TVA Group Inc.
TSX : TVA.B

TVA Group Inc.

May 24, 2011 09:27 ET

TVA Group Reports Net Income Attributable to Shareholders of $0.3 Million for the First Quarter Ended March 31, 2011

MONTREAL, CANADA--(Marketwire - May 24, 2011) - TVA Group Inc. ("the Corporation") (TSX:TVA.B) announces that it recorded net income attributable to shareholders in the amount of $0.3 million, or $0.01 per share, for the first quarter of 2011, compared with $0.7 million, or $0.03 per share, in the same quarter of 2010.

The Corporation adopted International Financial Reporting Standards ("IFRS") on January 1, 2011. The Corporation's consolidated financial statements for the three-month period ended March 31, 2011 have therefore been prepared in accordance with IFRS and comparative data for 2010 have been restated. For more information, see "Transition to IFRS" below.

First quarter operating highlights:

  • $578,000 (16.8%) decrease in the Television sector's operating income1 compared with the same quarter of the previous year, mainly because of:

    • pre-operating expenses of the new SUN News specialty service, which launched on April 18, 2011;

      • Partially offset by:

    • 82.2% decrease in the TVA Films division's operating loss because of lower volume and a write-down of rights inventories in the first quarter of 2010, which did not recur in the first quarter of 2011;

    • 46.5% decrease in the SUN TV station's operating loss due to substantially reduced activity with the launch of the new SUN News service.

  • 26.4% decrease in the Publishing sector's operating income from $2,301,000 in the first quarter of 2010 to $1,694,000 in the first quarter of 2011.

"The lower numbers for TVA Group reflect our strategy of investing in content and the launch of new specialty services to take advantage of opportunities in the fast-changing industry environment," said Pierre Dion, President and Chief Executive Officer of the Corporation. "In the first quarter of 2011, our specialty services grew their advertising revenues by 15.3%, while our subscription revenues increased by 9.2% compared with the same quarter of 2010. We are particularly proud of the creation and launch of the SUN News Network and the new "Mlle" specialty service, dedicated to style, beauty and the well-being of Quebec women. Meanwhile, TVA Network registered a 24.9 market share during the January 3 to April 3, 2011 period, well ahead of our main competitors."

1 Refer to definition of operating income on the next page.

"While operating income decreased in the Publishing sector in the first quarter of 2011, our new TVA Studio division posted strong growth," noted Mr. Dion. "TVA Studio continued expanding with the introduction of premedia services, a new line of services that is expected to support the Publishing sector's growth going forward."

Cash flows provided by operating activities totalled $10.2 million for the quarter; in the same quarter of 2010, operating activities used cash flows in the amount of $6.1 million. The $16.3 million improvement was due to a favourable variance in current income taxes and accounts receivable.

Transition to IFRS

On January 1, 2011, Canadian generally accepted accounting principles ("GAAP"), as used by publicly accountable enterprises, were fully converged to IFRS. Accordingly, the interim consolidated financial statements for the three-month period ended March 31, 2011 are the first financial statements the Corporation prepared in accordance with IFRS. Prior to the adoption of IFRS, for all periods up to and including the year ended December 31, 2010, the Corporation's consolidated financial statements were prepared in accordance with Canadian GAAP. IFRS uses a conceptual framework similar to Canadian GAAP, but there are significant differences related to recognition, measurement and disclosures.

The date of the opening balance sheet under IFRS and the date of transition to IFRS are January 1, 2010. The financial data for 2010 have therefore been restated. The Corporation is also required to apply IFRS accounting policies retrospectively to determine its opening balance sheet, subject to certain exemptions. However, the Corporation is not required to restate figures for periods prior to January 1, 2010 that were previously prepared in accordance with Canadian GAAP.

The new significant accounting policies under IFRS are disclosed in Note 1 to the consolidated financial statements for the three-month period ended March 31, 2011, while Note 9 explains adjustments made by the Corporation in preparing its IFRS opening consolidated balance sheet as of January 1, 2010 and in restating its previously published Canadian GAAP consolidated financial statements for the three-month period ended March 31, 2010 and the year ended December 31, 2010. Note 9 also provides details on exemption choices made by the Corporation with respect to the general principle of retrospective application of IFRS.

