Second quarter operating highlights:
- Consolidated adjusted EBITDA1 of
$7,366,000 , a$3,602,000 favourable variance from the same quarter of 2019. $3,470,000 in adjusted EBITDA1 in the Broadcasting segment, a$5,076,000 favourable variance due to a 59.4% improvement in negative adjusted EBITDA1 at the specialty channels, particularly "TVA Sports ," whose costs reflect a significant reduction in the sporting events broadcast by the channel, including postponement of theNational Hockey League ("NHL") playoffs, partially offset by a 38.4% decrease in the adjusted EBITDA1 of TVA Network.$507,000 in adjusted EBITDA1 in the Film Production & Audiovisual Services segment, a$1,330,000 unfavourable variance caused primarily by the decreased profitability of soundstage, mobile and equipment rental and of postproduction activities as a result of the current health crisis. The segment's other activities posted increased profitability.$2,890,000 in adjusted EBITDA1 in the Magazines segment, a$321,000 unfavourable variance resulting mainly from discontinuation of some titles, partially offset by the performance of the other titles, the publication frequency of which was reviewed, generating cost savings in excess of the decrease in their operating revenues.$428,000 in adjusted EBITDA1 in the Production & Distribution segment, a$106,000 favourable variance due mainly to savings in administrative expenses, which outweighed the decrease in gross margin on film production and distribution.
__________________________________ | |
1 | See definition of adjusted EBITDA below. |
"As expected, the COVID-19 pandemic significantly impacted our results in the second quarter of 2020. Many of our activities were curtailed to comply with
"
"The Film Production & Audiovisual Services segment's financial results were significantly affected by the pandemic, forcing the suspension of film shoots, including a
"While the Magazines segment's operating revenues continued their decline in the second quarter of 2020, exacerbated by the current situation, our efforts yielded a 37.8% decrease in operating expenses and enabled the segment to continue making a positive contribution to the Corporation's operating results. This performance was made possible by the speed with which our people adjusted to the situation, temporarily curtailed the release of some titles and adjusted our content to address our readers' interests during the crisis. Protecting the strong brands that make
"The Production & Distribution segment, which includes the operations of the companies in the Incendo group, continues to make a positive contribution to the Corporation's financial results. In addition to diversifying our revenue streams and expanding our presence internationally, particularly in English-language markets, this segment positions us to take advantage of the anticipated demand for production of original content, which will have been boosted by the current crisis. We are already planning the resumption of the segment's activities, which we hope to be able to accelerate through co-productions with
"Once again, I sincerely thank all our employees in all our segments and all regions of
__________________________________ | |
1 | Numeris – French Quebec, |
2 | Vividata, Spring 2020, Total Canada, 14+, |
Update on the COVID-19 situation
The second quarter results must be viewed in the context of the COVID-19 pandemic, an unprecedented situation with major consequences for Canadians and indeed the global economy. As a provider of essential services, our priority is to continue our mission of informing and entertaining the public. We kept our continuous news services available to all on our various broadcasting platforms and provided free access to our "LCN" all-news specialty channel throughout the quarter.
We expect the financial impacts of this crisis will continue to be felt in the coming quarters, including:
- significant reduction in advertising revenues, which will inevitably affect the Broadcasting and Magazines segments;
- increase in bad debts as a result of the precarious situation of some advertisers;
- significant variability in our revenues and content costs related to live broadcasts of sporting events organized by professional leagues, as they resume their activities while cancelling some events and making significant changes to formats and broadcast schedules;
- reduction in the publication frequency of some periodicals, which will affect revenues in the Magazines segment;
- decline in the level of activity in the MELS segment and in the Production & Distribution segment resulting from a slow and complex resumption of our content production activities due to factors such as the need to comply with health precautions and physical distancing rules on the set, the closing of borders with some countries, and production insurance challenges.
On
Given the uncertainty surrounding the duration of the pandemic and its potential impacts, we are currently unable to predict the overall effect it will have on our operating and financial results. However, we believe that our current sound financial health, our strong balance sheet and the steps we have taken will enable us to continue to deliver positive cash flows.
