MONTREAL, Dec. 19, 2012 /CNW Telbec/ - Transat A.T. Inc. has restated
its financial statements for fiscal 2011 following discovery of a
recurring accounting error starting in 2006 within its U.K. subsidiary,
which was acquired that year. Amounts received from customers for
services not yet rendered were not properly recorded in conformity with
the Corporation's accounting policy in current liabilities under Customer deposits and deferred income for fiscal years 2006 to 2011. Based on the Corporation's evaluation,
the recognition of deferred income of this subsidiary did not take into
account the adjustments required to reflect customers' actual departure
dates when transactional data was transferred from one system to
another for processing.
Accordingly, the Corporation has reduced its retained earnings as at
November 1, 2010 by $11.7 million, which is the sum of the annual
variance in earnings for the years 2006 to 2010 (the negative variance
is $3.1 million in 2006, $3.8 million in 2007, $1.6 million in 2008,
$2.1 million in 2009 and $1.1 million in 2010). For the year ended
October 31, 2011, the Corporation increased its net loss by
$2.9 million or $0.08 per share, from $11.8 million to $14.7 million.
On the balance sheet, income taxes receivable as at October 31, 2011
have increased by $2.3 million and customer deposits and deferred
income has increased by $16.7 million.
Consequently, the financial statements for fiscal 2011 have been
restated. Those of the previous years will not be refiled.
Following this discovery, remedial actions have been adopted and
implemented or are currently undergoing implementation, in particular:
more stringent review and validation of key balance sheet items of the
subsidiary; review of the subsidiary's end of period financial
statement closing process; review of the subsidiary's information
technology controls; periodic review by internal audit of the existence
and effectiveness of the newly adopted remedial actions.
"We take our financial reporting obligations very seriously and our
audits confirm that our internal controls are solid across all of our
subsidiaries," stated Denis Pétrin, Vice-President, Finance and
Administration and Chief Financial Officer.
Transat A.T. Inc. is an integrated international tour operator with more
than 60 destination countries and that distributes products in over 50
countries. A holiday travel specialist, Transat operates mainly in
Canada and Europe, as well as in the Caribbean, Mexico and the
Mediterranean Basin. Montreal-based Transat is also active in air
transportation, destination services, accommodation and distribution.
(TSX: TRZ.B, TRZ.A)
Caution regarding forward-looking statements
This news release contains certain forward-looking statements regarding
the Corporation's expectation that the assumptions used in the
valuation of the ABCP securities will materialize, and that travel
reservations will follow the trends. In making these statements, the
Corporation has assumed that the trends in reservations and selling
prices will continue, and that fuel prices, other costs and the value
of the Canadian dollar against foreign currencies will remain stable.
If these assumptions prove incorrect, actual results and developments
may differ materially from those contemplated by the forward-looking
statements contained in this press release. Results indicated in
forward-looking statements may differ materially from actual results
for a number of reasons, including without limitation, extreme weather
conditions, fuel prices, armed conflicts, terrorist attacks, general
industry, market and economic conditions, disease outbreaks, changes in
demand due to the seasonal nature of the business, the ability to
reduce operating costs and employee counts, labour relations,
collective bargaining and labour disputes, pension issues, exchange and
interest rates, availability of financing in the future, statutory
changes, adverse regulatory developments or procedures, pending
litigation and actions by third parties, and other risks detailed from
time to time in the Corporation's continuous disclosure documents.
These forward-looking statements, by their nature, necessarily involve
risks and uncertainties that could cause actual results to differ
materially from those contemplated by these forward-looking statements.
The Corporation considers the assumptions on which these
forward-looking statements are based to be reasonable, but cautions the
reader that these assumptions regarding future events, many of which
are beyond the Corporation's control, may ultimately prove to be
incorrect since they are subject to risks and uncertainties that affect
the Corporation. For additional information with respect to these and
other factors, see the Annual Information Form and Annual Report for
the year ended October 31, 2011, filed with Canadian securities
commissions. The Corporation disclaims any intention or obligation to
publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, other than as
required by securities legislation.
SOURCE: TRANSAT A.T. INC.
For further information:
514 987-1616, ext. 4662
Chief Financial Officer