MONTREAL, May 9, 2022
/CNW/ - TVA Group Inc. ("TVA Group" or the "Corporation") announced
today that it recorded operating revenues in the amount of
$144.5 million for the first quarter
of 2022, a year-over-year increase of $3.7
million. Net loss attributable to shareholders was
$13.0 million or $0.30 per share, compared with net loss
attributable to shareholders of $4.5
million or $0.10 per share for
the same quarter of 2021.
First quarter operating highlights:
- $9,721,000 in consolidated
negative adjusted EBITDA[1], an $11,857,000 unfavourable variance from the same
quarter of 2021.
- $15,468,000 in negative adjusted
EBITDA1 in the Broadcasting segment, an $11,886,000 unfavourable variance mainly due to a
decrease in profitability at TVA Network, which increased its
investments in content, and to the decrease in Qolab's adjusted
EBITDA1 due to lower volume of activities. The variances
were partially offset by increased profitability at "TVA Sports,"
which had to absorb significant content costs in the first quarter
of 2021 as a result of the change in the broadcast schedule for the
National Hockey League 2020-2021 season.
- $3,844,000 in adjusted
EBITDA1 in the Film Production & Audiovisual
Services ("MELS") segment, a $216,000
favourable variance stemming primarily from an increase in
profitability of soundstage, mobile and equipment rental services
and virtual production services, whereas the segment's other
activities recorded decreased profitability.
- $440,000 in adjusted
EBITDA1 in the Magazines segment, a $1,323,000 unfavourable variance due mainly to
reduced government assistance and lower newsstand revenues, which
were not entirely offset by cost-reduction measures and savings in
operating expenses.
- $1,553,000 in adjusted
EBITDA1 in the Production & Distribution segment, a
$1,261,000 favourable variance
generated primarily by Canadian and international distribution of
films produced by Incendo.
"First quarter results were largely affected by the reduced
profitability of TVA Network due to a significant increase in our
content investments. With our variety shows and series, our strong
prime time schedule allowed us to grow our market share by 0.7
points, as we broadcast four of the five most-watched shows in
Quebec, including the new original
series Le bonheur and the variety show Star Académie,
which stood out with average audiences of more than
1.5 million viewers. It is becoming critical to invest more
heavily in our programming to ensure that TVA Network maintains its
leadership position amid the intensified competition and the
increase in available content. On the strength of this strategy,
despite a declining traditional advertising market compared with
2021, TVA Network grew its advertising revenues by 2.3% during the
quarter, a level of growth fuelled by our digital platforms,
particularly TVA+. Our specialty channels' advertising revenues
also increased 11.3%, mainly due to "LCN," which has provided
exceptional coverage of the current geopolitical situation, as well
as "TVA Sports." More than ever, content is the key to our
strategies and our viewers and advertisers alike reap the
benefits," said Pierre Karl Péladeau, acting President and CEO of
TVA Group.
__________________________
|
1 See
definition of adjusted EBITDA below.
|
"In the Film Production & Audiovisual Services segment, our
soundstage and equipment rental services reported increased
activity. In addition to our desirability for various local
productions, we continue to be a destination of choice for
international players, including Disney, which rented part
of our studios for the first quarter of the year. Our financial
performance continues to be dependent on the presence of major
productions in our facilities. Indeed, enhancement of our service
offering through the addition of MELS 4 is designed to position us
well in that regard. Our virtual production activities, which are
up over the 2021 reference quarter, continue to stand out and
attract growing numbers of producers with a superior business
case," continued Mr. Péladeau.
"In the Magazines segment, first quarter results were
significantly impacted by the reduced government assistance and a
9.5% decrease in newsstand revenues, which are a major source of
revenues for our entertainment titles. In that context, we
reiterate the importance for the federal government to commit to
maintaining the current grant programs to support this segment,
which has been in decline for a number of years. As a leading
publisher in the French-language market, we produce titles that
help showcase our talent and local culture and it is essential to
ensure their survival.
