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Cenveo Reports Larger Loss on Small Uptick in Sales

March 3, 2011

Robert G. Burton, Sr., Chairman and CEO stated, “Our fourth-quarter results, combined with our recently announced acquisitions of Gilbreth and MeadWestvaco’s Envelope Products Group (EPG), marked a strong finish for Cenveo in 2010. Despite still dealing with some volatile industry conditions, we were able to deliver sequential operational and financial improvements in the fourth quarter, highlighted by delivering Non-GAAP operating income margin of 9.7 percent for the quarter.

“We also saw continued improvement in our label and commercial print markets, and began to see meaningful stabilization in the envelope market, as the changing competitive landscape and direct mail market strength resulted in increased utilization across the industry. In addition, we were able to opportunistically refinance our term loan and revolver during the fourth quarter, allowing us to push our debt maturities out several years.

“2011 will be a year of execution for Cenveo” Burton continued. “In the envelope market, we will look to take advantage of continued strength in the direct mail market, as well as the recent stabilization seen in the envelope industry over the past quarter. At the same time, we will finalize integration of the EPG acquisition, which will be truly transformative for our company. In the print business, we will look to continue to grow our market share and take advantage of stronger demand in the commercial end markets, led by strength in the automotive, financial services, and travel and leisure markets. We will also continue to invest in the high-growth labels area and in our leading custom product platform. We are utilizing our strong free cash flow to pay down debt and deleverage our balance sheet, while still investing for growth in our niche products.

“We have all the tools at our disposal to be successful in 2011. We’ve made tremendous progress in positioning Cenveo for future success over the past few years, and we have many opportunities ahead of us in 2011 and beyond. Based on the current business climate and the significant synergies that the acquisition of EPG will begin to provide, I expect Cenveo’s revenue to be between $2.0 billion and $2.1 billion for 2011. I also expect $230 million to $245 million in Adjusted EBITDA, and approximately $100 million to $120 million free cash flow. We believe that if there is a continued improvement in the economy, we are successful in our ability to recover historical and anticipated raw material price increases and our current integration timeline of EPG improves, then we may have the opportunity to increase our earnings guidance. I look forward to our conference call tomorrow to discuss in more depth our positive 2011 outlook for Cenveo.”

About Cenveo
Cenveo (NYSE: CVO), headquartered in Stamford, CT, is a leader in the management and distribution of print and related products and solutions. The Company provides its customers with low-cost alternatives within its core businesses of labels and forms manufacturing, packaging and publisher offerings, envelope production, and printing; supplying one-stop solutions from design through fulfillment. Cenveo delivers everyday for its customers through a network of production, fulfillment, content management, and distribution facilities across the globe.

Source: Financial release.


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