Montreal, December 10, 2003 – Transcontinental has achieved its growth targets despite highly competitive market conditions in some niches and the negative impact of the exchange rate. For the fiscal year ended October 31, 2003, consolidated revenues rose to $1.9 billion, up 7% over revenues of $1.8 billion in 2002, and operating income before depreciation and amortization was $336 million, up 11% over $303 million in 2002. Net income grew 15%, from $124 million in 2002 to $143 million in 2003; on a per share basis, it went from $1.46 to $1.61, an increase of 10%, despite the fact that the average number of shares outstanding increased from 84.7 million in 2002 to 88.7 million in 2003. The operating income margin before depreciation and amortization continued to increase substantially, from 17.1% in 2002 to 17.6% in 2003. Transcontinental ended the year with a strong fourth quarter. Consolidated revenues grew 5%, from $496 million in 2002 to $521 million in 2003, and operating income before depreciation and amortization grew 14% to $106 million, compared to $93 million in the fourth quarter of fiscal 2002. Net income grew 18%, from $40 million in 2002 to $47 million in 2003; on a per share basis, it rose 18%, from $0.45 to $0.53. The operating income margin before depreciation and amortization reached a record level of 20.4%, compared to 18.8% in 2002. “I am proud of our performance in 2003 which, let me remind you, comes after a strong year in 2002,” said Rémi Marcoux, Chairman of the Board and CEO of Transcontinental Inc. “Despite tough market conditions in some niches, we continued to stand out from the vast majority of our competitors by achieving the financial targets we announced at the beginning of the year. I'd like to express my gratitude to our people who, at all levels of the company, were inspired by our Horizon 2005 business project and found ways to reduce costs, improve efficiency and increase our market share by continually anticipating the ever-changing needs of our customers. Our improved profitability is also due to our disciplined financial management and rapid integration of the many acquisitions made in 2002. “In the year ahead, we plan to put even more energy into developing sales, particularly through our cross-sector teams, and will continue to make judicious investments in state-of-the-art technology as we did with the plant that prints the daily newspaper La Presse,” continued Mr. Marcoux. “With its solid balance sheet, Transcontinental is also in an excellent position to pursue its growth through acquisitions by actively seeking companies that complement our operations in the strategic niches we have identified, in Canada and the United States.” As of October 31, 2003, the Corporation's net debt stood at $313 million. The total net funded debt to capitalization ratio was 26%, a figure that is significantly lower than the 45% target set by management. Furthermore, all of the Corporation's bank credit facilities were undrawn, so Transcontinental had approximately $400 million available. Highlights of Fiscal 2003 The year 2003 was marked by numerous initiatives, achievements and recognition that bode well for the future. The main highlights are as follows: Deployment of Horizon 2005 intensified on all fronts in 2003. By December 31, 2003, more than 2000 new employees will have taken the Phil – The Three Pillars training, which aims to advance the culture of continuous improvement and employee involvement at every level of the organization and to promote Transcontinental's values. This will bring to 5000 the total number of employees who have taken the course since 2002. Also, 70 Kaizen workshops have been conducted to date. Human resources are another key component of Horizon 2005: in 2003, the Corporation invested considerable time and energy in hiring, retaining and training its employees. With respect to sales, six market-focused, cross-sector teams set up at the beginning of the year continued their efforts to offer their services to targeted groups in North America. Cross-sector sales initiatives with existing customers also continued to multiply, generating additional revenues. As part of its efforts to standardize systems and procedures, the Corporation is developing an information systems architecture, primarily by deploying an integrated manufacturing software platform in its printing plants. The niches that reported higher revenues and income in 2003 include local and regional newspaper publishing, door-to-door distribution of advertising material, and newspaper and flyer printing. In book printing, Transcontinental Gagné printed 440,000 English copies of the most recent volume in the Harry Potter series and, in December, had already printed 200,000 copies of the French version – and a new edition is in the offing. In early October, right on schedule, the ultramodern Transcontinental Metropolitan plant in Montreal began printing the daily newspaper La Presse. Transcontinental also finished building its newspaper printing plant in Borden, Prince Edward Island, which prints the National Post for the Atlantic provinces, and completed an expansion of its Halifax plant, which prints The Globe and Mail for the same region. These two plants also print most of the newspapers purchased from CanWest in 2002. In all, Transcontinental invested $141 million in capital expenditures in 2003. The action plan for improving the direct marketing operations in the United States started to have a positive impact at the end of the year. Demand for direct marketing products and services started to improve in the fourth quarter and this trend should continue in future quarters. The new telemarketing regulation should also have a positive impact on the direct marketing industry. Increasingly, major customers in this industry are looking for a supplier who can offer a complete range of products and services, both in Canada and the United States. In Mexico, a number of changes at all levels of operations and administration were implemented in the fourth quarter, improving results by year’s end. This bodes well for 2004. The most important changes were a notable improvement in the production process, intensive employee training and personnel reductions. However, management does not expect conditions in that market to improve in the next year. One of the big