Fourth quarter operating highlights:
- Consolidated adjusted EBITDA1 of
$33,568,000 , representing a$7,667,000 (29.6%) favourable variance from the same quarter of 2018. - $21,345,000 in adjusted EBITDA1 in the Broadcasting segment, a
$4,669,000 (28.0%) favourable variance mainly because of the acquisition of the "Évasion" and "Zeste" channels, a 24.6% increase in the adjusted EBITDA1 of the other specialty channels, which benefited from a favourable retroactive adjustment in subscription revenues, and a 13.5% increase in the adjusted EBITDA1 of the TVA Network. $1,983,000 in adjusted EBITDA1 in the Magazines segment, a$1,260,000 (-38.9%) unfavourable variance mainly because of a decrease in operating revenues, which was partially offset by savings generated by the continuation of various staff and expense rationalization plans introduced in recent quarters.$7,828,000 in adjusted EBITDA1 in the Film Production & Audiovisual Services ("MELS") segment, a$1,846,000 (30.9%) favourable variance due to the improved profitability of all of the segment's operations, including a 17.4% increase in adjusted EBITDA1 from soundstage, mobile and equipment rental, and an 81.4% decrease in negative adjusted EBITDA1 from visual effects.$2,198,000 in adjusted EBITDA1 in the new Production & Distribution segment which since April l, 2019 includes the businesses acquired through the acquisition of the Incendo group companies.
"We are very satisfied with our results for the last quarter of our financial year. Despite the many challenges we faced,
"
"In the Broadcasting segment, adjusted EBITDA1 increased because of, among other things, the addition of the "Évasion" and "Zeste" channels as well as increased subscription revenues at all the other specialty services. In this regard, we are pleased to report that we have renewed most of our distribution agreements and those cable operators have recognized the fair market value of our channels. Now Bell must recognize the fair market value of "TVA Sports" and all the specialty services about which we are currently negotiating. We will continue making representations on this issue to regulatory and government authorities. We welcome the Canadian Radio‑television and
____________________________ | |
1 See definition of adjusted EBITDA below. | |
2 Numeris – Quebec Franco, |
"In the Magazines segment, the various rationalization plans implemented in recent quarters and various operational efficiency initiatives enabled the segment to continue generating positive adjusted EBITDA1 and a 12.5% profit margin, despite a 23.9% decrease in operating revenues. Our priority is always to leverage our strong brands by maintaining rich, varied content to support their reach and popularity. Once again, we are pleased to report that
"The Film Production & Audiovisual Services segment's financial results improved in the fourth quarter of 2019, mainly because of the use of our soundstages and equipment by local and international producers, as well as higher volume of activities at all our other services, notably visual effects. At this time of proliferating dissemination platforms and strong demand for content production, MELS is well placed to sell its production services, which are gaining growing recognition beyond our borders. MELS remains a growth driver not only for the Corporation but for
"Lastly, the new Production & Distribution segment, which includes the operations of the companies in the Incendo group, made a positive contribution to the Corporation's financial results since the acquisition. In addition to diversifying our revenue streams and expanding our international presence, this acquisition will enable us to capitalize on the current strong demand for the production of original content," concluded
Fiscal 2019 results
For the fiscal year ended
The
Consolidated operating revenues amounted to
___________________________ | |
1 See definition of adjusted EBITDA below. | |
2Vividata, Winter 2020, Total Canada, 14+, |
Definition
1 Adjusted EBITDA (previously adjusted operating income (loss))
In its analysis of operating results, the Corporation defines adjusted EBITDA as net income (loss) before depreciation and amortization, financial expenses, operational restructuring costs and others, income taxes and share of income of associates. Adjusted EBITDA as defined above is not a measure of results that is consistent with International Financial Reporting Standards ("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 impairment, depreciation and amortization of tangible and intangible assets 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 adjusted EBITDA may not be identical to similarly titled measures reported by other companies.
