TVA Group Inc.
TSX : TVA.B

TVA Group Inc.

February 28, 2014 09:58 ET

TVA Group Reports $8.3 Million Net Income Attributable to Shareholders in the Fourth Quarter Ended December 31, 2013

MONTRÉAL, CANADA--(Marketwired - Feb. 28, 2014) - TVA Group Inc. (TSX:TVA.B) (the "Corporation") announces that it recorded net income attributable to shareholders in the amount of $8.3 million, or $0.35 per share, in the fourth quarter of 2013, compared with $8.8 million, or $0.37 per share, in the same quarter of 2012.

Fourth quarter operating highlights:

  • Consolidated adjusted operating income(1) totals $20,334,000, a slight $291,000 (-1.4%) decrease from the same quarter of 2012.
  • Television segment generates adjusted operating income in the amount of $18,031,000. The $750,000 (-4.0%) decrease is mainly due to:
    • 4.6% decrease in TVA Network's advertising revenues;
  • partially offset by:
    • favourable impact of implementation of an expense reduction plan and strict cost controls, which reduced TVA Network's operating expenses by 3.8%;
    • 6.8% increase in advertising revenues and 6.0% increase in subscription revenues from specialty services combined.
  • Publishing segment generates adjusted operating income in the amount of $2,303,000, a $459,000 (24.9%) increase due mainly to the inclusion of the operating results of La Semaine magazine since July 18, 2013 and cost-cutting related to the expense reduction plan implemented in the first quarter of 2013.

"The Television segment's fourth quarter 2013 financial results were down only slightly from the same quarter of the previous year, despite a 4.6% decrease in TVA Network's advertising revenues. This performance would not have been possible without the cost-cutting initiatives introduced in the second quarter of the year. We are also very pleased with the agreement with Rogers for French-language rights to National Hockey League national games for the next 12 seasons. This agreement will make our TVA Sports channel the go-to place for Québec sports fans, and especially hockey fans," commented Pierre Dion, President and CEO of the Corporation.

"The Publishing segment continues to benefit from our latest acquisition, La Semaine magazine. Thanks to this new property and all the initiatives taken by the other magazines, the operating segment's revenues grew by 3.1% and adjusted operating income by 24.9% in the fourth quarter compared with the same quarter of 2012. The positive impact of this acquisition will continue to be felt in 2014, when the magazine's operations will be included in our financial results for the full 12-month period," concluded M. Pierre Dion.

(1) See definition of adjusted operating income (loss) below.

Cash flows provided by operating activities totalled $5.1 million for the quarter, compared with $12.6 million in the same quarter of 2012. The $7.5 million decrease was essentially due to the unfavourable variance in non-cash items, particularly accounts receivable.

2013 results

For the fiscal year ended December 31, 2013, the Corporation's consolidated adjusted operating income was $60.6 million, compared with $42.5 million in the previous year. The 42.6% increase came from both the Television segment ($14.5 million) and the Publishing segment ($3.6 million). The growth in the Television segment is attributable to the results of SUN News, which have no longer been consolidated since July 1, 2012, recognition of retroactive royalties for distant signal retransmission, and implementation of an expense reduction plan, which made up for the decrease in advertising revenues. The growth in the Publishing segment is attributable to the favourable impact of the inclusion of the operating results of La Semaine magazine, acquired on July 18, 2013, and the unfavourable impact of recognition in 2012 of retroactive charges resulting from the adoption of new rates for business contributions toward the costs of waste recovery and recycling services provided by Québec municipalities.

Consolidated operating revenues totalled $444.8 million in fiscal 2013, compared with $453.1 million in the previous year, a 1.8% decrease. The Corporation recorded net income attributable to shareholders in the amount of $15.7 million, or $0.66 per share, in 2013, compared with a net loss attributable to shareholders in the amount of $6.5 million, or $0.27 per share, in 2012.

