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World Color Press Reports Revenue and Earnings Decline in Second Quarter

August 13, 2009
MONTRÉAL—8/13/2009—World Color Press Inc. (previously Quebecor World Inc.) emerged from court protection in the U.S. and in Canada on July 21, 2009. World Color’s successful restructuring allowed it to emerge as a stand-alone entity that is poised to resume and strengthen its role as a leading player in its industry.

“The Company’s exit from creditor protection was an important milestone and would not have been possible without the tireless efforts of our employees and the support of our customers. During this time we strengthened our financial structure and made important strides in reducing our cost structure and introducing new customer solutions across our platform,” said Jacques Mallette, President and CEO, World Color. “We have also continued to develop new integrated print solutions to ensure our customers get the best return on their investment. Going forward, we will be able to fully concentrate on strengthening our business to benefit all our stakeholders”.   In the second quarter 2009, World Color generated consolidated revenues from continuing operations of $702.5 million compared to $975.5 million in the second quarter of 2008. Operating income in the second quarter of 2009 before impairment of assets, restructuring and other charges (Adjusted EBIT) was $5.5 million compared to $27.8 million in the second quarter of 2008. Adjusted earnings before interest, tax, depreciation and amortization (Adjusted EBITDA) was $58.0 million in the second quarter of 2009 compared to $92.7 million in the second quarter of 2008. The lower Adjusted EBITDA in the second quarter resulted primarily from lower volumes, mostly due to the North American recession and to a lesser extent negative price pressures.

In the second quarter, the Company generated $28.1 million of free cash flow compared to negative free cash flow of $23.3 million in the second quarter of 2008, excluding the proceeds from business disposals. This was largely due to higher cash provided from operating activities.

“During the quarter and year-to-date, we continued to further reduce our cost base and improve efficiencies. These efforts together with our solid customer base and stronger balance sheet will benefit us going forward,” said Mr. Mallette.

World Color recently put in place cost reduction initiatives that are expected to realize in excess of $100 million in annualized cost savings. These measures include a significant program impacting wages, benefits and working conditions for union and non-union employees across the North American platform. These initiatives began to be implemented on April 19, 2009. In the second quarter, selling, general and administrative expenses decreased by 17% compared to the same period last year
 

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