Highlights
- Revenue growth of 21% for the Packaging Sector and 9% for the Printing Sector.
- Revenues of $715.5 million for the quarter ended May 1, 2022; operating earnings of $46.1 million; and net earnings attributable to shareholders of the Corporation of $28.3 million ($0.33 per share).
- Adjusted operating earnings before depreciation and amortization(1) of $103.6 million for the quarter ended May 1, 2022; adjusted operating earnings(1) of $64.1 million; and adjusted net earnings attributable to shareholders of the Corporation(1) of $41.7 million ($0.48 per share).
- Acquired Scolab Inc., a leader in the development of digital educational products, in March 2022, to enhance digital educational offering.
(1) Please refer to the section entitled "Non-IFRS Financial Measures" in this press release for a definition of these measures.
MONTRÉAL, June 08, 2022 (GLOBE NEWSWIRE) -- Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the second quarter of fiscal 2022, which ended May 1, 2022.
"I am proud of our coworkers and their work to overcome supply chain challenges and inflationary pressures," said Peter Brues, President and Chief Executive Officer of TC Transcontinental. "We are starting to see the benefit of the actions we have taken, and I am encouraged by their impact on our second quarter results.
"In our Packaging Sector, we recorded significant volume growth during the quarter. Focused on supporting customer growth, we continued to prioritize the security of supply and invest to grow our sustainable packaging portfolio. Volume growth and significant work to offset cost increases due to inflation drove the improvement in the sector's adjusted operating earnings before depreciation and amortization.
"Our Printing Sector produced organic growth in revenues for the fifth consecutive quarter. This growth was primarily generated by our in-store marketing and book printing activities, two rapidly growing segments.
"The team continues to take action to improve our performance, the benefits of which will continue to be felt in the second half of our fiscal year."
Financial Highlights
| (in millions of dollars, except per share amounts) | Q2 - 2022 | Q2 - 2021 | Variation in % | ||||||
| Revenues | $715.5 | $623.3 | 14.8 | % | |||||
| Operating earnings before depreciation and amortization(1) | 102.8 | 108.9 | (5.6 | ) | |||||
| Adjusted operating earnings before depreciation and amortization(1) (2) | 103.6 | 109.4 | (5.3 | ) | |||||
| Operating earnings | 46.1 | 55.9 | (17.5 | ) | |||||
| Adjusted operating earnings(2) | 64.1 | 72.6 | (11.7 | ) | |||||
| Net earnings attributable to shareholders of the Corporation | 28.3 | 35.6 | (20.5 | ) | |||||
| Net earnings attributable to shareholders of the Corporation per share | 0.33 | 0.41 | (19.5 | ) | |||||
| Adjusted net earnings attributable to shareholders of the Corporation(2) | 41.7 | 47.8 | (12.8 | ) | |||||
| Adjusted net earnings attributable to shareholders of the Corporation per share(2) | 0.48 | 0.55 | (12.7 | ) | |||||
| (1) Operating earnings before depreciation and amortization and Adjusted operating earnings before depreciation and amortization 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 $7.5 million in Canada Emergency Wage Subsidy for the second quarter of 2021. | |||||||||
2022 Second Quarter Results
Revenues increased by $92.2 million, or 14.8%, from $623.3 million in the second quarter of 2021 to $715.5 million in the corresponding period of 2022. This increase is mainly attributable to the impact of the contractual transfer of the rise in the price of raw materials and other increases to counter inflationary pressures, the acquisition of H.S. Crocker Company, Inc. and higher volume on the results of the Packaging Sector, as well as the impact of higher volume in our in-store marketing and book printing activities and the acquisition of BGI Retail Inc. on the results of the Printing Sector.
Operating earnings before depreciation and amortization decreased by $6.1 million, or 5.6%, from $108.9 million in the second quarter of 2021 to $102.8 million in the second quarter of 2022. Adjusted operating earnings before depreciation and amortization decreased by $5.8 million, or 5.3%, from $109.4 million in the second quarter of 2021 to $103.6 million in the second quarter of 2022. The decrease in operating earnings before depreciation and amortization and adjusted operating earnings before depreciation and amortization is mainly due to the end of the Canada Emergency Wage Subsidy which the Corporation received in the previous year, lags in passing through cost increases related to the inflationary environment to customers in the Printing Sector and additional costs related to the start-up period for new contracts in our in-store marketing activities. These items were partially offset by higher volume in the two main sectors, the decrease in the stock-based compensation expense related to the share price, acquisitions, as well as the contractual transfer of the rise in the price of raw materials and other increases to counter inflationary pressures in the Packaging Sector.
