Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for
the third quarter of fiscal 2024, which ended
July 28, 2024.
"I am satisfied with the increase in our results
in both the Packaging Sector and the Retail Services and Printing
Sector," said Thomas Morin, President and Chief Executive
Officer of TC Transcontinental. "This fourth consecutive quarter of
improvement in our profitability is the results of our cost
reduction initiatives, including the optimization of our
manufacturing network, as well as our efforts to market higher
value-added products.
"In our Packaging Sector, despite the ongoing
pressure on our medical market activities, we experienced a modest
increase in volume. Our cost reduction initiatives, combined with
volume growth, contributed to a solid increase of 20.6% in adjusted
operating earnings before depreciation and amortization.
"In our Retail Services and Printing Sector, we
posted a 12.4% increase in adjusted operating earnings before
depreciation and amortization. As in the previous quarter, the
actions taken to improve our cost structure, a more favourable
product mix, including the roll-out of raddarTM, as well as growth
in our in-store marketing activities, have shown results."
"The implementation of our two-year program
aimed at improving our profitability and our financial position is
proceeding in accordance with the objectives announced in
December 2023," added Donald LeCavalier, Executive Vice
President and Chief Financial Officer of TC Transcontinental. We
remain on track to generate annual recurring savings of
approximately $30 million by the end of fiscal 2024. Our
ability to generate significant cash flows enables us to reduce our
net indebtedness and improve our balance sheet while allocating
capital to our share repurchase program."
Financial Highlights
|
(in millions of dollars, except per share amounts) |
Q3-2024 |
Q3-2023 |
Variationin % |
|
Revenues |
$700.0 |
$706.7 |
(0.9 |
) % |
|
Operating earnings before depreciation and amortization |
121.5 |
95.3 |
27.5 |
|
|
Adjusted operating earnings before depreciation and amortization
(1) |
121.0 |
107.9 |
12.1 |
|
|
Operating earnings |
69.2 |
39.2 |
76.5 |
|
|
Adjusted operating earnings (1) |
84.2 |
70.2 |
19.9 |
|
|
Net earnings attributable to shareholders of the Corporation |
43.6 |
20.9 |
108.6 |
|
|
Net earnings attributable to shareholders of the Corporation per
share |
0.50 |
0.24 |
108.3 |
|
|
Adjusted net earnings attributable to shareholders of the
Corporation (1) |
51.4 |
44.0 |
16.8 |
|
|
Adjusted net earnings attributable to shareholders of the
Corporation per share (1) |
0.60 |
0.51 |
17.6 |
|
| (1) Please
refer to the section entitled "Reconciliation of Non-IFRS Financial
Measures" in this Press release for adjusted data presented
above. |
Results for the Third Quarter of Fiscal
2024
Revenues decreased by $6.7 million, or 0.9%,
from $706.7 million in the third quarter of 2023 to $700.0
million in the corresponding period of 2024. This decrease is
mainly due to lower volume in the Retail Services and Printing
Sector, partially mitigated by the favourable effect of exchange
rate fluctuations as well as higher volume in the Packaging
Sector.
Operating earnings before depreciation and
amortization increased by $26.2 million, or 27.5%, from $95.3
million in the third quarter of 2023 to $121.5 million in the
third quarter of 2024. This increase in mainly attributable to
our cost reduction initiatives, the decrease in restructuring and
other costs, a more favourable product mix in the Retail Services
and Printing Sector, the favourable effect of exchange rate
fluctuations and higher volume in the Packaging Sector, partially
offset by lower volume in the Retail Services and Printing
Sector.
Adjusted operating earnings before depreciation
and amortization increased by $13.1 million, or 12.1%, from $107.9
million in the third quarter of 2023 to $121.0 million in the
third quarter of 2024. This increase is mainly attributable to
our cost reduction initiatives, a more favourable product mix in
the Retail Services and Printing Sector, the favourable effect of
exchange rate fluctuations and higher volume in the Packaging
Sector, partially offset by lower volume in the Retail Services and
Printing Sector.
Net earnings attributable to shareholders of the
Corporation increased by $22.7 million, or 108.6%, from $20.9
million in the third quarter of 2023 to $43.6 million in
the third quarter of 2024. This increase is mainly due to the
previously explained increase in operating earnings before
depreciation and amortization, the decrease in depreciation and
amortization, and lower financial expenses, partially offset by
higher income taxes. On a per share basis, net earnings
attributable to shareholders of the Corporation went from $0.24 to
$0.50, respectively.
Adjusted net earnings attributable to
shareholders of the Corporation increased by $7.4 million, or
16.8%, from $44.0 million in the third quarter of 2023 to
$51.4 million in the third quarter of 2024. This increase is
mainly attributable to the previously explained increase in
adjusted operating earnings before depreciation and amortization,
the decrease in depreciation and amortization, and lower financial
expenses, partially offset by higher income taxes. On a per share
basis, adjusted net earnings attributable to shareholders of the
Corporation went from $0.51 to $0.60, respectively.
Results for the First Nine Months of Fiscal
2024
Revenues decreased by $97.3 million, or
4.5%, from $2,160.9 million in the first nine months of
fiscal 2023 to $2,063.6 million in the corresponding
period of 2024. This decrease is mainly due to lower volume in the
two main operating sectors.
