Spicers Canada Limited, an operating unit of Australia-based PaperlinX Limited, executed several staff layoffs last week. The layoffs are significant and reach across various geographical regions and employment levels.
When contacted by telephone, Cory Turner, President of Spicers Canada and a member of PaperlinX Limited's senior management team, refused to comment about the layoffs or acknowledge any actions had taken place.
PaperlinX Limited began to aggressively restructure its global operations in 2011. The distribution company itself was first listed on the Australian stock exchange in 2000 and expanded rapidly over the next few years.
In 2012, as part of a massive restructuring program, PaperlinX sold its United States operations, listed as Spicers Paper Inc. and Kelly Paper Company, to Central National-Gottesman (CNG) for US$76 million. Soon after, PaperlinX then sold its Italian entity to Lecta for €45 million.
After completing the sale of both its United States and Italian operations, and rebranding its Canadian operations as Spicers Canada, PaperlinX then reached agreements to sell its operations in Slovakia, Hungary, Slovenia, Croatia and Serbia to the Heinzel Group for €19.6 million. PaperlinX then signed an agreement to sell its South African operation to local management for net proceeds of around €5 million.
In November 2012, as it announced additional restructuring for its United Kingdom operation, from where the company operates its global business, PaperlinX stated its ongoing European restructuring in the 2013 financial year would see 370 employees leave the business.
During this 2012 restructuring process, PaperlinX Limited also went through a series of high-level executive resignations and appointments on its board.
In August 2012, PaperlinX Limited reported its year-end results, which included a statutory loss of $266.7 million (after tax) for its most recent year, compared to a loss of $108 million for the prior year. PaperlinX also reported a net debt of $148 million for the year ended versus the prior year’s net debt of $172 million.
This Thursday, on February 21, PaperlinX Limited is scheduled to release its 2013 interim financial results.
Eastman Kodak Company has received and accepted an offer from the Steering Committee of the Second Lien Noteholders Committee for interim and exit financing totaling US$830 million in loans. This offer replaces the US$793 million commitment announced by the company on November 12.
Each of the 10 institutional investors that comprise the Steering Committee holds senior secured notes of the company. The new financing is open to participation by all other holders of the notes, including the investors that extended the November 12 commitment.
"As we continue to progress toward successful emergence, we remain focused on doing what is best for the company's creditors and other stakeholders, including our customers, suppliers, and employees,” said Antonio Perez, Chairman and CEO. “We are pleased that these existing creditors have come forward with a new proposal that offers better terms and enables Kodak to further accelerate its momentum to emergence in the first half of 2013.”
The financing includes new money term loans of US$455 million, as well as term loans of up to US$375 million issued to holders of senior secured notes participating in the new money loans in a dollar-for-dollar exchange for amounts outstanding under the company's pre-petition second lien notes.
The financing is predicated on certain conditions, including the successful completion of the sale of Kodak's digital imaging patent portfolio for no less than US$500 million.
The commitment letter also contains provisions allowing for a conversion of up to US$630 million of the loans upon emergence into permanent exit financing due five years after emergence, provided Kodak meets certain conditions, including the consummation of a Plan of Reorganization by September 30, 2013, the resolution of the company's U.K. pension obligations, and the completion of all or a portion of the sales of Kodak's Document Imaging and Personalized Imaging businesses.
HP announced its fourth quarter and fiscal year end figures which saw revenues from its printing equipment activities fall five percent compared to 2011. Commercial hardware units were down 15 percent with consumer printing hardware sales down 22 percent.
"This restructuring is regrettable but warranted by changes in our industry which force us to align our cost structure with the new reality," said Pierre Karl Péladeau, President and CEO of Sun Media.
Quebecor in November last year cut 400 jobs, some attributed to outsourcing of production to India. Previous to that, 600 jobs were axed just prior to Christmas in 2008. Revenues from News Media shrunk $7.6 million to $227.6 million in the three months leading to September 30th compared to the same quarter in 2011.
According to Qubecor, Sun Media is Canada's largest newspaper publisher with a circulation of over 15.1 million copies a week spanning 36 paid-circulation dailies and six free commuter papers. The Corporation also publishes 200 community newspapers, shopping guides and other publications.
"We very much regret the impact that this has had on employees who are departing our organization and would like to thank them for their contribution. We wish them all well," concluded Mr. Péladeau.
A report by Jacqueline Palank of Dow Jones & Company, which is owned by News Corp., indicates a group of unsecured creditors are opposed to the auction and financing proposals of Vertis Holdings Inc., which last week announced it had again filed for Chapter 11 bankruptcy protection.
