Schawk Reports Net Loss Due to Challenging Americas Market
• Consumer packaged goods (CPG) accounts sales in the third quarter of 2012 were $88.2 million, or 79.5 percent of total net sales, compared to $86.2 million in the same period of 2011, an improvement of 2.3 percent, primarily due to higher product and brand development activity.
• Retail and advertising accounts sales in the third quarter of 2012 were $17.3 million, or 15.6 percent of total sales, a decrease of 9.8 percent, from $19.2 million during the 2011 third quarter, primarily driven by continued reductions in client promotional activity.
• Entertainment accounts sales for the third quarter of 2012 of $5.4 million, or 4.9 percent of total sales, decreased 22.5 percent, from $7.0 million in the 2011 period, driven by continued declines in print-related promotional activity.
Gross profit was $39.2 million in the third quarter of 2012, a decline of $2.7 million from the third quarter of 2011. Gross profit as a percentage of sales decreased to 35.4 percent from 37.4 percent in the prior-year period. Lower gross profit percent was driven by the sales decline and previously mentioned investments in expanding the company’s brand development and deployment capabilities.
Selling, general and administrative (SG&A) expenses increased approximately $1.3 million to $32.5 million during the third quarter of 2012 from $31.1 million in the 2011 period. Higher SG&A expenses in the third quarter of 2012 compared to the third quarter of 2011 is principally due to increases in the company’s previously mentioned investments in expanding brand development and deployment capabilities.
For the third quarter of 2012, Schawk reported business and systems integration expenses of $3.0 million, compared to $2.0 million in the prior-year period, relating to the company’s ongoing information technology and business process improvement initiative.
Acquisition integration and restructuring expenses increased from $0.5 million in the third quarter of 2011 to $1.2 million in the same quarter of 2012. These charges relate to employee terminations and other associated costs from the company’s continued focus on consolidating, reducing and re-aligning its work force and operations. The actions taken during the third quarter of 2012 are expected to result in annualized savings of approximately $5.2 million, with approximately $0.6 million expected to be realized during 2012.