ERPI

Sep 7, 2022

Author of the article: Try refreshing your browser, or Significant increase in revenues and net earnings, including organic revenue growth in all three operating sectors. Revenues of $747.8 million for the quarter ended July 31, 2022; operating earnings of $52.1 million; and net earnings attributable to shareholders of the Corporation of $34.1 million ($0.39 per share). Adjusted operating earnings before depreciation and amortization(1) of $113.0 million for the quarter ended July 31, 2022; adjusted operating earnings(1) of $72.6 million; and adjusted net earnings attributable to shareholders of the Corporation(1) of $49.6 million ($0.57 per share). Acquired ERPI (Éditions du renouveau pédagogique inc.), an educational publisher, on June 13, 2022, to pursue the growth strategy for educational products, both print and digital. Acquired Banaplast S.A.S., a flexible packaging company based in Armenia, Colombia, on June 22, 2022, which enables the Corporation to pursue its growth strategy with an expanded offering, in particular with banana tree bags and agro-mulches. Unveiled the 2025 Corporate Social Responsibility Plan, on June 15, 2022, which includes ambitious targets, in particular with respect to the creation of a circular economy, the reduction of greenhouse gases and diversity. Retirement of Brian Reid, President of TC Transcontinental Printing, after 41 years with the company, effective at the end of fiscal year 2022. Advertisement 2 Article content Financial Post Top Stories Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc. Email Address Sign Up By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300 Thanks for signing up! A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Financial Post Top Stories will soon be in your inbox. We encountered an issue signing you up. Please try again Article content (1) Please refer to the section entitled “Non-IFRS Financial Measures” in this press release for a definition of these measures. MONTREAL, Sept. 07, 2022 (GLOBE NEWSWIRE) — Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the third quarter of fiscal 2022, which ended July 31, 2022. “Despite continued inflationary pressures, supply chain challenges and a tight labour market, we increased both revenues and profits in the quarter,” said Peter Brues, President and Chief Executive Officer of TC Transcontinental. “I am proud of the actions taken by the team to improve our performance. “In our Packaging Sector, we recorded significant growth in revenues mainly as a result of the impact of the pass-through of raw materials costs, acquisitions and higher volume. This additional volume is the result of our investments in new equipment and innovative projects as well as the relentless work by our teams to support our customers. Combined with our initiatives to offset cost increases, the increase in volume contributed to a 15% organic growth in the sector’s adjusted operating earnings before depreciation and amortization. Advertisement 3 Article content “Our Printing Sector produced year-on-year revenue growth for the sixth consecutive quarter. Consistent with previous quarters, this growth was mainly driven by our in-store marketing, book printing and premedia activities. This demonstrates the positive evolution of our portfolio of activities. “I am very pleased with the acquisition of ERPI in our Media Sector as it complements our educational products and services offering, both print and digital. The timing of the transaction, combined with the seasonality of the educational publishing business, contributed to an increase in both revenues and profit in the sector for the quarter. “Our financial position remains solid, with no major debt maturities until 2025, giving us the flexibility to pursue our disciplined approach to profitable growth.” Advertisement 4 Article content 2022 Third Quarter Results Revenues increased by $126.2 million, or 20.3%, from $621.6 million in the third quarter of 2021 to $747.8 million in the corresponding period of 2022. This increase is mainly attributable to the impact of the transfer of the rise in raw materials prices, the acquisitions of H.S. Crocker Company, Inc., ERPI, BGI Retail Inc. Scolab Inc., and Banaplast S.A.S., as well as higher volume. Operating earnings before depreciation and amortization increased by $6.6 million, or 6.4%, from $103.4 million in the third quarter of 2021 to $110.0 million in the third quarter of 2022. Adjusted operating earnings before depreciation and amortization increased by $8.8 million, or 8.4%, from $104.2 million in the third quarter of 2021 to $113.0 million in the third quarter of 2022. These increases are mainly attributable to the acquisitions, higher volume, the positive impact of the transfer of higher raw materials prices in the Packaging Sector as well as the favourable exchange rate variation effect. These factors were partially offset by the end of the Canada Emergency Wage Subsidy which the Corporation received in the previous year and the unfavourable impact of inflationary pressures. Advertisement 6 Article content Net earnings attributable to shareholders of the Corporation increased by $6.0 million, from $28.1 million in the third quarter of 2021 to $34.1 million in the third quarter of 2022. This increase is mainly attributable to the previously explained growth in operating earnings before depreciation and amortization. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.32 to $0.39, respectively. Adjusted net earnings attributable to shareholders of the Corporation increased by $5.4 million, or 12.2%, from $44.2 million in the third quarter of 2021 to $49.6 million in the third quarter of 2022. This increase is attributable to higher adjusted operating earnings before depreciation and amortization. