FORM
10-K
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2007
Commission
file number 1-12551
|
||
COLORADO
(State
or other jurisdiction of
incorporation
or organization)
|
84-1250533
(I.R.S.
Employer Identification No.)
|
|
ONE
CANTERBURY GREEN
201
BROAD STREET
STAMFORD,
CT
(Address
of principal executive offices)
|
06901
(Zip
Code)
|
Title
of Each Class
|
Name
of Each Exchange on Which Registered
|
|
Common
Stock, par value $0.01 per share
|
New
York Stock Exchange
|
PART
I
|
|||
PAGE
|
|||
Business
|
1
|
||
Risk
Factors
|
7
|
||
Unresolved
Staff
Comments
|
10
|
||
Properties
|
10
|
||
Legal
Proceedings
|
10
|
|
|
Submission
of Matters to a Vote of Security
Holders
|
10
|
||
PART
II
|
|||
Market
for Registrant’s Common Equity, Related Shareholder
|
|||
Matters
and Issuer Purchases of Equity
Securities
|
11
|
||
Selected
Financial
Data
|
12
|
||
Management’s
Discussion and Analysis of Financial Condition
|
|||
and
Results of
Operations
|
13
|
||
Quantitative
and Qualitative Disclosures About Market Risk
|
26
|
||
Financial
Statements and Supplementary
Data
|
27
|
||
Changes
in and Disagreements with Accountants on Accounting
|
|||
and
Financial
Disclosure
|
81
|
||
Controls
and
Procedures
|
81
|
||
Other
Information
|
84
|
||
PART
III
|
|||
Directors,
Executive Officers and Corporate Governance
|
84
|
||
Executive
Compensation
|
84
|
||
Security
Ownership of Certain Beneficial Owners and
|
|
||
Management
and Related Shareholder
Matters
|
84
|
||
Certain
Relationships and Related Transactions, and Director
Independence
|
84
|
||
Principal
Accountant Fees and
Services
|
84
|
||
PART
IV
|
|||
Exhibits
and Financial Statement
Schedules
|
84
|
|
·
|
direct
mail and customized envelopes for advertising, billing and
remittance;
|
|
·
|
custom
labels and specialty forms; and
|
|
·
|
stock
envelopes, labels and business
forms.
|
|
·
|
high-end
color printing of a wide range of premium products for national and
regional customers;
|
|
·
|
general
commercial printing for regional and local
customers;
|
|
·
|
scientific,
technical and medical (“STM”) journals and special interest and trade
magazines for not-for-profit organizations, educational institutions and
specialty publishers; and
|
|
·
|
specialty
packaging and high quality promotional materials for multinational
consumer products companies.
|
Name
|
Age
|
Position
|
Year
Elected
to
Present
Position
|
||||
Robert
G. Burton,
Sr.
|
68
|
Chairman
and Chief Executive Officer
|
2005
|
||||
Mark
S.
Hiltwein
|
44
|
Chief
Financial Officer
|
2007
|
||||
Dean
Cherry
|
47
|
President,
Envelope Group
|
2008
|
||||
Timothy
M.
Davis
|
53
|
Senior
Vice President, General Counsel & Secretary
|
2006
|
||||
Sean
S.
Sullivan
|
40
|
President,
Commercial Print and Packaging
|
2007
|
||||
|
·
|
requiring
a substantial portion of our cash flow from operations to be dedicated to
the payment of principal and interest on indebtedness instead of funding
working capital, capital expenditures, acquisitions and other business
purposes;
|
|
·
|
making
it more difficult for us to satisfy all of our debt obligations, thereby
increasing the risk of triggering a cross-default
provision;
|
|
·
|
increasing
our vulnerability to economic downturns or other adverse developments
relative to less leveraged
competitors;
|
|
·
|
limiting
our ability to obtain additional financing for working capital, capital
expenditures, acquisitions or other corporate purposes in the future;
and
|
|
·
|
increasing
our cost of borrowing to satisfy business
needs.
|
|
·
|
incur
or guarantee additional
indebtedness;
|
|
·
|
make
restricted payments, including
dividends;
|
|
·
|
create
or permit certain liens;
|
|
·
|
enter
into business combinations and asset sale
transactions;
|
|
·
|
make
investments;
|
|
·
|
enter
into transactions with affiliates;
and
|
|
·
|
enter
into new businesses.
|
2007
|
High
|
Low
|
||||
First
Quarter
|
$
|
24.86
|
$
|
20.10
|
||
Second
Quarter
|
26.76
|
21.91
|
||||
Third
Quarter
|
24.51
|
17.67
|
||||
Fourth
Quarter
|
24.15
|
17.21
|
||||
2006
|
High
|
Low
|
||||
First
Quarter
|
$
|
16.58
|
$
|
12.75
|
||
Second
Quarter
|
19.96
|
15.01
|
||||
Third
Quarter
|
21.70
|
17.32
|
||||
Fourth
Quarter
|
21.86
|
17.79
|
Years
Ended December 31,
|
||||||||||||||||
2007
|
2006(2)
|
2005
|
2004
|
2003
|
||||||||||||
(in
thousands, except per share data)
|
||||||||||||||||
Net
sales
|
$
|
2,046,716
|
$
|
1,511,224
|
$
|
1,594,781
|
$
|
1,597,652
|
$
|
1,531,486
|
||||||
Restructuring,
impairment and other
charges
|
(40,086
|
)
|
(41,096
|
)
|
(77,254
|
)
|
(5,407
|
)
|
(6,860
|
)
|
||||||
Operating
income (loss)
|
137,550
|
63,395
|
(26,310
|
)
|
37,428
|
47,798
|
||||||||||
Loss
on early extinguishment of
debt
|
(9,256
|
)
|
(32,744
|
)
|
—
|
(17,748
|
)
|
—
|
||||||||
Income
(loss) from continuing operations
|
23,985
|
(11,148
|
)
|
(148,101
|
)
|
(44,708
|
)
|
(17,884
|
)
|
|||||||
Income
from discontinued operations,
net of taxes
|
16,796
|
(1)
|
126,519
|
(3)
|
13,049
|
25,000
|
23,356
|
|||||||||
Cumulative
effect of change in accounting
principle
|
—
|
—
|
—
|
—
|
(322
|
)
|
||||||||||
Net
income (loss)
|
40,781
|
(1)
|
115,371
|
(3)
|
(135,052
|
)
|
(19,708
|
)
|
5,150
|
|||||||
Income
(loss) per share from continuing operations:
|
||||||||||||||||
Basic
|
0.45
|
(0.21
|
)
|
(2.96
|
)
|
(0.94
|
)
|
(0.38
|
)
|
|||||||
Diluted
|
0.44
|
(0.21
|
)
|
(2.96
|
)
|
(0.94
|
)
|
(0.38
|
)
|
|||||||
Income
(loss) per share from discontinued operations:
|
||||||||||||||||
Basic
|
0.31
|
2.38
|
0.26
|
0.53
|
0.49
|
|||||||||||
Diluted
|
0.31
|
2.38
|
0.26
|
0.53
|
0.49
|
|||||||||||
Net
income (loss) per share:
|
||||||||||||||||
Basic
|
0.76
|
2.17
|
(2.70
|
)
|
(0.41
|
)
|
0.11
|
|||||||||
Diluted
|
0.75
|
2.17
|
(2.70
|
)
|
(0.41
|
)
|
0.11
|
|||||||||
Total
assets
|
2,002,722
|
999,892
|
1,079,564
|
1,174,747
|
1,111,446
|
|||||||||||
Total
long-term debt, including
current maturities
|
1,444,637
|
675,295
|
812,136
|
769,769
|
748,961
|
(2)
|
As
Restated, see Note 2 to the consolidated financial statements included in
Item 8 of this Annual Report on Form
10-K.
