Quebecor World Reports Third Quarter 2001 Results.Business Editors MONTREAL--(BUSINESS WIRE)--Oct. 29, 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.) announced diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.46 for the quarter ending September 30, 2001 compared to $0.58 during the same period in 2000. This is in keeping with recent guidance for the third quarter and full year 2001. Year to date diluted 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. was $1.13 compared to $1.21 for the year 2000. "Traditionally we earn almost one-half of our third quarter net income in September. The shock experienced by the U.S. economy dramatically affected our September results," 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 events weakened consumer confidence and had a direct impact on many of our publishing and retail customers. Business and airline magazines were specifically impacted and catalogers canceled orders, reduced circulation and delayed mailings. In addition, recent events are causing direct mail customers to rethink some of their products." Still some of Quebecor World's North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. product groups maintained or even improved results quarter to quarter. Revenues for the third quarter declined just 2% compared to the same period last year but by effectively managing costs and finding new efficiencies, domestic operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were an impressive 11.9%. Quebecor World partners with the biggest and the best publishers and retailers in the industry. The Company produced 30 book titles on the Publishers Weekly Bestseller List, and we produce 46% of the top 125 magazines in the U.S. Our customers are not immune to the current environment but will fair better than most and will be in a position to improve their market share when the economy improves. The restructuring initiatives announced on October 9, 2001 will increase operational efficiency in 2002 to offset the slow market by reducing costs and improving returns. The restructuring plan will be implemented during the next six months and will result in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. pre-tax earnings improvement of approximately $45 million. Quebecor World is advantaged as the only truly global printer with more than 30% of its revenues generated outside of the U.S. While indirectly impacted by the events 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. , our European and Latin American platforms are expanding and developing new customer relationships. In the Nordic countries revenues increased and we have increased exports to Russia from our facility in Finland. Quebecor World continues to develop its global mix. In August, the Company signed a binding agreement, subject to regulatory approval, that will solidify its French platform. Quebecor World is purchasing the printing assets of Hachette Filipacchi Medias, Europe's largest magazine publisher. Those assets include printing, bindery A NetWare file used for security and accounting in the early NetWare 2.x and 3.x versions. The bindery pertained only to the server it resided in and contained the names and passwords of users authorized to log in to that server. and logistics facilities in France and 50% ownership of Helio Charleroi in Belgium. As part of this transaction, Quebecor World has been awarded a five-year contract with a five-year renewal option valued at $400 million to print many of Hachette's magazines in France. 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. revenues increased 52%. Quebecor World expanded its directory and book platform by purchasing the assets of Grupo Serla in Mexico City Mexico City Spanish Ciudad de México City (pop., 2000: city, 8,605,239; 2003 metro. area est., 18,660,000), capital of Mexico. Located at an elevation of 7,350 ft (2,240 m), it is officially coterminous with the Federal District, which occupies 571 sq mi , Mexico. The facility will produce directories for ADSA ADSA Aging and Disability Services Administration ADSA American Dairy Science Association ADSA American Dental Society of Anesthesiology ADSA Axisymmetric Drop-Shape Analysis ADSA Association for Dietetics in South Africa , a subsidiary of Telmex, Mexico's largest telecommunications company See telecom company. . Already a major supplier of educational textbooks the Serla acquisition will improve Quebecor World's book platform, increasing capacity in Mexico by 100%. "Our Latin America platform continues to expand and to produce better results," said Mr. Cavell. "As we move forward we will replicate our successful strategy of being the region's leading consolidator and partnering with publisher/printers as they turn more attention towards their core businesses." "In the U.S. the advertising outlook for the balance of the year remains uncertain but our management is disciplined and focussed on implementing measures that will allow us to provide improved efficiencies and service that will benefit customers and shareholders when the economy recovers," said Mr. Cavell. In August, the Company successfully completed the placement of 7,000,000 Cumulative Redeemable First 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. , Series 5 at a price of 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. $25.00 per share, for an aggregate amount of CDN$175,000,000. Net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). will be used for capital expenditures and to fund general corporate purposes. The Board of Directors declared a dividend of $0.12 per share on Multiple Voting Noun 1. multiple voting - the act of voting in more than one place by the same person at the same election (illegal in U.S.) balloting, vote, voting, ballot - a choice that is made by counting the number of people in favor of each alternative; "there were only 17 Shares and 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. . The Board also declared a dividend of CDN$0.3125 per share on Series 2 Preferred Shares, CDN$0.4219 per share on Series 4 Preferred Shares and CDN$0.50687 on Series 5 Preferred Shares. The dividends are payable December 1, 2001 to shareholders of record on November 16, 2001. Quebecor World To Webcast Investor Conference Call on October 30, 2001 Quebecor World Inc. will broadcast its 2001 Third Quarter conference call live over the Internet on Tuesday, October 30 at 8:30 AM (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 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: www.ir-live.com/en/shows.php/quebecor-world/events/2001.10.30/?webcast -id=258 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 927883, available from October 30 to November 13, 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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Canada, Brazil, France, the United Kingdom, Belgium, Spain, Austria, Sweden, Switzerland, Finland, Chile, Argentina, Peru, Colombia, Mexico and India.
Quebecor World Inc.
Financial Highlights
Periods ended September 30
(In millions of US dollars, except per share amounts)
(Unaudited)
Three months Nine months
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2001 2000 Change 2001 2000 Change
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Consolidated Results
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Revenues $1,625.2 $1,633.8 (1)% $4,704.2 $4,813.3 (2)%
Operating income
before amortization 258.5 286.7 (10)% 720.7 774.3 (7)%
Operating income 172.7 202.4 (15)% 468.1 508.3 (8)%
Net income 70.8 88.7 (20)% 176.5 189.1 (7)%
Cash provided from
operating activities 12.1 17.5 135.8 307.0
Free cash flow from
operations (a) (58.2) 0.1 (97.9) 206.0
Operating margin
before amortization 15.9% 17.5% 15.3% 16.1%
Operating margin 10.6% 12.4% 10.0% 10.6%
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Segmented Information
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Revenues
North America $1,373.4 $1,398.4 (2)% $3,941.5 $4,080.9 (3)%
Europe 211.5 208.9 1% 651.9 654.1 -%
Latin America 40.5 26.7 52% 111.3 78.4 42%
Operating income
North America $163.0 $175.9 (7)% $427.0 $440.9 (3)%
Europe 9.7 13.9 (30)% 38.8 42.2 (8)%
Latin America 1.2 0.7 71% 5.5 3.6 53%
Operating margins
North America 11.9% 12.6% 10.8% 10.8%
Europe 4.6% 6.7% 6.0% 6.5%
Latin America 2.9% 2.5% 4.9% 4.6%
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Financial Position
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Working capital $198.5 $306.7
Total assets 6,603.6 6,628.0
Long-term debt
(including convertible notes) 2,409.1 2,670.0
Shareholders' equity 2,651.3 2,370.3
Debt-to-capitalization 47:53 53:47
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Per Share Data
Earnings
Basic $0.46 $0.59 (22)% $1.14 $1.23 (7)%
Diluted 0.46 0.58 (21)% 1.13 1.21 (7)%
Earnings before
goodwill amortization
Basic $0.58 $0.69 (16)% $1.47 $1.56 (6)%
Diluted 0.57 0.68 (16)% 1.45 1.53 (5)%
Dividends on equity
shares $0.12 $0.08 50% $0.34 $0.23 48%
Book value $15.66 $14.73 6%
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(a) Cash provided from operating activities, less capital expenditures
net of proceeds from disposals, and preferred share dividends.
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