Definition
Adjusted EBITDA
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.
Conference call for investors
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, labour relation risks, and the risks related to public health emergencies, including COVID-19, as well as any emergency measures implemented by government.
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 condensed consolidated financial statements as of
| |||||||||
Three-month periods | Six-month periods | ||||||||
Note | 2020 | 2019 | 2020 | 2019 | |||||
Revenues | 2 | $ | 103,855 | $ | 145,955 | $ | 240,989 | $ | 280,096 |
Purchases of goods and services | 3 | 81,817 | 104,951 | 173,556 | 198,876 | ||||
Employee costs | 3 | 14,672 | 37,240 | 51,560 | 73,489 | ||||
Depreciation and amortization | 8,471 | 9,722 | 17,002 | 18,787 | |||||
Financial expenses | 4 | 665 | 1,047 | 1,335 | 2,004 | ||||
Operational restructuring costs and others | 5 | 1,802 | 1,477 | 2,104 | 4,645 | ||||
Loss before tax recovery and share of income of associates | (3,572) | (8,482) | (4,568) | (17,705) | |||||
Tax recovery | (666) | (2,245) | (693) | (4,637) | |||||
Share of income of associates | (169) | (196) | (426) | (347) | |||||
Net loss | $ | (2,737) | $ | (6,041) | $ | (3,449) | $ | (12,721) | |
Net (loss) income attributable to: | |||||||||
Shareholders | $ | (2,744) | $ | (6,224) | $ | (3,467) | $ | (12,939) | |
Non-controlling interest | 7 | 183 | 18 | 218 | |||||
Basic and diluted loss per share attributable to shareholders | 7 c) | $ | (0.06) | $ | (0.14) | $ | (0.08) | $ | (0.30) |
See accompanying notes to condensed consolidated financial statements.
| |||||||||||
Three-month periods | Six-month periods | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Net loss | $ | (2,737) | $ | (6,041) | $ | (3,449) | $ | (12,721) | |||
Other comprehensive items that will not be reclassified to income: | |||||||||||
Defined benefit plans: | |||||||||||
Re-measurement loss (note 9) | (15,000) | – | (15,000) | – | |||||||
Deferred income taxes | 4,000 | – | 4,000 | – | |||||||
(11,000) | – | (11,000) | – | ||||||||
Comprehensive loss | $ | (13,737) | $ | (6,041) | $ | (14,449) | $ | (12,721) | |||
Comprehensive (loss) income attributable to: | |||||||||||
Shareholders | $ | (13,744) | $ | (6,224) | $ | (14,467) | $ | (12,939) | |||
Non-controlling interest | 7 | 183 | 18 | 218 | |||||||
See accompanying notes to condensed consolidated financial statements.
(unaudited) | ||||||||||||
Equity attributable to shareholders | Equity | Total | ||||||||||
Capital | Contributed | Retained | Accumula- | |||||||||
Balance as at | $ | 207,280 | $ | 581 | $ | 59,406 | $ | 3,497 | $ | 966 | $ | 271,730 |
Net (loss) income | – | – | (12,939) | – | 218 | (12,721) | ||||||
Balance as at | 207,280 | 581 | 46,467 | 3,497 | 1,184 | 259,009 | ||||||
Net income | – | – | 29,391 | – | 12 | 29,403 | ||||||
Other comprehensive income | – | – | – | 1,777 | – | 1,777 | ||||||
Balance as at | 207,280 | 581 | 75,858 | 5,274 | 1,196 | 290,189 | ||||||
Net (loss) income | – | – | (3,467) | – | 18 | (3,449) | ||||||
Other comprehensive loss | – | – | – | (11,000) | – | (11,000) | ||||||
Balance as at | $ | 207,280 | $ | 581 | $ | 72,391 | $ | (5,726) | $ | 1,214 | $ | 275,740 |
See accompanying notes to condensed consolidated financial statements.
