Transcontinental Inc.’s (TSX: TCL.A, TCL.B, TCL.PR.D) revenues for fiscal 2013 remained stable at $2.1 billion. This performance is mainly related to the contribution from acquisitions, in particular the acquisition of Quad/Graphics Canada, Inc., which was however offset by the end of the contract to print and distribute Zellers flyers, a decrease in volume in our book and magazine printing operations, a difficult advertising environment and the incentives granted for the renewal of certain contracts in 2012.
Adjusted operating income declined slightly, or 0.6%, from $245.2 million to $243.8 million. This slight decrease is primarily due to the share-price variance in fiscal 2013, compared to fiscal 2012 (a 62% rise in share price), which increased the stock-based compensation expense, as well as the reasons mentioned above. This decrease in adjusted operating income was partially offset, however, by synergies derived from the acquisition of Quad/Graphics Canada, Inc. and the optimization of our company-wide cost structure. Net income applicable to participating shares improved from a loss of $183.3 million, or $2.27 per share, to a loss of $14.5 million, or $0.19 per share. This improvement is mainly due to unusual income tax adjustments of $115.2 million recorded in 2012, including financial expenses, and to a lower asset impairment charge in 2013. Adjusted net income applicable to participating shares grew 5.2%, from $149.4 million, or $1.85 per share, to $157.2 million, or $2.02 per share.
“In fiscal 2013, considering the profound transformation that is ongoing in our industry, we have delivered strong results that reflect the excellence of our manufacturing know-how and our new product and service development efforts,” said François Olivier, President and Chief Executive Officer. “I am especially proud of the solid performance delivered by our Printing Sector which increased its adjusted operating income by 12%, or $23 million, making 2013 a record year for this operating segment. These results are due in large part to the successful integration of Quad/Graphics Canada, Inc.'s operations into our print network, which generated significant synergies and enabled greater optimization of our platform. In addition, despite the ongoing challenge of a soft advertising market, I would highlight that the launch of new digital media products in 2013, as well as investments in non-advertising related businesses, such as educational publishing, contributed to maintaining our revenues.
As a result of our excellent financial position and our ability to generate significant cash flows, we were able to both significantly reduce our debt and pay a special dividend to our participating shareholders in addition to paying the regular dividend. Our strong balance sheet gives us the financial flexibility we need to strategically pursue our transformation in conjunction with our employees, our communities, our shareholders and our customers.”