Quebecor World Reports Second Quarter 2001 Results: Increased Earnings per Share and Net Income.Business Editors MONTREAL--(BUSINESS WIRE)--July 26, 2001 Quebecor World Inc. (NYSE NYSE See: New York Stock Exchange :IQW)(TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :IQW.) is pleased to announce for the quarter ending June 30, 2001 Earnings per Share (on a diluted basis) of $0.41 compared with $0.40 a year ago. Year to date, EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. increased 6% to $0.68 and net income increased 5% to $105.7 million. "There is a tough economic environment in our core U.S. market but we are finding efficiencies and using alternative tools at our disposal to grow earnings for our shareholders," said Charles G. Cavell, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Quebecor World Inc. "These numbers show Quebecor World can continue to build value for its shareholders even in difficult market conditions." In North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , even though revenues declined by 4%, operating margins matched record levels of 11.1%. The decline in revenues is the result of the economic slowdown in the U.S. but earlier announced cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. initiatives and continuing synergies from the World Color merger significantly muted the impact. "In addition, our diversified product offering and our geographic platform are helping us weather the storm," added Mr. Cavell. "While not recession proof, we are certainly proving to be recession resistant. Operating margins were maintained in the U.S. despite a difficult economy and margins significantly improved in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and Europe." Europe reported positive results with revenues increasing 4% and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increasing 18%. This is before the unfavourable effects of currency translation. In Latin America revenues increased 40% and operating income increased 100%. Quebecor World's greenfield plant in Recife, the largest web offset facility in Brazil, was officially opened this quarter and it is producing telephone directories for Listel lis·tel n. Architecture A narrow border, molding, or fillet. Also called list2. [French, from Italian listello, diminutive of lista, border, Listas Telefonicas S.A. and magazines for Editora Abril Editora Abril is a Brazilian publisher. It was founded in 1950 by Victor Civita. The magazine publishes titles like Veja, Nova (cosmopolitan magazine), Placar, Estilo de Vida (InStyle), Claudia, Boa Forma, Manequim, Exame and the Brazilian issue of the Playboy magazine. . "We continue to see a strong future in Latin America," said Mr. Cavell. "Our strategy is to concentrate on certain key products and partner with the top customers in those product areas. This is what we have done successfully in North America and Europe and this is what we are doing in Latin America. As the leading printer in Latin America, with a population almost twice that of the U.S. we feel we are now ideally positioned to participate in this rapidly expanding market." Subsequent to the end of the second quarter the Company purchased Retail Printing Corporation of Taunton, Massachusetts Taunton is a city in Bristol County, Massachusetts, United States. It is the seat of Bristol County and the hub of the Greater Taunton Area. As of the 2000 census, the city had a total population of 55,976. Taunton's nicknames are derived from its history. . Retail Printing Corporation operates state-of-the-art printing plants in Taunton and Nashville, Tennessee “Nashville” redirects here. For other uses, see Nashville (disambiguation). Nashville is the capital and the second most populous city of the U.S. state of Tennessee, after Memphis. . At the same time Quebecor World announced it was strengthening its west coast retail capacity by expanding its facility in Merced, California. These transactions enhance Quebecor World's position as the only printer providing rotogravure rotogravure: see printing. and offset printing services to retail and newspaper insert customers across the entire continent. Management continues to believe that the Company's stock is significantly undervalued Undervalued A stock or other security that is trading below its true value. Notes: The difficulty is knowing what the "true" value actually is. Analysts will usually recommend an undervalued stock with a strong buy rating. . As of June 30, 2001 the Company had repurchased 1,339,100 Subordinate Voting Shares Voting Shares Shares that give the stockholder the right to vote on matters of corporate policy making as well as who will compose the members of the board of directors. Notes: Different classes of shares, such as preferred stock, sometimes don't allow for voting rights. under its April 6, 2001 Normal Course Issuer Bid. The average cost per share was CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. $38.58. The Company has also committed to repurchase for cancellation an additional 1,272,600 shares at