Cenveo Announces 2Q 2014 Results

Cenveo, Inc. announced results for the three and six months ended June 28, 2014.
 
The company generated net sales of $479.4 million for the three months ended June 28, 2014, compared to $406.5 million for the same period last year, an increase of 17.9%.
 
The company generated net sales of $969.5 million for the six months ended June 28, 2014, compared to $825.2 million for the same period last year, an increase of 17.5%. The increase in net sales is primarily due to sales generated from the integration of National Envelope into its envelope operations, as National Envelope was not included in Cenveo’s results in the first six months of 2013, as well as the company’s ability to pass along paper price increases to certain customers in the envelope operations and new account wins in its  print segment.
 
“We are very encouraged by our second quarter performance, highlighted by delivering consolidated organic revenue growth of over 2%,” said Robert G. Burton Sr., chairman and CEO, said. “We also were able to grow our adjusted EBITDA by approximately 7% versus the same quarter in the prior year; successfully refinance a significant portion of our capital structure, which will result in interest savings; and made significant progress on our accelerated integration efforts with National Envelope. We now expect to finalize our National Envelope consolidation efforts later this year, instead of in 2015 as originally planned.
 
“As a result of this accelerated consolidation, we have experienced some disruptions in our envelope operations that we originally anticipated occurring over a longer duration,” Burton added. “Despite these disruptions, we are very pleased to have accomplished our financial objectives for the quarter and remain on track to deliver our 2014 full-year guidance.
 
“During the second quarter, we saw organic revenue growth from all of our segments,” Burton noted. “Our print business again saw positive momentum, as our vertical sales focus continued to drive positive growth. Our envelope business grew organically as price increases and solid direct mail volumes more than offset the significant operational disruption due to the National Envelope consolidation efforts. Our label and packaging operations continue to perform well, driven by strong trends across our custom label and our international packaging operations.”
 
Operating income was $13.3 million for the three months ended June 28, 2014, compared to $16.8 million for the same period last year. Operating income was $23.4 million for the six months ended June 28, 2014, compared to $28.5 million for the same period last year. The decrease was primarily due to higher restructuring and integration charges from the closure of two print plants, the closure and consolidation of several envelope plants related to the integration of National Envelope, and the impact of the higher cost structure of National Envelope.
 
For the three months ended June 28, 2014, the company had a loss from continuing operations of $39.3 million, or $0.59 per diluted share, compared to a loss of $19.0 million, or $0.30 per diluted share, for the same period last year. For the six months ended June 28, 2014, the Company had a loss from continuing operations of $56.1 million, or $0.84 per diluted share, compared to a loss of $39.5 million, or $0.62 per diluted share, for the same period last year. The decrease was primarily due to a $26.5 million debt extinguishment charge in connection with the debt refinancing that was completed in June 2014.
 
Adjusted EBITDA for the three months ended June 28, 2014, was $42.1 million, compared to adjusted EBITDA of $39.5 million for the same period last year. For the six months ended June 28, 2014, adjusted EBITDA was $78.9 million, compared to $72.9 million for the same period last year.
 
Cash flow used in operating activities for the six months ended June 28, 2014, was $27.1 million, compared to cash flow provided by operating activities of $9.3 million for the same period last year.
 
“As we begin the second half of the year, we will continue to focus on driving cash flow through our working capital initiatives and our improved operational performance,” Burton concluded. “We also expect to see lower cash interest payments as a result of an accelerated interest payment in the second quarter in connection with the refinancing. I remain optimistic about the company’s future as we look forward to the completion of the consolidation efforts with National Envelope, the benefits of our refinancing, and expansion in the higher growth segments of our business.”