World Color Press Reports Revenue and Earnings Decline in Second Quarter
“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
On June 22, 2009, the creditors approved a plan of compromise and reorganization (the “Plan”) under both the CCAA and Chapter 11. On June 30, 2009, the Plan was sanctioned by the Quebec Superior Court, and it was confirmed by the U.S. Bankruptcy Court on July 2, 2009. The Plan was implemented following various transactions that were completed on July 21, 2009. The implementation of the Plan also involved entering into a new exit financing credit facility of $800 million. At closing, the Company drew approximately $540 million on the new credit facilities from which it repaid in full its DIP credit facility. The Company expects its newly issued Common Shares, as well as Series I Warrants and Series II Warrants to be listed and begin trading on the Toronto Stock Exchange (TSX: WC) by the end of August. On July 21, 2009, the Company has changed its legal name to World Color Press Inc. and it will be launching a rebranding effort in September.
Second quarter net loss For the second quarter ended June 30, 2009, World Color reported a net loss of $59.5 million, compared to a net loss from continuing operations of $77.7 million for the same period in 2008. These results incorporated impairment of assets, restructuring and other charges (IAROC), net of income taxes, of $2.5 million compared with $7.5 million for the same period in 2008, as well as reorganization items of $33.7 million which, net of income taxes, compared to $24.2 million in the second quarter of 2008.