MONTREAL, Aug. 4, 2017 /CNW Telbec/ - TVA Group Inc. ("TVA
Group" or the "Corporation") announced today that it recorded a net
loss attributable to shareholders in the amount of $1.9 million or $0.04 per share in the second quarter of 2017,
compared with a net loss attributable to shareholders of
$5.7 million or $0.13 per share in the same quarter of 2016.
Second quarter operating highlights:
- Consolidated adjusted operating income1 of
$11,072,000, a favourable variance of
$8,645,000 from the same quarter of
2016.
- $5,076,000 adjusted operating
income1 in the Broadcasting & Production
segment, a favourable variance of $7,507,000 caused mainly by a 30.2% decrease in
the adjusted operating loss1 of "TVA Sports" due to
increased advertising and subscription revenues.
- $3,965,000 adjusted operating
income1 in the Magazines segment, a favourable variance
of $45,000 due primarily to the
savings generated by rationalization plans implemented in recent
quarters.
- $2,031,000 adjusted operating
income1 in the Film Production & Audiovisual
Services segment ("MELS"), a favourable variance of $1,093,000 essentially because of increased
adjusted operating income1 from soundstage and equipment
rental due to higher volume of activities.
"We are satisfied with our second quarter of 2017 results,
particularly in the Broadcasting & Production segment, which
grew its advertising revenues for the third consecutive quarter,
with year-over-year increases of 77.6% at "TVA Sports", 4.2% at the
other specialty services, and 6.7% at TVA Network.
TVA Group's total market share increased by 3.5 points to
39.8%2 in the second quarter of 2017 compared with 36.3%
in the same period of 2016. "TVA Sports" increased its market share
by 1.8 points to 5.4% as a result of large audiences for the
Stanley Cup playoffs. The channel set a new record by registering
the best ratings for the Stanley Cup finals since 2008. The news
and public affairs channel "LCN" grew its market share by 0.8
points to 4.5% and TVA Network by 0.5 points to 23.9%. TVA
Network also had the top 3 most-watched programs in
Quebec during the period,"
commented Julie Tremblay, President
and CEO of the Corporation.
"The Magazines segment's adjusted operating income1
was stable in the second quarter of 2017 compared with the same
quarter of 2016 despite an 11.0% decrease3 in its
operating revenues. The savings generated by the expense
rationalization and reduction plans implemented in recent quarters
have offset the decline in the segment's operating revenues," added
Julie Tremblay.
"Lastly, the arrival of major new productions, including the
Hollywood movie X-Men and
the television series The Bold Type, in the second
quarter, helped boost the Film Production & Audiovisual
Services segment's adjusted operating income,1 which
more than doubled compared with the same quarter of 2016. The
growing demand for film and TV serie production services, combined
with the drawing power of Canada
and of Montreal in particular and
the reputation of our facilities and services in this field, have
led us to submit to the Corporation's Board of Directors a project
to expand our existing complex," concluded Ms. Tremblay.
MELS studios enlargement project
The Corporation's Board of Directors today approved the plan to
expand the MELS production complex in the Technoparc, near the
Bonaventure Autoroute. The project involves construction of a
160,000 square-foot building which will include a
60,000-square-foot soundstage with 50-foot vertical clearance and
adjacent multi-use spaces. The Corporation is in the process of
obtaining the required permits. It hopes to break ground in the
fall and have the facility ready to welcome its first productions
in the summer of 2018.
Definition
Adjusted operating income (loss)("Adjusted operating
results")
In its analysis of operating results, the Corporation defines
adjusted operating income (loss) as net income (loss) before
depreciation of property, plant and equipment, amortization of
intangible assets, financial expenses, operational restructuring
costs and others, income taxes and share of income of associated
corporations. Adjusted operating income (loss) as defined above is
not a measure of results that is consistent with International
Financial Reporting Standards ("IFRS"). Neither is it intended to
be regarded as an alternative to other financial performance
measures or to the statement of cash flows as a measure of
liquidity. This measure should not be considered in isolation or as
a substitute for other performance measures prepared in accordance
with IFRS. This measure is used by management and the Board of
Directors to evaluate the Corporation's consolidated results and
the results of its segments. This measure eliminates the
significant level of impairment, depreciation and amortization of
tangible and intangible assets and is unaffected by the capital
structure or investment activities of the Corporation and its
segments. Adjusted operating income (loss) is also relevant because
it is a significant component of the Corporation's annual incentive
compensation programs. The Corporation's definition of adjusted
operating income (loss) may not be identical to similarly titled
measures reported by other companies.
