MONTREAL, QUEBEC–(Marketwired – June 10, 2016) – Transcontinental Inc. (TSX:TCL.A)(TSX:TCL.B) announces its results for the second quarter of Fiscal 2016, which ended April 30, 2016.
“We experienced a more difficult second quarter in terms of profitability, as certain optimization initiatives that were implemented will only impact our results in upcoming quarters”, said François Olivier, President and Chief Executive Officer of TC Transcontinental. “In our printing division, the second half of the year should be more favorable, since we also have gained market share with some new customer wins in recent months. Our Media Sector already begun to benefit from the efficiency measures implemented during the quarter. As for our packaging division, we have a solid sales funnel which continues to improve, we have invested to increase our production capacity and remain very active on the acquisition front.”
“Finally, we have a sound financial position and continue to generate significant cash flows that will enable us to pursue our transformation.”
Financial Highlights
| (in millions of dollars, except per share amounts) | Q2-2016 | Q2-2015 | % | YTD 2016 | YTD 2015 | % | ||
| Revenues | 497.2 | 490.5 | 1.4 | 996.1 | 980.2 | 1.6 | ||
| Adjusted operating earnings before depreciation and amortization (Adjusted EBITDA) | 83.1 | 87.2 | (4.7 | ) | 167.0 | 168.0 | (0.6 | ) |
| Adjusted operating earnings (Adjusted EBIT) | 56.2 | 61.6 | (8.8 | ) | 113.3 | 117.3 | (3.4 | ) |
| Adjusted net earnings attributable to shareholders of the Corporation | 34.2 | 39.1 | (12.5 | ) | 75.6 | 77.3 | (2.2 | ) |
| Per share | 0.44 | 0.50 | (12.0 | ) | 0.97 | 0.99 | (2.0 | ) |
| Net earnings attributable to shareholders of the Corporation | 5.4 | 81.2 | (93.3 | ) | 42.7 | 119.1 | (64.1 | ) |
| Per share | 0.07 | 1.04 | (93.3 | ) | 0.55 | 1.53 | (64.1 | ) |
| Please refer to the table “Reconciliation of Non-IFRS financial measures” in this press release. |
2016 Second Quarter Results
Revenues for the second quarter of 2016 increased from $490.5 million to $497.2 million. The contribution from the acquisition of Ultra Flex Packaging and the appreciation of the U.S. dollar against the Canadian dollar more than offset the decrease in existing operations. In the printing division, the contribution of previously announced new contracts and the growth of the in-store marketing product niche were more than offset by the decline in advertising spending in several segments and the loss of a U.S. customer early in 2015. However, most of the printing volume stemming from Canadian retailers remained relatively stable. The decrease in the packaging division is mainly attributable to the loss of a customer as a result of its sale and to inventory balancing at an important customer. In the Media Sector, the decline in advertising revenues continued to significantly impact the newspapers in the Local Solutions Group.
Adjusted operating earnings went from $61.6 million to $56.2 million in the second quarter of 2016, a decrease of 8.8%. The contribution from the acquisition of Ultra Flex Packaging, the favourable exchange rate effect and the optimization of the cost structure in the Media Sector only partially offset the decrease in existing operations and the investments made to increase capacity and support the growth strategy of the packaging division.
Adjusted net earnings attributable to shareholders of the Corporation decreased 12.5%, from $39.1 million, or $0.50 per share, to $34.2 million, or $0.44 per share. This decrease is mainly due to lower adjusted operating earnings. Net earnings attributable to shareholders of the Corporation went from $81.2 million, or $1.04 per share, to $5.4 million, or $0.07 per share. This decrease is attributable to several unusual items totalling more than $80 million, including the gain on the sale of the consumer magazine publishing activities and the reversal of the provision for multi-employer pension plans in the second quarter of 2015, as well as the asset impairment charge related to the newspapers in the Atlantic provinces in the second quarter of 2016.
