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Transcontinental Inc — Management Reports 2025
Sep 5, 2025
42516_rns_2025-09-05_19f2b949-4918-460d-9f4c-4f2883d66998.pdf
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TRANSCONTINENTAL
Management's Discussion and Analysis
For the third quarter ended July 27, 2025
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the third quarter ended July 27, 2025
The purpose of this Management's Discussion and Analysis is to help the reader better understand the business, development strategy, and future outlook of Transcontinental Inc., how we manage risk, as well as to analyze the Corporation's results and financial position for the third quarter ended July 27, 2025. It should be read in conjunction with the information in the unaudited condensed interim consolidated financial statements and the accompanying notes. Additional information relating to the Corporation, including its Annual Report and Annual Information Form, may also be obtained on SEDAR+ at www.sedarplus.ca.
In this document, unless otherwise indicated, all financial data are prepared in accordance with International Financial Reporting Accounting Standards ("IFRS") and the term "dollar", as well as the symbol "$" designate Canadian dollars.
In addition, in this Management's Discussion and Analysis, we also use non-IFRS financial measures for which a complete definition is presented below and for which a reconciliation to financial information in accordance with IFRS is presented in Table #2 in the section entitled "Reconciliation of Non-IFRS Financial Measures" and in Note 3 "Segmented Information" to the unaudited condensed interim consolidated financial statements for the third quarter ended July 27, 2025. These measures should be considered as a complement to financial performance measures in accordance with IFRS. They do not substitute and are not superior to them.
| Terms Used | Definitions |
|---|---|
| Adjusted operating earnings before depreciation and amortization | Operating earnings before depreciation and amortization including realized gains on non-designated foreign exchange contracts and excluding restructuring and other costs (revenues) as well as impairment of assets. |
| Adjusted operating earnings margin before depreciation and amortization | Adjusted operating earnings before depreciation and amortization divided by revenues. |
| Adjusted operating earnings | Operating earnings including realized gains on non-designated foreign exchange contracts and excluding restructuring and other costs (revenues), amortization of intangible assets arising from business combinations as well as impairment of assets. |
| Adjusted operating earnings margin | Adjusted operating earnings divided by revenues. |
| Adjusted income taxes | Income taxes before income taxes on restructuring and other costs (revenues), amortization of intangible assets arising from business combinations, impairment of assets as well as the recognition of previous years tax assets of an acquired company. |
| Adjusted net earnings attributable to shareholders of the Corporation | Net earnings attributable to shareholders of the Corporation before restructuring and other costs (revenues), amortization of intangible assets arising from business combinations and impairment of assets, net of related income taxes, as well as the recognition of previous years tax assets of an acquired company. |
| Net indebtedness | Total of long-term debt, of current portion of long-term debt, of lease liabilities and of current portion of lease liabilities, less cash. |
| Net indebtedness ratio | Net indebtedness divided by the last 12 months' adjusted operating earnings before depreciation and amortization. |
Finally, to facilitate the reading of this report, the terms "TC Transcontinental", "Transcontinental", "Corporation", "we", "our" and "us" all refer to Transcontinental Inc. together with its subsidiaries and joint ventures.
TC • TRANSCONTINENTAL
Management's Discussion and Analysis - 1
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Our public communications often contain oral or written forward-looking statements which are based on the expectations of Management and inherently subject to a certain number of risks and uncertainties, known and unknown. By their very nature, forward-looking statements are derived from both general and specific assumptions. The Corporation cautions against undue reliance on such statements since actual results or events may differ materially from the expectations expressed or implied in them. Forward-looking statements include, among others, statements with respect to our objectives, our outlook, our strategies to achieve these objectives, as well as statements with respect to our beliefs, plans, expectations, anticipations, estimates and intentions. The words "may", "could", "should", "would", "assumptions", "plan", "strategy", "outlook", "believe", "anticipate", "estimate", "expect", "intend", "objective", the use of the future and conditional tenses, and words and expressions of similar nature are intended to identify forward-looking statements. Such forward-looking statements may also include observations concerning the Corporation's anticipated financial results and business outlooks and the economies in which it operates. The Corporation's future performance may also be affected by a number of factors, many of which are beyond its will or control. The main risks, uncertainties and factors that could influence actual results are described in the Management's Discussion and Analysis for the fiscal year ended October 27, 2024 and in the latest Annual Information Form.
Unless otherwise indicated by the Corporation, forward-looking statements do not take into account the potential impact of non-recurring or other unusual items, nor of disposals, business combinations, mergers or acquisitions which may be announced or concluded after the date of September 4, 2025.
These forward-looking statements are made pursuant to the "safe harbour" provisions of applicable Canadian securities legislation.
The forward-looking statements in this Management's Discussion and Analysis are based on current expectations and information available as at September 4, 2025. Such forward-looking statements may also be found in other documents filed with Canadian securities regulators or in other communications. The Corporation's Management disclaims any intention or obligation to update or revise these statements unless otherwise required by the securities authorities.
PROFILE OF TC TRANSCONTINENTAL
TC Transcontinental is a leader in flexible packaging in North America and in retail services in Canada, and is Canada's largest printer. The Corporation is also the leading Canadian French-language educational publishing group. Since 1976, TC Transcontinental's mission has been to create quality products and services that allow businesses to attract, reach and retain their target customers.
Respect, teamwork, performance and innovation are the strong values held by the Corporation and its employees. TC Transcontinental's commitment to its stakeholders is to pursue its business activities in a responsible manner.
Transcontinental Inc. (TSX: TCL.A TCL.B), known as TC Transcontinental, has approximately 7,600 employees, the majority of which are based in Canada, the United States and Latin America. TC Transcontinental generated revenues of $2.8 billion during the fiscal year ended October 27, 2024. For more information, visit TC Transcontinental's website at www.tc.tc.
TC · TRANSCONTINENTAL
Management's Discussion and Analysis - 2
HIGHLIGHTS
Table #1:
| (in millions of dollars, except per share amounts) | Q3-2025 | Q3-2024 | Variation in % |
|---|---|---|---|
| Revenues | $684.4 | $700.0 | (2.2)% |
| Operating earnings before depreciation and amortization | 109.0 | 121.5 | (10.3) |
| Adjusted operating earnings before depreciation and amortization (1) | 122.6 | 121.0 | 1.3 |
| Operating earnings | 57.4 | 69.2 | (17.1) |
| Adjusted operating earnings (1) | 85.4 | 84.2 | 1.4 |
| Net earnings attributable to shareholders of the Corporation | 38.7 | 43.6 | (11.2) |
| Net earnings attributable to shareholders of the Corporation per share | 0.46 | 0.50 | (8.0) |
| Adjusted net earnings attributable to shareholders of the Corporation (1) | 58.9 | 51.4 | 14.6 |
| Adjusted net earnings attributable to shareholders of the Corporation per share (1) | 0.70 | 0.60 | 16.7 |
(1) Please refer to Table #2 in the section entitled "Reconciliation of Non-IFRS Financial Measures" in this Management's Discussion and Analysis for adjusted data presented above.