Forward-looking information disclaimer
The statements in this news release that are not historical
facts may be forward-looking statements and are subject to
important known and unknown risks, uncertainties and assumptions
which could cause the Corporation's actual results for future
periods to differ materially from those set forth in the
forward-looking statements. Forward-looking statements generally
can be identified by the use of the conditional, the use of
forward-looking terminology such as "propose," "will," "expect,"
"may," "anticipate," "intend," "estimate," "plan," "foresee,"
"believe" or the negative of these terms or variations of them or
similar terminology. Certain factors that may cause actual results
to differ from current expectations include seasonality,
operational risks (including pricing actions by competitors and the
risk of loss of key customers in the Film Production &
Audiovisual Services segment), programming, content and production
cost risks, credit risk, government regulation risks, government
assistance risks, changes in economic conditions, fragmentation of
the media landscape, risk related to the Corporation's ability to
adapt to fast-paced technological change and to new delivery and
storage methods, and labour relation risks.
Investors and others are cautioned that the foregoing list of
factors that may affect future results is not exhaustive and that
undue reliance should not be placed on any forward-looking
statements. For more information on the risks, uncertainties and
assumptions that could cause the Corporation's actual results to
differ from current expectations, please refer to the Corporation's
public filings, available at www.sedar.com and http://groupetva.ca,
including in particular the "Risks and Uncertainties" section of
the Corporation's annual Management's Discussion and Analysis for
the year ended December 31, 2016 and
the "Risk Factors" section in the Corporation's 2016 annual
information form.
The forward-looking statements in this news release reflect the
Corporation's expectations as of August 4,
2017 and are subject to change after this date. The
Corporation expressly disclaims any obligation or intention to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, unless
required to do so by the applicable securities laws.
TVA Group
TVA Group Inc., a subsidiary of Quebecor Media Inc., is a
communications company engaged in the broadcasting, film and
audiovisual production, and magazine publishing industries. TVA
Group Inc. is North America's
largest broadcaster of French-language entertainment, information
and public affairs programming and one of the largest
private-sector producers of French-language content. It is also the
largest publisher of French-language magazines and publishes some
of the most popular English-language titles in Canada. The Corporation's Class B shares are
listed on the Toronto Stock Exchange under the ticker symbol
TVA.B.
|
1 See
definition of adjusted operating income (loss) below.
2 Numeris – French Quebec, April 1 to June 30, 2017,
Mon-Sun, 2 a.m. – 2 a.m., all t2+
3 Excluding discontinued titles.
|
TVA GROUP INC.
Interim consolidated statements of loss
|
|
(unaudited)
(in thousands of Canadian dollars, except per-share
amounts)
|
|
|
|
Three-month
periods
ended June 30
|
Six-month periods
ended June 30
|
|
Note
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
2
|
$
|
152,542
|
$
|
144,229
|
$
|
293,666
|
$
|
289,752
|
|
|
|
|
|
|
|
|
|
|
Purchases of goods
and services
|
3
|
|
101,812
|
|
101,480
|
|
204,717
|
|
205,229
|
Employee
costs
|
|
|
39,658
|
|
40,322
|
|
78,471
|
|
81,799
|
Depreciation of
property, plant and equipment and amortization of intangible
assets
|
|
|
8,919
|
|
8,920
|
|
17,742
|
|
17,354
|
Financial
expenses
|
4
|
|
637
|
|
866
|
|
1,272
|
|
1,836
|
Operational
restructuring costs and others
|
5
|
|
4,118
|
|
708
|
|
4,950
|
|
1,160
|
Loss before tax
recovery and share of income of associated
corporations
|
|
|
(2,602)
|
|
(8,067)
|
|
(13,486)
|
|
(17,626)
|
|
|
|
|
|
|
|
|
|
|
Tax
recovery
|
|
|
(595)
|
|
(2,126)
|
|
(3,197)
|
|
(4,225)
|
|
|
|
|
|
|
|
|
|
|
Share of income of
associated corporations
|
|
|
(265)
|
|
(222)
|
|
(467)
|
|
(328)
|
Net
loss
|
|
$
|
(1,742)
|
$
|
(5,719)
|
$
|
(9,822)
|
$
|
(13,073)
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to:
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
|
$
|
(1,870)
|
$
|
(5,676)
|
$
|
(9,902)
|
$
|
(13,065)
|
|
Non-controlling
interest
|
|
|
128
|
|
(43)
|
|
80
|
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share attributable to shareholders
|
6 c)
|
$
|
(0.04)
|
$
|
(0.13)
|
$
|
(0.23)
|
$
|
(0.30)
|
|
See accompanying
notes to interim condensed consolidated financial
statements.
|
TVA GROUP INC.
