Transcontinental : Q2-2026 Quarterly Report

About this update from Transcontinental Inc. Class A

Press Release For Immediate Release Transcontinental Inc. Announces Results for the Second Quarter of Fiscal Year 2026 Highlights Revenues of $269.2 million for the quarter ended April 26, 2026; operating earnings of $14.1 million; and net earnings from continuing operations of $4.3 million ($0.05 per share). Adjusted operating earnings before depreciation and amortization (1) of $45.4 million for the quarter ended April 26, 2026; adjusted operating earnings (1) of $29.9 million; and adjusted net earnings from continuing operations (1) of $16.0 million (0.19 $ per share). Closing of the sale of the packaging activities on March 6, 2026, and payment of a special distribution of $20.00 per share on March 20, 2026. Acquisition of PDI Group to accelerate the growth of in-store marketing activities. Subsequent to the closing of the second quarter of fiscal year 2026, sale of a warehouse located in Boucherville, Quebec, for a consideration of $34.9 million. Signing of multi-year agreements with Postmedia and Glacier for additional newspaper printing volume. Nationwide rollout of raddar ® planned for the week of June 15, 2026. Declaration of a quarterly dividend of $0.05 per share. (1) Please refer to the "Non-IFRS Financial Measures" section of this press release for a definition of these measures. Montréal, June 3, 2026 - Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the second quarter of fiscal year 2026 ended April 26, 2026. "Thanks to the initiatives implemented to increase profitability, we are on track for an improved financial performance in the second half of fiscal year 2026 and to meet our outlook of stable adjusted operating earnings before depreciation and amortization from continuing operations for fiscal year 2026 compared to fiscal year 2025," said Sam Bendavid, Chief Executive Officer of TC Transcontinental. "As in the previous quarter, our acquisitions in in-store marketing activities, including the recent acquisition of PDI Group, enabled us to partially offset the slowdown in our traditional activities. Furthermore, the recently signed agreements with Postmedia and Glacier as well as our cost reduction initiatives will have a positive impact on our traditional activities starting in the third quarter. In addition, the nationwide rollout of raddar ® planned for the week of June 15, 2026, bodes well for our future. Financial performance is improving, and I am very confident in the future of the business." "The sale of our Boucherville warehouse on April 30, 2026, and the significant cash flows we expect to generate in the fourth quarter of fiscal year 2026 will enable us to reduce significantly our net indebtedness in the next two quarters," added Donald LeCavalier, Executive Vice President and Chief Financial Officer of TC Transcontinental. Transcontinental Inc. 1 Place Ville Marie Suite 3240 Montréal, Québec H3B 0G1 Telephone: 514-954-4000 Fax: 514-954-4160 https://www.tc.tc Financial Highlights (for continuing operations, in millions of dollars, except per share amounts) Q2-2026 Q2-2025 Restated (1) Variation in % Revenues $ 269.2 $ 283.3 (5.0) % Operating earnings before depreciation and amortization 31.4 45.2 (30.5) Adjusted operating earnings before depreciation and amortization (2) 45.4 46.2 (1.7) Operating earnings 14.1 27.1 (48.0) Adjusted operating earnings (2) 29.9 29.3 2.0 Net earnings 4.3 15.4 (72.1) Net earnings per share 0.05 0.18 (72.2) Adjusted net earnings (2) 16.0 17.0 (5.9) Adjusted net earnings per share (2) 0.19 0.20 (5.0) (1) Please refer to the "Discontinued Operations and Reclassification of Comparative Figures" section and Table #2 in the "Accounting Restatements" section of the Management Discussion and Analysis for an explanation of the restated data presented above. (2) Please refer to the "Reconciliation of Non-IFRS Financial Measures" section of this Press Release for the adjusted data presented above. Results for the Second Quarter of Fiscal Year 2026 Revenues decreased by $14.1 million, or 5.0%, from $283.3 million in the second quarter of fiscal year 2025 to $269.2 million in the second quarter of fiscal year 2026. This decrease is mostly due to lower volume in our two sectors, partially mitigated by our recent acquisitions and, to a lesser extent, the favourable exchange rate effect. Operating earnings before depreciation and amortization decreased by $13.8 million, or 30.5%, from $45.2 million in the second quarter of fiscal year 2025 to $31.4 million in the second quarter of fiscal year 2026. This decrease is mainly due to the increase in restructuring costs and lower volume in our two sectors, partially mitigated by the decrease in incentive compensation, our recent acquisitions, our cost reduction initiatives and, to a lesser extent, the favourable exchange rate effect. Adjusted operating earnings before depreciation and amortization decreased by $0.8 million, or 1.7%, from $46.2 million in the second quarter of fiscal year 2025 to $45.4 million in the second quarter of fiscal year 2026. This decrease is mainly due to lower volume in our two sectors, mostly mitigated by the decrease in incentive compensation, our recent acquisitions, our cost reduction initiatives and the favourable exchange rate effect. Net earnings from continuing operations decreased by $11.1 million, or 72.1%, from $15.4 million in the second quarter of fiscal year 2025 to $4.3 million in the second quarter of fiscal year 2026. This decrease is mainly due to the previously explained decline in operating earnings before depreciation and amortization and the increase in financial expenses, partially mitigated by lower income taxes and, to a lesser extent, the decrease in depreciation and amortization. On a per share basis, net earnings from continuing operations decreased by 72.2%, from $0.18 to $0.05, respectively. Adjusted net earnings from continuing operations decreased by $1.0 million, or 5.9%, from $17.0 million in the second quarter of fiscal year 2025 to $16.0 million in the second quarter of fiscal year 2026. This decrease is mainly due to the increase in financial expenses and the previously explained decline in adjusted operating earnings before depreciation and amortization, partially mitigated by lower adjusted income taxes. On a per share basis, adjusted net earnings from continuing operations decreased by 5.0%, from $0.20 to $0.19, respectively. Results for the First Six Months of Fiscal Year 2026 Revenues decreased by $8.3 million, or 1.5%, from $541.0 million in the first six months of fiscal year 2025 to $532.7 million in the corresponding period of 2026. This decrease is mainly explained by lower volume in our two sectors, partially mitigated by our recent acquisitions and, to a lesser extent, the favourable exchange rate effect. Operating earnings before depreciation and amortization decreased by $24.4 million, or 29.8%, from $81.9 million in the first six months of fiscal year 2025 to $57.5 million in the corresponding period of 2026. This decrease is mainly due to lower volume in our two sectors, the increase in restructuring and other costs and the recognition of an asset impairment charge, partially mitigated by our recent acquisition and the favourable exchange rate effect. Adjusted operating earnings before depreciation and amortization decreased by $8.0 million, or 9.2%, from $86.5 million in the first six months of fiscal year 2025 to $78.5 million in the corresponding period of 2026. This decrease is mainly due to lower volume in our two sectors, partially mitigated by our recent acquisitions, the favourable exchange rate effect and the decrease in incentive compensation. Net earnings from continuing operations decreased by $16.1 million, or 79.7%, from $20.2 million in the first six months of fiscal year 2025 to $4.1 million in the corresponding period of 2026. This decrease is mainly due to the previously explained decline in operating earnings before depreciation and amortization and the increase in financial expenses, partially mitigated by lower income taxes and, to a lesser extent, the decrease in depreciation and amortization. On a per share basis, net earnings attributable to shareholders of the Corporation from continuing operations decreased by 79.2%, from $0.24 to $0.05, respectively. Adjusted net earnings from continuing operations decreased by $2.5 million, or 9.9%, from $25.2 million in the first six months of fiscal year 2025 to $22.7 million in the corresponding period of 2026. This decrease is mainly due to the previously explained decline in adjusted operating earnings before depreciation and amortization and the increase in financial expenses, partially mitigated by lower adjusted income taxes. On a per share basis, adjusted net earnings from continuing operations decreased by 10.0%, from $0.30 to $0.27, respectively. For more detailed financial information, please see the Management's Discussion and Analysis for the second quarter of fiscal year 2026 ended April 26, 2026, as well as the financial statements in the "Investors" section of our website at https://www.tc.tc . Outlook The closing of the sale of our Packaging Business represents a key milestone for TC Transcontinental. This transaction allows us to focus our resources on our growth strategy, in particular in in-store marketing and educational publishing activities. For fiscal year 2026, we anticipate lower volume in our traditional activities, including book printing which experienced very high growth in fiscal year 2025. This decrease should be partially offset by growth in our in-store marketing activities, including the positive impact of acquisitions. At the consolidated level, following the positive impact of cost reduction initiatives, we expect adjusted operating earnings before depreciation and amortization from continuing operations for fiscal year 2026 to remain stable compared to fiscal year 2025. Lastly, we expect to continue generating significant cash flows from operating activities. Over the next few quarters, this should enable us to reduce net indebtedness under two times adjusted operating earnings before depreciation and amortization for fiscal year 2026 while investing in our growth. Non-IFRS Financial Measures In this document, unless otherwise indicated, all financial data are prepared in accordance with International Financial Reporting Accounting Standards ("IFRS") and the term "dollar", as well as the symbol "$" designate Canadian dollars. In addition, in this press release, we also use certain non-IFRS financial measures for which a complete definition is presented below and for which a reconciliation to financial information in accordance with IFRS is presented in the "Reconciliation of Non-IFRS Financial Measures" section and in Note 4 "Segmented Information" to the condensed interim consolidated financial statements for the second quarter ended April 26, 2026. Terms Used Definitions Adjusted operating earnings before depreciation and amortization Operating earnings before depreciation and amortization excluding restructuring and other costs (revenues) as well as impairment of assets. This measure is used to assess the operating performance of the Corporation and its sectors on a comparable basis. Adjusted operating earnings Operating earnings excluding restructuring and other costs (revenues), amortization of intangible assets arising from business combinations as well as impairment of assets. This measure is used to better assess the current operating performance of the Corporation and its sectors on a comparable basis. Adjusted income taxes Income taxes before income taxes on restructuring and other costs (revenues), amortization of intangible assets arising from business combinations, impairment of assets as well as the recognition of previous years tax assets of an acquired company. Adjusted net earnings Net earnings (loss) from continuing operations before restructuring and other costs (revenues), amortization of intangible assets arising from business combinations and impairment of assets, net of related income taxes as well as the recognition of previous years tax assets of an acquired company. This measure is used to assess the financial performance of the Corporation and