Highlights
- Revenues of $705.8 million; operating earnings of $40.8 million; and net earnings attributable to shareholders of the Corporation of $6.4 million ($0.07 per share).
- Adjusted operating earnings before depreciation and amortization(1) of $109.0 million, adjusted operating earnings(1) of $72.1 million, and adjusted net earnings attributable to shareholders of the Corporation(1) of $42.8 million ($0.49 per share).
- Improvement in net indebtedness ratio(1) to 2.3x (2.0x excluding the impact of IFRS 16(2)) following the sale to Hood Packaging Corporation of its paper and woven polypropylene packaging operations for US$180 million (C$235.1 million).
- Acquired Artisan Complete Limited, a company specialized in in-store marketing, enabling TC Transcontinental to continue enhancing its product offering in this promising vertical.
- Created a Recycling Group within TC Transcontinental Packaging to vertically integrate the recycling of plastics in its packaging production chain.
- Increased the annual dividend by 2.3% to $0.90 per share.
- Increased the maximum number of Class A Subordinate Voting Shares that may be repurchased under its normal course issuer bid from 1,000,000 to 2,000,000 shares.
(1) Please refer to the section entitled "Non-IFRS Financial Measures" in this press release for a definition of these measures.
(2) The Corporation adopted IFRS 16 using the modified retrospective transition method. Under this method, the net indebtedness ratio calculation includes the total impact of IFRS 16 on the numerator and the partial impact on the denominator. For comparison purposes, the ratio excluding the impact of IFRS 16 was calculated.
MONTRÉAL, Feb. 27, 2020 (GLOBE NEWSWIRE) -- Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the first quarter of fiscal 2020, which ended January 26, 2020.
"I am pleased with the Printing Sector's performance in the first quarter of 2020, said François Olivier, President and Chief Executive Officer of TC Transcontinental. The cost reduction measures put in place in the last few quarters have delivered results. In addition, the integration of our two most recent acquisitions in the promising in-store marketing vertical is progressing.
"In our Packaging Sector, a decline in our paper packaging operations, which were sold to Hood Packaging Corporation around the end of the quarter, as well as the decrease in the price of resin led to lower revenues. However, our profit margins increased compared to last year, and we will continue to gradually improve them during the year, in particular by realizing synergies and efficiency gains.
"The creation of the Recycling Group aims to vertically integrate the recycling of plastics in our packaging production chain, ultimately ensuring a stable procurement of this material for us. This decision stems from our desire, and that of many customers, to differentiate ourselves with an offering of eco-responsible packaging products containing recycled plastic, to accelerate its development and to create a truly circular economy for plastic that will bring further benefits for the environment and for communities.
"To conclude, we are diligently pursuing our transformation, and the solid cash flows generated enabled us to significantly reduce our indebtedness and increase our dividend while providing us with the flexibility needed to pursue strategic and targeted acquisitions."
Financial Highlights
| (in millions of dollars, except per share amounts) |
Q1 - 2020 |
Q1 - 2019 |
Variation in % |
|
|
| Revenues |
$705.8 |
$751.6 |
(6.1 |
) |
% |
| Operating earnings before depreciation and amortization (2) |
95.7 |
103.7 |
(7.7 |
) |
|
| Adjusted operating earnings before depreciation and amortization (1) (2) |
109.0 |
108.1 |
0.8 |
|
|
| Operating earnings (2) |
40.8 |
53.6 |
(23.9 |
) |
|
| Adjusted operating earnings (1) (2) |
72.1 |
76.7 |
(6.0 |
) |
|
| Net earnings attributable to shareholders of the Corporation (2) |
6.4 |
28.1 |
(77.2 |
) |
|
| Net earnings attributable to shareholders of the Corporation per share (2) |
0.07 |
0.32 |
(78.1 |
) |
|
| Adjusted net earnings attributable to shareholders of the Corporation (1) (2) |
42.8 |
45.5 |
(5.9 |
) |
|
| Adjusted net earnings per share attributable to shareholders of the Corporation (1) (2) |
0.49 |
0.52 |
(5.8 |
) |
|
(1) Please refer to the section entitled "Reconciliation of Non-IFRS Financial Measures" in this press release for adjusted data presented above.
