Transcontinental Inc. Announces Results for the Second Quarter of Fiscal Year 2025

Highlights

• Revenues of $684.1 million for the quarter ended April 27, 2025; operating earnings of $51.1 million; and net earnings attributable to shareholders of the Corporation of $33.8 million ($0.40 per share).
• Adjusted operating earnings before depreciation and amortization⁽¹⁾ of $108.5 million for the quarter ended April 27, 2025; adjusted operating earnings⁽¹⁾ of $70.1 million; and adjusted net earnings attributable to shareholders of the Corporation⁽¹⁾ of $48.2 million ($0.58 per share).
• Growth in adjusted net earnings attributable to shareholders of the Corporation per share⁽¹⁾ of 11.5%.
• Repayment at maturity of unsecured notes (issued in 2022) amounting to $200.0 million.
• Payment of a special dividend of $1.00 per share on April 23, 2025.

(1) Please refer to the section entitled "Non-IFRS Financial Measures" in this press release for a definition of these measures.

Montréal, June 4, 2025 - Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the second quarter of fiscal year 2025, which ended April 27, 2025.

"Once again, the results for this quarter continue to demonstrate the positive impact of the implementation of our program aimed at improving our profitability and our financial position," said Thomas Morin, President and Chief Executive Officer of TC Transcontinental.

"As anticipated, the Packaging Sector experienced a slight decrease in revenues and earnings compared to the second quarter of 2024, during which the sector had posted record quarterly earnings. The initiatives put in place to reduce our costs enabled the sector to deliver an adjusted operating earnings margin before depreciation and amortization of 16.2% for the quarter. We remain confident in our ability to generate organic growth in volume and earnings during the second half of fiscal year 2025.

"The Retail Services and Printing Sector posted a very good quarter with a 5.1% increase in revenues and a 15.5% rise in adjusted operating earnings before depreciation and amortization to $54.4 million, which is the fourth consecutive increase in quarterly profitability. This solid performance results notably from growth in our book printing, specialty solutions and in-store marketing activities as well as the benefits of the cost reduction initiatives we implemented in the second quarter of fiscal year 2024."

"The decrease in our long-term debt as a result of the significant cash flows from operations generated during the last year and from the sale of our industrial packaging operations allowed us to reduce our financial expenses and to grow adjusted net earnings per share by 11.5% for the quarter," added Donald LeCavalier, Executive Vice President and Chief Financial Officer of TC Transcontinental. Our solid financial position enabled us to pay a special dividend of $1.00 per share during the second quarter while maintaining the flexibility needed to pursue targeted acquisitions."

Financial Highlights

 

 

Results for the Second Quarter of Fiscal Year 2025

Revenues increased by $0.9 million, or 0.1%, from $683.2 million in the second quarter of 2024 to $684.1 million in the corresponding period of 2025. This increase is attributable to the favourable exchange rate effect and higher volume in the Retail Services and Printing Sector, notably in book printing activities, partially offset by the impact of the sale of the industrial packaging operations and lower volume in the Packaging Sector.

Operating earnings before depreciation and amortization increased by $15.8 million, or 17.8%, from $88.7 million in the second quarter of 2024 to $104.5 million in the second quarter of 2025. This increase is mainly attributable to the decrease in restructuring and other costs, the decline in asset impairment charges, the favourable impact of cost reduction initiatives, the impact of higher volume in the Retail Services and Printing Sector and the favourable exchange rate effect, offset by the sale of the industrial packaging operations and the impact of lower volume in the Packaging Sector.

Adjusted operating earnings before depreciation and amortization decreased by $1.6 million, or 1.5%, from $110.1 million in the second quarter of 2024 to $108.5 million in the second quarter of 2025. This decrease is mainly due to the sale of the industrial packaging operations and the impact of lower volume in the Packaging Sector, mostly mitigated by the favourable impact of cost reduction initiatives, higher volume in the Retail Services and Printing Sector and the favourable exchange rate effect.

Net earnings attributable to shareholders of the Corporation increased by $17.9 million, or 112.6%, from $15.9 million in the second quarter of 2024 to $33.8 million in the second quarter of 2025. This increase is mainly attributable to the previously explained increase in operating earnings before depreciation and amortization, lower financial expenses and the decrease in depreciation and amortization, partially offset by higher income taxes. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.18 to $0.40, respectively.

