Transcontinental Inc. announces its financial results for fiscal 2017
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E-mailMONTREAL, QUEBEC -- (Marketwired) -- 12/14/17 -- Transcontinental Inc. (TSX: TCL.A)(TSX: TCL.B)
Fiscal 2017 Highlights
-- Revenues decreased by $12.3 million, or 0.6%.
-- Operating earnings increased by $89.2 million, from $212.8 million to
$302.0 million. Adjusted operating earnings, which exclude restructuring
and other costs (gains) and impairment of assets, increased by $9.9
million, from $283.4 million to $293.3 million, or 3.5%.
-- Net earnings increased by $65.2 million, from $146.3 million to $211.5
million. Adjusted net earnings, which exclude restructuring and other
costs (gains) and impairment of assets, net of related taxes, increased
by $5.9 million, from $196.3 million to $202.2 million, or 3.0%.
-- Maintained a solid financial position, with a net indebtedness ratio of
0.3x.
-- Concluded an expanded agreement with Lowe's Canada which includes the
renewal of the agreement with RONA and the addition of the printing of
Lowe's flyers in Canada. This agreement represents revenues of $200
million over five years and includes all services to retailers for all
Lowe's and RONA banners in the country.
-- Sold its media assets in Atlantic Canada and launched a process for the
sale of its local and regional newspapers in Quebec and Ontario. To
date, close to 60% of these newspapers have been sold.
-- Acquired, subsequent to the end of the fiscal year, Les Industries
Flexipak Inc., a flexible packaging supplier located in Montreal,
Quebec.
Transcontinental Inc. (TSX: TCL.A)(TSX: TCL.B) announces its results for fiscal 2017, which ended October 29, 2017.
"I am very proud of our performance in 2017," said Francois Olivier, President and Chief Executive Officer of TC Transcontinental. "While pursuing our transformation with determination, we recorded, for a third consecutive year, the highest profitability in our history."
"The printing division posted excellent results in 2017 and continued to improve its profitability, notably as a result of increased demand from Canadian retailers for our integrated service offering. We also renewed and expanded our long-term agreements with large retailers. Finally, we implemented measures to optimize the utilization of our printing platform."
"In the packaging division, we successfully integrated Robbie Manufacturing and Flexstar Packaging. With the investments made in our platform and the development of our sales force, many business opportunities came to fruition this year. As a result, this division generated sustained organic growth in 2017. Lastly, we pursued numerous acquisition initiatives and recently announced the acquisition of Les Industries Flexipak Inc., located in Montreal."
"In the Media Sector, we continued to strategically transform our asset portfolio to refocus on our most promising niches. Our specialty media and educational book publishing activities generated solid results in 2017. In addition, we disposed of our publications in Atlantic Canada and have already sold close to 60% of our local and regional newspapers in Quebec and Ontario."
"To conclude, with our sound financial position and our significant cash flows, we are very well positioned to continue building our North American flexible packaging platform."
Financial Highlights
---------------------------------------------------------------------------- (in millions of dollars, except per share Variation Variation amounts) Q4-2017 Q4-2016 in % 2017 2016 in % ---------------------------------------------------------------------------- Revenues $ 527.2 $ 555.6 (5.1)% $2,007.2 $2,019.5 (0.6)% ---------------------------------------------------------------------------- Operating earnings before depreciation and amortization 128.5 107.8 19.2 405.4 319.5 26.9 ---------------------------------------------------------------------------- Adjusted operating earnings before depreciation and amortization (1) 123.3 133.9 (7.9) 396.7 390.1 1.7 ---------------------------------------------------------------------------- Operating earnings 103.6 81.3 27.4 302.0 212.8 41.9 ---------------------------------------------------------------------------- Adjusted operating earnings (1) 98.4 107.4 (8.4) 293.3 283.4 3.5 ---------------------------------------------------------------------------- Net earnings 73.4 57.7 27.2 211.5 146.3 44.6 ---------------------------------------------------------------------------- Net earnings per share 0.94 0.75 25.3 2.73 1.89 44.4 ---------------------------------------------------------------------------- Adjusted net earnings(1) 68.3 76.6 (10.8) 202.2 196.3 3.0 ---------------------------------------------------------------------------- Adjusted net earnings per share (1) 0.88 0.99 (11.1) 2.61 2.53 3.2 ---------------------------------------------------------------------------- (1) Please refer to the section entitled "Reconciliation of Non-IFRS financial measures" in this press release for adjusted data presented above.
