Transcontinental Inc. (which recently changed its consumer brand as TC Transcontinental) saw its fourth-quarter profit drop 82% to $8 million, largely due to a devaluation of the printing and published company’s discontinued operations.
That compares to a profit of $44.5 million in the same quarter in 2010, the Montreal-based company said Thursday.
Transcontinental booked a goodwill charge of $52.2 million related to such things as discontinued operations in the United States and Mexico.
Goodwill is an intangible asset that arises during acquisitions and it’s partially or completely written down if the estimated long-term value of the affected business falls below certain thresholds. The estimations are often done once a year.
In its biggest deal this year, the Montreal-based company transferred its American and Mexican business units to Quad/Graphics. In return, Transcontinental got all of Quad/Graphics’ Canadian operations outside of Vancouver.
“This past year alone we aligned our business portfolio with our strategy by making strategic acquisitions, divesting non-core businesses and consolidating our operations,” chief executive Francois Olivier said in a news release.
“We also signed new contracts and launched new products and services to develop both our traditional and new digital offering. In fact, we have now built a business of close to $200 million in digital and interactive solutions,” he said.
Transcontinental earned 10 cents per share, down from 55 cents in the same quarter last year.
Excluding unusual items and discontinued operations, adjusted net income was down 4% to $60.2 million, or 74 cents per share, from $62.7 million, or 78 cents per share a year ago.
For fiscal 2011, net income was down by 53% to $77.8 million, or 96 cents per share, from $166.6 million, or $2.06 per share.
Transcontinental increased its revenues in fiscal 2011 by 1% to $2.04 million, up from $2.03 million in 2010, as a result of new printing contracts, notably from its expanded relationship with The Globe and Mail newspaper.
But the company said it had lower volume the printing of magazines, books and catalogues and marketing products as well as educational book publishing activities.
Transcontinental is the largest printer in Canada and Mexico, and fourth-largest in North America. It is the leading publisher of consumer magazines and French-language educational resources and community newspapers in Quebec and the Atlantic provinces.
