Highlights
- 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.
(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.
"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."
Financial Highlights
| (in millions of dollars, except per share amounts) | Q3-2022 | Q3-2021 | Variation in % | |||
| Revenues | $747.8 | $621.6 | 20.3% | |||
| Operating earnings before depreciation and amortization(1) | 110.0 | 103.4 | 6.4 | |||
| Adjusted operating earnings before depreciation and amortization(1) (2) | 113.0 | 104.2 | 8.4 | |||
| Operating earnings | 52.1 | 50.2 | 3.8 | |||
| Adjusted operating earnings(2) | 72.6 | 67.4 | 7.7 | |||
| Net earnings attributable to shareholders of the Corporation | 34.1 | 28.1 | 21.4 | |||
| Net earnings attributable to shareholders of the Corporation per share | 0.39 | 0.32 | 21.9 | |||
| Adjusted net earnings attributable to shareholders of the Corporation(2) | 49.6 | 44.2 | 12.2 | |||
| Adjusted net earnings attributable to shareholders of the Corporation per share(2) | 0.57 | 0.51 | 11.8 | |||
| (1) Operating earnings before depreciation and amortization and Adjusted operating earnings before depreciation and amortization for the comparative period have been restated to conform to the presentation adopted in the current period. | ||||||
| (2) Please refer to the section entitled "Reconciliation of Non-IFRS Financial Measures" in this press release for adjusted data presented above. | ||||||
| Note: The above results include $9.2 million in Canada Emergency Wage Subsidy for the third quarter of 2021. | ||||||
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.
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 $0.57, respectively.
Outlook
In the Packaging Sector, as a result of signing new contracts, introducing new products to the market and investing in new production equipment, we expect organic volume growth in fiscal year 2022 compared to fiscal 2021, excluding the impact of the 53rd week on the results for fiscal year 2021. In addition, we expect an increase in adjusted operating earnings before depreciation and amortization for fiscal year 2022 compared to the prior fiscal year.
In the Printing Sector, with the significant volume in our in-store marketing activities and other growth activities, we expect revenue growth for fiscal year 2022, excluding the impact of the 53rd week on the results for fiscal year 2021. In terms of profitability, we expect that adjusted operating earnings before depreciation and amortization for fiscal year 2022 will be similar to fiscal 2021, excluding amounts related to the Canada Emergency Wage Subsidy and the impact of the 53rd week on the results for fiscal year 2021.
Finally, we expect to continue generating significant cash flows from operating activities. In addition, with the proactive refinancing transactions of recent years, we have no major debt maturities until 2025. This, combined with our solid financial position, should provide us with the flexibility needed to pursue our profitable growth strategy.
Non-IFRS Financial Measures
In this document, unless otherwise indicated, all financial data are prepared in accordance with International Financial Reporting Standards (IFRS) and the term "dollar", as well as the symbol "$" 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.
| Terms Used | Definitions |
| Adjusted operating earnings before depreciation and amortization | Operating earnings before depreciation and amortization as well as restructuring and other costs (revenues) and impairment of assets. |
| Adjusted operating earnings margin before depreciation and amortization | Adjusted operating earnings before depreciation and amortization divided by revenues. |
| Adjusted operating earnings | Operating earnings before restructuring and other costs (revenues), amortization of intangible assets arising from business combinations and impairment of assets. |
| Adjusted operating earnings margin | Adjusted operating earnings divided by revenues. |
| Adjusted income taxes | Income taxes before income taxes on restructuring and other costs (revenues), impairment of assets, amortization of intangible assets arising from business combinations as well as the adjustment on additional income taxes in other jurisdictions resulting from a prior year and the tax impact of an internal reorganization. |
| Adjusted net earnings attributable to shareholders of the Corporation | Net earnings attributable to shareholders of the Corporation before restructuring and other costs (revenues), amortization of intangible assets arising from business combinations and impairment of assets, net of related income taxes as well as the adjustment on additional income taxes in other jurisdictions resulting from a prior year and the tax impact of an internal reorganization. |
| 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. |
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.
