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Press release from Marketwire

TVA Group Reports $11.5 Million in Net Income Attributable to Shareholders for Fourth Quarter Ended December 31, 2011

Wednesday, February 29, 2012

TVA Group Reports $11.5 Million in Net Income Attributable to Shareholders for Fourth Quarter Ended December 31, 201110:38 EST Wednesday, February 29, 2012MONTRÉAL, CANADA--(Marketwire - Feb. 29, 2012) - TVA Group Inc. (the "Corporation") (TSX:TVA.B) announces that it recorded net income attributable to shareholders in the amount of $11.5 million, or $0.48 per share, for the fourth quarter of 2011, compared with $19.3 million, or $0.81 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 year ended December 31, 2011 have therefore been prepared in accordance with IFRS and comparative data for 2010 have been restated. For more information, refer to Note 30, "Transition to IFRS," in the consolidated financial statements for the years ended December 31, 2011 and 2010, available on the Corporation's website at http://groupetva.ca and at www.sedar.com. Fourth quarter operating highlights :Television sector's operating income1 decreases $8,729,000 (32.5%) to $18,097,000, mainly because of: Operating loss of the new "TVA Sports" specialty service launched on September 12, 2011, which was in the free preview period for most of the fourth quarter of 2011; 7.0% decline in operating income at TVA Network due to a 2.5% decrease in its operating revenues, including a 1.7% decrease in advertising revenues; and Operating loss of the new SUN News specialty service launched in April 2011. 11.1% increase in the Publishing sector's operating income from $2,305,000 in the fourth quarter of 2010 to $2,560,000 in the fourth quarter of 2011.(1) Refer to definition of operating income on the next page. "The Television sector's financial results for the fourth quarter of 2011 were again affected by the operating losses of the three specialty channels launched in 2011: TVA Sports, SUN News and, to a lesser extent, Mlle," commented Pierre Dion, President and Chief Executive Officer of the Corporation. "At the same time, we are pleased to have finalized most of our carriage agreements for those three services with Canada's major broadcasting distribution undertakings, which will reap subscription fees starting in the first quarter of 2012. Also, the growth in our existing specialty services' subscription and advertising revenues during the last quarter confirms the soundness of our investment and diversification strategy for the sector."The significant increase in volume at the TVA Stud io division in the fourth quarter of 2011 was responsible for much of the increase in the Publishing sector's operating income. TVA Studio, which specializes in custom publishing, commercial printed productions and premedia services, has become a strong growth driver for the Publishing sector", concluded Pierre Dion.Cash flows provided by operating activities totalled $2.8 million for the quarter, compared with $10.5 million in the same quarter of 2010. The $7.7 million decline was essentially due to the decrease in the Corporation's operating income. 2011 results For the fiscal year ended December 31, 2011, the Corporation's consolidated operating income was $50.5 million, compared with $74.9 million in the previous year. The 32.5% decrease was mainly due to the Television sector, and was caused primarily by the operating results of the three new specialty services launched in 2011. Consolidated operating revenues totalled $445.5 million, compared with $448.2 million in 2010, a 0.6% decrease. The Corporation generated net income attributable to shareholders in the amount of $25.6 million, or $1.08 per share, in 2011, compared with $37.2 million, or $1.57 per share, in 2010. The Corporation 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 the largest publisher of French-language magazines in North America, and one of the largest private-sector content producers. 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 audited annual consolidated financial statements with notes and the annual Management Discussion and Analysis can be consulted on the Corporation's website at http://groupetva.ca. 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, restructuring costs of operations, impairment of assets and other costs, 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 management and the Board of Directors to evaluate the Corporation's consolidated results and the results of its business sectors. 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, governmental assistance risks, changes in economic conditions, fragmentation of the media landscape 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 http://groupetva.ca including, in particular, the "Risks and Uncertain ties" section of the Corporation's Management's Discussion and Analysis for the year ended December 31, 2011.The forward-looking statements in this news release reflect the Corporation's expectations as of February 29, 2012, 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 thousands of dollars, except per share amounts)Three-month periodsYearsended December 31ended December 312011201020112010Revenues$131,636$133,387$445,495$448,192Operating, selling and administrative expenses110,979104,255394,971373,315Amortization of property, plant and equipment and intangible assets4,9094,14717,43715,061Financial expenses1,5701,4195,9475,621Restructuring costs of operations, impairment of assets and other costs1,0327921,6659,138Income before income taxes and share of income of associated corporation13,14622,77425,47545,057Income taxes4,2644,3249,6139,584After-tax share of income of associated corporation(289)(406)(574)(1,116)Net income$9,171$18,856$16,436$36,589Net income attributable to:Shareholders11,46819,30525,60337,242Non-controlling interest(2,297)(449)(9,167)(653)Basic and diluted earnings per share attributable to shareholders$0.48$0.81$1.08$1.57TVA GROUP INC.Consolidated Statements of Comprehensive (Loss) Income(unaudited)(in