Mail-Well Expects Lower Sales in Q2, Plans to Keep PrintXcel Business

Press release from the issuing company

ENGLEWOOD, Colo., July 9 -- Mail-Well, Inc. announced today that it expects second quarter 2002 earnings before restructuring and other charges to be below forecast results, largely as a result of lower-than-expected revenues. "The downturn in our industries, especially the commercial printing industry, has continued longer than expected. As a result, our earnings and revenues for the second quarter will be below our earlier forecast," said Paul Reilly, Chairman, President and CEO. "Although our strategic initiatives are making us a more streamlined, efficient company, they are not sufficient to fully offset the prolonged slow down in sales." Mail-Well had forecast proforma second quarter EBITDA in the range of $26-$30 million before the effect of restructuring charges on sales of approximately $380 million. The company now expects second quarter proforma EBITDA in the range of $16-$17 million before the effect of restructuring charges on sales in the range of approximately $345 million. The Special Committee of the Board of Directors, established to oversee the disposition of the discontinued operations of the company, has today accepted management's recommendation that the remaining part of the company's Printed Office Products segment, known as PrintXcel, be withdrawn from the market. "PrintXcel has continued to perform as expected. However, the price that the potential buyer was able to offer given the present tight banking market environment was in our opinion totally inadequate," said Reilly. The improvement in the second quarter results by keeping PrintXcel will be approximately $6 million more on EBITDA, on extra sales of $50 million. Mail-Well believes its full-year EBITDA including the full year impact of the operations of PrintXcel will be in a range of $125-$140 million. This is based on the assumption that there will be no improvement in sales levels from where they stand today, except for some seasonality as it relates to the Commercial Print segment in the third quarter.