STAMFORD, CT - Cenveo Inc. has announced results for the three and six months ended June 28, 2014.

Robert G. Burton Sr., chairman and CEO, said on the company's second quarter performance: "We are very encouraged by our second quarter performance highlighted by delivering consolidated organic revenue growth of over 2 percent. We also were able to grow our Adjusted EBITDA by approximately 7 percent versus the same quarter in the prior year; successfully refinance a significant portion of our capital structure, which will result in interest savings; and made significant progress on our accelerated integration efforts with National Envelope. We now expect to finalize our National Envelope consolidation efforts later this year, instead of in 2015 as originally planned. As a result of this accelerated consolidation, we have experienced some disruptions in our envelope operations that we originally anticipated occurring over a longer duration. Despite these disruptions, we are very pleased to have accomplished our financial objectives for the quarter and remain on track to deliver our 2014 full-year guidance.

During the second quarter, we saw organic revenue growth from all of our segments. Our print business again saw positive momentum, as our vertical sales focus continued to drive positive growth. Our envelope business grew organically as price increases and solid direct mail volumes more than offset the significant operational disruption due to the National Envelope consolidation efforts. Our label and packaging operations continue to perform well, driven by strong trends across our custom label and our international packaging operations."

The company generated net sales of $479.4 million for the three months ended June 28, 2014, compared to $406.5 million for the same period last year, an increase of 17.9 percent. The company generated net sales of $969.5 million for the six months ended June 28, 2014, compared to $825.2 million for the same period last year, an increase of 17.5 percent. The increase in net sales is primarily due to sales generated from the integration of National Envelope into our envelope operations, as National Envelope was not included in our results in the first six months of 2013, as well as our ability to pass along paper price increases to certain customers in our envelope operations and new account wins in our print segment.

Operating income was $13.3 million for the three months ended June 28, 2014, compared to $16.8 million for the same period last year. Operating income was $23.4 million for the six months ended June 28, 2014, compared to $28.5 million for the same period last year. The decrease was primarily due to higher restructuring and integration charges from the closure of two print plants, the closure and consolidation of several envelope plants related to the integration of National Envelope, and the impact of the higher cost structure of National Envelope. Non-GAAP operating income was $25.5 million for the three months ended June 28, 2014, compared to $22.6 million for the same period last year, and $45.7 million for the six months ended June 28, 2014, compared to $40.7 million for the same period last year.

For the three months ended June 28, 2014, the company had a loss from continuing operations of $39.3 million, or $0.59 per diluted share, compared to a loss of $19.0 million, or $0.30 per diluted share, for the same period last year. For the six months ended June 28, 2014, the company had a loss from continuing operations of $56.1 million, or $0.84 per diluted share, compared to a loss of $39.5 million, or $0.62 per diluted share, for the same period last year. The decrease was primarily due to a $26.5 million debt extinguishment charge in connection with the debt refinancing that was completed in June 2014. Non-GAAP loss from continuing operations was $1.8 million, or $0.03 per diluted share, for the three months ended June 28, 2014, as compared to non-GAAP loss from continuing operations of $2.8 million, or $0.04 per diluted share, for the same period last year. For the six months ended June 28, 2014, non-GAAP loss from continuing operations was $9.6 million, or $0.14 per diluted share, compared to $14.8 million, or $0.23 per diluted share, for the same period last year. 

Adjusted EBITDA for the three months ended June 28, 2014, was $42.1 million, compared to Adjusted EBITDA of $39.5 million for the same period last year. For the six months ended June 28, 2014, Adjusted EBITDA was $78.9 million, compared to $72.9 million for the same period last year. Both prior year periods include the one-time cash proceeds of $2.7 million from an insurance claim related to a press fire in our packaging operations.

Cash flow used in operating activities for the six months ended June 28, 2014, was $27.1 million, compared to cash flow provided by operating activities of $9.3 million for the same period last year. The use of cash was primarily due to an accelerated interest payment of $14.5 million in the second quarter in connection with the refinancing of the 8.875 percent Notes and Term Loan Facility, which replaces the comparable, scheduled third quarter 2014 payment. Additionally, there was a use of cash related to a vendor arrangement in connection with the acquisition of certain assets of National Envelope.

Additionally, in June 2014, the company issued secured notes in the amount of $540.0 million at 6.0 percent (due 2019) and $250.0 million at 8.5 percent (due 2022). Net proceeds from these secured notes were used to refinance the company's existing 8.875 percent Notes and Term Loan Facility, and pay related expenses, fees and accrued interest. This transaction results in reductions in future cash interest expense, a significant extension of existing maturities and allows the company greater flexibility to address higher interest rate debt instruments in the future. Additionally, the company also used cash on hand of $9.4 million to repay in full the remaining principal balance on the Unsecured Term Loan.

Burton concluded: "As we begin the second half of the year, we will continue to focus on driving cash flow through our working capital initiatives and our improved operational performance. We also expect to see lower cash interest payments as a result of an accelerated interest payment in the second quarter in connection with the refinancing. I remain optimistic about the company's future as we look forward to the completion of the consolidation efforts with National Envelope, the benefits of our refinancing, and expansion in the higher growth segments of our business."