COLORADO
|
84-1250533
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer Identification No.)
|
ONE
CANTERBURY GREEN
201
BROAD STREET
|
|
STAMFORD,
CT
|
06901
|
(Address
of principal executive offices)
|
(Zip
Code)
|
203-595-3000
|
|
(Registrant’s
telephone number, including area
code)
|
|
Item
1. Financial
Statements
|
March
28, 2009
|
January
3, 2009
|
|||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 10,207 | $ | 10,444 | ||||
Accounts
receivable, net
|
249,998 | 270,145 | ||||||
Inventories
|
149,653 | 159,569 | ||||||
Prepaid
and other current assets
|
68,544 | 74,890 | ||||||
Total
current assets
|
478,402 | 515,048 | ||||||
Property,
plant and equipment, net
|
409,831 | 420,457 | ||||||
Goodwill
|
311,183 | 311,183 | ||||||
Other
intangible assets, net
|
274,628 | 276,944 | ||||||
Other
assets, net
|
27,401 | 28,482 | ||||||
Total
assets
|
$ | 1,501,445 | $ | 1,552,114 | ||||
Liabilities
and Shareholders’ Deficit
|
||||||||
Current
liabilities:
|
||||||||
Current
maturities of long-term debt
|
$ | 16,481 | $ | 24,314 | ||||
Accounts
payable
|
181,422 | 174,435 | ||||||
Accrued
compensation and related liabilities
|
32,953 | 37,319 | ||||||
Other
current liabilities
|
83,553 | 88,870 | ||||||
Total
current liabilities
|
314,409 | 324,938 | ||||||
Long-term
debt
|
1,244,741 | 1,282,041 | ||||||
Deferred
income taxes
|
25,955 | 26,772 | ||||||
Other
liabilities
|
137,717 | 139,318 | ||||||
Commitments
and contingencies
|
||||||||
Shareholders’
deficit:
|
||||||||
Preferred
stock
|
— | — | ||||||
Common
stock
|
545 | 542 | ||||||
Paid-in
capital
|
274,852 | 271,821 | ||||||
Retained
deficit
|
(451,277 | ) | (446,966 | ) | ||||
Accumulated
other comprehensive loss
|
(45,497 | ) | (46,352 | ) | ||||
Total
shareholders’ deficit
|
(221,377 | ) | (220,955 | ) | ||||
Total
liabilities and shareholders’ deficit
|
$ | 1,501,445 | $ | 1,552,114 |
Three
Months Ended
|
||||||||
March
28, 2009
|
March
29, 2008
|
|||||||
Net
sales
|
$ | 412,100 | $ | 534,328 | ||||
Cost
of sales
|
348,316 | 436,298 | ||||||
Selling,
general and administrative
|
52,515 | 63,126 | ||||||
Amortization
of intangible assets
|
2,316 | 2,175 | ||||||
Restructuring,
impairment and other charges
|
8,732 | 9,749 | ||||||
Operating
income
|
221 | 22,980 | ||||||
Interest
expense, net
|
22,545 | 26,978 | ||||||
Gain
on early extinguishment of debt
|
(17,642 | ) | — | |||||
Other
expense, net
|
35 | 461 | ||||||
Loss
from continuing operations before income taxes
|
(4,717 | ) | (4,459 | ) | ||||
Income
tax benefit
|
(530 | ) | (1,716 | ) | ||||
Loss
from continuing operations
|
(4,187 | ) | (2,743 | ) | ||||
Loss
from discontinued operations, net of taxes
|
(124 | ) | (656 | ) | ||||
Net
loss
|
$ | (4,311 | ) | $ | (3,399 | ) | ||
Loss
per share – basic and diluted:
|
||||||||
Continuing
operations
|
$ | (0.08 | ) | $ | (0.05 | ) | ||
Discontinued
operations
|
— | (0.01 | ) | |||||
Net
loss
|
$ | (0.08 | ) | $ | (0.06 | ) | ||
Weighted
average shares:
|
||||||||
Basic
and diluted
|
54,352 | 53,715 |
Three
Months Ended
|
||||||||
March
28, 2009
|
March
29, 2008
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
loss
|
$ | (4,311 | ) | $ | (3,399 | ) | ||
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
||||||||
Loss
from discontinued operations, net of taxes
|
124 | 656 | ||||||
Depreciation
and amortization, excluding non-cash interest expense
|
17,450 | 18,013 | ||||||
Non-cash
interest expense, net
|
485 | 390 | ||||||
Gain
on early extinguishment of debt
|
(17,642 | ) | — | |||||
Stock-based
compensation provision
|
3,462 | 2,692 | ||||||
Non-cash
restructuring, impairment and other charges