Other Highlights
- On March 10, 2016, TC Transcontinental announced the appointment of Jacynthe Côté, corporate director, to the Board of Directors of the Corporation.
- On April 22, 2016, TC Transcontinental released its latest Corporate Social Responsibility Report entitled “Guide. Mobilize. Achieve.”, marking the completion of the 2013-2015 three-year plan. It also released its 2016-2018 Corporate Social Responsibility Plan entitled “Driving Sustainable Results”. To learn more about TC Transcontinental’s commitments and achievements with respect to corporate social responsibility, please refer to the 2015 Report and the 2016-2018 Plan, which are available on the Corporation’s website at www.tc.tc/socialresponsibility.
- On May 17, 2016, the Corporation won in the “Business Transfer” category at the Mercuriades Awards.
- On May 30, 2016, TC Transcontinental announced that it divested its assets in the province of Saskatchewan. The transaction included the sale of its 13 local newspapers and associated web properties, as well as some commercial printing equipment and related book of business in Saskatchewan. The Saskatoon printing plant will remain in operation for a transition period, after which it will close.
Highlights of the First Half
For the first half of 2016, TC Transcontinental’s revenues grew 1.6%, from $980.2 million to $996.1 million. The acquisition of Ultra Flex Packaging and the appreciation of the U.S. dollar against the Canadian dollar more than offset the decrease in existing operations. In the printing division, the contribution of previously announced new contracts and the growth of the in-store marketing product niche were more than offset by the decline in advertising spending in several segments as well as the loss of a U.S. customer and a Canadian retailer early in 2015. However, most of the printing volume stemming from Canadian retailers remained stable. In the packaging division, both the loss of a customer as a result of its sale and inventory balancing at an important customer had an unfavourable impact. In the Media Sector, the decline in advertising revenues continued to have a significant effect on the newspapers in the Local Solutions Group. In addition, distribution activities were impacted by the exit of a retailer from the Canadian market in 2015.
Adjusted operating earnings went from $117.3 million to $113.3 million in the first half of 2016, a decrease of 3.4%. The contribution from the acquisition of Ultra Flex Packaging, the favourable exchange rate effect and the optimization of the cost structure in the printing division and the Media Sector only partially offset the decrease in existing operations and the investments made to increase capacity and support the growth strategy of the packaging division.
Adjusted net earnings attributable to shareholders of the Corporation decreased 2.2%, from $77.3 million, or $0.99 per share, to $75.6 million, or $0.97 per share. This decrease is mainly due to lower adjusted operating earnings, partially mitigated by a decrease in adjusted income taxes and net financial expenses. Net earnings attributable to shareholders of the Corporation went from $119.1 million, or $1.53 per share, to $42.7 million, or $0.55 per share. This decrease is attributable to several unusual items totalling close to $90 million, including the gain on the sale of the consumer magazine publishing activities, the reversal of the provision for multi-employer pension plans and the gain on the sale of a building in the first half of 2015, as well as the asset impairment charge related to the newspapers in the Atlantic provinces in the second quarter of 2016.
For more detailed financial information, please see Management’s Discussion and Analysis for the second quarter ended April 30th, 2016 as well as the financial statements in the “Investors” section of our website at www.tc.tc
Outlook for 2016
Flyer printing volume is expected to remain relatively stable during the second half of 2016. In addition, the success of our in-store marketing product offering for retailers and the net impact of new contracts, including the contract to print the Toronto Star, should act as positive catalysts during the second half of the year. However, these items should be offset by the continued negative impact of the advertising market on our traditional magazine, newspaper and marketing product printing activities. In addition, the positive impact of the non-recurring contract to print the Census of Canada will end after the third quarter. Lastly, we will continue to improve our operational efficiency in order to offset the decline in revenues.
With respect to our flexible packaging offering, we will continue developing new business opportunities and qualifying our products with customers to drive growth in this division. However, the loss of a customer as a result of its sale in early 2016 and our recent investments to increase our capacity and support our development strategy will continue to have an unfavourable impact on organic growth in the second half of 2016.