its sectors on a comparable basis. Net indebtedness Total of long-term debt, of current portion of long-term debt, of lease liabilities and of current portion of lease liabilities, less cash. This measure is used to calculate the net indebtedness ratio. Net indebtedness ratio Net indebtedness divided by the last 12 months' adjusted operating earnings before depreciation and amortization. This ratio is used by the Corporation to measure its ability to repay its debts and assess its financial leverage. Reconciliation of Non-IFRS Financial Measures The financial information has been prepared in accordance with IFRS. However, financial measures used, namely adjusted operating earnings before depreciation and amortization, adjusted operating earnings margin before depreciation and amortization, adjusted operating earnings, adjusted operating earnings margin, adjusted income taxes, adjusted net earnings from continuing operations, adjusted net earnings per share from continuing operations, net indebtedness and net indebtedness ratio, for which a reconciliation is presented in the following table, are not defined by IFRS. They may be calculated differently and may not be comparable to similar measures presented by other companies. We believe that many of our readers analyze the financial performance of the Corporation's activities based on these non-IFRS financial measures as such measures may allow for easier comparisons between periods. These measures should be considered as a complement to financial performance measures in accordance with IFRS. They do not substitute and are not superior to them. The Corporation also believes that these measures are useful indicators of the performance of its operations and its ability to meet its financial obligations. Furthermore, management also uses some of these non-IFRS financial measures to assess the performance of its activities and managers. Reconciliation of operating earnings from continuing operations - Second quarter and cumulative Three months ended Six months ended (in millions of dollars) April 26, 2026 April 27, 2025 Restated April 26, 2026 April 27, 2025 Restated Operating earnings $14.1 $27.1 $22.3 $45.9 Excluding Restructuring and other costs 14.0 1.0 17.5 4.6 Amortization of intangible assets arising from business combinations (1) 1.8 1.2 4.1 2.2 Impairment of assets - - 3.5 - Adjusted operating earnings $29.9 $29.3 $47.4 $52.7 Depreciation and amortization (2) 15.5 16.9 31.1 33.8 Adjusted operating earnings before depreciation and amortization $45.4 $46.2 $78.5 $86.5 (1) Amortization of intangible assets arising from business combinations includes our customer relationships, educational book titles, non-compete agreements, trade names with finite useful lives and rights of first refusal. (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations. Reconciliation of operating earnings - Second quarter and cumulative for the Retail Services and Printing Sector Three months ended Six months ended April 26, 2026 April 27, 2025 April 26, 2026 April 27, 2025 (in millions of dollars) Restated Restated Restated Operating earnings $25.0 $38.6 $47.9 $67.0 Excluding Restructuring and other costs 6.7 1.0 9.1 4.1 Amortization of intangible assets arising from business combinations (1) 1.3 0.6 3.4 1.2 Impairment of assets - - 3.5 - Adjusted operating earnings $33.0 $40.2 $63.9 $72.3 Depreciation and amortization (2) 8.1 9.1 15.9 18.1 Adjusted operating earnings before depreciation and amortization $41.1 $49.3 $79.8 $90.4 (1) Amortization of intangible assets arising from business combinations includes our customer relationships, non-compete agreements and trade names with finite useful lives. (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations. Reconciliation of operating earnings - Second quarter and cumulative for the Books and Education Sector Three months ended Six months ended April 26, 2026 April 27, 2025 April 26, 2026 April 27, 2025 (in millions of dollars) Restated Restated Restated Operating earnings $0.1 $0.3 $1.1 $0.3 Excluding Restructuring and other costs 0.1 0.2 0.1 0.2 Amortization of intangible assets arising from business combinations (1) 0.5 0.6 0.7 1.0 Adjusted operating earnings $0.7 $1.1 $1.9 $1.5 Depreciation and amortization (2) 6.3 6.4 13.0 13.1 Adjusted operating earnings before depreciation and amortization $7.0 $7.5 $14.9 $14.6 (1) Amortization of intangible assets arising from business combinations includes our rights of first refusal and educational book titles. (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations. Reconciliation of operating earnings - Second quarter and cumulative for head office Three months ended Six months ended April 26, 2026 April 27, 2025 April 26, 2026 April 27, 2025 (in millions of dollars) Restated Restated Restated Operating loss $(11.0) $(11.8) $(26.7) $(21.4) Excluding Restructuring and other costs (revenues) 7.2 (0.2) 8.3 0.3 Adjusted operating loss $(3.8) $(12.0) $(18.4) $(21.1) Depreciation and amortization 1.1 1.4 2.2 2.6 Adjusted operating loss before depreciation and amortization $(2.7) $(10.6) $(16.2) $(18.5) Reconciliation of net earnings from continuing operations - Second quarter and cumulative Three months ended Six months ended (in millions of dollars, except per share amounts) April 26, 2026 April 27, 2025 Restated April 26, 2026 April 27, 2025 Restated Net earnings $4.3 $15.4 $4.1 $20.2 Excluding Restructuring and other costs 14.0 1.0 17.5 4.6 Tax on restructuring and other costs (3.6) (0.3) (4.5) (1.2) Amortization of intangible assets arising from business combinations (1) 1.8 1.2 4.1 2.2 Tax on amortization of intangible assets arising from business combinations (0.5) (0.3) (1.1) (0.6) Impairment of assets - - 3.5 - Tax on impairment of assets - - (0.9) - Adjusted net earnings $16.0 $17.0 $22.7 $25.2 Net earnings attributable to shareholders of the Corporation per share $0.05 $0.18 $0.05 $0.24 Adjusted net earnings per share $0.19 $0.20 $0.27 $0.30 Weighted average number of shares outstanding 83.6 83.6 83.6 83.9 (1) Amortization of intangible assets arising from business combinations includes our customer relationships, educational book titles, non-compete agreements, trade names with finite useful lives and rights of first refusal. Reconciliation of net indebtedness As at April 26, 2026 As at October 26, 2025 (for continuing operations, in millions of dollars, except for ratios) Restated Long-term debt $105.8 $417.6 Current portion of long-term debt 250.5 253.2 Lease liabilities 74.2 91.1 Current portion of lease liabilities 14.4 25.5 Cash (8.8) (47.0) Net indebtedness $436.1 $740.4 Adjusted operating earnings before depreciation and amortization (last 12 months) $203.9 $211.9 Net indebtedness ratio 2.14x 3.49x Dividend The Corporation's Board of Directors declared a quarterly dividend of $0.05 per share on Class A Subordinate Voting Shares and Class B Shares. This dividend is payable on July 20, 2026, to shareholders of record at the close of business on June 29, 2026. Additional information Conference Call Upon releasing its results for the second quarter of fiscal year 2026, the Corporation will hold a conference call for the financial community on June 4, 2026, at 8:00 a.m. The dial-in numbers are 1-289-514-5100 or 1-800-717-1738. Media may hear the call in listen-only mode or tune in to the simultaneous audio broadcast on TC Transcontinental's website, which will then be archived for 30 days. For media requests or interviews, please contact Nora Labbe, Advisor, Corporate Communications of TC Transcontinental, at 514-451-8434. Profile Founded 50 years ago and 4,200 employees strong, Transcontinental Inc. (TSX: TCL.A TCL.B), known under the TC Transcontinental brand, is a Canadian retail marketing services company, Canada's largest printer, and the Canadian leader in French-language educational publishing. Driven by the vision of a more informed, educated and prosperous society, TC Transcontinental propels its clients' success across the retail, education, book and information industries. With agility, creativity and boldness, we design and deliver innovative, high-value products and services. For more information, please visit https://www.tc.tc . Forward-looking Statements Our public communications often contain oral or written forward-looking statements which are based on the expectations of management and inherently subject to a certain number of risks and uncertainties, known and unknown. By their very nature, forward-looking statements are derived from both general and specific assumptions. The Corporation cautions against undue reliance on such statements since actual results or events may differ materially from the expectations expressed or implied in them. Forward-looking statements may include observations concerning the Corporation's objectives, strategy, anticipated financial results and business outlook. The Corporation's future performance may also be affected by a number of factors, many of which are beyond the Corporation's will or control. These factors include, but are not limited to the impact of digital product development and adoption, the impact of changes in the participants in the distribution of newspapers and printed advertising materials and the disruption in their activities resulting mainly from labour disputes, including at Canada Post, the impact of regulations or legislation regarding door-to-door distribution on the printing of paper flyers or printed advertising materials, inflation and recession risks, economic conditions and geopolitical uncertainty, environmental risks as well as adoption of new regulations or amendments and changes to consumption habits, risk of an operational disruption that could be harmful to its ability to meet deadlines, the worldwide outbreak of a disease, a virus or any other contagious disease could have an adverse impact on the Corporation's operations, the ability to generate organic long-term growth and face competition, a significant increase in the cost of raw materials, the availability of those materials and energy consumption could have an adverse impact on the Corporation's activities, the ability to complete business acquisitions and disposals and properly integrate acquisitions, cybersecurity, data protection, warehousing and usage, the impact of digital product development and adoption on the demand for printed products other than flyers, the failure of patents, trademarks and confidentiality agreements to protect intellectual property, a difficulty to attract and retain employees, bad debts from certain customers, import and export controls, duties, tariffs or taxes, exchange rate fluctuations, increase in market interest rates with respect to its financial instruments as well as availability of capital at a reasonable cost, the legal risks related to its activities and the compliance of its activities with applicable regulations, the impact of major market fluctuations on the solvency of defined benefit pension plans, changes in tax legislation and disputes with tax authorities or amendments to statutory tax rates in force, the impact of impairment tests on the value of assets and a conflict of interest between the controlling shareholder and other shareholders. The main risks, uncertainties and factors that could influence actual results are described in the Management's Discussion and Analysis for the fiscal year ended October 26, 2025, and in the latest Annual Information Form . Unless otherwise indicated by the Corporation, forward-looking statements do not take into account the potential impact of non-recurring or other unusual items, nor of disposals, business combinations, mergers or acquisitions which may be announced or entered into after the date of June 3, 2026. The forward-looking statements in this press release are made pursuant to the "safe harbour" provisions of applicable Canadian securities legislation. The forward-looking statements in this release are based on current expectations and information available as at June 3, 2026. Such forward-looking information may also be found in other documents filed with Canadian securities regulators or in other communications. The Corporation's management disclaims any intention or obligation to update or revise these statements unless otherwise required by the