In close proximity to its Chapter 11 filing, Vertis announced it had signed an agreement with Quad/Graphics Inc. of Sussex, Wisconsin, which would purchase substantially all of Vertis’ assets for US$258.5 million.
Palank writes that unsecured creditors feel the auction and financing proposals do not include enough protections to make sure they are not left holding the bag during the company's third time through the Chapter 11 process.
The official committee representing Vertis's unsecured creditors, Palank explains, are urging a bankruptcy judge to slow down the sale of Vertis's print advertising and direct-mail marketing business, which they say is being run for the sole benefit of senior lenders led by General Electric Capital Corp.
See Palank’s full report at dowjones.com.
Xerox, despite steady growth in its services business, reported a three percent decline in revenues, hitting US$5.4 billion, for its 2012 third quarter when compared to the year ago quarter.
The company reported services revenue, which includes printing for corporate and government clients, increased by five percent in the quarter, partially offsetting a seven percent constant currency decline in technology revenue, representing the sale of document systems, supplies, technical service and financing of products. Specifically, equipment sales revenue declined 14 percent as compared to the third quarter of 2011.
“Our third-quarter performance aligns with shifts in our business as services become a larger proportion of our revenue," stated Ursula Burns, Xerox CEO. “Steady growth in services is consistent with our strategy. Scaling our offerings in business process, IT and document outsourcing gives us a diversified portfolio that helps mitigate declines in equipment sales and supplies.”
In the company's services business, constant currency revenue from business process outsourcing grew nine percent, IT outsourcing grew six percent and document outsourcing, which includes Xerox print services offerings, was up four percent.
During the fourth quarter, Xerox is planning to take a restructuring charge in the range of US$50 million to US$100 million.
Electronics For Imaging of Foster City, California, continued its strong financial standing with 2012 third quarter results (ended September 30, 2012) showing a five percent increase in revenues, which moved to US$154.1 million from US$147.3 million in the year-ago quarter.
For the nine months ended September 30, 2012, EFI reported revenue of US$478 million, up 12 percent year-over-year compared to US$428.5 million for the same period in 2011. Non-GAAP net income was US$41.7 million, compared to non-GAAP net income of US$36.4 million for the same period in 2011.
"Another very strong quarter by our industrial inkjet business coupled with continued double-digit growth in our Productivity Software business led to solid results for Q3 despite the softness in Europe,” stated Guy Gecht, Chief Executive Officer of EFI. “For the first time, industrial inkjet represented over 50 percent of total EFI revenues, while at the same time the continued high growth of ink volume shows that our customers are also enjoying a similar business expansion.”
Catalyst Paper of Richmond, British Columbia, announced it has successfully completed its reorganization under the Companies’ Creditors Arrangement Act. The news comes nearly a month after Catalyst entered into a commitment letter with a Canadian chartered bank for a $175 million syndicated asset-based loan (ABL) facility.
As a result of the reorganization and related transactions, Catalyst reports to have reduced its debt by $390 million, eliminated $80 million of accrued interest and reduced annual interest expense and other cash costs by approximately $70 million.
“We entered the reorganization process with a clear objective to put Catalyst on stronger financial footing and we have done so,” said Kevin Clarke, President and CEO. “Many parties worked long and hard to resolve balance sheet and cash-flow issues constructively and quickly throughout the process.
“I am very proud of our employees who stayed focused throughout this challenging period. Sales kept our order book strong, operations ran well and, going forward, we intend to capitalize on the momentum generated to compete even more vigorously in the markets for our products.”
The company’s new board of directors as of September 13, 2012, is comprised of John Brecker, Giorgio Caputo, John Charles, Kevin Clarke, Todd Dillabough, Walter Jones and Leslie Lederer.
“As we emerge from creditor protection, I want to acknowledge our former board chairman Jeffrey Marshall and directors Thomas Chambers, William Dickson, Douglas Hayhurst, Alan Miller, Geoffrey Plant and Dallas Ross for their service to Catalyst Paper,” said Clarke.
PaperlinX Limited, after arguably its most tumultuous year since being listed on the Australian Stock Exchange in 2000, has reported its year-end results, ended June 30, 2012.
PaperlinX announced a statutory loss of $266.7 million (after tax) for its most recent year, compared to a loss of $108 million for the prior year. The statutory loss of $266.7 million is increased from the $171 million expected loss that was announced on June 26 2012. The company states this is largely because of the board’s decision to write-off all remaining goodwill on its European operations.