- Revenues of $684.4 million for the quarter ended July 27, 2025; operating earnings of $57.4 million; and net earnings attributable to shareholders of the Corporation of $38.7 million ($0.46 per share).
- Adjusted operating earnings before depreciation and amortization of $122.6 million for the quarter ended July 27, 2025; adjusted operating earnings of $85.4 million; and adjusted net earnings attributable to shareholders of the Corporation of $58.9 million ($0.70 per share).
- Growth in adjusted net earnings attributable to shareholders of the Corporation per share of 16.7%.
- Acquisitions to accelerate the growth of in-store marketing activities: Middleton Group Inc., based in Ontario, on June 23, 2025, for $4.6 million; and, subsequent to the end of the quarter, Mirazed Inc., based in Quebec, and Intergraphics Decal Limited, based in Manitoba, for a maximum of $72.7 million, subject to adjustments.
T
TRANSCONTINENTAL
Management's Discussion and Analysis - 3
RECONCILIATION OF NON-IFRS FINANCIAL MEASURES
(Unaudited)
The financial information has been prepared in accordance with IFRS. However, financial measures used, namely adjusted operating earnings before depreciation and amortization, adjusted operating earnings margin before depreciation and amortization, adjusted operating earnings, adjusted operating earnings margin, adjusted income taxes, adjusted net earnings attributable to shareholders of the Corporation, adjusted net earnings attributable to shareholders of the Corporation per share, net indebtedness and the net indebtedness ratio, for which a reconciliation is presented in the following table, do not have any standardized meaning under IFRS and could be calculated differently by other companies. We believe that many of our readers analyze the financial performance of the Corporation's activities based on these non-IFRS financial measures as such measures may allow for easier comparisons between periods. These measures should be considered as a complement to financial performance measures in accordance with IFRS. They do not substitute and are not superior to them.
The Corporation also believes that these measures are useful indicators of the performance of its operations and its ability to meet its financial obligations. Furthermore, management also uses some of these non-IFRS financial measures to assess the performance of its activities and managers.
Table #2:
Reconciliation of operating earnings - Third quarter and cumulative
| Three months ended | Nine months ended | |||
|---|---|---|---|---|
| (in millions of dollars) | July 27, 2025 | July 28, 2024 | July 27, 2025 | July 28, 2024 |
| Operating earnings | $57.4 | $69.2 | $197.2 | $130.2 |
| Including | ||||
| Realized gains on non-designated foreign exchange contracts(1) | 1.2 | — | 1.2 | — |
| Excluding | ||||
| Restructuring and other costs (revenues) | 6.7 | (0.5) | (33.2) | 26.8 |
| Amortization of intangible assets arising from business combinations(2) | 14.4 | 15.5 | 44.2 | 51.0 |
| Impairment of assets | 5.7 | — | 5.7 | 7.5 |
| Adjusted operating earnings | $85.4 | $84.2 | $215.1 | $215.5 |
| Depreciation and amortization(3) | 37.2 | 36.8 | 113.5 | 111.7 |
| Adjusted operating earnings before depreciation and amortization | $122.6 | $121.0 | $328.6 | $327.2 |
(1) To mitigate the impact of foreign currency fluctuations when consolidating the Packaging Sector's earnings, the Corporation sometimes uses foreign exchange contracts. These contracts are not designated as part of a hedge accounting relationship, and resulting exchange gains or losses are added to adjusted operating earnings and adjusted operating earnings before depreciation and amortization.
(2) Amortization of intangible assets arising from business combinations include our customer relationships, rights of first refusal and educational book titles.
(3) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations
Reconciliation of operating earnings - Third quarter and cumulative for the Packaging Sector
| Three months ended | Nine months ended | |||
|---|---|---|---|---|
| (in millions of dollars) | July 27, 2025 | July 28, 2024 | July 27, 2025 | July 28, 2024 |
| Operating earnings | $29.4 | $29.4 | $126.5 | $84.1 |
| Including | ||||
| Realized gains on non-designated foreign exchange contracts(1) | 1.2 | — | 1.2 | — |
| Excluding | ||||
| Restructuring and other costs (revenues) | 1.1 | 2.4 | (41.1) | 9.7 |
| Amortization of intangible assets arising from business combinations(2) | 13.5 | 14.3 | 41.1 | 46.5 |
| Impairment of assets | — | — | — | 0.6 |
| Adjusted operating earnings | $45.2 | $46.1 | $127.7 | $140.9 |
| Depreciation and amortization(3) | 20.1 | 18.8 | 62.0 | 55.6 |
| Adjusted operating earnings before depreciation and amortization | $65.3 | $64.9 | $189.7 | $196.5 |
(1) To mitigate the impact of foreign currency fluctuations when consolidating the Packaging Sector's earnings, the Corporation sometimes uses foreign exchange contracts. These contracts are not designated as part of a hedge accounting relationship, and resulting exchange gains or losses are added to adjusted operating earnings and adjusted operating earnings before depreciation and amortization.
(2) Amortization of intangible assets arising from business combinations includes our customer relationships.
(3) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.
tc
•
TRANSCONTINENTAL
Management's Discussion and Analysis - 4
Reconciliation of operating earnings - Third quarter and cumulative for the Retail Services and Printing Sector
| Three months ended | Nine months ended | |||
|---|---|---|---|---|
| (in millions of dollars) | July 27, 2025 | July 28, 2024 | July 27, 2025 | July 28, 2024 |
| Operating earnings | $37.6 | $36.8 | $107.5 | $71.1 |
| Excluding | ||||
| Restructuring and other costs | 3.4 | 1.7 | 7.5 | 19.6 |
| Amortization of intangible assets arising from business combinations (1) | 0.5 | 0.7 | 1.7 | 3.0 |
| Impairment of assets | — | — | — | 6.9 |
| Adjusted operating earnings | $41.5 | $39.2 | $116.7 | $100.6 |
| Depreciation and amortization (2) | 10.5 | 11.6 | 31.6 | 36.8 |
| Adjusted operating earnings before depreciation and amortization | $52.0 | $50.8 | $148.3 | $137.4 |
(1) Amortization of intangible assets arising from business combinations includes our customer relationships.
(2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.
