Canadian replicator Cinram recorded revenue of $508.1 million in the fourth quarter 2009, a decrease of 9% from the $556.8 million reported in the fourth quarter of 2008. Despite this reduction in revenue, gross profit were $88.7 million in 2009, compared to an adjusted $67.4 million in the fourth quarter of 2008.

On 1 February 2010, Cinram had received written notice from Warner Home Video that the studio was exercising its option to terminate its service agreements on 31 July 2010, five months prior to the scheduled termination date of the contract. The notice covers all Cinram entities globally and will directly impact operations in North America, Mexico, UK, France, Germany and Spain. WHV revenues for 2009 represented approximately 32% of the total consolidated revenues of Cinram.

"Warner's decision not to extend their contract with Cinram was obviously regrettable. However, the initiatives undertaken this past year will continue to drive Cinram forward in a market which we forecast to still have a 10 to 15 year future. Physical media is still being embraced by the consumer markets and its migration to digital download and other non physical strategies have all been far slower than many previously forecasted. 2010 will hold its challenges, but will also provide us with opportunities," commented Steve Brown, CEO.

Fourth quarter home video revenue – which includes replication and distribution of DVDs and Blu-ray discs – was down 2% to $412.3 million from $420.9 million in 2008, primarily due to lower selling prices. Cinram replicated 426.7 million DVDs in the fourth quarter of 2009, compared to 435 million units in 2008. High-definition Blu-ray disc replication revenue increased to $7.8 million in the fourth quarter of 2009 from $5.1 million in the comparable 2008 period.

North America accounted for 53% of fourth quarter consolidated revenue compared with 55% in 2008. Fourth quarter European revenue represented 47% of consolidated sales compared with 45% in the fourth quarter of 2008.

Story filed 02.03.10