"Our Production & Distribution segment, for its part,
achieved solid performance for the first quarter of the year. Our
increased distribution activities during the period enabled us to
deliver over 20 films produced by Incendo in the past two years. To
continue to develop this segment, we recently announced the
establishment of a brand new distribution unit for Incendo and
Quebecor Content, under the direction of Cynthia Kennedy. With over 25 years of
experience in sales and management positions with international
media companies, we are confident Ms. Kennedy has the expertise and
leadership to accelerate our growth in this segment," concluded Mr.
Péladeau.
COVID-19 pandemic
Since March 2020, the COVID-19
pandemic has at times affected the quarterly results of the
Corporation's various segments. Given the uncertainty about the
future evolution of the pandemic, including any major new wave, the
full future impact of the public health crisis on operating results
cannot be determined with certainty.
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 other, income taxes expense (recovery) 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.
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 December 31, 2021 and
the "Risk Factors" section in the Corporation's 2021 annual
information form.
The forward-looking statements in this news release reflect the
Corporation's expectations as of May 9,
2022, 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
TVA Group Inc., a subsidiary of Quebecor Media Inc., is a
communications company engaged in the broadcasting, film production
and audiovisual services, international production and distribution
of television content, 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 consolidated Financial Statements, with notes, and
the interim Management's Discussion and Analysis for the
three-month period ended March 31,
2022, can be consulted on the Corporation's website at
www.groupetva.ca.
TVA GROUP INC.
Consolidated statements of
loss
(unaudited)
(in thousands of Canadian dollars, except per-share amounts)
Three-month
periods
ended March
31
|
|
Note
|
2022
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
2
|
$
|
144,497
|
$
|
140,808
|
|
|
|
|
|
|
Purchases of goods and
services
|
3
|
|
115,624
|
|
102,919
|
Employee
costs
|
|
|
38,594
|
|
35,753
|
Depreciation and
amortization
|
|
|
7,620
|
|
8,258
|
Financial
expenses
|
4
|
|
500
|
|
701
|
Operational
restructuring costs and other
|
5
|
|
20
|
|
(273)
|
Loss before income tax recovery and share of
income
of associates
|
|
|
(17,861)
|
|
(6,550)
|
|
|
|
|
|
|
Income tax
recovery
|
|
|
(4,597)
|
|
(1,696)
|
|
|
|
|
|
|
Share of income of
associates
|
|
|
(249)
|
|
(402)
|
Net loss
|
|
$
|
(13,015)
|
$
|
(4,452)
|
|
|
|
|
|
|
Net (loss) income attributable
to:
|
|
|
|
|
|
Shareholders
|
|
$
|
(13,016)
|
$
|
(4,451)
|
Non-controlling interest
|
|
|
1
|
|
(1)
|
|
|
|
|
|
|
Basic and diluted loss per share attributable to
shareholders
|
|
$
|
(0.30)
|
$
|
(0.10)
|
Weighted average number of shares outstanding and
diluted shares
|
|
|
43,205,535
|
|
43,205,535
|
|
See accompanying notes
to condensed consolidated financial statements.
|
TVA GROUP INC.
Consolidated statements of
comprehensive (loss) income
(unaudited)
(in thousands of Canadian dollars)
Three-month
periods
ended March
31
|
|
Note
|
2022
|
2021
|
|
|
|
|
|
|
Net loss
|
|
$
|
(13,015)
|
$
|
(4,452)
|
|
|
|
|
|
|
Other comprehensive
items that will not be reclassified to (loss) income:
|
|
|
|
|
|
Defined
benefit plans:
|
|
|
|
|
|
Re-measurement gain
|
8
|
|
14,500
|
|
29,500
|
Deferred income taxes
|
|
|
(3,800)
|
|
(7,800)
|
|
|
|
10,700
|
|
21,700
|
|
|
|
|
|
|
Comprehensive (loss) income
|
|
$
|
(2,315)
|
$
|
17,248
|
|
|
|
|
|
|
Comprehensive (loss) income attributable
to:
|
|
|
|
|
|
Shareholders
|
|
$
|
(2,316)
|
$
|
17,249
|
Non-controlling
interest
|
|
|
1
|
|
(1)
|
|
|
|
|
|
|
|
See accompanying notes
to condensed consolidated financial statements.
|
TVA GROUP INC.
