Worldcolor Narrows Loss on Lower Revenues in First Quarter 2010
“This is the third consecutive quarter in which we have increased our adjusted EBITDA and adjusted EBITDA margins compared to the same period in the prior year, in each case in an amount that exceeded our expectations. We saw a direct benefit from our restructuring and other cost containment initiatives announced last year and which continued in the first quarter,” said Mark Angelson, Chairman and CEO of Worldcolor. “These measures, as well as the streamlining of our North America printing operations into one platform, have enabled us better to serve our customers and to improve our results despite challenging market conditions and continued lower advertising spending.”
During the first quarter of 2010 Worldcolor and Quad/Graphics Inc., entered into a definitive arrangement agreement whereby Quad/Graphics will acquire Worldcolor. Concurrent with the closing of the transaction Quad/Graphics intends to become a publicly traded company. Under the terms of the agreement, Worldcolor shareholders will receive at closing approximately 40% of the outstanding shares of Quad/Graphics and Quad/Graphics shareholders will hold approximately 60% of the shares, and Worldcolor shareholders will receive up to $93,333,333 of cash consideration, the final amount of which will be determined at closing. The transaction has cleared antitrust regulatory requirements in the United States and Canada, and is expected to close early in the summer of 2010 subject to shareholder approvals, court approval and satisfaction of other customary closing conditions.
Fresh Start Reporting
Upon emergence from protection under the Companies’ Creditors Arrangement Act in Canada (“CCAA”) and Chapter 11 in the United States, the Company adopted “fresh start” financial accounting. Under fresh start accounting, Worldcolor, the Successor, became a new entity for financial reporting purposes. Accordingly, the Consolidated Financial Statements of the Successor on or after August 1, 2009 are not comparable to the Consolidated Financial Statements of the Predecessor prior to that date.