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Schawk Posts Record-High Net Income

March 9, 2011
DES PLAINES, IL—March 9, 2011—Schawk Inc., a leading provider of brand development and deployment services, reported fourth-quarter and full-year 2010 results. Net income in the fourth quarter of 2010 was $6.3 million vs. $3.7 million in the fourth quarter of 2009. Net income for the full year of 2010 was $32.4 million, compared to $19.5 million for the comparable prior-year period. Net income and EPS for the full year were record highs for the company.

President and CEO David A. Schawk commented, “I am very pleased with our record earnings for 2010. Our performance reflects the continued expansion of our brand development and deployment activities and focus on utilizing our global capacity more efficiently. In addition, we experienced growth during 2010 in our largest client channel, consumer packaged goods, reflecting their increased product innovation activity. The increase in overall revenue coupled with our continued focus on global capacity management contributed to an approximate 66 percent increase in our net income for 2010.”

Schawk added, “Our continued strong cash flow during the year has led to further debt reduction and a solid cash position at year end, thereby positioning us well to invest in our business and future opportunities to the extent they arise. Furthermore, our improved operating results and balance sheet enabled us to double our quarterly dividend to eight cents during the fourth quarter of 2010, which further underscores our confidence in the business and its future growth

“We also expanded our digital marketing and creative capabilities through the acquisitions of Real Branding and Untitled London Limited during 2010. These acquisitions reflect our continued commitment to strengthening our overall portfolio of brand development and deployment services that we offer to our clients as they expand their ways of connecting with consumers. Overall, given some continuing uncertainties within the global economy, I am both excited and proud of what we accomplished during 2010.”

Consolidated Results for the Year Ended Dec. 31, 2010

Consolidated net sales in 2010 were $460.6 million compared to $452.4 million in the same period of 2009, an increase of approximately $8.2 million, or 1.8 percent. Year-over-year sales were positively impacted by changes in foreign currency translation rates of approximately $5.2 million, as the U.S. dollar decreased in value relative to the local currencies of certain of the company’s non-U.S. subsidiaries.

Consumer packaged goods (CPG) accounts sales during the full year of 2010 were $329.0 million, or 71.4 percent of total net sales, compared to $318.7 million in the same period of 2009, an increase of 3.2 percent, reflecting increased product and brand activity by the company’s clients. Advertising and retail accounts sales in 2010 were $88.4 million, or 19.2 percent of total sales, a decrease of 1.5 percent, from $89.8 million during the full year of 2009, primarily driven by the loss of a non-core retail client. Entertainment accounts sales for the full year of 2010 of $29.1 million, or 6.3 percent of total sales, decreased 11.3 percent, from $32.8 million in the same period of 2009, driven by continued declines in promotional activity.

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