Operating earnings before depreciation and
amortization increased by $16.5 million, or 6.0%, from
$276.4 million in the first nine months of fiscal 2023 to
$292.9 million in the corresponding period of 2024. This
increase is mainly attributable to our cost reduction initiatives
and a more favourable product mix, partially offset by lower volume
and asset impairment charges.
Adjusted operating earnings before depreciation
and amortization increased by $26.2 million, or 8.7%, from
$301.0 million in the first nine months of fiscal 2023 to
$327.2 million in the corresponding period of 2024. This
increase is mainly attributable to our cost reduction initiatives
and a more favourable product mix, partially offset by lower
volume.
Net earnings attributable to shareholders of the
Corporation increased by $29.3 million, or 66.4%, from
$44.1 million in the first nine months of fiscal 2023 to
$73.4 million in the corresponding period of 2024. This
increase is mainly attributable to the previously explained
increase in operating earnings before depreciation and
amortization, the decrease in depreciation and amortization, and
lower financial expenses, partially offset by higher income taxes.
On a per share basis, net earnings attributable to shareholders of
the Corporation went from $0.51 to $0.85, respectively.
Adjusted net earnings attributable to
shareholders of the Corporation increased by $29.9 million, or
28.7%, from $104.2 million in the first nine months of
fiscal 2023 to $134.1 million in the corresponding period
of 2024. This increase is mostly attributable to the previously
explained increase in adjusted operating earnings before
depreciation and amortization, the decrease in depreciation and
amortization, and lower financial expenses, partially offset by
higher income taxes. On a per share basis, adjusted net earnings
attributable to shareholders of the Corporation went from $1.20 to
$1.55, respectively.
For more detailed financial information, please
see the Management’s Discussion and Analysis for the third quarter
ended July 28, 2024, as well as the financial statements
in the “Investors” section of our website at www.tc.tc.
New Director
The Corporation announces the appointment of
Serge Boulanger, CPA and corporate director, to its Board of
Directors. Mr. Boulanger has worked for more than 25 years in
the retail industry in the fields of food and pharmacies, where he
held leadership positions in procurement, food manufacturing and
private brand development. He also led all the activities of
several major banners and, earlier in his career, the marketing of
major brands. In 2023, he was awarded the Lifetime Achievement
Award by the Retail Council of Canada.
"I am delighted to welcome Serge Boulanger to
our Board of Directors," said Isabelle Marcoux, Executive Chair of
the Board of TC Transcontinental. "His vast experience and
extensive professional background will be valuable assets for our
two main sectors in pursuing their activities and developing
products and services for retailers."
Outlook
In the Packaging Sector, our investments,
including those related to sustainable packaging solutions,
position us well for the future and should be a key driver of our
growth. The economic environment however had a negative impact on
demand during the fiscal year. In terms of profitability, we expect
an increase in adjusted operating earnings before depreciation and
amortization for fiscal 2024 compared to fiscal 2023.
In the Retail Services and Printing Sector, we
are encouraged by the roll-out of raddarTM and growth opportunities
in our in-store marketing activities. The decrease in volume in our
traditional activities should be offset by our cost reduction
initiatives, the favourable impact of the roll-out of raddarTM and
the growth in our in-store marketing activities. We therefore
expect adjusted operating earnings before depreciation and
amortization for fiscal 2024 to be stable compared to fiscal
2023.
Given the solid financial performance since the
beginning of the fiscal year and the benefits of our profitability
and financial position improvement program, we expect an increase
in consolidated adjusted operating earnings before depreciation and
amortization for fiscal 2024 compared to fiscal 2023.
For the fourth quarter of fiscal 2024, we expect
adjusted operating earnings before depreciation and amortization
for our two main operating sectors to remain relatively stable
compared to the fourth quarter of fiscal 2023. However, as a result
of an anticipated increase in the incentive compensation expense,
including stock-based compensation, and the solid performance of
the Media Sector in the fourth quarter of fiscal 2023, we expect a
decrease in consolidated operating earnings before depreciation and
amortization for the fourth quarter of fiscal 2024.
Lastly, we expect to continue generating
significant cash flows from operating activities, which will enable
us to reduce our net indebtedness while continuing to make
strategic investments and return capital to our shareholders.
Non-IFRS Financial Measures
In this document, unless otherwise indicated,
all financial data are prepared in accordance with International
Financial Reporting Accounting Standards ("IFRS") and the term
"dollar", as well as the symbol "$" designate Canadian dollars.