(unaudited) | ||||||
Note |
|
| ||||
Assets | ||||||
Current assets | ||||||
Cash | $ | 2,828 | $ | 3,383 | ||
Accounts receivable | 147,185 | 160,552 | ||||
Income taxes | 5,664 | 2,508 | ||||
Audiovisual content | 72,770 | 88,422 | ||||
Prepaid expenses | 6,139 | 3,105 | ||||
234,586 | 257,970 | |||||
Non-current assets | ||||||
Audiovisual content | 54,457 | 54,678 | ||||
Investments | 10,993 | 10,598 | ||||
Property, plant and equipment | 167,294 | 175,653 | ||||
Right-of-use assets | 11,425 | 8,530 | ||||
Intangible assets | 26,342 | 29,311 | ||||
23,703 | 23,703 | |||||
Deferred income taxes | 20,098 | 14,703 | ||||
314,312 | 317,176 | |||||
Total assets | $ | 548,898 | $ | 575,146 | ||
Liabilities and equity | ||||||
Current liabilities | ||||||
Bank overdraft | $ | 5,874 | $ | – | ||
Accounts payable and accrued liabilities | 98,778 | 103,945 | ||||
Content rights payable | 91,152 | 83,244 | ||||
Deferred revenues | 18,187 | 16,883 | ||||
Current portion of lease liabilities | 3,403 | 3,238 | ||||
Income taxes | 1,516 | 309 | ||||
Short-term debt | 3,962 | 44,846 | ||||
222,872 | 252,465 | |||||
Non-current liabilities | ||||||
Lease liabilities | 10,383 | 7,978 | ||||
Other liabilities | 33,887 | 18,076 | ||||
Deferred income taxes | 6,016 | 6,438 | ||||
50,286 | 32,492 | |||||
Equity | ||||||
Capital stock | 7 | 207,280 | 207,280 | |||
Contributed surplus | 581 | 581 | ||||
Retained earnings | 72,391 | 75,858 | ||||
Accumulated other comprehensive (loss) income | 9 | (5,726) | 5,274 | |||
Equity attributable to shareholders | 274,526 | 288,993 | ||||
Non-controlling interest | 1,214 | 1,196 | ||||
275,740 | 290,189 | |||||
Contingencies | 11 | |||||
Total liabilities and equity | $ | 548,898 | $ | 575,146 |
See accompanying notes to condensed consolidated financial statements.
(unaudited) | |||||||||
Three-month periods | Six-month periods | ||||||||
Note | 2020 | 2019 | 2020 | 2019 | |||||
Cash flows related to operating activities | |||||||||
Net loss | $ | (2,737) | $ | (6,041) | $ | (3,449) | $ | (12,721) | |
Adjustments for: | |||||||||
Depreciation and amortization | 8,471 | 9,722 | 17,002 | 18,787 | |||||
Share of income of associates | (169) | (196) | (426) | (347) | |||||
Deferred income taxes | 318 | (506) | (1,817) | (573) | |||||
Gain on disposal of an asset | 5 | (253) | – | (253) | – | ||||
Others | (47) | 22 | (25) | (18) | |||||
5,583 | 3,001 | 11,032 | 5,128 | ||||||
Net change in non-cash operating assets and liabilities | 22,960 | 14,684 | 33,089 | 7,714 | |||||
Cash flows provided by operating activities | 28,543 | 17,685 | 44,121 | 12,842 | |||||
Cash flows related to investing activities | |||||||||
Additions to property, plant and equipment | (1,965) | (3,069) | (6,788) | (6,951) | |||||
Additions to intangible assets | (488) | (833) | (1,521) | (2,156) | |||||
Business acquisitions | 6 | – | (11,036) | – | (34,505) | ||||
Others | 401 | – | 401 | – | |||||
Cash flows used in investing activities | (2,052) | (14,938) | (7,908) | (43,612) | |||||
Cash flows related to financing activities | |||||||||
Net change in bank overdraft | 458 | (4,219) | 5,874 | 4,656 | |||||
Net change in revolving credit facility | (26,134) | 6,371 | (40,866) | 19,721 | |||||
Repayment of term loan | – | (2,780) | – | (5,532) | |||||
Repayment of lease liabilities | (867) | (1,129) | (1,723) | (2,232) | |||||
Others | – | – | (53) | (105) | |||||
Cash flows (used in) provided by financing activities | (26,543) | (1,757) | (36,768) | 16,508 | |||||
Net change in cash | (52) | 990 | (555) | (14,262) | |||||
Cash at beginning of period | 2,880 | 2,860 | 3,383 | 18,112 | |||||
Cash at end of period | $ | 2,828 | $ | 3,850 | $ | 2,828 | $ | 3,850 | |
Interest and taxes reflected as operating activities | |||||||||
Net interest paid | $ | 304 | $ | 1,018 | $ | 1,011 | $ | 1,779 | |
Net income taxes paid | 44 | 1,117 | 3,073 | 2,773 |
See accompanying notes to condensed consolidated financial statements.