|
3,334 | 3,456 | ||||||
Deferred
income taxes
|
(1,154 | ) | (1,775 | ) | ||||
Gain
on sale of assets
|
(47 | ) | (294 | ) | ||||
Other
non-cash charges, net
|
1,556 | 3,140 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
19,329 | 35,195 | ||||||
Inventories
|
9,040 | (10,106 | ) | |||||
Accounts
payable and accrued compensation and related liabilities
|
4,051 | (3,442 | ) | |||||
Other
working capital changes
|
2,268 | 12,955 | ||||||
Other,
net
|
(1,527 | ) | (3,050 | ) | ||||
Net
cash provided by operating activities
|
36,418 | 54,431 | ||||||
Cash
flows from investing activities:
|
||||||||
Capital
expenditures
|
(9,150 | ) | (9,097 | ) | ||||
Proceeds
from sale of property, plant and equipment
|
363 | 348 | ||||||
Net
cash used in investing activities
|
(8,787 | ) | (8,749 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Repayment
of term loans
|
(19,328 | ) | (1,800 | ) | ||||
Repayment
of 8⅜% senior subordinated notes
|
(18,959 | ) | — | |||||
Repayment
of 10½% senior notes
|
(3,250 | ) | — | |||||
Repayment
of 7⅞% senior subordinated notes
|
(3,125 | ) | — | |||||
Repayments
of other long-term debt
|
(2,242 | ) | (1,806 | ) | ||||
Purchase
and retirement of common stock upon vesting of
RSUs
|
(431 | ) | — | |||||
Payment
of fees on early extinguishment of debt
|
(94 | ) | — | |||||
(Repayments)
borrowings under revolving credit facility, net
|
19,750 | (45,200 | ) | |||||
Proceeds
from exercise of stock options
|
— | 288 | ||||||
Net
cash used in financing activities
|
(27,679 | ) | (48,518 | ) | ||||
Effect
of exchange rate changes on cash and cash equivalents
|
(189 | ) | 9 | |||||
Net
decrease in cash and cash equivalents
|
(237 | ) | (2,827 | ) | ||||
Cash
and cash equivalents at beginning of year
|
10,444 | 15,882 | ||||||
Cash
and cash equivalents at end of quarter
|
$ | 10,207 | $ | 13,055 |
March
28, 2009
|
January
3, 2009
|
|||||||
Raw
materials
|
$ | 63,166 | $ | 67,236 | ||||
Work
in process
|
22,734 | 27,011 | ||||||
Finished
goods
|
63,753 | 65,322 | ||||||
$ | 149,653 | $ | 159,569 |
|
Property,
plant and equipment are as follows (in
thousands):
|
March
28,
2009
|
January
3, 2009
|
|||||||
Land
and land improvements
|
$ | 21,412 | $ | 21,421 | ||||
Buildings
and building improvements
|
111,142 | 111,208 | ||||||
Machinery
and equipment
|
618,256 | 622,929 | ||||||
Furniture
and fixtures
|
12,772 | 12,589 | ||||||
Construction
in progress
|
16,229 | 14,558 | ||||||
779,811 | 782,705 | |||||||
Accumulated
depreciation
|
(369,980 | ) | (362,248 | ) | ||||
$ | 409,831 | $ | 420,457 |
March
28, 2009
|
January
3, 2009
|
|||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
|||||||||||||||||||
Intangible
assets with determinable lives:
|
||||||||||||||||||||||||
Customer
relationships
|
$ | 159,206 | $ | (31,825 | ) | $ | 127,381 | $ | 159,206 | $ | (29,875 | ) | $ | 129,331 | ||||||||||
Trademarks
and tradenames
|
21,011 | (4,307 | ) | 16,704 | 21,011 | (4,089 | ) | 16,922 | ||||||||||||||||
Patents
|
3,028 | (1,817 | ) | 1,211 | 3,028 | (1,755 | ) | 1,273 | ||||||||||||||||
Non-compete
agreements
|
2,456 | (1,712 | ) | 744 | 2,456 | (1,634 | ) | 822 | ||||||||||||||||
Other
|
768 | (400 | ) | 368 | 768 | (392 | ) | 376 | ||||||||||||||||
186,469 | (40,061 | ) | 146,408 | 186,469 | (37,745 | ) | 148,724 | |||||||||||||||||
Intangible
assets with indefinite lives:
|
||||||||||||||||||||||||
Trademarks
|
127,500 | — | 127,500 | 127,500 | — | 127,500 | ||||||||||||||||||
Pollution
credits
|
720 | — | 720 | 720 | — | 720 | ||||||||||||||||||
Total
|
$ | 314,689 | $ | (40,061 | ) | $ | 274,628 | $ | 314,689 | $ | (37,745 | ) | $ | 276,944 |