Net earnings attributable to shareholders of the Corporation decreased by $7.3 million, from $35.6 million in the second quarter of 2021 to $28.3 million in the second quarter of 2022. This decline is mainly due to lower operating earnings, partially offset by the decrease in income taxes. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.41 to $0.33, respectively.
Adjusted net earnings attributable to shareholders of the Corporation decreased by $6.1 million, or 12.8%, from $47.8 million in the second quarter of 2021 to $41.7 million in the second quarter of 2022. This decrease is due to the previously explained lower adjusted operating earnings, partially offset by the decrease in adjusted income taxes. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $0.55 to $0.48, respectively.
2022 First Six Months Results
Revenues increased by $160.1 million, or 12.8%, from $1,246.0 million in the first six months of fiscal 2021 to $1,406.1 million in the corresponding period of 2022. This increase is mainly attributable to the impact of the contractual transfer of the rise in the price of raw materials, the acquisition of H.S. Crocker Company, Inc., and higher volume on the results of the Packaging Sector, as well as the impact of higher volume in our in-store marketing and book printing activities and the acquisition of BGI Retail Inc. on the results of the Printing Sector. This increase was partially offset by the unfavorable exchange rate variation on results.
Operating earnings before depreciation and amortization decreased by $18.7 million, or 8.8%, from $212.2 million in the first six months of fiscal 2021 to $193.5 million in the corresponding period of 2022. Adjusted operating earnings before depreciation and amortization decreased by $24.9 million, or 11.4%, from $217.5 million in the first six months of fiscal 2021 to $192.6 million in the corresponding period of 2022. The decrease in operating earnings before depreciation and amortization and adjusted operating earnings before depreciation and amortization is mainly due to the end of the Canada Emergency Wage Subsidy which the Corporation received in the previous year, the negative impact of the pandemic on production capacity at several plants, especially in the first quarter of the fiscal year, and lags in passing through cost increases related to the inflationary environment to customers in the Printing Sector. These items were partially offset by higher volume in the two main sectors, acquisitions and the decrease in the stock-based compensation expense related to the share price. The decrease in restructuring costs also had a positive impact of operating earnings before depreciation and amortization.
Net earnings attributable to shareholders of the Corporation decreased by $16.6 million, or 26.2%, from $63.3 million in the first six months of fiscal 2021 to $46.7 million in the corresponding period of 2022. This decline is mainly due to the previously explained lower operating earnings, partially offset by the decrease in income taxes. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.73 to $0.54, respectively.
Adjusted net earnings attributable to shareholders of the Corporation decreased by $19.9 million, or 21.7%, from $91.6 million in the first six months of fiscal 2021 to $71.7 million in the corresponding period of 2022 mostly due to the previously explained lower adjusted operating earnings, partially offset by the decrease in adjusted income taxes. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $1.05 to $0.83, respectively.
For more detailed financial information, please see the Management’s Discussion and Analysis for the second quarter of fiscal 2022 ended May 1, 2022 as well as the financial statements in the “Investors” section of our website at www.tc.tc.
Outlook
In the Packaging Sector, as a result of signing new contracts, introducing new products to the market and investing in new production equipment, we expect organic volume growth in fiscal year 2022 compared to fiscal 2021, excluding the impact of the 53rd week on the results for fiscal year 2021. In addition, we continue to expect an increase in adjusted operating earnings before depreciation and amortization for fiscal year 2022 compared to the prior fiscal year.
In the Printing Sector, with the significant volume in our in-store marketing activities and other growth activities, we expect revenue growth for fiscal year 2022, excluding the impact of the 53rd week on the results for fiscal year 2021. In addition, excluding amounts related to the Canada Emergency Wage Subsidy and the impact of the 53rd week on the results for fiscal year 2021, we expect an increase in adjusted operating earnings before depreciation and amortization for fiscal year 2022 compared to fiscal year 2021.
