Transcontinental Inc. Announces Results for the Third Quarter of Fiscal Year 2026

Highlights

• Revenues of $306.0 million for the quarter ended July 26, 2026; operating earnings of $66.9 million; and net earnings from continuing operations of $36.9 million ($0.44 per share).
• Adjusted operating earnings before depreciation and amortization⁽¹⁾ of $60.9 million for the quarter ended July 26, 2026; adjusted operating earnings⁽¹⁾ of $43.6 million; and adjusted net earnings from continuing operations⁽¹⁾ of $27.1 million (0.32 $ per share).
• Successful nationwide rollout of raddar^®.
• Sale of two buildings for a net consideration of $36.5 million.

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

Montréal, September 9, 2026 - Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the third quarter of fiscal year 2026 ended July 26, 2026.

"We had anticipated improved performance for the second half of our fiscal year, and our results for the third quarter live up to expectations with an increase in adjusted operating earnings before depreciation and amortization," said Sam Bendavid, Chief Executive Officer of TC Transcontinental. "In this continuity, I am confident that we will end fiscal year 2026 with results that meet our financial outlook."

"In the Retail Services and Printing Sector, our acquisitions in in‑store marketing activities enabled us to generate growth despite the slowdown in our traditional activities. In addition, the increase in volume, combined with the initiatives implemented to increase profitability, enhanced the financial performance of our in‑store marketing and specialty activities. Furthermore, the successful nationwide rollout of raddar®, which occurred in mid‑June, had a positive impact on revenues for the quarter."

"In the Books and Education Sector, revenues decreased slightly, mainly as a result of last year's solid performance and a shift in orders to the fourth quarter of fiscal 2026."

"The significant cash flows we expect to generate in the fourth quarter of fiscal year 2026 will enable us to reduce significantly net indebtedness by the end of the fiscal year," added Donald LeCavalier, Executive Vice President and Chief Financial Officer of TC Transcontinental. "Our financial position is solid and gives us the flexibility we need to pursue our growth strategy."

Financial Highlights

Results for the Third Quarter of Fiscal Year 2026

Revenues increased by $11.1 million, or 3.8%, from $294.9 million in the third quarter of fiscal year 2025 to $306.0 million in the third quarter of fiscal year 2026. This increase is mostly attributable to our recent acquisitions, partially offset by lower volume in our two sectors and, to a lesser extent, the unfavourable exchange rate effect.

Operating earnings before depreciation and amortization increased by $38.5 million, or 81.6%, from $47.2 million in the third quarter of fiscal year 2025 to $85.7 million in the third quarter of fiscal year 2026. This increase is mainly attributable to the decrease in restructuring and other costs (revenues) related to the net gains on the sale of two buildings, the decline in asset impairment charges, our recent acquisitions and our cost reductions initiatives, partially offset by lower volume in our two sectors and, to a lesser extent, the unfavourable exchange rate effect.

Adjusted operating earnings before depreciation and amortization increased by $2.4 million, or 4.1%, from $58.5 million in the third quarter of fiscal year 2025 to $60.9 million in the third quarter of fiscal year 2026. This increase is mainly attributable to our recent acquisitions and our cost reduction initiatives, partially offset by lower volume in our two sectors and the unfavourable exchange rate effect.

Net earnings from continuing operations increased by $23.9 million, or 183.8%, from $13.0 million in the third quarter of fiscal year 2025 to $36.9 million in the third quarter of fiscal year 2026. This increase is mainly attributable to the previously explained increase in operating earnings before depreciation and amortization, partially offset by higher income taxes and the increase in financial expenses and, to a lesser extent, the increase in depreciation and amortization. On a per share basis, net earnings from continuing operations increased by 175.0%, from $0.16 to $0.44, respectively.

Adjusted net earnings from continuing operations increased by $4.9 million, or 22.1%, from $22.2 million in the third quarter of fiscal year 2025 to $27.1 million in the third quarter of fiscal year 2026. This increase is mainly attributable to the decrease in financial expenses excluding foreign exchange losses on non-designated financial instruments and the previously explained increase in adjusted operating earnings before depreciation and amortization, partially offset by higher adjusted income taxes. On a per share basis, adjusted net earnings from continuing operations increased by 18.5%, from $0.27 to $0.32, respectively.

Results for the First Nine Months of Fiscal Year 2026

Revenues increased by $2.8 million, or 0.3%, from $835.9 million in the first nine months of fiscal year 2025 to $838.7 million in the corresponding period of 2026. This increase is mainly explained by our recent acquisitions and the favourable exchange rate effect, mostly offset by lower volume in our two sectors.