Adjusted net earnings attributable to shareholders of the Corporation increased by $2.9 million, or 6.4%, from $45.3 million in the second quarter of 2024 to $48.2 million in the second quarter of 2025. This increase is mainly attributable to lower financial expenses, partially offset by the previously explained decrease in adjusted operating earnings before depreciation and amortization. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $0.52 to $0.58, respectively.

Results for the First Six Months of Fiscal Year 2025

Revenues decreased by $36.5 million, or 2.7%, from $1,363.6 million in the first six months of fiscal year 2024 to $1,327.1 million in the corresponding period of 2025. This decrease is mainly due to lower volume and the impact of the sale of the industrial packaging operations, partially mitigated by the favourable exchange rate effect.

Operating earnings before depreciation and amortization increased by $74.5 million, or 43.5%, from $171.4 million in the first six months of fiscal year 2024 to $245.9 million in the corresponding period of 2025. This increase is mainly attributable to the decrease in restructuring and other costs, the decline in asset impairment charges, the favourable impact of cost reduction initiatives and the favourable exchange rate effect, partially offset by the impact of the sale of the industrial packaging operations and the effect of lower volume in the Packaging Sector.

Adjusted operating earnings before depreciation and amortization remained relatively stable, from $206.2 million in the first six months of fiscal year 2024 to $206.0 million in the corresponding period of 2025. The impact of the sale of industrial packaging operations was mostly mitigated by the favourable exchange rate effect.

Net earnings attributable to shareholders of the Corporation increased by $59.6 million, or 200.0%, from $29.8 million in the first six months of fiscal year 2024 to $89.4 million in the corresponding period of 2025. 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 $0.34 to $1.07, respectively.

Adjusted net earnings attributable to shareholders of the Corporation increased by $7.0 million, or 8.5%, from $82.7 million in the first six months of fiscal year 2024 to $89.7 million in the corresponding period of 2025. This increase is mainly attributable to lower financial expenses, partially offset by higher adjusted income taxes. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $0.95 to $1.07, respectively.

For more detailed financial information, please see the Management’s Discussion and Analysis for the second quarter ended April 27, 2025, as well as the financial statements in the “Investors” section of our website at www.tc.tc.

Outlook ⁽¹⁾

The investments in our growth activities, including flexible packaging and in-store marketing, position us well for the future and should be a key driver of our long-term growth.

In terms of profitability, we expect to generate organic growth in adjusted operating earnings before depreciation and amortization of the Packaging Sector for fiscal 2025 compared to fiscal 2024. In the Retail Services and Printing Sector, we expect adjusted operating earnings before depreciation and amortization for fiscal 2025 to be stable compared to 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.

(1) The following outlook does not take into account the impact of the implementation of protectionist trade measures and a potential labour conflict at Canada Post on our operations and their effects on our results.

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 unaudited condensed interim consolidated financial statements for the second quarter ended April 27, 2025.

 

 

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.

 

 

 

 

 

 

 

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 July 21, 2025, to shareholders of record at the close of business on June 30, 2025.

Normal Course Issuer Bid

On June 12, 2024, the Corporation was 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 first six months of fiscal year 2025, the Corporation repurchased and cancelled 934,434 Class A Subordinate Voting Shares at a weighted average price of $17.38 and 3,600 Class B Shares at a weighted average price of $17.27, for a total cash consideration of $16.3 million.

Additional information

Conference Call

Upon releasing its results for the second quarter of fiscal year 2025, the Corporation will hold a conference call for the financial community on June 5, 2025, 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 Jonathan Provencher, Senior Manager, Corporate Communications of TC Transcontinental, at 438-925-1412.

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 7,400 employees, the majority of which are based in Canada, the United States and Latin America. TC Transcontinental generated revenues of $2.8 billion during the fiscal year ended October 27, 2024. 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, the impact of changes in the participants in the distribution of newspapers and printed advertising materials and the disruption in their activities resulting mainly from labour disputes, including at Canada Post, the impact of 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 pension 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 fiscal year ended October 27, 2024 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 June 4, 2025. The forward-looking statements in this press release are made pursuant to the “safe harbour” provisions of applicable Canadian securities legislation. The forward-looking statements in this release are based on current expectations and information available as at June 4, 2025. 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.

-30-

 

For Information