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Burton Not Soon Leaving Cenveo; Eyes Deal

April 2008
STAMFORD, CT—Bob Burton drove home a simple message during a February conference call—he’s not going anywhere, but Cenveo’s stock price will soon be rising.

Burton, chairman and CEO of printing’s fourth-largest player in the U.S., provided some updates on: The status of his company’s annual report, a change in his executive team, a major deal in the works and his increased commitment to the company. But the recurring theme was unmistakable; Burton’s prime goals are to see the company attain $3 billion in sales, $300 million of EBITDA and a stock price of $30 per share.

Cenveo appears heading in the right direction to help Burton realize those goals, even with a few bumps in the road. The company’s 2007 financial results reporting was delayed as it investigated the unsupported accounting entries made by a former controller for two plants within Cenveo’s envelope division. It was determined that roughly $4 million net income previously reported is unsupportable and, at press time, the company was in the process of completing its form 10-K for fiscal 2007.

Burton also announced the resignation of president Tom Oliva, who stepped down at the end of February due to health reasons. The Cenveo executive structure now sees four group presidents—Dean Cherry (envelope), Harry Vinson (Cadmus), Sean Sullivan (commercial and packaging) and Joe Cortes (forms and labels)—reporting to Burton. As for Burton himself, he announced he would remain at the Cenveo helm until at least 2012.

Burton did tip his hand regarding future acquisitions. He said the company has identified a couple of potential deals with companies ranging in the $500 million to $600 million sales bracket. These targets have product and service capabilities that mirror Cenveo’s, thus Burton would foresee significant “synergy savings” with such a deal, one that would go a long way toward helping the firm reach his stated goals.

“We’re in the process of doing additional diligence and, like a lot of people in America, we’re waiting for the financial markets to open up and start supporting businesses that want to grow,” Burton says.“We feel very good about the identification of the acquisition, the opportunity, and the synergy savings are far reaching, or we wouldn’t be bringing it up in a time with what’s going on with the economy.”

Burton underscored his personal interest in the future of Cenveo by announcing that he was increasing his level of ownership in the publicly traded company to 15 percent. He currently purchases the maximum of $10,000 in stock every month and spent $2.3 million on Cenveo stock for the previous quarter.
 

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