Within the Media Sector, the significant impact of the transformation of the advertising market should continue to affect our newspaper publishing activities. However, the impact of the optimization of our cost structure should enable us to stabilize our adjusted operating earnings during the second half of 2016.
Lastly, we expect to continue generating significant cash flows during the next quarters, and our excellent financial position should permit us to continue our transformation in the flexible packaging industry. We will maintain our disciplined acquisition approach in this promising market in order to invest in quality assets that meet our strategic criteria.
Reconciliation of Non-IFRS Financial Measures
Financial information has 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 normalized for evaluating the Corporation’s operating performance. Management uses such non-IFRS financial information to evaluate the performance of its operations and managers. 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.
| Three months ended April 30 | Six months ended April 30 | |||||||||||
| (in millions of dollars, except per share amounts) | 2016 | 2015 | 2016 | 2015 | ||||||||
| Net earnings attributable to shareholders of the Corporation | $ | 5.4 | $ | 81.2 | $ | 42.7 | $ | 119.1 | ||||
| Non-controlling interests | – | (0.2 | ) | – | (0.4 | ) | ||||||
| Net earnings from discontinued operations | – | (30.7 | ) | – | (28.5 | ) | ||||||
| Income taxes | 4.8 | 20.4 | 16.0 | 32.8 | ||||||||
| Share of net earnings in interests in joint ventures, net of related taxes | (0.3 | ) | (0.1 | ) | (0.3 | ) | (0.2 | ) | ||||
| Net financial expenses | 6.4 | 6.3 | 9.5 | 10.2 | ||||||||
| Impairment of assets | 30.3 | 1.4 | 30.3 | 1.4 | ||||||||
| Restructuring and other costs (revenues) | 9.6 | (16.7 | ) | 15.1 | (17.1 | ) | ||||||
| Adjusted operating earnings | $ | 56.2 | $ | 61.6 | $ | 113.3 | $ | 117.3 | ||||
| Depreciation and amortization | 26.9 | 25.6 | 53.7 | 50.7 | ||||||||
| Adjusted operating earnings before depreciation and amortization | $ | 83.1 | $ | 87.2 | $ | 167.0 | $ | 168.0 | ||||
| Net earnings attributable to shareholders of the Corporation | $ | 5.4 | $ | 81.2 | $ | 42.7 | $ | 119.1 | ||||
| Net earnings from discontinued operations | – | (30.7 | ) | – | (28.5 | ) | ||||||
| Impairment of assets (after tax) | 21.9 | 1.0 | 21.9 | 1.0 | ||||||||
| Restructuring and other costs (revenues), net of related taxes | 6.9 | (12.4 | ) | 11.0 | (14.3 | ) | ||||||
| Adjusted net earnings attributable to shareholders of the Corporation | $ | 34.2 | $ | 39.1 | $ | 75.6 | $ | 77.3 | ||||
| Weighted average number of shares outstanding | 77.6 | 78.1 | 77.8 | 78.1 | ||||||||
| Adjusted net earnings attributable to shareholders of the Corporation per share | $ | 0.44 | $ | 0.50 | $ | 0.97 | $ | 0.99 | ||||
| As at April 30, 2016 |
As at October 31, 2015 |
|||||||||||
| Long-term debt | $ | 347.6 | $ | 347.7 | ||||||||
| Current portion of long-term debt | 2.2 | 36.4 | ||||||||||
| Cash | (42.9 | ) | (38.6 | ) | ||||||||
| Net indebtedness | $ | 306.9 | $ | 345.5 | ||||||||
| Adjusted operating earnings before depreciation and amortization (last 12 months) | $ | 377.7 | $ | 378.7 | ||||||||
| Net indebtedness ratio | 0.8 | x | 0.9 | x | ||||||||
Dividend
The Corporation’s Board of Directors declared a quarterly dividend of $0.185 per share on Class A Subordinate Voting Shares and Class B Shares. This dividend is payable on July 21, 2016 to shareholders of record at the close of business on July 5, 2016.