Definition

Adjusted operating income (loss)

In its analysis of operating results, the Corporation defines adjusted operating income (loss) as net income (loss) before amortization of property, plant and equipment and intangible assets, financial expenses, operational restructuring costs, impairment of assets and other costs, impairment of goodwill, gain on disposal of investments, tax expense, share of loss of associated corporations and joint ventures, and net loss attributable to non-controlling interest. Adjusted operating income (loss) as defined above is not a measure of results that is consistent with International Financial Reporting Standards ("IFRS"). Neither is it intended to be regarded as an alternative to other financial performance measures or to the statement of cash flows as a measure of liquidity. This measure is not intended to represent funds available for debt service, dividend payment, reinvestment or other discretionary uses, and should not be considered in isolation or as a substitute for other performance measures prepared in accordance with IFRS. Adjusted operating income (loss) is used by the Corporation because management believes it is a meaningful measure of performance.

This measure is used by management and the Board of Directors to evaluate the Corporation's consolidated results and the results of its business segments. Measurements such as adjusted operating income (loss) are also commonly used by the investment community to analyze and compare the performance of companies in the industries in which the Corporation is active. The Corporation's definition of adjusted operating income (loss) may not be identical to similarly titled measures reported by other companies.

Forward-looking information disclaimer

The statements in this news release that are not historical facts may be forward-looking statements and are subject to important known and unknown risks, uncertainties and assumptions which could cause the Corporation's actual results for future periods to differ materially from those set forth in the forward-looking statements. Forward-looking statements generally can be identified by the use of the conditional, the use of forward-looking terminology such as "propose," "will," "expect," "may," "anticipate," "intend," "estimate," "plan," "foresee," "believe" or the negative of these terms or variations of them or similar terminology. Factors that may cause actual results to differ from current expectations include seasonality, operational risks (including pricing actions by competitors), programming, content and production cost risks, credit risk, government regulation risks, government assistance risks, changes in economic conditions, fragmentation of the media landscape, and labour relation risks. Investors and others are cautioned that the foregoing list of factors that may affect future results is not exhaustive and that undue reliance should not be placed on any forward-looking statements. For more information on the risks, uncertainties and assumptions that could cause the Corporation's actual results to differ from current expectations please refer to the Corporation's public filings available at www.sedar.com and http://groupetva.ca including, in particular, the "Risks and Uncertainties" section of the Corporation's annual Management's Discussion and Analysis for the year ended December 31, 2013.

The forward-looking statements in this news release reflect the Corporation's expectations as of February 28, 2014, and are subject to change after this date. The Corporation expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by the applicable securities laws.

TVA Group

TVA Group Inc., a subsidiary of Quebecor Media Inc., is an integrated communications company engaged in the creation, production, broadcast and distribution of audiovisual products, and in magazine publishing. TVA Group Inc. is the largest broadcaster of French-language entertainment, information and public affairs programming, the largest publisher of French-language magazines in North America, and one of the largest private-sector producers of French-language content in North America. The Corporation's Class B shares are listed on the Toronto Stock Exchange under the ticker symbol TVA.B.

The audited consolidated financial statements with notes and the annual Management's Discussion and Analysis can be consulted on the Corporation's website at http://groupetva.ca.

TVA GROUP INC.
Consolidated statements of income (loss)
(unaudited)
(in thousands of dollars, except per-share amounts)
Three-month periods
ended December 31
Years ended
December 31
2013 2012 2013 2012
(restated) (restated)
Revenues $ 120,022 $ 127,004 $ 444,816 $ 453,147
Purchases of goods and services 69,519 70,984 253,485 262,489
Employee costs 30,169 35,395 130,761 148,176
Amortization of property, plant and equipmentand intangible assets 5,474 4,970 21,430 20,342
Financial expenses 1,476 1,767 6,265 7,322
Operational restructuring costs, impairmentof assets and other costs 991 4,865 117
Impairment of goodwill 32,200
Gain on disposal of investments (12,881 )
Income (loss) before tax expense and share of loss of associated corporations and joint ventures

12,393


13,888


28,010


(4,618
)
Tax expense 2,564 3,191 6,110 4,583
Share of loss of associated corporations and joint ventures 1,501 1,859 6,154 1,677
Net income (loss) $ 8,328 $ 8,838 $ 15,746 $ (10,878 )
Net income (loss) attributable to:
Shareholders $ 8,328 $ 8,838 $ 15,746 $ (6,464 )
Non-controlling interest (4,414 )
Basic and diluted earnings per share attributable to shareholders
$