Earnings call
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 seasonality, operational risks (including pricing actions by competitors and the risk of loss of key customers in the Film Production & Audiovisual Services and Production & Distribution segments), programming, content and production cost risks, credit risk, government regulation risks, government assistance risks, changes in economic conditions, fragmentation of the media landscape, risk related to the Corporation's ability to adapt to fast‑paced technological change and to new delivery and storage methods, and labour relation risks.
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.sedar.com 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 audited consolidated financial statements, with notes, and the annual Management's Discussion and Analysis, can be consulted on the Corporation's website at www.groupetva.ca.
(unaudited) | ||||||||
Three-month periods | Years ended | |||||||
2019 | 2018 | 2019 | 2018 | |||||
(restated) | (restated) | |||||||
Revenues | $ | 164,196 | $ | 150,466 | $ | 569,910 | $ | 551,910 |
Purchases of goods and services | 92,908 | 88,552 | 353,132 | 353,037 | ||||
Employee costs | 37,720 | 36,013 | 144,338 | 144,356 | ||||
Depreciation and amortization | 10,369 | 10,591 | 40,311 | 38,619 | ||||
Financial expenses | 850 | 792 | 3,892 | 3,285 | ||||
Operational restructuring costs and others | 853 | 1,515 | 5,890 | 1,669 | ||||
Income before tax expense and share of income of associates | 21,496 | 13,003 | 22,347 | 10,944 | ||||
Tax expense | 5,654 | 3,492 | 6,150 | 2,735 | ||||
Share of income of associates | (193) | (74) | (485) | (684) | ||||
Net income | $ | 16,035 | $ | 9,585 | $ | 16,682 | $ | 8,893 |
Net income (loss) attributable to: | ||||||||
Shareholders | $ | 16,030 | $ | 9,525 | $ | 16,452 | $ | 9,057 |
Non-controlling interest | 5 | 60 | 230 | (164) | ||||
Basic and diluted earnings per share attributable to shareholders | $ | 0.37 | $ | 0.22 | $ | 0.38 | $ | 0.21 |
| ||||||||
Three-month periods | Years ended | |||||||
2019 | 2018 | 2019 | 2018 | |||||
(restated) | (restated) | |||||||
Net income | $ | 16,035 | $ | 9,585 | $ | 16,682 | $ | 8,893 |
Other comprehensive items that will not be reclassified to income: | ||||||||
Defined benefit plans: | ||||||||
Re-measurement gain | 2,421 | 710 | 2,421 | 710 | ||||
Deferred income taxes | (644) | (188) | (644) | (188) | ||||
1,777 | 522 | 1,777 | 522 | |||||
Comprehensive income | $ | 17,812 | $ | 10,107 | $ | 18,459 | $ | 9,415 |
Comprehensive income (loss) attributable to: | ||||||||
Shareholders | $ | 17,807 | $ | 10,047 | $ | 18,229 | $ | 9,579 |
Non-controlling interest | 5 | 60 | 230 | (164) | ||||
| ||||||||||||
Equity attributable to shareholders | Equity | Total | ||||||||||
Capital | Contributed | Retained | Accumulated other comprehensive income — Defined | |||||||||
Balance as at | $ | 207,280 | $ | 581 | $ | 51,563 | $ | 2,975 | $ | 1,130 | $ | 263,529 |
Changes in accounting policies | – | – | (1,214) | – | – | (1,214) | ||||||
Balance as at | 207,280 | 581 | 50,349 | 2,975 | 1,130 | 262,315 | ||||||
Net income (loss) | – | – | 9,057 | – | (164) | 8,893 | ||||||
Other comprehensive income | – | – | – | 522 | – | 522 | ||||||
Balance as at | 207,280 | 581 | 59,406 | 3,497 | 966 | 271,730 | ||||||
Net income | – | – | 16,452 | – | 230 | 16,682 | ||||||
Other comprehensive income | – | – | – | 1,777 | – | 1,777 | ||||||
Balance as at | $ | 207,280 | $ | 581 | $ | 75,858 | $ | 5,274 | $ | 1,196 | $ | 290,189 |
| ||||||
