Highlights
First quarter 2024
$129,161,000 in revenues, a$6,942,000 (-5.1%) decrease compared with the first quarter of 2023.$17,903,000 (-$0.41 per basic share) net loss attributable to shareholders, a$5,630,000 ($0.13 per basic share) favourable variance compared with the same quarter of 2023.$19,301,000 in consolidated negative adjusted EBITDA,1 a$4,676,000 favourable variance from the same quarter of 2023.$21,259,000 in negative adjusted EBITDA1 for the Broadcasting segment, a$1,547,000 favourable variance mainly due to savings in content costs, a decrease in CRTC Part II licence fees and savings stemming from the implementation of reorganization plans that slightly offset the decrease in revenues, particularly advertising revenues.$2,605,000 in adjusted EBITDA1 for the Film Production & Audiovisual Services segment ("MELS"), a$3,160,000 favourable variance, mainly due to higher volume of soundstage, mobile and equipment rental activities and the positive impact of the discontinuation of visual effects activities, partially offset by a lower volume of postproduction activities.$319,000 in negative adjusted EBITDA1 for the Magazines segment, a$48,000 favourable variance, mainly because cost savings were slightly higher than the decrease in revenues.$370,000 in negative adjusted EBITDA1 for the Production & Distribution segment, a$15,000 unfavourable variance, due mainly to lower adjusted EBITDA generated byTVA Films , as well as a decrease in gross margin for Incendo, partially offset by savings in administrative expenses.
__________________ |
1 See definition of adjusted EBITDA below. |
Pierre Karl Péladeau, acting President and CEO of
"While most segments showed improvement, our first-quarter results were still significantly impacted by lower revenues.
"Results in the Broadcasting segment continue to be adversely affected by the decline in our advertising revenues, which are the sole source of revenue for our over-the-air network, resulting in
"2024 will be a transitional year in which we will continue to implement the major reorganization plan announced on
"Despite the many challenges facing the industry,
"To better serve its customers,
"The television industry plays a key role in our culture and society. And let's not forget the importance of TV in keeping the public informed. That's why it's imperative that the governments of
"In the Film Production & Audiovisual Services segment, our services were in high demand during the first quarter, particularly our soundstage and equipment rental activities. We are delighted to welcome two major foreign productions from Apple and Skydance to our studios.
"We also welcome the
"In the Magazines segment, results for all titles were affected by a decline in revenues, offset by cost savings. This segment has been operating in a declining market for several years. That's why we're all the more concerned about the significant reduction in government support from the
"The Production & Distribution segment had a similar first quarter to last year. Although the segment continues to be affected by a slowdown in orders in the U.S. market, Incendo has begun production of a Christmas movie for the Roku platform.
"At a time when we are operating in an uncertain environment that is affecting the entire industry, we would like to highlight the dedication of all our employees, who are committed to contributing to
"In closing, following Jean-Marc Léger's decision not to seek another term as a director, I would like to thank him, on behalf of the Board of Directors of
_________________ |
1 See definition of adjusted EBITDA below. |
Definition
Adjusted EBITDA