Notes to condensed consolidated financial statements
Three-month and six-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.
The COVID-19 pandemic continues to have a major impact on the economic environment in
Accordingly, the results of operations for interim periods should not necessarily be considered indicative of full-year results.
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 and six-month periods ended
2. Revenues
Three-month periods | Six-month periods | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Advertising services | $ | 42,729 | $ | 71,185 | $ | 104,845 | $ | 138,141 |
Royalties | 34,637 | 35,279 | 71,030 | 69,048 | ||||
Rental, postproduction and distribution services and other services rendered(1) | 13,695 | 21,368 | 38,547 | 36,682 | ||||
Product sales(2) | 12,794 | 18,123 | 26,567 | 36,225 | ||||
$ | 103,855 | $ | 145,955 | $ | 240,989 | $ | 280,096 |
(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. |
3. Purchases of goods and services and employee costs
The main components of purchases of goods and services were as follows:
Three-month periods | Six-month periods | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Purchases of goods and services: | ||||||||
Rights and audiovisual content costs(1) | $ | 62,779 | $ | 75,401 | $ | 127,778 | $ | 139,853 |
Printing and distribution | 2,987 | 5,580 | 6,662 | 10,963 | ||||
Services rendered by the parent corporation: | ||||||||
- Commissions on advertising sales | 4,479 | 7,542 | 10,908 | 14,642 | ||||
- Others | 2,256 | 2,222 | 4,498 | 4,460 | ||||
Building costs | 3,646 | 4,238 | 7,744 | 8,817 | ||||
Marketing, advertising and promotion | 1,668 | 4,270 | 5,438 | 8,764 | ||||
Others | 4,002 | 5,698 | 10,528 | 11,377 | ||||
81,817 | 104,951 | 173,556 | 198,876 | |||||
Employee costs(2) | $ | 14,672 | $ | 37,240 | $ | 51,560 | $ | 73,489 |
$ | 96,489 | $ | 142,191 | $ | 225,116 | $ | 272,365 |
(1) | During the second quarter of 2020, the Corporation remeasured its audiovisual content asset, given the current pandemic and its impacts on the Corporation's operations. As a result of this remeasurement, the Corporation recorded a |
(2) | For the three-month and six-month periods ended |
4. Financial expenses
Three-month periods | Six-month periods | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Interest on short-term debt | $ | 181 | $ | 811 | $ | 615 | $ | 1,501 |
Amortization of financing costs | 13 | 48 | 35 | 97 | ||||
Interest on lease liabilities | 139 | 175 | 282 | 344 | ||||
Interest expense on net defined benefit liability | 67 | 96 | 162 | 209 | ||||
Foreign exchange loss (gain) | 150 | (45) | 24 | (39) | ||||
Others | 115 | (38) | 217 | (108) | ||||
$ | 665 | $ | 1,047 | $ | 1,335 | $ | 2,004 |
5. Operational restructuring costs and others
Three-month periods | Six-month periods | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Operational restructuring costs | $ | 2,097 | $ | 1,496 | $ | 2,250 | $ | 2,896 |
Others | (295) | (19) | (146) | 1,749 | ||||
$ | 1,802 | $ | 1,477 | $ | 2,104 | $ | 4,645 |
Operational restructuring costs
For the three-month and six-month periods ended
Three-month periods | Six-month periods | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Broadcasting | $ | 1,415 | $ | 834 | $ | 1,439 | $ | 1,147 |
Film Production & Audiovisual Services | 682 | 108 | 682 | 111 | ||||
Magazines | – | 554 | 129 | 1,638 | ||||
$ | 2,097 | $ | 1,496 | $ | 2,250 | $ | 2,896 |
Others
During the three-month and six-month periods ended
During the first six months of 2020, the Corporation recorded a
6. Business acquisitions
(a) Serdy
On
The acquisition is consistent with the Corporation's strategic objective of enhancing its array of television content for its viewers and advertisers. The goodwill associated with the acquisition arises mainly from the quality of the content and the expected synergies.