March
28,
2009
|
January
3,
2009
|
|||||||
Term
loan, due 2013
|
$ | 688,572 | $ | 707,900 | ||||
7⅞%
senior subordinated notes, due 2013
|
298,370 | 303,370 | ||||||
10½%
senior notes, due 2016
|
170,000 | 175,000 | ||||||
8⅜%
senior subordinated notes, due 2014 ($39.6 million and $72.3 million
outstanding principal amount as of March 28, 2009 and January 3, 2009,
respectively)
|
40,268 | 73,581 | ||||||
Revolving
credit facility, due 2012
|
27,750 | 8,000 | ||||||
Other
|
36,262 | 38,504 | ||||||
1,261,222 | 1,306,355 | |||||||
Less
current maturities
|
(16,481 | ) | (24,314 | ) | ||||
Long-term
debt
|
$ | 1,244,741 | $ | 1,282,041 |
March
28, 2009
|
January
3, 2009
|
|||||||
Current
Liabilities:
|
||||||||
Interest
Rate Swaps
|
$ | 2,394 | $ | 4,483 | ||||
Long-Term
Liabilities:
|
||||||||
Interest
Rate Swaps
|
21,930 | 23,180 | ||||||
Forward
Starting Swaps
|
1,512 | 943 |
Envelopes,
Forms
and
Labels
|
Commercial
Printing
|
Total
|
||||||||||
Employee
separation costs
|
$ | 1,999 | $ | 3,194 | $ | 5,193 | ||||||
Asset
impairments
|
2,571 | 147 | 2,718 | |||||||||
Equipment
moving expenses
|
133 | 18 | 151 | |||||||||
Lease
termination expenses
|
— | 184 | 184 | |||||||||
Building
clean-up and other expenses
|
7 | 187 | 194 | |||||||||
Total
restructuring and impairment charges
|
$ | 4,710 | $ | 3,730 | $ | 8,440 |
Lease
Termination
Costs
|
Employee
Separation
Costs
|
Other
Exit
Costs
|
Total
|
|||||||||||||
Balance
at January 3, 2009
|
$ | — | $ | — | $ | — | $ | — | ||||||||
Accruals,
net
|
184 | 5,193 | 345 | 5,722 | ||||||||||||
Payments
|
— | (875 | ) | (244 | ) | (1,119 | ) | |||||||||
Balance
at March 28, 2009
|
$ | 184 | $ | 4,318 | $ | 101 | $ | 4,603 |
Envelopes,
Forms
and
Labels
|
Commercial
Printing
|
Corporate
|
Total
|
|||||||||||||
Employee
separation costs
|
$ | 61 | $ | 82 | $ | 29 | $ | 172 | ||||||||
Asset
impairments, net of gain on sale
|
— | 17 | — | 17 | ||||||||||||
Equipment
moving expenses
|
— | 8 | — | 8 | ||||||||||||
Lease
termination expenses
|
13 | 54 | 3 | 70 | ||||||||||||
Building
clean-up and other expenses
|
8 | 192 | 18 | 218 | ||||||||||||
Total
restructuring and impairment charges
|
$ | 82 | $ | 353 | $ | 50 | $ | 485 |
Envelopes,
Forms
and
Labels
|
Commercial
Printing
|
Total
|
||||||||||
Employee
separation costs
|
$ | 813 | $ | 730 | $ | 1,543 | ||||||
Asset
impairments
|
152 | — | 152 | |||||||||
Equipment
moving expenses
|
48 | 67 | 115 | |||||||||
Lease
termination expenses
|
294 | — | 294 | |||||||||
Building
clean-up and other expenses
|
155 | 228 | 383 | |||||||||
Total
restructuring and impairment charges
|
$ | 1,462 | $ | 1,025 | $ | 2,487 |
Lease
Termination
Costs
|
Employee
Separation
Costs
|
Pension
Withdrawal
Liabilities
|
Total
|
|||||||||||||
Balance
at January 3, 2009
|
$ | 3,589 | $ | 1,975 | $ | 1,800 | $ | 7,364 | ||||||||
Accruals,
net
|
70 | 172 | — | 242 | ||||||||||||
Payments
|
(434 | ) | (1,218 | ) | — | (1,652 | ) | |||||||||
Balance
at March 28, 2009
|
$ | 3,225 | $ | 929 | $ | 1,800 | $ | 5,954 |
Envelopes,
Forms
and
Labels
|
Commercial
Printing
|
Corporate
|
Total
|
|||||||||||||
Employee
separation costs
|
$ | — | $ | — | $ | — | $ | — | ||||||||
Asset
impairments
|
— | — | — | — | ||||||||||||
Equipment
moving expenses
|
— | — | — | — | ||||||||||||
Lease
termination expenses
|
(41 | ) | 20 | 67 | 46 | |||||||||||
Building
clean-up and other expenses
|
5 | (244 | ) | — | (239 | ) | ||||||||||
Total
restructuring and impairment charges (income)
|
$ | (36 | ) | $ | (224 | ) | $ | 67 | $ | (193 | ) |
Envelopes,
Forms
and
Labels
|
Commercial
Printing
|
Corporate
|
Total
|
|||||||||||||
