Transcontinental Inc. Announces Results for the Third Quarter of Fiscal Year 2025

Highlights

• Revenues of $684.4 million for the quarter ended July 27, 2025; operating earnings of $57.4 million; and net earnings attributable to shareholders of the Corporation of $38.7 million ($0.46 per share).
• Adjusted operating earnings before depreciation and amortization⁽¹⁾ of $122.6 million for the quarter ended July 27, 2025; adjusted operating earnings⁽¹⁾ of $85.4 million; and adjusted net earnings attributable to shareholders of the Corporation⁽¹⁾ of $58.9 million ($0.70 per share).
• Growth in adjusted net earnings attributable to shareholders of the Corporation per share⁽¹⁾ of 16.7%.
• Acquisitions to accelerate the growth of in-store marketing activities: Middleton Group Inc., based in Ontario, on June 23, 2025, for $4.6 million; and, subsequent to the end of the quarter, Mirazed Inc., based in Quebec, and Intergraphics Decal Limited, based in Manitoba, for a maximum of $72.7 million, subject to adjustments.

(1) Please refer to the section entitled “Non-IFRS Financial Measures” in this press release for a definition of these measures.

MONTRÉAL, Sept. 04, 2025 (GLOBE NEWSWIRE) — Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the third quarter of fiscal year 2025, which ended July 27, 2025.

“For the third consecutive quarter, we significantly improved our adjusted net earnings per share, which continues to demonstrate the positive impact of the implementation of our two-year program aimed at improving our profitability and our financial position,” said Thomas Morin, President and Chief Executive Officer of TC Transcontinental.

“The Packaging Sector experienced a decrease in revenues in the third quarter, mainly due to the sale of our industrial packaging operations at the beginning of the fiscal year as well as weaker than expected demand. Thanks to our discipline and our ability to adapt our costs to the demand, and despite a less favourable product mix, we improved the sector’s adjusted operating earnings margin before depreciation and amortization. We expect volume growth in several of our markets in the fourth quarter, which makes us confident in our ability to generate organic growth in earnings for fiscal year 2025.

“The Retail Services and Printing Sector posted another good quarter with a 4.5% increase in revenues and an increase in profitability for the fifth consecutive quarter. This solid performance results mainly from significant growth in our book printing activities. As announced, we are pleased with the Mirazed, Intergraphics and Middleton acquisitions, which accelerate growth in our in-store marketing activities.”

“The decrease in our financial expenses as a result of the significant reduction in net indebtedness during the last year, combined with the improvement in our earnings and our share repurchase program, allowed us to grow adjusted net earnings per share by 16.7% for the quarter,” added Donald LeCavalier, Executive Vice President and Chief Financial Officer of TC Transcontinental.

Financial Highlights

   (1) Please refer to the section entitled “Reconciliation of Non-IFRS Financial Measures” in this Press release for adjusted data presented above.

Results for the Third Quarter of Fiscal Year 2025

Revenues decreased by $15.6 million, or 2.2%, from $700.0 million in the third quarter of 2024 to $684.4 million in the corresponding period of 2025. This decrease is mainly due to the impact of the sale of the industrial packaging operations and lower volume in the Packaging Sector, partially offset by higher volume in the Retail Services and Printing Sector, notably in book printing activities, the favourable exchange rate effect and, to a lesser extent, the acquisition of Middleton Group Inc.

Operating earnings before depreciation and amortization decreased by $12.5 million, or 10.3%, from $121.5 million in the third quarter of 2024 to $109.0 million in the third quarter of 2025. This decrease is mainly due to lower volume in the Packaging Sector, a less favourable product mix in our two main sectors, the increase in restructuring and other costs, an asset impairment charge and the sale of the industrial packaging operations, partially offset by the favourable impact of cost reduction initiatives and the favourable exchange rate effect.

Adjusted operating earnings before depreciation and amortization increased by $1.6 million, or 1.3%, from $121.0 million in the third quarter of 2024 to $122.6 million in the third quarter of 2025. This increase is mainly attributable to the favourable impact of cost reduction initiatives and the favourable exchange rate effect, mostly offset by lower volume in the Packaging Sector, a less favourable product mix in our two main sectors and the sale of the industrial packaging operations.