thousand of dollars)Three-month periodsYearsended December 31ended December 312011201020112010Net income$9,171$18,856$16,436$36,589Other comprehensive loss:Defined benefit plans:Net change in asset limit or in minimum funding liability(22,725)(3,380)(23,148)(7,098)Deferred income taxes6,0179096,1311,909(16,708)(2,471)(17,017)(5,189)Comprehensive (loss) income$(7,537)$16,385$(581)$31,400Comprehensive (loss) income attributable to:Shareholders$(5,240)$16,834$8,586$32,053Non-controlling interest(2,297)(449)(9,167)(653)TVA GROUP INC.Consolidated Statements of Equity(unaudited)(in thousand of dollars)Years ended December 31, 2011 and 2010 Equity attributable to shareholdersCapitalstockContributedsurplusRetainedearningsEquity attributableto non-controllinginterestTotal equityBalance as of December 31, 2009 as reported under Canadian GAAP$98,647$4,145$134,303$-$237,095IFRS adjustments-(4,145)11,182-7,037Balance as of January 1, 201098,647-145,485-244,132Net income (net loss)--37,242(653)36,589Related party transactions--(2, 000)-(2,000)Other comprehensive loss--(5,189)-(5,189)Dividends--(4,754)-(4,754)Contributions related to non-controlling interest---5,1645,164Balance as of December 31, 201098,647-170,7844,511273,942Net income (net loss)--25,603(9,167)16,436Other comprehensive loss--(17,017)-(17,017)Dividends--(2,377)-(2,377)Contributions related to non-controlling interest---10,04510,045Balance as at December 31, 2011$98,647$-$176,993$5, 389$281,029TVA GROUP INC.Consolidated Balance Sheets(unaudited)(in thousand of dollars)December 31, 2011 and 2010, January 1, 2010December 31December 31January 1201120102010AssetsCurrent assetsCash$1,756$5,605$1,924Accounts receivable121,658133,161121,593Programs, broadcast and distribution rights and inventories61,95460,12254,774Prepaid expenses and other current asset2,6902,2404,754Asset held for sale8,370--196,428201,128183,045Non-current assetsBroadcast and distribution rights35,48834,05838,950Investments12,86512,52711,637Property, plant and equipment102,00786,20879,123Licences and other intangible assets114,539112,475110,050Goodwill71,98171,98171,981Deferred income taxes5456942,654337,425317,943314,395Total assets$533,853$519,071$497,440Liabilities and equityCurrent liabilitiesBank overdraft$3,980$3,557$974Accounts payable and accrued liabilities82,58981,40288,369Broadcast and distribution rights payable15,77825,87928,611Provisions1,5332,0011,694Deferred revenues6,5357,1227,401Current portion of long-term debt17,756--Liability held for sale1,538--129,709119,961127,049Non-current liabilitiesLong-term debt74,63590,33888,580Other liabilities39,69625,06925,666Deferred income taxes8,7849,76112,013123,115125,168126,259EquityCapital stock98,64798,64798,647Retained earnings176,993170,784145,485Equity attributable to shareholders275,640269,431244,132Non-controlling interest5,3894,511-281,029 273,942 244,132Commitments, guarantees and contingenciesTotal liabilities and equity$533,853$519,071$497,440TVA GROUP INC.Consolidated Statements of Cash Flows(unaudited)(in thousands of dollars)Three-month periodsYears endedended December 31December 312011201020112010CASH FLOWS RELATED TO OPERATING ACTIVITIESNet income$9,171$18,856$16,436$36,589Non-cash itemsAmortization4,9994,22817,79615,419Restructuring costs of operations, impairment of assets and other costs1165386997,696Share of income of associated corporation(289)(406)(574)(1,116)Deferred income taxes2,5661,1695,2171,595Cash flows from current operations16,56324,38539,57460,183Net change in non-cash items(13,799)(13,855)(14,716)(37,636)Cash flows provided by operating activities2,76410,53024,85822,547CASH FLOWS RELATED TO INVESTING ACTIVITIESAdditions to property, plant and equipment(7,992)(6,524)(30,016)(18,352)Additions to intangible assets(2,392)(1,782)(5,830)(5,893)Disposal of an item of property, plant and equipment---760Net change in investments--236226Cash flows used in investing activities(10,384)(8,306)(35,610)(23,259)CASH FLOWS RELATED TO FINANCING ACTIVITIESNet change in bank overdraft4451,5964232,583Net change in revolving term loan4,994(4,574)1,6941,361Financing costs-39-39Non-controlling interest2,2054,91910,0455,164Dividends paid-(1,188)(2,377)(4,754)Cash flows provided by financing activities7,6447929,7854,393Net change in cash243,016(967)3,681Cash at beginning of period4,6142,5895,6051,924Cash at end of period$4,638$5,605$4,638$5,605Cash consists of the following :Cash$1,756$5,605$1,756$5,605Cash from operations held for sale2,882-2,882-$4,638$5,605$4,638$5,605SUPPLEMENTAL INFORMATIONInterest paid$2,449$2,423$5,451$5,419Interest received-(56)(20)(194)Income taxes paid, net amount3181,65797422,331Net change in additions to property, plant and equipment and intangible assets funded by accounts payable and accrued liabilities1,0133,571(546)2,127Net change in government assistance credited to property, plant and equipment--$-$434TVA GROUP INC.Segmented information(unaudited)(in thousands of dollars)The following tables include information on operating results, as well as information on assets:Three-month periodsYears endedended December 31December 312011201020112010RevenuesTelevision$114,447$115,516$378,854$377,283Publishing18,28619,26070,62275,004Intersegment items(1,097)(1,389)(3,981)(4,095)131,636133,387445,495448,192Operating, selling and administrative expensesTelevision96,35088,689338,910314,006Publishing15,72616,95560,04263,404Intersegment items(1,097)(1,389)(3,981)(4,095)110,979104,255394,971373,315Operating incomeTelevision18,09726,82739,94463,277Publishing2,5602,30510,58011,600Intersegment items----$20,657$29,132$50,524$74,877The intersegment items mentioned above represent the elimination of normal course business transactions made between the Corporation's business segments regarding revenues and expenses.December 31, 2011December 31, 2010Total assetsTelevision$449,943$435,331Publishing83,91083,740$533,853$519,071GoodwillTelevision$2,539$2,539Publishing69,44269,442FOR FURTHER INFORMATION PLEASE CONTACT: Vice-President and Chief Financial OfficerDenis Rozon, CA(514) 598-2808