(All figures in U.S. dollars unless otherwise indicated)
The Fund recorded a 15 per cent decrease in revenue to
In September, the Fund signed a three year extension of the replication services agreement with Lions Gate Entertainment Inc. "We are very pleased that we have extended the long standing relationship with a very important studio client" said
During the third quarter of 2009, the Fund repurchased
On
Segment revenue
-------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
-------------------------------------------------------------------------
(in thousands
of US$) 2009 2008 2009 2008
-------------------------------------------------------------------------
Home
Video $276,706 79% $298,403 72% $721,300 76% $850,243 73%
CD 42,319 12% 57,003 14% 118,854 12% 169,198 14%
Video
Game 18,192 5% 26,545 7% 58,404 6% 77,289 7%
Other 14,021 4% 29,702 7% 56,868 6% 74,994 6%
-------------------------------------------------------------------------
$351,238 100% $411,653 100% $955,426 100% $1,171,724 100%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Third quarter of 2009 Home Video revenue (which includes replication and distribution of DVDs and high-definition discs) was down seven per cent to
CD segment revenue (which includes replication and distribution of CDs) was down 26 per cent in the third quarter of 2009 to
Revenue from the Video Game segment was down 31 per cent to
Revenue from our Other segment, which includes the Motorola distribution business in both
Geographic revenue
Third quarter of 2009 North American revenue decreased 20 per cent to
European revenue was down seven per cent in the third quarter to
Other financial highlights
Gross profit for the quarter ended
Selling, general and administrative expenses for the quarter ended
Balance sheet and liquidity
The Fund had cash and cash equivalents on hand of
Unit data
For the three-month period ended
Reconciliation of EBITA and EBIT to net earnings from continuing
operations
-------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
(unaudited, in thousands
of U.S. dollars) 2009 2008 2009 2008
-------------------------------------------------------------------------
EBITA excluding other charges $ 44,402 $ 56,908 $ 95,809 $141,428
-------------------------------------------------------------------------
Other charges, net 1,587 - 3,113 536
-------------------------------------------------------------------------
EBITA(1) $ 42,815 $ 56,908 $ 92,696 $140,892
-------------------------------------------------------------------------
Amortization of property,
plant and equipment 21,215 24,392 65,695 74,980
Amortization of intangible
assets 10,451 10,594 30,950 31,912
-------------------------------------------------------------------------
EBIT(2) $ 11,149 $ 21,922 $ (3,949) $ 34,000
-------------------------------------------------------------------------
Interest expense 10,123 11,555 29,548 35,137
Gain on repurchase of debt (9,853) - (23,475) -
Foreign exchange (gain) loss (6,456) 7,577 (14,050) 2,499
Investment income (194) (452) (527) (1,511)
Income taxes (recovery) 3,588 1,713 932 (7,162)
-------------------------------------------------------------------------
Net earnings from continuing
operations $ 13,941 $ 1,529 $ 3,623 $ 5,037
-------------------------------------------------------------------------
(1) EBITA is defined as earnings from continuing operations before other
charges, impairment charges, gain on repurchase of debt, interest
expense, investment income, income taxes, amortization and foreign
exchange translation gain/loss. It is a standard measure that is
commonly reported and widely used in the industry to assist in
understanding and comparing operating results. EBITA and EBITA
including other charges, are not defined terms under generally
accepted accounting principles (GAAP). Accordingly, these measures
may not be comparable with other issuers and should not be considered
as a substitute or alternative for net earnings or cash flow, in each
case as determined in accordance with GAAP. See reconciliation of
EBITA to net earnings under GAAP as found in the table above.
(2) EBIT is defined as earnings from continuing operations before
impairment charges, interest expense, gain on repurchase of debt,
investment income, income taxes and foreign exchange translation
gain/loss, and is a standard measure that is commonly reported and
widely used in the industry to assist in understanding and comparing
operating results. EBIT is not a defined term under GAAP.
Accordingly, this measure may not be comparable with other issuers
and should not be considered as a substitute or alternative for net
earnings or cash flow, in each case as determined in accordance with
GAAP. See reconciliation of EBIT to net earnings under GAAP as found
in the table above.
