The Corporation also declared a net loss attributable to shareholders of $7.4 million or a loss of $0.17 per share for the quarter, compared with a net loss attributable to shareholders of $14.7 million or a loss of $0.57 per share in the same quarter of 2024.

First quarter operating highlights:

• Adjusted operating loss¹ in the Broadcasting & Production segment: $3,884,000, up $4,775,000 (55%) due mainly to the following factors:
  • 21% decrease in the adjusted operating loss¹ of “TVA Sports”;
  • Increase in adjusted operating income¹ at the specialty services other than “TVA Sports”; and
  • Increase in the adjusted operating income¹ at TVA Network, mainly due to lower operating expenses, other than the expenses generated by increased commercial production volume of activity.
• Adjusted operating income¹ in the Film Production & Audiovisual Services segment (“MELS”): $2,122,000, up $2,119,000 due to increased volume of activity in soundstage and production equipment leasing compared with the same quarter of 2024.
• Adjusted operating income¹ in the Magazines segment: $2,059,000, up $1,094,000 (113%) mainly because of the addition of the adjusted operating results of the magazines acquired from Transcontinental and a decrease in the magazines’ expenses due to a decline in the volume of activity for comparable magazines.

“We are very satisfied that we have increased our adjusted operating income¹ for the third consecutive quarter,” commented Julie Tremblay, President and Chief Executive Officer of the Corporation. “The improvement was driven by the addition of the magazines we acquired in the second quarter of 2024 combined with significant volume of activity growth at MELS and stringent control of operating expenses. The turmoil in the media industry is forcing us to constantly question our products and brands with a view to maintaining their profitability. We therefore had to resign ourselves to relinquishing the licence for our “Argent” specialty service when we filed our licence renewal applications to Canadian Radio-television and Telecommunications Commission in April. We will continue operating the prestigious “Argent” brand through the TVA Nouvelles newscasts, the “LCN” news and public affairs channel, and digital platforms, which hold the greatest potential for business news consumption. TVA Group’s total market share held strong at 35.7%² in the last quarter compared with 34.6% in the same quarter of 2024. TVA Network carried 22 of the 30 most-watched programs in Quebec, including the smash hit variety show La Voix, which attracted an average audience of nearly 2.6 million for an average market share of 57.5% and peaked at more than 3.5 million viewers”, also commented Ms. Tremblay.

“We are pleased with the response from local and foreign producers of films and television series, who are making extensive use of MELS’s soundstage facilities and equipment, as well as its postproduction and visual effects services. The financial results for the last quarter and the utilization rate of our film production facilities indicate increasing interest in our services and strong growth potential for this line of business”, added Julie Tremblay.

“Finally, in the Magazines segment, we are very proud to have Canada’s leading brands in our portfolio, with 9 million readers³ across all platforms. On April 12, we launched “Molto”, our digital newsstand, to address our readers’ adoption of multiple content delivery methods. “Molto” gives all users unlimited access to the full content of all our publications on their tablets and smartphones, making our magazines that much more accessible. This new product fits into our digital strategy and will increase the reach of our brands,” concluded Julie Tremblay.

Definition

Adjusted operating income (loss) (“Adjusted operating results”)

In its analysis of operating results, the Corporation defines adjusted operating income (loss) as net income (loss) before depreciation of property, plant and equipment, amortization of intangible assets, financial expenses, operational restructuring costs, impairment of assets and others, income taxes and share of loss (income) of associated corporations. Adjusted operating income (loss) 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 of tangible and intangible assets and is unaffected by the capital structure or investment activities of the Corporation and its segments. Adjusted operating income (loss) is also relevant because it is a significant component of the Corporation’s annual incentive compensation programs. The Corporation’s definition of adjusted operating income (loss) may not be identical to similarly titled measures reported by other companies.

TVA Group

TVA Group Inc., a subsidiary of Quebecor Media Inc., is an integrated communications company engaged in the broadcasting and production, film production and audiovisual services and magazine publishing industries. TVA Group Inc. is North America’s largest broadcaster of French-language entertainment, information and public affairs programming, largest publisher of French-language magazines, and one of the largest private-sector producers of French-language content. The Corporation’s Class B shares are listed on the Toronto Stock Exchange under the ticker symbol TVA.B.

____________________

See accompanying notes to interim condensed consolidated financial statements.

See accompanying notes to interim condensed consolidated financial statements.

See accompanying notes to interim condensed consolidated financial statements.

See accompanying notes to interim condensed consolidated financial statements.

On May 10, 2024, the Board of Directors approved the interim condensed consolidated financial statements for the three-month periods ended March 31, 2024 and 2024.

See accompanying notes to interim condensed consolidated financial statements.

TVA GROUP INC.
Notes to interim condensed consolidated financial statements

Three-month periods ended March 31, 2024 and 2024 (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 Québec Business Corporations Act. TVA Group is an integrated communications company engaged in the broadcasting and production, film production and audiovisual services and magazine publishing industries (note 11). 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, and demand for production services from international and local producers. 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 expenditures. 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 International Financial Reporting Standards (“IFRS”) as 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, they are condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the Corporation’s 2024 annual consolidated financial statements, which describe the accounting policies used to prepare these financial statements.

Certain comparative figures for the three-month period ended March 31, 2024, have been restated to conform to the presentation adopted for the three-month period ended March 31, 2024.