Interim consolidated statements of comprehensive
loss
|
|
(unaudited)
(in thousands of Canadian dollars)
|
|
|
|
Three-month
periods
ended June 30
|
Six-month periods
ended June 30
|
|
Note
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(1,742)
|
$
|
(5,719)
|
$
|
(9,822)
|
$
|
(13,073)
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
items that may be reclassified to income:
|
|
|
|
|
|
|
|
|
|
|
Cash flow
hedge:
|
|
|
|
|
|
|
|
|
|
|
|
Gain on valuation of
derivative financial instruments
|
8
|
|
65
|
|
71
|
|
110
|
|
163
|
|
|
Deferred income
taxes
|
8
|
|
(17)
|
|
(19)
|
|
(29)
|
|
(44)
|
Other comprehensive
items that will not be reclassified to income:
|
|
|
|
|
|
|
|
|
|
|
Defined benefit
plans:
|
|
|
|
|
|
|
|
|
|
|
|
Re-measurement
loss
|
8
|
|
–
|
|
(10,000)
|
|
–
|
|
(25,000)
|
|
|
Deferred income
taxes
|
8
|
|
–
|
|
2,685
|
|
–
|
|
6,685
|
|
|
|
48
|
|
(7,263)
|
|
81
|
|
(18,196)
|
Comprehensive
loss
|
|
$
|
(1,694)
|
$
|
(12,982)
|
$
|
(9,741)
|
$
|
(31,269)
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
(loss) income
attributable
to:
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
|
$
|
(1,822)
|
$
|
(12,939)
|
$
|
(9,821)
|
$
|
(31,261)
|
|
Non-controlling
interest
|
|
|
128
|
|
(43)
|
|
80
|
|
(8)
|
|
See accompanying
notes to interim condensed consolidated financial
statements.
|
TVA GROUP INC.
Interim consolidated statements of equity
|
|
(unaudited)
(in thousands of Canadian dollars)
|
|
|
Equity
attributable to shareholders
|
Equity
attributable to
non-controlling
interest
|
Total
equity
|
|
Capital
stock
(note 6)
|
Contributed
surplus
|
Retained
earnings
|
Accumulated
other
comprehensive
(loss) income
(note 8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at
December 31, 2015
|
$
|
207,280
|
$
|
581
|
$
|
107,369
|
$
|
(6,474)
|
$
|
676
|
$
|
309,432
|
Net loss
|
|
–
|
|
–
|
|
(13,065)
|
|
–
|
|
(8)
|
|
(13,073)
|
Other comprehensive
loss
|
|
–
|
|
–
|
|
–
|
|
(18,196)
|
|
–
|
|
(18,196)
|
Balance as at June
30, 2016
|
|
207,280
|
|
581
|
|
94,304
|
|
(24,670)
|
|
668
|
|
278,163
|
Net (loss)
income
|
|
–
|
|
–
|
|
(26,790)
|
|
–
|
|
172
|
|
(26,618)
|
Other comprehensive
income
|
|
–
|
|
–
|
|
–
|
|
26,680
|
|
–
|
|
26,680
|
Balance as at
December 31, 2016
|
|
207,280
|
|
581
|
|
67,514
|
|
2,010
|
|
840
|
|
278,225
|
Net (loss)
income
|
|
–
|
|
–
|
|
(9,902)
|
|
–
|
|
80
|
|
(9,822)
|
Other comprehensive
income
|
|
–
|
|
–
|
|
–
|
|
81
|
|
–
|
|
81
|
Balance as at June
30, 2017
|
$
|
207,280
|
$
|
581
|
$
|
57,612
|
$
|
2,091
|
$
|
920
|
$
|
268,484
|
|
See accompanying
notes to interim condensed consolidated financial
statements.
|
TVA GROUP INC.