Net earnings attributable to shareholders of the Corporation decreased by $4.9 million, or 11.2%, from $43.6 million in the third quarter of 2024 to $38.7 million in the third quarter of 2025. This decrease is mainly due to the previously explained decrease in operating earnings before depreciation and amortization, partially offset by lower financial expenses, depreciation and amortization, and income taxes. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.50 to $0.46, respectively.

Adjusted net earnings attributable to shareholders of the Corporation increased by $7.5 million, or 14.6%, from $51.4 million in the third quarter of 2024 to $58.9 million in the third quarter of 2025. This increase is mainly attributable to lower financial expenses and income taxes as well as the previously explained increase in adjusted operating earnings before depreciation and amortization. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $0.60 to $0.70, respectively.

Results for the First Nine Months of Fiscal Year 2025

Revenues decreased by $52.1 million, or 2.5%, from $2,063.6 million in the first nine months of fiscal year 2024 to $2,011.5 million in the corresponding period of 2025. This decrease is mainly due to the impact of the sale of the industrial packaging operations and lower volume, mainly in the Packaging Sector, partially offset by the favourable exchange rate effect.

Operating earnings before depreciation and amortization increased by $62.0 million, or 21.2%, from $292.9 million in the first nine months of fiscal year 2024 to $354.9 million in the corresponding period of 2025. This increase is mainly attributable to the decrease in restructuring and other costs (revenues), the favourable impact of cost reduction initiatives and the favourable exchange rate effect, partially offset by lower volume and a less favourable product mix in the Packaging Sector as well as the sale of the industrial packaging operations.

Adjusted operating earnings before depreciation and amortization increased by $1.4 million, or 0.4%, from $327.2 million in the first nine months of fiscal year 2024 to $328.6 million in the corresponding period of 2025. This increase is mainly attributable to the favourable impact of cost reduction initiatives and the favourable exchange rate effect, mostly offset by lower volume and a less favourable product mix in the Packaging Sector as well as the sale of the industrial packaging operations.

Net earnings attributable to shareholders of the Corporation increased by $54.7 million, or 74.5%, from $73.4 million in the first nine months of fiscal year 2024 to $128.1 million in the corresponding period of 2025. This increase is mainly attributable to the previously explained increase in operating earnings before depreciation and amortization as well as lower financial expenses and depreciation and amortization, partially offset by higher income taxes. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.85 to $1.53, respectively.

Adjusted net earnings attributable to shareholders of the Corporation increased by $14.5 million, or 10.8%, from $134.1 million in the first nine months of fiscal year 2024 to $148.6 million in the corresponding period of 2025. This increase is mainly attributable to lower financial expenses. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $1.55 to $1.77, respectively.

For more detailed financial information, please see the Management’s Discussion and Analysis for the third quarter ended July 27, 2025, as well as the financial statements in the “Investors” section of our website at www.tc.tc.

Outlook¹

The investments in our growth activities, including flexible packaging and in-store marketing, position us well for the future and should be a key driver of our long-term growth.

In terms of profitability, despite a weaker than anticipated demand in the third quarter, we expect to generate organic growth in adjusted operating earnings before depreciation and amortization of the Packaging Sector for fiscal 2025 compared to fiscal 2024. In the Retail Services and Printing Sector, given the higher than anticipated growth in earnings since the beginning of fiscal 2025, we expect adjusted operating earnings before depreciation and amortization for fiscal 2025 to rise compared to fiscal 2024.

Lastly, we expect to continue generating significant cash flows from operating activities, which will enable us to pursue our strategy launched in 2023 to reduce net indebtedness while investing in our growth and returning capital to our shareholders.

______________________
¹ The above outlook does not take into account the impact of the implementation of protectionist trade measures and a potential labour conflict at Canada Post on our operations and their effects on our results.

Non-IFRS Financial Measures

In this document, unless otherwise indicated, all financial data are prepared in accordance with International Financial Reporting Accounting 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 condensed interim consolidated financial statements for the third quarter ended July 27, 2025.

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 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.

