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Cenveo Announces 2Q 2013 Results



Published August 9, 2013
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Cenveo, Inc. (CVO) announced results for the three and six months ended June 29, 2013.

The company generated net sales of $415.7 million for the three months ended June 29, 2013, compared to $433.2 million for the same period last year. The company generated net sales of $844.0 million for the six months ended June 29, 2013, compared to $883.0 million for the same period last year.

The decrease in net sales for both periods was primarily due to lower sales volumes in Cenveo’s commercial print operations mainly resulting from production timing and lower customer demand, lower sales of office product envelopes due to the transition of a low margin account out of its operating platform, lower average selling price from direct envelopes due to initiatives to gain market share as well as pricing pressures primarily from a competitor now in bankruptcy protection. These decreases were offset in part by higher sales volume from direct envelopes due to initiatives to increase market share and increased direct mail demand.

Operating income was $19.2 million for the three months ended June 29, 2013, compared to $28.6 million for the same period last year. The decrease in operating income was primarily due to lower sales volumes and higher input costs in ancillary raw material categories. Operating income was $33.5 million for the six months ended June 29, 2013, compared to $42.7 million for the same period last year. The decrease in operating income was primarily due to lower sales volumes and higher input costs in ancillary raw material categories, offset in part by lower restructuring, impairment and other charges.

For the three months ended June 29, 2013, the company had a loss from continuing operations of $17.6 million, or $0.28 per share, compared to a loss of $0.2 million, or $0.01 per share for the same period last year. For the six months ended June 29, 2013, the company had a loss from continuing operations of $36.5 million, or $0.57 per share, compared to a loss of $22.8 million, or $0.36 per share for the same period last year.

Adjusted EBITDA for the three months ended June 29, 2013 was $42.0 million, compared to adjusted EBITDA of $52.6 million for the same period last year. Adjusted EBITDA for the six months ended June 29, 2013 was $78.3 million, compared to adjusted EBITDA of $99.4 million for the same period last year.

"Our second quarter performance was mixed,” Robert G. Burton Sr., chairman and CEO, said. “Our labels and packaging operations had a solid quarter with positive revenue growth up 2.5% despite continued disruption from the press fire that occurred earlier this year. I am very proud of our team's performance during this difficult period of time and I remain optimistic about our future prospects in our packaging business as the replacement press became fully operational in late June. We continue to expect that the performance of our print operations will begin to stabilize as we enter the back-half of the year as important industry verticals, such as managed care and travel and leisure enter seasonally stronger periods.

“In the meantime, we continue to remain vigilant on costs and increasing sales within this segment,” Mr. Burton added. “Our envelope operations have continued to see significant improvement in direct mail as credit card mailing volumes have increased over 20% in the first half of the year, the strongest performance we have experienced since 2011. Despite this improvement in volume, we have experienced pricing pressures due to industry competitive dynamics."


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