Transcontinental Inc. announces its results for the second quarter of fiscal 2021

Montreal, Quebec, CANADA


Highlights

  • Return to growth and significant increase in profitability in the Printing Sector, as well as solid performance in the Packaging and Media Sectors.
  • Revenues of $623.3 million for the quarter ended April 25, 2021; operating earnings of $55.9 million; and net earnings attributable to shareholders of the Corporation of $35.6 million ($0.41 per share).
  • Adjusted operating earnings before depreciation and amortization(1) of $107.0 million for the quarter ended April 25, 2021; adjusted operating earnings(1) of $72.6 million; and adjusted net earnings attributable to shareholders of the Corporation(1) of $47.8 million ($0.55 per share).
  • Maintained a solid financial position with a net indebtedness ratio(1) of 1.7x.
  • Favourable credit rating revision by DBRS Morningstar rating agency, from BBB (low) / negative outlook to BBB (low) / stable outlook.
  • Acquired BGI Retail Inc. on June 1, 2021 and expanded the in-store marketing solutions offering to retailers.
  • Winner of the Flexographic Technical Association (FTA) Innovations in Sustainability Award for the IntegrititeTM post-consumer recycled film.

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

MONTREAL, June 09, 2021 (GLOBE NEWSWIRE) -- Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the second quarter of fiscal 2021, which ended April 25, 2021.

"We continued to generate very good results, with solid performance in our three sectors and a return to growth in our Printing Sector, said François Olivier, President and Chief Executive Officer of TC Transcontinental. I am very grateful to all our employees for their continued efforts and resilience in the face of the challenges brought by the pandemic.

"In our Packaging Sector, our main engine of long-term growth, customer demand remains robust. With the introduction of new products on the market, the recently signed contracts and the momentum of our sustainable packaging products that contribute to the circular economy for plastic, we are confident in our ability to fuel organic growth in revenues in the coming quarters. Excluding the unfavourable effects of the significant and rapid rise in the price of resin and the exchange rate variation, the sector posted an excellent quarter with a significant increase in operating earnings.

"Our Printing Sector had an excellent quarter with positive organic growth, a first since the beginning of the pandemic. In addition to this growth, the sector posted a 25% increase in adjusted operating earnings before depreciation and amortization. The BGI Retail acquisition, which is highly complementary, enables us to further expand our in-store marketing solutions offering to retailers and, combined with the recently announced new revenues, increases the proportion of our growth activities in the sector. While we remain cautious about the evolution of the COVID-19 pandemic, we are encouraged by its slowdown and continue to expect an increase in printing volumes in the coming quarters. Finally, our Media Sector continued to deliver excellent results and significantly increased its revenues and profitability.

"To conclude, our performance and our solid financial position give us the momentum and the capacity to confidently pursue our growth objectives."


Financial Highlights

(in millions of dollars, except per share amounts)Q2 - 2021
Q2 - 2020Variation
in %
6 MONTHS 20216 MONTHS 2020Variation
in %
Revenues$623.3$625.1(0.3) %$1,246.0$1,330.9(6.4) %
Operating earnings before depreciation and amortization 106.597.39.5207.4193.07.5
Adjusted operating earnings before depreciation and amortization (1)107.0104.32.6212.7213.3(0.3)
Operating earnings55.944.126.8103.184.921.4
Adjusted operating earnings (1)72.668.56.0141.2140.60.4
Net earnings attributable to shareholders of the Corporation35.625.738.563.332.197.2
Net earnings attributable to shareholders of the Corporation per share0.410.3036.70.730.3797.3
Adjusted net earnings attributable to shareholders of the Corporation (1)47.843.69.691.686.46.0
Adjusted net earnings attributable to shareholders of the Corporation per share (1)0.550.5010.01.050.996.1
(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 $7.5 million in Canada Emergency Wage Subsidy for the second quarter of 2021 compared to $8.2 million for the second quarter of 2020 ($16.5 million for the first six months of 2021 compared to $8.2 million for the first six months of 2020).


2021 Second Quarter Results

Revenues decreased by $1.8 million, or 0.3%, from $625.1 million in the second quarter of 2020 to $623.3 million in the corresponding period of 2021. This decline is mainly due to the negative impact of the exchange rate variation on the Packaging Sector, mostly offset by organic growth in the three sectors.

