Revenues increased 1.9%. Adjusted operating earnings before depreciation and amortization grew 3.8%. Adjusted net earnings attributable to shareholders of the Corporation increased 8.4%. Maintained a solid financial position, with a stable net indebtedness ratio of 0.9x. Signed a five-year agreement with the Toronto Star to print their daily newspaper, which should take effect in July 2016. Signed a five-year exclusive agreement with the Société de transport de Montréal to distribute the Métro newspaper in the Montreal metro system, which took effect on February 1, 2016. Increased the dividend per participating share by 9%, to $0.74 per year.
With the shrunken American book printing industry enjoying a revival, Wisconsin’s Worzalla, an employee-owned book printer specializing in high-quality children’s books, cookbooks, and hardcovers that services many of the country’s largest publishers, has begun the final phase of a three-part effort to expand its printing capacity.
The last round of upgrades features a $10 million investment that covers the addition of a new casemaker with a wide range of casemaking applications and a non-stop case feeder for cutting and making covers of books. Worzalla has also purchased a Goss Sunday 2000 32-page Double Web Press that provides a broad range of print formats and page configurations. Installation of the press is expected to be complete later this year, and is projected to increase Worzalla’s large book format capacity by 30%.
Over the last several years, the company has spent more than $30 million on new manufacturing equipment. In addition, Worzalla is looking to hire 40 new employees for a range of positions.
Jim Fetherston, Worzalla CEO and president, said the expansion is due to increasing interest by U.S. publishers in using domestic printers rather than to go off shore. The pandemic has caused significant disruptions to supply chains, particularly in global supply chains, making printing in China more difficult and more expensive. In addition to disruptions caused by the pandemic, Fetherston said such factors as higher tariffs and paper prices, as well as the global shortage of shipping containers, have eroded some of China’s pricing advantages; these factors have also, he added, made it more challenging to get product out of China and to the U.S. in a timely manner.
The return of business to the States contributed to a 25% increase in first quarter production at Worzalla over the last year’s first quarter, Fetherston said, and he foresees neither a slowdown in business nor an immediate easing of the capacity crunch. With demand for books still strong and capacity limited, Fetherston said, “publishers are committing to projects much earlier and locking down capacity with their printing partners for the long term. Publishers will need to plan now well in advance to make sure that they can get their books printed for the summer and fall, as U.S. book printing capacity is already in short supply.”