PaperlinX’ revenue was $4.11 billion for the year, down from $4.67 billion in the prior year, which the company relates to weaker sales and the negative impact arising from the strength of the Australian dollar. Pointing to a weaker demand in Europe, the company also saw a drop in annual volumes, moving from last year’s 2.63 million tonnes to 2.44 million tonnes in the current year.
For its most-recent year, PaperlinX reported a lower net debt of $148 million versus the prior year’s net debt of $172 million. This follows the recent sale of its operations in the U.S. and Italy, while the sale of PaperlinX operations in South Eastern Europe and South Africa are expected to be complete in the first half of fiscal 2013.
Harry Boon, PaperlinX Chairman, said, “These results reflect a company in transition as we respond to the reality of the continuing structural decline in paper demand, current weak market conditions and the continuing poor outlook in Europe.
“The implementation of the strategic review involved taking substantial measures to reshape the company,” continued Boon. “Cash generated from asset disposals and the close out of the currency option have provided much needed liquidity, reduced debt and funded crucial restructuring. When completed, the expanded and accelerated restructuring program will provide a significantly lower operating cost base.”
Yesterday, Mississauga-based Central Reproductions Limited entered receivership, which is to be administered by trustee Paddon + Yorke Inc.
The news comes just one year short of the company’s 30th year of operation, after its founding in 1983. Central Reproduction’s was a long-established commercial printing operation in the Greater Toronto market.
In addition to its focus on the 40-inch sheetfed market, the company was an early adopter of toner reproduction technologies. In more recent years, Central Reproductions expanded its services into mailing and fulfillment and a range of creative services for print and online communications.
Eastman Kodak Company today released its financial results for the second quarter, ended June 30, which included a revenue decline of 27 percent when compared to Q2 in the previous year. The company reported a net loss of US$299 million for its most-recent quarter, compared to US$179 million in the second quarter of 2011.
For the six months ended June 30, 2012, Kodak reported a net loss of US$655 million compared to a net loss of US$425 million for the same six-month period in 2011.
Kodak, which filed for Chapter 11 bankruptcy protection in the United States on January 19, 2012, also reported it has since received approximately 5,900 proofs of claim from creditors. On May 10, 2012, the Bankruptcy Court entered an order establishing July 17, 2012, as the bar date for potential creditors to file proofs of claims.
Within its Q2 2012 results, Kodak reports that, as of August 2, 2012, total creditor claims filed against it now amount to approximately US$20.5 billion. The company’s cash balance at the end of the quarter stood at US$1.257 billion.
Kodak, however, points to some positive news within its Q2 2012 results. The company reports its second quarter earnings improved for its Commercial and Consumer segments by a combined total of US$82 million, compared to the same quarter in the prior year. Second quarter loss from continuing operations before interest expense, other income (charges), net, reorganization items, net and income taxes improved by US$79 million compared to the prior-year quarter.
“I am pleased with our progress, and our operating results are both improved from last year and also ahead of our plan,” said Antonio Perez, Chairman and Chief Executive Officer. “We are committed to sustaining the progress required to successfully emerge from Chapter 11.”
Catalyst Paper of Richmond, British Columbia, has entered into a commitment letter with a Canadian chartered bank for a $175 million syndicated asset-based loan (ABL) facility.
The ABL facility is a precondition for Catalyst to exit from creditor protection, providing for the refinancing of existing credit facilities to fund operations, as well as for general corporate purposes. The collateral for the ABL facility would primarily consist of all present and future working capital assets of the company.
Catalyst also entered into a commitment letter with respect to a secured exit notes facility of up to US$80 million. This Exit Facility, according to the company, provides it with backstop financing should additional funding be required to pay costs and expenses or manage other contingencies on exit from creditor protection.
“Having appropriate financing in place should enable a return to normal trade terms with our vendors as we exit from creditor protection and will, in turn, assure our customers of continued excellent service and product quality going forward,” said Catalyst President and CEO Kevin Clarke. “We kept high operating standards throughout this process and this gives us competitive momentum as we prepare to emerge successfully from CCAA in the near term.”
Catalyst filed for bankruptcy protection under the Companies’ Creditors Arrangement Act (CCAA), in the Supreme Court of British Columbia, back in January 2012. Then in March 2012, the company reached an agreement with 1,000 of its employees, who agreed to a 10 percent pay-cut and various adjustments to vacation, health and work rules to "provide Catalyst with a competitive labour cost structure." Annual savings as a result of this new contractual agreement will be between $18 and $20 million.
Catalyst manufactures specialty printing papers, newsprint and pulp, with four mills located in British Columbia and Arizona. The company has a combined annual production capacity of 1.9-million tonnes.
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