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $0.51 to $0.57, respectively. Advertisement 7 Article content Outlook In the Packaging Sector, as a result of signing new contracts, introducing new products to the market and investing in new production equipment, we expect organic volume growth in fiscal year 2022 compared to fiscal 2021, excluding the impact of the 53rd week on the results for fiscal year 2021. In addition, we expect an increase in adjusted operating earnings before depreciation and amortization for fiscal year 2022 compared to the prior fiscal year. In the Printing Sector, with the significant volume in our in-store marketing activities and other growth activities, we expect revenue growth for fiscal year 2022, excluding the impact of the 53rd week on the results for fiscal year 2021. In terms of profitability, we expect that adjusted operating earnings before depreciation and amortization for fiscal year 2022 will be similar to fiscal 2021, excluding amounts related to the Canada Emergency Wage Subsidy and the impact of the 53rd week on the results for fiscal year 2021. Advertisement 8 Article content Finally, we expect to continue generating significant cash flows from operating activities. In addition, with the proactive refinancing transactions of recent years, we have no major debt maturities until 2025. This, combined with our solid financial position, should provide us with the flexibility needed to pursue our profitable growth strategy. Non-IFRS Financial Measures In this document, unless otherwise indicated, all financial data are prepared in accordance with International Financial Reporting Standards (IFRS) and the term “dollar”, as well as the symbol “$” 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 interim condensed consolidated financial statements for the third quarter ended July 31, 2022. Advertisement 9 Article content 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 operating earnings margin, 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. Advertisement 11 Article content Normal Course Issuer Bid 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 October 1, 2021 and September 30, 2022, or at an earlier date if the Corporation concludes or cancels the offer, up to 1,000,000 of its Class A Subordinate Voting Shares and up to 190,300 of its Class B Shares. During the three-month period ended July 31, 2022, the Corporation redeemed and cancelled 63,000 of its Class A Subordinate Voting Shares at a weighted average price of $15.86 per share, for a total cash consideration of $1.0 million. During the nine-month period ended July 31, 2022, the Corporation redeemed and cancelled 400,800 of its Class A Subordinate Voting Shares at a weighted average price of $17.43 per share, for a total cash consideration of $7.0 million. Advertisement 18 Article content Conference Call Upon releasing its 2022 third quarter results, the Corporation will hold a conference call for the financial community on September 7, 2022 at 4:15 p.m. The dial-in numbers are 1-416-764-8646 or 1-888-396-8049. Media may hear the call in listen-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 a leader in flexible packaging in North America, and Canada’s largest printer. The Corporation is also the leading Canadian French-language educational publishing group. For over 45 years, TC Transcontinental’s mission has been to create quality products and services that allow businesses to attract, reach and retain their target customers. Advertisement 19 Article content 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 8,300 employees, the majority of which are based in Canada, the United States and Latin America. TC Transcontinental had revenues of more than C$2.6 billion for the fiscal year ended October 31, 2021. 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 economic situation in the world, structural changes in the industries in which the Corporation operates, the impact of digital product development and adoption on the demand for retailer-related services and other printed products, the Corporation’s ability to generate organic growth in highly competitive industries, the Corporation’s ability to complete acquisitions and properly integrate them, the inability to maintain or improve operational efficiency and avoid disruptions that could affect its ability to meet deadlines, cybersecurity and data protection, the political and social environment as well as regulatory and legislative changes, in particular with regard to the environment and door-to-door distribution, changes in consumption habits related, in particular, to issues involving sustainable development and the use of certain products or services such as door-to-door distribution, change in consumption habits or loss of a major customer, customer consolidation, the safety and quality of its packaging products used in the food industry, the protection of its intellectual property rights, the exchange rate, availability of capital at a reasonable cost, bad debts from certain customers, import and export controls, raw materials, transportation and consumed energy costs, availability of raw materials, recruiting and retaining qualified personnel, taxation, interest rates and the impact of the COVID-19 pandemic on its operations, facilities and financial results, changes in consumption habits from consumers and changes in the operations and financial position of the Corporation’s customers due to the COVID-19 pandemic and the effectiveness of plans and measures implemented in response thereto. 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 31, 2021 and in the latest Annual Information Form. Advertisement 20 Article content 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 7, 2022. 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 7, 2022. 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. Advertisement 21