Dividend

TVA Group Inc.'s Board of Directors today declared a dividend of $0.05 per share, payable on June 23, 2011 to Class A and B shareholders of record as at June 8, 2011. This dividend is designated to be an eligible dividend pursuant to subsection 89(14) of the Canada Income Tax Act and its provincial counterpart.

The Corporation

TVA Group Inc., a subsidiary of Quebecor Media Inc., is an integrated communications company involved in the creation, production 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 and 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 also operates SUN News, a Canada-wide English-language news and opinion specialty service. The Corporation's Class B shares are listed on the Toronto Stock Exchange under the ticker symbol TVA.B.

The unaudited consolidated financial statements for the three-month period ending March 31, 2011, with notes and the interim Management's Discussion and Analysis, can be consulted on TVA Group Inc.'s website at www.tva.canoe.ca.

Definitions

Operating income (loss)

In its analysis of operating results, the Corporation defines operating income (loss) as net income (net loss) attributable to shareholders before amortization of property, plant and equipment and intangible assets, financial expenses, restructuring costs of operations, impairment of assets and other, income taxes, share of income of associated corporation and net loss attributable to non-controlling interest. Operating income (loss) as defined above is not a measure of results that is consistent with 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. Operating income (loss) is used by the Corporation because management believes it is a meaningful measure of performance.

This measure is used by senior management and the Board of Directors to evaluate the consolidated results of the Corporation and the results of its sectors. Measurements such as operating income and operating 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 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. Certain factors that may cause actual results to differ from current expectations include seasonality, operational risks (including pricing actions by competitors), capital investment risks, credit risks, government regulation risks, governmental assistance risks, general changes in the economic environment and labour relations. 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 www.tva.canoe.ca including, in particular, the "Risks and Uncertainties" section of the Corporation's Management's Discussion and Analysis for the year ended December 31, 2010.

The forward-looking statements in this news release reflect the Corporation's expectations as of May 24, 2011, 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 INC.
Consolidated Statements of Income
(unaudited)
(in thousand of dollars, except per share amounts)
Three-month periods
ended March 31
Note20112010
Revenues2$107,097$109,634
Operating, selling and administrative expenses3102,537103,889
Amortization of property, plant and equipment and intangible assets4,0373,597
Financial expenses41,4661,275
Restructuring costs of operations, impairment of assets and other5-27
(Loss) income before income taxes and share of income of associated corporation(943)846
Income taxes171485
Share of income of associated corporation(270)(380)
(Net loss) net income$(844)$741
Net income (net loss) attributable to:
Shareholders$332$741
Non-controlling interest(1,176)-
Basic and diluted earnings per share6 (d)$0.01$0.03
See accompanying notes to consolidated financial statements.
TVA GROUP INC.
Consolidated Statements of Comprehensive Income
(unaudited)
(in thousands of dollars)
Three-month periods
ended March 31
20112010
(Net loss) net income$(844)$741
Other comprehensive loss:
Defined benefit plans:
Net change in asset limit or in minimum funding liability(141)(1,239)
Deferred income taxes38333
(103)(906)
Comprehensive loss$(947)$(165)
Comprehensive income (loss) attributable to:
Shareholders$229$(165)
Non-controlling interest(1,176)-
See accompanying notes to consolidated financial statements.
TVA GROUP INC.
Consolidated Statements of Changes in Equity
(unaudited)
(in thousands of dollars)
Equity attributable to shareholders



Capital
stock
(note 6)




