Cenveo Reports 11% Increase in First Quarter
Thursday, May 05, 2011
Press release from the issuing company
STAMFORD, CT – Cenveo, Inc. today provided the following financial guidance for its first quarter ended April 2, 2011.
Based on our preliminary results, we expect that for the first quarter of 2011 we will have net sales of approximately $503.1 million compared to $453.9 million in the first quarter of 2010, an increase of 11%. This increase was driven by the acquisition of MeadWestvaco’s Envelope Products Group (“EPG”), which closed in February, and mid-single-digit percentage organic growth in our custom labels, commercial print, envelope, and specialty packaging products.
For Adjusted EBITDA in the first quarter of 2011, we expect $51.1 million compared to $45.5 million in the first quarter of 2010, an increase of 12%. This increase is primarily attributable to stronger performances across the majority of the company’s product lines and minimal contribution from EPG given the timing of our integration plan. 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, gain on bargain purchase, 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 table.
The results for the first quarter of 2011 are anticipated to include a bargain purchase gain in connection with the EPG assets. The purchase price allocation of acquired assets and liabilities
assumed in the EPG acquisition and the related bargain purchase gain recognized in the Company’s earnings are preliminary. Differences between the preliminary and final purchase price allocations could have a material impact on the Company’s financial statements, including the bargain purchase gain. The Company will finalize the purchase price allocation as soon as practicable within the EPG acquisition’s measurement period, but in no event later than one year after the acquisition date.
Robert G. Burton, Sr., Chairman and Chief Executive Officer stated:
"We delivered a strong quarter, and we are pleased by our performance in which we grew revenue and profit and began the integration of the EPG transaction. I am also encouraged by the continued momentum that we saw in our businesses as industry conditions continue to improve. Our sales initiatives focused on recruiting and cross selling have started to deliver their desired results. I look forward to expanding my remarks when we fully release results next Wednesday.”
In addition to results presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”), included in this release is a certain Non-GAAP financial measure, specifically Adjusted EBITDA. This Non-GAAP financial measure is defined herein, and should be read in conjunction with GAAP financial measures. This Non-GAAP financial measure is not presented as an alternative to cash flows from operations, as a measure of our liquidity or as an alternative to reported net income (loss) as an indicator of our operating performance. The Non-GAAP financial measure as used herein may not be comparable to similarly titled measures reported by competitors.
We believe the use of Adjusted EBITDA along with GAAP financial measures enhances the understanding of our operating results and may be useful to investors in comparing our operating performance with that of our competitors and estimating our enterprise value. Adjusted EBITDA is also a useful tool in evaluating the core operating results of the Company given the significant variation that can result from, for example, the timing of capital expenditures, the amount of intangible assets recorded or the differences in assets’ lives. We also use Adjusted EBITDA internally to evaluate the operating performance of our segments, to allocate resources and capital to such segments, to measure performance for incentive compensation programs, and to evaluate future growth opportunities.
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