Transcontinental Inc. announces its results for the third quarter of fiscal 2021
*Highlights*· Strong growth in revenues and solid profitability in the Printing and Media Sectors.
· Revenues of $621.6 million for the quarter ended July 25, 2021; operating earnings of $50.2 million; and net earnings attributable to shareholders of the Corporation of $28.1 million ($0.32 per share).
· Adjusted operating earnings before depreciation and amortization^(1) of $101.7 million for the quarter ended July 25, 2021; adjusted operating earnings^(1) of $67.4 million; and adjusted net earnings attributable to shareholders of the Corporation^(1) of $44.2 million ($0.51 per share).
· Released a Corporate Social Responsibility Progress Report presenting innovative projects related to its commitment to the circular economy for plastic and the reduction of the Corporation’s carbon footprint.
· Closed a private offering of $250 million senior unsecured notes due in July 2026 and bearing interest at 2.28%.
· Subsequent to quarter-end, extended the $400 million revolving credit facility until 2026 and added a sustainability-related component providing for a rate adjustment based on achieving targets linked to ESG factors, including diversity and reduction in greenhouse gas emissions.
(1) Please refer to the section entitled "Non-IFRS Financial Measures" in this press release for a definition of these measures.
MONTREAL, Sept. 08, 2021 (GLOBE NEWSWIRE) -- Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the third quarter of fiscal 2021, which ended July 25, 2021.
"I'm satisfied with the operating profitability of our three sectors in the third quarter, said François Olivier, President and Chief Executive Officer of TC Transcontinental. Considering the short-term challenges presented by the rise in the price of resin, the reduction in the Canada Emergency Wage Subsidy and the exchange rate variation, we delivered good operating performance.
"In our Packaging Sector, our main engine of long-term growth, we continue to improve operating profitability and demand for our packaging products remains strong. We continue to secure significant and promising agreements with many customers, while our sustainable packaging products, which contribute to the circular economy for plastic, are gaining momentum. All of this bodes well for our growth outlook in the coming years.
"Our Printing Sector, while continuing to be impacted by the pandemic, posted strong organic growth in revenues and generated solid profitability as a result of the gradual reopening of the economy and our disciplined cost control. Our Media Sector had another excellent quarter with a significant increase in revenues and profitability.
"In terms of our community involvement, I am proud of our collaboration with the Government of Québec and Énergir as our vaccination centre, in the East end of Montréal, was able to administer over 30,000 doses of the COVID-19 vaccine while it was open, from May 26 to August 28, 2021. I want to thank the centre's management team, healthcare personnel, volunteers as well as all other public and private partners who contributed to the success of this initiative.
"To conclude, our performance since the beginning of the fiscal year, combined with the solid foundations of our customer relationships and the development of sustainable products, as well as our solid financial position, allow us to pursue our growth strategy in each of our three sectors and look to the future with confidence."
*Financial Highlights*
(in millions of dollars, except per share amounts) *Q3 - 2021* *Q3 - 2020* *Variation*
*in %* *9 MONTHS 2021* *9 MONTHS 2020* *Variation *
*in %*
*Revenues* *$621.6* *$587.4* *5.8**%* *$1,867.6* *$1,918.3* *(2.6**)**%*
*Operating earnings before depreciation and amortization* *100.9* *130.1* *(22.4**)* *308.3* *323.1* *(4.6**)*
*Adjusted operating earnings before depreciation and amortization ^(1)* *101.7* *139.3* *(27.0**)* *314.4* *352.6* *(10.8**)*
*Operating earnings* *50.2* *75.3* *(33.3**)* *153.3* *160.2* *(4.3**)*
*Adjusted operating earnings ^(1)* *67.4* *102.1* *(34.0**)* *208.6* *242.7* *(14.1**)*
*Net earnings attributable to shareholders of the Corporation* *28.1* *48.3* *(41.8**)* *91.4* *80.4* *13.7*
*Net earnings attributable to shareholders of the Corporation per share* *0.32* *0.55* *(41.8**)* *1.05* *0.92* *14.1*
*Adjusted net earnings attributable to shareholders of the Corporation ^(1)* *44.2* *68.2* *(35.2**)* *135.8* *154.6* *(12.2**)*
*Adjusted net earnings attributable to shareholders of the Corporation per share ^(1)* *0.51* *0.78* *(34.6**)* *1.56* *1.77* *(11.9**)*
(1) 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 compared to $35.9 million for the third quarter of 2020 ($25.8 million for the first nine months of 2021 compared to $44.1 million for the first nine months of 2020).
