Financial

Printology Inc. of Richmond Hill, Ontario, has closed its doors after filing for bankruptcy on July 18 with the company having close to $2.8 million in creditor liabilities.

Of the $2.765 million that Printology (formerly Carlton Taylor Graphics) owes to creditors, only $248,000 of it is secured, while $2.485 million of the company’s outstanding liabilities lie with unsecured creditors.

Together, paper companies are owed just over $100,000 by Printology, while a press vendor is currently owed $450,000 as an unsecured creditor.

According to its Statement of Affairs, Printology holds assets of $450,000, including $350,000 with machinery and equipment, but an auction date has not yet been set.


The first meeting of Printology’s creditors is scheduled for August 7, 2012, at the office of the bankruptcy trustee, SF Partners of Toronto.


Heidelberg announced its preliminary figures for the first quarter of its financial year. The numbers, which include the run-up to drupa, show a decline in sales of EUR 24 million compared to a year previous.

The company attributes the decline in sales to its customers reluctance to commit to purchases, preferring to wait until after drupa for new announcements.

Orders, on the other hand, were strong in the first quarter due to drupa, increasing EUR 225 million over 2011 to EUR 890 million, the highest level in four years. As a result, the company grew its order backlog to around EUR 850 million.

The lower sales, combined with the costs involved in putting together its drupa presence has led to the company reporting an operating result of EUR -58 million, compared to the previous year's figure of EUR -25 million. On the whole, the company reports its outlook for the current and next financial year as unchanged. This includes the target of a net profit for the financial year of 2013/2014.

Full financial details will be released by Heidelberg on August 8.


Canon Inc. announced plans to buy back up to 50 billion yen ($660 million Canadian) worth of its own shares over the next few weeks. Large corporations typically make these investments when executives feel the stock is undervalued on the open market.

The $660 million buy back, amounting to just 1.4 percent of its outstanding shares (17.4 million shares), also indicates the size Canon.

With more than 25,000 global employees, Canon in its 2011 fiscal year generated net sales of 2,160,732 million yen, or $28.5 billion Canadian dollars. The company stated its share buy back is aimed at “improving capital efficiency and ensuring a flexible capital strategy that provides for such future transactions as share exchange.”

The company will purchase the shares between June 5 and July 27.




Postmedia Network, the owner of The National Post, as well as several major metropolitan dailies, has announced a round of cuts which will see three of its papers cease publishing a Sunday edition.

The Calgary Herald, Edmonton Journal, and the Ottawa Citizen will no longer publish on Sundays and the National Post will continue its trend of not publishing on Mondays over the summer months.

In an internal memo to its staff, Paul Godfrey, CEO of Postmedia, wrote: "We are continuing on this path and looking to further reduce our print-related infrastructure costs, build out our digital platforms and invest in growth areas of our business. We know that print advertising revenue decline is ongoing across the industry. And a lot of the lost revenue in Canada is going to foreign-owned and controlled digital companies who, without any regulation, are accessing Canadian audiences and eroding Canadian media revenues."

The memo also laid out plans to centralize by "moving editorial production out of our local newsrooms," including moving a lot of the pagination and layout to Postmedia Editorial Services in Hamilton. Layoffs are expected, but have yet to be detailed.

Postmedia has announced a $11 million loss in the last financial quarter while still suffering from a long-term debt of over $516 million. Postmedia Network was created in 2010 from a $1.1 billion transaction which saw the former properties of Canwest Global Communications change hands.


Heidelberg’s large Hall 1 presence at drupa appears to have paid dividends for the German press manufacturer, which reports it signed close to 2,000 orders from over 80 countries during the show. These numbers equate to the ordering of around 550 sheetfed offset press units.

“The level of incoming orders during the show indicates that confidence within the industry in returning. The investment backlog is continuing to unwind in many parts of the world,” stated Bernhard Schreier, Heidelberg CEO, who continued to say that the company’s volume of orders at the show is equivalent to around half of the production of printing units over the past financial year.

Heidelberg received its most press orders from Germany, while Chinese orders came in second and, interestingly, the United States was third in press orders during the show, indicating that a positive investment mindset may be returning to that struggling print economy.

"Particularly the development in countries such as the U.S. and Japan fills us with optimism and exceeds our expectations," said Schreier.


After a couple of tough years, Heidelberg made sure its presence was felt at drupa by displaying what the company classifies as over 60 innovations within its trade show hall, including around 20 completely new products and solutions.

The new Speedmaster SX press platform introduced at drupa accounts for around 250 press units sold during drupa. The Speedmaster SX models combine the technology of the Speedmaster XL class, launched at drupa 2008, with the longer-running platform of the Speedmaster SM series. (To date, Heidelberg has sold over 40,000 printing units for the medium-format Speedmaster SM 74.)

Heidelberg states that its new flagship press, the Speedmaster XL 106 (41-inch format), turned out to be its most sold machine during drupa. The company also notes that it signed “sizeable contracts’ for the large-format Speedmaster XL 145 and Speedmaster XL 162 presses.


