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

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

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.}

MONTREAL, June 04, 2025 (GLOBE NEWSWIRE) -- 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.

Outlook¹

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.

^{(1) Amortization of intangible assets arising from business combinations includes our customer relationships, rights of first refusal and educational book titles.}

^{(2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.}

^{(1) Amortization of intangible assets arising from business combinations includes our customer relationships.}

^{(2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.}

^{(1) Amortization of intangible assets arising from business combinations includes our customer relationships.}

^{(2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.}