*
2021 Third Quarter Results *
Revenues increased by $34.2 million, or 5.8%, from $587.4 million in the third quarter of 2020 to $621.6 million in the corresponding period of 2021. This increase is mainly attributable to the Printing Sector, which posted organic growth of over 14%, while it had been more affected by the pandemic in the prior year. In the Packaging Sector, the significant favourable impact of the rise in the price of resin was offset by the negative impact of the exchange rate variation.
Operating earnings decreased by $25.1 million, or 33.3%, from $75.3 million in the third quarter of 2020 to $50.2 million in the third quarter of 2021. Adjusted operating earnings decreased by $34.7 million, or 34.0%, from $102.1 million in the third quarter of 2020 to $67.4 million in the third quarter of 2021. The decline in operating earnings and adjusted operating earnings is mainly due to the decrease in the Canada Emergency Wage Subsidy compared to the corresponding period of the prior year as well as the short-term unfavourable impact of contractual lags in passing through the rise in the price of resin to customers. These items were partially offset by good operating performance in all three sectors, including the significant increase in volume in the Printing Sector as a result of the gradual reopening of the economy. The decline in operating earnings was also partially offset by the $8.4 million decrease in restructuring and other costs.
Net earnings attributable to shareholders of the Corporation decreased by $20.2 million, from $48.3 million in the third quarter of 2020 to $28.1 million in the third quarter of 2021. This decline is mostly due to the decrease in the Canada Emergency Wage Subsidy and the short-term unfavourable impact of contractual lags in passing through the rise in the price of resin to customers. The decline is partially offset by good operating performance in all three sectors. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.55 to $0.32, respectively.
Adjusted net earnings attributable to shareholders of the Corporation decreased by $24.0 million, or 35.2%, from $68.2 million in the third quarter of 2020 to $44.2 million in the third quarter of 2021. This decrease is explained by the above-mentioned factors. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $0.78 to $0.51, respectively.
*2021 First Nine Months Results*
Revenues decreased by $50.7 million, or 2.6%, from $1,918.3 million in the first nine months of fiscal 2020 to $1,867.6 million in the corresponding period of fiscal 2021. This decline is mostly due to the unfavourable impact of the exchange rate variation on the Packaging Sector, the disposal of the paper packaging operations in January 2020 and lower printing volume in the first six months of fiscal 2021 caused by the pandemic. This decline was partially offset by the rise in the price of resin and organic growth in the Packaging Sector, higher volume in the third quarter in the Printing Sector and an increase in revenues in the Media Sector.
Operating earnings decreased by $6.9 million, or 4.3%, from $160.2 million in the first nine months of fiscal 2020 to $153.3 million in the corresponding period of fiscal 2021. Adjusted operating earnings decreased by $34.1 million, or 14.1%, from $242.7 million in the first nine months of fiscal 2020 to $208.6 million in the corresponding period of fiscal 2021. The decline in operating earnings and adjusted operating earnings is mostly due to the decrease in the Canada Emergency Wage Subsidy compared to the prior year, the short-term unfavourable impact of contractual lags in passing through the rise in the price of resin to customers, the unfavourable exchange rate variation in the Packaging Sector and the stock-based compensation expense. This decline was partially offset by good operating performance in all three sectors. The decline in operating earnings was also partially offset by the $23.4 million decrease in restructuring and other costs.
Net earnings attributable to shareholders of the Corporation increased by $11.0 million, or 13.7%, from $80.4 million in the first nine months of fiscal 2020 to $91.4 million in the corresponding period of fiscal 2021. This increase is mainly attributable to lower income taxes and net financial expenses, partially offset by lower operating earnings. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.92 to $1.05, respectively.
