Worldcolor Narrows Loss on Lower Revenues in First Quarter 2010
MONTRÉAL—5/10/2010—Worldcolor (TSX: WC, WC.U) more than doubled adjusted EBITDA in the first quarter of 2010 compared to the same period in 2009. This improvement was achieved because of the Company’s strict focus on restructuring initiatives, cost reductions and process improvements, which more than offset lower volume compared to the first quarter of 2009.
In the first quarter of 2010, Worldcolor generated revenues of $692 million compared to $752 million in the first quarter of 2009. Operating income in the first quarter of 2010 before impairment of assets, restructuring and other charges (IAROC) was $34 million compared to an operating loss before IAROC of $14 million in the first quarter of 2009.
The company reported a net loss of $29 million, compared to a net loss of $126 million for the same period in 2009. These results incorporated IAROC, net of income taxes, of $36 million, compared with IAROC, net of income taxes, of $11 million for the same period in 2009. The restructuring costs related largely to plant closures announced in the current year of the following facilities in North America: Oberlin, OH; Dyersburg, TN; West Bridgewater, MA; Richmond Hill, ON; St-Romuald, QC; Bromont, QC; as well as various workforce reductions. The 2010 restructuring initiatives affected a total of 1,700 employees, of which 401 positions were eliminated as of March 31, 2010 and 1,299 positions are expected to be eliminated as the aforementioned facilities are closed.
Adjusted EBITDA was $79 million in the first quarter of 2010 compared to $36 million in the first quarter of 2009. The higher adjusted EBITDA in the quarter was largely due to the benefits of restructuring, continuous improvement projects and ongoing cost containment initiatives which significantly improved operational efficiency.
In the first quarter of 2010, cost of sales decreased by 16% compared to the first quarter of 2009 while revenues in the first quarter 2010 decreased by 8% compared to the same period last year. Free cash flow in the first quarter was $98 million which was $23 million higher than in the first quarter of 2009.