Montreal, Canada – TVA Group Inc. (“TVA Group” or the “Corporation”) announced today that it recorded operating revenues in the amount of $134.1 million in the first quarter of 2019, a slight year-over-year increase, and a net loss attributable to shareholders in the amount of $6.7 million or $0.16 per share, compared with a net loss attributable to shareholders of $4.9 million or $0.11 per share in the same quarter of 2018.
First quarter operating highlights:
- Consolidated adjusted EBITDA¹ of $3,967,000 representing a favourable variance of $626,000 from the same quarter of 2018.
- $1,971,000 adjusted EBITDA¹ in the Broadcasting & Production segment representing an unfavourable variance of $646,000 due mainly to TVA Network’s negative adjusted EBITDA¹, which was partially offset by a 34.0% increase in adjusted EBITDA¹ from the specialty services, essentially reflecting the acquisition of the “Évasion” and “Zeste” channels.
- $1,890,000 adjusted EBITDA¹ in the Magazines segment representing a favourable variance of $668,000 due mainly to savings generated by staff and expense rationalization plans implemented in recent quarters, partially offset by a decrease in operating revenues.
- $106,000 adjusted EBITDA¹ in the Film Production & Audiovisual Services (“MELS”) segment, a $604,000 favourable variance due to increased adjusted EBITDA¹ from all of the segment’s activities, particularly postproduction, with the exception of soundstage, mobile and production equipment rental, in which the volume of activities decreased.
“During the first quarter of 2019, we began the process of integrating the “Évasion” and “Zeste” channels into our Broadcasting & Production segment, generating an increase in adjusted EBITDA¹ from the specialty channels and enhancing our offer of television content. We are very pleased with the two new channels’ preliminary results and we are pressing ahead with integration in order to realize the full potential of the anticipated synergies from the acquisition.
TVA Group’s total market share increased by 2.1 points² to 38.3%² in Q1 2019. The specialty channels increased their market share by 1.8 points² partly as a result of the acquisition of “Évasion” and “Zeste”, as well as the performance of “TVA Sports”, which surged 0.7 points². With a 4.7%² market share, the “LCN” channel was the most-watched specialty channel in Québec. We are highly satisfied with the quality and performance of our specialty channels and will continue to fight for royalties that reflect their fair value,”
1 See definition of adjusted EBITDA below.
2 Numeris – Quebec Franco, January 1 to March 31, 2019, Mo-Su, 2a-2a, t2
“While the Magazines segment’s operating revenues continued to decline in the first quarter of 2019, our efforts to reduce operating expenses, increase operational efficiencies and prioritize our strong brands yielded a 15.4% decrease in operating expenses and improved financial results for the segment. According to the latest Vividata survey, we are reaching more than 9.3 million¹ readers across all platforms. Our English-language titles have nearly 6.1 million readers and our French-language titles nearly 3.8 million,” added Ms Lauzière.
“The Film Production & Audiovisual Services segment’s financial results improved substantially in the first quarter of 2019, boosted by additional volume from our acquisitions of recent quarters. MELS remains a growth driver for the Corporation and our rental and postproduction services are increasingly recognized and in demand.
Lastly, the Corporation is pleased with the acquisition of the Incendo group, a Montreal-based producer and distributor of television programs for international markets. This acquisition will help us step up our international development and expand our footprint, especially in English-language markets,” France Lauzière concluded.
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 associated corporations. Adjusted EBITDA as defined above is not a measure of results that is consistent with International Financial Reporting Standards (“IFRS”). Neither is it intended to be regarded as an alternative to other financial 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 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.
Conference call for investors
TVA Group will hold a conference call to discuss its first quarter 2019 results on May 7, 2019, at 2:30 p.m. EST. There will be a question period reserved for financial analysts. To access the call, please dial 1-877-293-8052, access code for participants 66581#. A tape recording of the call will be available from May 7 to June 7, 2019 by dialling 1-877-293-8133, conference number 1244935#, access code for participants 66581#.
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 segment), 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.
1 Vividata, Spring 2019, Total Canada, 14+, January 1 to December 31, 2018, Readership without duplication
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 http://groupetva.ca, including in particular the “Risks and Uncertainties” section of the Corporation’s annual Management’s Discussion and Analysis for the year ended December 31, 2018 and the “Risk Factors” section in the Corporation’s 2018 annual information form.
The forward-looking statements in this news release reflect the Corporation’s expectations as of May 6, 2019 and are subject to change after this date. The Corporation expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by the applicable securities laws.
TVA Group Inc., a subsidiary of Quebecor Media Inc., is a communications company engaged in the broadcasting, film and audiovisual production, and magazine publishing industries. TVA Group Inc. is North America’s largest broadcaster of French-language entertainment, information and public affairs programming and one of the largest private-sector producers of French-language content. It is also the largest publisher of French-language magazines and publishes some of the most popular English-language titles in Canada. The Corporation’s Class B shares are listed on the Toronto Stock Exchange under the ticker symbol TVA.B.
The condensed interim consolidated financial Statements, with notes, and the interim Management’s Discussion and Analysis for the three-month period ended March 31, 2019, can be consulted on the Corporation’s website at www.groupetva.ca.
Anick Dubois, CPA, CA