Cenveo, Inc. today announced results for the three months ended March 31, 2012.

The Company generated net sales of $455.6 million for the first quarter of 2012, compared to $477.0 million in the first quarter of 2011. The decrease in net sales was primarily due to lower sales in our print and envelope product lines as a result of customer product launches in the first quarter of 2011 that did not repeat in the first quarter of 2012 and lower direct mail volumes from our financial services customers. The Company expects the direct mail market to strengthen in the second half of 2012. The Company's custom label and specialty packaging products both displayed strong growth relating to customer wins and sales channel expansion.

Operating income was $14.2 million in the first quarter of 2012, compared to $19.3 million in the first quarter of 2011. The decrease in operating income was primarily due to increased restructuring, impairment and other charges as a result of a print plant closure and other cost savings actions executed in the first quarter of 2012, offset in part by our lower cost structure due to the integration of our Envelope Product Group ("EPG") acquisition and lower compensation related expenses. Non-GAAP operating income was $31.6 million in the first quarter of 2012, compared to $31.5 million in the first quarter of 2011. Non-GAAP operating income excludes integration, acquisition and other charges, stock-based compensation provision, restructuring, impairment and other charges.

In the first quarter of 2012, the Company had a net loss of $27.2 million, or $0.43 per share, compared to net income of $2.8 million, or $0.04 per share in the first quarter of 2011. The results in the first quarter of 2012 include a loss on early extinguishment of debt, net of $10.6 million related to our recent debt refinancing and restructuring, impairment and other charges of $14.0 million as a result of a print plant closure and other cost savings actions executed in the first quarter of 2012, while the results in the first quarter of 2011 included a preliminary bargain purchase gain of $10.5 million related to the EPG acquisition and restructuring, impairment and other charges of $3.8 million. On a Non-GAAP basis, income from continuing operations was $3.3 million, or $0.04 per share, in the first quarter of 2012 as compared to $1.1 million, or $0.02 per share, in the first quarter of 2012. Non-GAAP income (loss) from continuing operations excludes integration, acquisition and other charges, stock-based compensation provision, restructuring, impairment and other charges, gain on bargain purchase, loss on early extinguishment of debt, net and adjusts income taxes to reflect an estimated cash tax rate. A reconciliation of (loss) income from continuing operations to Non-GAAP income from continuing operations is presented in the attached tables.

Adjusted EBITDA in the first quarter of 2012 was $47.0 million, compared to Adjusted EBITDA in the first quarter of 2011 of $47.4 million. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, integration, acquisition and other charges, stock-based compensation provision, restructuring, impairment and other charges, gain on bargain purchase, loss on early extinguishment of debt, net and (loss) income from discontinued operations, net of taxes.

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

"We are satisfied with our first quarter results, as our operations performed in line with expectations. We also accomplished several key initiatives during the quarter. We completed the dispositions of two non-core businesses allowing us to focus on our core label, specialty packaging, envelope, print and content management operations. During the quarter, we also completed a refinancing, which extends the majority of our near term debt out to 2017."

"Operationally, our label and packaging products produced another solid performance led by strong revenue growth in our custom products driven by investments in our sales channels and increased product offerings. Our envelope operations delivered expected revenue and operational results with the timing of customer revenues combined with seasonal trends offsetting gains in market share and operational improvements resulting from our integration of EPG. We expect the direct mail market to strengthen in the second half of 2012 with increased volume from our financial services customers. Our print products performed as expected as well with weakness in the publishing industry and in changes in the timing of customer purchases, offset by continued strength in our content management business."

Mr. Burton concluded:
"As we exit the first quarter, 2012 is progressing in line with our full year expectations. We remain focused on continuing to win market share and maintaining our cost structure to drive free cash flow and to pay down debt. The debt markets remain open and we will opportunistically look to address the near term portion of our capital structure. Given recent sales momentum and our focus on costs, we remain on track to deliver the full year net sales, free cash flow, and adjusted EBITDA targets that are consistent with our previous guidance."

The Company also announced the promotion of Scott J. Goodwin to Chief Accounting Officer. Mr. Goodwin previously held the positions of Assistant Corporate Controller and Corporate Controller for the Company. Prior to joining Cenveo, Mr. Goodwin spent seven years in public accounting at Deloitte & Touche, LLP. He is a CPA and received his degree in accounting from The Citadel. He will continue to report to Mark S. Hiltwein, Chief Financial Officer.