2. Revenues

The breakdown of revenues between advertising services, royalties, leasing and postproduction services and other services rendered, and product sales is as follows:

3. Purchases of goods and services

The main components of purchases of goods and services are as follows:

4. Financial expenses

5. Operational restructuring costs, impairment of assets and others

In the three-month period ended March 31, 2024, the Corporation recorded $392,000 in operational restructuring costs in connection with staff reductions, including $314,000 in the Magazines segment and $78,000 in the Film Production & Audiovisual Services segment ($245,000 in the Film Production & Audiovisual Services segment in the three-month period ended March 31, 2024). During the same period, the Corporation recognized $60,000 in professional fees in connection with business acquisitions made in 2024 and 2024 ($162,000 in the three-month period ended March 31, 2024).

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

On March 20, 2024, the Corporation completed a subscription rights offering to its shareholders, whereby it received gross proceeds totalling $110,000,000 from the issuance of 19,434,629 Class B non-voting shares. Transaction costs of $1,744,000, less $469,000 in income tax, were charged to capital stock as a reduction of gross proceeds from the issuance. The transaction costs included$1,100,000 in commitment fees paid to Quebecor Media.

c) Loss per share attributable to shareholders

The following table shows the computation of loss per basic and diluted share attributable to shareholders:

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

7. Stock-based compensation and other stock-based payments

Of the options outstanding as at March 31, 2024, 334,121 Corporation Class B stock options at an average exercise price of $14.30and 14,000 Quebecor Media stock options at an average price of $66.96 could be exercised.

During the three-month period ended March 31, 2024, no Quebecor Media stock options were exercised (11,625 stock options were exercised for a cash consideration of $292,000 during the three-month period ended March 31, 2015).

During the same period, the Corporation recorded no compensation expense in relation to its Class B stock options ($11,000 reversal in the same period of 2024) and it recorded a $329,000 compensation expense in relation to Quebecor Media stock options ($934,000in the same period of 2024).

8. Accumulated other comprehensive loss

9. Related-party transactions

a) ROC Television G.P. (“ROC Television,” formerly SUN News General Partnership)

Since the announcement on February 13, 2024 of the discontinuation of the operations of ROC Television, in which TVA Group holds a 49% interest, the Corporation has continued making capital contributions to ROC Television to cover its operating losses up to the closure date as well as costs related to the discontinuation of operations. A $1,760,000 allowance was recorded under accounts payable and accrued liabilities at March 31, 2024 to cover those costs.

The partners made no capital contribution in the first quarter of 2024, compared with a $4,800,000 contribution in the first quarter of 2024, including $2,352,000 from TVA Group and $2,448,000 from Sun Media Corporation, a company under common control.

b) Credit facility from parent corporation

In connection with the funding of the acquisition of substantially all of the assets of A.R. Global Vision Ltd., the Corporation obtained a$100,000,000 credit facility from Quebecor Media, which was paid down in full in the first quarter of 2024 with the proceeds from the subscription rights offering (note 6). The Corporation recognized and paid interest in the amount of $805,000 on that credit facility in the first quarter of 2024.

10. Fair value of financial instruments

In accordance with IFRS 13, Fair Value Measurement, the Corporation has considered the following fair value hierarchy. This hierarchy reflects the significance of the inputs used in measuring the financial instruments accounted for at fair value on the consolidated balance sheet:

The fair values of long-term debt and of the derivative financial instrument are estimated based on a valuation model using Level 2 inputs. The fair values are based on discounted cash flows using period-end market yields or the market value of similar financial instruments with the same maturity.

The carrying amount and the fair values of the long-term debt and of the derivative financial instrument as at March 31, 2024 andDecember 31, 2024 were as follows:

¹ The carrying amount of long-term debt excludes financing fees.

11. Segmented information

Management made changes to the Corporation’s management structure at the beginning of 2024. Some Broadcasting & Production segment operations formerly conducted by TVA Accès inc. (now Mels Dubbing Inc.) were transferred to other units of the Corporation. Commercial production remained in the Broadcasting & Production segment, while custom publishing, commercial printed production and premedia services were integrated into the operations of the Magazines segment and dubbing became part of the Film Production & Audiovisual Services segment. Prior period disclosures have been restated to reflect this new presentation.

The Corporation’s operations now consist of the following segments:

• The Broadcasting & Production segment, which includes the operations of TVA Network (including the subsidiary and divisions TVA Productions Inc., TVA Nouvelles and TVA Interactif), specialty services, the marketing of digital products associated with the various televisual brands, the commercial production and distribution of audiovisual products by the TVA Films division.
• The Magazines segment, which through its subsidiaries, notably TVA Publications inc. and Les Publications Charron & Cie inc., publishes French- and English-language magazines in various fields such as the arts, entertainment, television, fashion, sports and decoration, and markets digital products associated with the various magazine brands, and provides custom publishing, commercial print production and premedia services.
• The Film Production & Audiovisual Services segment, which through its subsidiaries Mels Studios and Postproduction G.P. and Mels Dubbing Inc. provides soundstage and equipment leasing, dubbing and postproduction and visual effects services.

The above-noted intersegment items represent the elimination of normal course business transactions between the Corporation’s business segments regarding revenues.

SOURCE TVA Group