(1) To mitigate the impact of foreign currency fluctuations when consolidating the Packaging Sector’s earnings, the Corporation sometimes uses foreign exchange contracts. These contracts are not designated as part of a hedge accounting relationship, and resulting exchange gains or losses are added to adjusted operating earnings and adjusted operating earnings before depreciation and amortization.
(2) Amortization of intangible assets arising from business combinations include our customer relationships, rights of first refusal and educational book titles.
(3) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations

(1) To mitigate the impact of foreign currency fluctuations when consolidating the Packaging Sector’s earnings, the Corporation sometimes uses foreign exchange contracts. These contracts are not designated as part of a hedge accounting relationship, and resulting exchange gains or losses are added to adjusted operating earnings and adjusted operating earnings before depreciation and amortization.
(2) Amortization of intangible assets arising from business combinations includes our customer relationships.
(3) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.

(1) Amortization of intangible assets arising from business combinations includes our customer relationships.
(2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.

(1) Amortization of intangible assets arising from business combinations includes our rights of first refusal and educational book titles.
(2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.

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 20, 2025, to shareholders of record at the close of business on September 25, 2025.

Normal Course Issuer Bid

On June 12, 2024, 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 June 17, 2024 and June 16, 2025, or at an earlier date if the Corporation concludes or cancels the offer, up to 3,662,967 of its Class A Subordinate Voting Shares and up to 668,241 of its Class B Shares. The repurchases are made in the normal course of business at market prices through the Toronto Stock Exchange.

During the first nine months of fiscal year 2025, the Corporation repurchased and cancelled 934,434 Class A Subordinate Voting Shares at a weighted average price of $17.38 and 3,600 Class B Shares at a weighted average price of $17.27, for a total cash consideration of $16.3 million. As at July 27, 2025, the Corporation had no share repurchase program in effect.

Additional information

Conference Call

Upon releasing its results for the third quarter of fiscal year 2025, the Corporation will hold a conference call for the financial community on September 5, 2025, at 8:00 a.m. The dial-in numbers are 1-289-514-5100 or 1-800-717-1738. Media may hear the call in listen-only mode or tune in to the simultaneous audio broadcast on TC Transcontinental’s website, which will then be archived for 30 days. For media requests or interviews, please contact Laurence Boucicault, Senior Advisor, Corporate Communications of TC Transcontinental, at 438-226-0469.

Profile

TC Transcontinental is a leader in flexible packaging in North America and in retail services in Canada, and is Canada’s largest printer. The Corporation is also the leading Canadian French-language educational publishing group. Since 1976, 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 7,600 employees, the majority of which are based in Canada, the United States and Latin America. TC Transcontinental generated revenues of $2.8 billion during the fiscal year ended October 27, 2024. 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 impact of digital product development and adoption, the impact of changes in the participants in the distribution of newspapers and printed advertising materials and the disruption in their activities resulting mainly from labour disputes, including at Canada Post, the impact of regulations or legislation regarding door-to-door distribution on the printing of paper flyers or printed advertising materials, inflation and recession risks, economic conditions and geopolitical uncertainty, environmental risks as well as adoption of new regulations or amendments and changes to consumption habits, risk of an operational disruption that could be harmful to its ability to meet deadlines, the worldwide outbreak of a disease, a virus or any other contagious disease could have an adverse impact on the Corporation’s operations, the ability to generate organic long-term growth and face competition, a significant increase in the cost of raw materials, the availability of those materials and energy consumption could have an adverse impact on the Corporation’s activities, the ability to complete acquisitions and properly integrate them, cybersecurity, data protection, warehousing and usage, the impact of digital product development and adoption on the demand for printed products other than flyers, the failure of patents, trademarks and confidentiality agreements to protect intellectual property, a difficulty to attract and retain employees in the main operating sectors, the safety and quality of packaging products used in the food industry, bad debts from certain customers, import and export controls, duties, tariffs or taxes, exchange rate fluctuations, increase in market interest rates with respect to our financial instruments as well as availability of capital at a reasonable cost, the legal risks related to its activities and the compliance of its activities with applicable regulations, the impact of major market fluctuations on the solvency of defined benefit pension plans, changes in tax legislation and disputes with tax authorities or amendments to statutory tax rates in force, the impact of impairment tests on the value of assets and a conflict of interest between the controlling shareholder and other shareholders. The main risks, uncertainties and factors that could influence actual results are described in the Management’s Discussion and Analysis for the fiscal year ended October 27, 2024 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 4, 2025. 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 4, 2025. 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.

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