Cenveo Reaps 16.5 Percent Net Sales Increase

STAMFORD, CT—Cenveo Inc. announced results for the three months and full year ended Dec. 28, 2013. The company generated net sales of $509.9 million for the three months ended Dec. 28, compared to $437.7 million for the same period the previous year, an increase of 16.5 percent. The company generated net sales of $1.8 billion for the year ended Dec. 28, compared to $1.7 billion for the prior year.

The increase in net sales was primarily due to the acquisition of certain assets of National Envelope in the third quarter, as National Envelope was not included in its 2012 results, as well as organic growth within its envelope and label and packaging segments, partially offset by a decline in sales in its print operations as a result of lower demand and pricing pressures.

Operating loss was $15.7 million for the three months ended December 28, 2013, compared to operating income of $31.7 million for the same period the prior year. The decrease in operating income was primarily due to a $33.4 million impairment charge related to the retirement of certain trade names, lower sales from its print operations and higher input costs within several of its segments. Non-GAAP operating income was $31.6 million for the three months ended December 28, 2013, compared to $39.3 million for the same period in 2012. For the year ended December 28, 2013, operating income was $29.4 million, compared to $101.2 million for the prior year.

The decrease in operating income was primarily due to a $33.4 million impairment charge related to the retirement of certain trade names, lower sales from its print operations and acquisition-related costs due to the acquisition of certain assets of National Envelope. These decreases were offset in part by higher gross margins in its envelope operations from volume increases. For the year ended December 28, 2013, non-GAAP operating income was $101.1 million, compared to $140.8 million for the prior year. Non-GAAP operating income excludes integration, acquisition and other charges, stock-based compensation provision, restructuring and other charges and impairment of intangible assets.

For the three months ended December 28, 2013, the company had a loss from continuing operations of $59.5 million, or $0.90 per share, compared to a loss of $57.4 million, or $0.90 per share for the same period last year. Non-GAAP income from continuing operations was $9.3 million, or $0.11 per share, for the three months ended December 28, 2013, as compared to $11.8 million, or $0.14 per share, for the same period last year. For the year ended December 28, 2013, the company had a loss from continuing operations of $85.5 million, or $1.32 per share, compared to $80.5 million, or $1.27 per share for the same period last year.

"We are very pleased with our fourth quarter performance and the continuation of the positive operational trends we experienced for the past couple of quarters," stated Robert G. Burton, Sr., chairman and CEO. "In the fourth quarter, we delivered 3.5 percent organic revenue growth from both our envelope and label and packaging segments. Direct mail continued to perform well as we saw strong growth in credit card mailings during the quarter. Recent leadership changes and selected capital investments are showing results in our print and label and packaging operations.

"The integration of National Envelope continues to progress well and remains on track with our expectations, as many cost actions have been implemented to date and we are relatively complete with the anticipated working capital build associated with the transaction."