Conference Call
Upon releasing its second quarter 2016 results, the Corporation will hold a conference call for the financial community today at 9:30 a.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, Communications of TC Transcontinental, at 514-954-3581.
Profile
Canada’s largest printer with operations in print, flexible packaging, publishing and digital media, TC Transcontinental’s mission is to create products and services that allow businesses to attract, reach and retain their target customers.
Respect, teamwork, performance and innovation are strong values held by the Corporation and its employees. The Corporation’s commitment to all stakeholders is to pursue its business and philanthropic activities in a responsible manner.
Transcontinental Inc. (TSX:TCL.A)(TSX:TCL.B), known as TC Transcontinental, has close to 8,000 employees in Canada and the United States, and revenues of C$2.0 billion in 2015. 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 its packaging products used in the food industry, innovation of its offering and concentration of its 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, 2015, in the latest Annual Information Form and have been updated in the MD&A for the second quarter ended April 30th, 2016.
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 9, 2016.
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 9, 2016. 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 dollars, except per share data) | 2016 | 2015 | 2016 | 2015 | |||||||
| Revenues | $ | 497.2 | $ | 490.5 | $ | 996.1 | $ | 980.2 | |||
| Operating expenses | 414.1 | 403.3 | 829.1 | 812.2 | |||||||
| Restructuring and other costs (revenues) | 9.6 | (16.7 | ) | 15.1 | (17.1 | ) | |||||
| Impairment of assets | 30.3 | 1.4 | 30.3 | 1.4 | |||||||
| Operating earnings before depreciation and amortization | 43.2 | 102.5 | 121.6 | 183.7 | |||||||
| Depreciation and amortization | 26.9 | 25.6 | 53.7 | 50.7 | |||||||
| Operating earnings | 16.3 | 76.9 | 67.9 | 133.0 | |||||||
| Net financial expenses | 6.4 | 6.3 | 9.5 | 10.2 | |||||||
| Earnings before share of net earnings in interests in joint ventures and income taxes | 9.9 | 70.6 | 58.4 | 122.8 | |||||||
| Share of net earnings in interests in joint ventures, net of related taxes | 0.3 | 0.1 | 0.3 | 0.2 | |||||||
| Income taxes | 4.8 | 20.4 | 16.0 | 32.8 | |||||||
| Net earnings from continuing operations | 5.4 | 50.3 | 42.7 | 90.2 | |||||||
| Net earnings from discontinued operations | – | 30.7 | – | 28.5 | |||||||
| Net earnings | 5.4 | 81.0 | 42.7 | 118.7 | |||||||
| Non-controlling interests | – | (0.2 | ) | – | (0.4 | ) | |||||
| Net earnings attributable to shareholders of the Corporation | $ | 5.4 | $ | 81.2 | $ | 42.7 | $ | 119.1 | |||
| Net earnings per share – basic | |||||||||||
| Continuing operations | $ | 0.07 | $ | 0.64 | $ | 0.55 | $ | 1.15 | |||
| Discontinued operations | – | 0.40 | – | 0.38 | |||||||
| $ | 0.07 | $ | 1.04 | $ | 0.55 | $ | 1.53 | ||||
| Net earnings per share – diluted | |||||||||||
| Continuing operations | $ | 0.07 | $ | 0.64 | $ | 0.55 | $ | 1.15 | |||
| Discontinued operations | – | 0.40 | – | 0.37 | |||||||