securities authorities. - 30 - For information: Media Nora Labbe Advisor, Corporate Communications TC Transcontinental Telephone: 514-451-8434 [email protected] https://www.tc.tc Financial Community Yan Lapointe Senior Director, Investor Relations and Treasury TC Transcontinental Telephone: 514-954-3574 [email protected] https://www.tc.tc C R ANSCONTINENTAL • Management's Discussion and Analysis For the the second quarter ended April 26, 2026 MANAGEMENT'S DISCUSSION AND ANALYSIS For the second quarter ended April 26, 2026 The purpose of this Management's Discussion and Analysis is to help the reader better understand the business, development strategy, and future outlook of Transcontinental Inc., how we manage risk, as well as to analyze the Corporation's results and financial position for the second quarter ended April 26, 2026. It should be read in conjunction with the information in the unaudited condensed interim consolidated financial statements and the accompanying notes. Additional information relating to the Corporation, including its Annual Report and Annual Information Form , may also be obtained on SEDAR+ at www.sedarplus.ca. In this document, unless otherwise indicated, all financial data are prepared in accordance with International Financial Reporting Accounting Standards ("IFRS") and the term "dollar", as well as the symbol "$" designate Canadian dollars. In addition, in this Management's Discussion and Analysis, we also use non-IFRS financial measures for which a complete definition is presented below and for which a reconciliation to financial information in accordance with IFRS is presented in Table #3 in the section entitled "Reconciliation of Non-IFRS Financial Measures" and in Note 4 "Segmented information" to the condensed interim consolidated financial statements for the second quarter ended April 26, 2026. These measures should be considered as a complement to financial performance measures in accordance with IFRS. They do not substitute and are not superior to them. Terms Used Definitions Adjusted operating earnings before depreciation and amortization Operating earnings before depreciation and amortization excluding restructuring and other costs (revenues) as well as impairment of assets. This measure is used to assess the operating performance of the Corporation and its sectors on a comparable basis. Adjusted operating earnings margin before depreciation and amortization Adjusted operating earnings before depreciation and amortization divided by revenues. This ratio is used to assess the operating performance and contribution of each sector on a comparable basis. Adjusted operating earnings Operating earnings excluding restructuring and other costs (revenues), amortization of intangible assets arising from business combinations as well as impairment of assets. This measure is used to better assess the current operating performance of the Corporation and its sectors on a comparable basis. Adjusted operating earnings margin Adjusted operating earnings divided by revenues. This ratio is used to assess the efficiency of the current operating performance of the Corporation and its sectors on a comparable basis, thus demonstrating the Corporation's ability to generate profitable growth. Adjusted income taxes Income taxes before income taxes on restructuring and other costs (revenues), amortization of intangible assets arising from business combinations, impairment of assets as well as the recognition of previous years tax assets of an acquired company. Adjusted net earnings Net earnings (loss) from continuing operations before restructuring and other costs (revenues), amortization of intangible assets arising from business combinations and impairment of assets, net of related income taxes as well as the recognition of previous years tax assets of an acquired company. This measure is used to assess the financial performance of the Corporation and its sectors on a comparable basis. Net indebtedness Total of long-term debt, of current portion of long-term debt, of lease liabilities and of current portion of lease liabilities, less cash. This measure is used to calculate the net indebtedness ratio. Net indebtedness ratio Net indebtedness divided by the last 12 months' adjusted operating earnings before depreciation and amortization. This ratio is used by the Corporation to measure its ability to repay its debts and assess its financial leverage. Finally, to facilitate the reading of this report, the terms "TC Transcontinental", "Transcontinental", "Corporation", "we", "our" and "us" all refer to Transcontinental Inc. together with its subsidiaries and joint ventures. CAUTION REGARDING FORWARD-LOOKING STATEMENTS Our public communications often contain oral or written forward-looking statements which are based on the expectations of Management and inherently subject to a certain number of risks and uncertainties, known and unknown. By their very nature, forward-looking statements are derived from both general and specific assumptions. The Corporation cautions against undue reliance on such statements since actual results or events may differ materially from the expectations expressed or implied in them. Forward-looking statements include, among others, statements with respect to our objectives, our outlook, our strategies to achieve these objectives, as well as statements with respect to our beliefs, plans, expectations, anticipations, estimates and intentions. The words "may", "could", "should", "would", "assumptions", "plan", "strategy", "outlook", "believe", "anticipate", "estimate", "expect", "intend", "objective", the use of the future and conditional tenses, and words and expressions of similar nature are intended to identify forward-looking statements. Such forward-looking statements may also include observations concerning the Corporation's anticipated financial results and business outlooks and the economies in which it operates. The Corporation's future performance may also be affected by a number of factors, many of which are beyond its will or control. The main risks, uncertainties and factors that could influence actual results are described in this Management's Discussion and Analysis for the fiscal year ended October 26, 2025 and in the latest Annual Information Form . Unless otherwise indicated by the Corporation, forward-looking statements do not take into account the potential impact of non-recurring or other unusual items, nor of disposals, business combinations, mergers or acquisitions which may be announced or concluded after the date of June 3, 2026. These forward-looking statements are made pursuant to the "safe harbour" provisions of applicable Canadian securities legislation. The forward-looking statements in this Management's Discussion and Analysis are based on current expectations and information available as at June 3, 2026. Such forward-looking statements may also be found in other documents filed with Canadian securities regulators or in other communications. The Corporation's Management disclaims any intention or obligation to update or revise these statements unless otherwise required by the securities authorities. PROFILE OF TC TRANSCONTINENTAL Founded 50 years ago and 4,200 employees strong, Transcontinental Inc. (TSX: TCL.A TCL.B), known under the TC Transcontinental brand, is a Canadian retail marketing services company, Canada's largest printer, and the Canadian leader in French-language educational publishing. Driven by the vision of a more informed, educated and prosperous society, TC Transcontinental propels its clients' success across the retail, education, book and information industries. With agility, creativity and boldness, we design and deliver innovative, high-value products and services. For more information, please visit https://www.tc.tc . HIGHLIGHTS Table #1: (for continuing operations, in millions of dollars, except per share amounts) Q2-2026 Q2-2025 Restated (1) Variation in % Revenues $269.2 $283.3 (5.0)% Operating earnings before depreciation and amortization 31.4 45.2 (30.5) Adjusted operating earnings before depreciation and amortization (2) 45.4 46.2 (1.7) Operating earnings 14.1 27.1 (48.0) Adjusted operating earnings (2) 29.9 29.3 2.0 Net earnings 4.3 15.4 (72.1) Net earnings per share 0.05 0.18 (72.2) Adjusted net earnings (2) 16.0 17.0 (5.9) Adjusted net earnings per share (2) 0.19 0.20 (5.0) Please refer to the "Discontinued Operations and Reclassification of Comparative Figures" section and Table #2 in the "Accounting Restatements" section of this Management Discussion and Analysis for an explanation of the restated data presented above. Please refer to Table #3 in the "Reconciliation of Non-IFRS Financial Measures" section of this Management Discussion and Analysis for the adjusted data presented above. Revenues of $269.2 million for the quarter ended April 26, 2026; operating earnings of $14.1 million; and net earnings from continuing operations of $4.3 million ($0.05 per share). Adjusted operating earnings before depreciation and amortization of $45.4 million for the quarter ended April 26, 2026; adjusted operating earnings of $29.9 million; and adjusted net earnings from continuing operations of $16.0 million ($0.19 per share). Closing of the sale of the packaging activities on March 6, 2026, and payment of a special distribution of $20.00 per share on March 20, 2026. Acquisition of PDI Group to accelerate the growth of in-store marketing activities. Subsequent to the closing of the second quarter of fiscal year 2026, sale of a warehouse located in Boucherville, Quebec, for a consideration of $34.9 million. Signing of multi-year agreements with Postmedia and Glacier for additional newspaper printing volume. Nationwide rollout of raddar ® planned for the week of June 15, 2026. Declaration of a quarterly dividend of $0.05 per share. HIGHLIGHTS OF THE SECOND QUARTER OF FISCAL YEAR 2026 Business disposal On March 6, 2026, the Corporation completed the sale of its Packaging Sector activities to ProAmpac Holdings Inc. In this period of industry consolidation, this transaction enabled the Corporation to maximize shareholder value by acting decisively and from a position of strength. In addition, it allows the Corporation to focus its resources on its growth strategy, in particular in in-store marketing and educational publishing activities. Acquisition of Phipps Dickson Integria Group inc. On March 31, 2026, the Corporation acquired all the shares of Phipps Dickson Integria Group Inc. ("PDI Group"), a company based in Kirkland and Laval, Quebec, which provides integrated commercial printing, large-format signage and in-store marketing services solutions. This acquisition strengthens the Corporation's ability to offer integrated in-store marketing solutions from design through production and distribution. The transaction was completed for a total consideration of $21.0 million, subject to adjustments. DISCONTINUED OPERATIONS AND RECLASSIFICATION OF COMPARATIVE FIGURES In accordance with the requirements of IFRS 5 "Non-Current Assets Held for Sale and Discontinued Operations", the Packaging Sector is reported as discontinued operations. As a result, the Consolidated Statement of Earnings, the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Cash Flows have been reclassified as if the operations had been discontinued from the beginning of the comparative period. Unless otherwise indicated, results are presented on a continuing operations basis. ACCOUNTING RESTATEMENTS During the first six months of fiscal year 2026, the Corporation revised the accounting treatment of digital revenues for the Book and Education Sector and volume discounts for the Retail Services and Printing Sector. The Corporation applied these treatments retrospectively, and the corresponding figures for the second quarter and the first six months of fiscal year 2025 have been adjusted to reflect these changes, which had a favourable impact of $ 1.5 million and $2.5 million, respectively, on previously reported net earnings. These restatements had a negligible impact on the opening balances as at October 27, 2024 . The following table presents, only for the applicable line items, the previously reported figures, the restatements and the restated figures: Table #2: (in millions of dollars) As at