Consolidated statements of
equity
(unaudited)
(in thousands of Canadian dollars)
|
Equity attributable to
shareholders
|
Equity
attributable
to non-
controlling
interest
|
Total
equity
|
|
Capital
stock
(note 6)
|
Contributed
surplus
|
Retained
earnings
|
Accumula-
ted other
comprehen
-sive (loss)
income –
Defined
benefit
plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at December 31, 2020
|
$
|
207,280
|
$
|
581
|
$
|
108,175
|
$
|
(4,637)
|
$
|
1,220
|
$
|
312,619
|
Net loss
|
|
–
|
|
–
|
|
(4,451)
|
|
–
|
|
(1)
|
|
(4,452)
|
Other comprehensive
income
|
|
–
|
|
–
|
|
–
|
|
21,700
|
|
–
|
|
21,700
|
Balance as at March 31, 2021
|
|
207,280
|
|
581
|
|
103,724
|
|
17,063
|
|
1,219
|
|
329,867
|
Net income
(loss)
|
|
–
|
|
–
|
|
34,955
|
|
–
|
|
(9)
|
|
34,946
|
Other comprehensive
income
|
|
–
|
|
–
|
|
–
|
|
15,651
|
|
–
|
|
15,651
|
Balance as at December 31, 2021
|
|
207,280
|
|
581
|
|
138,679
|
|
32,714
|
|
1,210
|
|
380,464
|
Net (loss)
income
|
|
–
|
|
–
|
|
(13,016)
|
|
–
|
|
1
|
|
(13,015)
|
Other comprehensive
income
|
|
–
|
|
–
|
|
–
|
|
10,700
|
|
–
|
|
10,700
|
Balance as at March 31, 2022
|
$
|
207,280
|
$
|
581
|
$
|
125,663
|
$
|
43,414
|
$
|
1,211
|
$
|
378,149
|
|
See accompanying notes
to condensed consolidated financial statements.
|
TVA GROUP INC.
Consolidated balance sheets
(unaudited)
(in thousands of Canadian dollars)
|
March 31,
2022
|
December 31,
2021
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
Cash
|
$
|
2,675
|
$
|
5,181
|
Accounts
receivable
|
|
196,451
|
|
210,814
|
Income
taxes
|
|
11,617
|
|
5,755
|
Audiovisual content
|
|
120,972
|
|
108,530
|
Prepaid
expenses
|
|
8,200
|
|
3,866
|
|
|
339,915
|
|
334,146
|
Non-current assets
|
|
|
|
|
Audiovisual content
|
|
72,351
|
|
72,541
|
Investments
|
|
12,364
|
|
12,115
|
Property,
plant and equipment
|
|
161,375
|
|
160,288
|
Right-of-use assets
|
|
8,453
|
|
9,084
|
Intangible assets
|
|
18,988
|
|
20,559
|
Goodwill
|
|
21,696
|
|
21,696
|
Defined
benefit plan asset
|
|
34,416
|
|
21,309
|
Deferred
income taxes
|
|
7,142
|
|
9,353
|
|
|
336,785
|
|
326,945
|
Total assets
|
$
|
676,700
|
$
|
661,091
|
TVA GROUP INC.
Consolidated balance sheets
(continued)
(unaudited)
(in thousands of Canadian dollars)
|
Note
|
March 31,
2022
|
December 31,
2021
|
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Bank
overdraft
|
|
$
|
1,574
|
$
|
–
|
Accounts
payable, accrued liabilities and provisions
|
|
|
131,732
|
|
139,149
|
Content
rights payable
|
|
|
106,796
|
|
93,383
|
Deferred
revenues
|
|
|
8,556
|
|
9,961
|
Income
taxes
|
|
|
50
|
|
1,622
|
Current
portion of lease liabilities
|
|
|
2,503
|
|
2,503
|
Short-term debt
|
|
|
24,930
|
|
11,980
|
|
|
|
276,141
|
|
258,598
|
Non-current liabilities
|
|
|
|
|
|
Lease
liabilities
|
|
|
7,142
|
|
7,857
|
Other
liabilities
|
|
|
8,285
|
|
7,798
|
Deferred
income taxes
|
|
|
6,983
|
|
6,374
|
|
|
|
22,410
|
|
22,029
|
Equity
|
|
|
|
|
|
Capital
stock
|
6
|
|
207,280
|
|
207,280
|
Contributed surplus
|
|
|
581
|
|
581
|
Retained
earnings
|
|
|
125,663
|
|
138,679
|
Accumulated other comprehensive income
|
|
|
43,414
|
|
32,714
|
Equity
attributable to shareholders
|
|
|
376,938
|
|
379,254
|
Non-controlling interest
|
|
|
1,211
|
|
1,210
|
|
|
|
378,149
|
|
380,464
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
676,700
|
$
|
661,091
|
|
See accompanying notes
to condensed consolidated financial statements.
|
TVA GROUP INC.
