Freshly removed from bankruptcy protection in Canada and the U.S. and sporting its new name, World Color Press Inc. (previously Quebecor World Inc.) reports that losses continued in the second quarter of 2009 (ended June 30). The net loss of US$59.5 million from consolidate revenues of US$702.5 million for the quarter compares to a net loss of $77.7 million from sales of US$975.5 million for the same period in 2008.
For the first six months of 2009, World Color’s net loss from continuing operations is US$185.4 million, compared to a loss of $226.3 million in the first half of 2008. Revenues for the first half of 2009 were US$1.46 billion, down 25% when compared to the company’s sales of $1.99 billion in the same period of 2008. The drop is attributed to decreased volume and price pressures.
"During the quarter and year-to-date, we continued to further reduce our cost base and improve efficiencies," said Jacques Mallette, president and CEO, World Color (pictured above). "These efforts together with our solid customer base and stronger balance sheet will benefit us going forward."
World Color initiated cost reduction initiatives in April this year and expects to realize over $100 million in annualized cost savings. In the second quarter, selling, general and administrative expenses decreased by 17% compared to the same period in 2008.
The company will be launching a rebranding campaign in September, and its newly issued common shares are now listed and trading on the Toronto Stock Exchange (TSX:WC).
Going forward World Color Press is required to adopt what’s called "fresh start" financial reporting. The fresh start means that the financial statements of the new entity will not be comparable to any of its previously issued financial statements.
The company has also announced that it has adopted a shareholder rights plan agreement to encourage the fair treatment of shareholders in any takeover offer for the corporation and to prevent a bidder from acquiring control of World Color in a manner detrimental to shareholders. These rights will become exercisable only when a person acquires or attempts to acquire 20 percent or more of the outstanding common shares or of the outstanding shares without complying with the “Permitted Bid” provisions of the Rights Plan or without approval of the World Color’s board of directors.
The company has noted that the rights plan was not adopted in response to any specific proposal to acquire control of the corporation, nor is the corporation aware of any such intention.