In its analysis of operating results, the Corporation defines adjusted EBITDA, as reconciled to net income (loss) under IFRS, as net income (loss) before depreciation and amortization, financial expenses, operational restructuring costs and other, income tax expense (recovery) and share of income of associates. Adjusted EBITDA as defined above is not a measure of results that is consistent with IFRS. It is not intended to be regarded as an alternative to other financial operating performance measures or to the statement of cash flows as a measure of liquidity. This measure should not be considered in isolation or as a substitute for other performance measures prepared in accordance with IFRS. This measure is used by management and the Board of Directors to evaluate the Corporation's consolidated results and the results of its segments. This measure eliminates the significant level of depreciation and amortization of tangible and intangible assets, including any asset impairment charges, as well as the cost associated with one-time restructuring measures, and is unaffected by the capital structure or investment activities of the Corporation and its segments. Adjusted EBITDA is also relevant because it is a significant component of the Corporation's annual incentive compensation programs. The Corporation's definition of EBITDA may not be the same as 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 the possibility that the reorganization plan announced on
The forward-looking statements in this document are made to give investors and the public a better understanding of the Corporation's circumstances and are based on assumptions it believes to be reasonable as of the day on which they were made. 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.sedarplus.ca and www.groupetva.ca, including in particular the "Risks and Uncertainties" section of the Corporation's annual Management's Discussion and Analysis for the year ended
The forward-looking statements in this news release reflect the Corporation's expectations as of
The condensed consolidated Financial Statements, with notes, and the interim Management's Discussion and Analysis for the three-month period ended
Consolidated statements of loss
(unaudited)
(in thousands of Canadian dollars, except per-share amounts)
Three-month periods ended | |||||
Note | 2024 | 2023 | |||
Revenues | 2 | $ | 129,161 | $ | 136,103 |
Purchases of goods and services | 3 | 118,556 | 123,742 | ||
Employee costs | 29,906 | 36,338 | |||
Depreciation and amortization | 6,210 | 7,182 | |||
Financial expenses (income) | 4 | 1,238 | (118) | ||
Operational restructuring costs and other | 5 | (1,892) | 902 | ||
Loss before income tax recovery and share of income | (24,857) | (31,943) | |||
Income tax recovery | (6,676) | (8,319) | |||
Share of income of associates | (278) | (91) | |||
Net loss attributable to shareholders | $ | (17,903) | $ | (23,533) | |
Basic and diluted loss per share attributable | $ | (0.41) | $ | (0.54) | |
Weighted average number of outstanding and diluted | 43,205,535 | 43,205,535 |
See accompanying notes to condensed consolidated financial statements.
Consolidated statements of comprehensive loss
(unaudited)
(in thousands of Canadian dollars)
Three-month periods ended | |||||
Note | 2024 | 2023 | |||
Net loss attributable to shareholders | $ | (17,903) | $ | (23,533) | |
Other comprehensive items that will not be reclassified to loss: | |||||
Defined benefit plans: | |||||
Re-measurement gain | 8 | 14,000 | – | ||
Deferred income taxes | (3,700) | – | |||
10,300 | – | ||||
Comprehensive loss attributable to shareholders | $ | (7,603) | $ | (23,533) |
See accompanying notes to condensed consolidated financial statements.
Consolidated statements of equity
(unaudited)
(in thousands of Canadian dollars)
Equity attributable to shareholders | |||||||||||||||
Capital | Contributed | Retained | Accumulated | Total | |||||||||||
Balance as at | $ | 207,280 | $ | 581 | $ | 129,810 | $ | 55,705 | $ | 393,376 | |||||
Net loss | – | – | (23,533) | – | (23,533) | ||||||||||
Balance as at | 207,280 | 581 | 106,277 | 55,705 | 369,843 | ||||||||||
Net loss | – | – | (24,358) | – | (24,358) | ||||||||||
Other comprehensive income | – | – | – | 1,863 | 1,863 | ||||||||||
Balance as at December 31, 2023 | 207,280 | 581 | 81,919 | 57,568 | 347,348 | ||||||||||
Net loss | – | – | (17,903) | – | (17,903) | ||||||||||
Other comprehensive income | – | – | – | 10,300 | 10,300 | ||||||||||
Balance as at | $ | 207,280 | $ | 581 | $ | 64,016 | $ | 67,868 | $ | 339,745 |
See accompanying notes to condensed consolidated financial statements.