Reconciliation of operating earnings - Third quarter and cumulative for the Other Sector
| Three months ended | Nine months ended | |||
|---|---|---|---|---|
| (in millions of dollars) | July 27, 2025 | July 28, 2024 | July 27, 2025 | July 28, 2024 |
| Operating earnings | $(9.6) | $3.0 | $(36.8) | $(25.0) |
| Excluding | ||||
| Restructuring and other costs (revenues) | 2.2 | (4.6) | 0.4 | (2.5) |
| Amortization of intangible assets arising from business combinations (1) | 0.4 | 0.5 | 1.4 | 1.5 |
| Impairment of assets | 5.7 | — | 5.7 | — |
| Adjusted operating earnings | $(1.3) | $(1.1) | $(29.3) | $(26.0) |
| Depreciation and amortization (2) | 6.6 | 6.4 | 19.9 | 19.3 |
| Adjusted operating earnings before depreciation and amortization | $5.3 | $5.3 | $(9.4) | $(6.7) |
(1) Amortization of intangible assets arising from business combinations includes our rights of first refusal and educational book titles.
(2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.
Reconciliation of operating earnings - Last eight quarters
| 2025 | 2024 | 2023 | ||||||
|---|---|---|---|---|---|---|---|---|
| (in millions of dollars) | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 |
| Operating earnings | $57.4 | $51.1 | $88.7 | $79.3 | $69.2 | $33.2 | $27.8 | $66.7 |
| Including | ||||||||
| Realized gains on non-designated foreign exchange contracts(1) | 1.2 | — | — | — | — | — | — | — |
| Excluding | ||||||||
| Restructuring and other costs (revenues) | 6.7 | 4.0 | (43.9) | 7.1 | (0.5) | 16.0 | 11.3 | (2.9) |
| Amortization of intangible assets arising from business combinations(2) | 14.4 | 15.0 | 14.8 | 15.4 | 15.5 | 17.7 | 17.8 | 18.3 |
| Impairment of assets | 5.7 | — | — | 3.3 | — | 5.4 | 2.1 | 25.2 |
| Adjusted operating earnings | $85.4 | $70.1 | $59.6 | $105.1 | $84.2 | $72.3 | $59.0 | $107.3 |
| Depreciation and amortization(3) | 37.2 | 38.4 | 37.9 | 37.1 | 36.8 | 37.8 | 37.1 | 38.2 |
| Adjusted operating earnings before depreciation and amortization | $122.6 | $108.5 | $97.5 | $142.2 | $121.0 | $110.1 | $96.1 | $145.5 |
(1) To mitigate the impact of foreign currency fluctuations when consolidating the Packaging Sector's earnings, the Corporation sometimes uses foreign exchange contracts. These contracts are not designated as part of a hedge accounting relationship, and resulting exchange gains or losses are added to adjusted operating earnings and adjusted operating earnings before depreciation and amortization.
(2) Amortization of intangible assets arising from business combinations includes our customer relationships, rights of first refusal and educational book titles.
(3) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.
Tc
TRANSCONTINENTAL
Management's Discussion and Analysis - 5
Reconciliation of net earnings attributable to shareholders of the Corporation - Third quarter and cumulative
| Three months ended | Nine months ended | |||
|---|---|---|---|---|
| (in millions of dollars, except per share amounts) | July 27, 2025 | July 28, 2024 | July 27, 2025 | July 28, 2024 |
| Net earnings attributable to shareholders of the Corporation | $38.7 | $43.6 | $128.1 | $73.4 |
| Excluding | ||||
| Restructuring and other costs (revenues) | 6.7 | (0.5) | (33.2) | 26.8 |
| Tax on restructuring and other costs (revenues) | (1.6) | — | 16.1 | (6.8) |
| Amortization of intangible assets arising from business combinations (1) | 14.4 | 15.5 | 44.2 | 51.0 |
| Tax on amortization of intangible assets arising from business combinations | (3.5) | (3.8) | (10.8) | (12.5) |
| Impairment of assets | 5.7 | — | 5.7 | 7.5 |
| Tax on impairment of assets | (1.5) | — | (1.5) | (1.9) |
| Recognition of previous years tax assets of an acquired company | — | (3.4) | — | (3.4) |
| Adjusted net earnings attributable to shareholders of the Corporation | $58.9 | $51.4 | $148.6 | $134.1 |
| Net earnings attributable to shareholders of the Corporation per share | $0.46 | $0.50 | $1.53 | $0.85 |
| Adjusted net earnings attributable to shareholders of the Corporation per share | $0.70 | $0.60 | $1.77 | $1.55 |
| Weighted average number of shares outstanding | 83.6 | 86.4 | 83.8 | 86.5 |
(1) Amortization of intangible assets arising from business combinations includes our customer relationships, rights of first refusal and educational book titles.
Reconciliation of net earnings attributable to shareholders of the Corporation - Last eight quarters
| 2025 | 2024 | 2023 | ||||||
|---|---|---|---|---|---|---|---|---|
| (in millions of dollars, except per share amounts) | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 |
| Net earnings attributable to shareholders of the Corporation | $38.7 | $33.8 | $55.6 | $47.9 | $43.6 | $15.9 | $13.9 | $41.7 |
| Excluding | ||||||||
| Restructuring and other costs (revenues) | 6.7 | 4.0 | (43.9) | 7.1 | (0.5) | 16.0 | 11.3 | (2.9) |
| Tax on restructuring and other costs (revenues) | (1.6) | (1.0) | 18.7 | (1.8) | — | (4.0) | (2.8) | 0.3 |
| Amortization of intangible assets arising from business combinations (1) | 14.4 | 15.0 | 14.8 | 15.4 | 15.5 | 17.7 | 17.8 | 18.3 |
| Tax on amortization of intangible assets arising from business combinations | (3.5) | (3.6) | (3.7) | (3.8) | (3.8) | (4.3) | (4.4) | (4.3) |
| Impairment of assets | 5.7 | — | — | 3.3 | — | 5.4 | 2.1 | 25.2 |
| Tax on impairment of assets | (1.5) | — | — | (0.8) | — | (1.4) | (0.5) | (6.5) |
| Recognition of previous years tax assets of an acquired company | — | — | — | — | (3.4) | — | — | — |
| Adjusted net earnings attributable to shareholders of the Corporation | $58.9 | $48.2 | $41.5 | $67.3 | $51.4 | $45.3 | $37.4 | $71.8 |
| Net earnings attributable to shareholders of the Corporation per share | $0.46 | $0.40 | $0.66 | $0.57 | $0.50 | $0.18 | $0.16 | $0.48 |
| Adjusted net earnings attributable to shareholders of the Corporation per share | $0.70 | $0.58 | $0.49 | $0.79 | $0.60 | $0.52 | $0.43 | $0.83 |
| Weighted average number of shares outstanding | 83.6 | 83.6 | 84.2 | 84.8 | 86.4 | 86.6 | 86.6 | 86.6 |
(1) Amortization of intangible assets arising from business combinations includes our customer relationships, rights of first refusal and educational book titles.