(2) The results for the current period reflect the impact of the adoption of the new IFRS 16 accounting standard, which applies to the Corporation for its fiscal year beginning October 28, 2019. The Corporation adopted the new standard using the modified retrospective transition method, whereby the cumulative impact of initial application has been reflected in opening retained earnings as at October 28, 2019, without restatement of comparative figures. Consequently, data might not be comparable. Please refer to Note 2 to the unaudited condensed interim consolidated financial statements for more information on the adoption of the new standard and Table #2 in the Management's Discussion and Analysis. |
2020 First Quarter Results
Revenues decreased by $45.8 million, or 6.1%, from $751.6 million in the first quarter of 2019 to $705.8 million in the corresponding period of 2020. This decrease is partially due to a decline in our recently sold paper packaging operations. Excluding the paper packaging operations, the organic decline would have been $8.0 million, or 2.0%. This decline is mainly due to the decrease in raw material costs and the impact of temporary legislative changes on the agricultural packaging product offering. The decline in the Printing Sector and the sale of the specialty media assets and event planning activities also contributed to the decrease in consolidated revenues.
Operating earnings decreased by $12.8 million, or 23.9%, from $53.6 million in the first quarter of 2019 to $40.8 million in the first quarter of 2020. This decrease is mostly due to the increase in restructuring and other non-recurring costs resulting mainly from the sale of the paper packaging operations and operational efficiency initiatives in the Printing Sector.
Adjusted operating earnings decreased by $4.6 million, or 6.0%, from $76.7 million to $72.1 million. This decrease is partly attributable to lower revenues in our paper packaging operations, the sale of specialty media assets and event planning activities, and an increase in head office costs. The decrease is partially offset by higher profitability in the Printing Sector and the synergies achieved in the Packaging Sector.
Net earnings attributable to shareholders of the Corporation decreased by $21.7 million, or 77.2%, from $28.1 million in the first quarter of 2019 to $6.4 million in the first quarter of 2020. This decrease is mainly due to an increase in income taxes caused mostly by gains on a tax basis resulting from the sale of the paper packaging operations and the previously explained increase in restructuring and other costs. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.32 to $0.07.
Adjusted net earnings attributable to shareholders of the Corporation decreased by $2.7 million, or 5.9%, from $45.5 million in the first quarter of 2019 to $42.8 million in the first quarter of 2020. This decrease is mostly due to the previously explained lower adjusted operating earnings and the increase in adjusted income taxes, partially offset by the decrease in financial expenses. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $0.52 to $0.49.
Outlook
In the Packaging Sector, after normalizing the impact of the sale of our paper packaging operations and the price of resin, we expect a slight organic growth in revenues, especially in the second half of the year. We also continue to expect an increase in our profit margins as a result of operational synergies and the disposal of our paper packaging operations, which generated lower margins.
In the Printing Sector, we expect that an organic decline will continue to affect the majority of our verticals, but that the reduction in flyer printing volume should be less significant than in 2019. The acquisitions of Holland & Crosby Limited and Artisan Complete Limited, combined with the anticipated growth of book and in-store marketing product printing activities, will help partially offset this organic decline. Lastly, our operational efficiency initiatives will have a positive impact in fiscal 2020, which should mitigate the effect of the decrease in volume on operating earnings.
To conclude, we expect to continue generating significant cash flows from all our operating activities, which gives us the confidence needed to increase the dividend while enabling us to reduce our net indebtedness and providing us with the desired flexibility to continue our transformation through strategic and targeted acquisitions.
Non-IFRS Financial Measures
In this document, unless otherwise indicated, all financial data are prepared in accordance with International Financial Reporting Standards (IFRS) and the term "dollar", as well as the symbol "$" designate Canadian dollars.
