Montreal, September 12, 2001 – For the third quarter ended July 31, 2001, Transcontinental Group posted consolidated revenues of $409.8 million from continuing operations, up 6% compared to $385.4 million for the same period last year. Net income rose 23% to $12.9 million, compared to $10.5 million in 2000. On a per-share basis, net earnings grew 11% to $0.31 from $0.28 in 2000. Note that the average number of common shares outstanding increased, for the same period, from 37.3 million to 41.3 million subsequent to the treasury issue of 4 million shares in February 2001. Cash flow from continuing operations rose 19%, from $35 million in 2000 to $41.5 million in 2001 (from $0.94 to $1.00 per share). For the first nine months of the year, consolidated revenues from continuing operations were up 12%, to $1.31 billion from $1.17 billion in 2000. Net earnings from continuing operations grew 28%, from $40.3 million to $51.4 million. Including the one-time charge incurred from the divestment of Americ Disc, announced in the second quarter, the Corporation posted a net loss of $4 million in the first nine months of the year compared to net income of $39.4 million in 2000. On a per-share basis, net earnings from continuing operations rose 20% to $1.30 from $1.08 a year earlier. Including the one-time charge related to Americ Disc, the Corporation recorded a net loss of $0.10, compared to net earnings of $1.06 for the same period last year. Cash flow from continuing operations increased 21%, from $111 million in 2000 to $134.4 million in 2001 (from $2.99 to $3.40 per share). "Given the current economic slowdown, we are very satisfied with our overall performance," said Daniel Denault, Vice President and Chief Financial Officer. "Our good results stem from our niche-oriented growth strategy, the complementarity of our operating sectors and measures taken in recent years to reduce costs and improve productivity. The judicious capital investments of the past several years also had a positive impact. Once again, the printing sector had a strong quarter, particularly in Mexico. With its solid financial balance sheet, the Corporation is in an excellent position to continue its growth momentum." At July 31, 2001, the Corporation's net debt for continuing operations was $410 million, down 9% from $451.8 million at the end of the third quarter of fiscal 2000, for a net debt-equity ratio of 0:77, one of the lowest in its industry. General Comments on Operating Results The following are the main highlights of the quarter according to Luc Desjardins, President and Chief Operating Officer: Printing sector revenues increased by 9% and operating income by 20% compared to the third quarter of 2000. This sector, which accounts for 70% of the Corporation's income, continues to post significant growth, quarter after quarter. Particularly noteworthy were the significant improvement of Mexican operations, where operating margins are now similar to those realized in Canada in the flyer-printing segment, and another excellent performance for the Book group. As was the case last year, the order book for all plants is quite full to the end of the fourth quarter. In the Media sector, revenues were up 9% and operating income was up 16%. Despite the drop in advertising revenue caused by the economic slowdown, Transcontinental posted another good performance due to the dominant position of its publications in their niches and the synergies achieved following last year's acquisitions. The women's magazines posted excellent results, especially Elle Québec and Elle Canada, as did the door-to-door distribution of advertising material in Québec. Revenues in the Interactive Marketing sector remained stable, rising slightly from $41.4 million in 2000 to $42 million in 2001. The sector went from an operating income of $3.1 million to an operating loss of $800 000. The strong performance of the Canadian plants, in particular that of Yorkville Printing in Toronto, could not offset the impact of significantly lower advertising expenditures in the United States, which affected the two American plants. The Corporation is reviewing different options for improving the services it offers in this market. "The fourth quarter is usually our best quarter and 2001 will be no exception," said Luc Desjardins. "Given our order book, we are confident that we will be able to achieve our earnings targeted annual growth. We are also planning to implement cost reduction and productivity enhancement measures in the next few months to mitigate the effects of the drop in advertising expenditures from our customers, which is having an increasingly tangible impact in Canada." Subsequent Event On August 6, 2001, pursuant to its decision announced on June 6, 2001 to dispose of its participation in Americ Disc, Transcontinental agreed to sell most of its interest in Americ Disc to a group of investors headed by David Littlefield, a well-known figure in the U.S. compact-disc industry and the president and owner of Cycle Software Services, a CD supplier based in Minneapolis, Minnesota. Under the agreement, Transcontinental's share in Americ Disc will drop from 50% to19.9% while the Corporation will continue to provide administrative support. The transaction is subject to certain conditions. Dividend Declared At its September 11, 2001 meeting, the Corporation's Board of Directors voted a quarterly dividend of $0.05 per share on Class A Subordinate Voting Shares and Class B shares. These dividends are payable on October 15, 2001 to shareholders of record at the close of the Toronto Stock Exchange on October 5, 2001.