Transcontinental Inc. is reporting a more profitable third quarter with net income rising to $32.4-million, or 42 cents per share, in the three months ended July 31.
That's up from $8.1-million, or 10 cents per share, in the same quarter last year when the company recognized unusual costs related to its acquisition of Quad/Graphics Canada.
Excluding unusual items, Transcontinental's adjusted net income was up 43.4 per cent compared with a year ago, rising to $35.7-million from $24.9-million.
But revenues decreased 4.5 per cent to $493.8-million from $517-million year-over-year, mainly due to the end of the Zellers flyers contract. The Canadian discount retailer has sold most of its locations to Target Corp. and ceased operations.
Transcontinental said other factors contributing to lower revenue were the change in the format and type of paper used by some of our major customers, difficult market conditions affecting its magazine, book and catalogue printing business and a soft advertising market.
"Our third quarter results clearly outperformed in our industry," said president and CEO Francois Olivier said in a statement Thursday.
"Despite the pressure we are facing with regards to the advertising market in our media sector, we have continued to roll out our digital offering and have launched several new products and services."
Olivier said Transcontinental's solid financial position and ability to generate cash flow "gives us the flexibility we need to continue to invest in our development and transform our operations in order to better meet the continually evolving needs of our customers."
The Montreal-based company bought the printing operations of Quad/Graphics Canada in March 2012. The company said there have been more than $35-million to date in synergies from that acquisition.
Transcontinental is Canada's largest printer and a leading provider of media and marketing solutions. It has about 9,500 employees in Canada and the United States.