About Cinram
Cinram International Inc., an indirect, wholly-owned subsidiary of the Fund, is the world's largest provider of pre-recorded multimedia products and related logistics services. With facilities in
Certain statements included in this release constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Fund, or results of the multimedia replication industry, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Such factors include, among others, the following: general economic and business conditions, which will, among other things, impact the demand for the Fund's products and services; multimedia replication industry conditions and capacity; the ability of the Fund to implement its business strategy; the Fund's ability to retain major customers; the Fund's ability to invest successfully in new technologies; the Fund's ability to refinance its credit facilities upon maturity and other factors which are described in the Fund's filings with the securities commissions.
INTERIM CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
-------------------------------------------------------------------------
September 30 December 31
2009 2008
(unaudited)
-------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $93,622 $73,349
Accounts receivable 321,757 495,604
Inventories 52,242 48,987
Income taxes receivable 284 18,235
Prepaid expenses 18,293 21,913
Future income taxes 1,900 1,827
-------------------------------------------------------------------------
488,098 659,915
Property, plant and equipment 296,716 361,804
Goodwill 63,530 64,737
Intangible assets 63,971 94,423
Other assets 24,948 24,557
-------------------------------------------------------------------------
$937,263 $1,205,436
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND UNITHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable $80,451 $203,619
Accrued liabilities 246,773 247,968
Income taxes payable 14,609 11,581
Current portion of long-term debt 35,245 6,750
Current portion of obligations under capital leases 2,114 3,094
-------------------------------------------------------------------------
379,192 473,012
Long-term debt 481,097 636,299
Obligations under capital leases 2,701 3,926
Other long-term liabilities 44,859 43,625
Derivative instruments 27,069 26,586
Future income taxes 4,071 5,208
Unitholders' equity (deficiency) (1,726) 16,780
-------------------------------------------------------------------------
$937,263 $1,205,436
-------------------------------------------------------------------------
-------------------------------------------------------------------------
INTERIM CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(unaudited, in thousands of U.S. dollars, except per
unit/exchangeable LP unit amounts)
-------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
2009 2008 2009 2008
-------------------------------------------------------------------------
Revenue $351,238 $411,653 $955,426 $1,171,724
Cost of goods sold 288,626 341,173 802,883 985,480
-------------------------------------------------------------------------
Gross profit 62,612 70,480 152,543 186,244
Selling, general and
administrative expenses 39,425 37,964 122,429 119,796
Amortization of
intangible assets 10,451 10,594 30,950 31,912
Other charges, net 1,587 - 3,113 536
-------------------------------------------------------------------------
Earnings (loss) before
the undernoted 11,149 21,922 (3,949) 34,000
Interest on long-term debt 9,147 11,392 28,363 34,473
Other interest expense 976 163 1,185 664
Gain on repurchase of debt (9,853) - (23,475) -
Foreign exchange
(gain) loss (6,456) 7,577 (14,050) 2,499
Investment income (194) (452) (527) (1,511)
-------------------------------------------------------------------------
Earnings (loss) from
continuing operations
before income taxes 17,529 3,242 4,555 (2,125)
Income taxes (recovery) 3,588 1,713 932 (7,162)
-------------------------------------------------------------------------
Earnings from continuing
operations 13,941 1,529 3,623 5,037
Earnings (loss) from
discontinued operations (4,460) 493 (17,179) (13,482)
-------------------------------------------------------------------------
Net earnings (loss) $9,481 $2,022 $(13,556) $(8,445)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per unit from
continuing operations:
Basic $0.26 $0.03 $0.07 $0.09
Diluted $0.25 $0.03 $0.07 $0.09
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings (loss) Loss per unit:
Basic $0.17 $0.04 $(0.25) $(0.15)
Diluted $0.17 $0.04 $(0.25) $(0.15)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number of
units and exchangeable
limited partnership units
outstanding, (in thousands):
Basic 54,530 56,481 54,956 56,864
Diluted 55,564 56,550 55,474 56,920