Interim consolidated balance sheets
|
|
(unaudited)
(in thousands of Canadian dollars)
|
|
|
Note
|
June 30,
2017
|
December 31,
2016
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash
|
|
$
|
1,018
|
$
|
17,219
|
|
Accounts
receivable
|
|
|
153,642
|
|
142,663
|
|
Income
taxes
|
|
|
3,148
|
|
3,966
|
|
Programs, broadcast
rights and inventories
|
|
|
63,626
|
|
77,628
|
|
Prepaid
expenses
|
|
|
7,741
|
|
3,870
|
|
|
|
229,175
|
|
245,346
|
Non-current
assets
|
|
|
|
|
|
|
Broadcast
rights
|
|
|
45,779
|
|
44,684
|
|
Investments
|
|
|
13,166
|
|
12,756
|
|
Property, plant and
equipment
|
|
|
202,889
|
|
205,843
|
|
Intangible
assets
|
|
|
28,743
|
|
32,493
|
|
Goodwill
|
|
|
37,885
|
|
37,885
|
|
Defined benefit plan
asset
|
|
|
3,171
|
|
4,250
|
|
Deferred income
taxes
|
|
|
6,050
|
|
3,351
|
|
|
|
337,683
|
|
341,262
|
Total
assets
|
|
$
|
566,858
|
$
|
586,608
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Bank
overdraft
|
|
$
|
6,631
|
$
|
–
|
|
Accounts payable and
accrued liabilities
|
|
|
100,570
|
|
105,523
|
|
Income
taxes
|
|
|
818
|
|
1,250
|
|
Broadcast rights
payable
|
|
|
79,029
|
|
92,627
|
|
Provisions
|
|
|
8,057
|
|
6,638
|
|
Deferred
revenues
|
|
|
15,431
|
|
19,847
|
|
Short-term
debt
|
|
|
8,437
|
|
6,562
|
|
|
|
218,973
|
|
232,447
|
Non-current
liabilities
|
|
|
|
|
|
|
Long-term
debt
|
|
|
64,817
|
|
62,561
|
|
Other
liabilities
|
|
|
12,812
|
|
11,579
|
|
Deferred income
taxes
|
|
|
1,772
|
|
1,796
|
|
|
|
79,401
|
|
75,936
|
Equity
|
|
|
|
|
|
|
Capital
stock
|
6
|
|
207,280
|
|
207,280
|
|
Contributed
surplus
|
|
|
581
|
|
581
|
|
Retained
earnings
|
|
|
57,612
|
|
67,514
|
|
Accumulated other
comprehensive income
|
8
|
|
2,091
|
|
2,010
|
|
Equity attributable
to shareholders
|
|
|
267,564
|
|
277,385
|
|
Non-controlling
interest
|
|
|
920
|
|
840
|
|
|
|
268,484
|
|
278,225
|
Total liabilities
and equity
|
|
$
|
566,858
|
$
|
586,608
|
|
See accompanying
notes to interim condensed consolidated financial
statements.
|
On August 4, 2017, the Board of
Directors approved the interim condensed consolidated financial
statements for the three-month and six-month periods ended
June 30, 2017 and
2016.
TVA GROUP INC.
Interim consolidated statements of cash flows
|
|
(unaudited)
(in thousands of Canadian dollars)
|
|
|
|
Three-month
periods
ended June 30
|
Six-month periods
ended June 30
|
|
Note
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Cash flows related
to operating activities
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,742)
|
$
|
(5,719)
|
$
|
(9,822)
|
$
|
(13,073)
|
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
8,969
|
|
8,989
|
|
17,841
|
|
17,492
|
|
|
Share of income of
associated corporations
|
|
|
(265)
|
|
(222)
|
|
(467)
|
|
(328)
|
|
|
Deferred income
taxes
|
|
|
(1,061)
|
|
(2,032)
|
|
(2,753)
|
|
(3,800)
|
|
|
Loss on contingent
consideration receivable
|
5
|
|
–
|
|
198
|
|
–
|
|
198
|
|
|
Loss on valuation of
derivative financial instruments
|
|
|
–
|
|
1
|
|
1
|
|
3
|
|
|
|
5,901
|
|
1,215
|
|
4,800
|
|
492
|
|
Net change in
non-cash balances related to operating activities
|
|
|
596
|
|
6,325
|
|
(19,717)
|
|
2,272
|
Cash flows provided
by (used in) operating activities
|
|
|
6,497
|
|
7,540
|
|
(14,917)
|
|
2,764
|
|
|
|
|
|
|
|
|
|
|
Cash flows related
to investing activities
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
|
|
(5,146)
|
|
(3,306)
|
|
(10,886)
|
|
(16,197)
|
|
Additions to
intangible assets
|
|
|
(690)
|
|
(546)
|
|
(1,038)
|
|
(1,045)
|
|
Net change in
investments
|
|
|
57
|
|
293
|
|
57
|
|