Finally, we expect to continue generating significant cash flows from operating activities. These cash flows are expected to enable us to reduce our net indebtedness, while providing us with the flexibility needed to pursue our investments focused on organic growth as well as strategic and targeted acquisitions.
Non-IFRS Financial Measures
In this document, unless otherwise indicated, all financial data are prepared in accordance with International Financial Reporting Standards (IFRS) and the term "dollar", as well as the symbol "$" 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 unaudited interim condensed consolidated financial statements for the second quarter ended May 1, 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 - Second quarter and cumulative | |||||||||||||
| Three months ended | Six months ended | ||||||||||||
| (in millions of dollars) | May 1, 2022 | April 25, 2021 | May 1, 2022 | April 25, 2021 | |||||||||
| Operating earnings | $46.1 | $55.9 | $79.9 | $103.1 | |||||||||
| Restructuring and other costs (revenues) | 0.8 | 0.5 | (0.9 | ) | 5.3 | ||||||||
| Amortization of intangible assets arising from business combinations(1) | 17.2 | 16.2 | 34.4 | 32.8 | |||||||||
| Adjusted operating earnings | $64.1 | $72.6 | $113.4 | $141.2 | |||||||||
| Depreciation and amortization(2) (3) | 39.5 | 36.8 | 79.2 | 76.3 | |||||||||
| Adjusted operating earnings before depreciation and amortization(3) | $103.6 | $109.4 | $192.6 | $217.5 | |||||||||
(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 - Second quarter and cumulative for the Packaging Sector | |||||||||||||
| Three months ended | Six months ended | ||||||||||||
| (in millions of dollars) | May 1, 2022 | April 25, 2021 | May 1, 2022 | April 25, 2021 | |||||||||
| Operating earnings | $11.1 | $18.2 | $17.1 | $33.4 | |||||||||
| Restructuring and other costs (revenues) | 5.6 | (1.9 | ) | 2.7 | (1.8 | ) | |||||||
| Amortization of intangible assets arising from business combinations(1) | 15.1 | 14.9 | 30.3 | 30.3 | |||||||||
| Adjusted operating earnings | $31.8 | $31.2 | $50.1 | $61.9 | |||||||||
| Depreciation and amortization(2) | 20.6 | 18.0 | 41.2 | 37.4 | |||||||||
| Adjusted operating earnings before depreciation and amortization | $52.4 | $49.2 | $91.3 | $99.3 | |||||||||
(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 - Second quarter and cumulative for the Printing Sector | |||||||||||||
| Three months ended | Six months ended | ||||||||||||
| (in millions of dollars) | May 1, 2022 | April 25, 2021 | May 1, 2022 | April 25, 2021 | |||||||||
| Operating earnings | $37.8 | $50.4 | $77.1 | $92.4 | |||||||||
| Restructuring and other costs | 0.8 | 1.9 | 1.8 | 5.0 | |||||||||
| Amortization of intangible assets arising from business combinations(1) | 2.0 | 1.2 | 4.0 | 2.4 | |||||||||
| Adjusted operating earnings | $40.6 | $53.5 | $82.9 | $99.8 | |||||||||
| Depreciation and amortization(2) | 14.1 | 13.8 | 28.6 | 28.6 | |||||||||
| Adjusted operating earnings before depreciation and amortization | $54.7 | $67.3 | $111.5 | $128.4 | |||||||||
(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 - Second quarter and cumulative for the Other Sector | |||||||||||||
| Three months ended | Six months ended | ||||||||||||
| (in millions of dollars) | May 1, 2022 | April 25, 2021 | May 1, 2022 | April 25, 2021 | |||||||||
| Operating earnings | ($2.8 | ) | ($12.7 | ) | ($14.3 | ) | ($22.7 | ) | |||||
| Restructuring and other costs (revenues) | (5.6 | ) | 0.5 | (5.4 | ) | 2.1 | |||||||
| Amortization of intangible assets arising from business combinations(1) | 0.1 | 0.1 | 0.1 | 0.1 | |||||||||