Contri-
buted

surplus




Retai-
ned

ear-
nings
Accu-
mula-
ted

other
compre-
hensive

loss-
Defined
benefit

plans

Equity
attri-
butable

to non-
control-
ling

interest




Total
equity
Balance as of December 31, 2009 as previously reported underCanadian GAAP$98,647$4,145$134,303$-$-$237,095
IFRS adjustments (note 9)-(4,145)11,182--7,037
Balance as of January 1, 2010 as restated under IFRS98,647-145,485--244,132
Net income--741--741
Other comprehensive loss---(906)-(906)
Dividends--(1,188)--(1,188)
Balance as of March 31, 201098,647-145,038(906)-242,779
Net income (net loss)--36,501-(653)35,848
Related-party transactions--(2,000)--(2,000)
Other comprehensive loss---(4,283)-(4,283)
Dividends--(3,566)--(3,566)
Contributions related to the non-controlling interest----5,1645,164
Balance as of December 31, 201098,647-175,973(5,189)4,511273,942
Net income (net loss)--332-(1,176)(844)
Other comprehensive loss---(103)-(103)
Dividends--(1,188)--(1,188)
Contributions related to the non-controlling interest----2,9402,940
Balance as of March 31, 2011$98,647$-$175,117$(5,292)$6,275$274,747
See accompanying notes to consolidated financial statements.
TVA GROUP INC.
Consolidated Balance Sheets
(unaudited)
(in thousands of dollars)
March 31,December 31,January 1,
Note201120102010
Current assets
Cash$6,721$5,605$1,924
Accounts receivable114,527126,057120,515
Current income tax assets6,1837,1041,078
Programs, broadcast and distribution rights and inventories56,54360,12254,774
Prepaid expenses and other current asset3,5092,2404,754
187,483201,128183,045
Non-current assets
Broadcast and distribution rights37,04234,05838,950
Investments12,78712,52711,637
Property, plant and equipment89,64186,20879,123
Licences and other intangible assets112,124112,475110,050
Goodwill71,98171,98171,981
Deferred income taxes8426942,654
324,417317,943314,395
Total assets$511,900$519,071$497,440
Liabilities and equity
Current liabilities
Bank overdraft$1,050$3,557$974
Accounts payable and accrued liabilities79,09381,23179,879
Current income tax liabilities371718,490
Broadcast and distribution rights payable24,62625,87928,611
Provisions1,6222,0011,694
Deferred revenues5,8917,1227,401
112,319119,961127,049
Non-current liabilities
Long-term debt90,12490,33888,580
Other liabilities24,13225,06925,666
Deferred income taxes10,5789,76112,013
124,834125,168126,259
Equity
Capital stock698,64798,64798,647
Retained earnings175,117175,973145,485
Accumulated other comprehensive loss(5,292)(5,189)-
Equity attributable to shareholders268,472269,431244,132
Non-controlling interest6,2754,511-
274,747273,942244,132
Total liabilities and equity$511,900$519,071$497,440
See accompanying notes to consolidated financial statements.

On May 24, 2011, the Board of Directors approved the consolidated financial statements for the three-month periods ended march 31, 2011 and 2010, which were presented to the Audit Committee on May 16, 2011.

TVA GROUP INC.
Consolidated Statements of Cash Flows
(unaudited)
(in thousands of dollars)
Three-month periods
ended March 31
Note20112010
Cash flows related to operating activities
(Net loss) net income$(844)$741
Non-cash items:
Amortization4,1273,689
Share of income of associated corporation(270)(380)
Deferred income taxes677(377)
Other5-(505)
Cash flows from current operations3,6903,168
Net change in non-cash items6,552(9,234)
Cash flows provided by (used for) operating activities10,242(6,066)
Cash flows related to investing activities
Additions to property, plant and equipment(8,458)(3,616)
Additions to intangible assets(807)(419)
Net change in investments10-
Cash flows used in investing activities(9,255)(4,035)
Cash flows related to financing activities
Net change in bank overdraft(2,507)(638)
Net change in revolving term loan(304)11,019
Non-controlling interest2,940-
Cash flows provided by financing activities12910,381
Net change in cash1,116280
Cash at beginning of period5,6051,924
Cash at end of period$6,721$2,204
Non-cash transactions
Net change in additions to property, plant and equipment and intangible assets financed with accounts payables$(2,146)$(671)
Net change in government assistance and other receivables credited to property, plant and equipment-434
Interest and taxes reflected as operating activities
Net interest paid$333$206
Income taxes (received) paid(1,293)11,778

See accompanying notes to consolidated financial statements.

Contact Information

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