TVA Group reports $14.7 million loss in final earnings report before acquired Transcontinental titles are included
The TVA Group, which recently it had acquired 14 titles from Transcontinental Inc. for $55.5 million, including The Hockey News, reported earnings today. This will be the last report before the incorporation of the acquired magazines.
Here is the earnings statement:
MONTREAL, Quebec – May 5, 2015 — TVA Group Inc. announces that it recorded a net loss attributable to shareholders in the amount of $14.7 million, or $0.57 loss per share, in the first quarter of 2015, compared with a net loss of $10.2 million, or $0.43 loss per share, in the same quarter of 2014.
- $7,691,000 consolidated adjusted operating loss,1 a $1,666,000 (-27.7%) negative variance compared with the same quarter of 2014 due to:
- $8,483,000 adjusted operating loss in the Broadcasting & Production segment, a $272,000 (-3.3%) unfavourable variance caused mainly by an increase in the “TVA Sports” channel’s adjusted operating loss, partially offset by the TVA Network, which recorded adjusted operating income for the quarter, compared with an adjusted operating loss in the same period of 2014;
- $938,000 adjusted operating income in the Magazines segment, a $1,248,000 (-57.1%) decrease due primarily to a 11.1% decrease in operating revenues, partially offset by a 3.4% decrease in operating expenses, mainly editorial costs;
- $146,000 adjusted operating loss in the Corporation’s new Film Production and Audiovisual Services segment, which includes the operations of the properties acquired from Vision Globale A.R. ltée (“Vision Globale”) on December 30, 2014.
- On April 12, 2015, the Corporation closed the transaction announced on November 17, 2014, acquiring 14 magazines, three websites and custom publishing contracts from Transcontinental Inc. for $55.5 million.
- On March 20, 2015, the Corporation completed a subscription rights offering to its shareholders, whereby the Corporation received gross proceeds totalling $110 million from the issuance of 19,434,629 Class B non-voting shares. The Corporation used the proceeds from the rights offering to reimburse the amounts due under the terms of a $100 million credit facility extended by Quebecor Media Inc.
- On February 13, 2015, Sun Media Corporation announced the discontinuation of the operations of SUN News, in which TVA Group holds a 49% interest.
“The Broadcasting & Production segment’s results for the first quarter of 2015 reflect the fact that “TVA Sports” had to absorb the full cost of its new programming while the growth in the subscriber base has not yet reached its full potential,” said Julie Tremblay, President and CEO of the Corporation. “However, the subscription revenues of “TVA Sports” have more than quadrupled compared with the same quarter of 2014 and our advertising revenues continued to grow, increasing by millions of dollars. The channel is setting new ratings records, attracting more than 2 million viewers for Stanley Cup playoff games. On its part, the TVA Network is improving its financial performance compared with the same quarter of 2014, despite a 4.0% decline in advertising revenues. The TVA Network maintained its 24.2% market share, while its two main rivals lost market share. Season 3 of the variety show La Voix was a smash hit, topping the ratings charts during the quarter with an average audience of more than 2.7 million viewer, ” also commented Julie Tremblay.
“We are happy to report that the transaction with Transcontinental closed on April 12, 2015, which means that as of the coming quarter we will be operating the 14 new titles we have acquired, as well as the three websites and other properties. We are confident that the addition of these brands to our existing portfolio will increase this segment’s profitability in the coming quarters,” continued Julie Tremblay.
“Finally, our new segment, Film Production and Audiovisual Services, completed its first quarter of operation since its acquisition on December 30, 2014. The segment’s operating results for the first quarter of 2015 are in line with the Corporation’s budget forecasts. The first quarter of the year is relatively slow in this line of business, particularly for soundstage and film equipment leasing. It should be noted that a number of major productions are now in process, including the Hollywood blockbuster X-Men, which will result significant benefits for TVA Group and for Montreal,” concluded Julie Tremblay.
Cash flows provided by operating activities totalled $25.1 million for the quarter, compared with $4.9 million in the same quarter of 2014. The $20.2 million increase was essentially due to a favourable variance in non-cash items, particularly accounts payable, rights and accrued liabilities, which was partially offset by the increase in programs, broadcast and distribution rights and inventories.