During the first quarter of 2012, the Company completed the previously announced sales of its Forms and Business Documents Group ("Documents Group") and its wide format paper business (collectively the "Discontinued Operations"). For its fiscal year 2011 and prior periods, the Company will be reporting these businesses as discontinued operations in the consolidated financial statements resulting in the reclassification of the Company's consolidated balance sheets, statements of operations and statements of cash flows to reflect these discontinued operations separately from the Company's continuing operations. All results discussed below exclude the results of the Discontinued Operations unless otherwise indicated.

For the three months ended December 31, 2011, net sales were $486.5 million, as compared to $435.0 million for the same period in the previous year, an increase of 11.8%. For the year ended December 31, 2011, net sales were $1.9 billion, compared to $1.7 billion for the prior year, an increase of 11.7%. The increase in net sales was primarily due to the acquisition of MeadWestvaco Corporation's Envelope Product Group ("EPG"), and growth from direct envelope, custom label, content management, and specialty packaging product lines.

Operating income was $39.0 million for the three months ended December 31, 2011, compared to $17.5 million for the same period last year. This increase was a result of lower restructuring, impairment and other charges, a lower operating cost structure and contributions from the EPG acquisition. Non-GAAP operating income increased 13.1% to $46.7 million for the three months ended December 31, 2011, compared to $41.3 million for the same period last year. For the year ended December 31, 2011, operating income was $117.8 million, compared to an operating loss of $117.9 million for the prior year. This increase was a result of lower restructuring, impairment and other charges, a lower operating cost structure, and contributions from the EPG acquisition. For the year ended December 31, 2011, non-GAAP operating income increased 14.7% to $157.2 million, compared to $137.1 million for the prior year. Non-GAAP operating income excludes integration, acquisition and other charges, stock-based compensation provision, restructuring, impairment and other charges and divested operations or assets held for sale. A reconciliation of operating income (loss) to non-GAAP operating income is presented in the attached tables.

For the three months ended December 31, 2011, net loss was $14.5 million, or $0.23 per share, compared to a net loss of $9.8 million, or $0.16 per share, for the same period last year. Net loss for three months ended December 31, 2011 includes income from continuing operations before income taxes, offset by income tax expense and a loss from the Discontinued Operations, primarily due to the write-down of allocated goodwill of $13.5 million related to the Discontinued Operations. The net loss in the same period last year includes a loss from continuing operations before income taxes, offset by an income tax benefit and income from Discontinued Operations. For the year ended December 31, 2011, net loss was $8.6 million, or $0.14 per share, compared to $186.4 million, or $2.99 per share, for the prior year. The net loss for the year ended December 31, 2011 includes income from continuing operations before income taxes, offset by income tax expense and a loss from Discontinued Operations, primarily due to the write-down of allocated goodwill of $13.5 million related to the Discontinued Operations. The net loss in the prior year includes a loss from continuing operations before income taxes, partially offset by an income tax benefit and income from discontinued operations.

On a non-GAAP basis, income from continuing operations increased 68.8% to $18.2 million, or $0.29 per share, for the three months ended December, 31 2011, compared to $10.8 million, or $0.17 per share, for the three months ended January 1, 2011. For the year ended December 31, 2011, non-GAAP income from continuing operations increased 203.8% to $40.5 million, or $0.64 per share, compared to $13.3 million, or $0.21 per share, for the same period last year. These increases are primarily attributable to stronger performance across the majority of the Company's product lines combined with contributions from the EPG acquisition. 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 on bargain purchase, (gain) loss on early extinguishment of debt and adjusts income taxes to reflect an estimated cash tax rate. A reconciliation of loss from continuing operations to non-GAAP income from continuing operations is presented in the attached tables.

Adjusted EBITDA for the three months ended December 31, 2011 was $62.6 million, compared to $56.0 million for the three months ended January 1, 2011, an increase of approximately 11.7%. Adjusted EBITDA for the year ended December 31, 2011, was $221.6 million, compared to $198.6 million for the year ended January 1, 2011, an increase of approximately 11.6%. For comparative purposes, Adjusted EBITDA, including the results of the Discontinued Operations, for the three months ended December 31, 2011 was $64.8 million, compared to $60.3 million for the same period last year, an increase of approximately 7.6%. Adjusted EBITDA, including the results of the Discontinued Operations, for the year ended December 31, 2011, was $235.1 million, compared to $216.3 million for the prior year, an increase of approximately 8.7%. On a go forward basis, the Company will report Adjusted EBITDA excluding the Discontinued Operations. These increases are primarily attributable to stronger performance across the majority of the Company's product lines combined with contributions from the EPG acquisition. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding integration, acquisition and other charges, stock-based compensation provision, restructuring, impairment and other charges, gain on bargain purchase, (gain) loss on early extinguishment of debt, divested operations or assets held for sale and (income) 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.

Robert G. Burton, Sr., Chairman and Chief Executive Officer stated:
"I am very pleased with our fourth quarter operating results as we saw revenue increases, drove strong improvement in operating income and generated strong cash flows that we used to pay down debt. Combining these results with our recently completed dispositions of non-core businesses demonstrates that our game plan is working. When including the discontinued operations, we were able to achieve our financial projections for 2011 delivering adjusted EBITDA of $235.1 million for the year, highlighted by delivering non-GAAP operating income margin of 9.6% for the fourth quarter. We also continued to focus on our capital structure and leverage targets. During the fourth quarter we paid off more than $41 million of debt and amended our credit facility to allow the Company to purchase subordinated debt in the open market. Our focus on working capital has also begun to produce the desired results as we have lowered our inventory levels by over $25 million since the end of the second quarter."

"The positive trends, which we have seen across most of our businesses in 2011, continued into the fourth quarter of 2011. Our envelope business posted another quarter of strong organic sales growth of 10%, benefiting from direct mail volumes and favorable product mix. Both our custom and long-run label businesses showed growth driven by improving economic conditions and strong holiday shipments. Our packaging products grew in line with expectations highlighted by performance in our shrink sleeve end markets. Our print markets saw operational improvement as new sales wins in non-traditional end markets and a rebound in our customers marketing spend drove meaningful improvement. Our content management offering continues to grow as our unique global platform continues to benefit from the outsourcing of project management and composition services."

Mr. Burton concluded:
"As we look forward to 2012 and beyond, we believe that our future success will be based on our current operating plan: to invest in our market leading businesses in niche markets; to leverage our low-cost, highly efficient operating platform; and to make disciplined accretive strategic acquisitions. We will continue to focus on de-leveraging our balancing sheet by driving cash flow, improving working capital, and by continuing to push for operational improvement. Based on the current business climate and factoring in our recent divestitures, I expect $230 million to $240 million in Adjusted EBITDA, and approximately $100 million to $110 million free cash flow and expect to end the year with net leverage between 4.5 and 4.7x. I look forward to our conference call tomorrow to discuss in more depth our positive 2012 outlook for Cenveo."