Consolidated statements of cash
flows
(unaudited)
(in thousands of Canadian dollars)
Three-month periods
ended March
31
|
|
Note
|
2022
|
2021
|
|
|
|
|
|
|
Cash flows related to operating
activities
|
|
|
|
|
|
Net loss
|
|
$
|
(13,015)
|
$
|
(4,452)
|
Adjustments
for:
|
|
|
|
|
|
Depreciation and amortization
|
|
|
7,620
|
|
8,258
|
Share of
income of associates
|
|
|
(249)
|
|
(402)
|
Deferred
income taxes
|
|
|
(980)
|
|
(124)
|
Other
|
|
|
13
|
|
(81)
|
|
|
|
(6,611)
|
|
3,199
|
Net
change in non-cash balances related to operating items
|
|
|
(3,991)
|
|
4,238
|
Cash flows (used in)
provided by operating activities
|
|
|
(10,602)
|
|
7,437
|
|
|
|
|
|
|
Cash flows related to investing
activities
|
|
|
|
|
|
Additions
to property, plant and equipment
|
|
|
(5,196)
|
|
(3,737)
|
Additions
to intangible assets
|
|
|
(423)
|
|
(1,004)
|
Business
acquisitions
|
5
|
|
–
|
|
(606)
|
Cash flows used in
investing activities
|
|
|
(5,619)
|
|
(5,347)
|
|
|
|
|
|
|
Cash flows related to financing
activities
|
|
|
|
|
|
Net
change in bank overdraft
|
|
|
1,574
|
|
1,553
|
Net
change in revolving credit facility
|
|
|
12,990
|
|
(3,085)
|
Repayment
of lease liabilities
|
|
|
(796)
|
|
(979)
|
Other
|
|
|
(53)
|
|
(53)
|
Cash flows provided by
(used in) financing activities
|
|
|
13,715
|
|
(2,564)
|
|
|
|
|
|
|
Net change in cash
|
|
|
(2,506)
|
|
(474)
|
Cash, beginning of period
|
|
|
5,181
|
|
2,838
|
Cash, end of period
|
|
$
|
2,675
|
$
|
2,364
|
|
|
|
|
|
|
Interest and taxes reflected as operating
activities
|
|
|
|
|
|
Net
interest paid
|
|
$
|
294
|
$
|
369
|
Income
taxes paid
|
|
|
3,817
|
|
10,763
|
|
See accompanying notes
to condensed consolidated financial statements.
|
TVA GROUP INC.
Notes to condensed consolidated
financial statements
Three-month periods ended March 31, 2022 and 2021
(unaudited)
(Tabular amounts are expressed in thousands of Canadian dollars,
except per share and per option amounts)
TVA Group Inc. ("TVA Group" or the "Corporation") is governed by
the Quebec Business
Corporations Act. TVA Group is a communications company
engaged in broadcasting, film production & audiovisual
services, international production & distribution of television
content, and magazine publishing (note 9). The Corporation is a
subsidiary of Quebecor Media Inc. ("Quebecor Media" or the
"parent corporation") and its ultimate parent corporation is
Quebecor Inc. ("Quebecor"). The Corporation's head office is
located at 1600 de Maisonneuve Boulevard East, Montreal, Quebec, Canada.
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. In view of the seasonal nature of some
of the Corporation's activities, the results of operations for
interim periods should not necessarily be considered indicative of
full-year results.
Since March 2020, the COVID-19 pandemic has at times
affected the quarterly results of the Corporation's segments. Given
the uncertainty about the future evolution of the pandemic,
including any major new wave, the full future impact of the public
health crisis on operating results cannot be determined with
certainty.