successes of the year was the rapid integration of the newspapers purchased from CanWest in the Atlantic provinces and Saskatchewan. These newspapers played a significant role in improving Transcontinental's profitability in 2003. There was also a major relaunch of the Halifax Daily News aimed at making it a leading paper in the Atlantic provinces. The paper's new offices were inaugurated at a ceremony attended by the provincial premier and the mayor of Halifax. The ingenuity, professionalism and teamwork of Transcontinental employees once again took centre stage when The Globe and Mail was the only national daily to be fully and completely distributed on schedule in the Toronto area on Friday, August 15, the day after the biggest blackout in the history of North America. This feat was pulled off by Transcontinental's three newspaper plants in the Montreal area which, for a number of hours, took over printing of the newspaper from Transcontinental Interweb Toronto, which prints The Globe and Mail for Ontario. At the end of the first quarter, Transcontinental issued US$125 million of long-term senior unsecured notes, through a private placement with institutional investors. The offering was divided into two parts: the first US$75 million will be fully repayable at maturity in December 2012 and bears interest at 5.62%; the second part will also be fully repayable at maturity in December 2014 and bears interest at 5.73%. 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, achieved through continued productivity improvements, its strategy of becoming the leader in its niches and the contributions from acquisitions made through a disciplined approach. Important anniversaries in 2003: the newspaper Les Affaires celebrated its 75th anniversary and marked the occasion by publishing two special editions: "75 years of business and finance in Quebec" and "75 leaders for the future." Affaires Plus and the well-known Publi-Sac celebrated their 25th anniversaries. The number of prizes and awards won by Transcontinental's newspapers, magazines and printing plants was outstanding in 2003, strengthening even more Transcontinental's reputation for quality. In terms of social responsibility, Transcontinental was again recognized as one of Canada's most socially responsible corporations at the Corporate Knights gala, ranking third in the "Industrial" category. Desjardins Securities also drew attention to the Corporation's reputation for openness and integrity, giving Transcontinental top ranking for corporate governance in Canada's media industry. On a more personal note, Rémi Marcoux was awarded an honorary doctorate by HEC Montréal in recognition of his achievements in the business community, his services to HEC and society in general, and his remarkable personal qualities. Mr. Marcoux was also designated the best Quebec CEO in the communications industry by the magazine CEO of the Year, published jointly by the National Post and La Presse. In August 2003, the Quebec Superior Court handed down its ruling in favour of the Montreal Transit Corporation in the case brought by Sun Media Corporation regarding the Métro newspaper. The Court rejected the argument made by this subsidiary of Quebecor Inc. that its freedom of the press was being violated. The Court also supported the exclusive agreement between the Montreal Transit Corporation and Métro, which is owned by Publications Métropolitaines inc., a partnership of Transcontinental Media Inc., Metro International S.A. and Gesca ltée. Transcontinental will thus continue to print, publish and distribute this free newspaper in the Montreal subway system as agreed in the exclusive contract with the transit corporation. On September 5, 2003, Sun Media Corporation indicated that it intended to appeal the decision. Subsequent Event On November 27, 2003, Transcontinental announced to shareholders of Optipress Inc., a major printer and publisher in the Atlantic provinces, its intent to make a takeover bid for Optipress. Transcontinental will offer to buy all of Optipress' seven million outstanding shares at C$8.00 per share, in cash, for a total price of $56 million. The Optipress board of directors, after consulting its financial advisors, determined that the price was fair and in the best interest of the Company and its shareholders. Transcontinental and Optipress signed an agreement in which the Optipress board of directors unanimously agreed to recommend to shareholders that they accept the Transcontinental offer. By December 11, 2003, Transcontinental will be sending Optipress shareholders a takeover bid circular. Concurrently, the Optipress board will send shareholders the Directors' Circular recommending, among other things, acceptance of Transcontinental's offer. Transcontinental’s offer is subject to certain conditions, including the deposit of 66 2/3% of the outstanding shares and regulatory approval. The transaction is expected to close at the end of January 2004. The major Optipress shareholders, i.e. NewCap Inc., Cameron Publications Limited, Dynamic Mutual Funds Ltd. and Craig L. Dobbin, which together hold 59.9% of the outstanding shares, have signed a lock-up agreement in which they agree to deposit the shares they hold, subject to the usual conditions. For Transcontinental, the 25 weekly and bi-weekly newspapers involved in this transaction, as well as the nine printing plants and network of digital reproduction centres, are a natural complement to its existing operations in the Atlantic provinces. Outlook The many sales development, efficiency improvement and cost reduction initiatives that are ongoing under Horizon 2005, as well as the contribution from acquisitions already announced, will help Transcontinental continue its track record of growth into 2004. These efforts will more than offset market conditions, which will remain difficult in the coming year, particularly in commercial printing, where profitability stemming from the expected gradual increase in sales volume may be offset by downward price pressures across North America. Considering this environment, management is setting a target for earnings per common share at $1.70 to $1.76 in 2004, an increase of 6% to 9% over fiscal 2003. This target is based on, among other things, an average exchange rate of $0.78 for the Canadian dollar in relation to the U.S. dollar.