293
|
|
Business
disposal
|
|
|
–
|
|
222
|
|
–
|
|
222
|
Cash flows used in
investing activities
|
|
|
(5,779)
|
|
(3,337)
|
|
(11,867)
|
|
(16,727)
|
|
|
|
|
|
|
|
|
|
|
Cash flows related
to financing activities
|
|
|
|
|
|
|
|
|
|
|
Change in bank
overdraft
|
|
|
(583)
|
|
(5,574)
|
|
6,631
|
|
6,244
|
|
(Decrease) increase
in long-term debt
|
|
|
(1,266)
|
|
2,058
|
|
4,032
|
|
1,131
|
|
Repayment of
derivative financial instruments
|
|
|
(39)
|
|
(46)
|
|
(80)
|
|
(96)
|
Cash flows (used in)
provided by financing activities
|
|
|
(1,888)
|
|
(3,562)
|
|
10,583
|
|
7,279
|
Net change in
cash
|
|
|
(1,170)
|
|
641
|
|
(16,201)
|
|
(6,684)
|
Cash at beginning
of period
|
|
|
2,188
|
|
4,671
|
|
17,219
|
|
11,996
|
Cash at end of
period
|
|
$
|
1,018
|
$
|
5,312
|
$
|
1,018
|
$
|
5,312
|
Interest and taxes
reflected as operating activities
|
|
|
|
|
|
|
|
|
|
|
Net interest
paid
|
|
$
|
645
|
$
|
637
|
$
|
1,225
|
$
|
1,271
|
|
Income taxes
(received) paid (net of payments or refunds)
|
|
|
(104)
|
|
936
|
|
(830)
|
|
2,046
|
|
See accompanying
notes to interim condensed consolidated financial
statements.
|
TVA GROUP INC.
Notes to interim condensed
consolidated financial statements
Three-month and six-month periods ended June 30, 2017 and 2016 (unaudited)
(Tabular amounts are expressed in thousands of Canadian dollars,
except per share and per option amounts)
TVA Group Inc. ("TVA Group" or the "Corporation") is governed by
the Quebec Business Corporations Act. TVA Group is a
communications company engaged in the Broadcasting &
Production, Film Production & Audiovisual Services, and
Magazines businesses (note 10). The Corporation is a subsidiary of
Quebecor Media Inc. ("Quebecor Media" or the "parent corporation")
and its ultimate parent corporation is Quebecor Inc. ("Quebecor").
The Corporation's head office is located at 1600 de Maisonneuve
Boulevard East, Montreal, Quebec,
Canada.
The Corporation's businesses experience significant seasonality
due to, among other factors, seasonal advertising patterns,
consumers' viewing, reading and listening habits, and the
production needs of international and local producers. Because the
Corporation depends on the sale of advertising for a significant
portion of its revenues, operating results are also sensitive to
prevailing economic conditions, including changes in local,
regional and national economic conditions, particularly as they may
affect advertising expenditures. Accordingly, the results of
operations for interim periods should not necessarily be considered
indicative of full-year results.
1. Basis of presentation
These consolidated financial statements were prepared in
accordance with International Financial Reporting Standards
("IFRS") as issued by the International Accounting Standards Board
("IASB"), except that they do not include all disclosures required
under IFRS for annual consolidated financial statements. In
particular, these consolidated financial statements were prepared
in accordance with IAS 34, Interim Financial Reporting, and
accordingly, they are condensed consolidated financial statements.
These condensed consolidated financial statements should be read in
conjunction with the Corporation's 2016 annual consolidated
financial statements, which describe the accounting policies used
to prepare these financial statements.
Certain comparative figures for the three-month and six-month
periods ended June 30, 2016 have been
restated to conform to the presentation adopted for the three-month
and six-month periods ended June 30,
2017.