Tc
TRANSCONTINENTAL
Management's Discussion and Analysis - 6
Reconciliation of net indebtedness
| (in millions of dollars, except ratios) | As at July 27, 2025 | As at October 27, 2024 |
|---|---|---|
| Long-term debt | $461.2 | $668.1 |
| Current portion of long-term debt | 252.0 | 201.0 |
| Lease liabilities | 88.7 | 95.8 |
| Current portion of lease liabilities | 24.5 | 24.1 |
| Cash | (35.9) | (185.2) |
| Net indebtedness | $790.5 | $803.8 |
| Adjusted operating earnings before depreciation and amortization (last 12 months) | $470.8 | $469.4 |
| Net indebtedness ratio | 1.68x | 1.71x |
ANALYSIS OF CONSOLIDATED RESULTS - THIRD QUARTER
Revenues
Revenues decreased by $15.6 million, or 2.2%, from $700.0 million in the third quarter of 2024 to $684.4 million in the corresponding period of 2025. This decrease is mainly due to the impact of the sale of the industrial packaging operations and lower volume in the Packaging Sector, partially offset by higher volume in the Retail Services and Printing Sector, notably in book printing activities, the favourable exchange rate effect and, to a lesser extent, the acquisition of Middleton Group Inc. ("Middleton"). A more detailed analysis of revenues is presented in the section "Analysis of Sector Results - Third Quarter".
Operating and Other Expenses
Operating expenses decreased by $16.0 million, or 2.8%, in the third quarter of 2025 compared to the corresponding period of 2024. This decrease results mainly from cost reduction initiatives, lower volume in the Packaging Sector and the impact of the sale of the industrial packaging operations, partially offset by higher volume in the Retail Services and Printing Sector and the unfavourable exchange rate effect.
Restructuring and other costs (revenues) increased by $7.2 million, from a revenue of $0.5 million in the third quarter of 2024 to an expense of $6.7 million in the third quarter of 2025. This increase is mainly due to the net gain on the sale of a building in the third quarter of 2024 and costs incurred in relation with the labour conflict at Canada Post in the third quarter of 2025.
Asset impairment charges increased by $5.7 million, from no asset impairment charge in the third quarter of 2024 to an asset impairment charge of $5.7 million in the third quarter of 2025. On July 9, 2025, the Corporation definitively ceased the operations of Groupe Constructo in the Media Sector, which led to the recognition of a goodwill impairment charge of $5.7 million.
Operating Earnings before Depreciation and Amortization
Operating earnings before depreciation and amortization decreased by $12.5 million, or 10.3%, from $121.5 million in the third quarter of 2024 to $109.0 million in the third quarter of 2025. This decrease is mainly due to lower volume in the Packaging Sector, a less favourable product mix in our two main sectors, the increase in restructuring and other costs, an asset impairment charge and the sale of the industrial packaging operations, partially offset by the favourable impact of cost reduction initiatives and the favourable exchange rate effect.
Adjusted operating earnings before depreciation and amortization increased by $1.6 million, or 1.3%, from $121.0 million in the third quarter of 2024 to $122.6 million in the third quarter of 2025. This increase is mainly attributable to the favourable impact of cost reduction initiatives and the favourable exchange rate effect, mostly offset by lower volume in the Packaging Sector, a less favourable product mix in our two main sectors and the sale of the industrial packaging operations. A more detailed analysis of adjusted operating earnings is presented in the section "Analysis of Sector Results - Third Quarter".
Depreciation and Amortization
Depreciation and amortization decreased by $0.7 million, from $52.3 million in the third quarter of 2024 to $51.6 million in the third quarter of 2025. This decrease is mostly attributable to the end of the depreciation and amortization period for some items of property, plant and equipment and the impact of the sale of the industrial packaging operations, partially offset by the impact of items of property, plant and equipment brought into use, mainly in the Packaging Sector.
TRANSCONTINENTAL
Management's Discussion and Analysis - 7
Net Financial Expenses
Net financial expenses decreased by $4.6 million, from $15.6 million in the third quarter of 2024 to $11.0 million in the third quarter of 2025. This favourable change is mainly explained by the reduction in net indebtedness, the favourable exchange rate effect and, to a lesser extent, the decrease in interest rates.
Income Taxes
Income taxes decreased by $2.2 million, from $9.8 million in the third quarter of 2024 to $7.6 million in the third quarter of 2025. This decrease is mainly attributable to the decrease in earnings before income taxes.
Adjusted income taxes decreased by $2.8 million, from $17.0 million in the third quarter of 2024, for an effective tax rate of 24.8%, to $14.2 million in the third quarter of 2025, for an effective tax rate of 19.4%. This decrease in the effective tax rate is mainly attributable to differences between the accounting and tax treatment that had an unfavourable impact in 2024 and a favourable impact in 2025.
Net Earnings Attributable to Shareholders of the Corporation
Net earnings attributable to shareholders of the Corporation decreased by $4.9 million, or 11.2%, from $43.6 million in the third quarter of 2024 to $38.7 million in the third quarter of 2025. This decrease is mainly due to the previously explained decrease in operating earnings before depreciation and amortization, partially offset by lower financial expenses, depreciation and amortization, and income taxes. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.50 to $0.46, respectively.
Adjusted net earnings attributable to shareholders of the Corporation increased by $7.5 million, or 14.6%, from $51.4 million in the third quarter of 2024 to $58.9 million in the third quarter of 2025. This increase is mainly attributable to lower financial expenses and income taxes as well as the previously explained increase in adjusted operating earnings before depreciation and amortization. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $0.60 to $0.70, respectively.
ANALYSIS OF CONSOLIDATED RESULTS - CUMULATIVE
Revenues
Revenues decreased by $52.1 million, or 2.5%, from $2,063.6 million in the first nine months of fiscal year 2024 to $2,011.5 million in the corresponding period of 2025. This decrease is mainly due to the impact of the sale of the industrial packaging operations and lower volume, mainly in the Packaging Sector, partially offset by the favourable exchange rate effect. A more detailed analysis of revenues is presented in the section "Analysis of Sector Results - Cumulative".
Operating and Other Expenses
Operating expenses decreased by $52.3 million in the first nine months of fiscal year 2025, or 3.0%, compared to the corresponding period of 2024. This decrease results mainly from lower volume, lower costs of materials used and fixed costs and the impact of the sale of the industrial packaging operations, partially offset by the unfavourable exchange rate effect.
