Transcontinental Inc.’s printing business drove revenues up slightly in the third quarter, but the company took a hit from the sale of its Mexican operations.
The company also announced that its founder, Rémi Marcoux, will step down as executive chair of the board early next year.
Mr. Marcoux, 71, cited a desire to ease his work schedule. He will leave his position officially at the annual shareholders’ meeting in February, 2012. He will remain on the board of directors, and will be succeeded by his daughter, Isabelle Marcoux.
The media company that owns printing plants and publishes magazines and regional newspapers, reported net income of $12.3-million or 13 cents per share in the quarter ended July 31. This was down from a year-ago profit of $30.6-million or 36 cents per share.
The company said the decrease was mainly due to the discontinuation of its printing business in Mexico, which it announced last month it would sell to Wisconsin-based Quad/Graphics Inc. in exchange for that printing company’s Canadian operations. Quad/Graphics is the same U.S. printing company that last year bought Montreal-based World Color Press, the Canadian company formerly known as Quebecor World that filed for protection from its creditors under the Companies' Creditors Arrangement Act in Canada and Chapter 11 in the U.S. in 2008.
Transcontinental’s net income from operations, which excludes the discontinued operations and other unusual items, was reported as $33.6-million, down 2 per cent from $34.3-million during the same period last year.
Revenues for the quarter totalled $492.6-million. This was up 2.3 per cent from $481.3-million last year.
Transcontinental said the slight revenue increase was driven by its printing business, especially its contract to print The Globe and Mail, an 18-year deal worth a total of $1.7-billion.
Last week, Transcontinental announced it would cut 30 jobs as it combined two printing operations in Montreal later this month.
“I am satisfied with our third-quarter results, especially with the fact that we have generated organic revenue and profit growth for the sixth consecutive quarter in an industry that faces increasing competition,” Transcontinental’s chief executive officer François Olivier said in a statement. “...We will continue with our plan to transform Transcontinental to meet our customers' evolving needs. In the next few months we will launch new digital products and services and make use of our most productive assets in order to continue to grow and transform Transcontinental.”
Transcontinental’s shares fell 99 cents, or 7.6 per cent, in morning trading following the release of the company’s results.
Transcontinental’s new chair of the board, Isabelle Marcoux was a former lawyer with McCarthy Tétrault LLP, and has worked at the company for 14 years. She has served as vice-chair since 2007, and is also vice-president of corporate development for Transcontinental.
“It is with great confidence in the future of Transcontinental and with great pride in the progress achieved by a seasoned management team and experienced employees that I made this important decision,” Mr. Marcoux said in a statement.
Mr. Marcoux founded the company in 1976 with partners Claude Dubois and André Kingsley, when they bought a small commercial printing plant in Montreal. He remains the company’s controlling shareholder. Transcontinental now has 10,500 employees.