Press Releases

Transcontinental Inc. announces its financial results for the first quarter of Fiscal 2017


  • Revenues increased by $4.7 million, or 0.9%.
  • Operating earnings increased by $10.8 million, or 20.9%. Adjusted operating earnings, which exclude restructuring and other costs (revenues) and impairment of assets, increased by $4.2 million, or 7.4%.
  • Net earnings increased by $5.4 million, or 14.5%. Adjusted net earnings, which exclude restructuring and other costs (revenues) and impairment of assets, net of related taxes, decreased by $0.1 million, or 0.2%.
  • Conclusion of 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.
  • The Board of Directors approved an 8.1% increase in the dividend per share to $0.80 per year.

Montreal, March 3, 2017 - Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the first quarter of Fiscal 2017, which ended January 29, 2017.

"I am proud of our results for the first quarter, which show an increase in our revenues and profitability while we successfully continue our transformation", said François Olivier, President and Chief Executive Officer of TC Transcontinental. "Our performance confirms the effectiveness of our strategy, which we are executing in a disciplined manner."

"For the printing division, we are pleased to announce that we have entered into an expanded agreement with Lowe's Canada. In addition to renewing our agreement for the full range of services offered to RONA, we have expanded our business relationship with Lowe's, which has entrusted us with the printing of its flyers in Canada. This multi-year agreement, which includes all our retailer-related services for all of the Lowe's and RONA banners across the country, reflects their support of Canadian suppliers. It is also a mark of confidence in the quality of our services."

"In the Media Sector, the efficiency measures deployed over the last few quarters, combined with our exit from all our interactive marketing activities, continued to mitigate the impact of lower local newspapers advertising revenues on our profitability."

"As for our packaging division, we are finalizing the integration of Flexstar Packaging, which is proceeding according to plan. To support our transformation and our growth ambitions in this division, we continue to deploy significant resources to develop our sales force and invest in our manufacturing platform to meet our future needs. Considering our growing sales funnel, we are confident that these initiatives will yield results."

"With our sound financial position and our significant cash flows, we are well positioned to ensure our sustainable growth and continue to diversify our assets into packaging."

Financial Highlights

2017 First Quarter Results
Revenues for the first quarter of 2017 went from $498.9 million to $503.6 million, an increase of 0.9%. The contribution from acquisitions, in particular in the packaging division, and the favourable exchange rate effect more than offset the loss of revenues related to disposals and closures in the Media Sector and the decrease in revenues from existing operations. In the printing division, revenues from existing operations declined. This decrease was mitigated by the stable demand from Canadian retailers for printed flyers and door-to-door distribution services as well as the increase in revenues from premedia and in-store marketing services. In addition, the agreement to print the Toronto Star, which started in July 2016, partially offset the negative impact of the sustained decline in advertising spending in several activities as well as the completion of the agreement to print Canada's census form in 2016. In the packaging division, revenues from existing operations increased slightly compared to the first quarter of 2016. In the Media Sector, the decline in advertising revenues continued to have a negative impact on local newspaper publishing activities.

Adjusted operating earnings went from $57.1 million to $61.3 million in the first quarter of 2017, an increase of 7.4%. Excluding the unfavourable effect of $8.3 million related to stock-based compensation as a result of the significant change in the share price in the first quarter of 2017 compared to the corresponding period in 2016, adjusted operating earnings increased by 21.9%. This increase is attributable to the contribution from acquisitions, the favourable exchange rate effect as well as the increase in adjusted operating earnings from existing operations. This growth in adjusted operating earnings from existing operations is due to the continued cost reduction initiatives throughout the Corporation, partially offset by the lower revenues mentioned above.

Net earnings increased from $37.3 million in the first quarter of 2016 to $42.7 million in the first quarter of 2017. This increase is mainly explained by higher operating earnings, partially offset by the increase in net financial expenses and income taxes. On a per share basis, net earnings increased from $0.48 to $0.55. Excluding restructuring and other costs (revenues) and impairment of assets, net of related income taxes, adjusted net earnings decreased by $0.1 million, or 0.2%, from $41.4 million in the first quarter of 2016 to $41.3 million in the first quarter of 2017. On a per share basis, adjusted net earnings remained stable at $0.53.

For more detailed financial information, please see Management's Discussion and Analysis for the first quarter ended January 29th, 2017 as well as the financial statements in the "Investors" section of our website at

Outlook for 2017
In the printing division, we expect stable revenues from our offering to current retailers, in particular flyer printing and door-to-door distribution services, as well as higher revenues from premedia and in-store marketing product services. In addition, we will benefit from the new agreement with Lowe's Canada to print their flyers in Canada. We will also benefit from the additional contribution from the agreement to print the Toronto Star until the end of June, and we are pursuing our initiatives to secure new newspaper printing outsourcing contracts. However, these favourable elements should be affected by a decrease in volume from certain newspaper publishers as a result of reduced circulation. Furthermore, our commercial and magazine printing activities will be affected by a reduction in print advertising. Lastly, the completion of the non-recurring contract to print Canada's census form in the second quarter of 2016 will have an unfavourable effect in the second quarter of 2017. With respect to adjusted operating earnings, we will continue our operational efficiency initiatives as in the past.