October 26, 2025 As reported Restatement As at October 26, 2025 Restated Inventories $ 378.4 $ (5.7) $ 372.7 Deferred revenues and deposits 8.5 6.0 14.5 Deferred taxes 72.1 (3.0) 69.1 Retained earnings 1,258.3 (8.7) 1,249.6 Three months ended Six months ended (in millions of dollars) April 27, 2025 As reported Restatement April 27, 2025 Restated (1) April 27, 2025 As reported Restatement April 27, 2025 Restated (1) Revenues $ 684.1 $ 1.7 $ 685.8 $ 1,327.1 $ 4.2 $ 1,331.3 Operating expenses 575.6 (0.3) 575.3 1,121.1 0.7 1,121.8 Income taxes 8.1 0.5 8.6 31.8 1.0 32.8 Net earnings 34.0 1.5 35.5 89.7 2.5 92.2 (1) Amounts reported represent total amounts before the reclassification of discontinued operations. SEGMENTED INFORMATION During the second quarter of fiscal year 2026, in connection with the changes in the organizational structure and following the sale of the Packaging Sector activities, the Corporation's operating segments have been changed and are now aggregated and presented by management into two separate sectors: the Retail Services and Printing Sector and the Books and Education Sector. Comparative figures have been reclassified to conform to the presentation adopted in the second quarter of fiscal year 2026. Retail Services and Printing Sector The Retail Services and Printing Sector provides an integrated service offering for retailers, including content and business intelligence solutions, marketing solutions, including print and digital flyers, as well as in-store marketing and specialized products. It also offers an array of innovative print solutions for newspapers. This sector has approximately 3,100 employees across 16 operating sites. Books and Education Sector The Books and Education Sector offers an array of print solutions for magazines and 4-colour books as well as educational and specialized publishing services in print and digital formats and book distribution services. It has close to 800 employees across 3 operating sites. RECONCILIATION OF NON-IFRS FINANCIAL MEASURES (Unaudited) The financial information has been prepared in accordance with IFRS. However, financial measures used, namely adjusted operating earnings before depreciation and amortization, adjusted operating earnings margin before depreciation and amortization, adjusted operating earnings, adjusted operating earnings margin, adjusted income taxes, adjusted net earnings from continuing operations, adjusted net earnings per share from continuing operations, net indebtedness and net indebtedness ratio, for which a reconciliation is presented in the following table, are not defined by IFRS. They may be calculated differently and may not be comparable to similar measures presented by other companies. We believe that many of our readers analyze the financial performance of the Corporation's activities based on these non-IFRS financial measures as such measures may allow for easier comparisons between periods. These measures should be considered as a complement to financial performance measures in accordance with IFRS. They do not substitute and are not superior to them. The Corporation also believes that these measures are useful indicators of the performance of its operations and its ability to meet its financial obligations. Furthermore, management also uses some of these non-IFRS financial measures to assess the performance of its activities and managers. Table #3: Reconciliation of operating earnings from continuing operations - Second quarter and cumulative Three months ended Six months ended (in millions of dollars) April 26, 2026 April 27, 2025 Restated April 26, 2026 April 27, 2025 Restated Operating earnings $14.1 $27.1 $22.3 $45.9 Excluding Restructuring and other costs 14.0 1.0 17.5 4.6 Amortization of intangible assets arising from business combinations (1) 1.8 1.2 4.1 2.2 Impairment of assets - - 3.5 - Adjusted operating earnings $29.9 $29.3 $47.4 $52.7 Depreciation and amortization (2) 15.5 16.9 31.1 33.8 Adjusted operating earnings before depreciation and amortization $45.4 $46.2 $78.5 $86.5 (1) Amortization of intangible assets arising from business combinations includes our customer relationships, educational book titles, non-compete agreements, trade names with finite useful lives and rights of first refusal. (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations. Reconciliation of operating earnings - Second quarter and cumulative for the Retail Services and Printing Sector Three months ended Six months ended April 26, 2026 April 27, 2025 April 26, 2026 April 27, 2025 (in millions of dollars) Restated Restated Restated Operating earnings $25.0 $38.6 $47.9 $67.0 Excluding Restructuring and other costs 6.7 1.0 9.1 4.1 Amortization of intangible assets arising from business combinations (1) 1.3 0.6 3.4 1.2 Impairment of assets - - 3.5 - Adjusted operating earnings $33.0 $40.2 $63.9 $72.3 Depreciation and amortization (2) 8.1 9.1 15.9 18.1 Adjusted operating earnings before depreciation and amortization $41.1 $49.3 $79.8 $90.4 (1) Amortization of intangible assets arising from business combinations includes our customer relationships, non-compete agreements and trade names with finite useful lives. (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations. Reconciliation of operating earnings - Second quarter and cumulative for the Books and Education Sector Three months ended Six months ended April 26, 2026 April 27, 2025 April 26, 2026 April 27, 2025 (in millions of dollars) Restated Restated Restated Operating earnings $0.1 $0.3 $1.1 $0.3 Excluding Restructuring and other costs 0.1 0.2 0.1 0.2 Amortization of intangible assets arising from business combinations (1) 0.5 0.6 0.7 1.0 Adjusted operating earnings $0.7 $1.1 $1.9 $1.5 Depreciation and amortization (2) 6.3 6.4 13.0 13.1 Adjusted operating earnings before depreciation and amortization $7.0 $7.5 $14.9 $14.6 (1) Amortization of intangible assets arising from business combinations includes our rights of first refusal and educational book titles. (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations. Reconciliation of operating earnings - Second quarter and cumulative for head office Three months ended Six months ended April 26, 2026 April 27, 2025 April 26, 2026 April 27, 2025 (in millions of dollars) Restated Restated Restated Operating loss $(11.0) $(11.8) $(26.7) $(21.4) Excluding Restructuring and other costs (revenues) 7.2 (0.2) 8.3 0.3 Adjusted operating loss $(3.8) $(12.0) $(18.4) $(21.1) Depreciation and amortization 1.1 1.4 2.2 2.6 Adjusted operating loss before depreciation and amortization $(2.7) $(10.6) $(16.2) $(18.5) Reconciliation of operating earnings from continuing operations - Last eight quarters 2026 2025 - Restated 2024 - Restated (in millions of dollars) Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Operating earnings $14.1 $8.2 $42.2 $29.5 $27.1 $18.8 $49.8 $40.9 Excluding Restructuring and other costs (revenues) 14.0 3.5 3.3 5.6 1.0 3.6 5.6 (2.9) Amortization of intangible assets arising from business combinations (1) 1.8 2.3 1.0 0.9 1.2 1.0 1.0 1.2 Impairment of assets - 3.5 3.8 5.7 - - 3.3 - Adjusted operating earnings $29.9 $17.5 $50.3 $41.7 $29.3 $23.4 $59.7 $39.2 Depreciation and amortization (2) 15.5 15.6 16.6 16.8 16.9 16.9 17.7 17.7 Adjusted operating earnings before depreciation and amortization $45.4 $33.1 $66.9 $58.5 $46.2 $40.3 $77.4 $56.9 (1) Amortization of intangible assets arising from business combinations includes our customer relationships, educational book titles, non-compete agreements, trade names with finite useful lives and rights of first refusal. (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations. Reconciliation of net earnings from continuing operations - Second quarter and cumulative Three months ended Six months ended (in millions of dollars, except per share amounts) April 26, 2026 April 27, 2025 Restated April 26, 2026 April 27, 2025 Restated Net earnings $4.3 $15.4 $4.1 $20.2 Excluding Restructuring and other costs 14.0 1.0 17.5 4.6 Tax on restructuring and other costs (3.6) (0.3) (4.5) (1.2) Amortization of intangible assets arising from business combinations (1) 1.8 1.2 4.1 2.2 Tax on amortization of intangible assets arising from business combinations (0.5) (0.3) (1.1) (0.6) Impairment of assets - - 3.5 - Tax on impairment of assets - - (0.9) - Adjusted net earnings $16.0 $17.0 $22.7 $25.2 Net earnings attributable to shareholders of the Corporation per share $0.05 $0.18 $0.05 $0.24 Adjusted net earnings per share $0.19 $0.20 $0.27 $0.30 Weighted average number of shares outstanding 83.6 83.6 83.6 83.9 (1) Amortization of intangible assets arising from business combinations includes our customer relationships, educational book titles, non-compete agreements, trade names with finite useful lives and rights of first refusal. Reconciliation of net earnings from continuing operations - Last eight quarters 2026 2025 - Restated 2024 - Restated (in millions of dollars, except per share amounts) Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Net earnings (loss) $4.3 ($0.2) $29.2 $13.0 $15.4 $4.8 $36.1 $21.8 Excluding Restructuring and other costs (revenues) 14.0 3.5 3.3 5.6 1.0 3.6 5.6 (2.9) Recovery (tax) on restructuring and other costs (revenues) (3.6) (0.9) (3.7) (1.3) (0.3) (0.9) (1.4) 0.5 Amortization of intangible assets arising from business combinations (1) 1.8 2.3 1.0 0.9 1.2 1.0 1.0 1.2 Tax on amortization of intangible assets arising from business combinations (0.5) (0.6) (0.2) (0.2) (0.3) (0.3) (0.3) (0.3) Impairment of assets - 3.5 3.8 5.7 - - 3.3 - Tax on impairment of assets - (0.9) (1.0) (1.5) - - (0.8) - Recognition of previous years tax assets of an acquired company - - - - - - - (3.4) Adjusted net earnings $16.0 $6.7 $32.4 $22.2 $17.0 $8.2 $43.5 $16.9 Net earnings attributable to shareholders of the Corporation per share $0.05 $- $0.35 $0.16 $0.18 $0.06 $0.43 $0.25 Adjusted net earnings per share $0.19 $0.08 $0.39 $0.27 $0.20 $0.10 $0.51 $0.20 Weighted average number of shares outstanding 83.6 83.6 83.6 83.6 83.6 84.2 84.8 86.4 (1) Amortization of intangible assets arising from business combinations includes our customer relationships, educational book titles, non-compete agreements, trade names with finite useful lives and rights of first refusal. Reconciliation of net indebtedness As at April 26, 2026 As at October 26, 2025 (for continuing operations, in millions of dollars, except ratios) Restated Long-term debt $105.8 $417.6 Current portion of long-term debt 250.5 253.2 Lease liabilities 74.2 91.1 Current portion of lease liabilities 14.4 25.5 Cash (8.8) (47.0) Net indebtedness $436.1 $740.4 Adjusted operating earnings before depreciation and amortization (last 12 months) $203.9 $211.9 Net indebtedness ratio 2.14x 3.49x ANALYSIS OF CONSOLIDATED RESULTS - SECOND QUARTER OF FISCAL YEAR 2026 Revenues Revenues decreased by $14.1 million, or 5.0%, from $283.3 million in the second quarter of fiscal year 2025 to $269.2 million in the second quarter of fiscal year 2026. This decrease is mostly due to lower volume in our two sectors, partially mitigated by our recent acquisitions and, to a lesser extent, the favourable exchange rate effect. A more detailed analysis of revenues is presented in the section "Analysis of Sector Results - Second Quarter of Fiscal Year 2026". Operating and Other Expenses Operating expenses decreased by $13.3 million, or 5.6%, in the second quarter of fiscal year 2026 compared to the corresponding period of 2025. This decrease is mostly attributable to lower volume in our two sectors, cost reduction initiatives in the Retail Services and Printing Sector and the decrease in incentive compensation, partially offset by our recent acquisitions. Restructuring costs increased by $13.0 million, from $1.0 million in the second quarter of fiscal year 2025 to $14.0 million in the second quarter of fiscal year 2026. This increase is due to the rise in workforce reduction costs at head office following the sale of the Packaging Sector activities, incremental workforce reduction costs in the Retail Services and Printing Sector, to the increase in costs related to restructuring and, business integration costs. Operating Earnings before Depreciation and Amortization Operating earnings before depreciation and amortization decreased by $13.8 million, or 30.5%, from $45.2 