Replication | 5:19 March 04, 2010 | Print this story

Cinram sees Q4 profit rise, views future without Warner

Canadian DVD and CD replicators Cinram reported adjusted gross profit up year-on-year by 37% to $111.9 million in the fourth quarter of 2009 and a net loss from continuing operations of $17.3 million for the full year ending Dec. 31 compared with net earnings of $21.4 million in 2008.

Cinram reported a 15% decrease in revenue to $1.46 billion in 2009 from $1.73 billion in 2008, citing lower DVD unit sales and selling prices combined with lower revenue from CDs and wireless.

The group recorded a combined long-lived asset and goodwill impairment charge of $82.2 million in the fourth quarter relating primarily to the cancellation of its Warner Home Video business that was announced on Feb. 1.

Cinram CEO Steve Brown said the group faced challenges in 2010 but would also enjoy opportunities. “Warner’s decision not to extend their contract with Cinram was obviously regrettable. However, the initiatives undertaken this past year will continue to drive Cinram forward in a market we forecast to still have a 10-to-15 year future. Physical media is still being embraced by the consumer markets and its migration to digital download and other non-physical strategies have all been far slower than many previously forecasted.”

Chief Financial Officer John Bell said, “Debt reduction was a primary focus during 2009 and we are pleased that we were able to achieve a reduction in our net debt position by over $300 million.”