Transcontinental Inc.

For Q3 fiscal 2026, revenue increased 3.8% year over year and consolidated adjusted EBITDA rose 4.1% to $60.9 million. Adjusted EPS from continuing operations was $0.32 versus $0.27 last year, and adjusted tax expense was $14.4 million at a 32.3% effective rate. Retail Services and Printing revenue increased 7.1% to $233.3 million, with adjusted EBITDA up 2.3% to $49.4 million; Books and Education revenue declined to $73.1 million from $77.5 million, with adjusted EBITDA down $1.1 million to $20.5 million. Cash flow from operating activities was $25 million versus $36.5 million last year, CapEx was $19.8 million, and net debt fell to 2.06x from 2.14x three months earlier. Management reaffirmed fiscal 2026 adjusted EBITDA should be in line with the previous year, CapEx should be around $60 million for the full year, and net debt should end the year around 1.75x.

Sam Bendavid said the quarter reinforced confidence that the company can finish fiscal 2026 in line with its outlook. He highlighted that ISM and Specialty grew revenue and profitability beyond the benefit of acquisitions, with integration ahead of plan and synergies helping margins. He also emphasized raddar’s national rollout as a major milestone, saying the build-out is complete and the revenue opportunity is now ahead, while Books and Education weakness was described as timing-related and expected to recover in Q4.

Donald LeCavalier focused on the financial bridge: revenue up 3.8%, adjusted EBITDA up 4.1% to $60.9 million, and adjusted EPS up 18.5% to $0.32. He said the higher net financial expense was driven by a $12 million foreign-exchange loss on financial instruments tied to the packaging sale, and that the effective tax rate was 32.3% but should trend back to the mid-20s. On cash and capital allocation, he noted $25 million of operating cash flow, $19.8 million of CapEx, $36.5 million of real-estate-sale inflow in the quarter, net debt of 2.06x, and a year-end leverage target around 1.75x, with another two buildings expected to be sold over the next 12 months toward the original $100 million real-estate monetization goal.

Analysts focused on how much of the Q3 benefit came from newspaper insourcing, what raddar contributes to revenue and profitability, and whether Q4 would see a ramp in those benefits. Management said the newspaper insourcing phases were largely complete and affected revenue more than bottom line, while raddar has generated positive advertiser feedback and some top-line impact but is still too early to model precisely for profitability. Questions also covered leverage, cash flow, and capital allocation; management said the main Q4 debt reduction should come from normal working-capital reversal, while near-term capital allocation is expected to be dividends, possible ISM or education acquisitions, debt paydown, and routine CapEx.