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Cenveo narrows Q4 loss with lower charges

Friday, March 05, 2010

Press release from the issuing company

STAMFORD, Conn. - Cenveo, Inc. announced results for the three months and full year ended January 2, 2010.

For the three months ended January 2, 2010, net sales were $456.8 million, as compared to $517.2 million for the same period in the previous year. For the three months ended January 2, 2010, the Company reported a net loss of ($9.4) million, or ($0.15) per share, as compared to a net loss of ($309.7) million, or ($5.71) per share, for the three months ended January 3, 2009. On a Non-GAAP basis, income from continuing operations was $15.6 million, or $0.25 per diluted share for the three months ended January 2, 2010. Non-GAAP income from continuing operations excludes integration, acquisition and other charges, stock-based compensation provision, restructuring, impairment and other charges, divested operations or assets held for sale, (gain) loss on early extinguishment of debt and adjusts income taxes to reflect an estimated cash tax rate.

Adjusted EBITDA for the three months ended January 2, 2010 was $60.8 million. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, integration, acquisition and other charges, stock-based compensation provision, restructuring, impairment and other charges, divested operations or assets held for sale, (gain) loss on early extinguishment of debt, and income (loss) from discontinued operations, net of taxes. Free cash flow is defined as Adjusted EBITDA less cash interest, cash taxes, and capital expenditure. An explanation of the Company's use of Non-GAAP measures, Adjusted EBITDA and free cash flow is detailed below.

For the full year ended January 2, 2010, net sales were $1.7 billion, as compared to $2.1 billion for the same period in the previous year. For the year ended January 2, 2010, the Company reported a net loss of ($30.9) million, or ($0.54) per share, as compared to a net loss of ($298.0) million, or ($5.53) per share, for the year ended January 3, 2009. On a Non-GAAP basis, income from continuing operations was $26.0 million or $0.46 per diluted share for the full year. Adjusted EBITDA for the full year was $201.7 million.

Robert G. Burton, Sr., Chairman and Chief Executive Officer stated:

"We are very pleased with the Company's fourth quarter performance. Despite a challenging economic environment, we were able to deliver on our financial commitments with sequential improvements throughout the year. We also continued to see stabilization in many of the product markets we serve. These market improvements, combined with the cost savings actions we implemented earlier in the year and our successful integration of the Nashua acquisition, helped us increase operational performance and drive stronger cash flow. Our focus on cost reductions allowed us to deliver Non-GAAP operating income margins of 9.9% for the quarter, while our emphasis on generating strong cash flows helped us reduce debt by $47.7 million during the fourth quarter."

Mr. Burton concluded:

"2009 was the most challenging year I ever experienced in my business career. The economic events that affected our industry were truly unprecedented and previously unthinkable. Cenveo's skilled and talented employees rose to meet every challenge confronting us and, in the process, we distinguished ourselves through our quality service to our customers. I am truly thankful for all the hard work by our employees under the leadership of our senior management team and I appreciate their dedication demonstrated during this truly historic period."

"As we now place our full attention on 2010, I feel there will be a solid rebound this year for the major players in the printing industry, including Cenveo. The two recently announced M&A transactions indicate there will be continued industry consolidation to reduce excess capacity. I remain optimistic about our Company's future prospects and, despite continued uncertainty in the macro-economic environment, I am confident that Cenveo's long-term game plan of investing in strong niche product opportunities will yield dividends to us in 2010. This expectation, along with the continued positive trends in our product markets and the strong performance we have seen from Nashua to date, supports my belief that Cenveo's financial goals of $250 million in Adjusted EBITDA and approximately $120 million free cash flow are well within reach. To personally demonstrate my conviction in the Company's prospects, I recently purchased approximately $500,000 of Cenveo stock in the open market and doubled my Employee Stock Purchase Plan contribution to $20,000 a month. I look forward to our conference call tomorrow to discuss in more depth our positive 2010 outlook for Cenveo."

 

 

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