Fiscal 2017 Results
Revenues went from $2,019.5 million in fiscal 2016 to $2,007.2 million in fiscal 2017, a decrease of $12.3 million, or 0.6%. Excluding the unfavourable impact from the sale of newspapers and other media assets in 2016 and 2017 related to the Corporation's strategy, as well as the favourable exchange rate effect, revenues increased by $58.6 million, or 3.0%. This increase is mostly due to the contribution from acquisitions, particularly in the packaging division, higher demand for all services to Canadian retailers, notably under the expanded agreement with Lowe's Canada, higher volume in the packaging division and additional volume resulting from the agreement to print the Toronto Star. However, the contribution of these factors was mitigated by lower volume in printing verticals not related to services to Canadian retailers, notably as a result of the completion of the non-recurring agreement to print Canada's Census forms in 2016, and reduced activity in the local and regional newspaper publishing niche in Quebec and Ontario in the Media Sector.
Operating earnings increased by $89.2 million, or 41.9%, from $212.8 million in fiscal 2016 to $302.0 million in fiscal 2017. This increase is mostly attributable to the decrease in the asset impairment charge as a result of a charge related to intangible assets of daily and weekly newspapers outside Quebec in 2016, as well as to the decrease in restructuring costs as a result of gains on the sale of certain activities in the Media Sector and lower costs due to workforce reduction in 2017. Adjusted operating earnings increased by $9.9 million, or 3.5%, from $283.4 million in fiscal 2016 to $293.3 million in fiscal 2017. Excluding the $16.7 million unfavourable effect of the stock-based compensation expense as a result of the change in the share price in fiscal 2017 compared to fiscal 2016, the unfavourable impact from the sale of newspapers and other media assets in 2016 and 2017, as well as the favourable exchange rate effect, adjusted operating earnings increased by $23.9 million, or 8.5%. This increase is mostly attributable to the contribution from acquisitions and the favourable impact of cost reduction initiatives in the printing division and in the local and regional newspaper publishing activities in the Media Sector, partially offset by the effect of lower volume in printing verticals that are not related to Canadian retailer services.
Net earnings increased by $65.2 million, from $146.3 million in fiscal 2016 to $211.5 million in fiscal 2017. This increase is mostly attributable to the increase in operating earnings, as explained above, partially offset by the increase in income taxes. On a per share basis, net earnings went from $1.89 to $2.73. Excluding restructuring and other costs (gains) and impairment of assets, net of related income taxes, adjusted net earnings increased by $5.9 million, or 3.0%, from $196.3 million in fiscal 2016 to $202.2 million in fiscal 2017. This increase is attributable to the increase in adjusted operating earnings, as explained above. On a per share basis, adjusted net earnings went from $2.53 to $2.61.
2017 Fourth Quarter Results
Revenues went from $555.6 million in the fourth quarter of 2016 to $527.2 million in the fourth quarter of 2017, a decrease of $28.4 million, or 5.1%. Excluding the unfavourable impact from the sale of newspapers and other media assets in 2017 related to the Corporation's strategy and the unfavourable exchange rate effect, revenues increased by $3.3 million, or 0.6%. This increase is mostly due to the contribution from acquisitions, particularly in the packaging division, and to higher volume in this division. However, the contribution of these factors was mitigated by lower volume in printing verticals that are not related to services to Canadian retailers and reduced activity in the local and regional newspaper publishing niche in Quebec and Ontario in the Media Sector.
Operating earnings increased by $22.3 million, or 27.4%, from $81.3 million in the fourth quarter of 2016 to $103.6 million in the fourth quarter of 2017. This increase is mostly attributable to the decrease in the asset impairment charge as a result of a lower charge in the fourth quarter of 2017 in the local and regional newspaper publishing niche in Quebec and Ontario in the Media Sector, as well as to the decrease in restructuring costs as a result of gains on the sale of certain activities in that same sector and lower costs due to workforce reduction in the fourth quarter of 2017. Adjusted operating earnings decreased by $9.0 million, or 8.4%, from $107.4 million in the fourth quarter of 2016 to $98.4 million in the fourth quarter of 2017. Excluding the $3.6 million unfavourable effect of the stock-based compensation expense as a result of the change in the share price in the fourth quarter of 2017 compared to the corresponding period in 2016, the unfavourable impact from the sale of newspapers and other media assets in 2017, as well as the unfavourable exchange rate effect, adjusted operating earnings only decreased by $0.4 million, or 0.4%. This slight decrease is mostly attributable to the effect of lower volume in printing verticals that are not related to services to Canadian retailers, mitigated by the contribution from acquisitions and the favourable effect of cost reduction initiatives in the printing division and in the local and regional newspaper publishing niche in Quebec and Ontario in the Media Sector.