million in the second quarter of fiscal year 2025 to $31.4 million in the second quarter of fiscal year 2026. This decrease is mainly due to the increase in restructuring costs and lower volume in our two sectors, partially mitigated by the decrease in incentive compensation, our recent acquisitions, our cost reduction initiatives and, to a lesser extent, the favourable exchange rate effect. Adjusted operating earnings before depreciation and amortization decreased by $0.8 million, or 1.7%, from $46.2 million in the second quarter of fiscal year 2025 to $45.4 million in the second quarter of fiscal year 2026. This decrease is mainly due to lower volume in our two sectors, mostly mitigated by the decrease in incentive compensation, our recent acquisitions, our cost reduction initiatives and the favourable exchange rate effect. A more detailed analysis of adjusted operating earnings before depreciation and amortization is presented in the section "Analysis of Sector Results - Second Quarter of Fiscal Year 2026". Depreciation and Amortization Depreciation and amortization decreased by $0.8 million, from $18.1 million in the second quarter of fiscal year 2025 to $17.3 million in the second quarter of fiscal year 2026. This decrease is mainly attributable to the end of the depreciation period for some items of property, plant and equipment, partially offset by the depreciation and amortization of property, plant and equipment and intangible assets from our recent acquisitions. Net Financial Expenses Net financial expenses increased by $2.2 million, from $7.7 million in the second quarter of fiscal year 2025 to $9.9 million in the second quarter of fiscal year 2026. This unfavourable change is mainly explained by the exchange rate effect, partially offset by the decrease in net indebtedness. Income Taxes Income taxes decreased by $4.1 million, from an expense of $4.0 million in the second quarter of fiscal year 2025 to a recovery of $0.1 million in the second quarter of fiscal year 2026. This decrease is mainly attributable to the decline in earnings before income taxes. Adjusted income taxes decreased by $0.6 million, from $4.6 million in the second quarter of fiscal year 2025, for an effective tax rate of 21.3%, to $4.0 million in the second quarter of fiscal year 2026, for an effective tax rate of 20.0%. This decrease in the effective tax rate is mainly attributable to differences between the accounting and fiscal treatment that had a favorable impact in 2026, partially offset by prior year adjustments that had an unfavourable impact in second quarter of fiscal year 2026 compared to the corresponding period of 2025. Net Earnings from Continuing Operations Net earnings from continuing operations decreased by $11.1 million, or 72.1%, from $15.4 million in the second quarter of fiscal year 2025 to $4.3 million in the second quarter of fiscal year 2026. This decrease is mainly due to the previously explained decline in operating earnings before depreciation and amortization and the increase in financial expenses, partially mitigated by lower income taxes and, to a lesser extent, the decrease in depreciation and amortization. On a per share basis, net earnings attributable to shareholders of the Corporation from continuing operations decreased by 72.2 %, from $0.18 to $0.05, respectively. Adjusted net earnings from continuing operations decreased by $1.0 million, or 5.9%, from $17.0 million in the second quarter of fiscal year 2025 to $16.0 million in the second quarter of fiscal year 2026. This decrease is mainly due to the increase in financial expenses and the previously explained decline in adjusted operating earnings before depreciation and amortization, partially mitigated by lower adjusted income taxes. On a per share basis, adjusted net earnings from continuing operations decreased by 5.0%, from $0.20 to $0.19, respectively. Net Earnings from Discontinued Operations Net earnings from discontinued operations increased by $201.8 million, from $20.1 million in the second quarter of fiscal year 2025 to $221.9 million in the second quarter of fiscal year 2026. This increase is mainly attributable to the recognition of the gain on the sale of the Packaging Sector. On a per share basis, net earnings attributable to shareholders of the Corporation from discontinued operations increased from $0.24 to $2.65, respectively. ANALYSIS OF CONSOLIDATED RESULTS - CUMULATIVE FOR FISCAL YEAR 2026 Revenues Revenues decreased by $8.3 million, or 1.5%, from $541.0 million in the first six months of fiscal year 2025 to $532.7 million in the corresponding period of 2026. This decrease is mainly explained by lower volume in our two sectors, partially mitigated by our recent acquisitions and the favourable exchange rate effect. A more detailed analysis of revenues is presented in the section "Analysis of Sector Results - Cumulative for Fiscal Year 2026". Operating and Other Expenses Operating expenses decreased by $0.3 million, or 0.1%, from $454.5 million in the first six months of fiscal year 2025 to $454.2 million in the corresponding period of 2026. This decrease results from lower volume in our two sectors and cost reduction initiatives in the Retail Services and Printing Sector, mostly offset by our recent acquisitions. Restructuring and other costs increased by $12.9 million, from $4.6 million in the first six months of fiscal year 2025 to $17.5 million in the corresponding period of 2026. This increase is mainly due to the rise in workforce reduction costs at head office, following the sale of the Packaging Sector activities, incremental workforce reduction costs in the Retail Services and Printing Sector, other costs related to restructuring and, business integration costs, partially mitigated by decrease in costs incurred in relation with the labour conflict at Canada Post. In the first six months of fiscal year 2026, an asset impairment charge of $3.5 million was recognized as a result of the revision of estimates for the expected future economic benefits of equipment in the Retail Services and Printing Sector. In the first six months of fiscal year 2025, no impairment charges had been recognized. Operating Earnings before Depreciation and Amortization Operating earnings before depreciation and amortization decreased by $24.4 million, or 29.8%, from $81.9 million in the first six months of fiscal year 2025 to $57.5 million in the corresponding period of 2026. This decrease is mainly due to lower volume in our two sectors, the increase in restructuring and other costs and the recognition of an asset impairment charge, partially mitigated by our recent acquisition and the favourable exchange rate effect. Adjusted operating earnings before depreciation and amortization decreased by $8.0 million, or 9.2%, from $86.5 million in the first six months of fiscal year 2025 to $78.5 million in the corresponding period of 2026. This decrease is mainly due to lower volume in our two sectors, partially mitigated by our recent acquisitions, the favourable exchange rate effect and the decrease in incentive compensation. A more detailed analysis of adjusted operating earnings before depreciation and amortization is presented in the section "Analysis of Sector Results - Cumulative for Fiscal Year 2026". Depreciation and Amortization Depreciation and amortization decreased by $0.8 million, from $36.0 million in the first six months of fiscal year 2025 to $35.2 million in the corresponding period of 2026. This decrease is mainly attributable to the end of the depreciation period for some items of property, plant and equipment, partially offset by the depreciation and amortization of property, plant and equipment and intangible assets from our recent acquisitions. Net Financial Expenses Net financial expenses increased by $1.8 million, from $17.4 million in the first six months of fiscal year 2025 to $19.2 million in the corresponding period of 2026. This unfavourable change is mainly explained by the exchange rate effect and the decrease in interest income, partially mitigated by the decrease in net indebtedness. Income Taxes Income taxes decreased by $9.3 million, from income taxes of $8.3 million in the first six months of fiscal year 2025 to a recovery of $1.0 million in the corresponding period of 2026. This decrease is mainly attributable to the decline in earnings before taxes and to favorable differences between the accounting and tax treatment. Adjusted income taxes decreased by $4.6 million, from $10.1 million in the first six months of fiscal year 2025, for an effective tax rate of 28.6%, to $5.5 million in the corresponding period of 2026, for an effective tax rate of 19.5%. The decrease in the effective tax rate is mainly attributable to differences between the accounting and tax treatment as well as prior years adjustments that had a favourable impact the first six months of fiscal year 2026. Net Earnings from continuing operations Net earnings from continuing operations decreased by $16.1 million, or 79.7%, from $20.2 million in the first six months of fiscal year 2025 to $4.1 million in the corresponding period of 2026. This decrease is mainly due to the previously explained decline in operating earnings before depreciation and amortization and the increase in financial expenses, partially mitigated by lower income taxes and, to a lesser extent, the decrease in depreciation and amortization. On a per share basis, net earnings attributable to shareholders of the Corporation from continuing operations decreased by 79.2%, from $0.24 to $0.05, respectively. Adjusted net earnings from continuing operations decreased by $2.5 million, or 9.9%, from $25.2 million in the first six months of fiscal year 2025 to $22.7 million in the corresponding period of 2026. This decrease is mainly due to the previously explained decline in adjusted operating earnings before depreciation and amortization and the increase in financial expenses, partially mitigated by lower adjusted income taxes. On a per share basis, adjusted net earnings from continuing operations decreased by 10.0%, from $0.30 to $0.27, respectively. Net Earnings from Discontinued Operations Net earnings from discontinued operation increased by $180.0 million, from $72.0 million the first six months of fiscal year 2025 to $252.0 million in the corresponding period in 2026. This increase is mainly attributable to the recognition of the gain on the sale of the Packaging Sector. On a per share basis, net earnings attributable to shareholders of the Corporation from discontinued operations increased from $0.86 to $3.01, respectively. ANALYSIS OF SECTOR RESULTS - SECOND QUARTER OF FISCAL YEAR 2026 (Unaudited) Table #4: Consolidated Retail Head Office and results - Services and Books and Inter-sector Continuing (in millions of dollars) Printing Education Eliminations operations Revenues - Second quarter of 2025 - Restated $228.2 $55.9 ($0.8) $283.3 Business acquisition 15.1 - - 15.1 Exchange rate effect (0.7) 1.5 - 0.8 Organic growth (decline) (23.1) (7.3) 0.4 (30.0) Revenues - Second quarter of 2026 $219.5 $50.1 ($0.4) $269.2 Adjusted operating earnings before depreciation and amortization (1) - Second quarter of 2025 - Restated $49.3 $7.5 ($10.6) $46.2 Business acquisition 2.5 - - 2.5 Exchange rate effect (0.2) 1.8 0.1 1.7 Stock-based compensation - - 3.6 3.6 Organic growth (decline) (10.5) (2.3) 4.2 (8.6) Adjusted operating earnings before depreciation and amortization (1) -Second quarter of 2026 $41.1 $7.0 ($2.7) $45.4 Please refer to Table #3 in the "Reconciliation of Non-IFRS Financial Measures" section of this Management's Discussion and Analysis for adjusted data presented above. Retail Services and Printing Sector Retail Services and Printing Sector revenues decreased by $8.7 million, or 3.8%, from $228.2 million in the second quarter of fiscal year 2025 to $219.5 million in the second quarter of fiscal year 2026. This decrease is largely due to lower volume, mostly in flyer printing activities, partially mitigated by our recent acquisitions. Adjusted operating earnings before depreciation and amortization decreased by $8.2 million, or 16.6%, from $49.3 million in the second quarter of fiscal year 2025 to $41.1 million in the second quarter of fiscal year 2026. This decrease is mainly due to the previously