(TSX:TCL.A)(TSX:TCL.B)(TSX:TCL.PR.D)
----------------------------------------------------------------------------
(in millions of dollars, YTD
except per share data) Q2-14 Q2-13(1) % YTD 2014 2013(1) %
----------------------------------------------------------------------------
Revenues 498.2 517.8 (3.8) 997.5 1,043.4 (4.4)
----------------------------------------------------------------------------
Adjusted operating
earnings before
amortization (Adjusted
EBITDA) 82.8 80.4 3.0 151.4 149.8 1.1
----------------------------------------------------------------------------
Adjusted operating
earnings (Adjusted EBIT) 58.5 54.2 7.9 102.0 97.7 4.4
----------------------------------------------------------------------------
Adjusted net earnings
applicable to
participating shares 36.8 32.6 12.9 63.2 59.0 7.1
----------------------------------------------------------------------------
Per share 0.47 0.42 11.9 0.81 0.76 6.6
----------------------------------------------------------------------------
Net earnings applicable to
participating shares 34.7 25.3 37.2 51.9 41.0 26.6
----------------------------------------------------------------------------
Per share 0.45 0.32 40.6 0.67 0.52 28.8
----------------------------------------------------------------------------
Please refer to the table "Reconciliation of Non-IFRS financial measures" in
this press release.
(1) 2013 figures have been restated to take into account the effects of
amended IAS 19 - Employee Benefits, IFRS 11 - Joint Arrangements and
other elements.
Highlights
-- Revenues decreased 3.8%, primarily due to the soft advertising market.
-- Adjusted net earnings applicable to participating shares grew 12.9%,
from $32.6 million to $36.8 million. On a per share basis, they rose
from $0.42 to $0.47.
-- Completed the acquisition of the assets of Capri Packaging, a producer
of flexible packaging.
-- Completed the acquisition of the weekly newspapers owned by Sun Media
Corporation in Quebec and their related Web properties. Under the terms
of the agreement with the Competition Bureau, the Corporation must put
some weekly newspapers up for sale.
-- Closed a private financing agreement of $250 million in senior unsecured
notes.
-- Signed a multi-year agreement with Postmedia Network Inc. to print The
Gazette newspaper.
Transcontinental Inc.'s (TSX:TCL.A)(TSX:TCL.B)(TSX:TCL.PR.D) revenues decreased
by 3.8% in the second quarter, from $517.8 million to $498.2 million, primarily
due to the soft advertising market, which continues to influence our marketing
products printing as well as our newspaper and magazine publishing operations.
This decrease was partially offset by the sustained performance of our flyer
printing operations and by new contracts in both operating sectors.
Adjusted operating earnings rose from $54.2 million to $58.5 million. This
performance is due to the company-wide optimization of our cost structure and
our highly efficient printing platform. It was partially offset by the soft
advertising market as mentioned above. Net earnings applicable to participating
shares increased from $25.3 million, or $0.32 per share, to $34.7 million, or
$0.45 per share. This improvement is due to lower restructuring and other costs,
an increase in adjusted operating earnings and lower financial expenses,
partially offset by an increase in income taxes. Adjusted net earnings
applicable to participating shares grew 12.9%, from $32.6 million, or $0.42 per
share, to $36.8 million, or $0.47 per share.
"We are proud to have completed two major transactions that position TC
Transcontinental strategically for the future. With the acquisition of the Capri
Packaging assets, we have taken a first step into the flexible packaging market,
which is a new promising growth area for the Corporation. In addition, the
acquisition of the Sun Media weekly newspapers in Quebec strengthens our assets
in this market, while ensuring our ability to evolve our local solutions
offering in Quebec. Furthermore, our second quarter results were satisfactory.
Despite the pressure we are experiencing in the advertising market, the increase
in our profitability demonstrates the effectiveness of our strategy, namely
strengthening existing assets and developing new revenue sources," said Francois
Olivier, President and Chief Executive Officer.
"For coming quarters, our excellent financial position combined with our ability
to generate significant cash flows gives us the flexibility we need to integrate
our recent acquisitions, continue our transformation and invest in the future of
the Corporation," Mr. Olivier added.
Supplementary Information
-- On April 10, 2014, the Corporation announced the renewal of its normal
course issuer bid from April 15, 2014 to April 14, 2015.
