Cenveo Reports Decrease in Net Sales for Q4

For the year ended December 29, 2012, non-GAAP operating income was $151.9 million, compared to $157.2 million for the prior year. Non-GAAP operating income excludes integration, acquisition and other charges, stock-based compensation provision, and restructuring, impairment and other charges. A reconciliation of operating income to non-GAAP operating income is presented in the attached tables.

Income tax expense was $60.1 million for the year ended December 29, 2012, compared to $9.5 million in the prior year. The increase in income tax expense is due to a non-cash charge of $56.5 million related to a valuation allowance applied to our net U.S. deferred tax assets, which primarily consists of a federal tax loss carryforward in the amount of $88.7 million that does not begin to expire until 2022. Our cash income taxes were $1.4 million for the year ended December 29, 2012, compared to $2.1 million in the prior year, and we do not expect to be a significant cash tax payer for at least the next four years.

For the three months ended December 29, 2012, the company had a loss from continuing operations of $56.0 million, or $0.88 per share, primarily due to the valuation allowance discussed above, compared to $1.8 million, or $0.03 per share for the same period last year. Non-GAAP income from continuing operations was $14.2 million, or $0.17 per share, for the three months ended December 29, 2012, as compared to $18.2 million, or $0.29 per share, for the same period last year. For the year ended December 29, 2012, the company had a loss from continuing operations of $73.9 million, or $1.16 per share, primarily due to the valuation allowance discussed above and a net loss on early extinguishment of debt related to refinancing our 2013 maturity, compared to $1.0 million, or $0.02 per share for the same period last year.

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