Adjusted net earnings attributable to shareholders of the Corporation decreased by $18.8 million, or 12.2%, from $154.6 million in the first nine months of fiscal 2020 to $135.8 million in the corresponding period of fiscal 2021. This decrease is mostly due to lower adjusted operating earnings, partially offset by lower net financial expenses and lower adjusted income taxes. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $1.77 to $1.56, respectively.
For more detailed financial information, please see the Management’s Discussion and Analysis for the third quarter ended July 25, 2021 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 and introducing new products on the market, and despite weaker than anticipated organic growth in the third quarter, we continue to expect organic volume growth in the fourth quarter of fiscal 2021 and in fiscal 2022. However, the impact of contractual lags in passing through the rise in the price of resin to customers and the appreciation of the Canadian dollar against the U.S. dollar should continue to have a negative impact on the sector's profitability for the fourth quarter, but to a lesser extent. Excluding the impacts of the price of resin and the appreciation of the Canadian dollar, we expect to post an increase in operating earnings for fiscal 2021 compared to the prior fiscal year, as a result of our operational efficiency initiatives and the anticipated organic growth in revenues.
In the Printing Sector, we expect a continued gradual recovery in printing volume. This anticipated recovery, combined with growth in our in-store marketing activities, gives us confidence about the outlook for revenue growth for the quarters to come.
As fiscal 2021 comprises 53 weeks, the fourth quarter will include an additional week of results compared to the prior year. This additional week will have a favourable impact on the Packaging and Printing Sectors' revenues and operating earnings.
Finally, we expect to continue generating significant cash flows. This should enable us to reduce our net indebtedness, while providing us with the flexibility needed to pursue our investment strategy 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 condensed interim consolidated financial statements for the third quarter ended July 25, 2021.
*Terms Used* *Definitions*
Adjusted operating earnings before depreciation and amortization Operating earnings before depreciation and amortization as well as restructuring and other costs (gains) 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 (gains), impairment of assets, as well as amortization of intangible assets arising from business combinations.
Adjusted operating earnings margin Adjusted operating earnings divided by revenues.
Adjusted income taxes Income taxes before income taxes on restructuring and other costs (gains), impairment of assets, amortization of intangible assets arising from business combinations as well as an adjustment on additional income taxes in other jurisdictions resulting from a prior year.
Adjusted net earnings attributable to shareholders of the Corporation Net earnings attributable to shareholders of the Corporation before restructuring and other costs (gains), impairment of assets, amortization of intangible assets arising from business combinations, net of related income taxes as well as an adjustment on additional income taxes in other jurisdictions resulting from a prior year.
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 and cumulative* Three months ended Nine months ended
(in millions of dollars) *July 25, 2021**
* July 26, 2020 *July 25, 2021**
* July 26, 2020
*Operating earnings* *$50.2* $75.3 *$153.3* $160.2
Restructuring and other costs *0.8* 9.2 *6.1* 29.5
Amortization of intangible assets arising from business combinations ^(1) *16.4* 17.6 *49.2* 53.0
*Adjusted operating earnings* *$67.4* $102.1 *$208.6* $242.7
Depreciation and amortization ^(2) *34.3* 37.2 *105.8* 109.9
*Adjusted operating earnings before depreciation and amortization* *$101.7* $139.3 *$314.4* $352.6
(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 net earnings attributable to shareholders of the Corporation - Third quarter* Three months ended *July 25, 2021*
July 26, 2020
(in millions of dollars, except per share amounts) *Total*
*Per share*
Total Per share
*Net earnings attributable to shareholders of the Corporation* *$28.1* *$0.32* $48.3 $0.55
Restructuring and other costs, net of related income taxes *0.4* *—* 6.6 0.07
Amortization of intangible assets arising from business combinations, net of related income taxes^ (1) *12.4* *0.15* 13.3 0.16
Adjustments on additional income taxes in other jurisdictions^(2) *3.3* *0.04* — —
*Adjusted net earnings attributable to shareholders of the Corporation* *$44.2* *$0.51* $68.2 $0.78
(1) Intangible assets arising from business combinations include our customer relationships, trademarks and non-compete agreements.