In addition, in this press release, we also use 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 interim condensed consolidated financial statements for the first quarter ended January 26, 2020.
| Terms Used |
Definitions |
| Adjusted revenues |
Revenues before the accelerated recognition of deferred revenues (1) |
| Adjusted operating earnings before depreciation and amortization |
Operating earnings before depreciation and amortization as well as the accelerated recognition of deferred revenues (1), restructuring and other costs (gains), impairment of assets and the reversal of the fair value adjustment of inventory sold arising from business combinations |
| Adjusted operating earnings margin before depreciation and amortization |
Adjusted operating earnings before depreciation and amortization divided by adjusted revenues |
| Adjusted operating earnings |
Operating earnings before the accelerated recognition of deferred revenues (1), accelerated depreciation (1), restructuring and other costs (gains), impairment of assets, as well as amortization of intangible assets and reversal of the fair value adjustment of inventory sold arising from business combinations |
| Adjusted operating earnings margin |
Adjusted operating earnings divided by adjusted revenues |
| Adjusted income taxes |
Income taxes before income taxes on the accelerated recognition of deferred revenues (1), accelerated depreciation (1), restructuring and other costs (gains), impairment of assets, amortization of intangible assets and reversal of the fair value adjustment of inventory sold arising from business combinations, the effect of the U.S. tax reform on deferred taxes as well as the retroactive application of a new directive as part of the U.S. tax reform |
| Adjusted net earnings attributable to shareholders of the Corporation |
Net earnings attributable to shareholders of the Corporation before the accelerated recognition of deferred revenues (1), accelerated depreciation (1), restructuring and other costs (gains), impairment of assets, amortization of intangible assets and reversal of the fair value adjustment of inventory sold arising from business combinations, net of related income taxes, the effect of the U.S. tax reform on deferred taxes as well as the retroactive application of a new directive as part of the U.S. tax reform |
| Net indebtedness |
Total of long-term debt, of current portion of long-term debt, of lease liabilities and of current portion of lease liabilities, less cash |
| Net indebtedness ratio |
Net indebtedness divided by the last 12 months’ adjusted operating earnings before depreciation and amortization |
| (1) Related to the agreements signed with The Hearst Corporation. Please refer to Note 31 to the annual consolidated financial statements for the year ended October 27, 2019. |
Reconciliation of Non-IFRS Financial Measures
The financial information has been prepared in accordance with IFRS. However, financial measures used, namely adjusted revenues, 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.
We also believe that adjusted revenues, adjusted operating earnings before depreciation and amortization, adjusted operating earnings and adjusted net earnings attributable to shareholders of the Corporation are useful indicators of the performance of our operations. Furthermore, management also uses some of these non-IFRS financial measures to assess the performance of its activities and managers.
Regarding net indebtedness and net indebtedness ratio, we believe that these indicators are useful to measure the Corporation’s financial leverage and ability to meet its financial obligations.
| Reconciliation of operating earnings - First quarter |
|
Three months ended |
| (in millions of dollars) |
January 26, 2020 |
January 27, 2019 |
| Operating earnings |
$40.8
|
$53.6 |
| Restructuring and other costs |
13.3 |
4.4 |
| Amortization of intangible assets arising from business combinations (1) |
18.0 |
18.7 |
| Adjusted operating earnings |
$72.1
|
$76.7 |
| Depreciation and amortization (2) |
36.9 |
31.4 |
| Adjusted operating earnings before depreciation and amortization |
$109.0
|
$108.1 |
(1) Intangible assets arising from business combinations include our customer relationships, trademarks and non-compete agreements.
