The United States Postal Service (USPS) ended its third quarter of fiscal year 2011 (April 1 to June 30) with a net loss of US$3.1 billion, compared to a net loss of US$3.5 billion for the same period in fiscal 2010. Total mail volume declined to 39.8-billion pieces for the quarter, compared to a decline of 40.9-billion pieces in the third quarter of 2010.
Despite major cost reductions and the enactment of various revenue-growth initiatives, the USPS projects its cash shortfall will have reached its statutory borrowing limit by the end of the fiscal year. Without legislative assistance, the postal service will be forced to default on payments to the Federal government – a US$5.5 billion mandated prepayment is due in September.
Net losses for the USPS’ past nine months, ended June 30, amount to US$5.7 billion in 2011 compared to $5.4 billion in 2010.
“We continue to take aggressive actions to reduce costs and bring the size of our infrastructure into alignment with reduced customer demand,” said Postmaster General and CEO, Patrick Donahoe.
The postal service announced plans on July 25 to identify nearly 3,700 under-utilized post offices for possible closure and introduced the Village Post Office concept. Village Post Offices would be operated by local businesses, such as pharmacies, grocery stores and other appropriate retailers, and would offer postal products and services such as stamps and flat-rate packaging.
USPS work hours were reduced by 9.2-million hours or 3.1 percent in the third quarter compared to the same period a year ago. During the first nine months of 2011, 2.8 percent fewer work hours were used compared to 2010. The third quarter saw the voluntary retirement of more than 1,850 administrative employees as part of an ongoing restructuring initiative.
The struggles of Canadian communications giant Research In Motion (RIM) continue as the QMI Agency reports that the Waterloo, Ontario-based company will lay off around 2,000 workers, which accounts for 11 percent of its workforce. RIM has 9,000 employees in Waterloo and 17,500 globally.
The news came two weeks after RIM’s annual general meeting, where, according to QMI Agency, Co-chief executive Jim Balsillie “tried to ease shareholders’ concerns about plummeting stock prices, a declining North American market share and increased competition from Apple and Google.”
This new announcement of 2,000 job cuts is actually RIM’s second round of layoffs in 2011. Back in June, RIM ended around 200 jobs at its Waterloo headquarters.
U.S. book retail chain Borders has announced it will be shutting down its remaining stores after a deal with Najafi Cos. fell apart last week. Its remaining 399 stores will be liquidated, with nearly 11,000 employees out of jobs.
Borders was founded in Ann Arbor, Michigan in 1971 and has grown to become one of the leading chains in the U.S. At its height, Borders had over 1,000 stores but in the last decade, competition from online retailers has caused its fortune to decline. The company filed for Chapter 11 bankruptcy protection in February this year.
Najafi Cos. approached Borders in an effort to keep some of the stores open, but declined to place a bid when asked to abandon its option to liquidate the stores.
Borders also holds 11 percent of the Toronto-based Kobo eBook initiative and Kobo has been asked to have right of first refusal when that holding is sold.
According to its preliminary calculations, Heidelberger Druckmaschinen AG generated sales of EUR544 million in the first quarter of financial year 2011/12, which declined from the previous year’s first quarter results of EUR 563 million in sales. Applying an adjustment of EUR 19 million exchange rate effect, Heidelberg states its first-quarter sales numbers are in line with last year’s results, but still fall short of the company’s expectations.
Among other factors, Heidelberg reports its first-quarter numbers are due to sales being shifted into the next quarters as a result of the earthquake disaster in Japan and delays resulting from the extended liquidity shortage in the Chinese banking system. However, Heidelberg executives feel this slowed business development in China will be temporary based on “continued robust demand and the persistently strong economic growth in this market.”
Heidelberg also announced that preliminary incoming orders in the first quarter amounted to EUR 665 million, while incoming orders in the first quarter of the previous year’s amounted to EUR 786 million (including results from the IPEX trade show) and the previous quarter came in at EUR 637 million.
