Business News

Cenveo Reports Unaudited Fourth Quarter and Full Year 2007 Results

Friday 14. March 2008 - 4th Quarter EPS of $0.33 per diluted share 4th Quarter Non-GAAP EPS of $0.53 per diluted share 2007 GAAP EPS of $0.74 per diluted share 2007 Non-GAAP EPS of $1.35 per diluted share 4th Quarter Adjusted EBITDA of $85.2 million 2007 Adjusted EBITDA of $256.2 million

Cenveo, Inc. (NYSE:CVO) today announced unaudited financial results for the quarter and full year ended December 31, 2007 that are consistent with the Company’s previously issued full year guidance.

The financial information reported herein is preliminary and remains subject to the completion of the Company’s year-end audit. The Company has substantially completed its internal review conducted under the direction of the Company’s audit committee in consultation with external counsel as a result of senior management’s learning of unsupported accounting entries by a former controller for two plants in the Company’s envelope division. The findings of the review determined that approximately $4 million of net income previously reported by the Company is unsupportable. Following the completion of the internal review, the Company is in the process of completing its Form 10-K for fiscal 2007 (the “Form 10-K”), facilitating the completion of the annual audit. The Company is also finalizing the impact on its financial statements issued in 2006 and 2007. The Company currently anticipates that the Form 10-K will be filed within the next 2 weeks, although there can be no assurance as to the timing of the filing or that any of the reported results will not differ from those contained in this release.

For the fourth quarter of 2007, the Company reported net income of $18.3 million, or $0.33 per diluted share. The fourth quarter 2007 results include income from discontinued operations of $1.7 million and restructuring and impairment charges of $8.0 million. These restructuring and impairment charges in the quarter primarily relate to the closure of certain businesses that were contemplated as a part of our recent acquisition activity. Net sales for the quarter were $584.4 million.

Non-GAAP income from continuing operations totaled $28.8 million, or $0.53 per diluted share, in the fourth quarter of 2007. Non-GAAP income from continuing operations excludes integration and acquisition charges, restructuring and impairment charges, (gain) loss on sale of non-strategic businesses, and loss on early extinguishment of debt. A reconciliation of income from continuing operations to non-GAAP income from continuing operations and the related per share data is presented in the attached tables.

Operating income totaled $53.6 million in the fourth quarter of 2007. Non-GAAP operating income in the fourth quarter of 2007 was $64.1 million, which produced an 11.0% margin, reflecting the continued benefits of our cost savings, restructuring and integration plans and productivity efforts. Non-GAAP operating income excludes integration and acquisition charges and restructuring and impairment charges. A reconciliation of operating income to non-GAAP operating income is presented in the attached tables.

Adjusted EBITDA in the fourth quarter of 2007 was $85.2 million. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding integration and acquisition charges, restructuring and impairment charges, (gain) loss on sale of non-strategic businesses, divested operations EBITDA, loss on early extinguishment of debt, stock-based compensation provision, and income (loss) from discontinued operations. An explanation of the Company’s use of Adjusted EBITDA is detailed below, and a reconciliation of net income to Adjusted EBITDA is presented in the attached tables.

For the full year of 2007, the Company reported net income of $40.3 million, or $0.74 per diluted share. The results for 2007 included income from discontinued operations of $16.8 million, primarily relating to our sale of Supremex. The 2007 results also included restructuring and impairment charges of $40.1 million. Net sales for 2007 were $2.05 billion.

Non-GAAP income from continuing operations for 2007 totaled $73.9 million, or $1.35 per diluted share. Non-GAAP income from continuing operations excludes integration costs, restructuring and impairment charges, (gain) loss on sale of non-strategic businesses and loss on early extinguishment of debt. A reconciliation of income (loss) from continuing operations to non-GAAP income from continuing operations and the related per share data is presented in the attached tables.

Operating income was $137.6 million for 2007. Non-GAAP operating income in 2007 was $183.5 million, which produced an 9.0% margin, reflecting the continued benefits of our cost savings, restructuring and integration plans. Non-GAAP operating income excludes integration costs and restructuring and impairment and acquisition charges. A reconciliation of operating income to non-GAAP operating income is presented in the attached tables.

Adjusted EBITDA for 2007 was $256.2 million. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding integration and acquisition charges, restructuring and impairment charges, (gain) loss on sale of non-strategic businesses, divested operations EBITDA, loss on early extinguishment of debt, stock-based compensation provision, and income (loss) from discontinued operations. An explanation of the Company’s use of Adjusted EBITDA is detailed below and a reconciliation of net income (loss) to Adjusted EBITDA is presented in the attached tables.

Robert G. Burton, Chairman and Chief Executive Officer stated:

“Cenveo had an outstanding year in 2007 and I am very pleased with our performance. During 2007, we were able to transform our company by completing four strategic acquisitions and by driving improved operating performance across our business units. We continued to focus on improving our cost structure and driving incremental revenues across our platform. These efforts combined with an increased focus on productivity and efficiency efforts allowed us to increase our non-GAAP operating margin to 9% for the year and deliver over $256 million in adjusted EBITDA. I am especially pleased with our strong generation of cash from continuing operations of over $86 million during the year, representing an substantial year-over-year improvement compared to 2006. I am also pleased that we were able to decrease net debt by $25 million during the fourth quarter, solidifying our balance sheet which has no significant maturities until 2012. I believe that these results demonstrate the Company’s strategy is working by delivering strong financial performance and strong cash flow while providing Cenveo the ability to invest in growth opportunities that will increase shareholder value.”

Mr. Burton continued:

“We made great progress in 2007 with a strong performance in a challenging environment, which underscores the strength of our operations and the market niches we serve. As we focus on 2008 and beyond, we will seek once again to improve our financial performance. We will aggressively look to improve our cost structure and increase our productivity through efficiency enhancements. We will continue to focus on delivering strong free cash flow and use those funds to service our debt and invest in the future growth of our business through capital expenditures and strategic acquisitions.”

Mr. Burton concluded:

“We made some bold promises for growth in 2007, and while we encountered some tough challenges during the year, we still came out ahead and delivered on our commitments. We made several key acquisitions, refocused on our core segments, and broadened our global reach. In 2008, we look forward to delivering even greater value to our customers, employees, and shareholders.”