0.35

$

0.37

$

0.66

$

(0.27
)
TVA GROUP INC.
Consolidated statements of comprehensive income (loss)
(unaudited)
(in thousands of dollars)
Three-month periods
ended December 31
Years ended
December 31
2013 2012 2013 2012
(restated) (restated)
Net income (loss) $ 8,328 $ 8,838 $ 15,746 $ (10,878 )
Other comprehensive items that will not be reclassified to income:
Defined benefit plans:
Re-measurement gain (loss) 11,304 (3,137 ) 35,304 (3,137 )
Deferred income taxes (3,036 ) 840 (9,536 ) 840
8,268 (2,297 ) 25,768 (2,297 )
Comprehensive income (loss) $ 16,596 $ 6,541 $ 41,514 $ (13,175 )
Comprehensive income (loss) attributable to:
Shareholders $ 16,596 $ 6,541 $ 41,514 $ (8,761 )
Non-controlling interest (4,414 )
TVA GROUP INC.
Consolidated statements of equity
(unaudited)
(in thousands of dollars)
Equity attributable to shareholders Equity attributable to non-controlling interest Total equity
Capital
stock
Contributed surplus Retained earnings Accumulated other comprehen-sive (loss) income - Defined benefit plans
Balance as at December 31, 2011, as previously reported $ 98,647 $ - $ 176,993 $ - $ 5,389 $ 281,029
Changes in accounting policies - - 17,408 (18,323 ) - (915 )
Balance as at December 31, 2011, as restated 98,647 - 194,401 (18,323 ) 5,389 280,114
Net loss - - (6,464 ) - (4,414 ) (10,878 )
Other comprehensive loss - - - (2,297 ) - (2,297 )
Contributions related to non-controlling interest - - - - 3,528 3,528
Disposal of interest in SUN News - 581 - - (4,503 ) (3,922 )
Balance as at December 31, 2012 98,647 581 187,937 (20,620 ) - 266,545
Net income - - 15,746 - - 15,746
Other comprehensive income - - - 25,768 - 25,768
Balance as at December 31, 2013 $ 98,647 $ 581 $ 203,683 $ 5,148 $ - $ 308,059
TVA GROUP INC.
Consolidated balance sheets
(unaudited)
(in thousands of dollars)
December 31, 2013 December 31, 2012
(restated)
Assets
Current assets
Cash $ 7,717 $ 10,619
Accounts receivable 136,408 115,925
Income taxes 124 3,152
Programs, broadcast and distribution rights and inventories 61,428 67,579
Prepaid expenses 2,380 2,426
208,057 199,701
Non-current assets
Broadcast and distribution rights 31,985 33,563
Investments 14,822 17,651
Property, plant and equipment 100,962 98,494
Licences and other intangible assets 112,566 112,056
Goodwill 44,536 39,781
Defined benefit plan asset 8,238
Deferred income taxes 885 725
313,994 302,270
Total assets 522,051 501,971
Liabilities and equity
Current liabilities
Accounts payable and accrued liabilities $ 85,960 $ 89,092
Income taxes 1,828 816
Broadcast and distribution rights payable 17,304 16,966
Provisions 645 862
Deferred revenues 9,302 6,136
Short-term debt 74,640
189,679 113,872
Non-current liabilities
Long-term debt 74,438
Other liabilities 3,974 38,499
Deferred income taxes 20,339 8,617
24,313 121,554
Equity
Capital stock 98,647 98,647
Contributed surplus 581 581
Retained earnings 203,683 187,937
Accumulated other comprehensive income (loss) 5,148 (20,620 )
Equity attributable to shareholders 308,059 266,545
Total liabilities and equity $ 522,051 $ 501,971
TVA GROUP INC.
Consolidated statements of cash flows
(unaudited)
(in thousands of dollars)
Three-month periods
ended December 31
Years ended
December 31
2013 2012 2013 2012
(restated) (restated)
Cash flows related to operating activities
Net income (loss) $ 8,328 $ 8,838 $ 15,746 $ (10,878 )
Adjustments for:
Amortization 5,525 5,075 21,632 20,762
Impairment of assets 483 2,093
Impairment of goodwill 32,200
Gain on disposal of investments (12,881 )
Share of loss of associated corporations and joint ventures
1,501