As a condition of approval of the transaction, the
Allocation of the purchase price was finalized during the fourth quarter of 2019.
(b) Incendo
On
This acquisition is in keeping with the Corporation's strategy of diversifying its revenue streams and expanding its international footprint, especially in English-language markets. The goodwill associated with this acquisition arises primarily from the organization's expertise and expected future growth.
Allocation of the purchase price was finalized during the fourth quarter of 2019.
The final breakdown of the fair value of assets and liabilities related to these acquisitions is as follows:
Serdy | Incendo | Total | ||||||
Non-cash assets acquired | ||||||||
Current assets | $ | 11,997 | $ | 14,004 | $ | 26,001 | ||
Non-current audiovisual content | 3,893 | 4,191 | 8,084 | |||||
Property, plant and equipment | 1,720 | 156 | 1,876 | |||||
Intangible assets | 8,661 | 12,575 | 21,236 | |||||
Right-of-use assets | 1,469 | 249 | 1,718 | |||||
Deferred income taxes | 241 | – | 241 | |||||
4,813 | 9,788 | 14,601 | ||||||
32,794 | 40,963 | 73,757 | ||||||
Liabilities assumed | ||||||||
Current liabilities | 5,404 | 17,390 | 22,794 | |||||
Lease liabilities | 1,469 | 249 | 1,718 | |||||
Deferred income taxes | – | 4,375 | 4,375 | |||||
6,873 | 22,014 | 28,887 | ||||||
Net assets acquired at fair value | $ | 25,921 | $ | 18,949 | $ | 44,870 | ||
Consideration | ||||||||
Cash | $ | 25,085 | $ | 10,392 | $ | 35,477 | ||
Amounts payable and contingent consideration(2) | – | 8,557 | 8,557 | |||||
Investment in Canal Évasion inc., 8.3% owned by the Corporation | 836 | – | 836 | |||||
$ | 25,921 | $ | 18,949 | $ | 44,870 | |||
(1) | |
(2) | The current portion of the amounts payable and of the contingent consideration in connection with the acquisition of the Incendo group is presented under "Accounts payable and accrued liabilities," while the long-term portion is presented under "Other liabilities" on the consolidated balance sheets. |
7. Capital stock
(a) Authorized capital stock
An unlimited number of Class A Common Shares, participating, voting, without par value.
An unlimited number of Class
An unlimited number of Preferred Shares, non-participating, non-voting, with a par value of
(b) Issued and outstanding capital stock
2020 | 2019 | |||
4,320,000 Class A common shares | $ | 72 | $ | 72 |
38,885,535 Class B shares | 207,208 | 207,208 | ||
$ | 207,280 | $ | 207,280 |
(c) Loss per share attributable to shareholders
The following table shows the computation of loss per basic and diluted share attributable to shareholders:
Three-month periods ended | Six-month periods ended | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Net loss attributable to shareholders | $ | (2,744) | $ | (6,224) | $ | (3,467) | $ | (12,939) |
Weighted average number of basic and diluted shares outstanding | 43,205,535 | 43,205,535 | 43,205,535 | 43,205,535 | ||||
Basic and diluted loss per share attributable to shareholders | $ | (0.06) | $ | (0.14) | $ | (0.08) | $ | (0.30) |
The loss per diluted share calculation does not take into consideration the potential dilutive effect of stock options of the Corporation, because their impact is non-dilutive.