Consolidated balance sheets
(unaudited)
(in thousands of Canadian dollars)
Note |
|
| |||
Assets | |||||
Current assets | |||||
Accounts receivable | $ | 136,902 | $ | 154,065 | |
Income taxes | 12,326 | 12,738 | |||
Audiovisual content | 143,639 | 140,696 | |||
Prepaid expenses | 7,239 | 3,408 | |||
300,106 | 310,907 | ||||
Non-current assets | |||||
Audiovisual content | 77,174 | 80,373 | |||
Investments | 12,520 | 12,242 | |||
Property, plant and equipment | 142,845 | 141,899 | |||
Intangible assets | 7,864 | 9,060 | |||
Right-of-use assets | 6,290 | 6,784 | |||
16,883 | 16,883 | ||||
Defined benefit plan asset | 8 | 53,328 | 39,867 | ||
Deferred income taxes | 11,414 | 8,495 | |||
328,318 | 315,603 | ||||
Total assets | $ | 628,424 | $ | 626,510 |
TVA GROUP INC.
Consolidated balance sheets (continued)
(unaudited)
(in thousands of Canadian dollars)
Note |
|
| |||
Liabilities and equity | |||||
Current liabilities | |||||
Bank indebtedness | $ | 3,574 | $ | 176 | |
Accounts payable, accrued liabilities and provisions | 134,517 | 130,054 | |||
Content rights payable | 48,741 | 42,417 | |||
Deferred revenues | 7,148 | 8,444 | |||
Income taxes | 611 | 1,619 | |||
Current portion of lease liabilities | 1,816 | 1,876 | |||
196,407 | 184,586 | ||||
Non-current liabilities | |||||
Debt due to the parent corporation | 80,902 | 83,883 | |||
Lease liabilities | 5,332 | 5,777 | |||
Other liabilities | 5,848 | 4,900 | |||
Deferred income taxes | 190 | 16 | |||
92,272 | 94,576 | ||||
Equity | |||||
Capital stock | 6 | 207,280 | 207,280 | ||
Contributed surplus | 581 | 581 | |||
Retained earnings | 64,016 | 81,919 | |||
Accumulated other comprehensive income | 67,868 | 57,568 | |||
Equity | 339,745 | 347,348 | |||
Total liabilities and equity | $ | 628,424 | $ | 626,510 |
See accompanying notes to condensed consolidated financial statements.
Consolidated statements of cash flows
(unaudited)
(in thousands of Canadian dollars)
Three-month periods ended | |||||
Note | 2024 | 2023 | |||
Cash flows related to operating activities | |||||
Net loss | $ | (17,903) | $ | (23,533) | |
Adjustments for: | |||||
Depreciation and amortization | 6,210 | 7,182 | |||
Gain on disposal of property, plant and equipment | 5 | (2,309) | – | ||
Share of income of associates | (278) | (91) | |||
Deferred income taxes | (6,445) | 1,054 | |||
Other | 19 | 13 | |||
(20,706) | (15,375) | ||||
Net change in non-cash balances related to operating items | 21,523 | 24,937 | |||
Cash flows provided by operating activities | 817 | 9,562 | |||
Cash flows related to investing activities | |||||
Additions to property, plant and equipment | (2,292) | (1,667) | |||
Additions to intangible assets | (1,018) | (125) | |||
Disposal of property, plant and equipment | 5 | 2,600 | – | ||
Cash flows used in investing activities | (710) | (1,792) | |||
Cash flows related to financing activities | |||||
Net change in bank indebtedness | 3,398 | 2,106 | |||
Net change in syndicated renewable credit facility | – | (8,970) | |||
Net change of debt due to the parent corporation | (3,000) | – | |||
Repayment of lease liabilities | (505) | (853) | |||
Other | – | (53) | |||
Cash flows used in financing activities | (107) | (7,770) | |||
Net change in cash | – | – | |||
Cash at beginning of period | – | – | |||
Cash at end of period | $ | – | $ | – | |
Interest and income taxes reflected as operating activities | |||||
Net interest paid | $ | 1,783 | $ | 298 | |
Income taxes paid | 365 | 1,209 |
See accompanying notes to condensed consolidated financial statements.