Operating earnings increased by $11.8 million, or 26.8%, from $44.1 million in the second quarter of 2020 to $55.9 million in the second quarter of 2021. The increase in operating earnings is explained by the reduction in restructuring and other costs as well as operational efficiency initiatives.

Adjusted operating earnings increased by $4.1 million, or 6.0%, from $68.5 million in the second quarter of 2020 to $72.6 million in the second quarter of 2021. The increase is mainly explained by higher adjusted operating earnings in the Printing Sector.

In the Packaging Sector, adjusted operating earnings decreased by $7.0 million, from $38.2 million in the second quarter of 2020 to $31.2 million in the second quarter of 2021. This decrease is mainly due to the unfavourable impact of the significant and rapid rise in the price of resin as well as the unfavourable exchange rate effect. Excluding these two negative items, the sector posted strong growth in operating earnings due to the solid performance of segments related to food and everyday consumer goods packaging.

In the Printing Sector, adjusted operating earnings increased by $14.1 million, or 35.8%, from $39.4 million in second quarter of 2020 to $53.5 million in the second quarter of 2021. This increase is mainly attributable to the solid performance by most of the groups and cost reduction initiatives undertaken by the sector. The Canada Emergency Wage Subsidy was similar to last year and did not have a significant effect on the change in the sector's organic growth.

Net earnings attributable to shareholders of the Corporation increased by $9.9 million, from $25.7 million in the second quarter of 2020 to $35.6 million in the second quarter of 2021.This increase is mostly explained by higher operating earnings and lower net financial expenses compared to the corresponding period of the prior year resulting from a reduction in net indebtedness and a lower weighted average interest rate. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.30 to $0.41, respectively.

Adjusted net earnings attributable to shareholders of the Corporation increased by $4.2 million, or 9.6%, from $43.6 million in the second quarter of 2020 to $47.8 million in the second quarter of 2021. This increase is mostly explained by higher adjusted operating earnings and lower net financial expenses resulting from a reduction in net indebtedness and a lower weighted average interest rate. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $0.50 to $0.55, respectively.

2021 First Six Months Results

Revenues decreased by $84.9 million, or 6.4%, from $1,330.9 million in the first six months of fiscal 2020 to $1,246.0 million in the corresponding period of fiscal 2021. This decline is mostly explained by the sale of the paper packaging operations, which occurred at the end of the first quarter of 2020, and the decrease in revenues in the Printing Sector, which has been significantly impacted by the COVID-19 pandemic since April 2020. The impact of the unfavourable variation of the exchange rate on the Packaging Sector also contributed to the decrease in revenues. This decrease was partially offset by organic growth of $38.3 million in the Packaging Sector resulting from the rise in the price of resin as well as the increase in volume in several segments that support the retail supply chain for food and everyday consumer products and in the Latin America group.

Operating earnings increased by $18.2 million, or 21.4%, from $84.9 million in the first six months of fiscal 2020 to $103.1 million in the corresponding period of fiscal 2021. The increase in operating earnings is mostly explained by the decrease in restructuring costs and operating expenses compared to the corresponding period of the prior year.

Adjusted operating earnings increased by $0.6 million, or 0.4%, from $140.6 million in the first six months of fiscal 2020 to $141.2 million in the corresponding period of fiscal 2021. This increase is mainly explained by the solid performance of the Printing Sector, partially offset by the unfavourable impact of the rapid rise in the price of resin and the unfavourable exchange rate effect in the Packaging Sector. Excluding the impacts of the resin price and the exchange rate, the Packaging Sector posted strong growth as a result of operational efficiency initiatives and the above-mentioned increase in volume.

Net earnings attributable to shareholders of the Corporation increased by $31.2 million, or 97.2%, from $32.1 million in the first six months of fiscal 2020 to $63.3 million in the corresponding period of fiscal 2021. This increase is mainly explained by higher operating earnings, lower income taxes and lower net financial expenses resulting from a reduction in net indebtedness and a lower weighted average interest rate. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.37 to $0.73, respectively.