| $ | 0.07 | $ | 1.04 | $ | 0.55 | $ | 1.52 | ||||
| Weighted average number of shares outstanding – basic (in millions) | 77.6 | 78.1 | 77.8 | 78.1 | |||||||
| Weighted average number of shares – diluted (in millions) | 77.9 | 78.3 | 78.1 | 78.3 | |||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) |
| Unaudited |
| Three months ended | Six months ended | |||||||||||||
| April 30 | April 30 | |||||||||||||
| (in millions of Canadian dollars) | 2016 | 2015 | 2016 | 2015 | ||||||||||
| Net earnings | $ | 5.4 | $ | 81.0 | $ | 42.7 | $ | 118.7 | ||||||
| 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 | 12.8 | 6.4 | 6.3 | (2.7 | ) | |||||||||
| 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 | 4.1 | 1.0 | 6.1 | 1.5 | ||||||||||
| Related income taxes | 4.6 | 2.0 | 3.3 | (0.3 | ) | |||||||||
| 12.3 | 5.4 | 9.1 | (0.9 | ) | ||||||||||
| Cumulative translation differences | ||||||||||||||
| Net unrealized exchange gains (losses) on the translation of the financial statements of foreign operations | (34.8 | ) | (8.4 | ) | (15.2 | ) | 10.6 | |||||||
| Net change in the fair value of derivatives designated as hedges of net investments in foreign operations | 3.7 | – | 3.0 | – | ||||||||||
| Related income taxes | 1.0 | – | 0.8 | – | ||||||||||
| (32.1 | ) | (8.4 | ) | (13.0 | ) | 10.6 | ||||||||
| 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 | (5.4 | ) | (6.9 | ) | (23.3 | ) | 0.6 | |||||||
| Related income taxes | (1.4 | ) | (1.8 | ) | (6.2 | ) | 0.2 | |||||||
| (4.0 | ) | (5.1 | ) | (17.1 | ) | 0.4 | ||||||||
| Other comprehensive income (loss) (1) | (23.8 | ) | (8.1 | ) | (21.0 | ) | 10.1 | |||||||
| Comprehensive income (loss) | $ | (18.4 | ) | $ | 72.9 | $ | 21.7 | $ | 128.8 | |||||
| Attributable to: | ||||||||||||||
| Shareholders of the Corporation | $ | (18.4 | ) | $ | 73.1 | $ | 21.7 | $ | 129.2 | |||||
| Non-controlling interests | – | (0.2 | ) | – | (0.4 | ) | ||||||||
| $ | (18.4 | ) | $ | 72.9 | $ | 21.7 | $ | 128.8 | ||||||
| (1) | Other comprehensive income (loss) is attributable to continuing operations. |
| 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 income (loss) |
Total | Non- controlling interests |
Total equity |
||||||||||||||||
| Balance as at October 31, 2015 | $ | 368.2 | $ | 3.2 | $ | 625.5 | $ | 19.4 | $ | 1,016.3 | $ | – | $ | 1,016.3 | ||||||||
| Net earnings | – | – | 42.7 | – | 42.7 | – | 42.7 | |||||||||||||||
| Other comprehensive loss | – | – | – | (21.0 | ) | (21.0 | ) | – | (21.0 | ) | ||||||||||||
| Shareholders’ contributions and distributions to shareholders | ||||||||||||||||||||||
| Share redemptions | (3.0 | ) | – | (6.4 | ) | – | (9.4 | ) | – | (9.4 | ) | |||||||||||
| Exercise of stock options | 0.5 | (0.1 | ) | – | – | 0.4 | – | 0.4 | ||||||||||||||
| Dividends | – | – | (27.6 | ) | – | (27.6 | ) | – | (27.6 | ) | ||||||||||||
| Balance as at April 30, 2016 | $ | 365.7 | $ | 3.1 | $ | 634.2 | $ | (1.6 | ) | $ | 1,001.4 | $ | – | $ | 1,001.4 | |||||||
| Balance as at October 31, 2014 | $ | 366.0 | $ | 3.4 | $ | 415.6 | $ | 7.1 | $ | 792.1 | $ | 1.0 | $ | 793.1 | ||||||||
