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Cenveo loss widens in Q1

Thursday, May 13, 2010

Press release from the issuing company

STAMFORD, Conn., May 12 -- Cenveo, Inc. today announced results for the three months ended April 3, 2010.

 

For the first quarter of 2010, net sales increased more than 10% to $453.9 million, as compared to $412.1 million in the first quarter of 2009, primarily due to contributions from the Nashua acquisition.  

The Company generated operating income of $12.2 million in the first quarter of 2010, as compared to $0.2 million in the first quarter of 2009.  Non-GAAP operating income increased 111% to $29.8 million as compared to $14.1 million in the prior year reflecting the benefits of the Company's focus on cost containment.  Non-GAAP operating income excludes integration, acquisition and other charges, stock-based compensation provision, restructuring and impairment charges and divested operations or asset held for sale. A reconciliation of operating income to Non-GAAP income (loss) from continuing operations is presented in the attached tables.

Adjusted EBITDA in the first quarter of 2010 was $45.5 million as compared to $31.5 million in the first quarter of 2009. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding integration, acquisition and other charges, stock-based compensation provision, restructuring and impairment charges, divested operations or asset held for sale, loss (gain) on early extinguishment of debt, and loss from discontinued operations, net of taxes.  An explanation of the Company's use of Adjusted EBITDA is detailed below and a reconciliation of net loss to Adjusted EBITDA is provided in the attached tables.

For the first quarter of 2010, the Company recorded a net loss of $11.1 million, or $0.18 per share, as compared to a net loss of $4.3 million, or $0.08 per share, for the first quarter of 2009. The results for the first quarter of 2010 include a loss of $2.6 million on early extinguishment of debt while the results for the first quarter of 2009 include a gain of $17.6 million on early extinguishment of debt.  On a Non-GAAP basis, loss from continuing operations was $0.5 million, or $0.01 per share, for the first quarter of 2010 as compared to a Non-GAAP loss from continuing operations of $8.2 million, or $0.15 per share, for the first quarter of 2009. Non-GAAP income (loss) from continuing operations excludes integration, acquisition and other charges, stock-based compensation provision, restructuring and impairment charges, divested operations or asset held for sale, loss (gain) on early extinguishment of debt and adjusts income taxes to reflect an estimated cash tax rate. A reconciliation of income (loss) from continuing operations to Non-GAAP income (loss) from continuing operations is presented in the attached tables.

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

"The positive momentum that we began to see at the end of 2009 continued through the first quarter of 2010 as the environment stabilized across our products. We generally saw stronger operational performance from our businesses and we had several of our larger financial services customers return to the market. Our continued focus on cost management and our successful acquisition integration efforts have achieved their desired results as our Adjusted EBITDA increased 44.5% to $45.5 million in the first quarter."

"We were able to accomplish several strategic goals during the quarter as well. The acquisition of Clixx enhanced our direct mail data management and fulfillment solutions, while we also extended the term of some of our debt maturities and enhanced our liquidity position via the $400 million senior second lien notes offering we completed in February. These two accomplishments further demonstrate that Cenveo can continue to execute in the marketplace while much of our competition cannot. "

Mr. Burton concluded:

"Given our momentum and current visibility, I remain optimistic that the trends we have seen will continue as we enter the seasonally stronger back half of the year. I remain confident that we will achieve our previously announced 2010 guidance of $250 million Adjusted EBITDA and free cash flow of $120 million."

"For the remainder of 2010, we will maintain our focus on cost management and continue to focus on gaining market share in the niche products that we produce. We expect to continue generating strong cash flow and using these funds to pay down debt or make strategic acquisitions that strengthen our product leadership positions. As the senior manager of Cenveo, I assure you that we will do everything in our power to capitalize on the marketplace trends we are seeing and continue generating the financial results that our customers and shareholders expect."

 

 

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