TVA Group Reports $5.9 Million Net Loss Attributable to Shareholders in First Quarter Ended March 31, 2013
(firmenpresse) - MONTREAL, CANADA -- (Marketwired) -- 05/07/13 -- TVA Group Inc. (the "Corporation")(TSX: TVA.B) announces that it recorded a net loss attributable to shareholders in the amount of $5.9 million, or $0.25 per share, in the first quarter of 2013, compared with a net loss of $39.9 million, or $1.68 per share, in the same quarter of 2012.
First quarter operating highlights:
"The Television segment's first quarter 2013 financial results showed improvement from the first quarter of 2012, despite a decrease in TVA Network's advertising revenues," said Pierre Dion, President and CEO of the Corporation. "Our French-language specialty services registered a 23.4% increase in subscription revenues, confirming the growing popularity of our specialty services and their content. We are also very pleased by the audience response to 'La Voix,' which drew an average of more than 2.6 million viewers on Sunday evenings and generated considerable buzz on Quebec social networks.
"Our magazines' quarterly newsstand revenues continued to decline year-over-year while advertising revenues were relatively stable. A number of cost-containment initiatives aimed at maintaining the Publishing segment's operating margins were undertaken during the quarter and will continue through the rest of the year, and strategies to stimulate newsstand sales will be implemented in the coming quarters."
Cash flows used in operating activities totalled $2.5 million in the first quarter of 2013 while cash flows provided by operating activities in the amount of $2.3 million were recorded in the same quarter of 2012. The $4.8 million decrease was essentially due to the unfavourable net change in non-cash items, resulting in part from a negative variance in accounts payable and accrued liabilities, which was partially offset by the favourable variance in operating income.
( 1 ) See definition of operating income (loss) below.
Definition
Operating income (loss)
In its analysis of operating results, the Corporation defines 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, tax expense, share of loss (income) of associated corporations and joint ventures and net loss attributable to non-controlling interest. 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. 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 segments. Measurements such as 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 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), 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 and including, in particular, the "Risks and Uncertainties" section of the Corporation's annual Management's Discussion and Analysis for the year ended December 31, 2012.
The forward-looking statements in this news release reflect the Corporation's expectations as of May 7, 2013, 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 involved 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 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's Class B shares are listed on the Toronto Stock Exchange under the ticker symbol TVA.B.
TVA Group Inc. ("TVA Group" or the "Corporation") is governed by the Quebec Business Corporations Act. TVA Group is an integrated communications company with two operating segments: Television and Publishing (note 11). The Corporation is a subsidiary of Quebecor Media Inc. ("Quebecor Media" or the "parent corporation") and the ultimate parent corporation is Quebecor Inc. ("Quebecor"). The Corporation's head office is located at 1600 de Maisonneuve Boulevard East, Montreal, Quebec, Canada.
The Corporation's businesses experience significant seasonality due, among other factors, to seasonal advertising patterns and influences on people's viewing, reading and listening habits. Because the Corporation depends on the sale of advertising for a significant portion of its revenues, operating results are also sensitive to prevailing economic conditions, including changes in local, regional and national economic conditions, particularly as they may affect advertising expenditures. Furthermore, the Corporation is investing in the launch of new specialty services in the Television segment. During the period immediately following the launch of a new specialty service, subscription revenues are always relatively modest, while initial operating expenses may prove more substantial. Accordingly, the results of operations for interim periods should not necessarily be considered indicative of full-year results.
1. Basis of presentation
These consolidated financial statements were prepared in accordance with the International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), except that they do not include all disclosures required under IFRS for annual consolidated financial statements. In particular, these consolidated financial statements were prepared in accordance with IAS 34, Interim Financial Reporting, and accordingly, they are condensed consolidated financial statements. They are presented in Canadian dollars, which is the currency of the primary economic environment in which the Corporation and its subsidiaries operate ("functional currency"). These condensed consolidated financial statements should be read in conjunction with the Corporation's 2012 annual consolidated financial statements, which describe the accounting policies used to prepare these financial statements.
Comparative figures for the three-month period ended March 31, 2012, have been restated to conform to the presentation adopted for the three-month period ended March 31, 2013.
2. Changes in accounting policies
On January 1, 2013, the Corporation adopted retrospectively the following standards. Unless otherwise indicated, the adoption of these new standards did not have a material impact on prior period comparative figures.
(i) IFRS 10 Consolidated Financial Statements replaces SIC 12 Consolidation - Special Purpose Entities and parts of IAS 27 Consolidated and Separate Financial Statements and provides additional guidance regarding the concept of control as the determining factor in whether an entity should be included in the consolidated financial statements of the parent corporation.
(ii) IFRS 11 Joint Arrangements replaces IAS 31 Interests in Joint Ventures with guidance that focuses on the rights and obligations of the arrangement, rather than its legal form. It also withdraws the option to proportionately consolidate an entity's interest in joint ventures. The new standard requires that such interests be recognized using the equity method.
