Cenveo Announces Q1 Net Loss of $22.6 million
Tuesday, May 03, 2005
ENGLEWOOD, Colo., May 2 -- Cenveo, Inc., today announced its results for the quarter ended March 31, 2005. Net loss in the quarter was $22.6 million, or $0.47 per share on sales of $450 million. In the first quarter of 2004, the net loss was $16.5 million, or $0.35 per share, on $424 million of sales. Sales increased 6.1% as compared to the same period last year. Cenveo's net loss for the quarter ended March 31, 2005, includes restructuring and impairment charges of $8 million. The restructuring charge relates to a plant that is currently being closed. The asset impairments relate to underperforming plants that will likely be sold or otherwise disposed of before the end of 2005. In the corresponding period last year, the company incurred a $17.7 million charge upon refinancing a significant portion of its long-term debt. EBITDA for the first quarter of 2005 was $24.9 million compared to EBITDA of $31.4 million for the first quarter of 2004. As discussed during the company's last conference call this decrease in EBITDA was fully expected and driven by three elements, 1) the continued reduced profitability of sales to the office products channel 2) the provision for incentive remuneration as the company's results are in line with internal plans this quarter, contrary to last year when no provision was made for incentive remuneration, and finally 3) as previously disclosed, the cost of the transition to a new CEO. An explanation of the Company's use of EBITDA for comparative purposes is provided below. Net cash used by operating activities in the quarter ended March 31, 2005 was $27 million compared to $15 million used during the comparable period of 2004, generally in line with internal expectations and driven by the seasonality of our business. The Company also announced that its Board of Directors had accepted the resignation of President and CEO Paul Reilly effective April 30, and that Michel Salbaing, Senior Vice President and Chief Financial Officer had been appointed acting CEO while the Board completes its search for Mr. Reilly's successor. Mr. Salbaing, stated, "In the first quarter we continued to see increases in volumes of orders and production. However, our margins continue to erode due to higher paper prices, as well as increases in other raw materials. We intend to recover these costs through increases in the prices of our products and services and through productivity improvements. We will also consider further plant consolidations where we determine that it is in the best long-term interest of the Company. Our expectations for full year improvement in EBITDA remain unchanged."