Restructuring and other costs (revenues) decreased by $60.0 million, from an expense of $26.8 million in the first nine months of fiscal year 2024 to a revenue of $33.2 million in the corresponding period of 2025. This decrease is mainly attributable to the gain on the sale of the industrial packaging operations, the decrease in workforce reduction costs and costs resulting from plant closures in 2024 and the reversal of a purchase price holdback, partially offset by costs incurred in relation with the labour conflict at Canada Post in the first nine months of fiscal year 2025 and a net gain on the sale of a building in the first nine months of fiscal year 2024.
Asset impairment charges decreased by $1.8 million, from $7.5 million in the first nine months of fiscal year 2024 to $5.7 million in the corresponding period of 2025. In the first nine months of fiscal year 2024, impairment charges of $7.5 million had been recognized due to the revision of estimates for the expected future economic benefits of equipment, mainly in the Retail Services and Printing Sector. In the first nine months of fiscal year 2025, a goodwill impairment charge of $5.7 million was recognized upon termination, on July 9, 2025, of the operations of Groupe Constructo in the Media Sector.
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TRANSCONTINENTAL
Management's Discussion and Analysis - 8
Operating Earnings before Depreciation and Amortization
Operating earnings before depreciation and amortization increased by $62.0 million, or 21.2%, from $292.9 million in the first nine months of fiscal year 2024 to $354.9 million in the corresponding period of 2025. This increase is mainly attributable to the decrease in restructuring and other costs (revenues), the favourable impact of cost reduction initiatives and the favourable exchange rate effect, partially offset by lower volume and a less favourable product mix in the Packaging Sector as well as the sale of the industrial packaging operations.
Adjusted operating earnings before depreciation and amortization increased by $1.4 million, or 0.4%, from $327.2 million in the first nine months of fiscal year 2024 to $328.6 million in the corresponding period of 2025. This increase is mainly attributable to the favourable impact of cost reduction initiatives and the favourable exchange rate effect, mostly offset by lower volume and a less favourable product mix in the Packaging Sector as well as the sale of the industrial packaging operations. A more detailed analysis of adjusted operating earnings before depreciation and amortization is presented in the section "Analysis of Sector Results - Cumulative".
Depreciation and Amortization
Depreciation and amortization decreased by $5.0 million, from $162.7 million in the first nine months of fiscal year 2024 to $157.7 million in the corresponding period of 2025. This decrease is mostly attributable to the end of the depreciation and amortization period for some items of property, plant and equipment and intangible assets and the impact of the sale of the industrial packaging operations, partially offset by the impact of items of property, plant and equipment brought into use, mainly in the Packaging Sector.
Net Financial Expenses
Net financial expenses decreased by $14.6 million, from $43.9 million in the first nine months of fiscal year 2024 to $29.3 million in the corresponding period of 2025. This favourable change is mainly explained by the reduction in net indebtedness and, to a lesser extent, the favourable exchange rate effect and the decrease in interest rates.
Income Taxes
Income taxes increased by $27.0 million, from $12.4 million in the first nine months of fiscal year 2024 to $39.4 million in the corresponding period of 2025. This increase is mainly due to the taxable gain realized on the sale of the industrial packaging operations, which significantly contributed to the increase in earnings.
Adjusted income taxes decreased by $1.4 million, from $37.0 million in the first nine months of fiscal year 2024, for an effective tax rate of 21.6%, to $35.6 million in the corresponding period of 2025, for an effective tax rate of 19.3%. The decrease in the effective tax rate is mainly attributable to differences between the accounting and tax treatment that had an unfavourable impact in 2024 and a favourable impact in 2025 as well as a favourable prior years adjustment.
Net Earnings Attributable to Shareholders of the Corporation
Net earnings attributable to shareholders of the Corporation increased by $54.7 million, or 74.5%, from $73.4 million in the first nine months of fiscal year 2024 to $128.1 million in the corresponding period of 2025. This increase is mainly attributable to the previously explained increase in operating earnings before depreciation and amortization as well as lower financial expenses and depreciation and amortization, partially offset by higher income taxes. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.85 to $1.53, respectively.
Adjusted net earnings attributable to shareholders of the Corporation increased by $14.5 million, or 10.8%, from $134.1 million in the first nine months of fiscal year 2024 to $148.6 million in the corresponding period of 2025. This increase is mainly attributable to lower financial expenses. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $1.55 to $1.77, respectively.
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Management's Discussion and Analysis - 9
ANALYSIS OF SECTOR RESULTS - THIRD QUARTER
(Unaudited)
Table #3:
| (in millions of dollars) | Packaging | Retail Services and Printing | Other | Consolidated results |
|---|---|---|---|---|
| Revenues - Third quarter of 2024 | $417.3 | $250.0 | $32.7 | $700.0 |
| Business acquisition and disposal | (16.4) | 1.5 | — | (14.9) |
| Exchange rate effect | 3.9 | 1.0 | — | 4.9 |
| Organic growth (decline) | (13.6) | 8.7 | (0.7) | (5.6) |
| Revenues - Third quarter of 2025 | $391.2 | $261.2 | $32.0 | $684.4 |
| Adjusted operating earnings before depreciation and amortization (1) - Third quarter of 2024 | $64.9 | $50.8 | $5.3 | $121.0 |
| Business acquisition and disposal | (3.4) | 0.1 | — | (3.3) |
| Exchange rate effect | 0.8 | 0.8 | — | 1.6 |
| Stock-based compensation | — | — | (0.9) | (0.9) |
| Organic growth (decline) | 3.0 | 0.3 | 0.9 | 4.2 |
| Adjusted operating earnings before depreciation and amortization (1) - Third quarter of 2025 | $65.3 | $52.0 | $5.3 | $122.6 |
(1) Please refer to Table #2 in the section entitled "Reconciliation of Non-IFRS Financial Measures" in this Management's Discussion and Analysis for adjusted data presented above.
Packaging Sector
Packaging Sector revenues decreased by $26.1 million, or 6.3%, from $417.3 million in the third quarter of 2024 to $391.2 million in the third quarter of 2025. This decrease is mainly due to the sale of the industrial packaging operations and lower volume in several markets, except, notably, the medical market, partially offset by the favourable exchange rate effect.
Adjusted operating earnings before depreciation and amortization increased by $0.4 million, or 0.6%, from $64.9 million in the third quarter of 2024 to $65.3 million in the third quarter of 2025. This increase is mainly attributable to cost reduction initiatives and the favourable exchange rate effect, mostly offset by lower volume, a less favourable product mix and the sale of the industrial packaging operations. The sector's adjusted operating earnings margin before depreciation and amortization increased from 15.6% in the third quarter of 2024 to 16.7% in the third quarter of 2025, mainly as a result of the above-mentioned items.