an average price per share of CDN$39.07 for settlement prior to April 2002. Quebecor World continues to be focused on paying down debt. During the quarter the Company cancelled the remaining balance of $250 million of the $1.25 billion Revolving Credit Agreement Revolving credit agreement A legal commitment in which a bank promises to lend a customer up to a specified maximum amount during a specified period. revolving credit agreement See line of credit. used for the World Color acquisition. The Company's debt-to-capitalization ratio improved to 47:53 from 53:47 a year earlier. The Board of Directors declared a dividend of $0.12 per share on Multiple Voting Shares and Subordinate Voting Shares. The Board also declared a dividend of CDN$0.3125 per share on Series 2 Preferred Shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. and CDN$0.4219 per share on Series 4 Preferred Shares. The dividends are payable September 1st, 2001 to shareholders of record on August 17, 2001. Quebecor World To Webcast Investor Conference Call on July 26, 2001 Quebecor World Inc. will broadcast its 2001 Second Quarter Earnings conference call live over the Internet on Thursday, July 26 at 2:00 PM (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ). The Company's financial results will be made public in a press release prior to the conference call. The conference call, which will last approximately one hour, will be webcast live and can be accessed on the Quebecor World web site: http://www.quebecorworld.com/htmen/20-0/20-1inv-8.htm or at: http://www.ir-live.com/en/shows.php/quebecor-world/events/2001.07.26/ ?webcast-id=232 Prior to the call please ensure that you have the appropriate software. The Quebecor World web address listed above has instructions and a direct link to download the necessary software, free of charge. Anyone unable to attend this conference call may listen to the replay tape by phoning (416) 695-5800 or (800) 408-3053 passcode 845781, available from July 26 to August 8, 2001. Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks include, among others, changes in customers' demand for the Company's products, changes in raw material and equipment costs and availability, seasonal changes in customer orders, pricing actions by the Company's competitors, and general changes in economic conditions. Quebecor World Inc. (NYSE; TSE:IQW) is the largest commercial printer in the world. It is a market leader in most of its major product categories which include magazines, inserts and circulars, books, catalogs, specialty printing and direct mail, directories, digital pre-media, logistics, mail list technologies and other value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. services. Quebecor World Inc. has approximately 40,000 employees working in more than 160 printing and related facilities in the United States, Canada, Brazil, France, the United Kingdom, Spain, Austria, Sweden, Switzerland, Finland, Chile, Argentina, Peru, Colombia, Mexico and India.
Quebecor World Inc.
Financial Highlights
Periods ended June 30
(In millions of US dollars, except per share amounts)
(Unaudited)
Three months Six months
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2001 2000 Change 2001 2000 Change
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Consolidated
Results
Revenues $1,502.3 $1,549.1 (3)% $3,079.0 $3,179.5 (3)%
Operating
income before
amortization 243.0 255.9 (5)% 462.2 487.6 (5)%
Operating income 159.0 167.7 (5)% 295.4 305.9 (3)%
Net income 63.2 62.8 1% 105.7 100.4 5%
Cash provided
from operating
activities 277.2 216.9 123.7 289.5
Free cash flow
from operations* 178.9 163.0 (39.7) 205.9
Operating
margin before
amortization 16.2% 16.5% 15.0% 15.3%
Operating margin 10.6% 10.8% 9.6% 9.6%
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Segmented
Information
Revenues
North America $1,252.5 $1,304.8 (4)% $2,568.1 $2,682.5 (4)%
Europe 213.3 217.9 (2)% 440.4 445.2 (1)%
Latin America 36.6 26.2 40% 70.8 51.7 37%
Operating income
North America $139.0 $145.4 (4)% $264.0 $265.0 -%
Europe 16.3 14.9 9% 29.1 28.3 3%
Latin America 2.4 1.2 100% 4.3 2.9 48%
Operating margins
North America 11.1% 11.1% 10.3% 9.9%
Europe 7.6% 6.8% 6.6% 6.4%
Latin America 6.6% 4.7% 6.1% 5.7%
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Financial Position
Working capital $53.8 $157.8
Total assets 6,300.9 6,529.8
Long-term debt
(including
convertible notes) 2,245.4 2,643.7
Shareholders' equity 2,521.7 2,359.4
Debt-to-capitalization 47:53 53:47
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Per Share Data
Earnings
Basic $0.41 $0.41 -% $0.68 $0.65 5%
Diluted 0.41 0.40 3% 0.68 0.64 6%
Earnings
before goodwill
amortization
Basic $0.52 $0.52 -% $0.90 $0.86 5%
Diluted 0.51 0.51 -% 0.89 0.85 5%
Dividends on
equity shares $0.12 $0.08 50% $0.22 $0.15 47%
Book value $15.35 $14.58 5%
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* Cash provided from operating activities, less capital expenditures
net of proceeds from disposals, and preferred share dividends.
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