Cenveo Releases Q4, Full Year 2013 Results, Reports 16.5% Net Sales Increase

STAMFORD, CT—February 26, 2014—Cenveo Inc. announced results for the three months and full year ended December 28, 2013. The company generated net sales of $509.9 million for the three months ended December 28, 2013, compared to $437.7 million for the same period last year, an increase of 16.5 percent. The company generated net sales of $1.8 billion for the year ended December 28, 2013, 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 our 2012 results, as well as organic growth within our envelope and label and packaging segments, partially offset by a decline in sales in our 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 last 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 our print operations, and higher input costs within several of our 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 last year. 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 our 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 our 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. For the year ended December 28, 2013, non-GAAP loss from continuing operations was $6.2 million, or $0.10 per share, as compared to non-GAAP income of $29.1 million, or $0.37 per share, for the same period last year. Non-GAAP (loss) income from continuing operations excludes integration, acquisition and other related charges, stock-based compensation provision, restructuring and other charges, impairment of intangible assets, gain on bargain purchase, loss on early extinguishment of debt, net, an adjustment to income taxes to reflect an estimated cash tax rate, and an adjustment for interest expense related to the 7 percent convertible notes ("7 percent Notes"), net of taxes.

Adjusted EBITDA for the three months ended December 28, 2013 was $52.1 million, compared to Adjusted EBITDA of $55.3 million for the same period last year. Adjusted EBITDA for the year ended December 28, 2013, was $167.2 million, compared to $202.7 million, for the same period last year. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, integration, acquisition and other related charges, stock-based compensation provision, restructuring and other charges, impairment of intangible assets, gain on bargain purchase, loss (gain) on early extinguishment of debt, net and income from discontinued operations, net of taxes.

"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."

Burton concluded:
 "I am very excited about our prospects for 2014 given the momentum in our business and the strength of our current team. We spent the majority of last year re-focusing and building our operations for the future and in 2014 we expect to begin to see the positive results of our efforts. Between the continued investment in capital and technology across our platform, the acquisition of certain assets of National Envelope and related investment of working capital, we have a strong foundation for success in 2014 and beyond."

About Cenveo
Cenveo (NYSE: CVO), headquartered in Stamford, CT, is a leading global provider of print and related resources, offering world-class solutions in the areas of custom boxes, custom labels, shrink sleeve labels, envelopes, commercial print, content management and publisher solutions. The company provides a one-stop offering through services ranging from design and content management to fulfillment and distribution. With a worldwide distribution platform, it prides itself on delivering quality solutions and service every day for more than 100,000 customers.

Source: Cenveo Inc.