Operating earnings before depreciation and amortization increased by $14.1 million, or 10.9%, from $129.1 million in the first nine months of fiscal year 2025 to $143.2 million in the corresponding period of 2026. This increase is mainly attributable to the decrease in restructuring and other costs (revenues), our recent acquisitions, the favourable exchange rate effect, the drop in asset impairment charges, our cost reduction initiatives and the decrease in incentive compensation, partially offset by lower volume in our two sectors.

Adjusted operating earnings before depreciation and amortization decreased by $5.6 million, or 3.9%, from $145.0 million in the first nine months of fiscal year 2025 to $139.4 million in the corresponding period of 2026. This decrease is mainly due to lower volume in our two sectors, partially mitigated by our recent acquisitions, the favourable exchange rate effect, our cost reduction initiatives and the decrease in incentive compensation.

Net earnings from continuing operations increased by $7.8 million, or 23.5%, from $33.2 million in the first nine months of fiscal year 2025 to $41.0 million in the corresponding period of 2026. This increase is mainly attributable to the previously explained rise in operating earnings before depreciation and amortization and lower income taxes, partially offset by the increase in financial expenses and, to a lesser extent, higher depreciation and amortization. On a per share basis, net earnings attributable to shareholders of the Corporation from continuing operations increased by 22.5%, from $0.40 to $0.49, respectively.

Adjusted net earnings from continuing operations increased by $2.4 million, or 5.1%, from $47.4 million in the first nine months of fiscal year 2025 to $49.8 million in the corresponding period of 2026. This increase is mainly attributable to the decrease in financial expenses excluding foreign exchange losses on non-designated financial instruments and lower adjusted income taxes, partially offset by the previously explained decline in adjusted operating earnings before depreciation and amortization. On a per share basis, adjusted net earnings from continuing operations increased by 5.3%, from $0.57 to $0.60, respectively.

For more detailed financial information, please see the Management’s Discussion and Analysis for the third quarter of fiscal year 2026 ended July 26, 2026, as well as the financial statements in the “Investors” section of our website at www.tc.tc.

Outlook

The closing of the sale of our Packaging Business represents a key milestone for TC Transcontinental. This transaction allows us to focus our resources on our growth strategy, in particular in in-store marketing and educational publishing activities.

For fiscal year 2026, we anticipate lower volume in our traditional activities, including book printing which experienced very high growth in fiscal year 2025. This decrease should be partially offset by growth in our in‑store marketing and specialty activities, including the positive impact of acquisitions.

At the consolidated level, following the positive impact of cost reduction initiatives, we expect adjusted operating earnings before depreciation and amortization from continuing operations for fiscal year 2026 to remain stable compared to fiscal year 2025.

Lastly, we expect to continue generating significant cash flows from operating activities. Over the next quarter, this should enable us to reduce net indebtedness under two times adjusted operating earnings before depreciation and amortization for fiscal year 2026 while investing in our growth.

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 "Reconciliation of Non-IFRS Financial Measures" section and in Note 4 "Segmented Information" to the condensed interim consolidated financial statements for the third quarter ended July 26, 2026.

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 margin before depreciation and amortization, adjusted operating earnings, adjusted operating earnings margin, adjusted income taxes, adjusted net earnings from continuing operations, adjusted net earnings per share from continuing operations, net indebtedness and net indebtedness ratio, for which a reconciliation is presented in the following table, are not defined by IFRS. They may be calculated differently and may not be comparable to similar measures presented 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 $0.05 per share on Class A Subordinate Voting Shares and Class B Shares. This dividend is payable on October 21, 2026, to shareholders of record at the close of business on October 5, 2026.

Additional information

Conference Call

Upon releasing its results for the third quarter of fiscal year 2026, the Corporation will hold a conference call for the financial community on September 9, 2026, at 4:00 p.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 Jeanne Routhier, Coordinator, Communications of TC Transcontinental, at 438-398-4055.

Profile

Founded 50 years ago and 4,200 employees strong, Transcontinental Inc. (TSX: TCL.A TCL.B), known under the TC Transcontinental brand, is a Canadian retail marketing services company, Canada's largest printer, and the Canadian leader in French‑language educational publishing. Driven by the vision of a more informed, educated and prosperous society, TC Transcontinental propels its clients' success across the retail, education, book and information industries. With agility, creativity and boldness, we design and deliver innovative, high‑value products and services. For more information, please visit 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 business acquisitions and disposals and properly integrate acquisitions, 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, bad debts from certain customers, import and export controls, duties, tariffs or taxes, exchange rate fluctuations, increase in market interest rates with respect to its 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 26, 2025, 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 9, 2026. 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 9, 2026. 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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