explained drop in volume, partially mitigated by our recent acquisitions and our cost reduction initiatives. The sector's adjusted operating earnings margin before depreciation and amortization decreased from 21.6% in the second quarter of fiscal year 2025 to 18.7% in the second quarter of fiscal year 2026, mainly as a result of the above-mentioned items. Books and Education Sector Books and Education Sector revenues decreased by $5.8 million, or 10.4%, from $55.9 million in the second quarter of fiscal year 2025 to $50.1 million in the second quarter of fiscal year 2026. This decrease is mainly due to lower volume in book printing activities, resulting in particular from the non-renewal of a contract compared to the corresponding period of the prior year and the end of the contract related to SEAO, Quebec's electronic tendering system, partially mitigated by the favourable exchange rate effect. Adjusted operating earnings before depreciation and amortization decreased by $0.5 million, or 6.7%, from $7.5 million in the second quarter of fiscal year 2025 to $7.0 million in the second quarter of fiscal year 2026. This decrease is due to the previously explained lower volume in book printing activities and an increase in distribution costs and overhead in the Education segment, mostly mitigated by the favourable exchange rate effect. The sector's adjusted operating earnings margin before depreciation and amortization increased from 13.4 % in the second quarter of fiscal year 2025 to 14.0% in the second quarter of fiscal year 2026, mainly as a result of the above-mentioned items. Head Office and Inter-sector Eliminations Inter-sector eliminations decreased by $0.4 million, from $-0.8 million in the second quarter of fiscal year 2025 to $-0.4 million in the second quarter of fiscal year 2026. Adjusted operating earnings before depreciation and amortization increased by $7.9 million, from $-10.6 million in the second quarter of fiscal year 2025 to $-2.7 million in the second quarter of fiscal year 2026. This increase is mainly attributable to the decrease in incentive compensation and administrative expenses. ANALYSIS OF SECTOR RESULTS - CUMULATIVE FOR FISCAL YEAR 2026 (Unaudited) Table #5 : Consolidated Retail Head Office and results - Services and Books and Inter-sector Continuing (in millions of dollars) Printing Education Eliminations operations Revenues - Six months ended April 27, 2025 - Restated $435.0 $107.4 ($1.4) $541.0 Business acquisition and disposal 26.5 - - 26.5 Exchange rate effect (0.8) 3.1 - 2.3 Organic growth (decline) (27.8) (9.6) 0.3 (37.1) Revenues - Six months ended April 26, 2026 $432.9 $100.9 ($1.1) $532.7 Adjusted operating earnings before depreciation and amortization (1) - Six months ended April 27, 2025 - Restated $90.4 $14.6 ($18.5) $86.5 Business acquisition and disposal 4.6 - - 4.6 Exchange rate effect (0.3) 3.4 0.1 3.2 Stock-based compensation - - 1.3 1.3 Organic growth (decline) (14.9) (3.1) 0.9 (17.1) Adjusted operating earnings before depreciation and amortization (1) -Six months ended April 26, 2026 $79.8 $14.9 ($16.2) $78.5 Please refer to Table #3 in the section entitled "Reconciliation of Non-IFRS Financial Measures" in this Management's Discussion and Analysis for adjusted data presented above. Retail Services and Printing Sector Retail Services and Printing Sector revenues decreased by $2.1 million, or 0.5%, from $435.0 million in the first six months of fiscal year 2025 to $432.9 million in the corresponding period of 2026. This decrease is mostly due to lower volume, mainly in flyer printing activities, and, to a lesser extent, the favourable exchange rate effect, partially mitigated by our recent acquisitions. Adjusted operating earnings before depreciation and amortization decreased by $10.6 million, or 11.7%, from $90.4 million in the first six months of fiscal year 2025 to $79.8 million in the corresponding period of 2026. This decrease is mainly due to the previously explained drop in volume, partially mitigated by our cost reduction initiatives and our recent acquisitions. The sector's adjusted operating earnings margin before depreciation and amortization decreased from 20.8% in the first six months of fiscal year 2025 to 18.4% in the corresponding period of 2026, mainly as a result of the above-mentioned items. Books and Education Sector Books and Education Sector revenues decreased by $6.5 million, or 6.1%, from $107.4 million in the first six months of fiscal year 2025 to $100.9 million in the corresponding period of 2026. This decrease is mainly due to lower volume in book printing activities, resulting in particular from the non-renewal of a contract compared to the corresponding period of the prior year and the end of the contract related to SEAO, Quebec's electronic tendering system, partially mitigated by the favourable exchange rate effect. Adjusted operating earnings before depreciation and amortization increased by $0.3 million, or 2.1%, from $14.6 million in the the first six months of fiscal year 2025 to $14.9 million in the corresponding period of 2026. This increase is attributable to the favourable exchange rate effect, mostly offset by the lower volume in book printing activities. The sector's adjusted operating earnings margin before depreciation and amortization increased from 13.6% in the first six months of fiscal year 2025 to 14.8% in the corresponding period of 2026, mainly as a result of the above-mentioned factors. Head Office and Inter-sector Eliminations Inter-sector eliminations decreased by $0.3 million, from $-1.4 million in the first six months of fiscal year 2025 to $-1.1 million in the corresponding period of 2026. Adjusted operating earnings before depreciation and amortization increased by $2.3 million, from $-18.5 million in the first six months of fiscal year 2025 to $-16.2 million in the corresponding period of 2026. This increase is attributable to the decrease in incentive compensation and a decline in several administrative expenses. SALE OF THE PACKAGING SECTOR ACTIVITIES For the sale of the packaging sector activities, the Corporation received a consideration of $2.1 billion (US$1.5 billion), less transaction costs incurred, subject to final working capital adjustments. The Corporation expects that these adjustments will be finalized during fiscal year 2026. Tableau #6: Business disposal Consideration received $2,134.9 Transaction costs (1) (42.8) Estimated consideration receivable for working capital adjustments 12.0 Total consideration 2,104.1 Net assets sold Accumulated net exchange gains from the translation of the financial statements of foreign operations, (1,975.0) net of the hedge of the net investment, reclassified to net earnings 64.7 Provision for contingencies (13.9) Non-controlling interests 6.2 Gain on business disposal, net of income taxes of nil on the gain $186.1 (1) Transaction costs include an amount of $10.5 million recognized during fiscal year 2025. The following table presents net earnings from discontinued operations for the second quarter and the first six months of fiscal years 2026 and 2025 : Table #7: Three months ended Six months ended April 26, 2026 April 27, 2025 April 26, 2026 April 27, 2025 Revenues $176.2 $402.5 $560.6 $790.3 Operating expenses 146.4 338.2 478.1 667.3 Restructuring and other costs (revenues) (1) 2.5 3.0 2.6 (44.5) Depreciation and amortization - 35.3 11.2 70.1 Net financial expenses (2) 2.3 1.3 (3.0) 0.9 Earnings before income taxes 25.0 24.7 71.7 96.5 Income taxes 8.5 4.6 16.3 24.5 Net earnings from discontinued operations, net of the gain 16.5 20.1 55.4 72.0 Gain on business disposal, net of income taxes of nil on the gain (3) 205.4 - 196.6 - Net earnings from discontinued operations $221.9 $20.1 $252.0 $72.0 (1) For the second quarter and the first six months of fiscal year 2025, this line item includes the loss (gain) on the sale of the industrial packaging activities of $0.3 million and $46.0 million, respectively. (2) The Corporation held foreign exchange forward contracts that were not designated as part of hedging relationships. These contracts, whose notional amount totalled $1.6 billion (US$1.2 billion), matured in March 2026 and generated gains of $3.2 million, for a total of $6.6 million recognized during the first six months of fiscal year 2026. (3) Transaction costs recognized in the second quarter and the first six months of fiscal year 2026 were $23.5 million and $32.3 million, respectively. The following table presents cash flows from discontinued operations for the second quarter and the first six months of fiscal years 2026 and 2025: Table #8: Three months ended Six months ended April 26, 2026 April 27, 2025 April 26, 2026 April 27, 2025 Cash flows from operating activities of discontinued operations ($36.3) $28.0 ($23.1) $54.7 Cash flows from investing activities of discontinued operations 2,078.6 (11.2) 2,069.7 109.5 Cash flows from financing activities of discontinued operations (1.9) (3.5) (5.7) (6.9) Net change in cash from discontinued operations $2,040.4 $13.3 $2,040.9 $157.3 The following table presents the carrying amount of assets sold and liabilities transferred as remeasured at the foreign exchange rate prevailing on transaction date: Table #9: As at April 26, 2026 Current assets Cash disposed $48.9 Accounts receivable 229.8 Income taxes receivable 20.6 Inventories 279.7 Prepaid expenses and other current assets 7.4 Property, plant and equipment 582.9 Right-of-use assets 50.6 Intangible assets 190.9 Goodwill 768.9 Deferred taxes 2.7 Other assets 25.5 Assets sold $2,207.9 Current liabilities Accounts payable and accrued liabilities $121.3 Income taxes payable 10.5 Deferred revenues and deposits 0.2 Long-term debt 0.6 Lease liabilities 52.3 Deferred taxes 32.8 Other liabilities 15.2 Liabilities transferred $232.9 Net assets sold $1,975.0 SUMMARY OF QUARTERLY RESULTS (Unaudited) Table #10 summarizes selected restated consolidated financial information derived from the Corporation's audited annual consolidated financial statements and some non-IFRS financial measures for each of the last eight quarters. Table #10: 2026 2025 - Restated 2024 - Restated (for continuing operations, in millions of dollars, unless otherwise indicated and per share amounts) Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Revenues $ 269.2 $ 263.5 $ 317.1 $ 294.9 $ 283.3 $ 257.7 $ 334.9 $283.7 Operating earnings before depreciation and amortization 31.4 26.1 59.8 47.2 45.2 36.7 68.5 59.8 Adjusted operating earnings before depreciation and amortization (1) 45.4 33.1 66.9 58.5 46.2 40.3 77.4 56.9 Adjusted operating earnings margin before depreciation and amortization (1) 16.9% 12.6% 21.1% 19.8% 16.3% 15.6% 23.1% 20.1% Operating earnings $ 14.1 $ 8.2 $ 42.2 $ 29.5 $ 27.1 $ 18.8 $ 49.8 $ 40.9 Adjusted operating earnings (1) 29.9 17.5 50.3 41.7 29.3 23.4 59.7 39.2 Adjusted operating earnings margin (1) 11.1% 6.6% 15.9% 14.1% 10.3% 9.1% 17.8% 13.8% Net earnings (loss) $ 4.3 $ (0.2) $ 29.2 $ 13.0 $ 15.4 $ 4.8 $ 36.1 $ 21.8 Net earnings per share 0.05 - 0.35 0.16 0.18 0.06 0.43 0.25 Adjusted net earnings (1) 16.0 6.7 32.4 22.2 17.0 8.2 43.5 16.9 Adjusted net earnings per share (1) 0.19 0.08 0.39 0.27 0.20 0.10 0.51 0.20 Adjusted net earnings as a % of the fiscal year -% -% 41% 28% 21% 10% 64% 25% (1) Please refer to Table #3 in the "Reconciliation of Non-IFRS Financial Measures" section of this Management's Discussion and Analysis for adjusted data presented above. The variability of financial information for interim periods is influenced by many factors, such as: The impact of business acquisitions and disposals; The effect of exchange rate fluctuations; The effect of interest rate fluctuations; The impact of the change in the share price on the stock-based compensation expense; The impact of changes in price of raw materials; and The impact of inflation on costs. FINANCIAL POSITION, LIQUIDITY AND CAPITAL STRUCTURE (Unaudited) Table #11: Three months ended Six months ended (in millions of dollars) April 26, 2026 April 27, 2025 Restated (1) April 26, 2026 April 27, 2025 Restated (1) Operating activities operating items and income taxes paid $32.8 $44.8 $61.1 $83.8 Changes in non-cash operating items (56.3) 10.7 (67.1) (25.7) Income taxes paid (5.9) (3.3) (12.6) (8.9) Cash flows from operating activities