(2) Adjustments on additional income taxes in other jurisdictions resulting from a pre-acquisition item.
*Reconciliation of net earnings attributable to shareholders of the Corporation - Cumulative* Nine months ended *July 25, 2021**
* July 26, 2020
(in millions of dollars, except per share amounts) *Total**
* *Per share**
* Total Per share
*Net earnings attributable to shareholders of the Corporation* *$91.4* *$1.05* $80.4 $0.92
Restructuring and other costs, net of related income taxes *3.8* *0.04* 34.2 0.39
Amortization of intangible assets arising from business combinations, net of related income taxes^ (1) *37.3* *0.43* 40.0 0.46
Adjustments on additional income taxes in other jurisdictions^(2) *3.3* *0.04* — —
*Adjusted net earnings attributable to shareholders of the Corporation* *$135.8* *$1.56* $154.6 $1.77
(1) Intangible assets arising from business combinations include our customer relationships, trademarks and non-compete agreements.
(2) Adjustments on additional income taxes in other jurisdictions resulting from a pre-acquisition item.
*Reconciliation of net indebtedness*
(in millions of dollars, except ratios) *As at July 25, 2021*
As at October 25, 2020
Long-term debt *$781.6* $790.4
Current portion of long-term debt *378.5* 229.7
Lease liabilities *134.7* 132.0
Current portion of lease liabilities *23.7* 22.8
Cash *(392.0* *)* (241.0 )
*Net indebtedness* *$926.5* $933.9
Adjusted operating earnings before depreciation and amortization (last 12 months) *$461.2* $499.4
*Net indebtedness ratio * *2.0* *x* 1.9 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 19, 2021 to shareholders of record at the close of business on October 4, 2021.
*
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, 2020 and September 30, 2021, 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 191,320 of its Class B Shares. Under the current repurchase program, the Corporation has not repurchased any shares to date.
*
Additional information
*
*Conference Call*
Upon releasing its 2021 third quarter results, the Corporation will hold a conference call for the financial community on September 8, 2021 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 close to 8,000 employees, the majority of which are based in Canada, the United States and Latin America. TC Transcontinental had revenues of approximately C$2.6 billion for the fiscal year ended October 25, 2020. 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 in the packaging industry 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 rate, bad debts from certain customers, import and export controls, raw materials and transportation costs, recruiting and retaining qualified personnel in certain geographic areas and industry sectors, 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 25, 2020 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 8, 2021. 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 8, 2021. 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
(in millions of Canadian dollars, *July 25,*
July 26, *July 25,*
July 26,
unless otherwise indicated and per share data) *2021*
2020 *2021*
2020
Revenues *$* *621.6* $ 587.4 *$* *1,867.6* $ 1,918.3
Operating expenses *519.9* 448.1 *1,553.2* 1,565.7
Restructuring and other costs *0.8* 9.2 *6.1* 29.5
Operating earnings before depreciation and amortization *100.9* 130.1 *308.3* 323.1
Depreciation and amortization *50.7* 54.8 *155.0* 162.9
Operating earnings *50.2* 75.3 *153.3* 160.2
