

��

(59.2)

��

��

(89.4)

��

��

(167.3)

��

Increase in revolving term credit facility

��

2.0

��

��

78.4

��

��

57.8

��

��

109.4

��

Financial expenses on long-term debt

��

(6.8)

��

��

(7.8)

��

��

(19.4)

��

��

(23.9)

��

Expenses related to long-term debt prepayment

��

-

��

��

(1.0)

��

��

-

��

��

(4.4)

��

Dividends on participating shares

��

(11.7)

��

��

(10.9)

��

��

(34.4)

��

��

(28.7)

��

Dividends on preferred shares

��

(1.7)

��

��

(1.7)

��

��

(5.1)

��

��

(5.1)

��

Issuance of participating shares

��

0.2

��

��

-

��

��

0.5

��

��

0.2

��

Redemption of participating shares

��

(4.4)

��

��

-

��

��

(4.4)

��

��

-��

��

Bond forward contract

��

-

��

��

-

��

��

-

��

��

(6.0)

��

Cash flows from the financing of continuing operations

��

(30.6)

��

��

(2.2)

��

��

(94.4)

��

��

(125.8)

��

��

��

��

��

��

��

��

��

��

��

��

Effect of exchange rate changes on cash and cash equivalents denominated
in foreign currencies

��

1.5

��

��

(0.4)

��

��

1.3

��

��

(1.2)

��

��

��

��

��

��

��

��

��

��

��

��

Increase (decrease) in cash and cash equivalents

��

6.3

��

��

63.2

��

��

(46.5)

��

��

26.2

Cash and cash equivalents (bank overdraft) at beginning of period

��

22.2

��

��

(0.7)

��

��

75.0

��

��

36.3

Cash and cash equivalents at end of period

$

�� 28.5

��

$

�� 62.5

��

$

28.5

��

$

�� 62.5

��

��

��

��

��

��

��

��

��

��

��

��

Non-cash investing and financing activities

��

��

��

��

��

��

��

��

��

��

��

��

Net change in capital asset acquisitions financed by accounts payable

$

(0.8)

��

$

(1.5)

��

$

�� (3.0)

��

$

�� (15.5)


SOURCE: TRANSCONTINENTAL INC.







For further information:

Media

Nancy Bouffard
Director, Internal and External Communications
TC Transcontinental��
Telephone��: 514��954���2809��
nancy.bouffard@tc.tc
www.tc.tc

Financial Community

Jennifer F. McCaughey
Senior Director, Investor Relations and Financial Communications
TC Transcontinental
Telephone��: 514��954���2821
jennifer.mccaughey@tc.tc

www.tc.tc









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