Cenveo to layoff 125 Executives, Comments on meeting with Burton
Press release from the issuing company
ENGLEWOOD, Colo., June 1 -- Cenveo Inc. today announced that it has initiated a comprehensive program to streamline certain management functions, increase flexibility and efficiency, and reduce operating expenses. These initiatives will give more decision- making authority to local managers and help them better serve the needs of the company's customers and business partners. These initiatives are effective immediately. The Company said that in addition to changes in certain operating procedures, approximately 125 primarily management positions will be eliminated throughout the organization. The Company expects these initiatives to result in cost savings of $9 million in 2005 and annualized savings of $20 million.
Michel Salbaing, Acting CEO of Cenveo, said, "The initiatives we are implementing are expected to reduce total SG&A expense by approximately 7%, help us sharpen our focus on customers and improve our strategic, operating and financial performance. Our strategy of delivering a diverse portfolio of products and services to answer the needs of our customers continues to build traction as is evidenced by the growth in our strategic sales in the current year as compared to prior periods."
On April 18, 2005, Cenveo announced that it had, with the assistance of its financial and legal advisors, commenced an aggressive and thorough evaluation of strategic alternatives with the goal of maximizing shareholder value. The Company reported today that the review is continuing and that expressions of interest have already been received from a number of parties. The Board reiterated that the Company will consider all of its options, and there can be no assurance of any particular outcome from this review.
On May 6, 2005 two of the Company's directors and the Company's financial and legal advisors met with Mr. Robert Burton, three members of his family, Mr. Burton's legal counsel and a representative of Goodwood Capital. At the meeting Mr. Burton reiterated his view that the Company's Board should hire him as Chairman and CEO, place him and two of his designees on the Company's Board and reduce the number of directors to seven, but declined to make an acquisition proposal or proposal to make a direct investment in the Company.
The Company had previously invited Mr. Burton to participate in the Company's formal CEO selection process and, following the meeting, the Company also invited Mr. Burton to participate, on the same terms as other third parties, in the Company's strategic alternatives process. Mr. Burton declined to participate in the Board's defined processes. Mr. Burton, however, reiterated his demand that the Board appoint him Chairman and CEO without further exploring the Company's strategic alternatives.
Susan Rheney, Chairman of Cenveo, said, "We are pleased with the progress of our evaluation of strategic alternatives. The Board, with the assistance of our financial and legal advisors, will pursue these expressions of interest, along with the evaluation of other options. Cenveo's Board and management are absolutely committed to maximizing shareholder value and are taking all steps necessary to do so."
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