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Schawk Sees Growth Overseas, but Reduced Activity in the Americas

March 6, 2012
DES PLAINES, IL—March 6, 2012—Schawk Inc. reported its net income in the fourth quarter of 2011 was $5.8 million vs. $6.3 million in the fourth quarter of 2010. Its net income for the full year of 2011 was $20.6 million, compared to $32.4 million for the comparable prior-year period.

Business and system integration expense related to the company’s ongoing information technology and business process improvement initiative increased $2.2 million and $7.2 million for the fourth quarter and full year, respectively, compared to the prior-year comparable periods, which contributed in part to the overall decline in net income.

President and CEO David A. Schawk commented, “We continued to see client expansion in global markets as evidenced by our growth in Europe and Asia during 2011, thereby reflecting our clients’ strategies to invest more in emerging markets relative to the more mature markets. However, we also saw reduced activity in the Americas, particularly in the food and beverage categories and with our advertising and retail accounts clients as they continued to reduce their promotional activities. Overall, we believe our global scope and breadth of capabilities positions us well to capitalize on opportunities in all markets as the economy improves.”

Schawk continued, “We made significant investments during 2011 to further align our product and service offerings with client needs, while improving the operational and financial performance of the company for the long term. First, our acquisition of Brandimage expanded and complemented our global brand development and deployment capabilities. Second, our continuing information technology and business process improvement initiative will provide greater visibility into ongoing client activities, allowing further integration of our operations over time. Finally, with our new revolving credit and private shelf facility, we have greater flexibility to invest in the business while reducing the company’s overall cost of debt.”

Consolidated Results for the Year Ended Dec. 31, 2011

Consolidated net sales in 2011 were $455.3 million, compared to $460.6 million in 2010, a decline of approximately $5.3 million or 1.2 percent.

Consumer packaged goods (CPG) accounts sales during 2011 were $347.7 million, or 76.4 percent of total net sales, compared to $343.1 million in the same period of 2010, an increase of 1.3 percent, primarily due to the positive impact of foreign currency translation rates.

Advertising and retail accounts sales in 2011 totaled $79.7 million, or 17.5 percent of overall sales, a decrease of 9.8 percent, from $88.4 million during 2010, primarily driven by reduced client promotional activity coupled with the loss of a non-core retail client during the third quarter of 2010.

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