Notes to condensed consolidated financial statements
Three-month periods ended
(Tabular amounts are expressed in thousands of Canadian dollars, except per share and per option amounts)
The Corporation's businesses experience significant seasonality due to, among other factors, seasonal advertising patterns, consumers' viewing, reading and listening habits, demand for production services from international and local producers, and demand for content from global broadcasters. 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 spending. In view of the seasonal nature of some of the Corporation's activities, the results of operations for interim periods should not necessarily be considered indicative of full-year results.
Notes to condensed consolidated financial statements (continued)
Three-month periods ended
(Tabular amounts are expressed in thousands of Canadian dollars, except per share and per option amounts)
1. Basis of presentation
These consolidated financial statements were prepared in accordance with the International Financial Reporting Standards ("IFRS") issued by the
These condensed consolidated financial statements were approved by the Corporation's Board of Directors on
Certain comparative figures for the three-month period ended
2. Revenues
Three-month periods ended | ||||
2024 | 2023 | |||
Advertising services | $ | 63,015 | $ | 68,780 |
Royalties | 32,169 | 33,309 | ||
Rental, postproduction and distribution services and other services rendered (1) | 21,808 | 20,709 | ||
Product sales (2) | 12,169 | 13,305 | ||
$ | 129,161 | $ | 136,103 |
(1) | Revenues from rental of soundstages, mobiles, equipment and rental space amounted to |
(2) | Revenues from product sales include newsstand and subscription sales of magazines and sales of audiovisual content. |
Notes to condensed consolidated financial statements (continued)
Three-month periods ended
(Tabular amounts are expressed in thousands of Canadian dollars, except per share and per option amounts)
3. Purchases of goods and services
Three-month periods ended | ||||
2024 | 2023 | |||
Rights, audiovisual content costs and costs of services rendered | $ | 89,419 | $ | 96,251 |
Printing and distribution | 3,084 | 3,303 | ||
Services rendered by the parent corporation: | ||||
• Commissions on advertising sales | 5,271 | 6,129 | ||
• Other | 3,435 | 2,457 | ||
Building costs | 4,642 | 4,390 | ||
Marketing, advertising and promotion | 4,395 | 4,309 | ||
Other | 8,310 | 6,903 | ||
$ | 118,556 | $ | 123,742 |
4. Financial expenses (income)
Three-month periods ended | |||||
2024 | 2023 | ||||
Interest on debt(1) | $ | 1,766 | $ | 249 | |
Amortization of financing costs | 19 | 13 | |||
Interest on lease liabilities | 98 | 102 | |||
Interest income related to defined benefit plans | (417) | (504) | |||
Foreign exchange (gain) loss | (108) | 92 | |||
Other | (120) | (70) | |||
$ | 1,238 | $ | (118) |
(1) | For the three-month period ended |
Notes to condensed consolidated financial statements (continued)
Three-month periods ended
(Tabular amounts are expressed in thousands of Canadian dollars, except per share and per option amounts)
5. Operational restructuring costs and other
Three-month periods ended | ||||
2024 | 2023 | |||
Operational restructuring costs | $ | 417 | $ | 902 |
Gain on disposal of property, plant and equipment | (2,309) | – | ||
$ | (1,892) | $ | 902 |
Operational restructuring costs
For the three-month periods ended
2024 | 2023 | |||
Broadcasting | $ | 303 | $ | 585 |
Film Production & Audiovisual Services | 3 | 174 | ||
Magazines | 111 | 111 | ||
Production & Distribution | – | 32 | ||
$ | 417 | $ | 902 |
Gain on disposal of fixed assets
During the three-month period ended
6. Capital stock
(a) Authorized capital stock
An unlimited number of Class A common shares, participating, voting, without par value.
An unlimited number of Class B shares, participating, non-voting, without par value.