In addition, in this press release, we also use
certain non-IFRS financial measures for which a complete definition
is presented below and for which a reconciliation to financial
information in accordance with IFRS is presented in the section
entitled "Reconciliation of Non-IFRS Financial Measures" and in
Note 3, "Segmented Information", to the condensed interim
consolidated financial statements for the third quarter ended
July 28, 2024.
|
Terms Used |
Definitions |
|
Adjusted operating earnings before depreciation and
amortization |
Operating earnings before depreciation and amortization as well as
restructuring and other costs (revenues) and impairment of
assets. |
|
Adjusted operating earnings |
Operating earnings before restructuring and other costs (revenues),
amortization of intangible assets arising from business
combinations and impairment of assets. |
|
Adjusted income taxes |
Income taxes before income taxes on restructuring and other costs
(revenues), impairment of assets and amortization of intangible
assets arising from business combinations as well as the
recognition of previous years tax assets of an acquired
company. |
|
Adjusted net earnings attributable to shareholders of the
Corporation |
Net earnings attributable to shareholders of the Corporation before
restructuring and other costs (revenues), amortization of
intangible assets arising from business combinations and impairment
of assets, net of related income taxes as well as the recognition
of previous years tax assets of an acquired company. |
|
Net indebtedness |
Total of long-term debt, of current portion of long-term debt, of
lease liabilities and of current portion of lease liabilities, less
cash. |
|
Net indebtedness ratio |
Net indebtedness divided by the last 12 months’ adjusted operating
earnings before depreciation and amortization. |
Reconciliation of Non-IFRS Financial
Measures
The financial information has been prepared in
accordance with IFRS. However, financial measures used, namely
adjusted operating earnings before depreciation and amortization,
adjusted operating earnings, adjusted income taxes, adjusted net
earnings attributable to shareholders of the Corporation, adjusted
net earnings attributable to shareholders of the Corporation per
share, net indebtedness and net indebtedness ratio, for which a
reconciliation is presented in the following table, do not have any
standardized meaning under IFRS and could be calculated differently
by other companies. We believe that many of our readers analyze the
financial performance of the Corporation’s activities based on
these non-IFRS financial measures as such measures may allow for
easier comparisons between periods. These measures should be
considered as a complement to financial performance measures in
accordance with IFRS. They do not substitute and are not superior
to them.
The Corporation also believes that these
measures are useful indicators of the performance of its operations
and its ability to meet its financial obligations. Furthermore,
management also uses some of these non-IFRS financial measures to
assess the performance of its activities and managers.
|
Reconciliation of operating earnings - Third quarter and
cumulative |
|
|
Three months ended |
Nine months ended |
|
(in millions of dollars) |
July 28, 2024 |
|
July 30, 2023 |
July 28, 2024 |
July 30, 2023 |
| Operating
earnings |
$69.2 |
|
$39.2 |
$130.2 |
$98.0 |
|
Restructuring and other costs (revenues) |
(0.5 |
) |
12.6 |
26.8 |
24.6 |
| Amortization of intangible
assets arising from business combinations (1) |
15.5 |
|
18.4 |
51.0 |
55.6 |
| Impairment of assets |
— |
|
— |
7.5 |
— |
|
Adjusted operating earnings |
$84.2 |
|
$70.2 |
$215.5 |
$178.2 |
| Depreciation and amortization
(2) |
36.8 |
|
37.7 |
111.7 |
122.8 |
|
Adjusted operating earnings before depreciation and
amortization |
$121.0 |
|
$107.9 |
$327.2 |
$301.0 |
| (1)
Amortization of intangible assets arising from business
combinations includes our customer relationships, non-compete
agreements, rights of first refusal and educational book titles.(2)
Depreciation and amortization excludes the amortization of
intangible assets arising from business combinations. |
|
Reconciliation of operating earnings - Third quarter and
cumulative for the Packaging Sector |
|
|
Three months ended |
Nine months ended |
|
(in millions of dollars) |
July 28, 2024 |
July 30, 2023 |
July 28, 2024 |
July 30, 2023 |
| Operating
earnings |
$29.4 |
$17.7 |
$84.1 |
$48.4 |
| Restructuring and other
costs |
2.4 |
1.5 |
9.7 |
7.4 |
| Amortization of intangible
assets arising from business combinations (1) |
14.3 |
15.9 |
46.5 |
48.0 |
|
Impairment of assets |
— |
— |
0.6 |
— |
|
Adjusted operating earnings |
$46.1 |
$35.1 |
$140.9 |
$103.8 |
| Depreciation and amortization
(2) |
18.8 |
18.7 |
55.6 |
64.0 |
|
Adjusted operating earnings before depreciation and
amortization |
$64.9 |
$53.8 |
$196.5 |
$167.8 |
| (1)
Amortization of intangible assets arising from business
combinations includes our customer relationships.(2) Depreciation
and amortization excludes the amortization of intangible assets
arising from business combinations. |
|
Reconciliation of operating earnings - Third quarter and