Net financial expenses *10.1* 11.0 *30.4* 36.7
Earnings before income taxes *40.1* 64.3 *122.9* 123.5
Income taxes *12.4* 16.0 *31.8* 42.9
*Net earnings* *27.7* 48.3 *91.1* 80.6
Non-controlling interest *(0.4* *)* — *(0.3* *)* 0.2
*Net earnings attributable to the shareholders of the Corporation* *$* *28.1* $ 48.3 *$* *91.4* $ 80.4
Net earnings per share - basic and diluted *$* *0.32* $ 0.55 *$* *1.05* $ 0.92
Weighted average number of shares outstanding - basic and diluted (in millions) *87.0* 87.0 *87.0* 87.1 *CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME*
Unaudited
Three months ended Nine months ended *July 25,*
July 26, *July 25,*
July 26,
(in millions of Canadian dollars) *2021*
2020 *2021*
2020
*Net earnings* *$* *27.7* $ 48.3 *$* *91.1* $ 80.6
*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 *(4.1* *)* 10.4 *1.3* (0.7 )
Net change in the fair value of designated derivatives - interest rate risk *(0.3* *)* 1.5 *2.0* (14.1 )
Reclassification of the net change in the fair value of designated derivatives recognized in net earnings during the period *2.8* 3.1 9.0 4.9
Related income taxes *(0.4* *)* 4.0 *3.3* (2.6 ) *(1.2* *)* 11.0 *9.0* (7.3 )
*Cumulative translation differences*
Net unrealized exchange gains (losses) on the translation of the financial statements of foreign operations *10.3* (88.6 ) *(71.8* *)* 46.5
Net gains (losses) on hedge of the net investment in foreign operations *(7.1* *)* 47.0 *31.7* (19.3 )
Related income taxes *(1.3* *)* (1.0 ) *3.6* (2.7 ) *4.5* (40.6 ) *(43.7* *)* 29.9
*Items that will not be reclassified to net earnings*
*Changes related to defined benefit plans*
Actuarial gains on defined benefit plans *4.0* (16.9 ) *16.2* (1.4 )
Related income taxes *1.0* (4.3 ) *3.8* (0.2 ) *3.0* (12.6 ) *12.4* (1.2 )
*Other comprehensive income (loss)* *6.3* (42.2 ) *(22.3* *)* 21.4
*Comprehensive income* *$* *34.0* $ 6.1 *$* *68.8* $ 102.0 *CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY*
Unaudited
Accumulated other Non- (in millions of Share Contributed Retained comprehensive controlling Total Canadian dollars) capital surplus earnings income (loss) Total interest equity
Balance as at October 25, 2020 *$* *640.0* *$* *0.9* *$* *1,107.2* *$* *(14.8* *)* *$* *1,733.3* *$* *5.3* *$* *1,738.6*
*Net earnings* *—* *—* *91.4* *—* *91.4* *(0.3* *)* *91.1*
*Other comprehensive loss* *—* *—* *—* *(22.3* *)* *(22.3* *)* *—* *(22.3* *)*
*Shareholders' contributions and distributions to shareholders*
Dividends *—* *—* *(58.7* *)* *—* *(58.7* *)* *—* *(58.7* *)*
Balance as at July 25, 2021 *$* *640.0* *$* *0.9* *$* *1,139.9* *$* *(37.1* *)* *$* *1,743.7* *$* *5.0* *$* *1,748.7*
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* — — 80.4 — 80.4 0.2 80.6
*Other comprehensive income * — — — 21.4 21.4 — 21.4
*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 — — (58.3 ) — (58.3 ) — (58.3 )
*Business combination* — — — — — 1.0 1.0
Balance as at July 26, 2020 $ 640.0 $ 0.9 $ 1,075.5 $ (4.5 ) $ 1,711.9 $ 5.4 $ 1,717.3 *CONSOLIDATED STATEMENTS OF FINANCIAL POSITION*
Unaudited
*As at*
As at *July 25,*
October 25,
(in millions of Canadian dollars) *2021*
2020
*Current assets*
Cash *$* *392.0* $ 241.0
Accounts receivable *420.7* 461.2
Income taxes receivable *15.5* 13.4
Inventories *340.0* 288.8
Prepaid expenses and other current assets *30.2* 20.3 *1,198.4* 1,024.7
*Property, plant and equipment* *703.5* 712.4
*Right-of-use assets* *139.7* 134.6
*Intangible assets* *532.5* 568.5