Adjusted net earnings attributable to shareholders of the Corporation increased by $5.2 million, or 6.0%, from $86.4 million in the first six months of fiscal 2020 to $91.6 million in the corresponding period in fiscal 2021. This increase is mostly due to lower net financial expenses resulting from a reduction in net indebtedness and a lower weighted average interest rate. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $0.99 to $1.05, respectively.

For more detailed financial information, please see the Management’s Discussion and Analysis for the second quarter ended April 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, we expect organic volume growth in in fiscal 2021. The significant and rapid rise in the price of resin and the appreciation of the Canadian dollar against the US dollar should however continue to have a negative impact of the sector's profitability. Excluding the impacts of the resin price and the appreciation of the Canadian dollar, we expect to post an increase in operating earnings 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 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 second half of fiscal 2021 and for fiscal 2022. In addition, excluding amounts related to the Canada Emergency Wage Subsidy, we expect operating earnings to grow in fiscal 2021 compared to fiscal 2020.

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 second quarter ended April 25, 2021.

Terms UsedDefinitions
Adjusted operating earnings before depreciation and amortizationOperating earnings before depreciation and amortization as well as restructuring and other costs (gains) and impairment of assets.
Adjusted operating earnings margin before depreciation and amortizationAdjusted operating earnings before depreciation and amortization divided by revenues.
Adjusted operating earningsOperating earnings before restructuring and other costs (gains), impairment of assets, as well as amortization of intangible assets arising from business combinations.
Adjusted operating earnings marginAdjusted operating earnings divided by revenues.
Adjusted income taxesIncome taxes before income taxes on restructuring and other costs (gains), impairment of assets, amortization of intangible assets arising from business combinations.
Adjusted net earnings attributable to shareholders of the CorporationNet 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.
Net indebtednessTotal 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 ratioNet 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 endedSix months ended
(in millions of dollars) April 25, 2021April 26, 2020April 25, 2021April 26, 2020
Operating earnings $55.9$44.1$103.1$84.9
Restructuring and other costs 0.57.05.320.3
Amortization of intangible assets arising from business combinations (1) 16.217.432.835.4
Adjusted operating earnings $72.6$68.5$141.2$128.9
Depreciation and amortization (2) 34.435.871.572.7
Adjusted operating earnings before depreciation and amortization $107.0$104.3$212.7$201.6
(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 - Second quarter
  Three months ended
  April 25, 2021April 26, 2020
(in millions of dollars, except per share amounts) Total
 Per shareTotalPer share
Net earnings attributable to shareholders of the Corporation $35.6 $0.41$25.7$0.30
Restructuring and other costs, net of related income taxes  (0.1)  4.8 0.06
Amortization of intangible assets arising from business combinations, net of related income taxes (1)  12.3  0.14 13.1 0.14
Adjusted net earnings attributable to shareholders of the Corporation $47.8 $0.55$43.6$0.50
(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
  April 25, 2021April 26, 2020
(in millions of dollars, except per share amounts) Total
 Per shareTotalPer share
Net earnings attributable to shareholders of the Corporation $63.3 $0.41$32.1$0.37
Restructuring and other costs, net of related income taxes  3.4   27.6 0.32
Amortization of intangible assets arising from business combinations, net of related income taxes (1)  24.9  0.14 26.7 0.30
Adjusted net earnings attributable to shareholders of the Corporation $91.6 $0.55$86.4$0.99
(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 April 25, 2021
  As at October 25, 2020  
Long-term debt$569.5  $790.4  
Current portion of long-term debt 327.6   229.7  
Lease liabilities 122.7   132.0  
Current portion of lease liabilities 22.1   22.8  
Cash (199.6)  (241.0) 
Net indebtedness$842.3  $933.9  
Adjusted operating earnings before depreciation and amortization (last 12 months)$498.8  $499.4  
Net indebtedness ratio  1.7 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 July 20, 2021 to shareholders of record at the close of business on July 6, 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 second quarter results, the Corporation will hold a conference call for the financial community on June 9, 2021 at 4:15 p.m. The dial-in numbers are 1 647 788-4922 or 1 877 223-4471. 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 June 9, 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 June 9, 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:

MediaFinancial Community
  
Nathalie St-JeanYan Lapointe
Senior Advisor, Corporate CommunicationsDirector, Investor Relations
TC TranscontinentalTC Transcontinental
Telephone: 514-954-3581Telephone: 514-954-3574
nathalie.st-jean@tc.tcyan.lapointe@tc.tc
www.tc.tc
www.tc.tc


CONSOLIDATED STATEMENTS OF EARNINGS
Unaudited

 Three months endedSix months ended
 April 25,
 April 26, April 25,
 April 26, 
(in millions of Canadian dollars, unless otherwise indicated and per share data)2021
 2020 2021
 2020 
     
Revenues$623.3 $625.1 $1,246.0 $1,330.9 
Operating expenses516.3 520.8 1,033.3 1,117.6 
Restructuring and other costs0.5 7.0 5.3 20.3 
     
Operating earnings before depreciation and amortization106.5 97.3 207.4 193.0 
Depreciation and amortization50.6 53.2 104.3 108.1 
     
Operating earnings55.9 44.1 103.1 84.9 
Net financial expenses9.5 11.7 20.3 25.7 
     
Earnings before income taxes46.4 32.4 82.8 59.2 
Income taxes10.8 6.6 19.4 26.9 
     
Net earnings35.6 25.8 63.4 32.3 
Non-controlling interest 0.1 0.1 0.2 
Net earnings attributable to the shareholders of the Corporation$35.6 $25.7 $63.3 $32.1 
     
Net earnings per share - basic and diluted$0.41 $0.30 $0.73 $0.37 
     
Weighted average number of shares outstanding - basic and diluted (in millions)87.0 87.0 87.0 87.2 


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited

 Three months endedSix months ended
 April 25,
 April 26, April 25,
 April 26, 
(in millions of Canadian dollars)2021
 2020 2021
 2020 
     
Net earnings$35.6 $25.8 $63.4 $32.3 
     
Other comprehensive income (loss)    
     
Items that will be reclassified to net earnings    
Net change related to cash flow hedges    
Net change in the fair value of designated derivatives - foreign exchange risk1.1 (10.6)5.4 (11.1)
Net change in the fair value of designated derivatives - interest rate risk2.7 (15.8)2.3 (15.6)
Reclassification of the net change in the fair value of designated derivatives    
recognized in net earnings during the period3.0 1.0 6.2 1.8 
Related income taxes1.8 (6.8)3.7 (6.6)
 5.0 (18.6)10.2 (18.3)
     
Cumulative translation differences    
Net unrealized exchange gains (losses) on the translation of the financial statements of    
foreign operations(33.3)127.5 (82.1)135.1 
Net gains (losses) on hedge of the net investment in foreign operations15.3 (67.0)38.8 (66.3)
Related income taxes1.9 (1.9)4.9 (1.7)
 (19.9)62.4 (48.2)70.5 
     
Items that will not be reclassified to net earnings    
Changes related to defined benefit plans    
Actuarial gains on defined benefit plans21.9 11.5 12.2 15.5 
Related income taxes5.6 3.1 2.8 4.1 
 16.3 8.4 9.4 11.4 
     
Other comprehensive income (loss)1.4 52.2 (28.6)63.6 
Comprehensive income$37.0 $78.0 $34.8 $95.9 


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Unaudited

          Accumulated         
          other    Non-   
 Share Contributed Retained comprehensive    controllingTotal 
(in millions of Canadian dollars)capital surplus earnings income (loss) Total interestequity 
        
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 0.163.4 
Other comprehensive loss   (28.6)(28.6)(28.6)
Shareholders' contributions and       
distributions 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 
        
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 - adjusted641.9 1.1 1,056.7 (25.9)1,673.8 4.21,678.0 
Net earnings  32.1  32.1 0.232.3 
Other comprehensive income    63.6 63.6 63.6 
Shareholders' contributions and       
distributions to shareholders       
Share redemptions(3.8) (3.3) (7.1)(7.1)
Exercise of stock options1.9 (0.2)  1.7 1.7 
Dividends  (38.7) (38.7)(38.7)
Balance as at April 26, 2020$640.0 $0.9 $1,046.8 $37.7 $1,725.4 $4.4$1,729.8 