|
(3)
|
Includes
a $113.5 million gain on a disposal of discontinued operations, net of
taxes of $22.5 million.
|
|
·
|
direct
mail and customized envelopes for advertising, billing and
remittance;
|
|
·
|
custom
labels and specialty forms; and
|
|
·
|
stock
envelopes, labels and business
forms.
|
|
·
|
high-end
color printing of a wide range of premium products for national and
regional customers;
|
|
·
|
general
commercial printing for regional and local
customers;
|
|
·
|
scientific,
technical and medical (“STM”) journals and special interest and trade
magazines for not-for-profit organizations, educational institutions and
specialty publishers; and
|
|
·
|
specialty
packaging and high quality promotional materials for multinational
consumer products companies.
|
|
·
|
Improve our Cost Structure and
Profitability. We have
implemented two cost savings plans: the 2007 Cost Savings and Integration
Plan, which we refer to as the 2007 Plan, and the 2005 Cost Savings and
Restructuring Plan, which we refer to as the 2005 Plan. The 2007 Plan
relates to activities undertaken in connection with our 2007 acquisitions
of Printegra, Cadmus, ColorGraphics and Commercial Envelope, which we
refer to as the 2007 Acquisitions. Under the 2007 Plan, we
closed six manufacturing facilities and integrated those operations into
acquired and existing operations. The 2005 Plan, which
was completed in the fourth quarter of 2007, included such actions as
consolidating our purchasing activities and manufacturing platform
including closing two manufacturing facilities in 2007 that were
integrated into existing operations, reducing corporate and field
personnel, streamlining our information technology infrastructure and
elimination of discretionary
spending.
|
|
·
|
Capitalize on Scale
Advantages. We believe
there are significant advantages to being a large competitor in a highly
fragmented industry. We seek to capitalize on our size,
geographic footprint and broad product lines to offer one-stop shopping
and enhance our overall value proposition. As we grow in scale
and increase our operating leverage, we seek to realize better profit
margins through improvements in manufacturing facility
utilization.
|
|
·
|
Enhance the Supply
Chain. We continue to
work with our core suppliers to improve all aspects of our purchasing and
other logistics as well as to ensure a stable source of supply. We seek to
lower costs through more favorable pricing and payment terms, more
effective inventory management and improved communications with vendors.
We continue to consolidate our suppliers of key production inputs such as
paper and ink, and believe that significant opportunities exist in
optimizing the rest of our supply
chain.
|
|
·
|
Seek Products and Processing
Improvements. We
encourage regular review of our product offerings, manufacturing processes
and distribution methods to ensure that we take advantage of new
technology when practical and meet the changing needs of our customers and
the demands of a global economy. We seek to enter into growth
product markets in which we may have competitive advantages based on our
existing infrastructure, operating expertise and customer
relationships. Pharmaceutical labels, direct mail, and
specialty packaging are examples of growth areas into which we recently
expanded. By expanding our product offerings, we intend to
increase cross-selling opportunities to our existing customer base and
mitigate the impact of any decline in a given
market.
|
|
·
|
Pursue Strategic
Acquisitions. We
continue to selectively review opportunities to expand within growing
niche markets, broaden our product offerings and increase our economies of
scale through acquisitions. We will pursue reasonably-priced
opportunities that we expect to yield greater profitability and cash flow
or improved operating efficiencies, such as increased utilization of our
assets. Since July 2006, we have completed five acquisitions
that we believe will continue to enhance our operating margins and deliver
economies of scale. We believe our acquisition strategy will
allow us to both realize increased revenue and cost-saving synergies, and
apply our management expertise to improve the operations of acquired
entities. For example, our acquisition of Commercial Envelope strengthened
our position in the direct mail market and will allow us to enhance our
raw material purchasing power and rationalize our manufacturing
platform. Our acquisition of Rx Technology in July 2006 gave us
an entry into the pharmaceutical labels business, which has high barriers
to entry, while also allowing us to cross-sell a broader product platform
to new and existing customers.