While much of the media attention around drupa has focused on prototype machines that are still years away from market readiness, such as Landa’s nanographic press technology and several new cut-sheet inkjet concepts, Heidelberg’s large offset presence at the trade show, with working technology, appears to have provided the press maker with a positive start to its current fiscal year.



Technology giant HP announced it will be cutting its workforce by eight percent, equating to approximately 27,000 jobs by the end of 2014. The cuts will save the company between $3 and $3.5 billion, annually.

"These initiatives build upon our recent organizational realignment, and will further streamline our operations, improve our processes, and remove complexity from our business," said Meg Whitman, HP President and Chief Executive Officer. "While some of these actions are difficult because they involve the loss of jobs, they are necessary to improve execution and to fund the long term health of the company. We are setting HP on a path to extend our global leadership and deliver the greatest value to customers and shareholders."

The company also announced that it has seen a three percent drop in its revenues in the last quarter when compared to a year ago, a figure equating to roughly a 30 percent fall in profits. 

"We are making progress in our multi-year effort to make HP simpler, more efficient and better for customers, employees, and shareholders," said Whitman. "This quarter we exceeded our previously provided outlook and are executing against our strategy, but we still have a lot of work to do."


Presstek announced its financials for the first financial quarter in which the company improved over the previous quarter, but still fell short of its results year over year. Presstek earned $27 million in revenue in its first quarter of 2012 compared to $31.9 million in Q1 2011.

Presstek generated positive adjusted EBITDA of $0.5 million for the quarter, a reduction of $0.3 million from the prior year, but an increase of $1.4 million on a sequential quarter basis. Both equipment and consumables revenues were lower compared to the same period in 2011.

"We are still in the early stages of the recovery as spending remained cautious in the first quarter; however, the number and quality of opportunities in our pipeline has definitely strengthened," said Stanley Freimuth, Presstek's Chairman, President and Chief Executive Officer. "We continue to make good progress in our drive to reduce operating expenses to improve profitability, and we are pleased to report positive adjusted EBITDA of $0.5 million. Our focus on optimizing our operations is on track, and we are well positioned to leverage our lowered fixed cost base as our sales grow."
 
Presstek also reported that it conducted more than 100 demonstrations of its 75DI press at drupa earlier this month, which was met with "favorable interest."


Somerville Graphics Inc. of Oakville, Ontario, received a Notice of Termination from its landlord, Realspace Management Group, for its leased production space in Oakville, Ontario.

Calls to the company from PrintAction magazine have gone unanswered. Printers and suppliers who contacted PrintAction about the situation also report that they have been unable to reach Somerville over the past few days.


A subsequent email received from Brenda Somerville indicates that Somerville Graphics is no longer operating.

The Notice of Termination from Realspace states the landlord has taken immediate possession of the facility based on Somerville’s failure to pay base rent and additional rent due on May 1, 2012, following previous amendments to the lease.

Somerville Graphics first opened its doors in 1997. The commercial printing company’s equipment list includes two offset presses, a 4-colour Printmaster Perfector and an 18-inch Quickmaster, as well as a Xerox 700 toner device and various small-format finishing technologies.


Heidelberg, as part of its FOCUS 2012 Efficiency Program, concluded negotiations with its employees’ representatives, which will include reducing its global employee headcount to below 14,000 by mid-2014. As of December 31, 2011, Heidelberg had 15,666 employees worldwide.

The company will also immediately reduce its capacity at German production sites by around 15 percent. This will involve shortening the working week to 31.5 hours for all staff and reducing remuneration levels accordingly.

“In consultation with the Workers’ Council and the IG Metall union, we have devised a responsible concept for making the required cost and capacity reductions on a socially acceptable and sustainable basis through the global job cuts announced,” stated Heidelberg CEO Bernhard Schreier.


Heidelberg estimates these measures will help it realize cost savings of around EUR 180 million by financial year 2013/2014.


Pickering, Ontario-based Ironstone Media Corporation has submitted a Notice of Intent to file a Proposal within Canada’s Bankruptcy and Insolvency Act, which affords the company bankruptcy protection as it restructures.

“We initiated the process, which is fully supported by our bank and key suppliers,” wrote John Bacopulos, CEO of Ironstone Media, in a statement about the filing. “Further, we have spoken to our customers about our plan and the feedback and support has been overwhelmingly positive.”

Bacopulos indicates that Ironstone fully intends to use the BIA process to restructure, and that the company will continue to operate as normally for the time being.

Founded in 1961, Ironstone Media today consists of three divisions, with around 100 employees, including Web Offset Publications, LinkPath and Imprint. The company was built primarily by focusing on publication printing, and more recently expanded into digital- and cross-media initiatives, such as virtual publications (LinkPath), and toner-based production (Imprint).

“We anticipate that within a short period of time we will have accomplished our restructuring goals and will continue to be print suppliers in the publication printing marketplace.”


Richmond, BC-based Catalyst Paper has reached an agreement with 1,000 of its employees that will see the workers take a 10 percent paycut and various adjustments to vacation, health and work rules to "provide Catalyst with a competitive labour cost structure."

