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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.
 

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