| Adjusted operating earnings | ($8.3 | ) | ($12.1 | ) | ($19.6 | ) | ($20.5 | ) | |||||
| Depreciation and amortization(2) (3) | 4.8 | 5.0 | 9.4 | 10.3 | |||||||||
| Adjusted operating earnings before depreciation and amortization(3) | ($3.5 | ) | ($7.1 | ) | ($10.2 | ) | ($10.2 | ) | |||||
(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 net earnings attributable to shareholders of the Corporation - Second quarter | |||||||
| Three months ended | |||||||
| (in millions of dollars, except per share amounts) | May 1, 2022 | April 25, 2021 | |||||
| Net earnings attributable to shareholders of the Corporation | $28.3 | $35.6 | |||||
| Restructuring and other costs | 0.8 | 0.5 | |||||
| Tax on restructuring and other costs | (0.4 | ) | (0.6 | ) | |||
| Amortization of intangible assets arising from business combinations(1) | 17.2 | 16.2 | |||||
| Tax on amortization of intangible assets arising from business combinations | (4.2 | ) | (3.9 | ) | |||
| Adjusted net earnings attributable to shareholders of the Corporation | $41.7 | $47.8 | |||||
| Net earnings attributable to shareholders of the Corporation per share | $0.33 | $0.41 | |||||
| Adjusted net earnings attributable to shareholders of the Corporation per share | $0.48 | $0.55 | |||||
| Weighted average number of shares outstanding | 86.8 | 87.0 | |||||
| (1) Intangible assets arising from business combinations include our customer relationships, trademarks and non-compete agreements. | |||||||
| Reconciliation of net earnings attributable to shareholders of the Corporation - Cumulative | |||||||
| Six months ended | |||||||
| (in millions of dollars, except per share amounts) | May 1, 2022 | April 25, 2021 | |||||
| Net earnings attributable to shareholders of the Corporation | $46.7 | $63.3 | |||||
| Restructuring and other costs (revenues) | (0.9 | ) | 5.3 | ||||
| Tax on restructuring and other costs | — | (1.9 | ) | ||||
| Amortization of intangible assets arising from business combinations(1) | 34.4 | 32.8 | |||||
| Tax on amortization of intangible assets arising from business combinations | (8.5 | ) | (7.9 | ) | |||
| Adjusted net earnings attributable to shareholders of the Corporation | $71.7 | $91.6 | |||||
| Net earnings attributable to shareholders of the Corporation per share | $0.54 | $0.73 | |||||
| Adjusted net earnings attributable to shareholders of the Corporation per share | $0.83 | $1.05 | |||||
| Weighted average number of shares outstanding | 86.9 | 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 May 1, 2022 | As at October 31, 2021 | ||||
| Long-term debt | $743.7 | $778.2 | ||||
| Current portion of long-term debt | 149.9 | 187.3 | ||||
| Lease liabilities | 142.1 | 137.3 | ||||
| Current portion of lease liabilities | 24.1 | 23.1 | ||||
| Cash | (24.8 | ) | (231.1 | ) | ||
| Net indebtedness | $1,035.0 | $894.8 | ||||
| Adjusted operating earnings before depreciation and amortization (last 12 months) | $439.9 | $464.8 | ||||
| Net indebtedness ratio | 2.35 | 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 July 25, 2022 to shareholders of record at the close of business on July 5, 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 May 1, 2022, the Corporation redeemed and cancelled 180,000 of its Class A Subordinate Voting Shares at a weighted average price of $16.79 per share, for a total cash consideration of $3.0 million. During the six-month period ended May 1, 2022, the Corporation redeemed and cancelled 337,800 of its Class A Subordinate Voting Shares at a weighted average price of $17.73 per share, for a total cash consideration of $6.0 million.