|
| (2) Depreciation and amortization exclude amortization of intangible assets arising from business combinations. |
| Reconciliation of net earnings attributable to shareholders of the Corporation - First quarter |
|
Three months ended |
|
January 26, 2020 |
January 27, 2019 |
| (in millions of dollars, except per share amounts) |
Total |
Per share |
Total |
Per share |
| Net earnings attributable to shareholders of the Corporation |
$6.4 |
$0.07 |
$28.1 |
$0.32 |
| Restructuring and other costs, net of related income taxes |
22.8 |
0.26 |
3.3 |
0.04 |
| Amortization of intangible assets arising from business combinations, net of related income taxes (1) |
13.6 |
0.16 |
14.1 |
0.16 |
| Adjusted net earnings attributable to shareholders of the Corporation |
$42.8 |
$0.49 |
$45.5 |
$0.52 |
| (1) Intangible assets arising from business combinations include our customer relationships, trademarks and non-compete agreements. |
| Reconciliation of net indebtedness |
| (in millions of dollars, except ratios) |
As at January 26, 2020 |
|
|
As at October 27, 2019 |
|
|
| Long-term debt |
$1,236.7 |
|
|
$1,381.9 |
|
|
| Current portion of long-term debt |
148.5 |
|
|
1.2 |
|
|
| Lease liabilities (1) |
112.1 |
|
|
— |
|
|
| Current portion of lease liabilities (1) |
20.0 |
|
|
— |
|
|
| Cash |
(424.6 |
) |
|
(213.7 |
) |
|
| Net indebtedness (1) |
$1,092.7 |
|
|
$1,169.4 |
|
|
| Adjusted operating earnings before depreciation and amortization (last 12 months) (1) |
$476.7 |
|
|
$475.8 |
|
|
| Net indebtedness ratio (1) |
2.3 |
|
x |
2.5 |
|
x |
| (1) The results for the current period reflect the impact of the adoption of the new IFRS 16 accounting standard, which applies to the Corporation for its fiscal year beginning October 28, 2019. The Corporation adopted the new standard using the modified retrospective transition method, whereby the cumulative impact of initial application has been reflected in opening retained earnings as at October 28, 2019, without restatement of comparative figures. Consequently, data might not be comparable. Please refer to Note 2 to the unaudited condensed interim consolidated financial statements for more information on the adoption of the new standard and Table #2 of the Management's Discussion and Analysis. |
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 April 7, 2020 to shareholders of record at the close of business on March 23, 2020. The Corporation also increased the dividend per participating share by 2.3%, or $0.02, thus raising the annual dividend from $0.88 to $0.90 per share. This increase reflects TC Transcontinental's solid financial position as well as the Corporation's confidence in its ability to generate solid cash flows.
Normal Course Issuer Bid
The Corporation has received approval from the Toronto Stock Exchange to amend its normal course issuer bid (“NCIB”) in order to increase the maximum number of Class A Subordinate Voting Shares that may be repurchased from 1,000,000 Class A Subordinate Voting Shares, representing approximately 1.36% of the 73,360,754 issued and outstanding Class A Subordinate Voting Shares as of September 18, 2019 (the "reference date"), to 2,000,000 Class A Subordinate Voting Shares, representing approximately 2.73% of the 73,360,754 issued and outstanding Class A Subordinate Voting Shares on the reference date. No other terms of the NCIB have been amended.
Purchases under the NCIB began on October 1st, 2019, will end no later than September 30, 2020, and will be made through the facilities of the Toronto Stock Exchange and/or alternative Canadian trading systems in accordance with its requirements. Under its current NCIB, as of February 14, 2020, the Corporation had repurchased 450,450 of its Class A Subordinate Voting Shares at a weighted‑average price of $15.70 per share, for a total cash consideration of $7.1 million.
Additional information
Annual General Meeting of Shareholders
Transcontinental Inc. will hold its Annual General Meeting of shareholders today at 2 p.m., at the Saint James's Club, 1145 Union Avenue, Montréal. Those who are unable to attend the meeting will have access to a webcast (audio only) as of February 28 on the "Presentations and Events" page of the "Investors" section of the Corporation's website at www.tc.tc.
Conference Call
Upon releasing its 2020 first quarter results, the Corporation will hold a conference call for the financial community today at 4:15 p.m. The dial-in numbers are 1 647 788-4922 or 1 877 223-4471. 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 positioned as the leading Canadian French-language educational publishing group. For over 40 years, 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 over 8,700 employees, the majority of which are based in Canada, the United States and Latin America. TC Transcontinental had revenues of more than C$3.0 billion for the fiscal year ended October 27, 2019. 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 exchange rate, availability of capital at a reasonable rate, bad debts from certain customers, import and export controls, raw materials and transportation costs, competition, the Corporation's ability to generate organic growth in its Packaging Sector, the Corporation's ability to identify and engage in strategic transactions and effectively integrate acquisitions into its activities without affecting its growth and its profitability, while achieving the expected synergies, 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, the impact of digital product development and adoption on the demand for retailer-related services and other printed products, change in consumption habits or loss of a major customer, the impact of customer consolidation, the safety and quality of its packaging products used in the food industry, innovation of its offering, the protection of its intellectual property rights, concentration of its sales in certain segments, cybersecurity and data protection, the inability to maintain or improve operational efficiency and avoid disruptions that could affect its ability to meet deadlines, recruiting and retaining qualified personnel in certain geographic areas and industry sectors, taxation, interest rates and indebtedness level. 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 27, 2019and 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 February 27, 2020.
