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Cenveo’s Sales Increase, Robert G. Burton, Jr. Appointed President

August 10, 2011
STAMFORD, CT—August 10, 2011—Cenveo Inc. announced results for the three and six months ended July 2, 2011. For the three months ended July 2, 2011, net sales increased approximately 11.2 percent to $495.2 million, compared to $445.3 million for the three months ended July 3, 2010, primarily due to the acquisition of MeadWestvaco Corp.’s Envelope Product Group (EPG), which closed in February, and growth from the company’s direct envelope group, which benefited from strong direct mail volumes.

For the six months ended July 2, 2011, net sales increased approximately 11.0 percent to $998.3 million, compared to $899.2 million for the six months ended July 3, 2010. This increase was driven by the acquisition of EPG and organic growth in the company’s direct envelope, custom label, content, commercial print and specialty packaging product lines.

The company generated operating income of $29.4 million for the quarter, compared to $19.4 million for the three months ended July 3, 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 7.5 percent to $40.6 million for the three months ended July 2, 2011, compared to $37.8 million for the three months ended July 3, 2010.

For the six months ended July 2, 2011, the company generated operating income of $51.5 million, compared to $31.6 million for the same period of the previous year. 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 11.2 percent to $75.1 million, compared to $67.6 million for the six months ended July 3, 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 July 2, 2011, Cenveo recorded net income of $0.4 million, compared to a net loss of $8.3 million for the three months ended July 3, 2010. The improvement in net income is primarily due to lower restructuring and impairment charges and lower interest expense in the second quarter of 2011, compared to the second quarter of 2010, partially offset by a lower income tax benefit in the second quarter of 2011, compared to the second quarter of 2010.

For the six months ended July 2, 2011, the company recorded net income of $3.2 million, compared to a net loss of $19.4 million for the six months ended July 3, 2010. The improvement in net income is primarily due to a preliminary bargain purchase gain of $11.1 million related to the EPG acquisition, lower restructuring and impairment charges and lower interest expense in the first six months of 2011, compared to the first six months of 2010, partially offset by a lower income tax benefit in the first six months of 2011, compared to the first six months of 2010 and a loss on early extinguishment of debt of $2.6 million in the first six months of 2010.
 

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