Net earnings increased by $15.7 million, from $57.7 million in the fourth quarter of 2016 to $73.4 million in the fourth quarter of 2017. This increase is mostly attributable to the increase in operating earnings, as explained above, partially offset by the increase in income taxes. On a per share basis, net earnings went from $0.75 to $0.94. Excluding restructuring and other costs (gains) and impairment of assets, net of related income taxes, adjusted net earnings decreased by $8.3 million, or 10.8%, from $76.6 million in the fourth quarter of 2016 to $68.3 million in the fourth quarter of 2017. This decrease is attributable to the decline in adjusted operating earnings, as explained above. On a per share basis, adjusted net earnings went from $0.99 to $0.88.
For more detailed financial information, please see the Management's Discussion and Analysis for the fiscal year ended October 29, 2017 as well as the financial statements in the "Investors" section of our website at www.tc.tc
Subsequent Events
Sale of local and regional newspapers in Quebec and Ontario
In November and December 2017, the Corporation disposed of several groups of local and regional newspapers in the province of Quebec, representing a total of 34 newspapers and related web properties, as well as one website in exchange for cash consideration and an amount receivable.
These sales of newspapers are in the context of the sale process of local and regional newspapers in Quebec and Ontario announced by the Corporation on April 18, 2017.
Business combination
On October 31, 2017, the Corporation acquired all the shares of Les Industries Flexipak Inc. ("Flexipak"), a flexible packaging supplier located in Montreal, Quebec. The Corporation will perform the assessment of the fair value of assets acquired and liabilities assumed of Flexipak during the next fiscal year.
This acquisition allows the Corporation to pursue its development in the packaging industry.
Outlook for 2018
In the printing division, we expect revenues from all our services to Canadian retailers to remain relatively stable in fiscal 2018 compared to fiscal 2017. We will benefit, in the first months of the fiscal year, from the additional contribution from the expanded agreement with Lowe's Canada, and we intend to seize the opportunities to expand our services to our retail customers. In all the other printing verticals, we expect that our revenues will continue to be affected by a decline in volume caused by the same trends in the advertising market. In addition, in the newspaper printing activities, we will experience a volume decrease as a result of the end of the printing of La Presse as of January 2018 and The Globe and Mail in the Maritimes as of December, 2017. To partially offset the lower volume, we will continue with our operational efficiency initiatives, in particular the previously announced consolidation of our newspaper printing activities in Quebec.
In our packaging division, the acquisition of Les Industries Flexipak Inc., completed in October 2017, will contribute to results in fiscal 2018, and we expect to maintain our disciplined acquisition approach. We also rely on our sales force to continue developing our funnel of potential customers and we expect for other sales to materialize. As a result of the temporary disruption in resin supply caused by the hurricane in the Gulf Coast of the United States in summer 2017, the price of several plastic resins increased and could have an unfavourable impact on costs in the first half of fiscal 2018.
In the Media Sector, we expect that the Business and Education Group will continue to perform well by diversifying its revenues in niches that depend little on advertising, while a reduction in advertising revenues will have an unfavourable impact on the print version of our specialty publications. In addition, our Sector revenues will be affected in 2018 by the sale of our media assets related to local and regional newspapers, but we will continue to adjust our cost structure based on the volume of activity.
To conclude, in fiscal 2018, we expect to continue generating significant cash flows from our operating activities and maintaining our excellent financial position, which should enable us to continue making acquisitions to support our transformation into packaging.
Reconciliation of Non-IFRS Financial Measures
The financial information has been prepared in accordance with IFRS. However, financial measures used, namely the adjusted operating earnings, the adjusted operating earnings before depreciation and amortization, the adjusted net earnings, the adjusted net earnings per share, the net indebtedness and the net indebtedness ratio, for which a complete definition is presented in the Management's Discussion and Analysis for the fiscal year ended October 29, 2017, and 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.