-- On May 3, 2014, the Corporation completed the acquisition of the assets
of Capri Packaging, a producer of flexible packaging, operating two
facilities located in Clinton, Missouri. The acquisition will add about
US$72 million to TC Transcontinental's revenues. As part of the
transaction, the seller, Schreiber Foods, Inc. has signed a 10-year
agreement to secure Capri Packaging as a strategic supplier of flexible
packaging, which represents about 75% of Capri's total revenues.
-- On May 5, 2014, TC Transcontinental Printing signed a multi-year
agreement with Postmedia Network Inc. to print The Gazette, published
primarily for the Montreal market. This agreement builds on our recent
announcement to print the Vancouver Sun and the Calgary Herald. The
contract with Postmedia Network will take effect in August 2014.
-- On May 8, 2014, the Corporation completed a private financing agreement
for an amount of $250 million of 3.897% senior unsecured notes due in
2019. Transcontinental Inc. intends to use the net proceeds to repay
outstanding indebtedness under its revolving credit facility and for
general corporate purposes.
-- On June 1, 2014, Transcontinental Inc. completed the acquisition of the
weekly newspapers owned by Sun Media Corporation in Quebec and their
related Web properties. Under the terms of the agreement with the
Competition Bureau, the Corporation must put some weekly newspapers up
for sale. Despite this requirement, the transaction will add about $20
million to the operating earnings before amortization of
Transcontinental Inc. and further advance the local multiplatform
offering for businesses and communities.
Highlights of the First Half
In the first half of 2014, TC Transcontinental's revenues decreased 4.4%, from
$1,043.4 million to $997.5 million. This decrease stems primarily from the soft
advertising market in our two operating sectors. Adjusted operating earnings
grew 4.4%, from $97.7 million to $102.0 million, due to the optimization of our
cost structure. This increase was partially offset by the factors mentioned
above. Net earnings applicable to participating shares rose from $41.0 million,
or $0.52 per share, to $51.9 million, or $0.67 per share. This improvement is
due to lower financial expenses, a decrease in restructuring and other costs, as
well as an increase in adjusted operating earnings, partially offset by an
increase in income taxes. Excluding unusual items, adjusted net earnings
applicable to participating shares grew 7.1%, from $59.0 million, or $0.76 per
share, to $63.2 million, or $0.81 per share.
For more detailed financial information, please see Management's Discussion and
Analysis for the second quarter ended April 30th, 2014 as well as the financial
statements in the "Investors" section of our website at www.tc.tc
Outlook
New agreements to print magazines, newspapers and marketing products signed
since the start of the fiscal year will reduce the impact of difficult market
conditions in these niches. We believe that our printing offering to major
retail chains will remain relatively stable and we are continuing to improve our
point-of-purchase marketing services. The Printing Sector will also continue to
optimize its cost structure and operations in order to maintain its longer-term
profitability.
The Media Sector should continue to benefit from cost-structure optimization
initiatives and the new flyer-distribution agreements that will help stabilize
our operating margin and reduce the impact of difficult conditions in the
advertising market. We will also continue to invest in the development and
commercialization of new digital products. The acquisition of the Sun Media
Corporation weekly papers in Quebec should also enable us to strengthen our
media assets and improve our offering in local markets.
The Corporation completed the transaction to acquire the assets of Capri
Packaging in order to start a new growth vector in flexible packaging. We have
initiated the operational integration process, modifying our organizational
structure and creating a packaging division headed by a team of senior
executives with outstanding capabilities in manufacturing. The long-term
agreement with the seller, Schreiber Foods, Inc., will secure most of the
revenues for this division. In the coming months we will be implementing a plan
to build the loyalty of our existing customers and attract new ones to ensure
our success in this promising niche.
We have secured additional long-term financing to give us the financial
flexibility required to pursue our transformation and execute our growth
strategy. Given our excellent financial position, we will continue our balanced
approach to capital management, which allows us to reduce our debt, pay
dividends and invest in our transformation focused on our core competencies. We
will also keep on developing internal projects and evaluating strategic
acquisitions to maintain our position in our niches, while developing our new
packaging growth vector to ensure the long-term success and profitability of the
business.