of continuing operations $(29.4) $52.2 $(18.6) $49.2 Investing activities Business combinations, net of acquired cash $(17.3) $- $(17.5) $- Acquisitions of property, plant and equipment (5.2) (4.2) (10.3) (7.8) Disposals of property, plant and equipment and other - - 0.6 0.1 Increase in intangible assets (7.7) (9.1) (14.5) (16.3) Cash flows from investing activities of continuing operations $(30.2) $(13.3) $(41.7) $(24.0) Financing activities Reimbursement of long-term debt $(308.3) $(200.5) $(308.9) $(201.0) Net (decrease) increase in credit facilities (22.0) 65.0 6.0 65.0 Settlement of cross-currency swaps (0.2) (25.9) (0.2) (25.9) Financial expenses paid on long-term debt and credit facilities (7.3) (14.8) (15.0) (23.0) Repayment of principal on lease liabilities (3.3) (3.2) (6.9) (6.6) Interest paid on lease liabilities (0.5) (0.4) (0.9) (0.9) Dividends (1,153.6) (102.4) (1,172.4) (121.3) Reduction of stated capital (518.8) - (518.8) - Shares repurchased - - - (16.3) Cash flows from financing activities of continuing operations $(2,014.0) $(282.2) $(2,017.1) $(330.0) Effect of exchange rate changes on cash denominated in foreign currencies (1.0) 0.1 (1.7) 5.5 Net change in cash from continuing operations $(2,074.6) $(243.2) $(2,079.1) $(299.3) Net change in cash from discontinued operations (1) Certain comparative figures have been reclassified to conform to the presentation adopted in the period. $2,040.4 $13.3 $2,040.9 $157.3 Cash flows generated by operating activities before changes in non-cash Table #12: Financial position (in millions of dollars, except ratios) As at April 26, 2026 As at October 26, 2025 Restated Net indebtedness (1) $436.1 $740.4 Net indebtedness ratio (1) 2.14x 3.49x Credit rating DBRS BB (high) BBB (low) Outlook Stable Stable Standard and Poor's BB BBB- Outlook Stable Stable Consolidated Statements of Financial Position As at April 26, 2026 As at October 26, 2025 (in millions of dollars) Restated Current assets $405.8 $932.0 Current liabilities 514.2 731.9 Total assets 1,201.9 3,340.8 Total liabilities 815.1 1,430.7 (1) Please refer to Table #3 in the "Reconciliation of Non-IFRS Financial Measures" section of this Management's Discussion and Analysis for adjusted data presented above. ANALYSIS OF CASH FLOWS - SECOND QUARTER OF FISCAL YEAR 2026 Cash Flows from Continuing Operating Activities Cash flows from continuing operating activities decreased from a cash inflow of $52.2 million in the second quarter of fiscal year 2025 to a cash outflow of $29.4 million in the second quarter of fiscal year 2026. This decrease is mainly explained by the unfavourable change in working capital, in particular accounts payable and accrued liabilities. Cash Flows from Continuing Investing Activities Cash flows from continuing investing activities decreased from a cash outflow of $13.3 million in the second quarter of fiscal year 2025 to a cash outflow of $30.2 million in the second quarter of fiscal year 2026. This change is mainly attributable to the acquisition of PDI Group and an increase in acquisitions of property, plant and equipment, partially mitigated by a lower increase in intangible assets. Cash Flows from Continuing Financing Activities Cash flows from financing activities decreased from a cash outflow of $282.2 million in the second quarter of fiscal year 2025 to a cash outflow of $2,014.0 million in the second quarter of fiscal year 2026. This change is mostly attributable to the payment of the special distribution including the reduction of stated capital, the increase in reimbursements of long-term debt and the net decrease in borrowings on the credit facility, partially offset by effects of swaps contract settlements. Debt Instruments On March 6, 2026, subsequent to the closing of the sale of the Packaging Sector activities, the credit facility previously amounting to $400.0 million was renegotiated and reduced to $35.0 million or the U.S. dollar equivalent. The maturity date will be in four years, in March 2030. Once the Corporation will have repaid the unsecured notes (issued in 2021) and provided the required securities, the amount will be increased to $200.0 million. The applicable interest rate on the credit facility is based on the indebtedness level of the Corporation which, based on the indebtedness level for the previous quarter, would be the Canadian Overnight Repo Rate Average ("CORRA") plus 2.545% for one-month periods or plus 2.571% for three-month periods, or the Secured Overnight Financing Rate ("SOFR") plus 2.350%, or the Canadian prime rate or the U.S. prime rate plus 1.250%. The Corporation expects to issue, on July 13, 2026, a secured term loan of $100.0 million. The applicable interest rate on this loan will be based on the Corporation's indebtedness level which, based on the indebtedness level for the previous quarter, would be CORRA plus 2.545% for one-month periods or plus 2.571% for three-month periods. The loan will be repayable over three years, and the Corporation will use the borrowed funds to repay the unsecured notes (issued in 2021). On March 6, 2026, subsequent to the closing of the sale of the Packaging Sector activities, the Corporation cancelled the credit facility with a maximum amount of $20.4 million (US$15.0 million), which was maturing in March 2026. As at April 26, 2026, $6.0 million were drawn on the credit facility and the unused amount under the credit facility was $29.0 million. As at April 26, 2026, the majority of the Corporation's long-term debt was bearing interest at fixed rates. Repayment of Term Loans On March 6, 2026, subsequent to the closing of the sale of the Packaging Sector activities, the Corporation repaid early the balance of the U.S. dollar term loan (issued in 2021) of $155.5 million (US$114.6 million), which was maturing on June 14, 2028, as well as the balance of the U.S. dollar term loan (extended in 2022) of $152.6 million (US$112.5 million), which was maturing on June 30, 2027. On April 24, 2026, following the repayment of the U.S. term loan (renewed in 2022), the Corporation settled a floating-to-fixed interest rate swap for a consideration received of $0.2 million. Net Indebtedness Net indebtedness went from $740.4 million as at October 26, 2025 to $436.1 million as at April 26, 2026. This decrease is explained by the consideration received for the sale of the Packaging Sector activities, partially offset by the payment of the special distribution, including the reduction of stated capital, and investments in property, plant and equipment and intangible assets. As a result, the net indebtedness ratio stood at 2.14x as at April 26, 2026 compared to 3.49x as at October 26, 2025. FINANCIAL POSITION - SECOND QUARTER (Unaudited) Table #13 presents, for assets and liabilities, the change due to the disposal of assets and liabilities as a result of the sale of the Packaging Sector activities, the impact of the accounting restatements and the remaining changes for the second quarter of fiscal year 2026. Table #13: Continued operations As at Assets and As at October 26, 2025 liabilities Restatements Changes April 26, 2026 (in millions of dollars) disposed of Assets Accounts receivable $ 468.1 $ (229.8) $ - $ 4.5 $ 242.8 Income taxes receivable 7.2 (20.6) - 26.1 12.7 Inventories 378.4 (279.7) (5.7) 17.6 110.6 Prepaid expenses and other current assets 25.0 (7.4) - 1.3 18.9 Assets held for sale 12.0 - - - 12.0 Property, plant and equipment 725.5 (582.9) - (7.0) 135.6 Right-of-use assets 98.5 (50.6) - 27.4 75.3 Intangible assets 328.0 (190.9) - (13.0) 124.1 Goodwill 1,179.5 (768.9) - (9.0) 401.6 Deferred taxes 47.3 (2.7) - (0.9) 43.7 Other assets 30.0 (25.5) - 11.3 15.8 Liabilities Accounts payable and accrued liabilities 433.9 (121.3) - (98.3) 214.3 Provisions 1.3 - - 16.7 18.0 Income taxes payable 3.5 (10.5) - 9.8 2.8 Deferred revenues and deposits 8.5 (0.2) 6.0 (0.1) 14.2 Current portion of long-term debt 253.2 (0.6) - (2.1) 250.5 Current portion of lease liabilities 25.5 (12.2) - 1.1 14.4 Long-term debt 417.6 - - (311.8) 105.8 Lease liabilities 91.1 (40.1) - 23.2 74.2 Deferred taxes 72.1 (32.8) (3.0) (0.4) 35.9 Other liabilities 121.0 (15.2) - (20.8) 85.0 ANALYSIS OF FINANCIAL POSITION - SECOND QUARTER OF FISCAL YEAR Right-of-use Assets Right-of-use assets decreased by $23.2 million, from $98.5 million as at October 26, 2025 to $75.3 million as at April 26, 2026. This decrease is mostly attributable to the disposal of the Packaging Sector's right-of-use assets, partially mitigated by the addition of a right-of-use asset and the right-of-use assets of our recent acquisition. Accounts Payable and Accrued Liabilities Accounts payables and accrued liabilities decreased by $219.6 million, from $433.9 million as at October 26, 2025 to $214.3 million as at April 26, 2026. This decrease is mostly attributable to the disposal of the Packaging Sector's accounts payable and accrued liabilities and timing differences in payments. Lease Liabilities Lease obligations decreased by $16.9 million, from $91.1 million as at October 26, 2025 to $74.2 million as at April 26, 2026. This decrease is mostly attributable to the disposal of the Packaging Sector's lease obligations, partially mitigated by the addition of a new lease and the leases of our recent acquisition. CAPITAL STRUCTURE Share Capital Table #14: Shares Issued and Outstanding As at April 26, 2026 As at May 29, 2026 Class A (Subordinate Voting Shares) 74,112,647 74,112,647 Class B (Multiple Voting Shares) 9,506,272 9,506,272 Total Class A and Class B 83,618,919 83,618,919 During second quarter of fiscal year 2026, the Corporation had no share repurchase program in effect. On June 12, 2024, the Corporation was authorized to repurchase for cancellation, on the open market or subject to the approval of any securities authority by private agreements, between June 17, 2024 and June 16, 2025, or at an earlier date if the Corporation concludes or cancels the offer, up to 3,662,967 of its Class A Subordinate Voting Shares and up to 668,241 of its Class B Shares. The repurchases are made in the normal course of business at market prices through the Toronto Stock Exchange. During the second quarter of fiscal year 2025, the Corporation had repurchased and cancelled 934,434 Class A Subordinate Voting Shares at a weighted average price of $17.38 and 3,600 Class B Shares at a weighted average price of $17.27, for a total cash consideration of $16.3 million. The excess of the total consideration over the carrying amount of the shares, amounting to $8.5 million, as well as related income taxes payable amounting to $0.3 million, had been applied against retained earnings. A special distribution of $20.00 per share was declared and paid to the holders of Class A Subordinate Voting Shares and Class B Shares in the second quarter of fiscal year 2026. For Class A Subordinate Voting Shares, this distribution includes a reduction of stated capital of $7.00 per share and a cash dividend of $13.00 per share for the remainder of the distribution. INTERNAL CONTROL OVER FINANCIAL REPORTING Management is responsible for establishing and maintaining adequate internal control. The purpose of internal control over financial reporting ("ICFR") is to provide reasonable assurance regarding the reliability of the Corporation's financial reporting and the preparation of consolidated financial statements in accordance with IFRS. Management certifies disclosures in annual and interim filings under Regulation 52-109 using the internal control framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). In accordance with the provisions of Regulation 52-109, management has limited the scope of its design of the Corporation's disclosure controls and procedures and ICFR to exclude the controls, policies and procedures of the acquired entities, namely PDI Group, Mirazed and Intergraphics. This exclusion is accepted by the Autorité des marchés financiers ("AMF") during the first year after the acquisition of a business to give a corporation time to integrate the acquisition. During the first six months of fiscal year 2026, PDI Group generated revenues of $2.6 million, or 0.5% of the Corporation's consolidated revenues. During the first six months of fiscal year 2026, Mirazed and Intergraphics generated revenues of $20.3 million, or 3.8% of the