cumulative for the Retail Services and Printing
Sector |
|
|
Three months ended |
Nine months ended |
|
(in millions of dollars) |
July 28, 2024 |
July 30, 2023 |
July 28, 2024 |
July 30, 2023 |
| Operating
earnings |
$36.8 |
$27.3 |
$71.1 |
$82.8 |
| Restructuring and other
costs |
1.7 |
2.7 |
19.6 |
7.2 |
| Amortization of intangible
assets arising from business combinations (1) |
0.7 |
1.9 |
3.0 |
6.0 |
|
Impairment of assets |
— |
— |
6.9 |
— |
|
Adjusted operating earnings |
$39.2 |
$31.9 |
$100.6 |
$96.0 |
| Depreciation and amortization
(2) |
11.6 |
13.3 |
36.8 |
39.8 |
|
Adjusted operating earnings before depreciation and
amortization |
$50.8 |
$45.2 |
$137.4 |
$135.8 |
| (1)
Amortization of intangible assets arising from business
combinations includes our customer relationships.(2) Depreciation
and amortization excludes the amortization of intangible assets
arising from business combinations. |
|
Reconciliation of operating earnings - Third quarter and
cumulative for the Other Sector |
|
|
Three months ended |
Nine months ended |
|
(in millions of dollars) |
July 28, 2024 |
|
July 30, 2023 |
|
July 28, 2024 |
|
July 30, 2023 |
|
| Operating
earnings |
$3.0 |
|
($5.8 |
) |
($25.0 |
) |
($33.2 |
) |
| Restructuring and other costs
(revenues) |
(4.6 |
) |
8.4 |
|
(2.5 |
) |
10.0 |
|
| Amortization of intangible
assets arising from business combinations (1) |
0.5 |
|
0.6 |
|
1.5 |
|
1.6 |
|
|
Adjusted operating earnings |
($1.1 |
) |
$3.2 |
|
($26.0 |
) |
($21.6 |
) |
| Depreciation and amortization
(2) |
6.4 |
|
5.7 |
|
19.3 |
|
19.0 |
|
|
Adjusted operating earnings before depreciation and
amortization |
$5.3 |
|
$8.9 |
|
($6.7 |
) |
($2.6 |
) |
| (1)
Amortization of intangible assets arising from business
combinations includes non-compete agreements, rights of first
refusal and educational book titles.(2) Depreciation and
amortization excludes the amortization of intangible assets arising
from business combinations. |
|
Reconciliation of net earnings attributable to shareholders
of the Corporation - Third quarter and cumulative |
|
|
Three months
ended |
Nine months
ended |
|
(in millions of dollars, except per share amounts) |
July 28, 2024 |
|
July 30, 2023 |
|
July 28, 2024 |
|
July 30, 2023 |
|
| Net earnings
attributable to shareholders of the Corporation |
$43.6 |
|
$20.9 |
|
$73.4 |
|
$44.1 |
|
| Restructuring and other costs
(revenues) |
(0.5 |
) |
12.6 |
|
26.8 |
|
24.6 |
|
| Tax on restructuring and other
costs |
— |
|
(3.3 |
) |
(6.8 |
) |
(6.3 |
) |
| Amortization of intangible
assets arising from business combinations (1) |
15.5 |
|
18.4 |
|
51.0 |
|
55.6 |
|
| Tax on amortization of
intangible assets arising from business combinations |
(3.8 |
) |
(4.6 |
) |
(12.5 |
) |
(13.8 |
) |
| Impairment of assets |
— |
|
— |
|
7.5 |
|
— |
|
| Tax on impairment of
assets |
— |
|
— |
|
(1.9 |
) |
— |
|
|
Recognition of previous years tax assets of an acquired
company |
(3.4 |
) |
— |
|
(3.4 |
) |
— |
|
|
Adjusted net earnings attributable to shareholders of the
Corporation |
$51.4 |
|
$44.0 |
|
$134.1 |
|
$104.2 |
|
|
Net earnings attributable to shareholders of the
Corporation per share |
$0.50 |
|
$0.24 |
|
$0.85 |
|
$0.51 |
|
|
Adjusted net earnings attributable to shareholders of the
Corporation per share |
$0.60 |
|
$0.51 |
|
$1.55 |
|
$1.20 |
|
|
Weighted average number of shares outstanding |
86.4 |
|
86.6 |
|
86.5 |
|
86.6 |
|
| (1) Amortization of
intangible assets arising from business combinations includes our
customer relationships, non-compete agreements, rights of first
refusal and educational book titles. |
|
Reconciliation of net indebtedness |
|
(in millions of dollars, except ratios) |
As at July 28, 2024 |
|
As at October 29, 2023 |
|
| Long-term debt |
$667.1 |
|
$937.8 |
|
| Current portion of long-term
debt |
199.8 |
|
2.1 |
|
| Lease liabilities |
93.5 |
|
94.6 |
|
| Current portion of lease
liabilities |
22.8 |
|
23.5 |
|
|
Cash |
(79.9 |
) |
(137.0 |
) |
|
Net indebtedness |
$903.3 |
|
$921.0 |
|
|
Adjusted operating earnings before depreciation and amortization
(last 12 months) |
$472.7 |
|
$446.5 |
|
|
Net indebtedness ratio |
1.91 |
x |
2.06 |
x |
Dividend
The Corporation's Board of Directors declared a
quarterly dividend of $0.225 per share on Class A Subordinate
Voting Shares and Class B Shares. This dividend is payable on
October 21, 2024, to shareholders of record at the close of
business on October 3, 2024.
Normal Course Issuer Bid
On June 12, 2024, the Corporation has been
authorized to repurchase, for cancellation on the open market, or
subject to the approval of any securities authority by private
agreements, between June 17, 2024 and June 16, 2025, or at an
earlier date if the Corporation concludes or cancels the offer, up
to 3,662,967 of its Class A Subordinate Voting Shares and up to
668,241 of its Class B Shares. The repurchases are made in the
normal course of business at market prices through the Toronto
Stock Exchange.
During the third quarter ended July 28,
2024, the Corporation repurchased and cancelled 1,159,758 Class A
Subordinate Voting Shares at a weighted average price of $15.22 and
5,000 Class B Shares at a weighted average price of $15.37, for a
total cash consideration of $17.7 million.