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 Six months ended
April 30 April 30
(in millions of dollars,
except per share amounts) 2014 2013 (1) 2014 2013 (1)
----------------------------------------------------------------------------
Net earnings applicable to
participating shares $ 34.7 $ 25.3 $ 51.9 $ 41.0
Dividends on preferred
shares, net of related
taxes 1.7 1.7 3.4 3.4
Non-controlling interests 0.4 0.4 0.1 0.1
Income tax 14.9 10.7 23.6 13.7
Share of earnings in
interests in joint
ventures, net of related
taxes (0.2) (0.3) (0.5) (0.4)
Net financial expenses 4.0 6.5 8.6 15.2
Impairment of assets 0.1 0.7 0.5 2.8
Restructuring and other
costs 2.9 9.2 14.4 21.9
----------------------------------------------------------------------------
Adjusted operating
earnings $ 58.5 $ 54.2 $ 102.0 $ 97.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Amortization 24.3 26.2 49.4 52.1
----------------------------------------------------------------------------
Adjusted operating
earnings before
amortization $ 82.8 $ 80.4 $ 151.4 $ 149.8
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings applicable to
participating shares $ 34.7 $ 25.3 $ 51.9 $ 41.0
Impairment of assets
(after tax) 0.1 0.6 0.4 2.1
Restructuring and other
costs (after tax) 2.0 6.7 10.9 15.9
----------------------------------------------------------------------------
Adjusted net earnings
applicable to
participating shares $ 36.8 $ 32.6 $ 63.2 $ 59.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Weighted Average number of
participating shares
outstanding 78.0 77.9 78.0 78.0
----------------------------------------------------------------------------
Adjusted net earnings
applicable to
participating shares per
share $ 0.47 $ 0.42 $ 0.81 $ 0.76
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
As at As at
April October
30, 31,
2014 2013 (1)
----------------------------------------------------------------------------
Long-term debt $ 119.7 $ 128.9
Current portion of long-
term debt 161.9 218.3
Cash (29.9) (26.4)
----------------------------------------------------------------------------
Net indebtedness $ 251.7 $ 320.8
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted operating
earnings before
amortization (last 12
months) $ 340.2 $ 338.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net indebtedness ratio 0.74 x 0.95 x
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) 2013 figures have been restated to take into account the effects of IAS
19 amended - Employee Benefits, IFRS 11 - Joint Arrangements and other
elements.
Dividends
Dividend on Participating Shares
The Corporation's Board of Directors declared a quarterly dividend of $0.16 per
share on Class A Subordinate Voting Shares and Class B Shares. This dividend is
payable on July 17, 2014 to shareholders of record at the close of business on
June 30, 2014.
Dividend on Preferred shares
The Corporation's Board of Directors declared a quarterly dividend of $0.4207
per share on Cumulative 5-Year Rate Reset First Preferred Shares, Series D. This
dividend is payable on July 15, 2014. On an annual basis, this represents a
dividend of $1.6875 per preferred share.
Additional Information
Conference Call
Upon releasing its second quarter 2014 results, the Corporation will hold a
conference call for the financial community today at 4:15 p.m. The dial-in
numbers are 1 647-788-4922 or 1 877-223-4471. Media may hear the call in
listen-in only mode or tune in to the simultaneous audio broadcast on the
Corporation's website, which will then be archived for 30 days. For media
requests or interviews, please contact Nathalie St-Jean, Senior Advisor,
Corporation Communications of TC Transcontinental, at 514-954-3581.
Profile
Largest printer and a leading provider of media and marketing activation
solutions in Canada, TC Transcontinental creates products and services that
allow businesses to attract, reach and retain their target customers. The
Corporation specializes in print and digital media, the production of magazines,
newspapers, books and custom content, mass and personalized marketing,
interactive and mobile applications, door-to-door distribution, and also
manufactures a range of flexible packaging products in the United States.
Transcontinental Inc. (TSX:TCL.A)(TSX:TCL.B)(TSX:TCL.PR.D), including TC
Transcontinental, TC Media, TC Transcontinental Printing and TC Transcontinental
Packaging, has over 9,000 employees in Canada and the United States, and
revenues of C$2.1 billion in 2013. Website www.tc.tc.
Forward-looking Statements
Our public communications often contain oral or written forward-looking
statements which are based on the expectations of management and inherently
subject to a certain number of risks and uncertainties, known and unknown. By
their very nature, forward-looking statements are derived from both general and
specific assumptions. The Corporation cautions against undue reliance on such
statements since actual results or events may differ materially from the
expectations expressed or implied in them. Forward-looking statements may
include observations concerning the Corporation's objectives, strategy,
anticipated financial results and business outlook. The Corporation's future
performance may also be affected by a number of factors, many of which are
beyond the Corporation's will or control. These factors include, but are not
limited to, the economic situation in the world and particularly in Canada and
the United States, structural changes in the industries in which the Corporation
operates, the exchange rate, availability of capital, energy costs, competition,
the Corporation's capacity to engage in strategic transactions and integrate
acquisitions into its activities, the regulatory environment, the safety of our
packaging products used in the food industry, innovation of our offering and
concentration of our sales in certain segments. The main risks, uncertainties
and factors that could influence actual results are described in Management's
Discussion and Analysis (MD&A) for the fiscal year ended on October 31st, 2013,
in the latest Annual Information Form and have been updated in the MD&A for the
second quarter ended April 30th, 2014.