Corporation's consolidated revenues. Additional information about these acquisitions is presented in the following table: Table #15: (in millions of dollars) PDI Group Mirazed and Intergraphics Statement of Financial Position As at April 26, 2026 As at April 26, 2026 Current assets $14.8 $19.9 Non-current assets 20.4 57.1 Current liabilities 7.4 6.6 Non-current liabilities 7.9 18.9 Statement of Earnings Six months ended April 26, 2026 Six months ended April 26, 2026 Revenues $2.6 $20.3 Operating earnings before depreciation and amortization 0.2 3.9 Operating earnings 0.1 2.6 During the second quarter ended April 26, 2026, except for the above-mentioned facts, no change that has materially affected or is reasonably likely to affect the ICFR was brought to the attention of management, including the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer of the Corporation. SUBSEQUENT EVENT On April 30, 2026, subsequent to the second quarter of fiscal year 2026, the Corporation sold a warehouse located in Boucherville, Quebec, to Placements Carrousel inc., the parent company of Emballages Carrousel whose head office is in Boucherville, for a consideration of $34.9 million. OUTLOOK The closing of the sale of our Packaging Business represents a key milestone for TC Transcontinental. This transaction allows us to focus our resources on our growth strategy, in particular in in-store marketing and educational publishing activities. For fiscal year 2026, we anticipate lower volume in our traditional activities, including book printing which experienced very high growth in fiscal year 2025. This decrease should be partially offset by growth in our in-store marketing activities, including the positive impact of acquisitions. At the consolidated level, following the positive impact of cost reduction initiatives, we expect adjusted operating earnings before depreciation and amortization from continuing operations for fiscal year 2026 to remain stable compared to fiscal year 2025. Lastly, we expect to continue generating significant cash flows from operating activities. Over the next few quarters, this should enable us to reduce net indebtedness under two times adjusted operating earnings before depreciation and amortization for fiscal year 2026 while investing in our growth. On behalf of Management, (s) Donald LeCavalier Executive Vice President and Chief Financial Officer June 3, 2026 C R ANSCONTINENTAL • Condensed Interim Consolidated Financial Statements For the six-month periods ended April 26, 2026 and April 27, 2025 CONSOLIDATED STATEMENTS OF EARNINGS Unaudited (in millions of Canadian dollars, unless otherwise indicated and per share data) Three months ended Six months ended Notes April 26, 2026 April 27, 2025 Restated (1) April 26, 2026 April 27, 2025 Restated (1) Revenues 4 $ 269.2 $ 283.3 $ 532.7 $ 541.0 Operating expenses 6 223.8 237.1 454.2 454.5 Restructuring and other costs 7 14.0 1.0 17.5 4.6 Impairment of assets 7 - - 3.5 - Operating earnings before depreciation and amortization 31.4 45.2 57.5 81.9 Depreciation and amortization 8 17.3 18.1 35.2 36.0 Operating earnings 14.1 27.1 22.3 45.9 Net financial expenses 9 9.9 7.7 19.2 17.4 Earnings before income taxes 4.2 19.4 3.1 28.5 (Recovery) income taxes 10 (0.1) 4.0 (1.0) 8.3 Net earnings from continuing operations 4.3 15.4 4.1 20.2 Net earnings from discontinued operations 3 221.9 20.1 252.0 72.0 Net earnings 226.2 35.5 256.1 92.2 Non-controlling interests (2) 0.1 0.2 0.3 0.3 Net earnings attributable to shareholders of the Corporation $ 226.1 $ 35.3 $ 255.8 $ 91.9 Net earnings attributable to shareholders of the Corporation per share - basic and diluted Continuing operations $ 0.05 $ 0.18 $ 0.05 $ 0.24 Discontinued operations 2.65 0.24 3.01 0.86 $ 2.70 $ 0.42 $ 3.06 $ 1.10 Weighted average number of shares outstanding - basic and diluted (in millions) 13 83.6 83.6 83.6 83.9 (1) Please see Note 2 "Material accounting policies" for a description of the items restated during the period. (2) Non-controlling interests are all attributable to discontinued operations. The notes are an integral part of these condensed interim consolidated financial statements. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Unaudited (in millions of Canadian dollars) Three months ended Six months ended Notes April 26, 2026 April 27, 2025 Restated (1) April 26, 2026 April 27, 2025 Restated (1) Net earnings $ 226.2 $ 35.5 $ 256.1 $ 92.2 Other comprehensive loss Items that may be subsequently reclassified to net earnings Net change related to cash flow hedges Net change in the fair value of designated derivatives - foreign exchange risk 1.7 8.5 7.7 (1.5) Net change in the fair value of designated derivatives - interest rate risk 0.2 (1.9) 0.8 (0.5) Reclassification of the net change in the fair value of designated derivatives recognized in net earnings during the period (0.9) 2.6 (0.5) 4.6 Related income taxes 0.3 2.5 2.1 0.7 15 0.7 6.7 5.9 1.9 Cumulative translation differences Net unrealized exchange gains on the translation of the financial statements of foreign operations (4.8) (54.9) (35.8) (0.8) Net unrealized exchange losses on the translation of the financial statements of foreign operations reversed to net earnings during the current period 3 (84.8) - (84.8) (8.2) Net gains (losses) on hedge of the net investment in foreign operations 4.0 19.3 12.3 (5.1) Net gains on hedge of the net investment in foreign operation reversed to net earnings during the current period 3 20.1 - 20.1 - Related (recovery) income taxes (1.5) (1.0) (0.9) 0.5 15 (64.0) (34.6) (87.3) (14.6) Items that will not be reclassified to net earnings Changes related to defined benefit plans Actuarial gains (losses) on defined benefit plans 0.9 (1.5) (0.9) (0.9) Related income taxes (recovery) 0.2 (0.3) (0.3) (0.2) 15 0.7 (1.2) (0.6) (0.7) Other comprehensive loss 15 (62.6) (29.1) (82.0) (13.4) Comprehensive income $ 163.6 $ 6.4 $ 174.1 $ 78.8 Comprehensive income from continuing operations $ 7.4 $ 17.3 $ 9.4 $ 18.9 Comprehensive income (loss) from discontinued operations 156.2 (10.9) 164.7 59.9 (1) Please see Note 2 "Material accounting policies" for a description of the items restated during the period. The notes are an integral part of these condensed interim consolidated financial statements. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Unaudited (in millions of Canadian dollars) Notes Share capital Contributed surplus Retained earnings Accumulated other comprehensive income (loss) Total Non-controlling interests Total equity Balance as at October 26, 2025 - As reported $ 611.4 $ 0.9 $ 1,258.3 $ 42.3 $ 1,912.9 $ 5.9 $ 1,918.8 Restatement 2 - - (8.7) - (8.7) - (8.7) Balance as at October 26, 2025 - Restated 611.4 0.9 1,249.6 42.3 1,904.2 5.9 1,910.1 Net earnings - - 255.8 - 255.8 0.3 256.1 Other comprehensive loss 15 - - - (82.0) (82.0) - (82.0) Disposal of non-controlling interests 3 - - - - - (6.2) (6.2) Reclassification of other comprehensive income Shareholders' contributions and 3 & 15 - - 9.5 (9.5) - - - distributions to shareholders Reduction of stated capital 13 (518.8) - - - (518.8) - (518.8) Dividends 13 - - (1,172.4) - (1,172.4) - (1,172.4) Balance as at April 26, 2026 $ 92.6 $ 0.9 $ 342.5 $ (49.2) $ 386.8 $ - $ 386.8 Balance as at October 27, 2024 - As reported $ 619.2 $ 0.9 $ 1,237.5 $ 51.7 $ 1,909.3 $ 5.5 $ 1,914.8 Restatement 2 - - (8.3) - (8.3) - (8.3) Balance as at October 27, 2024 - Restated 619.2 0.9 1,229.2 51.7 1,901.0 5.5 1,906.5 Net earnings - Restated 2 - - 91.9 - 91.9 0.3 92.2 Other comprehensive loss 15 - - - (13.4) (13.4) - (13.4) Shareholders' contributions and distributions to shareholders Share repurchases and related income taxes 13 (7.8) - 8.8 - 1.0 - 1.0 Dividends 13 - - (121.3) - (121.3) - (121.3) Balance as at April 27, 2025 - Restated $ 611.4 $ 0.9 $ 1,208.6 $ 38.3 $ 1,859.2 $ 5.8 $ 1,865.0 The notes are an integral part of these condensed interim consolidated financial statements. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Unaudited (in millions of Canadian dollars) As at As at April 26, October 26, 2026 2025 Notes Restated (1) Current assets Cash $ 8.8 $ 47.0 Accounts receivable 242.8 468.1 Income taxes receivable 12.7 7.2 Inventories 110.6 372.7 Prepaid expenses and other current assets 18.9 25.0 Assets held for sale 12.0 12.0 405.8 932.0 Property, plant and equipment 135.6 725.5 Right-of-use assets 75.3 98.5 Intangible assets 124.1 328.0 Goodwill 401.6 1,179.5 Deferred taxes 43.7 47.3 Other assets 15.8 30.0 $ 1,201.9 $ 3,340.8 Current liabilities Accounts payable and accrued liabilities $ 214.3 $ 433.9 Provisions 18.0 1.3 Income taxes payable 2.8 3.5 Deferred revenues and deposits 14.2 14.5 Current portion of long-term debt 11 250.5 253.2 Current portion of lease liabilities 14.4 25.5 514.2 731.9 Long-term debt 11 105.8 417.6 Lease liabilities 74.2 91.1 Deferred taxes 35.9 69.1 Other liabilities 12 85.0 121.0 815.1 1,430.7 Equity Share capital 13 92.6 611.4 Contributed surplus 0.9 0.9 Retained earnings 342.5 1,249.6 Accumulated other comprehensive (loss) income 15 (49.2) 42.3 Attributable to shareholders of the Corporation 386.8 1,904.2 Non-controlling interests - 5.9 386.8 1,910.1 $ 1,201.9 $ 3,340.8 (1) Please see Note 2 "Material accounting policies" for a description of the items restated during the period. The notes are an integral part of these condensed interim consolidated financial statements. CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited (in millions of Canadian dollars) Three months ended Six months ended Notes April 26, 2026 April 27, 2025 Restated (1) April 26, 2026 April 27, 2025 Restated (1) Operating activities Net earnings $ 226.2 $ 35.5 $ 256.1 $ 92.2 Less : Net earnings from discontinued operations 221.9 20.1 252.0 72.0 Net earnings from continuing operations $ 4.3 $ 15.4 $ 4.1 $ 20.2 Adjustments to reconcile net earnings and cash flows from operating activities: Impairment of assets 7 - - 3.5 - Depreciation and amortization 8 17.3 18.1 35.2 36.0 Financial expenses on long-term debt and lease liabilities 9 6.8 8.3 14.9 20.0 Net losses (gains) on disposal of assets 0.1 0.1 (0.3) (0.1) (Recovery) income taxes 10 (0.1) 4.0 (1.0) 8.3 Net foreign exchange differences and other 4.4 (1.1) 4.7 (0.6) Cash flows generated by operating activities before changes in non-cash operating items and income taxes paid 32.8 44.8 61.1 83.8 Changes in non-cash operating items (56.3) 10.7 (67.1) (25.7) Income taxes paid (5.9) (3.3) (12.6) (8.9) Cash flows from operating activities of continuing operations (29.4) 52.2 (18.6) 49.2 Investing activities Business combinations, net of acquired cash 5 (17.3) - (17.5) - Acquisitions of property, plant and equipment (5.2) (4.2) (10.3) (7.8) Disposals of property, plant and equipment and other - - 0.6 0.1 Increase in intangible assets (7.7) (9.1) (14.5) (16.3) Cash flows from investing activities of continuing operations (30.2) (13.3) (41.7) (24.0) Financing activities Reimbursement of long-term debt 11 (308.3) (200.5) (308.9) (201.0) Net (decrease) increase in credit facilities (22.0) 65.0 6.0 65.0 Settlement of cross-currency swaps 16 (0.2) (25.9) (0.2) (25.9) Financial expenses paid on long-term debt and credit facilities (7.3) (14.8) (15.0) (23.0) Repayment of principal on lease liabilities (3.3) (3.2) (6.9) (6.6) Interest paid on lease liabilities (0.5) (0.4) (0.9) (0.9) Dividends 13 (1,153.6) (102.4) (1,172.4) (121.3) Reduction of stated capital 13 (518.8) - (518.8) - Shares repurchased 13 - - - (16.3) Cash flows from financing activities of continuing operations (2,014.0) (282.2) (2,017.1) (330.0) Effect of exchange rate changes on cash denominated in foreign currencies (1.0) 0.1 (1.7) 5.5 Net change in cash from continuing operations (2,074.6) (243.2) (2,079.1) (299.3) Net change in cash from discontinued operations 3 2,040.4 13.3 2,040.9 157.3 Cash at beginning of the period 43.0 273.1 47.0 185.2 Cash at end of period $ 8.8 $ 43.2 $ 8.8 $ 43.2 Non-cash investing activities Net change in capital asset acquisitions financed by accounts payable $ 0.8 $ (0.5) $ (1.6) $ (3.3) (1) Please see Note 2 "Material accounting policies" for a description of the items restated during the period. The notes are an integral part of these condensed interim consolidated financial statements. 2

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