Heidelberg's annual sales target in the medium term, which the company intends to achieve within the next two or three years, has been set at over EUR 3 billion. Assuming that the economic environment will continue to be generally stable, Heidelberg expects to gradually approach this target during the current and next financial year.
Bloomberg reports that Borders Group, the giant United States-based bookstore chain that filed for Chapter 11 bankruptcy protection back in February, has agreed to sell its business to Najafi Companies.
The pending purchase is being directed through Najafi’s Direct Brands LLC operation, which is a direct marketer that owns the Book-of-the-Month Club brand. Before the deal is completed, however, the opportunity to purchase Borders Group must still be put out to auction (a July 19), under U.S. bankruptcy code.
Borders Group stated Najafi’s pending purchase would save it from liquidation. According to the Bloomberg report, Najafi, a Phoenix-based private-investment firm, bid US$215.1 million for Borders stores and would assume $220 million of liabilities. The deal will be up for court approval at a July 21 hearing.
Borders was founded in 1971 in Ann Arbor, Michigan; it did not open its second location until 1986. The company was acquired by Kmart in 1992, merged with rival Waldenbooks, and then spun off as Borders Group. In the late 1990s, the company attempted international expansion, but after a decade, was largely unsuccessful. By 2009, all of Borders’ directly owned overseas locations had been sold. Seventy-two stores in the UK, the company's biggest expansion market, were closed at the end of 2009.
According to the Associated Press, the last time Borders Group saw a profit was in 2006. The company's revenues have dropped by US$1 billion since then. At its peak in 2003, Borders operated 1,249 locations, a combination of Borders and Waldenbooks stores.
Read the complete Bloomberg report
At KBA's 86th annual general meeting in Würzburg, Germany, company President and CEO Helge Hansen announced plans to trim KBA's workforce at its Würzburg and Trennfeld plants by 700 "to restore competitiveness and profitability in a much-diminished market." However, Hansen also reported that the company's sales are up 27 percent in the first five months of this year, over the same period last year.
Despite the company's growth in orders and sales numbers, it has fallen short of its annual targets so far. Company management says it stands by its objective for 2011 of a single-digit percentage increase in group sales over the previous year (€1.18 billion), and a moderate improvement in earnings. The company has also suffered a six-week strike at its Frankenthal plant, which has resulted in a skeleton agreement drafted for the union involved last week. The agreement with the Industrial Union of Metalworkers sees some of the production being shifted to its Würzburg plant before the Frankenthal plant is shuttered by 2016.
Hansen also discussed the merger scenarios which were rumoured between the top three press manufacturers at the height of the slump: “The merger scenarios mooted would have led to more redundancies and closures, a loss of productivity through staff tensions, and the costs that these entail. With industry players working to capacity until 2007, the charge of failing to diversify sooner can only be leveled by those who have no idea how hard it is to change horses in midstream.”
Diversification was also a primary goal to KBA, announced Hansen, pointing to its partnership announcement with RR Donnelley, announced in March, as a way to rapidly enter the inkjet market.
Richmond Hill's Acuity Solutions Group has closed its doors, placing upwards of 80 employees out of work.
Visitors to the company's 20 East Pearce St. location are greeted by a notice on the door, which says the property is in possession of Grant Thornton Limited, a Court Appointed Receiver for Acuity Solutions Group. Nobody from the company could be reached for comment.
The company struggled financially in recent years, but in April 2010, Acuity President Ron Morgan announced it had finished its restructuring to gain new financing. “The restructuring puts us in a better financial position moving forward,” wrote Morgan on the company's blog. The company was known as Acuity Innovative Solutions before the restructuring.
The company was one of only a few 10-micron stochastic capable printers in Canada and offered end-to-end solutions, from digital asset management to point-of-purchase graphics.
Following the April 29 receivership of Winnipeg-based Printcrafters Group of Companies, Ernst & Young is working with Great American Group and Toronto-based Danbury Sales to hold an online equipment auction on June 23.