The adoption of the standard had the following impacts on prior period comparative figures:
Consolidated statements of income and comprehensive income
(iii) IFRS 12 Disclosure of Interests in Other Entities is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose entities and other off-balance sheet vehicles.
(iv) IFRS 13 Fair Value Measurement is a new and comprehensive standard that sets out a framework for measuring at fair value and that provides guidance on required disclosures about fair value measurements.
(v) IAS 1 Presentation of Financial Statements was amended and the principal change resulting from amendments to this standard is the requirement to present separately other comprehensive items that may be reclassified to income and other comprehensive items that will not be reclassified to income.
(vi) IAS 19 Employee Benefits (Amended) involves, among other changes, the immediate recognition of the re-measurement component in other comprehensive income, thereby removing the accounting option previously available in IAS 19 to recognize or to defer recognition of changes in defined benefit obligations and in the fair value of plan assets directly in the consolidated statement of income. IAS 19 also introduces a net interest approach that replaces the expected return on assets and interest costs on the defined benefit obligation with a single net interest component determined by multiplying the net defined benefit liability or asset by the discount rate used to determine the defined benefit obligation. In addition, all past service costs are required to be recognized in profit or loss when the employee benefit plan is amended and no longer spread over any future service period. IAS 19 also allows amounts recorded in other comprehensive income to be recognized either immediately in retained earnings or as a separate category within equity. The Corporation has elected to immediately recognize in accumulated other comprehensive income the amounts recorded in other comprehensive income.
The adoption of the amended standard had the following impacts on comparative figures for prior period:
Consolidated statements of income and comprehensive income
Consolidated balance sheets
3. Revenues
The breakdown of revenues between services rendered and product sales is as follows:
4. Purchases of goods and services
The main components of purchases of goods and services are as follows:
5. Financial expenses
6. Operational restructuring costs, impairment of assets and other costs
In the three-month period ended March 31, 2013, the Corporation recorded operational restructuring costs in the amount of $565,000 for legal expenses in connection with a trial related to a legal dispute involving a former subsidiary. The Corporation also recorded a $387,000 impairment charge related to its non-current distribution rights inventory following its decision to discontinue theatrical distribution of new Quebec films.
In the three-month period ended March 31, 2012, the Corporation recorded $117,000 in operational restructuring costs following the elimination of positions in the Publishing segment.
7. Impairment of goodwill
During the three-month period ended March 31, 2012, following the adoption of new rates for business contributions toward the costs of waste recovery services provided by Quebec municipalities, the Corporation had to review its business plan for the related activities and perform an impairment test on the Publishing cash-generating unit ("CGU"). The Corporation concluded that the recoverable amount based on value in use was less than the carrying amount of the Publishing CGU and a goodwill impairment charge of $32,200,000 was recorded. The Corporation used a pre-tax discount rate of 16.26% (15.89% as of April 1, 2011) and a perpetual growth rate of 1.00% (1.00% as of April 1, 2011) to calculate the recoverable amount.
8. Capital stock
(a) Authorized capital stock
(b) Issued and outstanding capital stock
(c) Loss per share attributable to shareholders
The following table sets forth the computation of basic and diluted loss per share attributable to shareholders:
The diluted loss per share calculation does not take into consideration the potential dilutive effect of stock options of the Corporation since their impact is anti-dilutive.
9. Stock-based compensation and other stock-based payments
Of the number of options outstanding as at March 31, 2013, 691,076 Corporation's Class B stock options at an average exercise price of $16.54 and 68,334 Quebecor Media stock options at an average price of $46.07 could be exercised.
During the three-month period ended March 31, 2013, 19,957 Quebecor Media stock options were exercised for a cash consideration of $228,000 (no stock options were exercised in 2012).
During the three-month period ended March 31, 2013, the Corporation recorded a compensation expense of $52,000 ($5,000 in 2012) in relation to the Corporation's Class B stock options and a compensation expense reversal of $29,000 (compensation expense of $596,000 in 2012) in relation to Quebecor Media stock options.
10. Related party transactions
During the three-month period ended March 31, 2013, no capital contribution was made by the partners in SUN News, compared with a capital contribution of $3,600,000 in the three-month period ended March 31, 2012, including $1,836,000 from the Corporation and $1,764,000 from Sun Media Corporation.
11. Segmented information
The Corporation's operations consist of the following segments:
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 operating income (loss) as a measure of financial performance for assessing the performance of each of the Corporation's segments. Operating income (loss) is defined as net 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, tax expense, share of loss (income) of associated corporations and joint ventures, 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.
Contacts:
Denis Rozon, CPA, CA
Vice-President and Chief Financial Officer
(514) 598-2808
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Datum: 07.05.2013 - 07:11 Uhr
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