TVA GROUP INC.
Notes to condensed consolidated
financial statements (continued)
Three-month periods ended March 31, 2022 and 2021
(unaudited)
(Tabular amounts are expressed in thousands of Canadian dollars,
except per share and per option amounts)
1. Basis of presentation
These consolidated financial statements were prepared in
accordance with the International Financial Reporting Standards
("IFRS") issued by the International Accounting Standards Board
("IASB"), except that they do not include all disclosures required
under IFRS for annual consolidated financial statements. In
particular, these consolidated financial statements were prepared
in accordance with IAS 34, Interim Financial Reporting, and
accordingly are condensed consolidated financial statements. These
condensed consolidated financial statements should be read in
conjunction with the Corporation's 2021 annual consolidated
financial statements, which describe the accounting policies used
to prepare these condensed consolidated financial statements.
These condensed consolidated financial statements were approved
by the Corporation's Board of Directors on May 9,
2022.
Certain comparative figures for the three-month period ended
March 31, 2021 have been restated to conform to the
presentation adopted for the three-month period ended
March 31, 2022.
2. Revenues
Three-month
periods
ended March
31
|
|
2022
|
2021
|
|
|
|
|
|
Advertising
services
|
$
|
66,468
|
$
|
63,252
|
Royalties
|
|
34,253
|
|
34,890
|
Rental, postproduction
and distribution services and other services
rendered(1)
|
|
29,801
|
|
27,316
|
Product
sales(2)
|
|
13,975
|
|
15,350
|
|
$
|
144,497
|
$
|
140,808
|
(1)
|
Revenues from rental of
soundstages, mobiles, equipment and rental space amounted to
$9,573,000 for the three-month period ended March 31, 2022
($8,471,000 for the same period of 2021). Service revenues also
include the activities of the Production & Distribution
segment.
|
(2)
|
Revenues from product
sales include newsstand and subscription sales of magazines and
sales of audiovisual content.
|
TVA GROUP INC.
Notes to condensed consolidated
financial statements (continued)
Three-month periods ended March 31, 2022 and 2021
(unaudited)
(Tabular amounts are expressed in thousands of Canadian dollars,
except per share and per option amounts)
3. Purchases of goods and services
The main components of purchases of goods and services are as
follows:
Three-month
periods
ended March
31
|
|
2022
|
2021
|
|
|
|
|
|
Rights and audiovisual
content costs
|
$
|
88,403
|
$
|
75,986
|
Printing and
distribution
|
|
3,678
|
|
3,200
|
Services rendered by
the parent corporation:
|
|
|
|
|
- Commissions on advertising
sales
|
|
6,632
|
|
6,732
|
- Other
|
|
2,384
|
|
2,136
|
Building
costs
|
|
4,462
|
|
4,595
|
Marketing, advertising
and promotion
|
|
4,128
|
|
4,405
|
Other
|
|
5,937
|
|
5,865
|
|
$
|
115,624
|
$
|
102,919
|
4. Financial expenses
Three-month
periods
ended March
31
|
|
|
2022
|
2021
|
|
|
|
|
|
|
Interest on
debt
|
|
$
|
191
|
$
|
158
|
Amortization of
financing costs
|
|
|
13
|
|
13
|
Interest on lease
liabilities
|
|
|
119
|
|
141
|
(Revenues) interest
expense related to defined benefit plans
|
|
|
(111)
|
|
191
|
Foreign exchange
loss
|
|
|
196
|
|
91
|
Other
|
|
|
92
|
|
107
|
|
|
$
|
500
|
$
|
701
|
TVA GROUP INC.