Unless otherwise indicated by the Corporation, forward-looking statements do not
take into account the potential impact of nonrecurring or other unusual items,
nor of divestitures, business combinations, mergers or acquisitions which may be
announced after the date of June 5, 2014.
The forward-looking statements in this press release are made pursuant to the
"safe harbour" provisions of applicable Canadian securities legislation.
The forward-looking statements in this release are based on current expectations
and information available as at June 5, 2014. Such forward-looking information
may also be found in other documents filed with Canadian securities regulators
or in other communications. The Corporation's management disclaims any intention
or obligation to update or revise these statements unless otherwise required by
the securities authorities.
CONSOLIDATED STATEMENTS OF EARNINGS
Unaudited
Three months ended Six months ended
April 30 April 30
----------------------------------------------------------------------------
(in millions of Canadian 2014 2013 2014 2013
dollars, except per share data) Restated Restated
----------------------------------------------------------------------------
Revenues $ 498.2 $ 517.8 $ 997.5 $ 1,043.4
Operating expenses 415.4 437.4 846.1 893.6
Restructuring and other costs 2.9 9.2 14.4 21.9
Impairment of assets 0.1 0.7 0.5 2.8
----------------------------------------------------------------------------
Operating earnings before
amortization 79.8 70.5 136.5 125.1
Amortization 24.3 26.2 49.4 52.1
----------------------------------------------------------------------------
Operating earnings 55.5 44.3 87.1 73.0
Net financial expenses 4.0 6.5 8.6 15.2
----------------------------------------------------------------------------
Earnings before share of net
earnings in interests in joint
ventures and income taxes 51.5 37.8 78.5 57.8
Share of net earnings in
interests in joint ventures,
net of related taxes 0.2 0.3 0.5 0.4
Income taxes 14.9 10.7 23.6 13.7
----------------------------------------------------------------------------
Net earnings 36.8 27.4 55.4 44.5
Non-controlling interests 0.4 0.4 0.1 0.1
----------------------------------------------------------------------------
Net earnings attributable to
shareholders of the Corporation 36.4 27.0 55.3 44.4
Dividends on preferred shares,
net of related taxes 1.7 1.7 3.4 3.4
----------------------------------------------------------------------------
Net earnings attributable to
participating shares $ 34.7 $ 25.3 $ 51.9 $ 41.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings per participating
share - basic $ 0.45 $ 0.32 $ 0.67 $ 0.52
----------------------------------------------------------------------------
Net earnings per participating
share - diluted $ 0.44 $ 0.32 $ 0.66 $ 0.52
----------------------------------------------------------------------------
Weighted average number of
participating shares
outstanding - basic (in
millions) 78.0 77.9 78.0 78.0
----------------------------------------------------------------------------
Weighted average number of
participating shares - diluted
(in millions) 78.2 77.9 78.2 78.0
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited
Three months ended Six months ended
April 30 April 30
----------------------------------------------------------------------------
(in millions of Canadian 2014 2013 2014 2013
dollars) Restated Restated
----------------------------------------------------------------------------
Net earnings $ 36.8 $ 27.4 $ 55.4 $ 44.5
Other comprehensive income
(loss)
Items that will be
reclassified to net earnings:
Net change related to cash
flow hedges
Net change in the fair
value of derivatives
designated as cash flow
hedges 0.8 (1.1) 0.2 1.0
Reclassification of the
net change in the fair
value of derivatives
designated as cash flow
hedges in prior periods,
recognized in net
earnings during the
period 0.8 1.4 - (0.1)
Related income taxes 0.3 0.1 0.1 0.3
----------------------------------------------------------------------------
1.3 0.2 0.1 0.6
----------------------------------------------------------------------------
Cumulative translation
differences
Net unrealized exchange
gains (losses) on the
translation of the
financial statements of
foreign operations (0.1) 0.6 2.8 0.3
Unrealized exchange gains
(losses) on the
translation of a debt
designated as a hedge of
a net investment in
foreign operations 0.1 (0.2) (2.4) (0.6)
----------------------------------------------------------------------------
- 0.4 0.4 (0.3)