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.
| Reconciliation of operating earnings - Third quarter | ||||
| Three months ended | ||||
| (in millions of dollars) | July 31, 2022 | July 25, 2021 | ||
| Operating earnings | $52.1 | $50.2 | ||
| Restructuring and other costs | 3.0 | 0.8 | ||
| Amortization of intangible assets arising from business combinations (1) | 17.5 | 16.4 | ||
| Adjusted operating earnings | $72.6 | $67.4 | ||
| Depreciation and amortization (2) (3) | 40.4 | 36.8 | ||
| Adjusted operating earnings before depreciation and amortization (3) | $113.0 | $104.2 | ||
| (1) Intangible assets arising from business combinations include our customer relationships, trademarks and non-compete agreements. | ||||
| (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations. | ||||
| (3) Depreciation and amortization and Adjusted operating earnings before depreciation and amortization have been restated to conform to the presentation adopted in the current period. | ||||
| Reconciliation of operating earnings - Third quarter for the Packaging Sector | ||||
| Three months ended | ||||
| (in millions of dollars) | July 31, 2022 | July 25, 2021 | ||
| Operating earnings | $12.9 | $11.3 | ||
| Restructuring and other costs (revenues) | 2.7 | (1.2 | ) | |
| Amortization of intangible assets arising from business combinations(1) | 15.4 | 14.7 | ||
| Adjusted operating earnings | $31.0 | $24.8 | ||
| Depreciation and amortization(2) | 21.4 | 17.5 | ||
| Adjusted operating earnings before depreciation and amortization | $52.4 | $42.3 | ||
| (1) Intangible assets arising from business combinations include our customer relationships, trademarks and non-compete agreements. | ||||
| (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations. | ||||
| Reconciliation of operating earnings - Third quarter for the Printing Sector | ||||
| Three months ended | ||||
| (in millions of dollars) | July 31, 2022 | July 25, 2021 | ||
| Operating earnings | $36.7 | $42.5 | ||
| Restructuring and other costs | 0.1 | 1.6 | ||
| Amortization of intangible assets arising from business combinations(1) | 2.1 | 1.7 | ||
| Adjusted operating earnings | $38.9 | $45.8 | ||
| Depreciation and amortization(2) | 13.4 | 14.3 | ||
| Adjusted operating earnings before depreciation and amortization | $52.3 | $60.1 | ||
| (1) Intangible assets arising from business combinations include our customer relationships, trademarks and non-compete agreements. | ||||
| (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations. | ||||
| Reconciliation of operating earnings - Third quarter for the Other Sector | ||||
| Three months ended | ||||
| (in millions of dollars) | July 31, 2022 | July 25, 2021 | ||
| Operating earnings | $2.5 | ($3.6 | ) | |
| Restructuring and other costs | 0.2 | 0.4 | ||
| Amortization of intangible assets arising from business combinations(1) | — | — | ||
| Adjusted operating earnings | $2.7 | ($3.2 | ) | |
| Depreciation and amortization(2) (3) | 5.6 | 5.0 | ||
| Adjusted operating earnings before depreciation and amortization(3) | $8.3 | $1.8 | ||
| (1) Intangible assets arising from business combinations include our customer relationships, trademarks and non-compete agreements. | ||||
| (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations. | ||||
| (3) Depreciation and amortization and Adjusted operating earnings before depreciation and amortization have been restated to conform to the presentation adopted in the current period. | ||||
| Reconciliation of net earnings attributable to shareholders of the Corporation - Third quarter | ||||
| Three months ended | ||||
| (in millions of dollars, except per share amounts) | July 31, 2022 | July 25, 2021 | ||
| Net earnings attributable to shareholders of the Corporation | $34.1 | $28.1 | ||
| Restructuring and other costs | 3.0 | 0.8 | ||
| Tax on restructuring and other costs | (0.7 | ) | (0.4 | ) |
| Amortization of intangible assets arising from business combinations(1) | 17.5 | 16.4 | ||
| Tax on amortization of intangible assets arising from business combinations | (4.3 | ) | (4.0 | ) |
| Adjustment on additional taxes in other jurisdictions | — | 3.3 | ||
| Adjusted net earnings attributable to shareholders of the Corporation | $49.6 | $44.2 | ||
| Net earnings attributable to shareholders of the Corporation per share | $0.39 | $0.32 | ||
| Adjusted net earnings attributable to shareholders of the Corporation per share | $0.57 | $0.51 | ||
| Weighted average number of shares outstanding | 86.6 | 87.0 | ||
| (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 July 31, 2022 | As at October 31, 2021 | ||||
| Long-term debt | $971.8 | $778.2 | ||||
| Current portion of long-term debt | 16.1 | 187.3 | ||||
| Lease liabilities | 139.3 | 137.3 | ||||
| Current portion of lease liabilities | 24.4 | 23.1 | ||||
| Cash | (26.4 | ) | (231.1 | ) | ||
| Net indebtedness | $1,125.2 | $894.8 | ||||
| Adjusted operating earnings before depreciation and amortization (last 12 months) | $448.8 | $464.8 | ||||
| Net indebtedness ratio | 2.51 | x | 1.93 | x | ||
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 October 24, 2022 to shareholders of record at the close of business on October 3, 2022.