Additional information
Conference Call
Upon releasing its 2022 second quarter results, the Corporation will hold a conference call for the financial community on June 8, 2022 at 4:15 p.m. The dial-in numbers are 1-438-793-6811 or 1-888-440-2149. 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 8,000 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 June 8, 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 June 8, 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 Nathalie St-Jean Senior Advisor, Corporate Communications TC Transcontinental Telephone: 514-954-3581 nathalie.st-jean@tc.tc www.tc.tc | Financial Community Yan Lapointe Director, Investor Relations TC Transcontinental Telephone: 514-954-3574 yan.lapointe@tc.tc www.tc.tc |
CONSOLIDATED STATEMENTS OF EARNINGS
Unaudited
| Three months ended | Six months ended | |||||||||||||||
| May 1, | April 25, | May 1, | April 25, | |||||||||||||
| (in millions of Canadian dollars, unless otherwise indicated and per share data) | 2022 | 2021(1) | 2022 | 2021(1) | ||||||||||||
| Revenues | $715.5 | $623.3 | $1,406.1 | $1,246.0 | ||||||||||||
| Operating expenses | 611.9 | 513.9 | 1,213.5 | 1,028.5 | ||||||||||||
| Restructuring and other costs (revenues) | 0.8 | 0.5 | (0.9 | ) | 5.3 | |||||||||||
| Operating earnings before depreciation and amortization | 102.8 | 108.9 | 193.5 | 212.2 | ||||||||||||
| Depreciation and amortization | 56.7 | 53.0 | 113.6 | 109.1 | ||||||||||||
| Operating earnings | 46.1 | 55.9 | 79.9 | 103.1 | ||||||||||||
| Net financial expenses | 9.9 | 9.5 | 19.7 | 20.3 | ||||||||||||
| Earnings before income taxes | 36.2 | 46.4 | 60.2 | 82.8 | ||||||||||||
| Income taxes | 7.9 | 10.8 | 13.6 | 19.4 | ||||||||||||
| Net earnings | 28.3 | 35.6 | 46.6 | 63.4 | ||||||||||||
| Non-controlling interest | — | — | (0.1 | ) | 0.1 | |||||||||||
| Net earnings attributable to the shareholders of the Corporation | $28.3 | $35.6 | $46.7 | $63.3 | ||||||||||||
| Net earnings per share - basic and diluted | $0.33 | $0.41 | $0.54 | $0.73 | ||||||||||||
| Weighted average number of shares outstanding - basic and diluted (in millions) | 86.8 | 87.0 | 86.9 | 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 | Six months ended | |||||||||||||||
| May 1, | April 25, | May 1, | April 25, | |||||||||||||
| (in millions of Canadian dollars) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net earnings | $28.3 | $35.6 | $46.6 | $63.4 | ||||||||||||
| 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 | (0.5 | ) | 1.1 | (4.1 | ) | 5.4 | ||||||||||
| Net change in the fair value of designated derivatives - interest rate risk | 2.6 | 2.7 | 3.4 | 2.3 | ||||||||||||
| Reclassification of the net change in the fair value of designated derivatives recognized in net earnings during the period | 0.6 | 3.0 | 1.5 | 6.2 | ||||||||||||
| Related income taxes | 0.7 | 1.8 | 0.2 | 3.7 | ||||||||||||
| 2.0 | 5.0 | 0.6 | 10.2 | |||||||||||||
| Cumulative translation differences | ||||||||||||||||
| Net unrealized exchange gains (losses) on the translation of the financial statements of foreign operations | 7.8 | (33.3 | ) | 52.4 | (82.1 | ) | ||||||||||
| Net gains (losses) on hedge of the net investment in foreign operations | 2.7 | 15.3 | (10.2 | ) | 38.8 | |||||||||||
| Related income taxes | 1.1 | 1.9 | (0.2 | ) | 4.9 | |||||||||||