----------------------------------------------------------------------------
Items that will not be
reclassified to net earnings:
Changes in actuarial gains
and losses in respect of
defined benefit plans
Actuarial gains (losses)
in respect of defined
benefit plans 17.2 (8.6) 11.2 3.4
Related income taxes 4.6 (2.2) 3.0 0.8
----------------------------------------------------------------------------
12.6 (6.4) 8.2 2.6
----------------------------------------------------------------------------
Other comprehensive income
(loss) 13.9 (5.8) 8.7 2.9
----------------------------------------------------------------------------
Comprehensive income $ 50.7 $ 21.6 $ 64.1 $ 47.4
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:
Shareholders of the
Corporation $ 50.3 $ 21.2 $ 64.0 $ 47.3
Non-controlling interests 0.4 0.4 0.1 0.1
----------------------------------------------------------------------------
$ 50.7 $ 21.6 $ 64.1 $ 47.4
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Unaudited
(in millions of Canadian dollars)
----------------------------------------------------------------------------
Attributable to shareholders of the
Corporation
-----------------------------------------------------------
Accumulated
other
Share Contributed Retained comprehensive
capital surplus earnings loss Total
----------------------------------------------------------------------------
Balance as at
October 31, 2013
(Restated) $ 462.8 $ 2.9 $ 362.5 $ (13.2) $ 815.0
Net earnings - - 55.3 - 55.3
Other
comprehensive
income - - - 8.7 8.7
Shareholders'
contributions
and
distributions to
shareholders
Dividends - - (27.2) - (27.2)
Stock-option
based
compensation - 0.3 - - 0.3
----------------------------------------------------------------------------
Balance as at
April 30, 2014 $ 462.8 $ 3.2 $ 390.6 $ (4.5) $ 852.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance as at
November 1, 2012 $ 467.7 $ 2.5 $ 514.2 $ (84.4) $ 900.0
Net earnings - - 44.4 - 44.4
Other
comprehensive
income - - - 2.9 2.9
Shareholders'
contributions
and
distributions to
shareholders
Participating
share
redemptions (6.4) - (5.2) - (11.6)
Dividends - - (103.9) - (103.9)
Stock-option
based
compensation - 0.4 - - 0.4
----------------------------------------------------------------------------
Balance as at
April 30, 2013
(Restated) $ 461.3 $ 2.9 $ 449.5 $ (81.5) $ 832.2
----------------------------------------------------------------------------
----------------------------------------------------------------------------
-------------------------------------------------------------
Non-
controlling
interests Total equity
-------------------------------------------------------------
Balance as at
October 31, 2013
(Restated) $ 0.4 $ 815.4
Net earnings 0.1 55.4
Other
comprehensive
income - 8.7
Shareholders'
contributions
and
distributions to
shareholders
Dividends - (27.2)
Stock-option
based
compensation - 0.3
-------------------------------------------------------------
Balance as at
April 30, 2014 $ 0.5 $ 852.6
-------------------------------------------------------------
-------------------------------------------------------------
Balance as at
November 1, 2012 $ 1.4 $ 901.4
Net earnings 0.1 44.5
Other
comprehensive
income - 2.9
Shareholders'
contributions
and
distributions to
shareholders
Participating
share
redemptions - (11.6)
Dividends (1.4) (105.3)
Stock-option
based
compensation - 0.4
-------------------------------------------------------------
Balance as at
April 30, 2013
(Restated) $ 0.1 $ 832.3
-------------------------------------------------------------
-------------------------------------------------------------
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited
----------------------------------------------------------------------------
(in millions of Canadian dollars) As at As at
April 30, October 31,
2014 2013
Restated
----------------------------------------------------------------------------
Current assets
Cash $ 29.9 $ 26.4
Accounts receivable 381.8 419.2
Income taxes receivable 16.5 12.1
Inventories 80.2 82.0
Prepaid expenses and other current assets 15.1 13.9
----------------------------------------------------------------------------
523.5 553.6
Property, plant and equipment 577.2 596.0
Intangible assets 191.3 194.1
Goodwill 324.0 324.0
Investments in joint ventures 1.3 0.8
Deferred income taxes 143.6 147.7
Other assets 56.8 34.6
----------------------------------------------------------------------------
$ 1,817.7 $ 1,850.8
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Current liabilities
Accounts payable and accrued liabilities $ 237.8 $ 272.8