|
Years
Ended December 31,
|
|||||||||
2007
|
2006
|
2005
|
|||||||
(in
thousands, except per share amount)
|
|||||||||
Division
net
sales
|
$
|
2,046,716
|
$
|
1,501,869
|
$
|
1,551,008
|
|||
Divested
operations
|
—
|
9,355
|
43,773
|
||||||
Net
sales
|
$
|
2,046,716
|
$
|
1,511,224
|
$
|
1,594,781
|
|||
Operating
income (loss):
|
|||||||||
Envelopes,
forms and
labels
|
$
|
117,342
|
$
|
82,753
|
$
|
51,830
|
|||
Commercial
printing
|
55,085
|
13,606
|
(30,675
|
)
|
|||||
Corporate
|
(34,877
|
)
|
(32,964
|
)
|
(47,465
|
)
|
|||
Total
operating income
(loss)
|
137,550
|
63,395
|
(26,310
|
)
|
|||||
(Gain)
loss on sale of non-strategic businesses
|
(189
|
)
|
2,035
|
4,479
|
|||||
Interest
expense,
net
|
91,467
|
60,980
|
73,821
|
||||||
Loss
on early extinguishment of
debt
|
9,256
|
32,744
|
—
|
||||||
Other
expense (income),
net
|
3,131
|
(78
|
)
|
1,143
|
|||||
Income
(loss) from continuing operations before income taxes
|
33,885
|
(32,286
|
)
|
(105,753
|
)
|
||||
Income
tax expense
(benefit)
|
9,900
|
(21,138
|
)
|
42,348
|
|||||
Income
(loss) from continuing
operations
|
23,985
|
(11,148
|
)
|
(148,101
|
)
|
||||
Income
from discontinued operations, net of taxes
|
16,796
|
126,519
|
13,049
|
||||||
Net
income
(loss)
|
$
|
40,781
|
$
|
115,371
|
$
|
(135,052
|
)
|
||
Income
(loss) per share—basic:
|
|||||||||
Continuing
operations
|
$
|
0.45
|
$
|
(0.21
|
)
|
$
|
(2.96
|
)
|
|
Discontinued
operations
|
0.31
|
2.38
|
0.26
|
||||||
Net
income
(loss)
|
$
|
0.76
|
$
|
2.17
|
$
|
(2.70
|
)
|
||
Income
(loss) per share—diluted:
|
|||||||||
Continuing
operations
|
$
|
0.44
|
$
|
(0.21
|
)
|
$
|
(2.96
|
)
|
|
Discontinued
operations
|
0.31
|
2.38
|
0.26
|
||||||
Net
income
(loss)
|
$
|
0.75
|
$
|
2.17
|
$
|
(2.70
|
)
|
2007
|
2006
|
2005
|
|||||||
(in
thousands)
|
|||||||||
Income
tax expense (benefit) for U.S. operations
|
$
|
11,903
|
$
|
(21,418
|
)
|
$
|
41,992
|
||
Income
tax (benefit) expense for foreign operations
|
(2,003
|
)
|
280
|
356
|
|||||
Income
tax expense (benefit)
|
$
|
9,900
|
$
|
(21,138
|
)
|
$
|
42,348
|
||
Effective
income tax rate
|
29.2
|
%
|
(65.5
|
)%
|
40.0
|
%
|
2007
|
2006
|
2005
|
|||||||
(in
thousands)
|
|||||||||
Segment
net
sales
|
$
|
897,722
|
$
|
780,696
|
$
|
767,403
|
|||
Divested
operations
|
—
|
—
|
(8,502
|
)
|
|||||
Division
net
sales
|
$
|
897,722
|
$
|
780,696
|
$
|
758,901
|
|||
Segment
operating
income
|
$
|
117,342
|
$
|
82,753
|
$
|
51,830
|
|||
Operating
income
margin
|
13.1
|
%
|
10.6
|
%
|
6.8
|
%
|
|||
Items
included in segment operating income (loss):
|
|||||||||
Restructuring
and impairment charges
|
$
|
11,350
|
$
|
18,336
|
$
|
12,540
|
|||
Operating
(loss) from divested operations
|
—
|
—
|
(341
|
)
|
2007
|
2006
|
2005
|
|||||||
(in
thousands)
|
|||||||||
Segment
net
sales
|
$
|
1,148,994
|
$
|
730,528
|
$
|
827,378
|
|||
Divested
operations
|
—
|
(9,355
|
)
|
(35,271
|
)
|
||||
Division
net
sales
|
$
|
1,148,994
|
$
|
721,173
|
$
|
792,107
|
|||
Segment
operating income
(loss)
|
$
|
55,085
|
$
|
13,606
|
$
|
(30,675
|
)
|
||
Operating
income
margin
|
4.8
|
%
|
1.9
|
%
|
(3.7
|
)%
|
|||
Items
included in segment operating income (loss):
|
|||||||||
Restructuring
and impairment charges
|
$
|
28,279
|
$
|
21,560
|
$
|
36,367
|
|||
Operating
(loss) income from divested operations
|
—
|
(1,375
|
)
|
686
|
Payments
Due
|
Long-Term
Debt(1)
|
Operating
Leases
|
Other
Long-Term
Obligations(2)
|
Purchase
Commitments
and
Other(3)
|
Total
|
|||||||||||
2008
|
$
|
127,384
|
$
|
34,944
|
$
|
27,320
|
$
|
11,156
|
$
|
200,804
|
||||||
2009
|
122,310
|
27,555
|
13,964
|
—
|
163,829
|
|||||||||||
2010
|
119,704
|
21,251
|
18,546
|
—
|
159,501
|
|||||||||||
2011
|
117,200
|
16,613
|
6,341
|
—
|
140,154
|
|||||||||||
2012
|
200,032
|
12,833
|
2,510
|
—
|
215,375
|
|||||||||||
Thereafter
|
1,390,893
|
33,514
|
49,704
|
—
|
1,474,111
|
|||||||||||
Total
|
$
|
2,077,523
|
$
|
146,710
|
$
|
118,385
|
$
|
11,156
|
$
|
2,353,774
|
(1)
|
Includes
estimated interest expense over the term of long-term debt with variable
rate debt having an average interest rate of
6.0%.
|
(2)
|
Includes
pension and other postretirement benefit obligations, anticipated worker’s
compensation claims, restructuring liabilities, including interest expense
on lease terminations, income tax contingencies and derivative
liabilities.
|
(3)
|
Purchase
commitments and other consists primarily of payments for
equipment.