1,859

6,154

1,677
Deferred income taxes (86 ) 429 1,162 809
15,751 16,201 46,787 31,689
Net change in non-cash balances related to operating activities
(10,657
)
(3,605
)
(20,509
)
3,470
Cash flows provided by operating activities 5,094 12,596 26,278 35,159
Cash flows related to investing activities
Additions to property, plant and equipment (2,055 ) (4,162 ) (16,245 ) (21,830 )
Additions to intangible assets (1,308 ) (1,070 ) (3,003 ) (3,265 )
(Acquisition) disposal of businesses, net of cash (6,607 ) 765
Net change in investments (1,177 ) (2,181 ) (3,325 ) 17,289
Cash of SUN News at the date of deconsolidation (430 )
Cash flows used in investing activities (4,540 ) (7,413 ) (29,180 ) (7,471 )
Cash flows related to financing activities
Net change in bank overdraft (3,980 )
Net change in revolving credit facility (246 ) (17,982 )
Financing costs (47 ) (391 )
Non-controlling interest 3,528
Cash flows used in financing activities (293 ) (18,825 )
Net change in cash 554 4,890 (2,902 ) 8,863
Cash at beginning of period 7,163 5,729 10,619 1,756
Cash at end of period $ 7,717 $ 10,619 $ 7,717 $ 10,619
Interests and taxes reflected as operating activities
Net interests paid $ 2,188 $ 2,236 $ 4,514 $ 5,031
Income taxes paid, net of refunds 191 607 1,005 2,578
TVA GROUP INC.
Segmented information
(unaudited)
(in thousands of dollars)

The Corporation's business segments are:

  • The Television segment includes the operations of TVA Network (including the subsidiaries and divisions TVA Productions Inc., TVA Sales and Marketing Inc., TVA Accès Inc., TVA Nouvelles and TVA Interactif), specialty services, the marketing of digital products associated with the various televisual brands, the home and online shopping services of the TVA Boutiques division up to the second quarter of 2013, and the distribution of audiovisual products by the TVA Films division;

  • The Publishing segment includes the operations of TVA Publications Inc. and Les Publications Charron & Cie Inc., which publish French-language magazines in various fields such as the arts, entertainment, television, fashion and decoration, and market digital products associated with the various magazine brands - and the operations of the TVA Studio division, which specializes in custom publishing, commercial print production and premedia services.

Three-month periods
ended December 31
Years ended
December 31
2013 2012 2013 2012
(restated) (restated)
Revenues
Television $ 102,796 $ 110,477 $ 380,064 $ 389,856
Publishing 17,923 17,384 67,909 67,357
Intersegment items (697 ) (857 ) (3,157 ) (4,066 )
120,022 127,004 444,816 453,147
Adjusted operating income(1)
Television 18,031 18,781 52,284 37,792
Publishing 2,303 1,844 8,286 4,690
20,334 20,625 60,570 42,482
Amortization of property, plant and equipment and intangible assets 5,474 4,970 21,430 20,342
Financial expenses 1,476 1,767 6,265 7,322
Operational restructuring costs, impairment of assets and other costs 991 4,865 117
Impairment of goodwill 32,200
Gain on disposal of investments (12,881 )
Income (loss) before tax expense and share of loss of associated corporations and joint ventures $ 12,393 $ 13,888 $ 28,010 $ (4,618 )

The above-noted intersegment items represent the elimination of normal course business transactions between the Corporation's business segments regarding revenues.

(1) The Chief Executive Officer uses adjusted operating income as a measure of financial performance for assessing the performance of each of the Corporation's segments. Adjusted operating income is a non-IFRS measure and is defined as net income (loss) before amortization of property, plant and equipment and intangible assets, financial expenses, operational restructuring costs, impairment of assets and other costs, impairment of goodwill, gain on disposal of investments, tax expense, share of loss of associated corporations and joint ventures, and net loss attributable to non-controlling interest.

Contact Information

  • Denis Rozon, CPA, CA
    Vice President and Chief Financial Officer
    (514) 598-2808