RICHMOND, Va., Feb. 27 Cadmus Communications Corporation (Nasdaq: CDMS) ("Cadmus") today announced that it is closing an Atlanta-based logistics operation primarily serving technology-related customers. The action follows the Company's continuing efforts to sharpen the focus on its core businesses and to address changes in demand. Customers of that unit will be served from the Company's newer logistics facility in Charlotte, N.C. The Company said that the closing would result in a fiscal third-quarter pre-tax charge of approximately $8.0 million, most of which will be non-cash. Commenting on the consolidation, Bruce V. Thomas, president and chief executive officer, noted, "We are acting aggressively to address the changes in demand driven by industry-specific and overall economic factors. We also are acting to ensure that all of our assets and our capital base meaningfully contribute to operating earnings and EBITDA. We have placed a high priority on continuing to use our positive cash flow to reduce debt, but we also want to provide the funds to capitalize on growth opportunities in our core businesses. With the transferred volume, our Charlotte-based logistics operation should see improvements in profitability and productivity. We will also be able to supply the financial and managerial resources necessary to pursue several exciting, new marketing initiatives related to specialty packaging." "The consolidation of our logistics operations will allow us to better serve our customers," commented Gerald P. Lux, group president of Cadmus Specialty Packaging. "Over the last year, we have seen changes in demand, as our customers have been seeking a new blend of services that made our Atlanta-based operation only part of the marketing solution and therefore less profitable. These trends are playing directly to the strengths of the services we now offer in our Charlotte center. For example, we are seeing substantial interest in our new E-SERT(TM) product, a proprietary product that provides an efficient, innovative way for marketers to reach end users. As a result of this consolidation, we will be in a position to redeploy more of our resources toward E-SERT(TM) and other similar growth activities." David E. Bosher, senior vice president and chief financial officer, noted, "We estimate that about 80 percent of the third-quarter charge from thisconsolidation will consist of non-cash items, including goodwill and other asset write-offs. As a result of these actions, we expect to generate more than $5 million in net cash proceeds once this consolidation is completed. The cash generated from these actions will assist us in accomplishing our goals of funding our growth opportunities while continuing to enhance our financial position by aggressively reducing debt. The closing of the Atlanta operation should also add approximately $1.0 million annually to the Company's pre-tax operating income."