-------------------------------------------------------------------------
-------------------------------------------------------------------------
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited, in thousands of U.S. dollars)
-------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
2009 2008 2009 2008
-------------------------------------------------------------------------
Net earnings (loss) for
the period $9,481 $2,022 $(13,556) $(8,445)
Other comprehensive income,
net of tax :
Unrealized gain (loss) on
translating financial
statements of self-
sustaining foreign
operations (12,445) (507) (29,416) 13,345
Unrealized gain (loss) on
hedges of net investment
in self-sustaining
operations 12,627 (7,034) 25,899 (14,447)
Partial release of
cumulative translation
adjustment - - - 1,203
-------------------------------------------------------------------------
Unrealized foreign
exchange translation
gain (loss), net of
hedging activities 182 (7,541) (3,517) 101
Net unrealized gain
(loss) on derivatives
designated as cash flow
hedges (1,897) (874) (479) 1,046
-------------------------------------------------------------------------
Other comprehensive
income (loss) (1,715) (8,415) (3,996) 1,147
-------------------------------------------------------------------------
Comprehensive income
(loss), net of tax $7,766 $(6,393) $(17,552) $(7,298)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
INTERIM CONSOLIDATED STATEMENTS OF UNITHOLDERS' EQUITY (DEFICIENCY)
(unaudited, in thousands of U.S. dollars)
Three and nine months ended September 30, 2008
-------------------------------------------------------------------------
Exchangeable Limited Contributed
Fund Units Partnership units surplus
Amount Number Amount Number
-------------------------------------------------------------------------
(000's) (000's)
-------------------------------------------------------------------------
Balance,
January 1, 2008 $181,660 57,021 $298 98 $-
Loss for the six
months ended
June 30, 2008 - - - - -
Deferred units
issued - - - - 157
Repurchase of
units (414) (130) - - -
Limited partnership
units exchanged
for Fund units 198 65 (198) (65) -
Deferred units
exchanged for
Fund units 135 24 - - (135)
Other comprehensive
income - - - - -
-------------------------------------------------------------------------
Balance, June 30,
2008 $181,579 56,980 $100 33 $22
Earnings for
the quarter - - - - -
Deferred units
issued - - - - 68
Repurchase of
units (5,607) (1,761) - - (22)
Other comprehensive
loss - - - - -
-------------------------------------------------------------------------
Balance, September
30, 2008 $175,972 55,219 $100 33 $68
-------------------------------------------------------------------------
--------------------------------------------------------------
Accumulated Total
Employee other Unit-
unit comprehensive holders'
purchase income equity
loan Deficit (loss) (deficiency)
--------------------------------------------------------------
--------------------------------------------------------------
Balance,
January 1, 2008 $- $(223,854) $111,966 $70,070
Loss for the six
months ended
June 30, 2008 - (10,467) - (10,467)
Deferred units
issued - - - 157
Repurchase of
units - (315) - (729)
Limited partnership
units exchanged
for Fund units - - - -
Deferred units
exchanged for
Fund units - - - -
Other comprehensive
income - - 9,562 9,562
--------------------------------------------------------------
Balance, June 30,
2008 $- $(234,636) $121,528 $68,593
Earnings for
the quarter - 2,022 - 2,022
Deferred units
issued - - - 68
Repurchase of
units - (2,727) - (8,356)
Other comprehensive
loss - - (8,415) (8,415)
--------------------------------------------------------------
Balance, September
30, 2008 $- $(235,341) $113,113 $53,912
--------------------------------------------------------------
INTERIM CONSOLIDATED STATEMENTS OF UNITHOLDERS' EQUITY (DEFICIENCY)
(unaudited, in thousands of U.S. dollars)
Three and nine months ended September 30, 2009
-------------------------------------------------------------------------
Exchangeable Limited Contributed
Fund Units Partnership units surplus
Amount Number Amount Number
-------------------------------------------------------------------------
(000's) (000's)
-------------------------------------------------------------------------
Balance,
January 1, 2009 $175,990 55,223 $100 33 $-
Loss for the six
months ended
June 30, 2009 - - - - -
Deferred units
issued - - - - 203
Limited partnership
units exchanged
for Fund units 12 4 (12) (4) -
Issuance of
employee unit
purchase loans - - - - -
Other comprehensive
loss - - -
-------------------------------------------------------------------------
Balance, June 30,
2009 $176,002 55,227 $88 29 $203