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.
Additional information
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.
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.
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.
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 | Nine months ended | ||||||||||
| July 31, | July 25, | July 31, | July 25, | ||||||||
| (in millions of Canadian dollars, unless otherwise indicated and per share data) | 2022 | 2021(1) | 2022 | 2021(1) | |||||||
| Revenues | $ | 747.8 | $ | 621.6 | $ | 2,153.9 | $ | 1,867.6 | |||
| Operating expenses | 634.8 | 517.4 | 1,848.3 | 1,545.9 | |||||||
| Restructuring and other costs | 3.0 | 0.8 | 2.1 | 6.1 | |||||||
| Operating earnings before depreciation and amortization | 110.0 | 103.4 | 303.5 | 315.6 | |||||||
| Depreciation and amortization | 57.9 | 53.2 | 171.5 | 162.3 | |||||||
| Operating earnings | 52.1 | 50.2 | 132.0 | 153.3 | |||||||
| Net financial expenses | 9.8 | 10.1 | 29.5 | 30.4 | |||||||
| Earnings before income taxes | 42.3 | 40.1 | 102.5 | 122.9 | |||||||
| Income taxes | 8.2 | 12.4 | 21.8 | 31.8 | |||||||
| Net earnings | 34.1 | 27.7 | 80.7 | 91.1 | |||||||
| Non-controlling interest | — | (0.4 | ) | (0.1 | ) | (0.3 | ) | ||||
| Net earnings attributable to the shareholders of the Corporation | $ | 34.1 | $ | 28.1 | $ | 80.8 | $ | 91.4 | |||
| Net earnings per share - basic and diluted | $ | 0.39 | $ | 0.32 | $ | 0.93 | $ | 1.05 | |||
| Weighted average number of shares outstanding - basic and diluted (in millions) | 86.6 | 87.0 | 86.8 | 87.0 | |||||||
| (1) Certain comparative figures have been reclassified to conform to the presentation adopted in the current period. | |||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited
| Three months ended | Nine months ended | |||||||||||
| July 31, | July 25, | July 31, | July 25, | |||||||||
| (in millions of Canadian dollars) | 2022 | 2021 | 2022 | 2021 | ||||||||
| Net earnings | $ | 34.1 | $ | 27.7 | $ | 80.7 | $ | 91.1 | ||||
| Other comprehensive income (loss) | ||||||||||||
| Items that will be or may be subsequently reclassified to net earnings | ||||||||||||
| Net change related to cash flow hedges | ||||||||||||
| Net change in the fair value of designated derivatives - foreign exchange risk | 1.5 | (4.1 | ) | (2.6 | ) | 1.3 | ||||||
| Net change in the fair value of designated derivatives - interest rate risk | (0.6 | ) | (0.3 | ) | 2.8 | 2.0 | ||||||
| Reclassification of the net change in the fair value of designated derivatives recognized in net earnings during the period | 0.1 | 2.8 | 1.6 | 9.0 | ||||||||
| Related income taxes | 0.3 | (0.4 | ) | 0.5 | 3.3 | |||||||
| 0.7 | (1.2 | ) | 1.3 | 9.0 | ||||||||
| Cumulative translation differences | ||||||||||||
| Net unrealized exchange (losses) gains on the translation of the financial statements of foreign operations | (18.7 | ) | 10.3 | 33.7 | (71.8 | ) | ||||||
| Net gains (losses) on hedge of the net investment in foreign operations | 1.9 | (7.1 | ) | (8.3 | ) | 31.7 | ||||||
| Related income taxes | 0.1 | (1.3 | ) | (0.1 | ) | 3.6 | ||||||
| (16.9 | ) | 4.5 | 25.5 | (43.7 | ) | |||||||
| Items that will not be reclassified to net earnings | ||||||||||||
| Changes related to defined benefit plans | ||||||||||||
