Cinram loses Warner Home Video contract
Company's biggest contract provided 28 per cent of sales in 2009
By PIC Staff | February 02, 2010
CD and DVD moulder Cinram International Inc., Toronto, ON, has announced that it is losing its biggest contract. The company received written notice from Warner Home Video Inc. (WHV), that WHV has exercised its option to terminate its service agreements on July 31, 2010. The notice will impact operations in North America, Mexico, UK, France, Germany and Spain.
WHV revenues represented approximately 28 per cent of the total revenues of Cinram International in 2009, said the company.
“While we are disappointed with the decision by WHV to end our over six year relationship as their exclusive service provider of standard DVD products and distribution services, we will nevertheless be working closely with WHV to ensure an orderly transition of the services and ensuring that all affected employees and other stakeholders are given the absolute greatest consideration during this process,” said CEO Steve Brown in a release.
Shares of Cinram fell 60 per cent to close at $1.16 after the announcement was made on February 1, according to a report in the Toronto Star newspaper. The company operates as an income trust fund, a corporate structure that requires regular payouts to investors. Over its 36-year history, Cinram has manufactured all major types of recorded media formats, including vinyl records, eight-track tapes, audio cassettes, VHS video cassettes, CDs and DVDs. However, the DVD market has declined in recent years, hurting companies like WHV and Sony, says the Star article.
Cinram