The new contract will start after the current one expires on April 30 and will be effective until April 2017. Annual savings as a result of this new contractual agreement will be between $18 and $20 million.

“Approval of the new labour agreements lets everyone know that the people who make up Catalyst are taking the actions necessary to save jobs and ensure we have a viable and competitive business for the future,” said Kevin J. Clarke, President and Chief Executive Officer of Catalyst. “We appreciate there is still an enormous amount of work to do to complete the restructuring plan that will enable the company to exit creditor protection on solid footing going forward.”

Catalyst Paper entered court-ordered creditor protection at the beginning of the year after defaulting on a $21 million bond interest payment on December 15. The company's debt is estimated to be over $810 million.

Catalyst Paper has its roots dating back a century as the Powell River Company. It adopted the name of Catalyst Paper in 2005.

Printing giant TC Transcontinental has posted a first-quarter loss, mainly due to a tax re-assessment, which hit the company for $58 million. The company has also increased the dividends on participating shares by seven percent, now standing at $0.58 per share annually.

The company faced a decline in revenue of four percent in the first quarter compared to a year ago. Transcontinental attributed the decline to the sale of its black and white book printing business to Quad Graphics, which closed on March 1. 

"The acquisition of the Canadian assets of Quad/Graphics is an important milestone in our development," said François Olivier, President and Chief Executive Officer of TC Transcontinental. "It strengthens our print business going forward given the industry dynamics and it allows us to extend our integrated marketing activation offering to many new customers. In fact, our transformation continues to ramp up with the growth of our digital and interactive revenues again this quarter."

The company says the asset swap with Quad/Graphics is expected to bring in $230 million in revenues over the 12 to 24 months. The company also decreased its capital expenditures from $21 million to $8 million year over year, but capital expenditures are expected to be $75 million in 2012.

The tax re-assessment covers 2006 to 2010 and relates to the deductions Transcontinental made on investment in capital assets. The company says it intends to contest the re-assessments.

Heidelberg has reported its third quarter results which saw the company's revenues fall four percent over the same period last year. 

"The economic uncertainty and the resultant reluctance to invest have impacted on the business operations of Heidelberg as expected," said Heidelberg CEO Bernhard Schreier. "Nevertheless, consistent cost management has ensured that the operating result in the third quarter is positive and on the whole in line with the scaled-down expectations." 

The company's North American sales were "up significantly" while incoming orders in the Europe, Middle East and Africa (EMEA), South America, and Asia/Pacific regions lay below last year's level. 

The incoming orders of the Heidelberg Services division improved in the third quarter to EUR 277 million, up on the previous quarters. Compared with the equivalent nine months of the previous year, incoming orders were five percent below the previous year's figure at EUR 792 million. In the same period, the division's sales dropped by five percent to EUR 769 million.

The result of operating activities, excluding special itmes after nine moths has improved to EUR -19 million, compared to a EUR -26 million for the same three quarters last year.

"Heidelberg is on a stable financial footing thanks to successful refinancing and systematic asset management," said Heidelberg CFO Dirk Kaliebe. "The success of our financial measures is reflected in the consistently stable equity ratio and significantly reduced net financial debt." 

Catalyst Paper Corporation of Richmond, BC, today filed for bankruptcy protection under the Companies’ Creditors Arrangement Act (CCAA), in the Supreme Court of British Columbia.

The CCAA filing indicates that the company plans to restructure, but the company states the terms and conditions of the plan have not yet been determined. Catalyst management will remain responsible for the day-to-day operations of the company.

“Our debt restructuring objective remains clear and unchanged though our path forward was altered by recent setbacks,” commented Catalyst President and CEO, Kevin J. Clarke, in a written statement about the filing. “Without the new labour agreement, and without two-thirds support of 2014 noteholders, the economics of the previously announced consensual restructuring transaction was undermined.

“After reviewing this matter carefully with our Board of Directors and advisors, we have elected to begin the CCAA proceeding,” continued Clarke. “The Board, management and our advisors believe this approach will best facilitate the completion of a recapitalization transaction that delivers the improvements to our liquidity and capital structure which are necessary to put our company on firm financial and competitive footing in the current business and economic environment.”

According to its statement, Catalyst previously announced a consensual recapitalization transaction under the Canada Business Corporations Act (CBCA), based on varying support of its senior-note holders.

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.


xpedx made a surprise announcement on its Facebook page stating it will be closing its Stores division, which is in charge of its retail locations serving smaller printers, office workers and consumers. The company also recently announced the closure of its Canadian facilities, blaming the Canadian economic conditions and stating it will focus its investments in the U.S. and Mexican markets.

"This year xpedx will realign operations so that we can continue to provide excellent service while helping our customers keep pace with the fast-growing digital print market. This means we will transition away from our current stores business model, to servicing many customers from xpedx’s well established distribution network. We will also open “mini-merchant” locations based in some of the country’s top digital print markets."

xpedx is an International Paper company. It launched its Canadian operations in August 2007 and eventually acquired West coast distributor Gould Paper in 2009. xpedx was created in 1998, but has roots in the early 19th century.

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