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 February 27, 2020. 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.
For information:
| Media |
Financial Community |
|
|
| Nathalie St-Jean |
Yan Lapointe |
| Senior Advisor, Corporate Communications |
Director, Investor Relations |
| TC Transcontinental |
TC Transcontinental |
| Telephone: 514-954-3581 |
Telephone: 514-954-3574 |
| nathalie.st-jean@tc.tc |
yan.lapointe@tc.tc |
| www.tc.tc |
www.tc.tc |
CONSOLIDATED STATEMENTS OF EARNINGS
Unaudited
|
Three months ended |
| (in millions of Canadian dollars, unless otherwise indicated and per share data) |
January 26, 2020 |
January 27, 2019 |
|
|
|
| Revenues |
$ |
705.8 |
$ |
751.6 |
| Operating expenses |
596.8 |
643.5 |
| Restructuring and other costs |
13.3 |
4.4 |
|
|
|
| Operating earnings before depreciation and amortization |
95.7 |
103.7 |
| Depreciation and amortization |
54.9 |
50.1 |
|
|
|
| Operating earnings |
40.8 |
53.6 |
| Net financial expenses |
14.0 |
17.7 |
|
|
|
| Earnings before income taxes |
26.8 |
35.9 |
| Income taxes |
20.3 |
7.8 |
|
|
|
| Net earnings |
6.5 |
28.1 |
| Non-controlling interests |
0.1 |
— |
| Net earnings attributable to the shareholders of the Corporation |
$ |
6.4 |
$ |
28.1 |
|
|
|
| Net earnings per share - basic |
$ |
0.07 |
$ |
0.32 |
|
|
|
| Net earnings per share - diluted |
$ |
0.07 |
$ |
0.32 |
|
|
|
| Weighted average number of shares outstanding - basic (in millions) |
87.3 |
87.3 |
|
|
|
| Weighted average number of shares - diluted (in millions) |
87.3 |
87.4 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited
|
Three months ended |
| (in millions of Canadian dollars) |
January 26, 2020
|
|
January 27, 2019 |
|
|
|
|
| Net earnings |
$ |
6.5 |
|
$ |
28.1 |
|
|
|
|
| Other comprehensive income (loss) |
|
|
| Items that will be reclassified to net earnings |
|
|
| Net change related to cash flow hedges |
|
|
| Net change in the fair value of derivatives designated as cash flow hedges - Foreign exchange risk |
(0.5 |
) |
(0.4 |
) |
| Net change in the fair value of derivatives designated as cash flow hedges - Interest rate risk |
0.2 |
|
— |
|
| Reclassification of the net change in the fair value of derivatives designated as cash flow hedges in prior periods, recognized in net earnings during the period |
0.8 |
|
0.2 |
|
| Related income taxes |
0.2 |
|
(0.1 |
) |
|
0.3 |
|
(0.1 |
) |
|
|
|
| Cumulative translation differences |
|
|
| Net unrealized exchange gains on the translation of the financial statements of foreign operations |
7.5 |
|
12.3 |
|
| Net gains (losses) on hedge of the net investment in foreign operations |
0.8 |
|
(0.6 |
) |
| Related income taxes |
0.2 |
|
(0.2 |
) |
|
8.1 |
|
11.9 |
|
|
|
|
| Items that will not be reclassified to net earnings |
|
|
| Changes related to defined benefit plans |
|
|
| Actuarial gains (losses) on defined benefit plans |
4.0 |
|
(3.1 |
) |
| Related income taxes |
1.0 |
|
(0.8 |
) |
|
3.0 |
|
(2.3 |
) |
|
|
|
| Other comprehensive income |
11.4 |
|
9.5 |
|
| Comprehensive income |
$ |
17.9 |