|
Rating
Agency
|
Corporate
Rating
|
Amended
Credit
Facilities
|
7⅞%
Notes
|
8⅜%
Notes
|
Last
Update
|
||||||
Standard
&
Poor’s
|
BB-
|
BB+
|
B
|
B
|
December
2007
|
||||||
Moody’s
|
B1
|
Ba2
|
B3
|
B3
|
September
2007
|
/s/ ERNST & YOUNG LLP |
December
31,
|
|||||||
As
Restated
|
|||||||
2007
|
2006
|
||||||
Assets
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
15,882
|
$
|
10,558
|
|||
Accounts
receivable, net
|
344,634
|
228,912
|
|||||
Inventories
|
162,908
|
91,534
|
|||||
Assets
held for sale
|
—
|
51,966
|
|||||
Prepaid
and other current assets
|
73,358
|
41,413
|
|||||
Total
current assets
|
596,782
|
424,383
|
|||||
Property,
plant and equipment, net
|
428,341
|
251,103
|
|||||
Goodwill
|
669,802
|
258,136
|
|||||
Other
intangible assets, net
|
270,622
|
31,985
|
|||||
Other
assets, net
|
37,175
|
34,285
|
|||||
Total
assets
|
$
|
2,002,722
|
$
|
999,892
|
|||
Liabilities
and Shareholders’ Equity
|
|||||||
Current
liabilities:
|
|||||||
Current
maturities of long-term debt
|
$
|
18,752
|
$
|
7,513
|
|||
Accounts
Payable
|
165,458
|
116,180
|
|||||
Accrued
compensation and related liabilities
|
47,153
|
40,242
|
|||||
Other
current liabilities
|
79,554
|
63,812
|
|||||
Total
current liabilities
|
310,917
|
227,747
|
|||||
Long-term
debt
|
1,425,885
|
667,782
|
|||||
Deferred
income taxes
|
55,181
|
4,356
|
|||||
Other
liabilities
|
111,413
|
41,550
|
|||||
Commitments
and contingencies
|
|||||||
Shareholders’
equity:
|
|||||||
Preferred
stock, $0.01 par value; 25 shares authorized,
none
issued
|
—
|
—
|
|||||
Common
stock, $0.01 par value; 100,000 shares
authorized,
53,700 and 53,515 shares issued and
outstanding
as of December 31, 2007 and 2006,
respectively
|
537
|
535
|
|||||
Paid-in
capital
|
254,241
|
244,894
|
|||||
Retained
deficit
|
(148,939
|
)
|
(189,720
|
)
|
|||
Accumulated
other comprehensive (loss) income
|
(6,513
|
)
|
2,748
|
||||
Total
shareholders’ equity
|
99,326
|
58,457
|
|||||
Total
liabilities and shareholders’ equity
|
$
|
2,002,722
|
$
|
999,892
|
Years
Ended December 31,
|
||||||||||
As
Restated
|
||||||||||
2007
|
2006
|
2005
|
||||||||
Net
sales
|
$
|
2,046,716
|
$
|
1,511,224
|
$
|
1,594,781
|
||||
Cost
of sales
|
1,628,706
|
1,211,784
|
1,319,950
|
|||||||
Selling,
general and administrative
|
229,961
|
189,476
|
218,740
|
|||||||
Amortization
of intangible assets
|
10,413
|
5,473
|
5,147
|
|||||||
Restructuring,
impairment and other charges
|
40,086
|
41,096
|
77,254
|
|||||||
Operating
income (loss)
|
137,550
|
63,395
|
(26,310
|
)
|
||||||
(Gain)
loss on sale of non-strategic businesses
|
(189
|
)
|
2,035
|
4,479
|
||||||
Interest
expense, net
|
91,467
|
60,980
|
73,821
|
|||||||
Loss
on early extinguishment of debt
|
9,256
|
32,744
|
—
|
|||||||
Other
expense (income), net
|
3,131
|
(78
|
)
|
1,143
|
||||||
Income
(loss) from continuing operations before income
taxes
|
33,885
|
(32,286
|
)
|
(105,753
|
)
|
|||||
Income
tax expense (benefit)
|
9,900
|
(21,138
|
)
|
42,348
|
||||||
Income
(loss) from continuing operations
|
23,985
|
(11,148
|
)
|
(148,101
|
)
|
|||||
Income
from discontinued operations, net of taxes
|
16,796
|
126,519
|
13,049
|
|||||||
Net
income (loss)
|
$
|
40,781
|
$
|
115,371
|
$
|
(135,052
|
)
|
|||
Income (loss) per share—basic: | ||||||||||
Continuing
operations
|
$
|
0.45
|
$
|
(0.21
|
)
|
$
|
(2.96
|
)
|
||
Discontinued
operations
|
0.31
|
2.38
|
0.26
|
|||||||
Net
income (loss)
|
$
|
0.76
|
$
|
2.17
|
$
|
(2.70
|
)
|
|||
Income (loss) per share—diluted: | ||||||||||
Continuing
operations
|
$
|
0.44
|
$
|
(0.21
|
)
|
$
|
(2.96
|
)
|
||
Discontinued
operations
|
0.31
|
2.38
|
0.26
|
|||||||
Net
income (loss)
|
$
|
0.75
|
$
|
2.17
|
$
|
(2.70
|
)
|
|||
Weighted
average shares:
|
||||||||||
Basic
|
53,584
|
53,288
|
50,038
|
|||||||
Diluted
|
54,645
|
53,288
|
50,038
|
Years
Ended December 31,
|
|||||||||
As
Restated
|
|||||||||
2007
|
2006
|
2005
|
|||||||
Cash
flows from operating activities:
|
|||||||||
Net
income (loss)
|
$
|
40,781
|
$
|
115,371
|
$
|
(135,052
|
)
|
||
Adjustments
to reconcile net income (loss) to net cash
provided
by (used in) operating activities:
|
|||||||||
Gain
on sale of discontinued operations, net of taxes
|
(17,007
|
)
|
(113,477
|
)
|
—
|
||||
Loss
(income) from discontinued operations, net of taxes
|
211
|
(13,042
|
)
|
(13,049
|
)
|
||||
Depreciation
|
55,095
|
35,220
|
43,101
|
||||||
Amortization
