Transcontinental to consolidate direct mail facilities

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Feeling the impact of the turmoil in the financial marketplace, Transcontinental Inc. said that its US direct mail subsidiary will consolidate production from its Warminster, PA, facility to a facility in Hamburg, PA. As a result, 460 positions are being eliminated in Warminster.

“Following an extensive capacity review of our US direct mail operations, Transcontinental has acted to quickly address the negative impact of current market conditions, while continuing to meet the needs of our customers and giving us the flexibility we need over the long term,” said François Olivier, president and CEO at Transcontinental, in a statement.

Financial institutions represent a large portion of Transcontinental's direct mail customers in the US. The company is adjusting capacity to meet lower demand levels as financial institutions reduce the amount of direct mail they use because of how difficult it has become for consumers to get credit. Once the consolidation is complete in January, Transcontinental will have a production capacity of 3.5 billion direct mail pieces per year. Transcontinental Direct USA Inc. represents approximately 10% of the corporation's consolidated revenues.

As a result of a recent goodwill impairment test for its US direct mail business, Transcontinental will completely write off the goodwill associated with this business in the fourth quarter. The impairment amounts to approximately $195 million.

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