|
$ |
37.6 |
|
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Unaudited
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
other |
|
|
Non- |
|
|
Share |
|
Contributed |
|
Retained |
|
comprehensive |
|
|
controlling |
Total |
|
| (in millions of Canadian dollars) |
capital |
|
surplus |
|
earnings |
|
income (loss) |
|
Total |
|
interests |
equity |
|
|
|
|
|
|
|
|
|
| Balance as at October 27, 2019 |
$ |
641.9 |
|
$ |
1.1 |
|
$ |
1,069.9 |
|
$ |
(25.9 |
) |
$ |
1,687.0 |
|
$ |
4.2 |
$ |
1,691.2 |
|
| Impact of the transition to IFRS 16 |
— |
|
— |
|
(13.2 |
) |
— |
|
(13.2 |
) |
— |
(13.2 |
) |
| Balance as at October 27, 2019 - adjusted |
641.9 |
|
1.1 |
|
1,056.7 |
|
(25.9 |
) |
1,673.8 |
|
4.2 |
1,678.0 |
|
| Net earnings |
— |
|
— |
|
6.4 |
|
— |
|
6.4 |
|
0.1 |
6.5 |
|
| Other comprehensive income |
— |
|
— |
|
— |
|
11.4 |
|
11.4 |
|
— |
11.4 |
|
| Shareholders' contributions and |
|
|
|
|
|
|
|
| distributions to shareholders |
|
|
|
|
|
|
|
| Share redemptions |
(3.8 |
) |
— |
|
(3.3 |
) |
— |
|
(7.1 |
) |
— |
(7.1 |
) |
| Exercise of stock options |
1.9 |
|
(0.2 |
) |
— |
|
— |
|
1.7 |
|
— |
1.7 |
|
| Dividends |
— |
|
— |
|
(19.2 |
) |
— |
|
(19.2 |
) |
— |
(19.2 |
) |
| Balance as at January 26, 2020 |
$ |
640.0 |
|
$ |
0.9 |
|
$ |
1,040.6 |
|
$ |
(14.5 |
) |
$ |
1,667.0 |
|
$ |
4.3 |
$ |
1,671.3 |
|
|
|
|
|
|
|
|
|
| Balance as at October 28, 2018 |
$ |
642.4 |
|
$ |
1.1 |
|
$ |
979.8 |
|
$ |
10.8 |
|
$ |
1,634.1 |
|
$ |
— |
$ |
1,634.1 |
|
| Net earnings |
— |
|
— |
|
28.1 |
|
— |
|
28.1 |
|
— |
28.1 |
|
| Other comprehensive income |
— |
|
— |
|
— |
|
9.5 |
|
9.5 |
|
— |
9.5 |
|
| Shareholders' contributions and |
|
|
|
|
|
|
|
| distributions to shareholders |
|
|
|
|
|
|
|
| Dividends |
— |
|
— |
|
(18.3 |
) |
— |
|
(18.3 |
) |
— |
(18.3 |
) |
| Income taxes on share issuance costs |
(0.2 |
) |
— |
|
— |
|
— |
|
(0.2 |
) |
— |
(0.2 |
) |
| Balance as at January 27, 2019 |
$ |
642.2 |
|
$ |
1.1 |
|
$ |
989.6 |
|
$ |
20.3 |
|
$ |
1,653.2 |
|
$ |
— |
$ |
1,653.2 |
|
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited
|
As at
|
|
As at |
|
| (in millions of Canadian dollars) |
January 26, 2020
|
|
October 27, 2019 (1) |
|
|
|
|
| Current assets |
|
|
| Cash |
$ |
424.6 |
|
$ |
213.7 |
|
| Accounts receivable |
443.7 |
|
520.7 |
|
| Income taxes receivable |
9.3 |
|
10.2 |
|
| Inventories |
274.0 |
|
304.2 |
|
| Prepaid expenses and other current assets |
19.9 |
|
20.0 |
|
|
1,171.5 |
|
1,068.8 |
|
|
|
|
| Property, plant, equipment |
745.3 |
|
820.1 |
|
| Right-of-use assets |
110.9 |
|
— |
|
| Intangible assets |
618.4 |
|
686.2 |
|
| Goodwill |
1,096.5 |
|
1,145.3 |
|
| Deferred taxes |
28.1 |
|
27.2 |
|
| Other assets |
35.2 |
|
34.2 |
|
|
$ |
3,805.9 |
|
$ |
3,781.8 |
|
|
|
|
| Current liabilities |
|
|
| Accounts payable and accrued liabilities |
$ |
350.1 |
|
$ |
420.0 |
|
| Provisions |
8.3 |
|
14.1 |
|
| Income taxes payable |
10.1 |
|
12.8 |
|
| Deferred revenues and deposits |
11.4 |
|
9.3 |
|
| Current portion of long-term debt |
148.5 |
|
1.2 |
|
| Current portion of lease liabilities |