Earnings for
the quarter - - - - -
Deferred units
issued - - - - 91
Issuance of
employee unit
purchase loans - - - - -
Other comprehensive
loss - - - - -
-------------------------------------------------------------------------
Balance, September
30, 2009 $176,002 55,227 $88 29 $294
-------------------------------------------------------------------------
--------------------------------------------------------------
Accumulated Total
Employee other Unit-
unit comprehensive holders'
purchase income equity
loan Deficit (loss) (deficiency)
--------------------------------------------------------------
Balance,
January 1, 2009 $- $(258,425) $99,115 $16,780
Loss for the six
months ended
June 30, 2009 - (23,037) - (23,037)
Deferred units
issued - - - 203
Limited partnership
units exchanged
for Fund units - - - -
Issuance of
employee unit
purchase loans (486) - - (486)
Other comprehensive
loss - - (2,281) (2,281)
--------------------------------------------------------------
Balance, June 30,
2009 $(486) $(281,462) $96,834 $(8,821)
Earnings for
the quarter - 9,481 - 9,481
Deferred units
issued - - - 91
Issuance of
employee unit
purchase loans (762) - - (762)
Other comprehensive
loss - - (1,715) (1,715)
--------------------------------------------------------------
Balance, September
30, 2009 $(1,248) $(271,981) $95,119 $(1,726)
--------------------------------------------------------------
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands of U.S. dollars)
-------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
2009 2008 2009 2008
-------------------------------------------------------------------------
Cash provided by (used in):
Operating Activities:
Net earnings from
continuing operations $13,941 $1,529 $3,623 $5,037
Items not involving cash:
Amortization 31,666 34,986 96,645 106,892
Future income taxes
(recovery) 215 (607) (1,210) 3,016
Gain on repurchase
of debt (9,853) - (23,475) -
Release of cumulative
translation adjustment - - - 536
Non-cash interest expense 600 445 1,866 1,333
Hedge ineffectiveness 490 (636) (4) (243)
(Gain) loss on
disposition of property,
plant and equipment 184 (229) (1,553) (309)
Other 91 68 294 225
Change in non-cash
operating working capital 24,186 (60,890) 85,891 13,002
-------------------------------------------------------------------------
61,520 (25,334) 162,077 129,489
Financing Activities:
Transaction costs - - (1,525) -
Repayment/repurchase of
long-term debt and bank
indebtedness (37,075) (1,688) (103,457) (31,732)
Decrease in obligations
under capital leases (658) (868) (2,205) (1,824)
Financing of employee
unit purchase loan (762) - (1,248) -
Repurchase of units - (8,356) - (9,085)
Distributions paid - - - (9,247)
-------------------------------------------------------------------------
(38,495) (10,912) (108,435) (51,888)
Investing Activities:
Purchase of property,
plant and equipment (8,128) (17,040) (37,853) (54,052)
Acquisitions, net of cash - (3,392) - (5,386)
Acquisition expense - 248 - 1,003
Payment of acquisition
earnout amount - - (16,131) (13,449)
Proceeds on disposition
of property, plant and
equipment 2,764 266 29,406 364
Decrease (increase) in
other assets (266) 2,696 (391) (5,262)
Increase (decrease) in
other long-term
liabilities 129 (333) (5,211) 1,203
-------------------------------------------------------------------------
(5,501) (17,555) (30,180) (75,579)
Cash provided by (used
in) discontinued
operating activities (174) (3,350) (20,052) (16,037)
Cash provided by (used
in) discontinued
investing activities - 1,552 13,990 6,964
Foreign currency translation
gain/(loss) on cash held
in foreign currencies (351) (1,818) 2,873 810
-------------------------------------------------------------------------
Increase (decrease) in
cash and cash equivalents 16,999 (57,417) 20,273 (6,241)
Cash and cash equivalents,
beginning of period 76,623 119,582 73,349 68,406
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period $93,622 $62,165 $93,622 $62,165
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash and cash equivalents
are comprised of:
Cash $66,086 $28,616 $66,086 $28,616
Cash equivalents 27,536 33,549 27,536 33,549
-------------------------------------------------------------------------
$93,622 $62,165 $93,622 $62,165
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Supplemental cash flow
information:
Interest paid $8,725 $10,482 $29,009 $34,967
Income taxes received (19,294) (16,726) (17,600) (7,781)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash and cash equivalents are defined as cash and short-term deposits
that have an original maturity of less than 90 days.
For further information: John H. Bell, Tel: (416) 332-2902, [email protected]
Share this article