2. Revenues
The breakdown of revenues between advertising services,
royalties, rental and postproduction services and other services
rendered, and product sales is as follows:
|
|
|
|
Three-month
periods ended June
30
|
Six-month
periods ended June
30
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Advertising
services
|
$
|
81,393
|
$
|
76,324
|
$
|
154,472
|
$
|
147,515
|
Royalties
|
|
32,183
|
|
28,761
|
|
64,371
|
|
57,923
|
Rental and
postproduction services and other services rendered
|
|
13,659
|
|
11,521
|
|
25,123
|
|
28,296
|
Product
sales
|
|
25,307
|
|
27,623
|
|
49,700
|
|
56,018
|
|
$
|
152,542
|
$
|
144,229
|
$
|
293,666
|
$
|
289,752
|
3. Purchases of goods and services
The main components of purchases of goods and services are as
follows:
|
|
|
|
Three-month
periods
ended June
30
|
Six-month
periods
ended June
30
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Rights and production
costs
|
$
|
69,792
|
$
|
67,514
|
$
|
139,024
|
$
|
137,971
|
Printing and
distribution
|
|
6,838
|
|
8,635
|
|
13,609
|
|
16,823
|
Services rendered by
the parent corporation
|
|
|
|
|
|
|
|
|
|
- Commissions on
advertising sales
|
|
6,154
|
|
5,700
|
|
11,492
|
|
10,784
|
|
- Others
|
|
2,216
|
|
2,189
|
|
4,458
|
|
4,391
|
Building
costs
|
|
4,706
|
|
5,154
|
|
10,565
|
|
10,777
|
Marketing,
advertising and promotion
|
|
4,293
|
|
5,597
|
|
8,558
|
|
9,194
|
Others
|
|
7,813
|
|
6,691
|
|
17,011
|
|
15,289
|
|
$
|
101,812
|
$
|
101,480
|
$
|
204,717
|
$
|
205,229
|
4. Financial expenses
|
|
|
|
Three-month
periods
ended June
30
|
Six-month
periods
ended June
30
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Interest on long-term
debt
|
$
|
614
|
$
|
603
|
$
|
1,202
|
$
|
1,276
|
Amortization of
financing costs
|
|
50
|
|
69
|
|
99
|
|
138
|
Interest expense on
net defined benefit liability or asset
|
|
25
|
|
87
|
|
49
|
|
174
|
Foreign exchange
(gain) loss
|
|
(78)
|
|
98
|
|
(108)
|
|
233
|
Others
|
|
26
|
|
9
|
|
30
|
|
15
|
|
$
|
637
|
$
|
866
|
$
|
1,272
|
$
|
1,836
|
5. Operational restructuring costs and others
In the second quarter of 2017, the Corporation recorded a
$3,663,000 allowance for onerous
leases extending up to June 2022 for
premises that are unused following implementation of
rationalization plans in the Magazines segment.
In the three-month and six-month periods ended June 30, 2017 and 2016, the Corporation recorded
the following operational restructuring costs in connection with
elimination of positions:
|
|
|
|
Three-month
periods
ended June 30
|
Six-month
periods ended
June 30
|
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
|
|
|
|
Broadcasting &
Production
|
$
|
219
|
$
|
404
|
$
|
691
|
$
|
404
|
Magazines
|
|
261
|
|
76
|
|
407
|
|
390
|
Film Production &
Audiovisual Services
|
|
3
|
|
18
|
|
137
|
|
96
|
|
$
|
483
|
$
|
498
|
$
|
1,235
|
$
|
890
|
During the second quarter of 2016, the Corporation had
recognized a $198,000 loss arising
from the final adjustment to a contingent consideration related to
the sale of the book publishing operations acquired from
Transcontinental Inc.
6. Capital stock
a) Authorized capital stock
An unlimited number of Class A common shares, participating,
voting, without par value.
An unlimited number of Class B shares, participating,
non-voting, without par value.
An unlimited number of preferred shares, non-participating,
non-voting, with a par value of $10
each, issuable in series.
b) Issued and outstanding capital stock
|
|
|
|
|
June
30,
2017
|
|
December 31,
2016
|
|
|
|
|
|
|
4,320,000 Class A
common shares
|
$
|
72
|
|
$
|
72
|
38,885,535 Class B
shares
|
|
207,208
|
|
|
207,208
|
|
$
|
207,280
|
|
$
|
207,280
|
c) Loss per share attributable to shareholders
The following table shows the computation of loss per basic and
diluted share attributable to shareholders:
|
|
|
|
Three-month
periods
ended June
30
|
Six-month
periods
ended June
30
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to shareholders
|
$
|
(1,870)
|
$
|
(5,676)
|
$
|
(9,902)
|
$
|
(13,065)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of basic and diluted shares outstanding
|
|
43,205,535
|
|
43,205,535
|
|
43,205,535
|
|
43,205,535
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share attributable to shareholders
|
$
|
(0.04)
|
$
|
(0.13)
|
$
|
(0.23)
|
$
|
(0.30)
|
The loss per diluted share calculation does not take into
consideration the potential dilutive effect of stock options of the
Corporation, because their impact is non-dilutive.
