Transcontinental Inc. Announces Results for the First Quarter of Fiscal Year 2026

Executive Summary

• TC Transcontinental reported Q1 FY 2026 revenue of $263.5 M (up 2.3% YoY) but posted a net loss of $0.2 M from continuing operations and a decline in operating earnings.
• The company completed the sale of its Packaging Business on March 6 2026, enabling a focus on retail services, printing, and educational publishing; proceeds will be used to reduce net indebtedness.
• Sam Bendavid was appointed Chief Executive Officer, effective April 6 2026, succeeding Thomas Morin.

Key Details

• Financial Highlights (Continuing Operations)
• Revenue: $263.5 M vs. $257.7 M YoY (+2.3%)
• Operating earnings before depreciation & amortisation: $26.1 M vs. $36.7 M (-28.9%)
• Adjusted operating earnings before depreciation & amortisation: $33.1 M vs. $40.3 M (-17.9%)
• Net loss (continuing): $(0.2) M vs. $4.8 M profit YoY (‑104.2%)
• Adjusted net earnings: $6.7 M vs. $8.2 M (-18.3%); adjusted EPS $0.08 vs. $0.10 YoY
• Divestiture of Packaging Business
• Sale closed March 6 2026 to ProAmpac (buyer not restated in release).
• Transaction will materially reduce net indebtedness; net debt fell to $709.2 M from $740.4 M.
• Net indebtedness ratio improved slightly to 3.46× (vs. 3.49× prior quarter).
• CEO Transition
• Sam Bendavid appointed CEO, effective April 6 2026.
• Thomas Morin steps down; remains President until transition complete.
• Outlook & Guidance
• Adjusted operating earnings before depreciation & amortisation for FY 2026 expected to be stable vs. FY 2025 at the consolidated level.
• Anticipated lower volume in traditional printing offset by growth in in‑store marketing acquisitions.
• Expect continued strong cash flow generation to further reduce indebtedness; adjusted net‑indebtedness ratio projected to rise over next two quarters then improve in Q4 FY 2026.
• Special Distribution
• Company intends to declare a special distribution of $20.00 per share on Class A Subordinate Voting Shares and Class B Shares, subject to shareholder approval at the March 10 2026 meeting.
• Capital Structure & Debt Activity (Quarter)
• Long‑term debt: $438.3 M (up from $417.6 M)
• Current portion of long‑term debt: $252.2 M (down marginally)
• Lease liabilities: $49.6 M (down from $91.1 M)
• Cash balance at quarter end: $43.0 M (down from $47.0 M)
• Conference Call
• Management call scheduled for March 10 2026, 4:00 p.m. ET; dial‑in numbers provided.
• Other Notable Metrics
• Net cash used in operating activities of continuing operations: $(4.5) M (vs. $(56.1) M prior year).
• Capital expenditures (CAPEX) for the quarter: $5.1 M (down from $3.6 M YoY increase in absolute terms due to acquisitions and disposals).

Notable Quotes

• “The closing of the sale of our packaging activities allows us to begin a new chapter…focus our resources on retail services, printing and educational publishing,” – Thomas Morin, President & CEO (pre‑transition).
• “We remain confident that we will deliver adjusted operating earnings … similar to fiscal year 2025 at the consolidated level,” – Thomas Morin.
• “Our balance sheet is solid, and we are well positioned to benefit from growth opportunities…the sale will significantly reduce net indebtedness,” – Donald LeCavalier, EVP & CFO.