| Actuarial gains on defined benefit plans | 0.4 | 4.0 | 22.4 | 16.2 | ||||||||
| Related income taxes | 0.1 | 1.0 | 6.0 | 3.8 | ||||||||
| 0.3 | 3.0 | 16.4 | 12.4 | |||||||||
| Other comprehensive income (loss) | (15.9 | ) | 6.3 | 43.2 | (22.3 | ) | ||||||
| Comprehensive income | $ | 18.2 | $ | 34.0 | $ | 123.9 | $ | 68.8 | ||||
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 | interest | equity | |||||||||||||
| Balance as at October 31, 2021 | $ | 640.0 | $ | 0.9 | $ | 1,159.5 | $ | (41.3 | ) | $ | 1,759.1 | $ | 5.2 | $ | 1,764.3 | |||||
| Net earnings | — | — | 80.8 | — | 80.8 | (0.1 | ) | 80.7 | ||||||||||||
| Other comprehensive income | — | — | — | 43.2 | 43.2 | — | 43.2 | |||||||||||||
| Shareholders' contributions and distribution to shareholders | ||||||||||||||||||||
| Share redemptions | (3.4 | ) | — | (3.6 | ) | — | (7.0 | ) | — | (7.0 | ) | |||||||||
| Dividends | — | — | (58.6 | ) | — | (58.6 | ) | — | (58.6 | ) | ||||||||||
| Balance as at July 31, 2022 | $ | 636.6 | $ | 0.9 | $ | 1,178.1 | $ | 1.9 | $ | 1,817.5 | $ | 5.1 | $ | 1,822.6 | ||||||
| Balance as at October 25, 2020 | $ | 640.0 | $ | 0.9 | $ | 1,107.2 | $ | (14.8 | ) | $ | 1,733.3 | $ | 5.3 | $ | 1,738.6 | |||||
| Net earnings | — | — | 91.4 | — | 91.4 | (0.3 | ) | 91.1 | ||||||||||||
| Other comprehensive loss | — | — | — | (22.3 | ) | (22.3 | ) | — | (22.3 | ) | ||||||||||
| Shareholders' contributions and distribution to shareholders | ||||||||||||||||||||
| Dividends | — | — | (58.7 | ) | — | (58.7 | ) | — | (58.7 | ) | ||||||||||
| Balance as at July 25, 2021 | $ | 640.0 | $ | 0.9 | $ | 1,139.9 | $ | (37.1 | ) | $ | 1,743.7 | $ | 5.0 | $ | 1,748.7 | |||||
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited
| As at | As at | |||||
| July 31, | October 31, | |||||
| (in millions of Canadian dollars) | 2022 | 2021 | ||||
| Current assets | ||||||
| Cash | $ | 26.4 | $ | 231.1 | ||
| Accounts receivable | 508.7 | 496.1 | ||||
| Income taxes receivable | 9.2 | 16.9 | ||||
| Inventories | 465.5 | 357.0 | ||||
| Prepaid expenses and other current assets | 26.4 | 24.4 | ||||
| 1,036.2 | 1,125.5 | |||||
| Property, plant and equipment | 727.5 | 689.7 | ||||
| Right-of-use assets | 144.3 | 140.8 | ||||
| Intangible assets | 499.7 | 513.0 | ||||
| Goodwill | 1,154.6 | 1,086.6 | ||||
| Deferred taxes | 22.9 | 18.6 | ||||
| Other assets | 50.2 | 38.7 | ||||
| $ | 3,635.4 | $ | 3,612.9 | |||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | $ | 433.5 | $ | 439.2 | ||
| Provisions | 0.5 | 1.5 | ||||
| Income taxes payable | 11.5 | 28.9 | ||||
| Deferred revenues and deposits | 15.1 | 12.3 | ||||
| Current portion of long-term debt | 16.1 | 187.3 | ||||
| Current portion of lease liabilities | 24.4 | 23.1 | ||||
| 501.1 | 692.3 | |||||
| Long-term debt | 971.8 | 778.2 | ||||
| Lease liabilities | 139.3 | 137.3 | ||||
| Deferred taxes | 117.4 | 137.3 | ||||
| Provisions | 0.3 | 0.6 | ||||
| Other liabilities | 82.9 | 102.9 | ||||
| 1,812.8 | 1,848.6 | |||||
| Equity | ||||||
| Share capital | 636.6 | 640.0 | ||||
| Contributed surplus | 0.9 | 0.9 | ||||
| Retained earnings | 1,178.1 | 1,159.5 | ||||
| Accumulated other comprehensive income (loss) | 1.9 | (41.3 | ) | |||
| Attributable to the shareholders of the Corporation | 1,817.5 | 1,759.1 | ||||