We also believe that the adjusted operating earnings before depreciation and amortization, the adjusted operating earnings, that takes into account the impact of past investments in property, plant and equipment and intangible assets, and the adjusted net earnings are useful indicators of the performance of our operations. Furthermore, management also uses some of these non-IFRS financial measures to assess the performance of its activities and managers.
Regarding the net indebtedness and net indebtedness ratio, we believe that these indicators are useful to measure the Corporation's financial leverage and ability to meet its financial obligations.
Reconciliation of operating earnings - Fourth quarter and fiscal year
----------------------------------------------------------------------------
Three months ended Year ended
----------------------------------------------------------------------------
October 29, October 31, October 29, October 31,
(in millions of dollars) 2017 2016 2017 2016
----------------------------------------------------------------------------
Operating earnings $ 103.6 $ 81.3 $ 302.0 $ 212.8
Restructuring and other
costs (gains) (7.6) 2.9 (13.6) 17.0
Impairment of assets 2.4 23.2 4.9 53.6
----------------------------------------------------------------------------
Adjusted operating
earnings $ 98.4 $ 107.4 $ 293.3 $ 283.4
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Depreciation and
amortization 24.9 26.5 103.4 106.7
----------------------------------------------------------------------------
Adjusted operating
earnings before
depreciation and
amortization $ 123.3 $ 133.9 $ 396.7 $ 390.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Reconciliation of net earnings - Fiscal year
----------------------------------------------------------------------------
Year ended
----------------------------------------------------------------------------
October 29, 2017 October 31, 2016
(in millions of dollars,
except per share amounts) Total Per share Total Per share
----------------------------------------------------------------------------
Net earnings $ 211.5 $ 2.73 $ 146.3 $ 1.89
Restructuring and other
costs (gains), net of
related taxes (12.8) (0.17) 10.4 0.13
Impairment of assets, net
of related taxes 3.5 0.05 39.6 0.51
----------------------------------------------------------------------------
Adjusted net earnings $ 202.2 $ 2.61 $ 196.3 $ 2.53
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Reconciliation of net earnings - Fourth quarter
----------------------------------------------------------------------------
Three months ended
----------------------------------------------------------------------------
October 29, 2017 October 31, 2016
(in millions of dollars,
except per share amounts) Total Per share Total Per share
----------------------------------------------------------------------------
Net earnings $ 73.4 $ 0.94 $ 57.7 $ 0.75
Restructuring and other
costs (gains), net of
related taxes (6.8) (0.08) 1.7 0.02
Impairment of assets, net
of related taxes 1.7 0.02 17.2 0.22
----------------------------------------------------------------------------
Adjusted net earnings $ 68.3 $ 0.88 $ 76.6 $ 0.99
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Reconciliation of net indebtedness
----------------------------------------------------------------------------
As at As at
October 29, October 31,
(in millions of dollars, except ratios) 2017 2016
----------------------------------------------------------------------------
Long-term debt $ 348.3 $ 347.9
Current portion of long-term debt - 0.2
Cash (247.1) (16.7)
----------------------------------------------------------------------------
Net indebtedness $ 101.2 $ 331.4
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted operating earnings before depreciation
and amortization (last 12 months) $ 396.7 $ 390.1
----------------------------------------------------------------------------
Net indebtedness ratio 0.3 x 0.8 x
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Dividend
The Corporation's Board of Directors declared a quarterly dividend of $0.20 per share on Class A Subordinate Voting Shares and Class B Shares. This dividend is payable on January 23, 2018 to shareholders of record at the close of business on January 4, 2018.
Conference Call
Upon releasing its fiscal 2017 results, the Corporation will hold a conference call for the financial community today at 4:15 p.m. The dial-in numbers are 1 647 788-4922 or 1 877 223-4471. Media may hear the call in listen-in only mode or tune in to the simultaneous audio broadcast on the Corporation's website, which will then be archived for 30 days. For media requests or interviews, please contact Nathalie St-Jean, Senior Advisor, Corporate Communications of TC Transcontinental, at 514 954-3581.
Profile
TC Transcontinental is Canada's largest printer and a key supplier of flexible packaging in North America. The Corporation is also a leader in its specialty media segments. 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 its stakeholders is to pursue its business activities in a responsible manner.
