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Cenveo Reports Unaudited Q4 Results

Friday, March 14, 2008

Press release from the issuing company

STAMFORD, Conn., March 13, 2008 --  Cenveo, Inc. today announced unaudited financial results for the quarter and full year ended December 31, 2007 that are consistent with the Company's previously issued full year guidance.

The financial information reported herein is preliminary and remains subject to the completion of the Company's year-end audit. The Company has substantially completed its internal review conducted under the direction of the Company's audit committee in consultation with external counsel as a result of senior management's learning of unsupported accounting entries by a former controller for two plants in the Company's envelope division. The findings of the review determined that approximately $4 million of net income previously reported by the Company is unsupportable. Following the completion of the internal review, the Company is in the process of completing its Form 10-K for fiscal 2007 (the "Form 10-K"), facilitating the completion of the annual audit. The Company is also finalizing the impact on its financial statements issued in 2006 and 2007. The Company currently anticipates that the Form 10-K will be filed within the next 2 weeks, although there can be no assurance as to the timing of the filing or that any of the reported results will not differ from those contained in this release.

For the fourth quarter of 2007, the Company reported net income of $18.3 million, or $0.33 per diluted share. The fourth quarter 2007 results include income from discontinued operations of $1.7 million and restructuring and impairment charges of $8.0 million. These restructuring and impairment charges in the quarter primarily relate to the closure of certain businesses that were contemplated as a part of our recent acquisition activity. Net sales for the quarter were $584.4 million.

Non-GAAP income from continuing operations totaled $28.8 million, or $0.53 per diluted share, in the fourth quarter of 2007. Non-GAAP income from continuing operations excludes integration and acquisition charges, restructuring and impairment charges, (gain) loss on sale of non-strategic businesses, and loss on early extinguishment of debt. A reconciliation of income from continuing operations to non-GAAP income from continuing operations and the related per share data is presented in the attached tables.

Operating income totaled $53.6 million in the fourth quarter of 2007. Non-GAAP operating income in the fourth quarter of 2007 was $64.1 million, which produced an 11.0% margin, reflecting the continued benefits of our cost savings, restructuring and integration plans and productivity efforts. Non-GAAP operating income excludes integration and acquisition charges and restructuring and impairment charges. A reconciliation of operating income to non-GAAP operating income is presented in the attached tables.

Adjusted EBITDA in the fourth quarter of 2007 was $85.2 million. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding integration and acquisition charges, restructuring and impairment charges, (gain) loss on sale of non-strategic businesses, divested operations EBITDA, loss on early extinguishment of debt, stock-based compensation provision, and income (loss) from discontinued operations. An explanation of the Company's use of Adjusted EBITDA is detailed below, and a reconciliation of net income to Adjusted EBITDA is presented in the attached tables.

For the full year of 2007, the Company reported net income of $40.3 million, or $0.74 per diluted share. The results for 2007 included income from discontinued operations of $16.8 million, primarily relating to our sale of Supremex. The 2007 results also included restructuring and impairment charges of $40.1 million. Net sales for 2007 were $2.05 billion.

Non-GAAP income from continuing operations for 2007 totaled $73.9 million, or $1.35 per diluted share. Non-GAAP income from continuing operations excludes integration costs, restructuring and impairment charges, (gain) loss on sale of non-strategic businesses and loss on early extinguishment of debt. A reconciliation of income (loss) from continuing operations to non-GAAP income from continuing operations and the related per share data is presented in the attached tables.

Operating income was $137.6 million for 2007. Non-GAAP operating income in 2007 was $183.5 million, which produced an 9.0% margin, reflecting the continued benefits of our cost savings, restructuring and integration plans. Non-GAAP operating income excludes integration costs and restructuring and impairment and acquisition charges. A reconciliation of operating income to non-GAAP operating income is presented in the attached tables.

Adjusted EBITDA for 2007 was $256.2 million. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding integration and acquisition charges, restructuring and impairment charges, (gain) loss on sale of non-strategic businesses, divested operations EBITDA, loss on early extinguishment of debt, stock-based compensation provision, and income (loss) from discontinued operations. An explanation of the Company's use of Adjusted EBITDA is detailed below and a reconciliation of net income (loss) to Adjusted EBITDA is presented in the attached tables.

 

 

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