Notes to condensed consolidated
financial statements (continued)
Three-month periods ended March 31, 2022 and 2021
(unaudited)
(Tabular amounts are expressed in thousands of Canadian dollars,
except per share and per option amounts)
5. Operational restructuring costs and
other
Three-month
periods
ended March
31
|
|
2022
|
2021
|
|
|
|
|
|
Operational
restructuring costs
|
$
|
37
|
$
|
(130)
|
Other
|
|
(17)
|
|
(143)
|
|
$
|
20
|
$
|
(273)
|
Operational restructuring costs
For the three-month periods ended March 31, 2022 and 2021,
the Corporation recorded a charge (reversal of charge) for
operational restructuring in connection with the elimination of
positions and the implementation of cost reduction initiatives. The
segment breakdown is as follows:
Three-month
periods
ended March
31
|
|
2022
|
2021
|
|
|
|
|
|
Broadcasting
|
$
|
37
|
$
|
156
|
Film Production &
Audiovisual Services
|
|
–
|
|
3
|
Magazines
|
|
–
|
|
(289)
|
|
$
|
37
|
$
|
(130)
|
Other
During the first quarter of 2021, the Corporation reversed a
$49,000 charge following
remeasurement of the contingent consideration payable in connection
with the acquisition of the companies in the Incendo group. During
the same period, the Corporation also made a $606,000 payment with respect to this contingent
consideration.
For the first quarter of 2021, the Corporation recorded a
$94,000 gain on the write-off of
lease liabilities as a result of early release from certain real
estate spaces.
TVA GROUP INC.
Notes to condensed consolidated
financial statements (continued)
Three-month periods ended March 31, 2022 and 2021
(unaudited)
(Tabular amounts are expressed in thousands of Canadian dollars,
except per share and per option amounts)
6. Capital stock
(a) Authorized capital stock
An unlimited number of Class A common shares, participating,
voting, without par value.
An unlimited number of Class B shares, participating,
non-voting, without par value.
An unlimited number of preferred shares, non-participating,
non-voting, with a par value of $10
each, issuable in series.
(b) Issued and outstanding capital stock
|
March 31,
2022
|
December 31,
2021
|
|
|
|
|
|
4,320,000
Class A common shares
|
$
|
72
|
$
|
72
|
38,885,535 Class B
shares
|
|
207,208
|
|
207,208
|
|
$
|
207,280
|
$
|
207,280
|
|
|
|
|
|
|
7. Stock-based compensation and other stock-based
payments
(a) Stock option plans
Outstanding
options
|
|
Number
|
Weighted average
exercise price
|
|
|
|
|
Groupe TVA
|
|
|
|
As at December 31, 2021 and as at March 31,
2022
|
369,503
|
$
|
2.09
|
Vested options as at March 31,
2022
|
48,832
|
$
|
4.56
|
|
|
|
|
|
|
|
|
Quebecor
|
|
|
|
As at December 31,
2021
|
207,295
|
$
|
31.12
|
Transferred
|
(23,079)
|
|
30.69
|
As at March 31, 2022
|
184,216
|
$
|
31.18
|
Vested options as at March 31,
2022
|
13,833
|
$
|
26.52
|
|
|
|
|
|
During the three-month period ended March 31, 2022, no
Quebecor Media stock options were exercised (6,300 options
were exercised for a cash consideration of $374,000 during the three-month period ended
March 31, 2021).
TVA GROUP INC.
Notes to condensed consolidated
financial statements (continued)
Three-month periods ended March 31, 2022 and 2021
(unaudited)
(Tabular amounts are expressed in thousands of Canadian dollars,
except per share and per option amounts)
7. Stock-based compensation and other stock-based
payments (continued)
(b) Deferred stock unit ("DSU") plan for executives
TVA Group has a DSU plan for some executives based on TVA Group
Class B Non-Voting Shares ("TVA Group Class B Shares"). Quebecor
also has a DSU plan for its executives and those of its
subsidiaries, based on, among other things, Quebecor Class B
Shares. Under these plans, the DSUs vest over six years and will be
redeemed for cash only upon the participant's retirement or
cessation of employment, as the case may be. Under the TVA Group
plan, holders of DSUs are entitled to collect dividends on TVA
Group Class B Shares in the form of additional units. Under the
Quebecor plan, holders of DSUs are entitled to collect dividends on
Quebecor Class B Shares in the form of additional units.
The following table shows changes in outstanding DSUs for the
three-month period ended March 31, 2022:
|
Outstanding
units
|
|
Corporation stock
units
|
Quebecor stock
units
|
|
|
|
|
|
Balance as at December
31, 2021
|
|
102,648
|
|
14,874
|
Transferred
|
|
(7,401)
|
|
(1,611)
|
Balance as at March 31, 2022
|
|
95,247
|
|
13,263
|
For the three-month period ended March 31, 2022,
7,401 DSUs under the Corporation's plan and 1,611 DSUs
under Quebecor's plan were transferred to Quebecor Media (for the
same period of 2021, 18,122 DSUs under the Corporation's plan
and 3,747 DSUs under the Quebecor plan were redeemed for cash
considerations of $43,000 and
$139,000, respectively).
