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Cadmus Announces Q2 Results: Continued Top Line Growth

Monday, February 12, 2007

Press release from the issuing company

Feb. 9 -- Cadmus today announced results for its second quarter of fiscal 2007. Net sales were $116.0 million on a consolidated basis, up 8% from $107.3 million in the first quarter of fiscal 2007, and up 2% from $114.2 million in last year's second quarter. Operating income was $3.8 million, loss from continuing operations was $1.3 million, and net loss was $1.3 million, or a loss of $0.14 per share assuming dilution, for the second quarter of fiscal 2007, compared to operating income of $5.2 million, income from continuing operations of $1.1 million, and net income of $1.1 million, or $0.12 per share assuming dilution, in the second quarter of fiscal 2006. Included in the results for the second quarter of fiscal 2007 are merger- related costs of approximately $2.6 million, or $0.28 per share net of tax, in connection with the Company's previously announced agreement of merger with Cenveo, Inc., pursuant to which Cadmus will become an indirect, wholly owned subsidiary of Cenveo, and approximately $0.2 million, or $0.01 per share net of tax, of restructuring and other charges. The results for the second quarter of fiscal 2006 included $1.5 million, or $0.09 per share net of tax, of restructuring and other charges. Adjusted for the impact of these items(1), (i) adjusted operating income was $6.5 million for the second quarter of fiscal 2007 compared to $4.5 million for the first quarter of fiscal 2007(2), and $6.7 million for the second quarter of last year, (ii) adjusted income per share was $0.15 for the second quarter of fiscal 2007 compared to a loss of $(0.02) per share for the first quarter of fiscal 2007(3), and income of $0.21 per share in last year's second quarter, and (iii) Adjusted EBITDA(4) was $11.6 million for the second quarter of fiscal 2007, up from $9.1 million in the first quarter of fiscal 2007, and up slightly from $11.5 million in last year's second quarter. Operating highlights for the second quarter of fiscal 2007 were as follows: -- Net sales for the Publisher Services segment increased 3% to $94.9 million from $92.2 million in the prior year second quarter; -- Content services sales within the Publisher Services segment rose 10% and print services sales within the Publisher Services segment rose 2% compared to prior year second quarter; -- Specialty Packaging net sales decreased 4% to $21.2 million; however operating margins improved to 9.1% from 8.6% in last year's second quarter; Bruce V. Thomas, president and chief executive officer, remarked, "We are pleased with the sequential improvement throughout our operations from the first quarter of fiscal 2007. Our Publisher Services segment continued to show broad-based improvement and sustained top-line growth and our Specialty Packaging segment continues to deliver strong operating margins. Overall, we are pleased with the performance of our operations and the improvement in Adjusted EBITDA that was achieved for the second quarter." Second Quarter Operating Results Review Net sales for the second quarter totaled $116.0 million, an increase of 8% from $107.3 million in the first quarter of fiscal 2007 and up 2% from $114.2 million last year. Specialty Packaging segment net sales were $21.2 million, an increase of 16% from $18.2 million in the first quarter of fiscal 2007 and a decrease of 4% from $22.0 million last year. Publisher Services segment net sales were $94.9 million, an increase of 6% from the first quarter of fiscal 2007 and an increase of 3% from $92.2 million last year. Adjusted operating income(5) for the quarter was $6.5 million, or 5.6% of net sales in the second quarter, compared to $4.5 million, or 4.1% of net sales in the first quarter of fiscal 2007, and $6.7 million, or 5.9% of net sales last year. Specialty Packaging operating income of $1.9 million, or 9.1% of net sales, was up from $1.5 million, or 8.4% of net sales in the first quarter of fiscal 2007(6), and up slightly from $1.9 million, or 8.6% of net sales last year. Publisher Services operating income in the second quarter of fiscal 2007 declined to $6.0 million from $6.5 million last year and operating income margins declined to 6.3% of net sales from 7.1% last year. However, operating income for Publisher Services improved over the $4.3 million, or 4.8% of net sales in the first quarter of fiscal 2007(7). Adjusted income for the second quarter totaled $1.4 million, or $0.15 per share, compared to adjusted income of $2.0 million, or $0.21 per share, in last year's second quarter.(8) Total debt increased by $4.6 million (excluding the fair market value of interest rate swap agreements) from September 30, 2006, as the Company paid its semi-annual interest payment on the senior subordinated notes, incurred approximately $4.4 million in capital expenditures during the quarter and saw increases in accounts receivable and inventory.

 

 

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