Scheduled to begin at 10:00 am next Thursday, the primary feature of the auction is a 10-colour Heidelberg Speedmaster press. The auction will also include 6-colour and 5-colour Speedmaster presses, a Muller Martini Monstar perfect binder, among smaller pressroom, bindery, and prepress equipment.
On the day prior to the online auction, interested parties can inspect the equipment on Printcrafters’ plant floor.
A “Buyer’s Premium” of 13 percent (before taxes) applies to all onsite sales, while a 15 percent charge is applied to Webcast sales.
A report issued last week by Agence France-Presse (AFP) describes Ricoh’s plans to cut 10,000 jobs worldwide over three years. The Japan-based company indicated that its first round of major job cuts are to be concluded by March 2014.
From a total staff count of over 100,000, Ricoh currently employs 40,000 people in Japan and around 69,000 across its international operations.
Read the complete AFP report through Yahoo News
Heidelberg has announced the preliminary financial year results for 2010/2011 and says it has met its own forecasts. Incoming orders were up 16 percent over the previous year and sales increased 14 percent. The net result is expected to be around -130 million Euros, mostly due to what Heidelberg calls "huge increases in financing costs and non-recurring expenditures linked to the comprehensive capital restructuring."
"The Heidelberg Group resumed its path to growth in financial year 2010/2011. We improved incoming orders and sales and, after two deficit years, our operating result is back in the black. Thanks to the strategic partnership with Ricoh, the leading position that Heidelberg occupies in the offset printing market will be complemented in future by innovative digital printing products. These operational and strategic successes show that Heidelberg is on the right track to achieving long-term success," said Heidelberg CEO Bernhard Schreier.
"Through comprehensive cost-cutting measures, we have lowered our operating break-even threshold as planned, and thus improved our earnings significantly," said CFO Dirk Kaliebe. "With the considerably reduced level of debt, the successful capital increase and the bond placement we have safeguarded our long-term financing, and have succeeded in leading Heidelberg out of the crisis."
As of March 31, 2011, the Heidelberg Group employed a workforce of 15,828 worldwide, down from 16,496 the previous year.
Winnipeg-based Printcrafters has shut down due to millions owing to its creditors. The closure has left more than 125 people out of work.
According to a report by the Winnipeg Free Press, The Printcrafters Group of Companies owes the Royal Bank of Canada close to $4.5 million, plus $2 million to Xerox, $1.2 million to CIT Financial and a further $2 million to unsecured creditors.
Ernst & Young is the court-appointed receivers and according to the Free Press, said it does not anticipate there being any funds available for unsecured creditors.
Printcrafters was founded in May of 1996 by 11 employees. In March 2005, it acquired Westcan Printing Group and in June 2007, it acquired Dave's Quick Print. Acquisitions continued in January 2008 and March 2009 with Kildonan Printing and Globally Boundless respectively. An undated statement on the company's website it says its "10 year goal is still to be $100,000,000 in sales with various plants throughout Canada and the USA."
President and CEO Bob Payne could not be reached for comment.
California-based EFI has reported its Q1 earnings results which saw the company's revenues rise to US$140.1 million, compared to US$110.8 million in 2010. Overall, the company saw a net gain of US$6.2 million compared to a net loss of US$11.4 million in the same period last year.
"Our exceptional results in Q1, with 26% year-over-year revenue growth, are a strong indication of the opportunities ahead for EFI as we maintain our focus on the fastest growing segments of printing," said Guy Gecht, Chief Executive Officer of EFI.
In other company news, EFI has contributed $45,000 to the Red Cross for relief efforts due to the recent Japanese tsunami. The funds were raised from a 30-day employee donation drive, matched by EFI corporate. EFI has an office in Shinjuku-ku, Tokyo and also has several OEM partners headquartered in Japan.
