Worldcolor Sees Income Jump on Lower Revenues for Third Quarter
Fresh Start Reporting and combined financial results
Upon emergence from protection under the Companies’ Creditors Arrangement Act in Canada (“CCAA”) and Chapter 11 in the United States, the Company is required to adopt “fresh start” financial accounting. Under fresh start accounting, the Company undertook a comprehensive re-evaluation of its assets and liabilities based on the estimated enterprise value of $1.5 billion as established in the Plan of Reorganization. Enterprise value is generally defined to be the Company’s estimated fair value at the Fresh Start date, less cash and cash equivalents. As a result of 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. However, for the readers’ convenience the current financial results for the two periods have been combined in this news release.
Use of Non-GAAP Measures
In the discussion of our 2009 results, we use certain financial measures that are not calculated in accordance with Canadian generally accepted accounting principles (GAAP) or United States GAAP to assess our financial performance, including EBITDA (earnings before interest, tax, depreciation and amortization), Adjusted EBITDA, Adjusted EBIT, and free cash flow. We use such non-GAAP financial measures because we believe that they are meaningful measures of our performance. Our method of calculating these non-GAAP financial measures may differ from the methods used by other companies and, as a result, the non-GAAP financial measures presented in this press release may not be comparable to other similarly titled measures disclosed by other companies. We provide a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures in Figure 4, “Reconciliation of non-GAAP Measures” of our third quarter 2009 management’s discussion and analysis filed with the Canadian securities regulatory authorities at www.sedar.com and furnished to the United States Securities and Exchange Commission at www.sec.gov. A copy of our third quarter 2009 management’s discussion and analysis is also available on the Company’s website at www.worldcolor.com.