Retail Services and Printing Sector
Retail Services and Printing Sector revenues increased by $11.2 million, or 4.5%, from $250.0 million in the third quarter of 2024 to $261.2 million in the third quarter of 2025. This increase is mostly attributable to higher volume for book printing activities, in particular as a result of more competitive prices due to favourable exchange rates that facilitate securing contracts, the recent acquisition and, to a lesser extent, the favourable exchange rate effect, partially offset by lower volume for flyer printing activities.
Adjusted operating earnings before depreciation and amortization increased by $1.2 million, or 2.4%, from $50.8 million in the third quarter of 2024 to $52.0 million in the third quarter of 2025. This increase is mainly attributable to the previously explained higher volume and the favourable exchange rate effect, mostly offset by lower volume for flyer printing activities and a less favourable product mix. The sector's adjusted operating earnings margin before depreciation and amortization decreased from 20.3% in the third quarter of 2024 to 19.9% in the third quarter of 2025, mainly as a result of the above-mentioned items.
Other
Revenues decreased by $0.7 million, or 2.1%, from $32.7 million in the third quarter of 2024 to $32.0 million in the third quarter of 2025. This decrease is due to lower volume in the Media Sector, which was mainly caused by the end of the contract related to SEAO, Quebec's electronic tendering system, and the increase in inter-sector eliminations, partially offset by the solid performance of the Education segment.
Adjusted operating earnings before depreciation and amortization remained stable at $5.3 million in the third quarter of 2024 and the third quarter of 2025, as the higher volumes in the Education segment was offset by the increase in the stock-based compensation expense.
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Management's Discussion and Analysis - 10
ANALYSIS OF SECTOR RESULTS - CUMULATIVE
(Unaudited)
Table #4 :
| (in millions of dollars) | Packaging | Retail Services and Printing | Other | Consolidated results |
|---|---|---|---|---|
| Revenues - Nine months ended July 28, 2024 | $1,227.9 | $781.4 | $54.3 | $2,063.6 |
| Business acquisition and disposal | (47.3) | 1.5 | — | (45.8) |
| Exchange rate effect | 37.6 | 3.1 | — | 40.7 |
| Organic growth (decline) | (33.6) | (4.2) | (9.2) | (47.0) |
| Revenues - Nine months ended July 27, 2025 | $1,184.6 | $781.8 | $45.1 | $2,011.5 |
| Adjusted operating earnings before depreciation and amortization (1) - Nine months ended July 28, 2024 | $196.5 | $137.4 | $(6.7) | $327.2 |
| Business acquisition and disposal | (9.7) | 0.1 | — | (9.6) |
| Exchange rate effect | 7.0 | 1.7 | (0.2) | 8.5 |
| Stock-based compensation | — | — | (1.7) | (1.7) |
| Organic growth (decline) | (4.1) | 9.1 | (0.8) | 4.2 |
| Adjusted operating earnings before depreciation and amortization (1) - Nine months ended July 27, 2025 | $189.7 | $148.3 | $(9.4) | $328.6 |
(1) Please refer to Table #2 in the section entitled "Reconciliation of Non-IFRS Financial Measures" in this Management's Discussion and Analysis for adjusted data presented above.
Packaging Sector
Packaging Sector revenues decreased by $43.3 million, from $1,227.9 million in the first nine months of fiscal year 2024 to $1,184.6 million in the corresponding period of 2025. This decrease is mainly due to the sale of the industrial packaging operations and lower volume in several markets, except, notably, the medical market, partially offset by the favourable exchange rate effect.
Adjusted operating earnings before depreciation and amortization decreased by $6.8 million, from $196.5 million in the first nine months of fiscal year 2024 to $189.7 million in the corresponding period of 2025. This decrease is mainly due to lower volume and a less favourable product mix, as well as the sale of the industrial packaging operations, partially offset by cost reduction initiatives and the favourable exchange rate effect. The sector's adjusted operating earnings margin before depreciation and amortization remained stable at 16.0% in the first nine months of fiscal year 2024 and in the corresponding period of 2025, mainly as a result of the above-mentioned items.
Retail Services and Printing Sector
Retail Services and Printing Sector revenues increased by $0.4 million, from $781.4 million in the first nine months of fiscal year 2024 to $781.8 million in the corresponding period of 2025. This increase is mostly attributable to higher book printing activities, in particular as a result of more competitive prices due to favourable exchange rates that facilitate securing contracts, the favourable exchange rate effect and our recent acquisition, offset by lower volume for flyer printing activities.
Adjusted operating earnings before depreciation and amortization increased by $10.9 million, from $137.4 million in the first nine months of fiscal year 2024 to $148.3 million in the corresponding period of 2025. This increase is mainly attributable to the previously explained higher volume for book printing activities as well as cost reduction initiatives and, to a lesser extent, the favourable exchange rate effect. The sector's adjusted operating earnings margin before depreciation and amortization increased from 17.6% in the first nine months of fiscal year 2024 to 19.0% in the corresponding period of 2025, mainly as a result of the above-mentioned items.
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Management's Discussion and Analysis - 11
Other
Revenues decreased by $9.2 million, from $54.3 million in the first nine months of fiscal year 2024 to $45.1 million in the corresponding period of 2025. This decrease is due to lower volume in the Media Sector, which was mainly caused by the end of the contract related to SEAO, Quebec's electronic tendering system, as well as the increase in inter-sector eliminations, partially offset by higher volume in the Education segment.
Adjusted operating earnings before depreciation and amortization decreased by $2.7 million, from $-6.7 million in the first nine months of fiscal year 2024 to $-9.4 million in the corresponding period of 2025. This decrease is mainly due to the end of the contract related to SEAO in the Media Sector and to the increase in the stock-based compensation expense, partially offset by cost reduction initiatives and higher volume in the Education segment.
SUMMARY OF QUARTERLY RESULTS
(Unaudited)
Table #5 summarizes selected consolidated financial information derived from the Corporation's audited annual consolidated financial statements and some non-IFRS financial measures for each of the last eight quarters.