An unlimited number of preferred shares, non–participating, non-voting, with a par value of
Notes to condensed consolidated financial statements (continued)
Three-month periods ended
(Tabular amounts are expressed in thousands of Canadian dollars, except per share and per option amounts)
6. Capital stock (continued)
(b) Issued and outstanding capital stock
|
| ||||
4,320,000 Class A common shares | $ | 72 | $ | 72 | |
38,885,535 Class B shares | 207,208 | 207,208 | |||
$ | 207,280 | $ | 207,280 |
7. Stock-based compensation and other stock-based payments
(a) Stock option plans
Outstanding options | ||||
Number | Weighted average | |||
Balance as at | 393,774 | $ | 2.42 | |
Vested options as at | 134,527 | $ | 2.87 | |
Quebecor | ||||
Balance as at | 85,656 | $ | 31.96 | |
Vested options as at | 17,798 | $ | 32.13 |
(b) Deferred stock unit ("DSU") plan for directors
Outstanding units | ||||
Corporation stock units | ||||
Balance as at December 31, 2023 | 533,955 | |||
Granted | 21,228 | |||
Balance as at | 555,183 |
Notes to condensed consolidated financial statements (continued)
Three-month periods ended
(Tabular amounts are expressed in thousands of Canadian dollars, except per share and per option amounts)
7. Stock-based compensation and other stock-based payments (continued)
(c) Stock-based compensation expense
For the three-month period ended
8. Pension plans and postretirement benefits
The gain on remeasurement of defined benefit plans recognized in the consolidated statement of comprehensive loss for the three-month period ended
9. Segmented information
The Corporation's operations consist of the following segments:
- The Broadcasting segment, which includes the operations of TVA Network, specialty services, the marketing of digital products associated with the various televisual brands, and commercial production and custom publishing services, including those of its Communications Qolab inc. subsidiary;
- The Film Production & Audiovisual Services segment, which through its subsidiaries
Mels Studios andPostproduction G.P. and Mels Dubbing Inc. provides soundstage, mobile and production equipment rental services, as well as dubbing and described video ("media accessibility services"), postproduction and virtual production services; - The Magazines segment, which through its
TVA Publications inc. subsidiary publishes magazines in various fields including the arts, entertainment, television, fashion and decorating, and markets digital products associated with the various magazine brands; - The Production & Distribution segment, which through the companies in the Incendo group and the TVA Films division produces and distributes television shows, movies and television series for the world market.
Notes to condensed consolidated financial statements (continued)
Three-month periods ended
(Tabular amounts are expressed in thousands of Canadian dollars, except per share and per option amounts)
9. Segmented information (continued)
Three-month periods ended | ||||
2024 | 2023 | |||
Revenues | ||||
Broadcasting | $ | 107,663 | $ | 116,010 |
Film Production & Audiovisual Services | 16,250 | 14,272 | ||
Magazines | 7,619 | 8,647 | ||
Production & Distribution | 1,876 | 2,341 | ||
Intersegment items | (4,247) | (5,167) | ||
129,161 | 136,103 | |||
(Negative adjusted EBITDA) adjusted EBITDA (1) | ||||
Broadcasting | (21,259) | (22,806) | ||
Film Production & Audiovisual Services | 2,605 | (555) | ||
Magazines | (319) | (367) | ||
Production & Distribution | (370) | (355) | ||
Intersegment items | 42 | 106 | ||
(19,301) | (23,977) | |||
Depreciation and amortization | 6,210 | 7,182 | ||
Financial expenses (income) | 1,238 | (118) | ||
Operational restructuring costs and other | (1,892) | 902 | ||
Loss before income tax recovery and share of income of associates | $ | (24,857) | $ | (31,943) |
The above-noted intersegment items represent the elimination of normal course business transactions between the Corporation's business segments.
(1) | The Chief Executive Officer uses adjusted EBITDA as a measure of financial performance for assessing the performance of each of the Corporation's segments. Adjusted EBITDA is defined as net loss before depreciation and amortization, financial expenses (income), operational restructuring costs and other, income tax recovery and share of income of associates. Adjusted EBITDA as defined above is not a measure of results that is consistent with IFRS. |
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