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Cenveo Posts Gains Primarily Due to Acquisition

November 10, 2011
STAMFORD, CT—Nov. 9, 2011—Cenveo Inc.announced results for the three and nine months ended Oct. 1, 2011.

Third-Quarter Highlights:
  • Net Sales of $500.6 million, up 10 percent from 2010.
  • Net Income of $2.8 million.
  • Non-GAAP Operating Income of $44.3 million, up 12 percent from 2010.
  • Adjusted EBITDA of $61.6 million, up 8.9 percent from 2010.

Cenveo 1011 results
[+] click to enlarge
For the three months, net sales increased approximately 10 percent to $500.6 million, compared to $455.1 million for the three months ended Oct. 2, 2010, primarily due to the acquisition of MeadWestvaco Corp.’s Envelope Product Group, which closed in February, and growth from the company’s direct envelope group, which benefited from strong direct mail volumes.

For the nine months ended Oct. 1, 2011, net sales increased approximately 10.7 percent to $1.50 billion, compared to $1.35 billion for the nine months ended Oct. 2, 2010. This increase was driven by the acquisition of EPG and organic growth in the company’s direct envelope, custom label, content management, and specialty packaging product lines.

The company generated operating income of $35.7 million for the three months ended Oct. 1, 2011, compared to an operating loss of $156.1 million for the three months ended Oct. 2, 2010. This increase was a result of lower restructuring and impairment charges, a lower operating cost structure than prior year and contributions from the EPG acquisition.

Non-GAAP operating income increased 12 percent to $44.3 million, compared to $39.5 million for the three months ended Oct. 2, 2010. For the nine months ended Oct. 1, 2011, the company generated operating income of $87.2 million, compared to an operating loss of $124.6 million for the nine months ended Oct. 2, 2010. This increase was a result of lower restructuring and impairment charges, a lower operating cost structure than prior year and contributions from the EPG acquisition.

For the nine months ended Oct. 1, 2011, non-GAAP operating income increased 11.5 percent to $119.4 million, compared to $107.1 million for the nine months ended Oct. 2, 2010. Non-GAAP operating income excludes integration, acquisition and other charges, stock-based compensation provision, restructuring and impairment charges and divested operations or assets held for sale. A reconciliation of operating income to non-GAAP operating income is presented in the attached tables.

For the three months ended Oct. 1, 2011, the company recorded net income of $2.8 million, compared to a net loss of $157.2 million for the three months ended Oct. 2, 2010. The improvement in net income was primarily due to lower restructuring and impairment charges and lower interest expense in the third quarter of 2011, compared to the third quarter of 2010, partially offset by higher income tax expense in the third quarter of 2011, compared to the third quarter of 2010.
 

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