Business News

Cenveo Announces First Quarter 2008 Results

Thursday 08. May 2008 - 1st Quarter Revenue growth of 29% Cash Flow from Operations of $54.4 million during the quarter 1st Quarter EPS of $(0.06) per share 1st Quarter Non-GAAP EPS of $0.15 per diluted share 1st Quarter Adjusted EBITDA of $54.1 million, up 18% from prior year Reaffirms full year adjusted EBITDA and Free Cash Flow forecast

Cenveo, Inc. (NYSE:CVO) today announced results for the three months ended March 29, 2008.

For the first quarter, sales increased 29% to $534.3 million in 2008 from $414.7 million in 2007, primarily due to contributions from our 2007 acquisitions. The Company reported a net loss of $3.4 million, or $(0.06) per share, as compared to net income of $18.1 million, or $0.34 per diluted share, in the first quarter of 2007. First quarter 2008 results include restructuring, impairment, and other charges of $9.7 million, of which $6.7 million relates to the internal review initiated by the Company’s audit committee at the end of 2007. This compares to $2.6 million of restructuring and impairment charges in 2007. The first quarter 2008 results include a loss from discontinued operations, net of taxes, of $0.7 million, as compared to income from discontinued operations, net of taxes, of $16.3 million in 2007, related to the Company’s sale of its remaining interest in the Supremex Income fund.

Non-GAAP net income from continuing operations totaled $8.1 million or $0.15 per diluted share in the first quarter of 2008. Non-GAAP net income from continuing operations excludes restructuring, impairment and other charges, integration, acquisition and other charges, stock-based compensation expense and loss on early extinguishment of debt. A reconciliation of net income from continuing operations to non-GAAP net income from continuing operations for these adjustments is presented in the attached tables.

Adjusted EBITDA in the first quarter of 2008 was $54.1 million as compared to $45.8 million in the same period last year, an increase of 18%. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding restructuring, impairment and other charges, integration, acquisition and other charges, loss on early extinguishment of debt, stock-based compensation expense, 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 income to Adjusted EBITDA is provided in the attached tables.

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

“We are pleased with our strong cash flow generation and solid operational performance during the first quarter despite an extremely challenging economic environment. We were able to generate over $54 million of cash flows from continuing operations during the quarter, representing an 83% increase from last year. I am also pleased that we were able to decrease our debt by approximately $49 million during the quarter, further solidifying our balance sheet. We continued to focus on improving our cost structure and driving incremental revenues across our platform. During the quarter we also implemented a $25 million cost containment plan focusing on headcount reduction, increasing productivity and improving efficiencies to further drive incremental margins.

2008 Outlook:

We reiterate our financial guidance for 2008, projecting adjusted EBITDA of $300 million and free cash flow of $130 million. We also are providing the following additional information:

— Capital Expenditures: Capital expenditures during the first quarter
were $9.1 million, and are expected to be in the $35 to $40 million
range for the year.
— Cash Taxes: The Company paid cash taxes of $0.7 million during the
quarter. The company currently has approximately $220 million of net
operating loss carryforwards.
— Cash Interest: The Company incurred $19.2 million of cash interest
expense during the quarter. The difference between cash interest
expense versus reported interest expense reflects the timing of
interest payments on our senior subordinated notes. The company’s
weighted average cost of debt was 7.3% during the quarter


Mr. Burton concluded:


“We benefited from our diverse product offerings, our attention to customer service and our broad operational platform during the quarter despite a very challenging economic environment with softness from our financial services customers compounded by seasonal slowdowns in certain product areas. We saw strong performances from our Cadmus publisher services group, custom labels, forms and envelopes business and global packaging operations. We also continue to focus on lowering costs and winning a larger share of the market place. We expect to continue generating strong cash flow and use these funds to pay down debt, and grow our business organically and through thoughtful strategic acquisition. We encountered many challenges during the quarter and we worked relentlessly to overcome them. As the senior manager of Cenveo, I can assure you that we are doing everything in our power to ensure that we are successful in 2008, and that our customers, employees and shareholders reap the rewards with us as their partner.”