Employee
separation costs
|
$ | 13 | $ | 122 | $ | 68 | $ | 203 | ||||||||
Asset
impairments, net of gain on sale
|
— | (476 | ) | — | (476 | ) | ||||||||||
Equipment
moving expenses
|
— | 322 | — | 322 | ||||||||||||
Lease
termination expenses
|
32 | — | 34 | 66 | ||||||||||||
Building
clean-up and other expenses
|
148 | 361 | — | 509 | ||||||||||||
Total
restructuring and impairment charges
|
$ | 193 | $ | 329 | $ | 102 | $ | 624 |
Lease
Termination
Costs
|
Employee
Separation
Costs
|
Pension
Withdrawal
Liabilities
|
Total
|
|||||||||||||
Balance
at January 3, 2009
|
$ | 3,877 | $ | — | $ | 208 | $ | 4,085 | ||||||||
Accruals,
net
|
46 | — | — | 46 | ||||||||||||
Payments
|
(948 | ) | — | (29 | ) | (977 | ) | |||||||||
Balance
at March 28, 2009
|
$ | 2,975 | $ | — | $ | 179 | $ | 3,154 |
Lease
Termination
Costs
|
||||
Balance
at January 3, 2009
|
$
|
2,264
|
||
Accruals,
net
|
—
|
|||
Payments
|
(134
|
) | ||
Balance
at March 28, 2009
|
$
|
2,130
|
Pension
and
Postretirement
Plans
|
||||||||
Three
Months Ended
|
||||||||
March
28,
2009
|
March
29,
2008
|
|||||||
Service
cost
|
$ | 99 | $ | 119 | ||||
Interest
cost
|
2,493 | 2,581 | ||||||
Expected
return on plan assets
|
(1,926 | ) | (2,685 | ) | ||||
Net
amortization and deferral
|
— | 2 | ||||||
Recognized
net actuarial loss
|
588 | 56 | ||||||
Net
periodic pension expense
|
$ | 1,254 | $ | 73 |
Three
Months Ended
|
||||||||
March
28,
2009
|
March
29,
2008
|
|||||||
Net
loss
|
$ | (4,311 | ) | $ | (3,399 | ) | ||
Other
comprehensive income (loss):
|
||||||||
Unrealized
gain (loss) on cash flow hedges
|
1,555 | (9,359 | ) | |||||
Currency
translation adjustment
|
(700 | ) | (1,250 | ) | ||||
Comprehensive
loss
|
$ | (3,456 | ) | $ | (14,008 | ) |
Three
Months Ended
|
||||||||
March
28, 2009
|
March
29, 2008
|
|||||||
Numerator
for basic and diluted loss per share:
|
||||||||
Loss
from continuing operations
|
$ | 4,187 | $ | 2,743 | ||||
Loss
from discontinued operations, net of taxes
|
124 | 656 | ||||||
Net
loss
|
$ | 4,311 | $ | 3,399 | ||||
Denominator
weighted average common shares outstanding:
|
||||||||
Basic
and diluted shares
|
54,352 | 53,715 | ||||||
Loss
per share – basic and diluted:
|
||||||||
Continuing
operations
|
$ | 0.08 | $ | 0.05 | ||||
Discontinued
operations
|
— | 0.01 | ||||||
Net
loss
|
$ | 0.08 | $ | 0.06 | ||||
Three
Months Ended
|
|||||||||
March
28, 2009
|
March
29, 2008
|
||||||||
Net
sales:
|
|||||||||
Envelopes,
forms and labels
|
$ | 182,431 | $ | 238,137 | |||||
Commercial
printing
|
229,669 | 296,191 | |||||||
Total
|
$ | 412,100 | $ | 534,328 | |||||
Operating
income (loss):
|
|||||||||
Envelopes,
forms and labels
|
$ | 8,406 | $ | 25,626 | |||||
Commercial
printing
|
1,430 | 11,278 | |||||||
Corporate
|
(9,615 | ) | (13,924 | ) | |||||
Total
|
$ | 221 | $ | 22,980 | |||||
Restructuring,
impairment and other charges:
|
|||||||||
Envelopes,
forms and labels
|
$ | 4,756 | $ | 1,655 | |||||
Commercial
printing
|
3,859 | 1,354 | |||||||
Corporate
|
117 | 6,740 | |||||||
Total
|
$ | 8,732 | $ | 9,749 | |||||
150 | |||||||||
Net
sales by product line:
|
|||||||||
Envelopes
|
$ | 126,675 | $ | 165,668 | |||||
Commercial
printing
|
155,775 | 201,405 | |||||||
Journals
and periodicals
|
73,333 | 93,845 | |||||||
Labels
and business forms
|
56,317 | 73,410 | |||||||
Total
|
$ | 412,100 | $ | 534,328 | |||||
Intercompany
sales:
|
|||||||||
Envelopes,
forms and labels to commercial printing
|
$ | 1,367 | $ | 1,234 | |||||
Commercial
printing to envelopes, forms and labels
|
540 | 1,514 | |||||||
Total
|
$ | 1,907 | $ | 2,748 | |||||
March
28,
2009
|
January
3, 2009
|
||||||||
Identifiable
assets:
|
|||||||||
Envelopes,
forms and labels
|
$ | 601,180 | $ | 624,760 | |||||
Commercial
printing
|
837,310 | 863,224 | |||||||
Corporate
|
62,955 | 64,130 | |||||||
Total
|
$ | 1,501,445 | 1,552,114 | ||||||
Parent
|
Subsidiary
|
Guarantor
|
Non-Guarantor
|
|||||||||||||||||||||
Company
|
Issuer
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Current
assets:
|
||||||||||||||||||||||||
Cash
and cash equivalents
|
$ | — | $ | 5,040 | $ | 634 | $ | 4,533 | $ | — | $ | 10,207 | ||||||||||||
Accounts
receivable, net
|
— | 124,066 | 119,627 | 6,305 | — | 249,998 | ||||||||||||||||||
Inventories
|
— | 81,209 | 67,018 | 1,426 | — | 149,653 | ||||||||||||||||||
Notes
receivable from subsidiaries
|
— | 39,213 | — | — | (39,213 | ) | — | |||||||||||||||||
Prepaid
and other current assets
|
— | 54,658 | 11,671 | 2,215 | — | 68,544 | ||||||||||||||||||
Total
current assets
|
— | 304,186 | 198,950 | 14,479 | (39,213 | ) | 478,402 | |||||||||||||||||
Investment
in subsidiaries
|
(221,377 | ) | 1,385,122 | 8,739 | — | (1,172,484 | ) | — | ||||||||||||||||
Property,
plant and equipment, net
|
— | 162,143 | 247,294 | 394 | — | 409,831 | ||||||||||||||||||
Goodwill
|
— | 29,245 | 281,938 | — | — | 311,183 | ||||||||||||||||||
Other
intangible assets, net
|
— | 8,988 | 265,640 | — | — | 274,628 | ||||||||||||||||||
Other
assets, net
|
— | 21,172 | 5,903 | 326 | — | 27,401 | ||||||||||||||||||
Total
assets
|
$ | (221,377 | ) | $ | 1,910,856 | $ | 1,008,464 | $ | 15,199 | $ | (1,211,697 | ) | $ | 1,501,445 | ||||||||||
Liabilities
and Shareholders’ Equity (Deficit)
|
||||||||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||||||
Current
maturities of long-term debt
|
$ | — | $ | 8,466 | $ | 8,015 | $ | — | $ | — | $ | 16,481 | ||||||||||||
Accounts
payable
|
— | 107,481 | 72,142 | 1,799 | — | 181,422 | ||||||||||||||||||
Accrued
compensation and related liabilities
|
— | 20,596 | 12,357 | — | — | 32,953 | ||||||||||||||||||
Other
current liabilities
|
— | 66,963 | 15,574 | 1,016 | — | 83,553 | ||||||||||||||||||
Intercompany
payable (receivable)
|
— | 691,345 | (695,793 | ) | 4,448 | — | — | |||||||||||||||||
Notes
payable to issuer
|
— | — | 39,213 | — | (39,213 | ) | — | |||||||||||||||||
Total
current liabilities
|
— | 894,851 | (548,492 | ) | 7,263 | (39,213 | ) | 314,409 | ||||||||||||||||
Long-term
debt
|
— | 1,223,619 | 21,122 | — | — | 1,244,741 | ||||||||||||||||||
Deferred
income tax liability (asset)
|
— | (59,585 | ) | 86,343 | (803 | ) | — | 25,955 | ||||||||||||||||
Other
liabilities
|
— | 73,348 | 64,369 | — | — | 137,717 | ||||||||||||||||||
Shareholders’
equity (deficit)
|
(221,377 | ) | (221,377 | ) | 1,385,122 | 8,739 | (1,172,484 | ) | (221,377 | ) | ||||||||||||||
Total
liabilities and shareholders’ equity (deficit)
|
$ | (221,377 | ) | $ | 1,910,856 | $ | 1,008,464 | $ | 15,199 | $ | (1,211,697 | ) | $ | 1,501,445 |
Parent
|
Subsidiary
|
Guarantor
|
Non-
Guarantor
|
|||||||||||||||||||||
Company
|
Issuer
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Net
sales
|
$ | — | $ | 194,866 | $ | 212,442 | $ | 4,792 | $ | — | $ | 412,100 | ||||||||||||
Cost
of sales
|
— | 166,643 | 178,831 | 2,842 | — | 348,316 | ||||||||||||||||||
Selling,
general and administrative
|
— | 31,384 | 21,028 | 103 | — | 52,515 | ||||||||||||||||||
Amortization
of intangible assets
|
— | 101 | 2,215 | — | — | 2,316 | ||||||||||||||||||
Restructuring,
impairment and other charges
|
— | 4,229 | 4,503 | — | — | 8,732 | ||||||||||||||||||
Operating
income (loss)
|
— | (7,491 | ) | 5,865 | 1,847 | — | 221 | |||||||||||||||||
Interest
expense (income), net
|