| 9.4 | (19.9 | ) | 42.4 | (48.2 | ) | |||||||||||
| Items that will not be reclassified to net earnings | ||||||||||||||||
| Changes related to defined benefit plans | ||||||||||||||||
| Actuarial gains on defined benefit plans | 17.3 | 21.9 | 22.0 | 12.2 | ||||||||||||
| Related income taxes | 4.6 | 5.6 | 5.9 | 2.8 | ||||||||||||
| 12.7 | 16.3 | 16.1 | 9.4 | |||||||||||||
| Other comprehensive income (loss) | 24.1 | 1.4 | 59.1 | (28.6 | ) | |||||||||||
| Comprehensive income | $52.4 | $37.0 | $105.7 | $34.8 | ||||||||||||
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 | — | — | 46.7 | — | 46.7 | (0.1 | ) | 46.6 | |||||||||||||||||||
| Other comprehensive income | — | — | — | 59.1 | 59.1 | — | 59.1 | ||||||||||||||||||||
| Shareholders' contributions and distribution to shareholders | |||||||||||||||||||||||||||
| Share redemptions | (2.9 | ) | — | (3.1 | ) | — | (6.0 | ) | — | (6.0 | ) | ||||||||||||||||
| Dividends | — | — | (39.1 | ) | — | (39.1 | ) | — | (39.1 | ) | |||||||||||||||||
| Balance as at May 1, 2022 | $637.1 | $0.9 | $1,164.0 | $17.8 | $1,819.8 | $5.1 | $1,824.9 | ||||||||||||||||||||
| 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 | — | — | 63.3 | — | 63.3 | 0.1 | 63.4 | ||||||||||||||||||||
| Other comprehensive loss | — | — | — | (28.6 | ) | (28.6 | ) | — | (28.6 | ) | |||||||||||||||||
| Shareholders' contributions and distribution to shareholders | |||||||||||||||||||||||||||
| Dividends | — | — | (39.2 | ) | — | (39.2 | ) | — | (39.2 | ) | |||||||||||||||||
| Balance as at April 25, 2021 | $640.0 | $0.9 | $1,131.3 | $(43.4 | ) | $1,728.8 | $5.4 | $1,734.2 | |||||||||||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited
| As at | As at | |||||||
| May 1, | October 31, | |||||||
| (in millions of Canadian dollars) | 2022 | 2021 | ||||||
| Current assets | ||||||||
| Cash | $24.8 | $231.1 | ||||||
| Accounts receivable | 492.6 | 496.1 | ||||||
| Income taxes receivable | 9.9 | 16.9 | ||||||
| Inventories | 426.1 | 357.0 | ||||||
| Prepaid expenses and other current assets | 20.6 | 24.4 | ||||||
| 974.0 | 1,125.5 | |||||||
| Property, plant and equipment | 726.8 | 689.7 | ||||||
| Right-of-use assets | 147.1 | 140.8 | ||||||
| Intangible assets | 501.9 | 513.0 | ||||||
| Goodwill | 1,124.0 | 1,086.6 | ||||||
| Deferred taxes | 18.6 | 18.6 | ||||||
| Other assets | 49.4 | 38.7 | ||||||
| $3,541.8 | $3,612.9 | |||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $414.8 | $439.2 | ||||||
| Provisions | 0.7 | 1.5 | ||||||
| Income taxes payable | 13.3 | 28.9 | ||||||
| Deferred revenues and deposits | 15.5 | 12.3 | ||||||
| Current portion of long-term debt | 149.9 | 187.3 | ||||||
| Current portion of lease liabilities | 24.1 | 23.1 | ||||||
| 618.3 | 692.3 | |||||||
| Long-term debt | 743.7 | 778.2 | ||||||
| Lease liabilities | 142.1 | 137.3 | ||||||
| Deferred taxes | 122.5 | 137.3 | ||||||
| Provisions | 0.3 | 0.6 | ||||||
| Other liabilities | 90.0 | 102.9 | ||||||
| 1,716.9 | 1,848.6 | |||||||
| Equity | ||||||||
| Share capital | 637.1 | 640.0 | ||||||
| Contributed surplus | 0.9 | 0.9 | ||||||
| Retained earnings | 1,164.0 | 1,159.5 | ||||||
| Accumulated other comprehensive income (loss) | 17.8 | (41.3 | ) | |||||
| Attributable to the shareholders of the Corporation | 1,819.8 | 1,759.1 | ||||||
| Non-controlling interest | 5.1 | 5.2 | ||||||
| 1,824.9 | 1,764.3 | |||||||