Table #5:
| 2025 | 2024 | 2023 | ||||||
|---|---|---|---|---|---|---|---|---|
| (in millions of dollars, unless otherwise indicated and per share amounts) | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 |
| Revenues | $ 684.4 | $ 684.1 | $ 643.0 | $ 749.3 | $ 700.0 | $ 683.2 | $ 680.4 | $779.7 |
| Operating earnings before depreciation and amortization | 109.0 | 104.5 | 141.4 | 131.8 | 121.5 | 88.7 | 82.7 | 123.2 |
| Adjusted operating earnings before depreciation and amortization (1) | 122.6 | 108.5 | 97.5 | 142.2 | 121.0 | 110.1 | 96.1 | 145.5 |
| Adjusted operating earnings margin before depreciation and amortization (2) | 17.9% | 15.9% | 15.2% | 19.0% | 17.3% | 16.1% | 14.1% | 18.7% |
| Operating earnings | $ 57.4 | $ 51.1 | $ 88.7 | $ 79.3 | $ 69.2 | $ 33.2 | $ 27.8 | $ 66.7 |
| Adjusted operating earnings (1) | 85.4 | 70.1 | 59.6 | 105.1 | 84.2 | 72.3 | 59.0 | 107.3 |
| Adjusted operating earnings margin (1) | 12.5% | 10.2% | 9.3% | 14.0% | 12.0% | 10.6% | 8.7% | 13.8% |
| Net earnings attributable to shareholders of the Corporation | $ 38.7 | $ 33.8 | $ 55.6 | $ 47.9 | $ 43.6 | $ 15.9 | $ 13.9 | $ 41.7 |
| Net earnings attributable to shareholders of the Corporation per share | 0.46 | 0.40 | 0.66 | 0.57 | 0.50 | 0.18 | 0.16 | 0.48 |
| Adjusted net earnings attributable to shareholders of the Corporation (1) | 58.9 | 48.2 | 41.5 | 67.3 | 51.4 | 45.3 | 37.4 | 71.8 |
| Adjusted net earnings attributable to shareholders of the Corporation per share (1) | 0.70 | 0.58 | 0.49 | 0.79 | 0.60 | 0.52 | 0.43 | 0.83 |
| Adjusted net earnings attributable to shareholders of the Corporation as a % of the fiscal year | —% | —% | —% | 34% | 26% | 22% | 18% | 41% |
(1) Please refer to Table #2 in the section entitled "Reconciliation of Non-IFRS Financial Measures" in this Management's Discussion and Analysis for adjusted data presented above.
(2) Corresponds to adjusted operating earnings before depreciation and amortization divided by revenues.
The variability of financial information for interim periods is influenced by many factors, such as:
- The impact of business acquisitions and disposals;
- The effect of exchange rate fluctuations;
- The effect of interest rate fluctuations;
- The impact of the change in the share price on the stock-based compensation expense;
- The impact of changes in price of raw materials, including resin and paper; and
- The impact of inflation on costs.
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Management's Discussion and Analysis - 12
FINANCIAL POSITION, LIQUIDITY AND CAPITAL STRUCTURE
(Unaudited)
Table #6:
| Three months ended | Nine months ended | |||
|---|---|---|---|---|
| (in millions of dollars) | July 27, 2025 | July 28, 2024 | July 27, 2025 | July 28, 2024 |
| Operating activities | ||||
| Cash flows generated by operating activities before changes in non-cash operating items and income taxes paid | $113.5 | $112.6 | $313.0 | $284.7 |
| Changes in non-cash operating items | (21.1) | (7.3) | (91.6) | (28.2) |
| Income taxes paid | (14.6) | (7.0) | (39.7) | (27.8) |
| Cash flows from operating activities | $77.8 | $98.3 | $181.7 | $228.7 |
| Investing activities | ||||
| Business combination, net of acquired cash | $(4.1) | $— | $(4.1) | $— |
| Business disposal | — | — | 132.0 | — |
| Acquisitions of property, plant and equipment | (22.5) | (23.8) | (52.3) | (75.9) |
| Disposals of property, plant and equipment and other | 0.1 | 7.3 | 0.2 | 8.8 |
| Increase in intangible assets | (7.1) | (6.8) | (23.9) | (21.4) |
| Cash flows from investing activities | $(33.6) | $(23.3) | $51.9 | $(88.5) |
| Financing activities | ||||
| Reimbursement of long-term debt | $(0.7) | $(0.2) | $(201.9) | $(2.2) |
| Net (decrease) increase in credit facilities | (16.0) | (1.3) | 49.0 | (75.4) |
| Settlement of cross-currency fixed-to-floating interest rate swaps | — | — | (25.9) | — |
| Financial expenses paid on long-term debt and credit facilities | (8.3) | (6.1) | (31.3) | (27.7) |
| Repayment of principal on lease liabilities | (6.4) | (5.6) | (18.5) | (17.2) |
| Interest paid on lease liabilities | (1.0) | (0.8) | (3.1) | (2.5) |
| Dividends | (18.9) | (19.4) | (140.2) | (58.4) |
| Shares repurchased | — | (17.7) | (16.3) | (17.7) |
| Cash flows from financing activities | $(51.3) | $(51.1) | $(388.2) | $(201.1) |
| Effect of exchange rate changes on cash denominated in foreign currencies | (0.2) | 0.9 | 5.3 | 3.8 |
| Net change in cash | $(7.3) | $24.8 | $(149.3) | $(57.1) |
Table #7:
| Financial position | As at July 27, 2025 | As at October 27, 2024 |
|---|---|---|
| Net indebtedness (1) | $790.5 | $803.8 |
| Net indebtedness ratio (1) | 1.68x | 1.71x |
| Credit rating | ||
| DBRS | BBB (low) | BBB (low) |
| Outlook | Stable | Stable |
| Standard and Poor's | BBB- | BBB- |
| Outlook | Stable | Stable |
| Consolidated Statements of Financial Position | As at July 27, 2025 | As at October 27, 2024 |
| Current assets | $915.1 | $1,214.6 |
| Current liabilities | 659.8 | 765.3 |
| Total assets | 3,265.6 | 3,641.3 |
| Total liabilities | 1,388.1 | 1,726.5 |
(1) Please refer to Table #2 in the section entitled "Reconciliation of Non-IFRS Financial Measures" in this Management's Discussion and Analysis for adjusted data presented above.
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Management's Discussion and Analysis - 13
ANALYSIS OF FINANCIAL POSITION - THIRD QUARTER
Cash Flows from Operating Activities
Cash flows from operating activities decreased, from $98.3 million in the third quarter of 2024 to $77.8 million in the third quarter of 2025. This decreased is mainly explained by an unfavourable change in working capital, notably caused by an unfavourable change in accounts payable and prepaid expenses, as well as an increase in income taxes paid.
Cash Flows from Investing Activities
Cash flows from investing activities increased, from a cash outflow of $23.3 million in the third quarter of 2024 to a cash outflow of $33.6 million in the third quarter of 2025. This change is mainly attributable to higher disposals of real estate assets in the third quarter of 2024 and the Middleton business combination in the third quarter of 2025.