of other intangible assets
|
10,413
|
5,473
|
5,147
|
||||||
Non-cash
interest expense, net
|
1,410
|
1,728
|
3,603
|
||||||
Deferred
income taxes
|
8,763
|
(24,842
|
)
|
35,665
|
|||||
Non-cash
restructuring, impairment and other charges, net
|
19,729
|
10,346
|
32,010
|
||||||
Loss
on early extinguishment of debt
|
9,256
|
32,744
|
—
|
||||||
(Gain)
loss on sale of non-strategic businesses
|
(189
|
)
|
2,035
|
4,479
|
|||||
Provisions
for bad debts
|
5,363
|
4,345
|
3,427
|
||||||
Provisions
for inventory obsolescence
|
2,851
|
1,900
|
2,936
|
||||||
Stock-based
compensation provision
|
10,280
|
5,954
|
2,505
|
||||||
(Gain)
loss on disposal of assets
|
(369
|
)
|
379
|
(555
|
)
|
||||
Changes
in operating assets and liabilities, excluding the
effects
of acquired businesses:
|
|||||||||
Accounts
receivable
|
(6,086
|
)
|
(5,322
|
)
|
341
|
||||
Inventories
|
1,193
|
3,084
|
(139
|
)
|
|||||
Accounts
payable and accrued compensation and related liabilities
|
(9,101
|
)
|
(15,792
|
)
|
(59,386
|
)
|
|||
Other
working capital changes
|
(36,580
|
)
|
(29,802
|
)
|
8,652
|
||||
Other,
net
|
(9,805
|
)
|
(1,778
|
)
|
2,312
|
||||
Net
cash provided by (used in) continuing operating activities
|
86,208
|
14,524
|
(64,003
|
)
|
|||||
Net
cash provided by discontinued operating activities
|
2,198
|
8,832
|
25,330
|
||||||
Net
cash provided by (used in) operating activities
|
88,406
|
23,356
|
(38,673
|
) | |||||
Cash
flows from investing activities:
|
|||||||||
Cost
of business acquisitions, net of cash acquired
|
(627,304
|
)
|
(49,425
|
)
|
(3,552
|
)
|
|||
Capital
expenditures
|
(31,538
|
)
|
(19,930
|
)
|
(28,154
|
)
|
|||
Acquisition
payments
|
(3,653
|
)
|
(4,653
|
)
|
(4,053
|
)
|
|||
Proceeds
from sale of property, plant and equipment
|
8,949
|
11,475
|
3,796
|
||||||
Proceeds
from divestitures, net
|
431
|
3,189
|
8,377
|
||||||
Net
cash used in investing activities of continuing operations
|
(653,115
|
)
|
(59,344
|
)
|
(23,586
|
)
|
|||
Proceeds
from the sale of discontinued operations
|
73,628
|
211,529
|
—
|
||||||
Proceeds
from the sale of property, plant and
equipment
of discontinued operations
|
—
|
—
|
211
|
||||||
Capital
expenditures for discontinued operations
|
—
|
(632
|
)
|
(2,603
|
)
|
||||
Net
cash provided by (used in) investing activities of discontinued operations
|
73,628
|
210,897
|
(2,392
|
)
|
|||||
Net
cash (used in) provided by investing activities
|
(579,487
|
)
|
151,553
|
(25,978
|
)
|
||||
Cash
flows from financing activities:
|
|||||||||
Proceeds
from issuance of Term Loans
|
720,000
|
325,000
|
—
|
||||||
Proceeds
from Unsecured Loan
|
175,000
|
—
|
—
|
||||||
Borrowings
under Revolving Credit Facility, net
|
75,700
|
15,500
|
—
|
||||||
Proceeds
from exercise of stock options
|
304
|
1,956
|
22,433
|
||||||
Proceeds
from excess tax benefit from stock based compensation
|
67
|
1,168
|
—
|
||||||
Repayment
of Term Loan B
|
(324,188
|
)
|
—
|
—
|
|||||
Repayment
of Cadmus revolving senior bank credit facility
|
(70,100
|
)
|
—
|
—
|
|||||
Repayments
of other long-term debt
|
(29,053
|
)
|
(13,095
|
)
|
(3,123
|
)
|
|||
Repayment
of 8⅜% Senior Subordinated Notes
|
(20,880
|
)
|
—
|
—
|
|||||
Repayment
of 9⅝% Senior Notes
|
(10,498
|
)
|
(339,502
|
)
|
—
|
||||
Repayments
of Term Loans
|
(4,900
|
)
|
(813
|
)
|
—
|
||||
(Repayments)
borrowings under senior secured revolving credit
facility, net
|
—
|
(123,931
|
)
|
45,490
|
|||||
Payment
of refinancing fees, redemption, premiums and expenses
|
(8,045
|
)
|
(26,142
|
)
|
—
|
||||
Payment
of debt issuance costs
|
(5,906
|
)
|
(3,770
|
)
|
—
|
||||
Purchase
and retirement of common stock upon vesting of RSUs
|
(1,302
|
)
|
(1,786
|
)
|
(187
|
)
|
|||
Net
cash provided by (used in) financing activities
|
496,199
|
(165,415
|
)
|
64,613
|
|||||
Effect
of exchange rate changes on cash and cash
equivalents
of continuing operations
|
206
|
14
|
107
|
||||||
Effect
of exchange rate changes on cash and cash equivalents
of
discontinued operations
|
—
|
15
|
170
|
||||||
Net
increase in cash and cash equivalents
|
5,324
|
9,523
|
239
|
||||||
Cash
and cash equivalents at beginning of year
|
10,558
|
1,035
|
796
|
||||||
Cash
and cash equivalents at end of year
|
$
|
15,882
|
$
|
10,558
|
$
|
1,035
|
Common
Stock
|
Paid-In
Capital
|
Retained
(Deficit)
|
Deferred
Compensation
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
Total
Shareholders’