7. Stock-based compensation and other stock-based
payments
|
|
|
Six-month period
ended June 30, 2017
|
|
Corporation's Class
B stock options
|
Quebecor
Media stock options
|
|
Number
|
Weighted
average
exercise price
|
Number
|
Weighted
average
exercise price
|
|
|
|
|
|
|
|
Balance as at
December 31, 2016
|
357,632
|
$
|
12.71
|
173,250
|
$
|
62.44
|
Exercised
|
–
|
|
–
|
(21,350)
|
|
64.59
|
Cancelled
|
(104,915)
|
|
14.00
|
(7,400)
|
|
64.78
|
Balance as at June
30, 2017
|
252,717
|
$
|
12.18
|
144,500
|
$
|
62.01
|
Of the options outstanding as at June 30,
2017, 198,717 Corporation Class B stock options at an
average exercise price of $13.44 and
18,000 Quebecor Media stock options at an average price of
$65.97 could be exercised.
During the three-month period ended June
30, 2017, 15,550 Quebecor Media stock options were exercised
for a cash consideration of $327,000
(3,800 stock options were exercised for a cash consideration of
$30,000 in the same period of 2016).
During the six-month period ended June 30,
2017, 21,350 Quebecor Media stock options were exercised for
a cash consideration of $378,000
(3,800 stock options were exercised for a cash consideration of
$30,000 in the same period of
2016).
Deferred stock unit ("DSU") and performance stock unit ("PSU")
plans
TVA Group has a DSU plan and a PSU plan for some management
employees based on TVA Group Class B Non-Voting Shares ("TVA Group
Class B Shares"). Quebecor also has DSU and PSU plans for its
employees and those of its subsidiaries, based on, among other
things, Quebecor Class B Shares. Under these plans, the DSUs vest
over six years and will be redeemed for cash only upon the
participant's retirement or cessation of employment, as the case
may be. The PSUs vest over three years and will be redeemed for
cash at the end of that period, subject to achievement of financial
targets. Under the TVA Group plan, holders of DSUs and PSUs are
entitled to receive dividends on TVA Group Class B Shares in the
form of additional units. Under the Quebecor plan, holders of DSUs
and PSUs are entitled to receive dividends on Quebecor Class B
Shares in the form of additional units.
The following table shows changes in outstanding DSUs and PSUs
during the six-month period ended June 30, 2017:
|
|
|
Outstanding
units
|
|
Corporation's stock units
|
Quebecor stock
units
|
|
DSU
|
PSU
|
DSU
|
PSU
|
|
|
|
|
|
Balance as at
December 31, 2016
|
159,499
|
212,671
|
11,482
|
12,762
|
Granted
|
–
|
–
|
18
|
22
|
Exercised
|
(1,114)
|
–
|
(119)
|
–
|
Cancelled
|
(4,232)
|
(7,128)
|
(451)
|
(634)
|
Balance as at June
30, 2017
|
154,153
|
205,543
|
10,930
|
12,150
|
Deferred stock unit ("DSU") plan for directors
As of June 30, 2017, the total
number of DSUs outstanding under this plan was 62,396 (43,932 as of
December 31,2016).
Stock-based compensation expense
During the three-month and six-month periods ended June 30, 2017, compensation expenses in the
amount of $842,000 and $1,244,000 respectively were recorded in respect
of all stock-based compensation plans ($289,000 and $652,000 in the same periods of 2016).
8. Accumulated other comprehensive (loss) income
|
|
|
|
|
Cash
flow hedge
|
Defined benefit plans
|
Total
|
|
|
|
|
|
|
|
Balance as at
December 31, 2015
|
$
|
(338)
|
$
|
(6,136)
|
$
|
(6,474)
|
Other comprehensive
income (loss)
|
|
119
|
|
(18,315)
|
|
(18,196)
|
Balance as at June
30, 2016
|
|
(219)
|
|
(24,451)
|
|
(24,670)
|
Other comprehensive
income
|
|
96
|
|
26,584
|
|
26,680
|
Balance as at
December 31, 2016
|
|
(123)
|
|
2,133
|
|
2,010
|
Other comprehensive
income
|
|
81
|
|
–
|
|
81
|
Balance as at June
30, 2017
|
$
|
(42)
|
$
|
2,133
|
$
|
2,091
|
|
|
|
|
|
|
|
9. Fair value of financial instruments
In accordance with IFRS 13, Fair Value Measurement, the
Corporation has considered the following fair value hierarchy. This
hierarchy reflects the significance of the inputs used in measuring
the financial instruments accounted for at fair value on the
consolidated balance sheets:
Level 1:
|
Quoted prices
(unadjusted) in active markets for identical assets or
liabilities;
|
Level 2:
|
Inputs other than
quoted prices included in Level 1 that are observable for the asset
or liability, either directly (i.e., as prices) or indirectly
(i.e., derived from prices); and
|
Level 3:
|
Inputs that are not
based on observable market data (unobservable inputs).
|
The fair value of long-term debt and of the derivative financial
instrument are estimated based on a valuation model using Level 2
inputs. Fair value is based on discounted cash flows using
period-end market yields or the market value of similar financial
instruments with the same maturity.