| $3,541.8 | $3,612.9 | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
| Three months ended | Six months ended | |||||||||||||||
| May 1, | April 25, | May 1, | April 25, | |||||||||||||
| (in millions of Canadian dollars) | 2022 | 2021(1) | 2022 | 2021(1) | ||||||||||||
| Operating activities | ||||||||||||||||
| Net earnings | $28.3 | $35.6 | $46.6 | $63.4 | ||||||||||||
| Adjustments to reconcile net earnings and cash flows from operating activities: | ||||||||||||||||
| Depreciation and amortization | 56.7 | 53.0 | 113.6 | 109.1 | ||||||||||||
| Financial expenses on long-term debt and lease liabilities | 8.1 | 9.3 | 18.2 | 18.8 | ||||||||||||
| Net losses (gains) on disposal of assets | (6.1 | ) | 0.3 | (5.9 | ) | 0.6 | ||||||||||
| Income taxes | 7.9 | 10.8 | 13.6 | 19.4 | ||||||||||||
| Net foreign exchange differences and other | 11.1 | (2.9 | ) | 7.8 | 1.1 | |||||||||||
| Cash flows generated by operating activities before changes in non-cash operating items and income taxes paid | 106.0 | 106.1 | 193.9 | 212.4 | ||||||||||||
| Changes in non-cash operating items | (16.5 | ) | (9.2 | ) | (81.4 | ) | (21.7 | ) | ||||||||
| Income taxes paid | (15.1 | ) | (13.6 | ) | (44.5 | ) | (22.7 | ) | ||||||||
| Cash flows from operating activities | 74.4 | 83.3 | 68.0 | 168.0 | ||||||||||||
| Investing activities | ||||||||||||||||
| Business combinations, net of acquired cash | (11.8 | ) | — | (57.5 | ) | — | ||||||||||
| Acquisitions of property, plant and equipment | (28.8 | ) | (22.4 | ) | (56.9 | ) | (49.7 | ) | ||||||||
| Disposals of property, plant and equipment | 8.1 | 0.2 | 8.1 | 0.3 | ||||||||||||
| Increase in intangible assets | (6.0 | ) | (5.2 | ) | (12.1 | ) | (9.7 | ) | ||||||||
| Cash flows from investing activities | (38.5 | ) | (27.4 | ) | (118.4 | ) | (59.1 | ) | ||||||||
| Financing activities | ||||||||||||||||
| Increase in long-term debt, net of issuance costs | 198.6 | — | 198.6 | — | ||||||||||||
| Reimbursement of long-term debt | (143.0 | ) | (0.1 | ) | (329.7 | ) | (83.5 | ) | ||||||||
| Net increase (decrease) in credit facilities | (53.7 | ) | (3.4 | ) | 49.8 | — | ||||||||||
| Financial expenses paid on long-term debt and credit facilities | (6.9 | ) | (9.1 | ) | (17.1 | ) | (16.7 | ) | ||||||||
| Repayment of principal on lease liabilities | (6.0 | ) | (6.0 | ) | (12.5 | ) | (11.4 | ) | ||||||||
| Interest paid on lease liabilities | (1.1 | ) | (0.8 | ) | (1.6 | ) | (1.7 | ) | ||||||||
| Dividends | (19.6 | ) | (19.6 | ) | (39.1 | ) | (39.2 | ) | ||||||||
| Share redemptions | (3.0 | ) | — | (6.0 | ) | — | ||||||||||
| Cash flows from financing activities | (34.7 | ) | (39.0 | ) | (157.6 | ) | (152.5 | ) | ||||||||
| Effect of exchange rate changes on cash denominated in foreign currencies | 0.6 | 0.7 | 1.7 | 2.2 | ||||||||||||
| Net change in cash | 1.8 | 17.6 | (206.3 | ) | (41.4 | ) | ||||||||||
| Cash at beginning of period | 23.0 | 182.0 | 231.1 | 241.0 | ||||||||||||
| Cash at end of period | $24.8 | $199.6 | $24.8 | $199.6 | ||||||||||||
| Non-cash investing activities | ||||||||||||||||
| Net change in capital asset acquisitions financed by accounts payable | $(2.3 | ) | $(0.1 | ) | $1.0 | $0.4 | ||||||||||
| (1)Certain comparative figures have been reclassified to conform to the presentation adopted in the current period. | ||||||||||||||||