On July 26, 2024, the Corporation authorized its
broker to repurchase shares between July 29, 2024, and September
13, 2024, inclusively, in accordance with parameters set by the
Corporation. Subsequent to the end of the third quarter of fiscal
2024, the Corporation repurchased 773,797 Class A Subordinated
Voting Shares and 2,000 Class B Shares for a total cash
consideration of $12.5 million.
Additional information
Conference Call
Upon releasing its 2024 third quarter results,
the Corporation will hold a conference call for the financial
community on September 12, 2024, at 8:00 a.m. The
dial-in numbers are 1-289-514-5100 or 1-800-717-1738. Media may
hear the call in listen-only mode or tune in to the simultaneous
audio broadcast on TC Transcontinental’s website, which will then
be archived for 30 days. For media requests or interviews, please
contact Nathalie St-Jean, Senior Advisor, Corporate Communications
of TC Transcontinental, at 514-954-3581.
Profile
TC Transcontinental is a leader in flexible
packaging in North America and in retail services in Canada and is
Canada’s largest printer. The Corporation is also the leading
Canadian French-language educational publishing group. Since 1976,
TC Transcontinental's mission has been to create quality products
and services that allow businesses to attract, reach and retain
their target customers.
Respect, teamwork, performance and innovation
are the strong values held by the Corporation and its employees.
TC Transcontinental's commitment to its stakeholders is to
pursue its business activities in a responsible manner.
Transcontinental Inc. (TSX: TCL.A TCL.B), known
as TC Transcontinental, has approximately 7,600 employees, the
majority of which are based in Canada, the United States and Latin
America. TC Transcontinental generated revenues of
$2.9 billion during the fiscal year ended
October 29, 2023. For more information, visit TC
Transcontinental's website at 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 impact of digital product
development and adoption as well as regulations or legislation
regarding door-to-door distribution on the printing of paper flyers
or printed advertising materials, inflation and recession risks,
economic conditions and geopolitical uncertainty, environmental
risks as well as adoption of new regulations or amendments and
changes to consumption habits, risk of an operational disruption
that could be harmful to its ability to meet deadlines, the
worldwide outbreak of a disease, a virus or any other contagious
disease could have an adverse impact on the Corporation’s
operations, the ability to generate organic long-term growth and
face competition, a significant increase in the cost of raw
materials, the availability of those materials and energy
consumption could have an adverse impact on the Corporation’s
activities, the ability to complete acquisitions and properly
integrate them, cybersecurity, data protection, warehousing and
usage, the impact of digital product development and adoption on
the demand for printed products other than flyers, the failure of
patents, trademarks and confidentiality agreements to protect
intellectual property, a difficulty to attract and retain employees
in the main operating sectors, the safety and quality of packaging
products used in the food industry, bad debts from certain
customers, import and export controls, duties, tariffs or taxes,
exchange rate fluctuations, increase in market interest rates with
respect to our financial instruments as well as availability of
capital at a reasonable cost, the legal risks related to its
activities and the compliance of its activities with applicable
regulations, the impact of major market fluctuations on the
solvency of defined benefit pensions plans, changes in tax
legislation and disputes with tax authorities or amendments to
statutory tax rates in force, the impact of impairment tests on the
value of assets and a conflict of interest between the controlling
shareholder and other shareholders. The main risks, uncertainties
and factors that could influence actual results are described in
the Management's Discussion and Analysis for the year ended October
29, 2023 and in the latest Annual Information Form.
Unless otherwise indicated by the Corporation,
forward-looking statements do not take into account the potential
impact of non-recurring or other unusual items, nor of disposals,
business combinations, mergers or acquisitions which may be
announced or entered into after the date of September 11, 2024. 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
September 11, 2024. 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.