Cash Flows from Financing Activities
Cash flows from financing activities remained relatively stable, from a cash outflow of $51.1 million in the third quarter of 2024 to a cash outflow of $51.3 million in the third quarter of 2025. This change is mainly attributable to the decrease in share redemptions, mostly offset by the decrease in borrowings under the credit facilities.
LIQUIDITY ANALYSIS - CUMULATIVE
Debt Instruments
On February 3, 2025, the Corporation repaid at maturity the unsecured notes (issued in 2022) amounting to $200.0 million. Concurrently with the repayment of the unsecured notes, the Corporation repaid the cross-currency fixed-to-floating interest rate swaps (CAD fixed/USD floating) amounting to $200.0 million (US$157.1 million).
The Corporation has a credit facility amounting to $400.0 million or the U.S. dollar equivalent, which was maturing in February 2028. On February 18, 2025, the maturity was extended for two additional years, until February 2030, with similar terms. The interest rate on the credit facility is based on the Corporation's credit rating. Based on the current credit rating, the applicable rate is the Canadian Overnight Repo Rate Average ("CORRA") plus 1.970% for one-month periods or plus 1.996% for three-month periods, or the Secured Overnight Financing Rate ("SOFR") plus 1.775%, or the Canadian prime rate or the U.S. prime rate plus 0.675%.
The Corporation has another credit facility with a maximum amount of US$15.0 million ($20.6 million), which was maturing in March 2025. On February 6, 2025, the maturity was extended for an additional year, until March 2026, with similar terms. The applicable interest rate for this credit facility is SOFR plus 1.450%.
As at July 27, 2025, $49.0 million were drawn on the credit facilities and the unused amount under the credit facilities was $371.6 million.
As at July 27, 2025, the floating-rate portion of the Corporation's long-term debt represented approximately 29.0% of total debt.
Net Indebtedness
Net indebtedness decreased, from $803.8 million as at October 27, 2024 to $790.5 million as at July 27, 2025. This change is explained by the decrease in borrowings under the credit facilities and the cash flows generated by the sale of the industrial packaging operations, which were partially offset by the payment of the special dividend. The net indebtedness ratio remained relatively stable, from 1.71x as at October 27, 2024 to 1.68x as at July 27, 2025.
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Management's Discussion and Analysis - 14
CAPITAL STRUCTURE
Share Capital
Table #8:
| Shares Issued and Outstanding | As at July 27, 2025 | As at August 29, 2025 |
|---|---|---|
| Class A (Subordinate Voting Shares) | 74,112,647 | 74,112,647 |
| Class B (Multiple Voting Shares) | 9,506,272 | 9,506,272 |
| Total Class A and Class B | 83,618,919 | 83,618,919 |
On June 12, 2024, the Corporation was authorized to repurchase for cancellation, on the open market or subject to the approval of any securities authority by private agreements, between June 17, 2024 and June 16, 2025, or at an earlier date if the Corporation concludes or cancels the offer, up to 3,662,967 of its Class A Subordinate Voting Shares and up to 668,241 of its Class B Shares. The repurchases are made in the normal course of business at market prices through the Toronto Stock Exchange.
During the third quarter of 2025, the Corporation did not repurchase any of its Class A Subordinate Voting Shares or Class B Shares. During the first nine months of fiscal year 2025, the Corporation repurchased and cancelled 934,434 Class A Subordinate Voting Shares at a weighted average price of $17.38 and 3,600 Class B Shares at a weighted average price of $17.27, for a total cash consideration of $16.3 million. The excess of the total consideration over the carrying amount of the shares, amounting to $8.5 million, as well as related income taxes payable amounting to $0.3 million, were applied against retained earnings. As at July 27, 2025, the Corporation had no share repurchase program in effect.
During the third quarter and the first nine months of fiscal year 2024, the Corporation had repurchased and cancelled 1,159,758 Class A Subordinate Voting Shares at a weighted average price of $15.22 and 5,000 Class B Shares at a weighted average price of $15.37, for a total cash consideration of $17.7 million. The excess of the total consideration over the carrying amount of the shares, amounting to $7.9 million, had been applied against retained earnings.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal control. The purpose of internal control over financial reporting ("ICFR") is to provide reasonable assurance regarding the reliability of the Corporation's financial reporting and the preparation of condensed interim consolidated financial statements in accordance with IFRS. Management certifies disclosures in annual and interim filings under Regulation 52-109 using the internal control framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
During the third quarter ended July 27, 2025, no change that has materially affected or is reasonably likely to affect the ICFR was brought to the attention of management, including the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer of the Corporation.
SUBSEQUENT EVENT
Business combination
On August 7, 2025, the Corporation acquired all the shares of two Canva Group businesses, Mirazed Inc. ("Mirazed") and Intergraphics Decal Limited ("Intergraphics"). Mirazed, located in Saint-Hubert, Quebec, is recognized for its cutting-edge expertise in screen printing as well as large format digital printing, the production of promotional displays and point-of-purchase signage. Intergraphics, based in Winnipeg, Manitoba, specializes in industrial screen and digital printing. The transaction was completed for a maximum consideration of $72.7 million, subject to adjustments, including a purchase price holdback of up to $5.0 million payable 18 months after the closing date of the transaction if performance thresholds are met for the reference period, and a cash contingent consideration of up to $8.5 million payable subject to attaining pre-established financial targets. The Corporation will measure the fair value of assets acquired and liabilities assumed in the coming quarters. This acquisition allows the Corporation to strengthen its position as a leader in in-store marketing.
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Management's Discussion and Analysis - 15
OUTLOOK¹
The investments in our growth activities, including flexible packaging and in-store marketing, position us well for the future and should be a key driver of our long-term growth.
In terms of profitability, despite a weaker than anticipated demand in the third quarter, we expect to generate organic growth in adjusted operating earnings before depreciation and amortization of the Packaging Sector for fiscal 2025 compared to fiscal 2024. In the Retail Services and Printing Sector, given the higher than anticipated growth in earnings since the beginning of fiscal 2025, we expect adjusted operating earnings before depreciation and amortization for fiscal 2025 to rise compared to fiscal 2024.
Lastly, we expect to continue generating significant cash flows from operating activities, which will enable us to pursue our strategy launched in 2023 to reduce net indebtedness while investing in our growth and returning capital to our shareholders.
On behalf of Management,
(s) Donald LeCavalier
Executive Vice President and Chief Financial Officer
September 4, 2025
¹ The above outlook does not take into account the impact of the implementation of protectionist trade measures and a potential labour conflict at Canada Post on our operations and their effects on our results.
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Management's Discussion and Analysis - 16