— | 22,235 | 336 | (26 | ) | — | 22,545 | |||||||||||||||||
Intercompany
interest expense (income)
|
— | (284 | ) | 284 | — | — | — | |||||||||||||||||
Gain
on early extinguishment of debt
|
— | (17,642 | ) | — | — | — | (17,642 | ) | ||||||||||||||||
Other
(income) expense, net
|
— | 248 | 54 | (267 | ) | — | 35 | |||||||||||||||||
Income
(loss) from continuing operations before income taxes and equity in income
of unconsolidated subsidiaries
|
— | (12,048 | ) | 5,191 | 2,140 | — | (4,717 | ) | ||||||||||||||||
Income
tax expense (benefit)
|
— | (2,362 | ) | 1,778 | 54 | — | (530 | ) | ||||||||||||||||
Income
(loss) from continuing operations before equity in income of
unconsolidated subsidiaries
|
— | (9,686 | ) | 3,413 | 2,086 | — | (4,187 | ) | ||||||||||||||||
Equity
in income of unconsolidated subsidiaries
|
(4,311 | ) | 5,499 | 2,086 | — | (3,274 | ) | — | ||||||||||||||||
Income
(loss) from continuing operations
|
(4,311 | ) | (4,187 | ) | 5,499 | 2,086 | (3,274 | ) | (4,187 | ) | ||||||||||||||
Loss
from discontinued operations, net of taxes
|
— | (124 | ) | — | — | — | (124 | ) | ||||||||||||||||
Net
income (loss)
|
$ | (4,311 | ) | $ | (4,311 | ) | $ | 5,499 | $ | 2,086 | $ | (3,274 | ) | $ | (4,311 | ) |
Parent
|
Subsidiary
|
Guarantor
|
Non-
Guarantor
|
|||||||||||||||||||||
Company
|
Issuer
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Cash
flows from operating activities:
|
||||||||||||||||||||||||
Net
cash provided by (used in) operating activities
|
$ | 3,462 | $ | (5,730 | ) | $ | 38,636 | $ | 50 | $ | — | $ | 36,418 | |||||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||||||
Capital
expenditures
|
— | (4,258 | ) | (4,892 | ) | — | — | (9,150 | ) | |||||||||||||||
Intercompany
note
|
— | (18 | ) | — | — | 18 | — | |||||||||||||||||
Proceeds
from sale of property, plant and equipment
|
— | 1 | 362 | — | — | 363 | ||||||||||||||||||
Net
cash (used in) provided by investing activities
|
— | (4,275 | ) | (4,530 | ) | — | 18 | (8,787 | ) | |||||||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||||||
Repayment
of term loans
|
— | (19,328 | ) | — | — | — | (19,328 | ) | ||||||||||||||||
Repayment
of 8⅜% senior subordinated notes
|
— | (18,959 | ) | — | — | — | (18,959 | ) | ||||||||||||||||
Repayment
of 10½% senior notes
|
— | (3,250 | ) | — | — | — | (3,250 | ) | ||||||||||||||||
Repayment
of 7⅞% senior subordinated notes
|
— | (3,125 | ) | — | — | — | (3,125 | ) | ||||||||||||||||
Repayments
of other long-term debt
|
— | (155 | ) | (2,087 | ) | — | — | (2,242 | ) | |||||||||||||||
Purchase
and retirement of common stock upon vesting of
RSUs
|
(431 | ) | — | — | — | — | (431 | ) | ||||||||||||||||
Payment
of fees on early extinguishment of debt
|
— | (94 | ) | — | — | — | (94 | ) | ||||||||||||||||
(Repayments)
borrowings under revolving credit facility, net
|
— | 19,750 | — | — | — | 19,750 | ||||||||||||||||||
Intercompany
note
|
— | — | 18 | — | (18 | ) | — | |||||||||||||||||
Intercompany
advances
|
(3,031 | ) | 35,491 | (32,456 | ) | (4 | ) | — | — | |||||||||||||||
Net
cash (used in) provided by financing activities
|
(3,462 | ) | 10,330 | (34,525 | ) | (4 | ) | (18 | ) | (27,679 | ) | |||||||||||||
Effect
of exchange rate changes on cash and cash equivalents
|
— | — | — | (189 | ) | — | (189 | ) | ||||||||||||||||
Net
(decrease) increase in cash and cash
equivalents
|
— | 325 | (419 | ) | (143 | ) | — | (237 | ) | |||||||||||||||
Cash
and cash equivalents at beginning of year
|
— | 4,715 | 1,053 | 4,676 | — | 10,444 | ||||||||||||||||||
Cash
and cash equivalents at end of quarter
|
$ | — | $ | 5,040 | $ | 634 | $ | 4,533 | $ | — | $ | 10,207 |
Parent
|