For information:
|
Media Nathalie St-JeanSenior Advisor, Corporate
Communications TC TranscontinentalTelephone:
514-954-3581nathalie.st-jean@tc.tcwww.tc.tc |
Financial CommunityYan LapointeDirector, Investor Relations and
TreasuryTC TranscontinentalTelephone:
514-954-3574yan.lapointe@tc.tcwww.tc.tc |
CONSOLIDATED STATEMENTS OF EARNINGSUnaudited(in
millions of Canadian dollars, unless otherwise indicated and per
share data)
|
|
Three months ended |
Nine months ended |
| |
|
July 28, |
|
July 30, |
July 28, |
July 30, |
|
|
|
2024 |
|
|
2023 |
|
2024 |
|
2023 |
| |
|
|
|
|
| Revenues |
$ |
700.0 |
|
$ |
706.7 |
$ |
2,063.6 |
$ |
2,160.9 |
| Operating expenses |
|
579.0 |
|
|
598.8 |
|
1,736.4 |
|
1,859.9 |
| Restructuring and other costs
(revenues) |
|
(0.5 |
) |
|
12.6 |
|
26.8 |
|
24.6 |
| Impairment of
assets |
|
— |
|
|
— |
|
7.5 |
|
— |
| |
|
|
|
|
| Operating earnings before
depreciation and amortization |
|
121.5 |
|
|
95.3 |
|
292.9 |
|
276.4 |
|
Depreciation and amortization |
|
52.3 |
|
|
56.1 |
|
162.7 |
|
178.4 |
| |
|
|
|
|
| Operating earnings |
|
69.2 |
|
|
39.2 |
|
130.2 |
|
98.0 |
| Net
financial expenses |
|
15.6 |
|
|
16.1 |
|
43.9 |
|
48.0 |
| |
|
|
|
|
| Earnings before income
taxes |
|
53.6 |
|
|
23.1 |
|
86.3 |
|
50.0 |
| Income
taxes |
|
9.8 |
|
|
2.1 |
|
12.4 |
|
5.6 |
| |
|
|
|
|
| Net
earnings |
|
43.8 |
|
|
21.0 |
|
73.9 |
|
44.4 |
|
Non-controlling interests |
|
0.2 |
|
|
0.1 |
|
0.5 |
|
0.3 |
|
Net earnings attributable to shareholders of the
Corporation |
$ |
43.6 |
|
$ |
20.9 |
$ |
73.4 |
$ |
44.1 |
| |
|
|
|
|
| Net
earnings attributable to shareholders of the Corporation per share
- basic and diluted |
$ |
0.50 |
|
$ |
0.24 |
$ |
0.85 |
$ |
0.51 |
| |
|
|
|
|
|
Weighted average number of shares outstanding - basic and diluted
(in millions) |
|
86.4 |
|
|
86.6 |
|
86.5 |
|
86.6 |
| |
|
|
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOMEUnaudited(in millions of Canadian dollars)
|
|
Three months ended |
Nine months ended |
| |
July 28, |
|
July 30, |
|
July 28, |
|
July 30, |
|
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
| Net
earnings |
$ |
43.8 |
|
$ |
21.0 |
|
$ |
73.9 |
|
$ |
44.4 |
|
| |
|
|
|
|
| Other comprehensive
income (loss) |
|
|
|
|
| |
|
|
|
|
| Items that may be
subsequently reclassified to net earnings |
|
|
|
|
|
Net change related to cash flow hedges (1) |
|
|
|
|
|
Net change in the fair value of designated derivatives - foreign
exchange risk |
|
(3.1 |
) |
|
5.1 |
|
|
0.7 |
|
|
10.5 |
|
|
Net change in the fair value of designated derivatives - interest
rate risk |
|
(2.3 |
) |
|
4.7 |
|
|
(1.1 |
) |
|
4.8 |
|
|
Reclassification of the net change in the fair value of designated
derivatives |
|
|
|
|
|
recognized in net earnings during the period |
|
0.2 |
|
|
0.5 |
|
|
1.8 |
|
|
1.0 |
|
|
Related income taxes (recovery) |
|
(1.3 |
) |
|
2.7 |
|
|
0.4 |
|
|
4.3 |
|
|
|
|
(3.9 |
) |
|
7.6 |
|
|
1.0 |
|
|
12.0 |
|
| |
|
|
|
|
|
Cumulative translation differences |
|
|
|
|
|
Net unrealized exchange gains (losses) on the translation of |
|
|
|
|
|
the financial statements of foreign operations |
|
22.9 |
|
|
(32.7 |
) |
|
7.5 |
|
|
(30.0 |
) |
|
Net (losses) gains on hedge of the net investment in foreign
operations |
|
(8.3 |
) |
|
11.4 |
|
|
(1.1 |
) |
|
8.6 |
|
|
Related income taxes (recovery) |
|
(1.5 |
) |
|
(1.4 |
) |
|
(1.5 |
) |
|
0.4 |
|
|
|
|
16.1 |
|
|
(19.9 |
) |
|
7.9 |
|
|
(21.8 |
) |
| |
|
|
|
|
| Items that will not be
reclassified to net earnings |
|
|
|
|
|
Changes related to defined benefit plans |
|
|
|
|
|
Actuarial gains (losses) on defined benefit plans |
|
3.5 |
|
|
(3.8 |
) |
|
(4.2 |
) |
|
(6.4 |
) |
|
Related income taxes (recovery) |
|
0.9 |
|
|
(1.0 |
) |
|
(1.2 |
) |
|
(1.7 |
) |
|
|
|
2.6 |
|
|
(2.8 |
) |
|
(3.0 |
) |
|
(4.7 |
) |
| |
|
|
|
|
|
Other comprehensive income (loss) |
|
14.8 |
|
|
(15.1 |
) |
|
5.9 |
|
|
(14.5 |
) |
|
Comprehensive income |
$ |
58.6 |
|
$ |
5.9 |
|
$ |
79.8 |
|
$ |
29.9 |
|
|
(1) For the three-month and nine-month periods ended
July 30, 2023, amounts of $0.9 million and $1.8 million,
respectively, were reclassified to Net change in the fair value of
designated derivatives - foreign exchange risk and Net change in
the fair value of designated derivatives - interest rate risk.
