Cinram Income Falls With Warner Departure2 Nov, 2010 By: Erik Gruenwedel
Disc replication company Cinram International Income Fund Nov. 2 posted third-quarter (ended Sept. 30) net earnings from consolidated operations of $11.9 million, compared with net earnings of $13.9 million during the same period last year.
Toronto-based Cinram attributed the decline to the July 31 departure of Warner Home Video’s physical media replication business. Warner transferred its replication contract to Technicolor beginning in the third quarter.
Home entertainment revenue fell nearly 29% to $197 million from $275 million last year, despite a 72% increase in Blu-ray Disc revenue to $8.1 million, compared with $4.7 million last year.
“As anticipated, revenue and pre-tax earnings were below prior year levels as a result of the contract loss,” said CEO Steve Brown. “However, our margins were better than expected as a result of the ongoing efficiency initiatives.”
Brown said Cinram remained engaged in talks with lenders to restructure the company’s financing. It lowered net debt to $240 million from $273 million last year. In August, Cinram cut 310 positions from its replication facility in Olyphant, Penn.