Equity
(Deficit)
|
|||||||||||||
Balance
at December 31, 2004
|
$
|
487
|
$
|
214,902
|
$
|
(170,039
|
)
|
$
|
(2,003
|
)
|
$
|
14,007
|
$
|
57,354
|
||||
Comprehensive
income (loss):
|
||||||||||||||||||
Net
loss
|
(135,052
|
)
|
(135,052
|
)
|
||||||||||||||
Other
comprehensive income (loss):
|
||||||||||||||||||
Pension
liability adjustment, net of tax benefit of $743
|
(1,187
|
)
|
(1,187
|
)
|
||||||||||||||
Currency
translation adjustment
|
4,584
|
4,584
|
||||||||||||||||
Other
comprehensive income
|
3,397
|
|||||||||||||||||
Total
comprehensive loss
|
(131,655
|
)
|
||||||||||||||||
Cancellation
of restricted shares
|
(4
|
)
|
(1,993
|
)
|
795
|
(1,202
|
)
|
|||||||||||
Issuance
of restricted shares
|
5
|
4,030
|
(4,035
|
)
|
—
|
|||||||||||||
Exercise
of stock options
|
42
|
22,391
|
22,433
|
|||||||||||||||
Purchase
and retirement of common stock
|
(187
|
)
|
(187
|
)
|
||||||||||||||
Amortization
of deferred compensation and restricted
stock units
|
289
|
3,418
|
3,707
|
|||||||||||||||
Balance
at December 31, 2005
|
530
|
239,432
|
(305,091
|
)
|
(1,825
|
)
|
17,404
|
(49,550
|
)
|
|||||||||
Comprehensive
income (loss) As Restated:
|
||||||||||||||||||
Net
income As Restated
|
115,371
|
115,371
|
||||||||||||||||
Other
comprehensive income (loss):
|
||||||||||||||||||
Pension
liability adjustment, net of tax expense of $429
|
6,326
|
6,326
|
||||||||||||||||
Unrealized
loss on cash flow hedges
|
(2,992
|
)
|
(2,992
|
)
|
||||||||||||||
Currency
translation adjustment
|
(3,603
|
)
|
(3,603
|
)
|
||||||||||||||
Reclassifications
to earnings on sale of discontinued operations:
|
||||||||||||||||||
Currency
translation adjustment
|
(14,387
|
)
|
(14,387
|
)
|
||||||||||||||
Other
comprehensive loss
|
(14,656
|
)
|
||||||||||||||||
Total
comprehensive income As Restated
|
100,715
|
|||||||||||||||||
Reversal
of unamortized deferred
compensation
on adoption of SFAS 123(R)
|
(1,825
|
)
|
1,825
|
—
|
||||||||||||||
Exercise
of stock options
|
5
|
1,951
|
1,956
|
|||||||||||||||
Purchase
and retirement of common stock upon vesting of RSUs
|
(1,786
|
)
|
(1,786
|
)
|
||||||||||||||
Amortization
of stock based compensation
|
5,954
|
5,954
|
||||||||||||||||
Excess
tax benefit from stock based compensation
|
1,168
|
1,168
|
||||||||||||||||
Balance
at December 31, 2006 As Restated
|
535
|
244,894
|
(189,720
|
)
|
—
|
2,748
|
58,457
|
|||||||||||
Comprehensive
income (loss):
|
||||||||||||||||||
Net
income
|
40,781
|
40,781
|
||||||||||||||||
Other
comprehensive income (loss):
|
||||||||||||||||||
Pension
liability adjustment, net of tax expense of $145
|
(2,131
|
)
|
(2,131
|
)
|
||||||||||||||
Unrealized
loss on cash flow hedges, net of tax benefit of $4,985
|
(7,780
|
)
|
(7,780
|
)
|
||||||||||||||
Currency
translation adjustment
|
6,151
|
6,151
|
||||||||||||||||
Reclassifications
to earnings on sale of discontinued operations:
|
||||||||||||||||||
Currency
translation adjustment
|
(5,501
|
)
|
(5,501
|
)
|
||||||||||||||
Other
comprehensive loss
|
(9,261
|
)
|
||||||||||||||||
Total
comprehensive income
|
31,520
|
|||||||||||||||||
Exercise
of stock options
|
304
|
304
|
||||||||||||||||
Purchase
and retirement of common stock upon vesting of RSUs
|
2
|
(1,304
|
)
|
(1,302
|
)
|
|||||||||||||
Amortization
of stock based compensation
|
10,280
|
10,280
|
||||||||||||||||
Excess
tax benefit from stock based compensation
|
67
|
67
|
||||||||||||||||
Balance
at December 31, 2007
|
$
|
537
|
$
|
254,241
|
$
|
(148,939
|
)
|
$
|
—
|
$
|
(6,513
|
)
|
$
|
99,326
|
Consolidated
balance sheet line items
(in
thousands)
|
|||||
December
31, 2006
|
|||||
As
Reported
|
As
Restated
|
||||
Accounts
receivable, net
|
$
|
230,098
|
$
|
228,912
|
|
Inventories
|
92,406
|
91,534
|
|||
Total
current assets
|
426,441
|
424,383
|
|||
Total
assets
|
$
|
1,001,950
|
$
|
999,892
|
|
Accounts
payable
|
$
|
116,067
|
$
|
116,180
|
|
Other
current liabilities
|
63,609
|
63,812
|
|||
Total
current liabilities
|
227,431
|
227,747
|
|||
Other
liabilities
|
40,640
|
41,550
|
|||
Retained
deficit
|
(186,436)
|
(189,720)
|
|||
Total
shareholders' equity
|
61,741
|
58,457
|
|||
Total
liabilities and shareholders' equity
|
$
|
1,001,950
|
$
|
999,892
|
Consolidated
statement of operations line items
(in
thousands, except per share data)
|
|||||
Year
Ended
|
|||||
December
31, 2006
|
|||||
As
Reported
|
As
Restated
|
||||
Cost