|
| |||||
(restated) | (restated) | |||||
Assets | ||||||
Current assets | ||||||
Cash | $ | 3,383 | $ | 18,112 | $ | 21,258 |
Accounts receivable | 160,552 | 151,715 | 144,913 | |||
Income taxes | 2,508 | 3,325 | 596 | |||
Audiovisual content | 88,422 | 78,483 | 79,437 | |||
Prepaid expenses | 3,105 | 4,081 | 3,736 | |||
257,970 | 255,716 | 249,940 | ||||
Non-current assets | ||||||
Audiovisual content | 54,678 | 42,987 | 43,031 | |||
Investments | 10,598 | 11,242 | 12,851 | |||
Property, plant and equipment | 175,653 | 186,583 | 200,510 | |||
Right-of-use assets | 8,530 | 9,694 | 10,922 | |||
Intangible assets | 29,311 | 13,662 | 15,120 | |||
23,703 | 9,102 | 7,892 | ||||
Defined benefit plan asset | − | − | 2,873 | |||
Deferred income taxes | 14,703 | 14,920 | 14,453 | |||
317,176 | 288,190 | 307,652 | ||||
Total assets | $ | 575,146 | $ | 543,906 | $ | 557,592 |
Liabilities and equity | ||||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | $ | 102,003 | $ | 100,306 | $ | 104,568 |
Content rights payable | 83,244 | 70,145 | 69,244 | |||
Provisions | 1,942 | 6,356 | 7,784 | |||
Deferred revenues | 16,883 | 16,803 | 18,728 | |||
Current portion of lease liabilities | 3,238 | 3,480 | 4,298 | |||
Income taxes | 309 | 782 | 6,314 | |||
Short-term debt | 44,846 | 52,849 | 9,844 | |||
252,465 | 250,721 | 220,780 | ||||
Non-current liabilities | ||||||
Long-term debt | − | − | 52,708 | |||
Lease liabilities | 7,978 | 10,123 | 11,226 | |||
Defined benefit plan liability | 4,489 | 4,258 | − | |||
Other liabilities | 13,587 | 6,627 | 9,772 | |||
Deferred income taxes | 6,438 | 447 | 791 | |||
32,492 | 21,455 | 74,497 | ||||
Equity | ||||||
Capital stock | 207,280 | 207,280 | 207,280 | |||
Contributed surplus | 581 | 581 | 581 | |||
Retained earnings | 75,858 | 59,406 | 50,349 | |||
Accumulated other comprehensive income | 5,274 | 3,497 | 2,975 | |||
Equity attributable to shareholders | 288,993 | 270,764 | 261,185 | |||
Non-controlling interest | 1,196 | 966 | 1,130 | |||
290,189 | 271,730 | 262,315 | ||||
Total liabilities and equity | $ | 575,146 | $ | 543,906 | $ | 557,592 |
(unaudited) | ||||||||
Three-month periods | Years ended | |||||||
2019 | 2018 | 2019 | 2018 | |||||
(restated) | (restated) | |||||||
Cash flows related to operating activities | ||||||||
Net income | $ | 16,035 | $ | 9,585 | $ | 16,682 | $ | 8,893 |
Adjustments for: | ||||||||
Depreciation and amortization | 10,369 | 10,591 | 40,311 | 38,619 | ||||
Share of income of associates | (193) | (74) | (485) | (684) | ||||
Deferred income taxes | 1,567 | (17) | 1,423 | (1,350) | ||||
Gain on disposal of assets | − | − | − | (3,936) | ||||
Impairment of assets | − | − | − | 2,000 | ||||
Others | (31) | 1,101 | 10 | 1,169 | ||||
27,747 | 21,186 | 57,941 | 44,711 | |||||
Net change in non-cash operating assets and liabilities | (21,959) | (15,386) | (6,469) | (14,778) | ||||
Cash flows provided by operating activities | 5,788 | 5,800 | 51,472 | 29,933 | ||||
Cash flows related to investing activities | ||||||||
Additions to property, plant and equipment | (4,819) | (2,552) | (14,169) | (12,936) | ||||
Additions to intangible assets | (985) | (1,006) | (4,627) | (3,916) | ||||
Business acquisitions | − | (24) | (35,477) | (4,755) | ||||
Disposal of property, plant and equipment and intangible assets | − | − | − | 3,723 | ||||
Others | − | − | 293 | (405) | ||||
Cash flows used in investing activities | (5,804) | (3,582) | (53,980) | (18,289) | ||||
Cash flows related to financing activities | ||||||||