8. Stock-based compensation and other stock-based payments
(a) Class B stock option plan for officers
Six-month period ended | |||
Number | Weighted | ||
Balance as at | 515,000 | $ | 2.43 |
Cancelled | (10,000) | 2.16 | |
Balance as at | 505,000 | $ | 2.43 |
Of the options outstanding as at
(b)
Six-month period ended | |||
Number | Weighted | ||
Balance as at | 31,600 | $ | 69.19 |
Exercised | (18,800) | 68.37 | |
Balance as at | 12,800 | $ | 70.39 |
Of the options outstanding as at
During the three-month period ended
During the six-month period ended
(c) Quebecor stock option plan
Six-month period ended | |||
Number | Weighted | ||
Balance as at | 420,500 | $ | 28.82 |
Cancelled | (20,000) | 26.52 | |
Balance as at | 400,500 | $ | 28.93 |
Of the options outstanding as at
(d) Deferred stock unit ("DSU") and performance stock unit ("PSU") plans
The following table shows changes in outstanding DSUs and PSUs during the six-month period ended
Outstanding units | ||||
Corporation stock units | Quebecor stock units | |||
DSU | PSU | DSU | PSU | |
Balance as at | 177,256 | 131,129 | 29,150 | 16,148 |
Granted | – | – | 356 | – |
Cancelled | (20,692) | – | (4,322) | – |
Redeemed | – | (131,129) | – | (16,148) |
Balance as at | 156,564 | – | 25,184 | – |
(e) Deferred stock unit ("DSU") plan for directors
As of
(f) Stock-based compensation expense
During the three-month and six-month periods ended
9. Pension plans and post-retirement benefits
The loss on remeasurement of defined benefit plans recognized on the consolidated statement of comprehensive loss for the six-month period ended
10. Segmented information
Management made changes to the Corporation's management structure at the beginning of the year. As a result of those changes, the custom publishing, commercial print production and premedia services previously provided by the Magazines segment were combined with the Broadcasting segment's existing commercial production activities. Financial information for comparative periods has been restated to take into account the new presentation.
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 and custom publishing services;
- 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, postproduction and visual effects; - 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, and markets digital products associated with the various magazine brands; - 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.
Three-month periods | Six-month periods | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Revenues | ||||||||
Broadcasting | $ | 86,767 | $ | 116,464 | $ | 194,828 | $ | 226,204 |
Film Production & Audiovisual Services | 7,460 | 14,248 | 25,442 | 27,201 | ||||
Magazines | 10,037 | 15,523 | 20,330 | 30,181 | ||||
Production & Distribution | 2,869 | 3,479 | 7,622 | 3,479 | ||||
Intersegment items | (3,278) | (3,759) | (7,233) | (6,969) | ||||
103,855 | 145,955 | 240,989 | 280,096 | |||||
Adjusted EBITDA (Negative adjusted EBITDA)(1) | ||||||||
Broadcasting | 3,470 | (1,606) | 7,299 | 874 | ||||
Film Production & Audiovisual Services | 507 | 1,837 | 3,679 | 1,943 | ||||
Magazines | 2,890 | 3,211 | 3,554 | 4,592 | ||||
Production & Distribution | 428 | 322 | 1,095 | 322 | ||||
Intersegment items | 71 | – | 246 | – | ||||
7,366 | 3,764 | 15,873 | 7,731 | |||||
Depreciation and amortization | 8,471 | 9,722 | 17,002 | 18,787 | ||||
Financial expenses | 665 | 1,047 | 1,335 | 2,004 | ||||
Operational restructuring costs and others | 1,802 | 1,477 | 2,104 | 4,645 | ||||
Loss before tax recovery and share of income of associates | $ | (3,572) | $ | (8,482) | $ | (4,568) | $ | (17,705) |
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 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 IFRS. |
11. Contingencies
Lawsuits were brought by and against the Corporation, and against Quebecor and some of its subsidiaries, in connection with business disputes with a cable operator. At this stage in the proceedings, management of the Corporation does not expect their outcome to have a material adverse effect on the Corporation's results or on its financial position.
SOURCE
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