Subsidiary
|
Guarantor
|
Non-Guarantor
|
|||||||||||||||||||||
Company
|
Issuer
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Current
assets:
|
||||||||||||||||||||||||
Cash
and cash equivalents
|
$ | — | $ | 4,715 | $ | 1,053 | $ | 4,676 | $ | — | $ | 10,444 | ||||||||||||
Accounts
receivable, net
|
— | 127,634 | 137,746 | 4,765 | — | 270,145 | ||||||||||||||||||
Inventories
|
— | 86,219 | 72,149 | 1,201 | — | 159,569 | ||||||||||||||||||
Notes
receivable from subsidiaries
|
— | 39,195 | — | — | (39,195 | ) | — | |||||||||||||||||
Prepaid
and other current assets
|
— | 62,961 | 9,879 | 2,050 | — | 74,890 | ||||||||||||||||||
Total
current assets
|
— | 320,724 | 220,827 | 12,692 | (39,195 | ) | 515,048 | |||||||||||||||||
Investment
in subsidiaries
|
(220,955 | ) | 1,380,326 | 7,063 | — | (1,166,434 | ) | — | ||||||||||||||||
Property,
plant and equipment, net
|
— | 165,140 | 254,841 | 476 | — | 420,457 | ||||||||||||||||||
Goodwill
|
— | 29,245 | 281,938 | — | — | 311,183 | ||||||||||||||||||
Other
intangible assets, net
|
— | 9,089 | 267,855 | — | — | 276,944 | ||||||||||||||||||
Other
assets, net
|
— | 21,936 | 6,205 | 341 | — | 28,482 | ||||||||||||||||||
Total
assets
|
$ | (220,955 | ) | $ | 1,926,460 | $ | 1,038,729 | $ | 13,509 | $ | (1,205,629 | ) | $ | 1,552,114 | ||||||||||
Liabilities
and Shareholders’ (Deficit) Equity
|
||||||||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||||||
Current
maturities of long-term debt
|
$ | — | $ | 15,956 | $ | 8,358 | $ | — | $ | — | $ | 24,314 | ||||||||||||
Accounts
payable
|
— | 99,150 | 73,402 | 1,883 | — | 174,435 | ||||||||||||||||||
Accrued
compensation and related liabilities
|
— | 21,311 | 16,008 | — | — | 37,319 | ||||||||||||||||||
Other
current liabilities
|
— | 74,653 | 13,302 | 915 | — | 88,870 | ||||||||||||||||||
Intercompany
payable (receivable)
|
— | 658,885 | (663,337 | ) | 4,452 | — | — | |||||||||||||||||
Notes
payable to issuer
|
— | — | 39,195 | — | (39,195 | ) | — | |||||||||||||||||
Total
current liabilities
|
— | 869,955 | (513,072 | ) | 7,250 | (39,195 | ) | 324,938 | ||||||||||||||||
Long-term
debt
|
— | 1,259,175 | 22,866 | — | — | 1,282,041 | ||||||||||||||||||
Deferred
income tax liability (asset)
|
— | (56,500 | ) | 84,076 | (804 | ) | — | 26,772 | ||||||||||||||||
Other
liabilities
|
— | 74,785 | 64,533 | — | — | 139,318 | ||||||||||||||||||
Shareholders’
(deficit) equity
|
(220,955 | ) | (220,955 | ) | 1,380,326 | 7,063 | (1,166,434 | ) | (220,955 | ) | ||||||||||||||
Total
liabilities and shareholders’ (deficit) equity
|
$ | (220,955 | ) | $ | 1,926,460 | $ | 1,038,729 | $ | 13,509 | $ | (1,205,629 | ) | $ | 1,552,114 |
Parent
|
Subsidiary
|
Guarantor
|
Non-
Guarantor
|
|||||||||||||||||||||
Company
|
Issuer
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Net
sales
|
$ | — | $ | 260,292 | $ | 269,624 | $ | 4,412 | $ | — | $ | 534,328 | ||||||||||||
Cost
of sales
|
— | 218,786 | 214,254 | 3,258 | — | 436,298 | ||||||||||||||||||
Selling,
general and administrative
|
— | 36,468 | 26,507 | 151 | — | 63,126 | ||||||||||||||||||
Amortization
of intangible assets
|
— | 111 | 2,064 | — | — | 2,175 | ||||||||||||||||||
Restructuring,
impairment and other charges
|
— | 9,708 | 41 | — | — | 9,749 | ||||||||||||||||||
Operating
income (loss)
|
— | (4,781 | ) | 26,758 | 1,003 | — | 22,980 | |||||||||||||||||
Interest
expense, net
|
— | 26,560 | 437 | (19 | ) | — | 26,978 | |||||||||||||||||
Intercompany
interest expense (income)
|
— | (944 | ) | 944 | — | — | — | |||||||||||||||||
Other
expense, net
|
— | 186 | 275 | — | — | 461 | ||||||||||||||||||
Income
