Cinram pulling purse strings tight
EmptyTORONTO -- Lower prices paid for DVD replication led Cinram International Income Fund on Monday to stop distributions to its unit holders.
Cinram, the world's biggest provider of prerecorded multimedia such as CDs and DVDs, announced the decision even as it reported higher third-quarter earnings and revenue.
"Over the last quarter we experienced a confluence of factors that adversely affected our DVD business and reinforced the merits of our diversification strategy into attractive, higher-growth markets," Cinram CEO Dave Rubenstein said in a statement. "These factors include general price erosion in the DVD replication marketplace and volumes that fell short of customers' forecasts."
As a result, Cinram said it will "suspend all distribution payments" after its December payout.
Cinram reported a profit of $34.9 million for the three months ending Sept. 30, against earnings of $15.4 million in 2006.
Third-quarter revenue came to $485.1 million, compared with a year-earlier $477.2 million, mainly because of increased distribution revenue that was offset by lower DVD, CD and printing sales.