Cenveo Announces Q2 Loss of $10.6 Million,
Tuesday, August 02, 2005
ENGLEWOOD, Colo., Aug. 1 -- Cenveo, Inc., announced its results for the quarter and six months ended June 30, 2005. The net loss was $10.6 million for the quarter and $33.2 million for the six months, or $0.22 per share and $0.69 per share, respectively. Sales for the quarter were $422 million and $871 million for the six months ended June 30, 2005. Last year, the net loss for the corresponding quarter was $2.1 million or $0.04 per share, on $409 million of sales and for the six months ended June 30, 2004, the net loss was $18.6 million, or $0.39 per share, on $833 million of sales. Cenveo's net loss for the six months ended June 30, 2005, included restructuring, impairment and other charges of $13.0 million and losses on sales of non-strategic businesses of $1.3 million. EBITDA of ongoing operations for the second quarter of 2005 was $30 million compared to EBITDA of $28 million achieved by the ongoing operations for the same period last year, a 7.3% improvement on 3% better sales. The guidance given previously had been for results to be flat to last year. For the six months ended June 30, 2005, EBITDA was $56.2 million compared to $59.4 million for the corresponding period of the prior year. This decline was primarily due to the costs of transitioning to a new CEO, lower margins on our envelope products, lower net pricing in our office products channel and higher incentive accruals. An explanation of the Company's use of EBITDA for comparative purposes is provided below. Net cash provided by operating activities in the quarter ended June 30, 2005 was $16.9 million compared to $9.8 million provided during the same period last year. It is still expected that operations will generate approximately $35 million of free cash flow for the full year. Jim Malone, President and CEO, stated, "The second quarter has been a turning point for Cenveo. Building on the previously announced plan to reduce SG&A expenses by $20 million on an annual basis, we have identified another $35 million of cost reductions that will be in place no later than January 1, 2006. On this basis, and even before factoring in continued strong market successes, we expect Cenveo to be at an annual EBITDA run rate of $190 million going into 2006. This significant change in the expected EBITDA of the company has been made possible by flattening the organization, reducing the size and changing the role of head office and making Cenveo much more customer and operations oriented. We have discontinued all programs and activities that are not designed to serve our customers or support the high level of corporate governance that we are committed to maintain. We are confident that what we are doing is clearly the best option for our shareholders and we will continue to aggressively pursue shareholder value creation for all of our shareholders."