Open Enrollment | Subscribe to Printing Impressions HERE
Connect
Follow us on
Advertisement
 

Cenveo’s Net Sales Fall, but Income Figures Show Mixed Results

August 8, 2012
STAMFORD, CT—August 8, 2012—Cenveo Inc. announced its results for the three and six months ended June 30, 2012. The company generated net sales of $438.9 million for the second quarter of 2012, compared to $469.9 million for the same quarter of 2011. The decrease in net sales was primarily due to lower sales in its print and envelope product lines as a result of lower direct mail volumes from our financial services customers, the closure and consolidation of a print plant and our decision to exit certain low margin businesses.

Cenveo generated net sales of $894.5 million for the first six months of 2012, compared to $946.9 million for the first six months of 2011. The decrease in net sales was primarily due to lower sales in our print and envelope product lines as a result of lower direct mail volumes from our financial services customers, customer product launches in the first six months of 2011 that did not repeat in the first six months of 2012, the closure and consolidation of a print plant and our decision to exit certain low margin businesses.

The company expects the direct mail market to strengthen in the second half of 2012. Net sales from its label and packaging business lines remained relatively flat for the second quarter of 2012 and for the six months of 2012 despite the decision to exit low margin businesses within those platforms, which has been offset in part by our e-commerce initiatives and new account wins in the packaging business.

Operating income was $29.0 million for the second quarter of 2012, compared to $26.3 million for the second quarter of 2011. The increase in operating income was primarily due to a lower cost structure as a result of the integration of the Envelope Product Group (EPG) acquisition and lower compensation related expenses, offset by increased pension expense and lower byproduct recoveries. Non-GAAP operating income was $36.3 million for the second quarter of 2012, compared to $37.3 million for the second quarter of 2011.

Operating income was $43.2 million for the first six months of 2012, compared to $45.5 million for the first six months of 2011. The decrease in operating income was primarily due to increased restructuring, impairment and other charges as a result of the closure and consolidation of a print plant and other cost savings actions executed in the first quarter of 2012, increased pension expense and lower recoveries, offset in part by our lower cost structure due to the integration of our EPG acquisition and lower compensation related expenses.

Non-GAAP operating income was $67.9 million for the first six months of 2012, compared to $68.8 million for the first six months of 2011. Non-GAAP operating income excludes integration, acquisition and other charges, stock-based compensation provision, restructuring, impairment and other charges.

For the second quarter of 2012, Cenveo had income from continuing operations of less than $0.1 million, compared to a loss from continuing operations of $1.6 million. On a Non-GAAP basis, income from continuing operations was $8.4 million for the second quarter of 2012, as compared to $7.5 million for the second quarter of 2011.

For the first six months of 2012, the company had a loss from continuing operations of $22.5 million compared to loss from continuing operations of $0.5 million for the first six months of 2011.

Adjusted EBITDA for the second quarter of 2012 was $53.1 million, compared to Adjusted EBITDA for the second quarter of 2011 of $53.5 million. Adjusted EBITDA for the first six months of 2012 was $100.1 million, compared to Adjusted EBITDA for the first six months of 2011 of $100.9 million.

Robert G. Burton, Sr., chairman and CEO stated, “Our second quarter results were in line with our expectations as we continued to execute well despite a challenging economic back drop. We were able to generate over $33 million in cash flow from operating activities of continuing operations, pay down debt and materially address our notes maturing in December 2013 by retiring $50.0 million of these notes.

“I feel highly confident in our plan to quickly address the remaining $98.5 million by continuing to generate strong cash flow and continuing to drive working capital improvements. Also, the passage of MAP-21 with its pension plan interest rate stabilization is very positive for Cenveo.  We currently estimate this legislation will reduce our planned pension contributions in excess of $10.5 million through 2013 and provides us additional cash to reduce our notes maturing in 2013, repay other outstanding debt or invest in our growing businesses,” Burton added.

“Operationally, our label and packaging products continue to deliver solid performances in 2012, with strong e-commerce revenue and production expansion offsetting our planned decision to walk away from unprofitable business. Despite being challenged by some cyclical and customer specific issues, our envelope operations delivered expected revenue and operational results met our expectations,” the chief exec continue.

“As we stated earlier this year, we expect the direct mail market to firm in the second half of 2012 as our customers return to a more normalized ordering pattern. Our print products were led by improving performance out of our print group. Our publisher services operations continue to be affected by macro trends and in changes in the timing of customer purchases offset by continued improvement in our content management business.“

Burton concluded, “As we enter the back half of the year, 2012 is generally progressing in line with our expectations. Despite a challenging macro environment, we have been able to drive cash flow, pay down debt and increase our operating margins. We are intensely focused at addressing our capital structure, particularly our 7.875 percent notes that mature at the end 2013, and fully expect to address the remaining $98.5 million by early 2013.

“Lastly, based on our current outlook, recent sales momentum and our focus on our cost structure, we remain on track to deliver the full year targets that are consistent with our previous guidance.”

Management Appointments:
Cenveo also announced the following promotions: Scott J. Goodwin has been promoted to the position of chief financial officer. Goodwin previously held the position of chief accounting officer. He replaces Mark S. Hiltwein who has been promoted to president of the Envelope Group.

About Cenveo
Cenveo (NYSE: CVO), headquartered in Stamford, CT, is a  leading global provider of print and related resources, offering world-class solutions in the areas of custom labels, specialty packaging, envelopes, commercial print, content management and publisher solutions. The company provides a one-stop offering through services ranging from design and content management to fulfillment and distribution. With approximately  7,900 employees worldwide, we pride ourselves on delivering quality solutions and service every day for our more than 100,000 customers.

Source: Cenveo.
 

Companies Mentioned:

COMMENTS

Click here to leave a comment...
Comment *
Most Recent Comments: