Transcontinental Ends Fiscal 2013 with a Steady Performance

Highlights of Fiscal 2013

• Adjusted net income applicable to participating shares grew 5.2 percent, from $149.4 million to $157.2 million; on a per share basis, it rose from $1.85 to $2.02.
• Excellent Printing Sector performance, including $30 million in realized synergies from the acquisition of Quad/Graphics Canada Inc. in 2013 and $40 million since the acquisition in March 2012.
• Recorded an asset impairment charge (including goodwill) of $170 million mainly due to difficult market conditions in the Media Sector.
• Successfully launched in-store marketing printing services for Canadian retailers, which generated annualized revenues of $25 million in 2013.
• Received an amount of US$200 million from the renegotiation of an agreement with Hearst Corp.
• Declared a special dividend of $1.00 per participating share, or approximately $78 million, in addition to the regular dividend.
• Maintained a solid financial position with a net indebtedness ratio of 0.91x.
• Entered into a definitive agreement pursuant to which the Corporation will acquire all Quebec community newspapers and associated web properties from Sun Media Corporation, a subsidiary of Quebecor Media, for a total purchase price of $75 million, as well as an agreement with Quebecor Media for the printing of some of its magazines and direct marketing material.

Adjusted operating income declined slightly, or 0.6 percent, from $245.2 million to $243.8 million. This slight decrease is primarily due to the share-price variance in fiscal 2013, compared to fiscal 2012 (a 62 percent rise in share price), which increased the stock-based compensation expense, as well as the reasons mentioned above. This decrease in adjusted operating income was partially offset, however, by synergies derived from the acquisition of Quad/Graphics Canada, Inc. and the optimization of our company-wide cost structure. Net income applicable to participating shares improved from a loss of $183.3 million, or $2.27 per share, to a loss of $14.5 million, or $0.19 per share. This improvement is mainly due to unusual income tax adjustments of $115.2 million recorded in 2012, including financial expenses, and to a lower asset impairment charge in 2013. Adjusted net income applicable to participating shares grew 5.2 percent, from $149.4 million, or $1.85 per share, to $157.2 million, or $2.02 per share.