Xerox has announced its first-quarter 2011 results which saw the corporation boost revenues two percent over the same period in 2010.
"Our results in the quarter reflect solid progress in scaling our services business while maintaining our leadership in document technology," said Ursula Burns, Chairman and Chief Executive Officer, Xerox Corporation. "Steady revenue growth and our continued sharp focus on operational improvements resulted in a 28 percent increase in adjusted earnings. It's a good start to the year."
First-quarter gross margin was 33 percent, and selling, administrative and general expenses were 20.5 percent of revenue. On a pro-forma basis, operating margin of 9.1 percent was up nearly one point from first-quarter 2010.
Revenues from equipment and supplies sales was flat compared to the previous year, however, with revenue from services rising five percent, totaling US$3 billion.
"In the past year, we transformed not only our business into a leading player in the services space, but also our business model with growth largely driven from an increasing annuity stream," added Burns. "Multi-year, multimillion dollar services contracts generate long-term revenue. And, we fueled this annuity in the first quarter through growth in both services revenue and signings while building a strong pipeline for future business.
Presstek Inc. released its fiscal 2010 results (ended January 1, 2011), which included total revenues of US$128.6 million. This number represents a decline of four percent from 2009, while adjusted EBITDA reached US$4.0 million, a US$5.6 million improvement over the prior year. Presstek also reported a 50 percent reduction in debt net of cash in 2010, as well as a US$38.6 million improvement in net income for 2010.
“2010 was again a difficult year in our industry, but I was pleased with our ability to not only continue to generate positive quarterly adjusted EBITDA but to increase it by US$5.6 million on a full year basis compared to 2009,” said Jeff Jacobson, Presstek Chairman, President and CEO. “Additionally, in 2010 we reduced our debt net of cash by US$6.0 million against a backdrop of a four percent decline in overall revenues. "
The company also released its 2010 fourth quarter results, which included total revenue of US$31.1 million, essentially flat from the previous quarter and a decrease of US$2.4 million from the fourth quarter of 2009.
Equipment revenue decreased US$0.3 million, to US$5.5 million in the fourth quarter of 2010, compared with the same period last year. Consumables revenue totaled US$19.5 million in the fourth quarter, compared with US$20.6 million for the same period last year. Service revenue declined approximately 15 percent to $6.0 million in the fourth quarter of 2010 compared to the year ago quarter.
Major U.S. book retailer Borders Group has filed for Chapter 11 protection under the United States Bankruptcy Code. The company said it plans to reorganize, which will see the chain close roughly 30 percent of its stores.
"We are confident that, with the protection afforded under Chapter 11 and with the support of employees, publishers, suppliers and creditors, and the reading public, a successful reorganization can be achieved enabling Borders to emerge from the process as a stronger and more vibrant book seller," said Mike Edwards, Borders Group President.
Edwards also revealed that the company has received commitments of US$505 million in Debtor-in-Possession financing, led by GE Capital. "This financing should enable Borders to meet its obligations going forward so that our stores continue to be competitive for customers in terms of goods, services and the shopping experience. It also affords Borders the opportunity to move forward in implementing the appropriate business strategy designed to reposition Borders to be a potentially vibrant, national retailer of books and other products."
Borders was founded in 1971 in Ann Arbor, Michigan; it did not open its second location until 1986. The company was acquired by Kmart in 1992, merged with rival Waldenbooks, then spun off as Borders Group. In the late 1990s, the company attempted international expansion, but after a decade, was largely unsuccessful. By 2009, all of Borders' directly owned overseas locations had been sold. Seventy-two stores in the UK, the company's biggest expansion market, were closed at the end of 2009.
According to the Associated Press, the last time Borders Group saw a profit was in 2006. The company's revenues have dropped by US$1 billion since then. At its peak in 2003, Borders operated 1,249 locations, a combination of Borders and Waldenbooks stores. At the start of January, the stock price for Borders Group fell under US$1.00 per share.
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