of sales
|
$
|
1,208,500
|
$
|
1,211,784
|
|
Operating
income
|
66,679
|
63,395
|
|||
Loss from
continuing operations before taxes
|
(29,002)
|
(32,286)
|
|||
Income
tax benefit
|
(7,177)
|
(21,138)
|
|||
Loss from
continuing operations
|
(21,825)
|
(11,148)
|
|||
Income from discontinued operations, net of taxes | 140,480 | 126,519 | |||
Net
income
|
$
|
118,655
|
$
|
115,371
|
|
Income
(loss) per share – basic and diluted:
|
|||||
Continuing
operations
|
$
|
(0.41)
|
$
|
(0.21)
|
|
Discontinued operations
|
2.64 | 2.38 | |||
Net
income
|
$ |
2.23
|
$ |
2.17
|
Consolidated
statement of cash flows line items
(in
thousands)
|
|||||
Year
Ended
|
|||||
December
31, 2006
|
|||||
As
Reported
|
As
Restated
|
||||
Net
income
|
$
|
118,655
|
$
|
115,371
|
|
Gain on sale of discontinued operations, net of taxes | (127,438) | (113,477) | |||
Deferred income taxes | (10,881) | (24,842) | |||
Accounts
receivable
|
(6,508)
|
(5,322)
|
|||
Inventories
|
2,212
|
3,084
|
|||
Accounts
payable and accrued compensation and related liabilities
|
(15,905)
|
(15,792)
|
|||
Other
working capital changes
|
(23,790)
|
(29,802)
|
|||
Other,
net
|
(2,688)
|
(1,778)
|
|||
Net
cash provided by continuing operating activities
|
20,739
|
14,524
|
|||
Net
cash provided by discontinued operating activities
|
2,617
|
8,832
|
As
of
August
30, 2007
|
||||
Current
assets
|
$
|
42,824
|
||
Property,
plant and equipment
|
36,757
|
|||
Goodwill
|
102,254
|
|||
Other
intangible assets
|
87,770
|
|||
Other
assets
|
929
|
|||
Total
assets acquired
|
270,534
|
|||
Current
liabilities, excluding current portion of long-term debt
|
9,782
|
|||
Long-term
debt, including current maturities
|
20,277
|
|||
Deferred
income taxes
|
21,355
|
|||
Total
liabilities assumed
|
51,414
|
|||
Net
assets acquired
|
219,120
|
|||
Less
cash acquired
|
(1,114)
|
|||
Cost
of Commercial Envelope acquisition, less cash acquired
|
$
|
218,006
|
Years
Ended
December
31,
|
|||||||||||||
2007
|
2006
|
||||||||||||
As
Reported
|
Pro
Forma
|
As
Reported
|
Pro
Forma
|
||||||||||
Net
sales
|
$
|
2,046,716
|
$
|
2,148,368
|
$
|
1,511,224
|
$
|
1,664,661
|
|||||
Operating
income
|
137,550
|
150,168
|
63,395
|
84,862
|
|||||||||
Income
(loss) from continuing operations
|
23,985
|
23,369
|
(11,148
|
)
|
(10,131
|
)
|
|||||||
Net
income
|
40,781
|
40,165
|
115,371
|
116,388
|
|||||||||
Income
(loss) per share – basic:
|
|||||||||||||
Continuing
operations
|
$
|
0.45
|
$
|
0.44
|
$
|
(0.21
|
)
|
$
|
(0.20
|
)
|
|||
Discontinued
operations
|
0.31
|
0.31
|
2.38
|
2.38
|
|||||||||
Net
income
|
$
|
0.76
|
$
|
0.75
|
$
|
2.17
|
$
|
2.18
|
|||||
Income
(loss) per share – diluted:
|
|||||||||||||
Continuing
operations
|
$
|
0.44
|
$
|
0.43
|
$
|
(0.21
|
)
|
$
|
(0.20
|
)
|
|||
Discontinued
operations
|
0.31
|
0.31
|
2.38
|
2.38
|
|||||||||
Net
income
|
$
|
0.75
|
$
|
0.74
|
$
|
2.17
|
$
|
2.18
|
As
of
March
7, 2007
|
||||
Current
assets
|
$
|
97,142
|
||
Property,
plant and equipment
|
136,268
|
|||
Goodwill
|
230,817
|
|||
Other
intangible assets
|
111,600
|
|||
Other
assets
|
6,856
|
|||
Total
assets acquired
|
582,683
|
|||
Current
liabilities, excluding current portion of long-term debt
|
57,989
|
|||
Long-term
debt, including current maturities
|
210,063
|
|||
Deferred income taxes | 7,500 | |||
Other
liabilities
|
57,813
|
|||
Total
liabilities assumed
|
333,365
|
|||
Net
assets acquired
|
249,318
|
|||
Less
cash acquired
|
—
|
|||
Cost
of Cadmus acquisition, less cash acquired
|
$
|
249,318
|
Years
Ended
December
31,
|
|||||||||||||
2007
|
2006
|
||||||||||||
As
Reported
|
Pro
Forma
|
As
Reported
|
Pro
Forma
|
||||||||||
Net
sales
|
$
|
2,046,716
|
$
|
2,128,533
|
$
|
1,511,224
|
$
|
1,964,395
|
|||||
Operating
income
|
137,550
|
140,874
|
63,395
|
70,532
|
|||||||||
Income
(loss) from continuing operations
|
23,985
|
19,029
|
(11,148
|
)
|
(18,854
|
)
|
|||||||
Net
income
|
40,781
|
35,825
|
115,371
|
107,665
|
|||||||||
Income
(loss) per share – basic:
|
|||||||||||||
Continuing
operations
|
$
|
0.45
|
$
|
0.36
|
$
|
(0.21
|
)
|
$
|
(0.36
|
)
|
|||
Discontinued
operations
|
0.31
|
0.31
|
2.38
|
2.38
|
|||||||||
Net
income
|
$
|
0.76
|
$
|
0.67
|
$
|
2.17
|
$
|
2.02
|
|||||
Income
(loss) per share – diluted:
|
|||||||||||||
Continuing
operations
|
$
|
0.44
|
$
|
0.35
|
$
|
(0.21
|
)
|
$
|
(0.36
|
)
|
|||
Discontinued
operations
|
0.31
|
0.31
|
2.38
|
2.38
|
|||||||||
Net
income
|
$
|
0.
