Schawk Reports Losses for Q4, Full Year 2012

Business and systems integration expenses were $12.1 million in 2012, compared to $8.5 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 $1.5 million in 2011 to $5.4 million in 2012, related to employee terminations and other associated costs which arose from the company's continued focus on consolidating, reducing and re-aligning its work force and operations. The actions taken during 2012 are expected to result in annualized savings of approximately $16.6 million, with approximately $5.5 million realized during 2012.

Long-lived asset impairment expenses in 2012 increased $4.3 million compared to the prior year, principally related to the write down of customer relationship intangible assets at certain locations within the Americas and European segments, coupled with expenses associated with company-owned real estate that was written down to its estimated market value.

The company recorded a $1.8 million loss on foreign exchange exposures in the full year of 2012, compared to a loss of $1.1 million in 2011. Net foreign exchange gains or losses relate primarily to currency exposure from intercompany debt obligations of the company's non-U.S. subsidiaries, net of the impact of gains or losses arising from foreign currency hedges entered into to mitigate the company's foreign exchange exposures.

The company reported an operating loss of $30.7 million in 2012 compared to income of $27.3 million in 2011. The decline year over year was driven by lower gross profit coupled with increased expenses principally related to the multiemployer pension withdrawal, long-lived asset impairment, acquisition integration and restructuring and business and systems integration expenses. Non-GAAP adjusted operating income was $24.2 million for 2012 compared to $36.9 million in the prior-year period.

For the full year of 2012, the company reported a tax benefit of $10.8 million compared to tax expense of $1.5 million during the same period in 2011, due primarily to the company's loss for the full year in 2012.