Provisions 5.6 10.3
Income taxes payable 11.1 6.3
Deferred revenues and deposits 61.2 55.9
Current portion of long-term debt 161.9 218.3
----------------------------------------------------------------------------
477.6 563.6
Long-term debt 119.7 128.9
Deferred income taxes 83.0 67.1
Provisions 39.8 40.2
Other liabilities 245.0 235.6
----------------------------------------------------------------------------
965.1 1,035.4
----------------------------------------------------------------------------
Equity
Share capital 462.8 462.8
Contributed surplus 3.2 2.9
Retained earnings 390.6 362.5
Accumulated other comprehensive loss (4.5) (13.2)
----------------------------------------------------------------------------
Attributable to shareholders of the
Corporation 852.1 815.0
----------------------------------------------------------------------------
Non-controlling interests 0.5 0.4
----------------------------------------------------------------------------
852.6 815.4
----------------------------------------------------------------------------
$ 1,817.7 $ 1,850.8
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
Three months ended Six months ended
April 30 April 30
----------------------------------------------------------------------------
(in millions of Canadian 2014 2013 2014 2013
dollars) Restated Restated
----------------------------------------------------------------------------
Operating activities
Net earnings $ 36.8 $ 27.4 $ 55.4 $ 44.5
Adjustments to reconcile net
earnings and cash flows
from operating activities:
Amortization 31.4 32.1 63.4 64.3
Impairment of assets 0.1 0.7 0.5 2.8
Financial expenses on
long-term debt 3.8 4.5 8.4 10.4
Net losses (gains) on
disposal of assets 0.2 0.1 0.1 (0.1)
Income taxes 14.9 10.7 23.6 13.7
Stock-option based
compensation 0.1 0.2 0.3 0.4
Other (0.8) (0.6) 0.4 1.5
----------------------------------------------------------------------------
Cash flows generated by
operating activities before
changes in non-cash
operating items and income
taxes paid 86.5 75.1 152.1 137.5
Changes in non-cash
operating items (14.7) (1.5) (13.1) 156.8
Income taxes paid (4.1) (3.1) (1.3) (13.9)
----------------------------------------------------------------------------
Cash flows from operating
activities 67.7 70.5 137.7 280.4
----------------------------------------------------------------------------
Investing activities
Business combinations - (1.7) (1.0) (25.0)
Disposals of subsidiaries 1.5 - 1.5 -
Acquisitions of property,
plant and equipment (9.9) (9.2) (18.7) (20.3)
Disposals of property,
plant and equipment 0.1 1.9 0.8 2.2
Increase in intangible
assets (4.9) (7.8) (11.2) (12.0)
----------------------------------------------------------------------------
Cash flows from investing
activities (13.2) (16.8) (28.6) (55.1)
----------------------------------------------------------------------------
Financing activities
Reimbursement of long-term
debt (16.9) (0.6) (25.5) (81.2)
Net increase (decrease) in
revolving term credit
facility (18.0) 44.0 (46.0) (2.5)
Financial expenses on
long-term debt (4.5) (4.8) (8.0) (11.4)
Dividends on participating
shares (12.5) (89.2) (23.8) (100.5)
Dividends on preferred
shares (1.7) (1.7) (3.4) (3.4)
Dividends paid to non-
controlling interests - - - (1.4)
Participating share
redemptions - - - (12.1)
----------------------------------------------------------------------------
Cash flows from financing
activities (53.6) (52.3) (106.7) (212.5)
----------------------------------------------------------------------------
Effect of exchange rate
changes on cash denominated
in foreign currencies 0.1 0.1 1.1 -
----------------------------------------------------------------------------
Net change in cash 1.0 1.5 3.5 12.8
Cash at beginning of period 28.9 24.1 26.4 12.8
----------------------------------------------------------------------------
Cash at end of period $ 29.9 $ 25.6 $ 29.9 $ 25.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Non-cash investing and
financing activities
Net change in capital
asset acquisitions
financed by accounts
payable $ 1.4 $ 0.2 $ - $ (4.6)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
FOR FURTHER INFORMATION PLEASE CONTACT:
Media: Nathalie St-Jean
Senior Advisor, Corporate - Communications
TC Transcontinental
514-954-3581
nathalie.st-jean@tc.tc
www.tc.tc
Financial Community: Jennifer F. McCaughey
Senior Director, Investor Relations
and External Corporate Communications - TC Transcontinental
514-954-2821
jennifer.mccaughey@tc.tc
www.tc.tc
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