(c) Deferred stock unit ("DSU") plan for directors
The following table shows changes in outstanding units for the
three-month period ended March 31, 2022:
|
Outstanding
units
|
|
|
Corporation stock
units
|
|
|
|
|
|
Balance as at December
31, 2021
|
|
|
|
385,440
|
Granted
|
|
|
|
13,625
|
Balance as at March 31, 2022
|
|
|
|
399,065
|
TVA GROUP INC.
Notes to condensed consolidated
financial statements (continued)
Three-month periods ended March 31, 2022 and 2021
(unaudited)
(Tabular amounts are expressed in thousands of Canadian dollars,
except per share and per option amounts)
7. Stock-based compensation and other stock-based
payments (continued)
(d) Stock-based compensation expense
For the three-month period ended March 31, 2022, a
$469,000 compensation charge was
recorded in respect of all stock-based compensation plans
($684,000 for the same period of
2021).
8. Pension plans and post-retirement
benefits
The gain on remeasurement of defined benefit plans recognized on
the consolidated statement of comprehensive (loss) income for the
three-month periods ended March 31, 2022 and 2021 mainly
reflects the increase in the discount rate.
9. Segmented information
Management made changes to the Corporation's management
structure at the beginning of the year. As a result of those
changes, the activities of the TVA Films division, formerly
presented in the Broadcasting segment, have been combined with the
Production & Distribution segment's existing distribution
activities. Comparative period disclosures have been restated to
reflect this new presentation.
The Corporation's operations 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, including
those of its Communications Qolab inc. subsidiary;
- The Film Production & Audiovisual Services segment,
which through its subsidiaries Mels Studios and Postproduction G.P.
and Mels Dubbing Inc. provides soundstage, mobile and production
equipment rental services, as well as dubbing and described video
("media accessibility services"), postproduction, virtual
production and visual effects;
- The Magazines segment, which through its TVA
Publications inc. subsidiary, 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 and the TVA Films division
produces and distributes television shows, movies and television
series for the world market.
TVA GROUP INC.
Notes to condensed consolidated
financial statements (continued)
Three-month periods ended March 31, 2022 and 2021
(unaudited)
(Tabular amounts are expressed in thousands of Canadian dollars,
except per share and per option amounts)
9. Segmented information (continued)
|
Three-month
periods
ended March
31
|
|
|
2022
|
|
2021
|
|
|
|
|
|
Revenues
|
|
|
|
|
Broadcasting
|
$
|
114,139
|
$
|
113,922
|
Film
Production & Audiovisual Services
|
|
19,351
|
|
18,017
|
Magazines
|
|
9,661
|
|
10,507
|
Production & Distribution
|
|
5,980
|
|
3,275
|
Intersegment items
|
|
(4,634)
|
|
(4,913)
|
|
|
144,497
|
|
140,808
|
(Negative adjusted EBITDA) adjusted
EBITDA(1)
|
|
|
|
|
Broadcasting
|
|
(15,468)
|
|
(3,582)
|
Film Production &
Audiovisual Services
|
|
3,844
|
|
3,628
|
Magazines
|
|
440
|
|
1,763
|
Production &
Distribution
|
|
1,553
|
|
292
|
Intersegment
items
|
|
(90)
|
|
35
|
|
|
(9,721)
|
|
2,136
|
|
|
|
|
|
Depreciation and
amortization
|
|
7,620
|
|
8,258
|
Financial
expenses
|
|
500
|
|
701
|
Operational
restructuring costs and other
|
|
20
|
|
(273)
|
Loss before income tax recovery and
share of
income of associates
|
$
|
(17,861)
|
$
|
(6,550)
|
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 other, income taxes expense (recovery) and
share of income of associates. Adjusted EBITDA as defined above is
not a measure of results that is consistent with IFRS.
|
SOURCE TVA Group