| Net earnings | – | – | 119.1 | – | 119.1 | (0.4 | ) | 118.7 | ||||||||||||||
| Other comprehensive income | – | – | – | 10.1 | 10.1 | – | 10.1 | |||||||||||||||
| Shareholders’ contributions and distributions to shareholders | ||||||||||||||||||||||
| Exercise of stock options | 0.8 | (0.1 | ) | – | – | 0.7 | – | 0.7 | ||||||||||||||
| Dividends | – | – | (25.8 | ) | – | (25.8 | ) | – | (25.8 | ) | ||||||||||||
| Stock-option based compensation | – | 0.1 | – | – | 0.1 | – | 0.1 | |||||||||||||||
| Business disposal | – | – | – | – | – | (0.6 | ) | (0.6 | ) | |||||||||||||
| Balance as at April 30, 2015 | $ | 366.8 | $ | 3.4 | $ | 508.9 | $ | 17.2 | $ | 896.3 | $ | – | $ | 896.3 | ||||||||
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
| Unaudited |
| (in millions of Canadian dollars) | As at | As at | ||||
| April 30, | October 31, | |||||
| 2016 | 2015 (1) | |||||
| Current assets | ||||||
| Cash | $ | 42.9 | $ | 38.6 | ||
| Accounts receivable | 337.3 | 393.0 | ||||
| Income taxes receivable | 7.2 | 15.2 | ||||
| Inventories | 97.9 | 116.3 | ||||
| Prepaid expenses and other current assets | 29.1 | 16.2 | ||||
| 514.4 | 579.3 | |||||
| Property, plant and equipment | 544.5 | 567.5 | ||||
| Intangible assets | 225.0 | 257.5 | ||||
| Goodwill | 452.7 | 459.5 | ||||
| Investments in joint ventures | 2.6 | 2.5 | ||||
| Deferred taxes | 172.6 | 181.6 | ||||
| Other assets | 40.4 | 50.1 | ||||
| $ | 1,952.2 | $ | 2,098.0 | |||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | $ | 274.6 | $ | 339.7 | ||
| Provisions | 12.1 | 10.2 | ||||
| Income taxes payable | 6.8 | 20.7 | ||||
| Deferred revenues and deposits | 54.1 | 51.4 | ||||
| Current portion of long-term debt | 2.2 | 36.4 | ||||
| 349.8 | 458.4 | |||||
| Long-term debt | 347.6 | 347.7 | ||||
| Deferred taxes | 44.9 | 64.4 | ||||
| Provisions | 3.9 | 5.7 | ||||
| Other liabilities | 204.6 | 205.5 | ||||
| 950.8 | 1,081.7 | |||||
| Equity | ||||||
| Share capital | 365.7 | 368.2 | ||||
| Contributed surplus | 3.1 | 3.2 | ||||
| Retained earnings | 634.2 | 625.5 | ||||
| Accumulated other comprehensive income (loss) | (1.6 | ) | 19.4 | |||
| 1,001.4 | 1,016.3 | |||||
| $ | 1,952.2 | $ | 2,098.0 | |||
| (1) | Certain comparative figures have been reclassified to conform to the presentation adopted in the current period. |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| Unaudited |
| Three months ended | Six months ended | |||||||||||||
| April 30 | April 30 | |||||||||||||
| (in millions of Canadian dollars) | 2016 | 2015(2) | 2016 | 2015(2) | ||||||||||
| Operating activities | ||||||||||||||
| Net earnings | $ | 5.4 | $ | 81.0 | $ | 42.7 | $ | 118.7 | ||||||
| Less: Net earnings from discontinued operations | – | 30.7 | – | 28.5 | ||||||||||
| Net earnings from continuing operations | 5.4 | 50.3 | 42.7 | 90.2 | ||||||||||
| Adjustments to reconcile net earnings from continuing operations and cash flows from operating activities: | ||||||||||||||
| Reversal of the provision for multi-employer pension plans | – | (22.6 | ) | – | (22.6 | ) | ||||||||
| Impairment of assets | 30.3 | 1.4 | 30.3 | 1.4 | ||||||||||
