Transcontinental Inc. Announces Results for the Second Quarter of Fiscal 2022

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.

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.”

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.
details at: https://tctranscontinental.com/en-us/company-overview/news-room/press-releases/transcontinental-inc-announces-results-for-the-second

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