Net change in bank overdraft | (1,029) | − | − | − | ||||
Repayment of term loan | (44,825) | (2,822) | (52,939) | (9,900) | ||||
Net change in revolving credit facility | 44,863 | − | 44,863 | − | ||||
Repayment of lease liabilities | (959) | (1,321) | (4,040) | (4,890) | ||||
Others | − | − | (105) | − | ||||
Cash flows used in financing activities | (1,950) | (4,143) | (12,221) | (14,790) | ||||
Net change in cash | (1,966) | (1,925) | (14,729) | (3,146) | ||||
Cash at beginning of period | 5,349 | 20,037 | 18,112 | 21,258 | ||||
Cash at end of period | $ | 3,383 | $ | 18,112 | $ | 3,383 | $ | 18,112 |
Interest and taxes reflected as operating activities | ||||||||
Net interest paid | $ | 571 | $ | 701 | $ | 2,969 | $ | 2,927 |
Income taxes paid (net of refunds) | 1,208 | 856 | 4,854 | 12,325 |
Segmented information
(unaudited)
(in thousands of Canadian dollars)
At the beginning of the second quarter of 2019, the Corporation reorganized its business segments to better reflect changes in its operations and management structure following the acquisition of the companies in the Incendo group on
As well, since
The Corporation's operations now 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 services;
- The Magazines segment, which through its subsidiaries, notably
TVA Publications inc. and Les Publications Charron & Cie inc., publishes magazines in various fields including the arts, entertainment, television, fashion and decorating; markets digital products associated with the various magazine brands; and provides custom publishing services; - The Film Production & Audiovisual Services segment, which through its subsidiaries Mels Studios and Postproduction G.P. and Mels Dubbing Inc., provides soundstage, mobile and equipment rental services, as well as dubbing, postproduction and visual effects;
- The Production & Distribution segment, which through the companies in the Incendo group, produces and distributes television shows, movies and television series for the world market.
(unaudited) | ||||||||
Three-month periods | Years ended | |||||||
2019 | 2018 | 2019 | 2018 | |||||
(restated) | (restated) | |||||||
Revenues | ||||||||
Broadcasting | $ | 122,611 | $ | 113,259 | $ | 436,161 | $ | 417,597 |
Magazines | 15,858 | 20,827 | 64,191 | 77,708 | ||||
Film Production & Audiovisual Services | 23,590 | 19,049 | 71,259 | 68,447 | ||||
Production & Distribution | 6,795 | − | 13,371 | − | ||||
Intersegment items | (4,658) | (2,669) | (15,072) | (11,842) | ||||
164,196 | 150,466 | 569,910 | 551,910 | |||||
Adjusted EBITDA(1) | ||||||||
Broadcasting | 21,345 | 16,676 | 42,862 | 28,085 | ||||
Magazines | 1,983 | 3,243 | 10,273 | 9,347 | ||||
Film Production & Audiovisual Services | 7,828 | 5,982 | 16,253 | 17,085 | ||||
Production & Distribution | 2,198 | − | 2,838 | − | ||||
Intersegment items | 214 | − | 214 | − | ||||
33,568 | 25,901 | 72,440 | 54,517 | |||||
Depreciation and amortization | 10,369 | 10,591 | 40,311 | 38,619 | ||||
Financial expenses | 850 | 792 | 3,892 | 3,285 | ||||
Operational restructuring costs and others | 853 | 1,515 | 5,890 | 1,669 | ||||
Income before tax expense and share of income of associates | $ | 21,496 | $ | 13,003 | $ | 22,347 | $ | 10,944 |
(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 income before depreciation and amortization, financial expenses, operational restructuring costs and others, income taxes and share of income of associates. Adjusted EBITDA as defined above is not a measure of results that is consistent with IFRS. |
SOURCE
© Canada Newswire, source