| Depreciation and amortization | 34.2 | 32.3 | 67.8 | 63.8 | ||||||||||
| Financial expenses on long-term debt | 4.4 | 4.9 | 9.0 | 10.5 | ||||||||||
| Net losses (gains) on disposal of assets | 0.3 | 0.2 | 0.7 | (6.7 | ) | |||||||||
| Income taxes | 4.8 | 20.4 | 16.0 | 32.8 | ||||||||||
| Net foreign exchange differences and other | 15.5 | 2.7 | 1.9 | (1.0 | ) | |||||||||
| Cash flows generated by operating activities before changes in non-cash operating items and income taxes paid | 94.9 | 89.6 | 168.4 | 168.4 | ||||||||||
| Changes in non-cash operating items (1) | 14.7 | (29.6 | ) | 2.8 | (42.7 | ) | ||||||||
| Income taxes paid | (17.3 | ) | (6.2 | ) | (44.6 | ) | (47.0 | ) | ||||||
| Cash flows from continuing operating activities | 92.3 | 53.8 | 126.6 | 78.7 | ||||||||||
| Investing activities | ||||||||||||||
| Business combinations | (9.9 | ) | – | (9.9 | ) | – | ||||||||
| Business disposals | – | 0.9 | 0.5 | 1.2 | ||||||||||
| Acquisitions of property, plant and equipment | (13.7 | ) | (16.6 | ) | (27.8 | ) | (29.6 | ) | ||||||
| Disposals of property, plant and equipment | 0.2 | 4.3 | 0.2 | 4.5 | ||||||||||
| Increase in intangible assets | (6.3 | ) | (5.9 | ) | (10.9 | ) | (11.4 | ) | ||||||
| Cash flows from investments in continuing operations | (29.7 | ) | (17.3 | ) | (47.9 | ) | (35.3 | ) | ||||||
| Financing activities | ||||||||||||||
| Reimbursement of long-term debt | (13.5 | ) | (0.1 | ) | (13.6 | ) | (65.1 | ) | ||||||
| Net decrease in credit facility | (14.0 | ) | (59.5 | ) | (22.0 | ) | (0.3 | ) | ||||||
| Financial expenses on long-term debt | (2.8 | ) | (3.2 | ) | (8.2 | ) | (11.0 | ) | ||||||
| Interest received related to previous tax reassessments | 2.5 | – | 7.9 | – | ||||||||||
| Exercise of stock options | 0.4 | – | 0.4 | 0.7 | ||||||||||
| Dividends | (14.4 | ) | (13.3 | ) | (27.6 | ) | (25.8 | ) | ||||||
| Share redemptions | – | – | (9.4 | ) | – | |||||||||
| Cash flows from the financing of continuing operations | (41.8 | ) | (76.1 | ) | (72.5 | ) | (101.5 | ) | ||||||
| Effect of exchange rate changes on cash denominated in foreign currencies | (3.5 | ) | (1.3 | ) | (1.9 | ) | 2.1 | |||||||
| Net change in cash from continuing operations | 17.3 | (40.9 | ) | 4.3 | (56.0 | ) | ||||||||
| Net change in cash from discontinued operations | – | 51.9 | – | 56.2 | ||||||||||
| Cash at beginning of period | 25.6 | 24.4 | 38.6 | 35.2 | ||||||||||
| Cash at end of period | $ | 42.9 | $ | 35.4 | $ | 42.9 | $ | 35.4 | ||||||
| Non-cash investing activities | ||||||||||||||
| Net change in capital asset acquisitions financed by accounts payable | $ | 4.0 | $ | 1.3 | $ | 3.2 | $ | 0.7 | ||||||
| (1) | Includes an amount of $31.0 millions that was received and recognized as deferred revenues during the three-month period ended January 31, 2016. |
| (2) | Certain comparative figures have been reclassified to conform to the presentation adopted in the current period. |
Senior Advisor, Communications
TC Transcontinental
514-954-3581
[email protected]
www.tc.tc
Financial Community: Jennifer F. McCaughey
Vice President, Communications
TC Transcontinental
514-954-2821
[email protected]
www.tc.tc
