Cenveo Q1 Results: Integration of Cadmus and Printegra on track
Thursday, May 10, 2007
STAMFORD, Conn., May 9 -- Cenveo, Inc. today announced its results for the three months ended March 31, 2007. For the first quarter, the Company reported net income of $18.7 million, or $0.34 per diluted share, as compared to net income of $112.2 million, or $2.11 per diluted share, in the first quarter of 2006. The first quarter 2007 results include income from discontinued operations, net of taxes, of $16.3 million as compared to $121.1 million in 2006, primarily related to the sale of Supremex. First quarter 2007 results include restructuring and impairment charges of $2.6 million, as compared to $13.5 million in 2006. Net sales for the quarter increased 8% to $414.7 million from $385.3 million in 2006, primarily due to the acquisitions of Cadmus and Printegra, which both closed in the first quarter of 2007. Non-GAAP net income totaled $12.9 million, or $0.24 per diluted share, in the first quarter of 2007 as compared to $5.1 million, or $0.10 per diluted share, in the first quarter of 2006. Non-GAAP net income excludes restructuring and impairment charges, integration costs, (gain) loss on sale of non-strategic businesses, loss on early extinguishment of debt, income from discontinued operations, net of taxes. A reconciliation of net income to non- GAAP net income for these adjustments is presented in the attached tables. Non-GAAP operating income in the first quarter of 2007 was $32.0 million, which produced a 7.7% margin, reflecting the continued benefits of our cost savings and restructuring plan. Non-GAAP operating income excludes restructuring and impairment charges and integration costs. A reconciliation of operating income to non-GAAP operating income is presented in the attached tables. Adjusted EBITDA in the first quarter of 2007 was $45.8 million as compared to $35.5 million in the same period last year, an increase of 29%. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding restructuring and impairment charges, integration costs, (gain) loss on sale of non-strategic businesses, divested operations EBITDA, loss on early extinguishment of debt, stock-based compensation expense, and income from discontinued operations, net of taxes. An explanation of the Company's use of Adjusted EBITDA is detailed below and a reconciliation of Adjusted EBITDA to net income is provided in the attached tables. Robert G. Burton, Chairman and Chief Executive Officer stated: "We are pleased to have delivered another strong quarter of results with our non-GAAP earnings per diluted share increasing 140% from last year. Both of our business segments continue to show meaningful operational improvement and margin expansion. Our focus on controlling costs and providing customers with a one-stop solution are yielding the desired results, as we delivered strong cash flow from operations. The integration of Cadmus and Printegra is on track and meeting our expectations. We have begun the process of consolidating facilities and functions of these companies, leveraging our purchasing spend, and cross-selling our capabilities. These results give us continued confidence that the game plan we implemented in September 2005 is working. I believe that the Company's future has never been brighter." Mr. Burton concluded: "We accomplished much in the first quarter: We closed two highly strategic acquisitions that we believe will be accretive to earnings and will expand the breadth of our manufacturing platform; we completed the sale of our remaining stake in Supremex to pay down debt and fund our growth initiatives; we refinanced our capital structure at favorable rates to fund our acquisitions; and most importantly, we delivered on our financial commitments to our shareholders. During the remainder of the year, we will build upon these successes to continue to deliver results for our customers, employees, and shareholders. We are integrating Cadmus and Printegra into our platform on a swift and aggressive time frame. We will continue to drive improved results in our core businesses by increasing productivity and efficiencies and reducing waste. I am also optimistic for our growth prospects, both organically and through acquisition. Our sales pipeline is strong and we will continue to look to grow our business by acquiring what we believe are strong companies in the niche markets we serve. With the positive results of our core business today, we continue to seek to expand our portfolio of products by acquiring additional businesses to provide additional opportunities to our customers."