The book value and fair value of long-term debt and the
derivative financial instrument as at June
30, 2017 and December 31, 2016
are as follows:
|
|
|
|
June 30,
2017
|
December 31,
2016
|
|
Carrying
amount
|
Fair
value
|
Carrying
amount
|
Fair
value
|
|
|
|
|
|
|
|
|
|
Derivative financial
instrument
|
$
|
133
|
$
|
133
|
$
|
322
|
$
|
322
|
Long-term
debt1
|
|
73,639
|
|
73,639
|
|
69,607
|
|
69,607
|
1 The
book value of long-term debt excludes deferred financing
costs.
|
10. Segmented information
The Corporation's operations consist of the following
segments:
- The Broadcasting & Production segment, which
includes the operations of TVA Network (including the subsidiary
and divisions TVA Productions inc., TVA Nouvelles and TVA
Interactif), specialty services, the marketing of digital products
associated with the various televisual brands, commercial
production services and distribution of audiovisual products.
- The Magazines segment, which through its
subsidiaries, notably TVA Publications inc. and
Les Publications Charron & Cie inc., publishes
magazines in various fields including the arts, entertainment,
television, fashion, sports and decoration, markets digital
products associated with the various magazine brands and provides
custom publishing, print advertising production and premedia
services.
- The Film Production & Audiovisual Services segment,
which through its subsidiaries
Mels Studios and Postproduction G.P. and Mels
Dubbing Inc. provides soundstage and equipment rental, dubbing,
postproduction and visual effects services.
|
|
|
|
Three-month
periods
ended June
30
|
Six-month
periods
ended June
30
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Broadcasting &
Production
|
$
|
117,252
|
$
|
105,061
|
$
|
228,023
|
$
|
211,024
|
|
Magazines
|
|
23,709
|
|
29,197
|
|
45,158
|
|
56,684
|
|
Film Production &
Audiovisual Services
|
|
14,214
|
|
12,650
|
|
25,778
|
|
28,162
|
|
Intersegment
items
|
|
(2,633)
|
|
(2,679)
|
|
(5,293)
|
|
(6,118)
|
|
|
152,542
|
|
144,229
|
|
293,666
|
|
289,752
|
Adjusted operating
income (loss) 1
|
|
|
|
|
|
|
|
|
|
Broadcasting &
Production
|
|
5,076
|
|
(2,431)
|
|
5,733
|
|
(6,315)
|
|
Magazines
|
|
3,965
|
|
3,920
|
|
4,349
|
|
5,979
|
|
Film Production &
Audiovisual Services
|
|
2,031
|
|
938
|
|
396
|
|
3,060
|
|
|
11,072
|
|
2,427
|
|
10,478
|
|
2,724
|
Depreciation of
property, plant and equipment and amortization of intangible
assets
|
|
8,919
|
|
8,920
|
|
17,742
|
|
17,354
|
Financial
expenses
|
|
637
|
|
866
|
|
1,272
|
|
1,836
|
Operational
restructuring costs and others
|
|
4,118
|
|
708
|
|
4,950
|
|
1,160
|
Loss before tax
recovery and share of income of associated
corporations
|
$
|
(2,602)
|
$
|
(8,067)
|
$
|
(13,486)
|
$
|
(17,626)
|
The above-noted intersegment items represent the elimination of
revenues from normal course business transactions between the
Corporation's business segments.
(1)
|
The Chief Executive
Officer uses adjusted operating income (loss) as a measure of
financial performance for assessing the performance of each of the
Corporation's segments. Adjusted operating income (loss) is defined
as net income (loss) before depreciation of property, plant and
equipment, amortization of intangible assets, financial expenses,
operational restructuring costs and others, income taxes and share
of income of associated corporations. Adjusted operating income
(loss) as defined above is not a measure of results that is
consistent with IFRS.
|
SOURCE TVA Group