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Warner Home Video Ends Cinram Relationship

Cinram International Income Fund (Cinram), a major manufacturer and distributor of prerecorded DVDs, Blu-ray Discs, audio CDs, and CD-ROMs, announced that it has 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 covers all Cinram entities globally and will directly impact operations in North America, Mexico, UK, France, Germany and Spain.

According to the statement, WHV revenues for 2009 represented approximately 28% of the total consolidated revenues of Cinram International Inc.

Commented Steve Brown, CEO, “While we are disappointed with the decision by WHV to end our over 6 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.”

On October 24, 2003, Cinram acquired the DVD and CD manufacturing and physical distribution businesses of then AOL Time Warner Inc. for US$1.05 billion in cash (WEA Manufacturing Inc., Warner Music Manufacturing Europe GmbH, Ivy Hill Corporation, Giant Merchandising and the physical distribution operations of Warner-Elektra-Atlantic Corporation). As part of the transaction, Cinram entered into exclusive long term agreements with Warner Home Video, Warner Music Group and New Line Cinema to manufacture, print, package and physically distribute their DVDs and CDs in North America and Europe.

As of September 2009, Cinram employed approximately 14,200 people and operated 21 major facilities worldwide, with an annual production capacity of 2.1 billion DVDs, 55 million Blu-ray Discs and 500 million CDs.

At 11:30 AM EST today, Cinram shares were trading down 60% from their opening price.

Cinram trades on the TSX under the symbol CRW.UN

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