Quebecor World reports $462.2 million 2008 operating loss

By Caroline Salls

Pittsburgh, March 27 - Quebecor World Inc. reported a $462.2 million operating loss for 2008 on $4.017 billion in revenues, according to a 20-F filed with the Securities and Exchange Commission.

In comparison, the company posted a $2.076 billion operating loss for the year ended Dec. 31, 2007 on $4.081 billion in revenues.

The company said the decline in revenues could be primarily attributed to lower volumes because of the North American recession, plant closures, lower paper sales and, to a lesser extent, the impact of Quebecor World's insolvency proceedings.

The 2008 net loss was $1.659 billion, narrowing from a $2.2 billion 2007 net loss.

The company had $208.7 million in cash and cash equivalents at Dec. 31, 2008, up from $61.1 million at Dec. 31, 2007.

"Despite the difficult economic situation, we succeeded in achieving our financial and operational goals in 2008," president and chief executive officer Jacques Mallette said in a company news release. "We reached our financial targets and delivered on all our commitments to our customers.

"We managed to achieve these objectives while dealing with the added complexity and challenges of operating under court supervised creditor protection in both the United States and Canada.

"We believe the actions we implement to streamline and rightsize our cost structure should make us a strong participant in our industry."

According to the release, Quebecor World reported a $654 million fourth-quarter net loss from continuing operations on $1.333 billion in revenues.

These figures compared with the $1.803 billion net loss from continuing operations posted for the fourth-quarter of 2007 on $1.231 billion in revenues.

In the fourth quarter of 2008, Quebecor World said it continued to focus on renewing major customers, gaining new ones and improving efficiency across all its business groups by reducing costs, improving processes and maximizing the performance of its manufacturing platform.

In addition, the company said it purchased three new state-of-the-art short cutoff retail offset presses to further enhance its industry leading U.S. and Canadian retail insert platforms, which will provide customers with a new format capability to reduce paper consumption, shorten cycle time and reduce delivery costs.

Also in the fourth quarter, the company continued to expand its Integrated Multichannel Solutions offering.

According to the 20-F filing, the company found a material weakness in its internal controls over financial reporting, meaning its disclosure controls and procedures were not effective as of Dec. 31.

As a result, Quebecor made adjustments to the amounts or disclosures of inventories, claims and liabilities subject to compromise, financial instruments, pension expense and income taxes, and the company is working on a remediation plan to address the internal control weaknesses.

Quebecor World, a Montreal-based printing and marketing company, filed for Chapter 11 bankruptcy on Jan. 21, 2008 in the U.S. Bankruptcy Court for the Southern District of New York and filed for protection under the Companies' Creditors Arrangement Act in Canada. Its Chapter 11 case number is 08-10152.

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