| Non-controlling interest | 5.1 | 5.2 | ||||
| 1,822.6 | 1,764.3 | |||||
| $ | 3,635.4 | $ | 3,612.9 | |||
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
| Three months ended | Nine months ended | |||||||||||
| July 31, | July 25, | July 31, | July 25, | |||||||||
| (in millions of Canadian dollars) | 2022 | 2021(1) | 2022 | 2021(1) | ||||||||
| Operating activities | ||||||||||||
| Net earnings | $ | 34.1 | $ | 27.7 | $ | 80.7 | $ | 91.1 | ||||
| Adjustments to reconcile net earnings and cash flows from operating activities: | ||||||||||||
| Depreciation and amortization | 57.9 | 53.2 | 171.5 | 162.3 | ||||||||
| Financial expenses on long-term debt and lease liabilities | 8.2 | 9.1 | 26.4 | 27.9 | ||||||||
| Net losses (gains) on disposal of assets | 0.5 | (0.5 | ) | (5.4 | ) | 0.1 | ||||||
| Income taxes | 8.2 | 12.4 | 21.8 | 31.8 | ||||||||
| Net foreign exchange differences and other | 4.5 | (0.5 | ) | 12.3 | 0.6 | |||||||
| Cash flows generated by operating activities before changes in non-cash operating items and income taxes paid | 113.4 | 101.4 | 307.3 | 313.8 | ||||||||
| Changes in non-cash operating items | (46.9 | ) | (36.5 | ) | (128.3 | ) | (58.2 | ) | ||||
| Income taxes paid | (17.2 | ) | (10.3 | ) | (61.7 | ) | (33.0 | ) | ||||
| Cash flows from operating activities | 49.3 | 54.6 | 117.3 | 222.6 | ||||||||
| Investing activities | ||||||||||||
| Business combinations, net of acquired cash | (67.3 | ) | (44.0 | ) | (124.8 | ) | (44.0 | ) | ||||
| Acquisitions of property, plant and equipment | (31.6 | ) | (39.5 | ) | (88.5 | ) | (89.2 | ) | ||||
| Disposals of property, plant and equipment | 0.4 | 0.6 | 8.5 | 0.9 | ||||||||
| Increase in intangible assets | (7.6 | ) | (5.8 | ) | (19.7 | ) | (15.5 | ) | ||||
| Cash flows from investing activities | (106.1 | ) | (88.7 | ) | (224.5 | ) | (147.8 | ) | ||||
| Financing activities | ||||||||||||
| Increase in long-term debt, net of issuance costs | — | 394.0 | 198.6 | 394.0 | ||||||||
| Reimbursement of long-term debt | (0.4 | ) | (138.4 | ) | (330.1 | ) | (221.9 | ) | ||||
| Net increase in credit facilities | 95.8 | — | 145.6 | — | ||||||||
| Financial expenses paid on long-term debt and credit facilities | (8.8 | ) | (6.6 | ) | (25.9 | ) | (23.3 | ) | ||||
| Repayment of principal on lease liabilities | (5.8 | ) | (6.1 | ) | (18.3 | ) | (17.5 | ) | ||||
| Interest paid on lease liabilities | (1.0 | ) | (0.8 | ) | (2.6 | ) | (2.5 | ) | ||||
| Dividends | (19.5 | ) | (19.5 | ) | (58.6 | ) | (58.7 | ) | ||||
| Share redemptions | (1.0 | ) | — | (7.0 | ) | — | ||||||
| Cash flows from financing activities | 59.3 | 222.6 | (98.3 | ) | 70.1 | |||||||
| Effect of exchange rate changes on cash denominated in foreign currencies | (0.9 | ) | 3.9 | 0.8 | 6.1 | |||||||
| Net change in cash | 1.6 | 192.4 | (204.7 | ) | 151.0 | |||||||
| Cash at beginning of period | 24.8 | 199.6 | 231.1 | 241.0 | ||||||||
| Cash at end of period | $ | 26.4 | $ | 392.0 | $ | 26.4 | $ | 392.0 | ||||
| Non-cash investing activities | ||||||||||||
| Net change in capital asset acquisitions financed by accounts payable | $ | (0.9 | ) | $ | 0.8 | $ | 2.4 | $ | 1.2 | |||
| (1)Certain comparative figures have been reclassified to conform to the presentation adopted in the current period. | ||||||||||||
