MONTREAL, QUEBEC-- Transcontinental has again distinguished itself among its North American counterparts by continuing to increase its revenues and earnings in the third quarter of 2003 compared to a strong third quarter in 2002, despite difficult conditions in most of its markets. This performance stems from its rapid and successful integration of the acquisitions made in 2002, its strategy of achieving leadership in its niches and the many measures implemented under its Horizon 2005 business project. At the end of the first nine months of fiscal 2003, management remains confident that its financial objectives for the year will be achieved. Management does not foresee any significant improvement in market conditions in the short term. For the third quarter ended July 31, 2003, Transcontinental reported consolidated revenues of $435 million, up 6% from $409 million in the corresponding period of 2002, and operating income before depreciation and amortization totalled $71 million, up 10% from $64 million in 2002. In both cases, growth stemmed primarily from the sucessful integration of the acquisitions completed in 2002, which added $36 million to revenues and $8 million to operating income before amortization and depreciation. Note that the paper effect had a negative impact of $11 million on revenues, without affecting income. Significant exchange rate fluctuations between the Canadian dollar and its U.S. and Mexican counterparts had a negative impact of $10 million on revenues and $5 million on operating income before depreciation and amortization. For a more detailed analysis, see Management's Discussion and Analysis of the financial position and operating results for the third quarter of 2003 on the home page of the Corporation's website at www.transcontinental.com. Net income grew by 18%, from $24 million in the third quarter of 2002 to $28 million in 2003. On a per common share basis, it rose from $0.28 to $0.32, a 14% improvement, despite the increase in the average number of shares outstanding, which rose from 84.8 million in 2002 to 88.6 million in 2003 following the share issue completed in June 2002. For the first nine months of fiscal 2003, consolidated revenues reached $1.4 billion, up 8% from $1.3 billion in the corresponding period of 2002, and operating income before depreciation and amortization totalled $230 million, up 10% from $210 million in 2002. Net income grew by 14%, from $84 million in 2002 to $96 million in 2003. On a per common share basis, it rose from $1.01 to $1.08, a 7% increase. "We are very satisfied with the results of the third quarter and the first nine months of fiscal 2003," said Daniel Denault, Vice President and Chief Financial Officer of Transcontinental Inc., "because we had strong growth in the corresponding period of 2002. This performance is in line with our guidance for fiscal 2003 and shows our ability to improve profitability in a tough market. Along with the successful integration of acquisitions completed in 2002, our performance is in large part due to the active participation of our employees in our Horizon 2005 business project, notably with respect to developing sales and improving efficiency. "The Corporation is in a solid financial position to pursue its growth in its core niches," said Mr. Denault. "Our net funded debt to total capitalization ratio is 32%, which puts it below the 45% target set by management. Also, the positive impact of our capital expenditures in 2002 and since the start of 2003, as well as the many initiatives under the Horizon 2005 project, will accelerate by the end of the year. We are therefore maintaining our earnings per common share guidance, which has remained unchanged since the start of the year, at $1.60 to $1.68 for 2003. Management expects, however, that earnings will be in the lower end of that range because we do not foresee any improvement in market conditions in the short term." Exceptional Event Thanks to the ingenuity of its employees and the strength of its network, Transcontinental pulled off the impressive feat of producing The Globe and Mail on time on Friday, August 15, 2003, the day after the biggest power failure in the history of North America began. In fact, The Globe and Mail was the only national daily to be fully distributed on schedule in the Toronto area that morning. Not only that, The Globe and Mail decided to increase its print run by about 160,000 copies, yet everything was ready to go before the usual deadline. This achievement was made possible by the teams at Transcontinental Interweb Toronto, Transcontinental Interweb Montreal and Transcontinental Transmag, in Montreal. Transcontinental management offers its congratulations to everyone who worked on that project for their outstanding teamwork and ingenuity in a very difficult situation. Subsequent Event On August 8, 2003, the Quebec Superior Court handed down its ruling in favour of the Montreal Transit Corporation in the case brought by Sun Media Corporation against the transit corporation regarding the newspaper Metro. The Superior Court rejected the argument made by the Quebecor Inc. subsidiary that its right to freedom of the press was being violated. The Court also confirmed the validity of the exclusive agreement between the Montreal Transit Corporation and Metro, which is owned by Publications Metropolitaines inc., a partnership that includes Transcontinental Media Inc., Metro International S.A. and Gesca Ltd. Transcontinental will thus continue to publish, print and distribute this free newspaper in the Montreal subway system as agreed in the exclusive agreement with the Montreal Transit Corporation. On September 5, 2003, Sun Media Corporation filed its intention to appeal the ruling. Corporate Affairs On August 22, 2003, Transcontinental's credit rating was upgraded by Dominion Bond Rating Service Limited (DBRS) from BBB to BBB (high). DBRS recognized Transcontinental's consistent growth in earnings and cash flow, as well as its above average return on shareholders' equity. DBRS also noted Transcontinental's effectiveness in improving its results despite difficult market conditions, an effectiveness achieved through continued productivity improvements, the strategy of becoming the leader in its niches, and contributions from acquisitions made according to our stringent criteria.