*Goodwill* *1,096.0* 1,098.8
*Deferred taxes* *16.0* 24.2
*Other assets* *34.5* 35.2 *$* *3,720.6* $ 3,598.4
*Current liabilities*
Accounts payable and accrued liabilities *$* *371.1* $ 399.7
Provisions *2.6* 7.9
Income taxes payable *24.4* 8.4
Deferred revenues and deposits *12.7* 9.0
Current portion of long-term debt *378.5* 229.7
Current portion of lease liabilities *23.7* 22.8 *813.0* 677.5
*Long-term debt* *781.6* 790.4
*Lease liabilities* *134.7* 132.0
*Deferred taxes* *132.5* 133.9
*Provisions* *0.6* 0.3
*Other liabilities* *109.5* 125.7 *1,971.9* 1,859.8
*Equity*
Share capital *640.0* 640.0
Contributed surplus *0.9* 0.9
Retained earnings *1,139.9* 1,107.2
Accumulated other comprehensive loss *(37.1* *)* (14.8 )
Attributable to the shareholders of the Corporation *1,743.7* 1,733.3
Non-controlling interest *5.0* 5.3 *1,748.7* 1,738.6 *$* *3,720.6* $ 3,598.4 *CONSOLIDATED STATEMENTS OF CASH FLOWS*
Unaudited
Three months ended Nine months ended *July 25,*
July 26, *July 25,*
July 26,
(in millions of Canadian dollars) *2021*
2020 ^(1) *2021*
2020 ^(1)
*Operating activities*
Net earnings *$* *27.7* $ 48.3 *$* *91.1* $ 80.6
Adjustments to reconcile net earnings and cash flows from operating activities:
Depreciation and amortization *55.6* 60.1 *169.8* 178.9
Financial expenses on long-term debt and lease liabilities *9.1* 10.3 *27.9* 37.0
Net losses (gains) on disposal of assets *(0.5* *)* 0.4 *0.1* 2.3
Net losses (gains) on business disposals *—* (1.3 ) *—* 3.1
Income taxes *12.4* 16.0 *31.8* 42.9
Net foreign exchange differences and other *(2.9* *)* (1.9 ) *(6.9* *)* 1.6
Cash flows generated by operating activities before changes in non-cash operating items and income taxes paid *101.4* 131.9 *313.8* 346.4
Changes in non-cash operating items *(36.5* *)* 9.7 *(58.2* *)* 1.4
Income taxes recovered (paid) *(10.3* *)* 5.0 *(33.0* *)* (22.8 )
Cash flows from operating activities *54.6* 146.6 *222.6* 325.0
*Investing activities*
Business combinations, net of acquired cash *(44.0* *)* — *(44.0* *)* (7.7 )
Business disposals *—* — *—* 232.1
Acquisitions of property, plant and equipment *(39.5* *)* (13.6 ) *(89.2* *)* (63.8 )
Disposals of property, plant and equipment *0.6* — *0.9* 0.2
Increase in intangible assets *(5.8* *)* (4.3 ) *(15.5* *)* (13.6 )
Cash flows from investing activities *(88.7* *)* (17.9 ) *(147.8* *)* 147.2
*Financing activities*
Increase in long-term debt, net of issuance costs *394.0* — *394.0* —
Reimbursement of long-term debt *(138.4* *)* (0.1 ) *(221.9* *)* (375.3 )
Financial expenses paid on long-term debt *(6.6* *)* (8.4 ) *(23.3* *)* (32.6 )
Repayment of principal on lease liabilities *(6.1* *)* (5.5 ) *(17.5* *)* (16.1 )
Interest paid on lease liabilities *(0.8* *)* (0.8 ) *(2.5* *)* (2.2 )
Exercise of stock options *—* — *—* 1.7
Dividends *(19.5* *)* (19.6 ) *(58.7* *)* (58.3 )
Share redemptions *—* — *—* (7.1 )
Cash flows from financing activities *222.6* (34.4 ) *70.1* (489.9 )
Effect of exchange rate changes on cash denominated in foreign currencies *3.9* (1.6 ) *6.1* 1.3
Net change in cash *192.4* 92.7 *151.0* (16.4 )
Cash at beginning of period *199.6* 104.6 *241.0* 213.7
Cash at end of period *$* *392.0* $ 197.3 *$* *392.0* $ 197.3
*Non-cash investing activities*
Net change in capital asset acquisitions financed by accounts payable *$* *0.8* $ 0.2 *$* *1.2* $ (0.8 )
^(1) Certain comparative figures have been reclassified to conform to the presentation adopted in the current period.