20.0 |
|
— |
|
|
548.4 |
|
457.4 |
|
|
|
|
| Long-term debt |
1,236.7 |
|
1,381.9 |
|
| Lease liabilities |
112.1 |
|
— |
|
| Deferred taxes |
126.1 |
|
120.2 |
|
| Provisions |
0.7 |
|
1.9 |
|
| Other liabilities |
110.6 |
|
129.2 |
|
|
2,134.6 |
|
2,090.6 |
|
|
|
|
| Equity |
|
|
| Share capital |
640.0 |
|
641.9 |
|
| Contributed surplus |
0.9 |
|
1.1 |
|
| Retained earnings |
1,040.6 |
|
1,069.9 |
|
| Accumulated other comprehensive loss |
(14.5 |
) |
(25.9 |
) |
| Attributable to the shareholders of the Corporation |
1,667.0 |
|
1,687.0 |
|
| Non-controlling interests |
4.3 |
|
4.2 |
|
|
1,671.3 |
|
1,691.2 |
|
|
$ |
3,805.9 |
|
$ |
3,781.8 |
|
|
|
|
| (1) Certain comparative figures have been reclassified to conform to the presentation adopted in the current year. |
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
|
Three months ended |
| (in millions of Canadian dollars) |
January 26, 2020
|
|
January 27, 2019 |
|
|
|
|
| Operating activities |
|
|
| Net earnings |
$ |
6.5 |
|
$ |
28.1 |
|
| Adjustments to reconcile net earnings and cash flows from operating activities: |
|
|
| Depreciation and amortization |
60.3 |
|
55.4 |
|
| Financial expenses on long-term debt and lease liabilities |
14.4 |
|
16.2 |
|
| Net losses on disposal of assets |
1.5 |
|
0.2 |
|
| Net losses on business disposals |
4.3 |
|
— |
|
| Income taxes |
20.3 |
|
7.8 |
|
| Net foreign exchange differences and other |
1.3 |
|
(0.3 |
) |
| Cash flows generated by operating activities before changes in non-cash operating items and income taxes paid |
108.6 |
|
107.4 |
|
| Changes in non-cash operating items |
(28.6 |
) |
(3.1 |
) |
| Income taxes paid |
(16.3 |
) |
(20.5 |
) |
| Cash flows from operating activities |
63.7 |
|
83.8 |
|
|
|
|
| Investing activities |
|
|
| Business combinations, net of acquired cash |
(7.7 |
) |
— |
|
| Business disposals |
232.1 |
|
— |
|
| Acquisitions of property, plant and equipment |
(23.1 |
) |
(35.7 |
) |
| Disposals of property, plant and equipment |
0.1 |
|
— |
|
| Increase in intangible assets |
(4.4 |
) |
(5.1 |
) |
| Cash flows from investing activities |
197.0 |
|
(40.8 |
) |
|
|
|
| Financing activities |
|
|
|
|
|
| Reimbursement of long-term debt |
(8.3 |
) |
— |
|
| Net increase in credit facility |
— |
|
4.3 |
|
| Financial expenses on long-term debt |
(13.2 |
) |
(17.2 |
) |
| Repayment of principal on lease liabilities |
(5.2 |
) |
— |
|
| Interest on lease liabilities |
(0.6 |
) |
— |
|
| Exercise of stock options |
1.7 |
|
— |
|
| Dividends |
(19.2 |
) |
(18.3 |
) |
| Share redemptions |
(7.1 |
) |
— |
|
| Cash flows from financing activities |
(51.9 |
) |
(31.2 |
) |
|
|
|
| Effect of exchange rate changes on cash denominated in foreign currencies |
2.1 |
|
1.4 |
|
|
|
|
| Net change in cash |
210.9 |
|
13.2 |
|
| Cash at beginning of period |
213.7 |
|
40.5 |
|
| Cash at end of period |
$ |
424.6 |
|
$ |
53.7 |
|
|
|
|
| Non-cash investing activities |
|
|
| Net change in capital asset acquisitions financed by accounts payable |
$ |
(1.0 |
) |
$ |
2.5 |
|
