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Cenveo Records Sales Decline, Net Loss in Second Quarter Results

August 5, 2009
STAMFORD, CT—Aug. 5, 2009—Cenveo, Inc. (NYSE: CVO) today announced results for the three and six months ended June 27, 2009. For the three months ended June 27, 2009, net sales were $397.6 million, as compared to $524.5 million for the same period in the previous year. For the three months ended June 27, 2009, the Company recorded a net loss of $18.3 million, or ($0.34) per share, compared to net income of $2.7 million, or $0.05 per share, in the three months ended June 28, 2008.

On a Non-GAAP basis, income from continuing operations was $8.1 million, or $0.15 per diluted share for the three months ended June 27, 2009. Non-GAAP income from continuing operations excludes integration, acquisition and other charges, stock-based compensation provision, restructuring, impairment and other charges, (gain) loss on early extinguishment of debt and includes an adjustment to income taxes to reflect an estimated cash tax rate.

Adjusted EBITDA for the three months ended June 27, 2009 was $53.1 million. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, integration, acquisition and other charges, stock-based compensation provision, restructuring, impairment and other charges, (gain) loss on early extinguishment of debt, and loss from discontinued operations, net of taxes. An explanation of the Company's use of Non-GAAP measures and Adjusted EBITDA is detailed below.

For the six months ended June 27, 2009, net sales were $809.7 million, as compared to $1.1 billion for the same period in the previous year. For the six months ended June 27, 2009, the Company recorded a net loss of $22.6 million, or ($0.41) per share, compared to a net loss of $0.7 million, or ($0.01) per share, in the six months ended June 28, 2008. On a Non-GAAP basis, income from continuing operations was $0.6 million or $0.01 per diluted share for the first six months of 2009. Adjusted EBITDA in the first six months of 2009 was $84.6 million. The six month periods ending on June 27, 2009 and June 28, 2008 consist of 25 and 26 weeks, respectively, which affects the comparability of the periods.

In the first six months of 2009, the Company generated cash flows from operations of $22.0 million and also made open market repurchases of an aggregate $52.2 million principal amount of its outstanding 7 7/8% senior subordinated notes due 2013, its 8 3/8% senior subordinated notes due 2014, and its 10 1/2% senior notes due 2016, (collectively the "Notes") for approximately $30.6 million plus accrued interest. In connection with the repurchases of the Notes, the Company recognized gains of approximately $4.3 million and $21.9 million in the three and six month periods ending June 27, 2009, representing the difference between the net carrying amount and the total repurchase price of the Notes. The Company also recognized a $5.0 million loss on extinguishment of debt in connection with its Amendment of its debt facilities in the second quarter of 2009. Additionally the Company made the annual mandatory prepayment sweep of excess cash flow repaying $17.5 million to lenders, thereby further reducing the balance of its term loans outstanding.
 

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