In our packaging division, we will benefit from the contribution from the acquisition of Robbie Manufacturing until the end of June, and from the acquisition of Flexstar Packaging until the end of our fourth quarter. In addition, once fully integrated, these acquisitions will also generate synergies. Furthermore, to support our transformation and future growth, we will continue to deploy resources to strengthen our sales force and develop our manufacturing platform. Lastly, we will maintain our disciplined acquisition approach in this promising market in order to invest in quality assets that meet our strategic criteria.

In the Media Sector, the impact of the transformation of the advertising market on our local newspaper publishing activities will continue, but will be partly offset by our cost reduction initiatives and our strategic exit from our interactive marketing solutions activities until the end of our second quarter of 2017. With respect to the Business and Education group, we expect that revenues and adjusted operating earnings will remain stable.

To conclude, we expect to generate significant cash flows and maintain our excellent financial position, which should enable us to continue investing to support our transformation into flexible packaging.

Reconciliation of Non-IFRS Financial Measures
Financial information has been prepared in conformity with IFRS. However, certain measures used in this press release do not have any standardized meaning under IFRS and could be calculated differently by other companies. We believe that many readers analyze our results based on certain non-IFRS financial measures because such measures provide a better indicator of the performance of the Corporation's activities. Management uses such non-IFRS financial information to evaluate the performance of its operations and managers. These measures should be considered in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with IFRS.

IFRS financial measures to non-IFRS financial measures

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 April 19, 2017 to shareholders of record at the close of business on April 3, 2017. The Corporation thus increased the dividend per participating share by 8.1%, or $0.06, raising the annual dividend from $0.74 to $0.80 per share. This increase reflects TC Transcontinental's solid cash flow position.

Additional Information

Annual General Meeting of Shareholders
Transcontinental Inc. will hold its Annual General Meeting of Shareholders today at 1:30 p.m. at the Saint James's Club, 1145 Union Avenue, in Montreal. For those who are unable to attend in person, an audio webcast of the meeting will be available as of March 6 on the Corporation's website

Conference Call
Upon releasing its first quarter 2017 results, the Corporation will hold a conference call for the financial community today at 11:30 a.m. The dial-in numbers are 1 647 788-4922 or 1 877 223-4471. Media may hear the call in listen-in only mode or tune in to the simultaneous audio broadcast on the Corporation's website, which will then be archived for 30 days. For media requests or interviews, please contact Nathalie St-Jean, Senior Advisor, Communications of TC Transcontinental, at 514-954-3581.

Canada's largest printer with operations in print, flexible packaging, publishing and digital media, TC Transcontinental's mission is to create products and services that allow businesses to attract, reach and retain their target customers.

Respect, teamwork, performance and innovation are strong values held by the Corporation and its employees. The Corporation's commitment to its stakeholders is to pursue its business and philanthropic activities in a responsible manner.

Transcontinental Inc. (TSX: TCL.A TCL.B), known as TC Transcontinental, has close to 8,000 employees in Canada and the United States, and revenues of C$2.0 billion in 2016.  Website

Forward-looking Statements
Our public communications often contain oral or written forward-looking statements which are based on the expectations of management and inherently subject to a certain number of risks and uncertainties, known and unknown. By their very nature, forward-looking statements are derived from both general and specific assumptions. The Corporation cautions against undue reliance on such statements since actual results or events may differ materially from the expectations expressed or implied in them. Forward-looking statements may include observations concerning the Corporation's objectives, strategy, anticipated financial results and business outlook. The Corporation's future performance may also be affected by a number of factors, many of which are beyond the Corporation's will or control. These factors include, but are not limited to, the economic situation in the world and particularly in Canada and the United States, structural changes in the industries in which the Corporation operates, the exchange rate, availability of capital, energy costs, competition, the Corporation's capacity to engage in strategic transactions and integrate acquisitions into its activities, the regulatory environment, the safety of its packaging products used in the food industry, innovation of its offering and concentration of its sales in certain segments. The main risks, uncertainties and factors that could influence actual results are described in Management's Discussion and Analysis (MD&A) for the fiscal year ended on October 31st, 2016, in the latest Annual Information Form and have been updated in the MD&A for the first quarter ended January 29th, 2017.

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 March 3, 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 March 3, 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.

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For information:


Nathalie St-Jean

Senior Advisor, Communications

TC Transcontinental

Telephone: 514-954-3581


Financial Community

Shirley Chenny

Advisor, Investor Relations

TC Transcontinental

Telephone: 514-954-4166