These amounts were previously reported under Reclassification of
the net change in the fair value of designated derivatives
recognized in net earnings during the period. These
reclassifications had no impact on comprehensive income or net
earnings |
CONSOLIDATED STATEMENTS OF CHANGES IN
EQUITYUnaudited(in millions of Canadian dollars)
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
other |
|
|
|
|
Non- |
|
|
|
| |
Share |
|
Contributed |
Retained |
|
comprehensive |
|
|
|
|
controlling |
Total |
|
|
|
capital |
|
surplus |
earnings |
|
income |
|
Total |
|
interests |
equity |
|
| |
|
|
|
|
|
|
|
|
Balance as at October 29, 2023 |
$ |
636.6 |
|
$ |
0.9 |
$ |
1,226.8 |
|
$ |
37.0 |
|
$ |
1,901.3 |
|
$ |
4.9 |
$ |
1,906.2 |
|
| Net
earnings |
|
— |
|
|
— |
|
73.4 |
|
|
— |
|
|
73.4 |
|
|
0.5 |
|
73.9 |
|
| Other comprehensive
income |
|
— |
|
|
— |
|
— |
|
|
5.9 |
|
|
5.9 |
|
|
— |
|
5.9 |
|
| Shareholders'
contributions and |
|
|
|
|
|
|
|
|
distributions to shareholders |
|
|
|
|
|
|
|
|
Share redemptions |
|
(9.8 |
) |
|
— |
|
(25.3 |
) |
|
— |
|
|
(35.1 |
) |
|
— |
|
(35.1 |
) |
|
Dividends |
|
— |
|
|
— |
|
(58.4 |
) |
|
— |
|
|
(58.4 |
) |
|
— |
|
(58.4 |
) |
|
Balance as at July 28, 2024 |
$ |
626.8 |
|
$ |
0.9 |
$ |
1,216.5 |
|
$ |
42.9 |
|
$ |
1,887.1 |
|
$ |
5.4 |
$ |
1,892.5 |
|
| |
|
|
|
|
|
|
|
| Balance as at
October 30, 2022 |
$ |
636.6 |
|
$ |
0.9 |
$ |
1,219.0 |
|
$ |
20.7 |
|
$ |
1,877.2 |
|
$ |
4.8 |
$ |
1,882.0 |
|
| Net earnings |
|
— |
|
|
— |
|
44.1 |
|
|
— |
|
|
44.1 |
|
|
0.3 |
|
44.4 |
|
| Other comprehensive loss |
|
— |
|
|
— |
|
— |
|
|
(14.5 |
) |
|
(14.5 |
) |
|
— |
|
(14.5 |
) |
| Shareholders' contributions
and |
|
|
|
|
|
|
|
|
distributions to shareholders |
|
|
|
|
|
|
|
|
Dividends |
|
— |
|
|
— |
|
(58.5 |
) |
|
— |
|
|
(58.5 |
) |
|
— |
|
(58.5 |
) |
| Balance
as at July 30, 2023 |
$ |
636.6 |
|
$ |
0.9 |
$ |
1,204.6 |
|
$ |
6.2 |
|
$ |
1,848.3 |
|
$ |
5.1 |
$ |
1,853.4 |
|
CONSOLIDATED STATEMENTS OF FINANCIAL
POSITIONUnaudited(in millions of Canadian dollars)
|
|
As at |
As at |
| |
July 28, |
October 29, |
|
|
|
2024 |
|
2023 |
| |
|
|
| Current
assets |
|
|
|
Cash |
$ |
79.9 |
$ |
137.0 |
|
Accounts receivable |
|
457.9 |
|
514.7 |
|
Income taxes receivable |
|
33.6 |
|
37.0 |
|
Inventories |
|
399.4 |
|
391.1 |
|
Prepaid expenses and other current assets |
|
24.3 |
|
20.6 |
| |
|
995.1 |
|
1,100.4 |
| |
|
|
| Property, plant and
equipment |
|
774.3 |
|
796.5 |
| Right-of-use
assets |
|
96.9 |
|
98.6 |
| Intangible
assets |
|
397.4 |
|
447.1 |
| Goodwill |
|
1,195.6 |
|
1,194.9 |
| Deferred
taxes |
|
30.1 |
|
30.4 |
|
Other assets |
|
30.9 |
|
32.4 |
|
|
$ |
3,520.3 |
$ |
3,700.3 |
| |
|
|
| Current
liabilities |
|
|
|
Accounts payable and accrued liabilities |
$ |
415.5 |
$ |
465.5 |
|
Income taxes payable |
|
19.3 |
|
24.8 |
|
Deferred revenues and deposits |
|
11.7 |
|
10.4 |
|
Current portion of long-term debt |
|
199.8 |
|
2.1 |
|
Current portion of lease liabilities |
|
22.8 |
|
23.5 |
| |
|
669.1 |
|
526.3 |
| |
|
|
| Long-term
debt |
|
667.1 |
|
937.8 |
| Lease
liabilities |
|
93.5 |
|
94.6 |
| Deferred
taxes |
|
74.1 |
|
89.8 |
|
Other liabilities |
|
124.0 |
|
145.6 |
|
|
|
1,627.8 |
|
1,794.1 |
| |
|
|
| Equity |
|
|
|
Share capital |
|
626.8 |
|
636.6 |
|
Contributed surplus |
|
0.9 |
|
0.9 |
|
Retained earnings |
|
1,216.5 |
|
1,226.8 |
|
Accumulated other comprehensive income |
