Cinram Profit Up, Revenue Down3 Mar, 2011 By: Chris Tribbey
Replicator Cinram reported a profit of $7.4 million for the fourth quarter of 2010, despite a year-over-year quarterly revenue drop of more than $200 million.
The loss of Warner Home Video’s replication work to Technicolor last summer saw Cinram’s fourth-quarter revenue drop to $300.1 million from $504.9 million in 2009. The company's $7.4 million in earnings, compared with a $9.3 million loss in 2009, came about due to “the efforts of our senior management and dedicated staff to client service and … cost control initiatives,” according to company CEO Steve Brown.
“The results for the 2010 fourth quarter were consistent with our expectations, given the termination of the Warner Home Video contract last July 31,” Brown said. “Notwithstanding, the fund performed well and was able to maintain the financial metrics and performance margins despite the significant decline in revenue.”
For the year, Cinram posted a profit of $18.4 million, compared with a loss of $6 million in 2009. As of Dec. 31 the company’s debt was down 26% to $202.3 million from 2009. As of Feb. 17 Cinram had received 100% lender support for a proposed refinancing and recapitalization plan, expected to close this month.
“The refinancing and recapitalization transaction is a significant and positive development for Cinram and removes the uncertainty that has impacted the fund following the announcement of the loss of the Warner Home Video contract a year ago,” said John Bell, Cinram's CFO.
Fourth-quarter revenue for pre-recorded media, including DVDs, Blu-ray Disc and CDs, was $261.9 million, down from $456.3 million in 2009. DVD revenue was $211.6 million, down from $402.5 million, while Blu-ray revenue was $13.1 million, up 68% from $7.8 million in the fourth quarter of 2009. CD revenue was $37.2 million (down from $46 million), while video game revenue was $20.2 million (down from $33.2 million).
Revenue from both Cinram’s North American ($178.6 million) and European ($121.5 million) segments were down.