Transcontinental Inc. (TSX: TCL.A)(TSX: TCL.B), known as TC Transcontinental, has over 6,500 employees in Canada and the United States, and revenues of C$2.0 billion in 2017. 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, concentration of its sales in certain segments, cybersecurity and data protection, recruiting and retaining qualified personnel in certain geographic areas, taxation and interest rate. 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 October 29, 2017 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 nonrecurring or other unusual items, nor of divestitures, business combinations, mergers or acquisitions which may be announced after the date of December 14, 2017.
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 December 14, 2017. 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
Years ended October 29, 2017 and October 31, 2016
(in millions of Canadian dollars, except per share data)
----------------------------------------------------------------------------
October 29, October 31,
2017 2016
----------------------------------------------------------------------------
Revenues $ 2,007.2 $ 2,019.5
Operating expenses 1,610.5 1,629.4
Restructuring and other costs (gains) (13.6) 17.0
Impairment of assets 4.9 53.6
----------------------------------------------------------------------------
Operating earnings before depreciation and
amortization 405.4 319.5
Depreciation and amortization 103.4 106.7
----------------------------------------------------------------------------
Operating earnings 302.0 212.8
Net financial expenses 17.7 15.9
----------------------------------------------------------------------------
Earnings before share of net earnings in interests
in joint ventures and income taxes 284.3 196.9
Share of net earnings in interests in joint
ventures, net of related taxes 0.3 0.5
Income taxes 73.1 51.1
----------------------------------------------------------------------------
Net earnings $ 211.5 $ 146.3
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings per share - basic $ 2.74 $ 1.89
----------------------------------------------------------------------------
Net earnings per share - diluted $ 2.73 $ 1.88
----------------------------------------------------------------------------
Weighted average number of shares outstanding -
basic (in millions) 77.3 77.6
----------------------------------------------------------------------------
Weighted average number of shares - diluted (in
millions) 77.5 77.8
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years ended October 29, 2017 and October 31, 2016
(in millions of Canadian dollars)
----------------------------------------------------------------------------
October 29, October 31,
2017 2016
----------------------------------------------------------------------------
Net earnings $ 211.5 $ 146.3
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 2.3 0.9
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 1.3 6.5
Related income taxes 1.0 2.0
----------------------------------------------------------------------------
2.6 5.4
----------------------------------------------------------------------------
Cumulative translation differences
Net unrealized exchange gains (losses) on the
translation of the financial statements of
foreign operations (19.5) 13.9
Net change in the fair value of derivatives
designated as hedges of net investments in
foreign operations 3.4 0.6
Related income taxes 0.9 0.1
----------------------------------------------------------------------------
(17.0) 14.4
----------------------------------------------------------------------------
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 8.6 (49.9)
Related income taxes 2.4 (13.4)
----------------------------------------------------------------------------
6.2 (36.5)
----------------------------------------------------------------------------
Other comprehensive income (loss) (8.2) (16.7)
----------------------------------------------------------------------------
Comprehensive income $ 203.3 $ 129.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Years ended October 29, 2017 and October 31, 2016
(in millions of Canadian dollars)
----------------------------------------------------------------------------
Accumulated
other
Share Contributed Retained comprehensive
capital surplus earnings income (loss) Total
----------------------------------------------------------------------------
Balance as at
October 31, 2016 $ 361.9 $ 3.2 $ 700.9 $ 2.7 $1,068.7
Net earnings - - 211.5 - 211.5
Other comprehensive
loss - - - (8.2) (8.2)
Shareholders'
contributions and
distributions to
shareholders
Exercise of stock
options 9.7 (2.1) - - 7.6
Dividends - - (60.9) - (60.9)
----------------------------------------------------------------------------
Balance as at
October 29, 2017 $ 371.6 $ 1.1 $ 851.5 $ (5.5) $1,218.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance as at
October 31, 2015 $ 368.2 $ 3.2 $ 625.5 $ 19.4 $1,016.3
Net earnings - - 146.3 - 146.3
Other comprehensive
loss - - - (16.7) (16.7)
Shareholders'
contributions and
distributions to
shareholders
Share redemptions (6.8) - (14.7) - (21.5)
Exercise of stock
options 0.5 (0.1) - - 0.4
Dividends - - (56.2) - (56.2)
Stock-option