|
42.9 |
|
37.0 |
|
Attributable to shareholders of the Corporation |
|
1,887.1 |
|
1,901.3 |
|
Non-controlling interests |
|
5.4 |
|
4.9 |
|
|
|
1,892.5 |
|
1,906.2 |
|
|
$ |
3,520.3 |
$ |
3,700.3 |
CONSOLIDATED STATEMENTS OF CASH
FLOWSUnaudited(in millions of Canadian dollars)
|
|
Three months ended |
Nine months ended |
| |
July 28, |
|
July 30, |
|
July 28, |
|
July 30, |
|
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
| Operating
activities |
|
|
|
|
|
Net earnings |
$ |
43.8 |
|
$ |
21.0 |
|
$ |
73.9 |
|
$ |
44.4 |
|
|
Adjustments to reconcile net earnings and cash flows from operating
activities: |
|
|
|
|
|
Impairment of assets |
|
— |
|
|
— |
|
|
7.5 |
|
|
— |
|
|
Depreciation and amortization |
|
52.3 |
|
|
56.1 |
|
|
162.7 |
|
|
178.4 |
|
|
Financial expenses on long-term debt and lease liabilities |
|
11.5 |
|
|
14.4 |
|
|
35.2 |
|
|
42.3 |
|
|
Net (gains) losses on disposal of assets |
|
(5.3 |
) |
|
0.4 |
|
|
(5.6 |
) |
|
1.2 |
|
|
Income taxes |
|
9.8 |
|
|
2.1 |
|
|
12.4 |
|
|
5.6 |
|
|
Net foreign exchange differences and other |
|
0.5 |
|
|
(2.6 |
) |
|
(1.4 |
) |
|
(0.7 |
) |
|
Cash flows generated by operating activities before changes in
non-cash operating |
|
items and income taxes paid |
|
112.6 |
|
|
91.4 |
|
|
284.7 |
|
|
271.2 |
|
|
Changes in non-cash operating items |
|
(7.3 |
) |
|
26.0 |
|
|
(28.2 |
) |
|
(2.4 |
) |
|
Income taxes paid |
|
(7.0 |
) |
|
(8.3 |
) |
|
(27.8 |
) |
|
(42.7 |
) |
|
Cash flows from operating activities |
|
98.3 |
|
|
109.1 |
|
|
228.7 |
|
|
226.1 |
|
| |
|
|
|
|
| Investing
activities |
|
|
|
|
|
Business combinations, net of acquired cash |
|
— |
|
|
0.6 |
|
|
— |
|
|
0.3 |
|
|
Acquisitions of property, plant and equipment |
|
(23.8 |
) |
|
(37.6 |
) |
|
(75.9 |
) |
|
(123.7 |
) |
|
Disposals of property, plant and equipment and other |
|
7.3 |
|
|
— |
|
|
8.8 |
|
|
— |
|
|
Increase in intangible assets |
|
(6.8 |
) |
|
(6.5 |
) |
|
(21.4 |
) |
|
(24.8 |
) |
|
Cash flows from investing activities |
|
(23.3 |
) |
|
(43.5 |
) |
|
(88.5 |
) |
|
(148.2 |
) |
| |
|
|
|
|
| Financing
activities |
|
|
|
|
|
Reimbursement of long-term debt |
|
(0.2 |
) |
|
(0.6 |
) |
|
(2.2 |
) |
|
(2.2 |
) |
|
Net (decrease) increase in credit facilities |
|
(1.3 |
) |
|
(26.7 |
) |
|
(75.4 |
) |
|
30.6 |
|
|
Financial expenses paid on long-term debt and credit
facilities |
|
(6.1 |
) |
|
(9.4 |
) |
|
(27.7 |
) |
|
(34.3 |
) |
|
Repayment of principal on lease liabilities |
|
(5.6 |
) |
|
(6.3 |
) |
|
(17.2 |
) |
|
(18.6 |
) |
|
Interest paid on lease liabilities |
|
(0.8 |
) |
|
(0.8 |
) |
|
(2.5 |
) |
|
(2.5 |
) |
|
Dividends |
|
(19.4 |
) |
|
(19.5 |
) |
|
(58.4 |
) |
|
(58.5 |
) |
|
Share redemptions |
|
(17.7 |
) |
|
— |
|
|
(17.7 |
) |
|
— |
|
|
Cash flows from financing activities |
|
(51.1 |
) |
|
(63.3 |
) |
|
(201.1 |
) |
|
(85.5 |
) |
| |
|
|
|
|
| Effect
of exchange rate changes on cash denominated in foreign
currencies |
|
0.9 |
|
|
(0.2 |
) |
|
3.8 |
|
|
0.4 |
|
| |
|
|
|
|
| Net change in cash |
|
24.8 |
|
|
2.1 |
|
|
(57.1 |
) |
|
(7.2 |
) |
| Cash at
beginning of the period |
|
55.1 |
|
|
36.4 |
|
|
137.0 |
|
|
45.7 |
|
| Cash at
end of period |
$ |
79.9 |
|
$ |
38.5 |
|
$ |
79.9 |
|
$ |
38.5 |
|
| |
|
|
|
|
| Non-cash investing
activities |
|
|
|
|
|
Net change in capital asset acquisitions financed by accounts
payable |
$ |
(2.3 |
) |
$ |
1.0 |
|
$ |
(11.6 |
) |
$ |
1.9 |
|