Schawk Signs Gravure Cylinder Supply Agreement, Posts Sales Decline
Acquisition integration and restructuring expenses increased from $0.2 million in the first quarter of 2010 to $0.4 million in the first quarter of 2011. The charges in the 2011 first quarter arose from the Company's continued focus on consolidating, reducing and re-aligning the Company's work force and operations and are for employee terminations and other associated costs. These actions are expected to result in annualized savings of approximately $1.3 million, with approximately $1.0 million to be realized during 2011.
Schawk reported operating income of $5.5 million in the 2011 first quarter compared to $6.5 million in the first quarter of 2010. The decrease in operating income compared to the prior-year period was primarily the result of the decrease in gross margin driven by lower revenue coupled with increased business and systems integration expenses, mitigated somewhat by the Company's previously-discussed cost reduction efforts, lower foreign exchange losses and reduced expenses related to the impairment of long-lived assets.
Net income in the first quarter of 2011 was $2.8 million compared to $2.5 million in the first quarter of 2010. Excluding the after-tax effects of certain expenses detailed within the non-GAAP tables at the end of this press release, first-quarter 2011 Adjusted net income was $4.2 million compared to $4.5 million on a comparable basis for the prior-year period.
Adjusted EBITDA and Management Adjusted EBITDA Performance
Adjusted EBITDA for the first quarter of 2011 was $10.4 million compared to $12.2 million for the first quarter of 2010. Management adjusted EBITDA for the first quarter of 2011 was $12.5 million compared to $14.3 million for the first quarter of 2010. Please refer to the "Reconciliation of Non-GAAP Adjusted EBITDA and Management Adjusted EBITDA" table attached at the end of this press release for a reconciliation of these measures.
Schawk Inc. is a leading provider of brand development and deployment services, enabling companies of all sizes to connect their brands with consumers. With a global footprint of operations in 18 countries, Schawk helps companies create compelling and consistent brand experiences by providing integrated strategic, creative and executional services across brand touchpoints. Founded in 1953, Schawk is trusted by many of the world's leading organizations to help them achieve global brand consistency. For more information about Schawk, visit www.schawk.com.