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited

 As at
 As at 
 April 25,
 October 25, 
(in millions of Canadian dollars)2021
 2020 
   
Current assets  
Cash$199.6 $241.0 
Accounts receivable420.5 461.2 
Income taxes receivable17.3 13.4 
Inventories288.3 288.8 
Prepaid expenses and other current assets25.2 20.3 
 950.9 1,024.7 
   
Property, plant and equipment686.6 712.4 
Right-of-use assets125.1 134.6 
Intangible assets513.6 568.5 
Goodwill1,062.4 1,098.8 
Deferred taxes16.4 24.2 
Other assets31.9 35.2 
 $3,386.9 $3,598.4 
   
Current liabilities  
Accounts payable and accrued liabilities$352.9 $399.7 
Provisions2.9 7.9 
Income taxes payable18.5 8.4 
Deferred revenues and deposits9.3 9.0 
Current portion of long-term debt327.6 229.7 
Current portion of lease liabilities22.1 22.8 
 733.3 677.5 
   
Long-term debt569.5 790.4 
Lease liabilities122.7 132.0 
Deferred taxes124.8 133.9 
Provisions0.6 0.3 
Other liabilities101.8 125.7 
 1,652.7 1,859.8 
   
Equity  
Share capital640.0 640.0 
Contributed surplus0.9 0.9 
Retained earnings1,131.3 1,107.2 
Accumulated other comprehensive loss(43.4)(14.8)
Attributable to the shareholders of the Corporation1,728.8 1,733.3 
Non-controlling interest5.4 5.3 
 1,734.2 1,738.6 
 $3,386.9 $3,598.4 


CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited

 Three months endedSix months ended
 April 25,
 April 26, April 25,
 April 26, 
(in millions of Canadian dollars)2021
 2020 2021
 2020 
     
Operating activities    
Net earnings$35.6 $25.8 $63.4 $32.3 
Adjustments to reconcile net earnings and cash flows from operating activities:    
Depreciation and amortization55.5 58.5 114.2 118.8 
Financial expenses on long-term debt and lease liabilities9.3 12.3 18.8 26.7 
Net losses on disposal of assets0.3 0.4 0.6 1.9 
Net losses on business disposals 0.1  4.4 
Income taxes10.8 6.6 19.4 26.9 
Net foreign exchange differences and other(5.4)2.2 (4.0)3.5 
Cash flows generated by operating activities before changes in non-cash operating    
items and income taxes paid106.1 105.9 212.4 214.5 
Changes in non-cash operating items(9.2)20.3 (21.7)(8.3)
Income taxes paid(13.6)(11.5)(22.7)(27.8)
Cash flows from operating activities83.3 114.7 168.0 178.4 
     
Investing activities    
Business combinations, net of acquired cash   (7.7)
Business disposals   232.1 
Acquisitions of property, plant and equipment(22.4)(27.1)(49.7)(50.2)
Disposals of property, plant and equipment0.2 0.1 0.3 0.2 
Increase in intangible assets(5.2)(4.9)(9.7)(9.3)
Cash flows from investing activities(27.4)(31.9)(59.1)165.1 
     
Financing activities    
Reimbursement of long-term debt(0.1)(366.9)(83.5)(375.2)
Net decrease in credit facilities(3.4)   
Financial expenses paid on long-term debt(9.1)(11.0)(16.7)(24.2)
Repayment of principal on lease liabilities(6.0)(5.4)(11.4)(10.6)
Interest paid on lease liabilities(0.8)(0.8)(1.7)(1.4)
Exercise of stock options   1.7 
Dividends(19.6)(19.5)(39.2)(38.7)
Share redemptions   (7.1)
Cash flows from financing activities(39.0)(403.6)(152.5)(455.5)
     
Effect of exchange rate changes on cash denominated in foreign currencies0.7 0.8 2.2 2.9 
     
Net change in cash17.6 (320.0)(41.4)(109.1)
Cash at beginning of period182.0 424.6 241.0 213.7 
Cash at end of period$199.6 $104.6 $199.6 $104.6 
     
Non-cash investing activities    
Net change in capital asset acquisitions financed by accounts payable$(0.1)$0.2 $0.4 $(0.8)