(loss) from continuing operations before income taxes and equity in income
of unconsolidated subsidiaries
|
— | (30,583 | ) | 25,102 | 1,022 | — | (4,459 | ) | ||||||||||||||||
Income
tax expense (benefit)
|
— | (3,823 | ) | 2,107 | — | — | (1,716 | ) | ||||||||||||||||
Income
(loss) from continuing operations before equity in income of
unconsolidated subsidiaries
|
— | (26,760 | ) | 22,995 | 1,022 | — | (2,743 | ) | ||||||||||||||||
Equity
in income of unconsolidated subsidiaries
|
(3,399 | ) | 24,017 | 1,022 | — | (21,640 | ) | — | ||||||||||||||||
Income
(loss) from continuing operations
|
(3,399 | ) | (2,743 | ) | 24,017 | 1,022 | (21,640 | ) | (2,743 | ) | ||||||||||||||
Loss
from discontinued operations, net of taxes
|
— | (656 | ) | — | — | — | (656 | ) | ||||||||||||||||
Net
income (loss)
|
$ | (3,399 | ) | $ | (3,399 | ) | $ | 24,017 | $ | 1,022 | $ | (21,640 | ) | $ | (3,399 | ) |
Parent
|
Subsidiary
|
Guarantor
|
Non-
Guarantor
|
|||||||||||||||||||||
Company
|
Issuer
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Cash
flows from operating activities:
|
||||||||||||||||||||||||
Net
cash provided by operating activities
|
$ | 2,692 | $ | 13,903 | $ | 37,668 | $ | 168 | $ | — | $ | 54,431 | ||||||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||||||
Intercompany
note
|
— | 683 | — | — | (683 | ) | — | |||||||||||||||||
Capital
expenditures
|
— | (1,712 | ) | (7,385 | ) | — | — | (9,097 | ) | |||||||||||||||
Proceeds
from sale of property, plant and equipment
|
— | 195 | 153 | — | — | 348 | ||||||||||||||||||
Net
cash used in investing activities
|
— | (834 | ) | (7,232 | ) | — | (683 | ) | (8,749 | ) | ||||||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||||||
Repayments
under revolving credit facility, net
|
— | (45,200 | ) | — | — | — | (45,200 | ) | ||||||||||||||||
Proceeds
from exercise of stock options
|
288 | — | — | — | — | 288 | ||||||||||||||||||
Repayments
of term loans
|
— | (1,800 | ) | — | — | — | (1,800 | ) | ||||||||||||||||
Repayments
of other long-term debt
|
— | (97 | ) | (1,709 | ) | — | — | (1,806 | ) | |||||||||||||||
Intercompany
note
|
— | — | (683 | ) | — | 683 | — | |||||||||||||||||
Intercompany
advances
|
(2,980 | ) | 29,630 | (26,841 | ) | 191 | — | — | ||||||||||||||||
Net
cash (used in) provided by financing activities
|
(2,692 | ) | (17,467 | ) | (29,233 | ) | 191 | 683 | (48,518 | ) | ||||||||||||||
Effect
of exchange rate changes on cash and cash equivalents
|
— | — | 9 | — | — | 9 | ||||||||||||||||||
Net
(decrease) increase in cash and cash equivalents
|
— | (4,398 | ) | 1,212 | 359 | — | (2,827 | ) | ||||||||||||||||
Cash
and cash equivalents at beginning of year
|
— | 13,091 | 882 | 1,909 | — | 15,882 | ||||||||||||||||||
Cash
and cash equivalents at end of quarter
|
$ | — | $ | 8,693 | $ | 2,094 | $ | 2,268 | $ | — | $ | 13,055 |
Item
6.
|
Exhibits
|
|||
Exhibit
Number
|
Description
|
|||
31.1*
|
Certification
by Robert G. Burton, Sr., Chief Executive Officer, pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
|
31.2*
|
Certification
by Kenneth P. Viret, Chief Financial Officer, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
32.1*
|
Certification
of the Chief Executive Officer and of the Chief Financial Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, furnished as an exhibit
to this report on Form
10-Q.
|
CENVEO,
INC.
|
||
By:
|
/s/
Robert
G. Burton, Sr.
|
|
Robert
G. Burton, Sr.
|
||
Chairman
and Chief Executive Officer
|
||
(Principal
Executive Officer)
|
||
By:
|
/s/
Kenneth
P. Viret
|
|
Kenneth
P. Viret
|
||
Chief
Financial Officer
|
||
(Principal
Financial Officer and
|
||
Principal
Accounting Officer)
|