based
compensation - 0.1 - - 0.1
----------------------------------------------------------------------------
Balance as at
October 31, 2016 $ 361.9 $ 3.2 $ 700.9 $ 2.7 $1,068.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Years ended October 29, 2017 and October 31, 2016
(in millions of Canadian dollars)
----------------------------------------------------------------------------
As at As at
October 29, October 31,
2017 2016 (1)
----------------------------------------------------------------------------
Current assets
Cash $ 247.1 $ 16.7
Accounts receivable 380.6 401.9
Income taxes receivable 17.2 5.8
Inventories 116.9 119.6
Prepaid expenses and other current assets 18.4 15.9
----------------------------------------------------------------------------
780.2 559.9
Property, plant and equipment 500.8 566.0
Intangible assets 171.1 217.0
Goodwill 505.0 509.7
Investments in joint ventures 2.3 2.9
Deferred taxes 139.0 171.3
Other assets 38.3 35.4
----------------------------------------------------------------------------
$ 2,136.7 $ 2,062.2
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Current liabilities
Accounts payable and accrued liabilities $ 304.7 $ 316.0
Provisions 6.4 9.8
Income taxes payable 9.5 3.5
Deferred revenues and deposits 44.7 55.4
Current portion of long-term debt - 0.2
----------------------------------------------------------------------------
365.3 384.9
Long-term debt 348.3 347.9
Deferred taxes 44.1 43.4
Provisions 1.3 2.9
Other liabilities 159.0 214.4
----------------------------------------------------------------------------
918.0 993.5
----------------------------------------------------------------------------
Equity
Share capital 371.6 361.9
Contributed surplus 1.1 3.2
Retained earnings 851.5 700.9
Accumulated other comprehensive income (loss) (5.5) 2.7
----------------------------------------------------------------------------
1,218.7 1,068.7
----------------------------------------------------------------------------
$ 2,136.7 $ 2,062.2
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Certain comparative figures have been reclassified to conform to the
presentation adopted in the current year.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended October 29, 2017 and October 31, 2016
(in millions of Canadian dollars)
----------------------------------------------------------------------------
October 29, October 31,
2017 2016
----------------------------------------------------------------------------
Operating activities
Net earnings $ 211.5 $ 146.3
Adjustments to reconcile net earnings and cash
flows from operating activities:
Impairment of assets 4.9 53.6
Depreciation and amortization 127.8 132.7
Financial expenses on long-term debt 17.5 17.7
Net losses (gains) on disposal of assets (1.2) 1.3
Net gains on business disposals (24.1) (3.0)
Income taxes 73.1 51.1
Net foreign exchange differences and other 1.4 (3.7)
----------------------------------------------------------------------------
Cash flows generated by operating activities
before changes in non-cash operating items and
income taxes paid 410.9 396.0
Changes in non-cash operating items (31.0) (48.3)
Income taxes paid (55.8) (74.4)
----------------------------------------------------------------------------
Cash flows from operating activities 324.1 273.3
----------------------------------------------------------------------------
Investing activities
Business combinations (15.9) (86.3)
Business disposals 33.7 4.2
Acquisitions of property, plant and equipment (33.2) (58.5)
Disposals of property, plant and equipment 7.1 7.1
Increase in intangible assets (15.6) (18.2)
----------------------------------------------------------------------------
Cash flows from investing activities (23.9) (151.7)
----------------------------------------------------------------------------
Financing activities
Reimbursement of long-term debt (0.2) (34.4)
Net decrease in credit facility - (24.0)
Financial expenses on long-term debt (16.2) (16.2)
Interest received related to previous tax
reassessments - 7.9
Exercise of stock options 7.6 0.4
Dividends (60.9) (56.2)
Share redemptions - (21.5)
----------------------------------------------------------------------------
Cash flows from financing activities (69.7) (144.0)
----------------------------------------------------------------------------
Effect of exchange rate changes on cash
denominated in foreign currencies (0.1) 0.5
----------------------------------------------------------------------------
Net change in cash 230.4 (21.9)
Cash at beginning of year 16.7 38.6
----------------------------------------------------------------------------
Cash at end of year $ 247.1 $ 16.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Non-cash investing activities
Net change in capital asset acquisitions
financed by accounts payable $ (0.4) $ 1.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Contacts: Media: Nathalie St-Jean Senior Advisor, Corporate Communications TC Transcontinental 514-954-3581 [email protected] www.tc.tc Financial Community: Shirley Chenny Advisor, Investor Relations TC Transcontinental 514-954-4166 [email protected] www.tc.tc
Source: Transcontinental Inc.
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