75
|
$
|
0.66
|
$
|
2.17
|
$
|
2.02
|
Lease
Termination
Costs
|
Employee
Separation
Costs
|
Other
Exit Costs
|
Total
|
|||||||||||
Liabilities
recorded at January 1, 2007
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Accruals,
net
|
5,641
|
7,056
|
1,802
|
14,499
|
||||||||||
Payments
|
(2,188
|
)
|
(6,561
|
)
|
(1,451
|
)
|
(10,200
|
)
|
||||||
Balance
at December 31, 2007
|
$
|
3,453
|
$
|
495
|
$
|
351
|
$
|
4,299
|
2007
|
2006
|
2005
|
||||||||
Net
sales
|
$
|
—
|
$
|
41,391
|
$
|
154,600
|
||||
Operating
income
|
—
|
8,838
|
34,208
|
|||||||
Other
income
|
2,065
|
—
|
—
|
|||||||
Income
tax
expense
|
2,276
|
1,373
|
19,948
|
|||||||
Gain
on sale of discontinued operations, net of taxes of
$8,427
and $22,456 in 2007 and 2006, respectively
|
17,007
|
113,477
|
—
|
|||||||
Income
from discontinued operations, net of taxes
|
16,796
|
126,519
|
13,049
|
Net
earnings of the Fund in Canadian dollars
|
$
|
19,431
|
||
Adjustment
to earnings of the Fund resulting from the reversal of fair value
adjustments in Canadian dollars:
|
||||
Amortization
of intangibles
|
4,232
|
|||
Increased
cost of sales on inventory step-up
|
4,304
|
|||
Decreased
amortization of property, plant and equipment
|
(549)
|
|||
Income
tax effect of above adjustments
|
(2,492)
|
|||
Income
tax recovery from change in tax rates relating to asset
revaluations
|
(489)
|
|||
Net
earnings of the Fund adjusted to reflect Cenveo’s carrying value under
U.S. GAAP
|
$
|
24,437
|
||
Equity
income in the Fund at 28.6% in Canadian dollars
|
6,989
|
|||
Canadian
dollar/U.S. dollar exchange rate
|
1.13147
|
|||
Equity
income in the Fund in U.S. dollars
|
$
|
6,177
|
2006
|
2005
|
|||||
Net
sales
|
$
|
9,355
|
$
|
43,773
|
||
Operating
(loss)
income
|
(1,375
|
)
|
345
|
December
31
|
||||||||
2007
|
2006
|
|||||||
Raw
materials
|
$ | 71,075 | $ | 28,030 | ||||
Work
in
process
|
34,875 | 21,285 | ||||||
Finished
goods
|
56,958 | 42,219 | ||||||
$ | 162,908 | $ | 91,534 |
December
31
|
|||||||
2007
|
2006
|
||||||
Land
and land
improvements
|
$
|
23,734
|
$
|
13,562
|
|||
Buildings
and
improvements
|
109,673
|
80,740
|
|||||
Machinery
and
equipment
|
577,763
|
437,910
|
|||||
Furniture
and
fixtures
|
12,430
|
10,771
|
|||||
Construction
in
progress
|
18,664
|
6,974
|
|||||
742,264
|
549,957
|
||||||
Accumulated
depreciation
|
(313,923
|
)
|
(298,854
|
)
|
|||
$
|
428,341
|
$
|
251,103
|
Envelopes,
Forms
And
Labels
|
Commercial
Printing
|
Total
|
||||||||
Balance
as of December 31, 2005
|
$
|
218,038
|
$
|
93,108
|
$
|
311,146
|
||||
Acquisitions
|
29,122
|
—
|
29,122
|
|||||||
Dispositions
|
(55,739
|
)
|
(747
|
)
|
(56,486
|
)
|
||||
Reclassified
to assets held for sale
|
(25,749
|
)
|
—
|
(25,749
|
)
|
|||||
Foreign
currency
translation
|
—
|
103
|
103
|
|||||||
Balance
as of December 31, 2006
|
$
|
165,672
|
$
|
92,464
|
$
|
258,136
|
||||
Acquisitions
|
139,353
|
271,205
|
410,558
|
|||||||
Foreign
currency
translation
|
—
|
1,108
|
1,108
|
|||||||
Balance
as of December 31, 2007
|
$
|
305,025
|
$
|
364,777
|
$
|
669,802
|
December
31
|
||||||||||||||||||
2007
|
2006
|
|||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
|||||||||||||
Intangible
assets with
determinable
lives:
|
||||||||||||||||||
Customer
relationship
|
$
|
153,806
|
$
|
(22,303
|
)
|
$
|
131,503
|
$
|
29,906
|
$
|
(13,001
|
)
|
$
|
16,905
|
||||
Trademarks
and trade names
|
20,521
|
(3,251
|
)
|
17,270
|
14,551
|
(2,487
|
)
|
12,064
|
||||||||||
Patents
|
3,028
|
(1,487
|
)
|
1,541
|
3,028
|
(1,218
|
)
|
1,810
|
||||||||||
Non-compete
agreements
|
2,316
|
(1,336
|
)
|
980
|
1,640
|
(1,591
|
)
|
49
|
||||||||||
Other
|
768
|
(360
|
)
|
408
|
768
|
(331
|
)
|
437
|
||||||||||
180,439
|
(28,737
|
)
|
151,702
|
49,893
|
(18,628
|
)
|
31,265
|
|||||||||||
Intangible
assets with indefinite lives:
|
||||||||||||||||||
Trademarks
|
118,200
|
—
|
118,200
|
—
|
—
|
—
|
||||||||||||
Pollution
credits
|
720
|
—
|
720
|
720
|
—
|
720
|
||||||||||||
Total
|
$
|
299,359
|
$
|
(28,737
|
)
|
$
|
270,622
|
$
|
50,613
|
$
|
(18,628
|
)
|
$
|
31,985
|
December
31
|
||||||
2007
|
2006
|
|||||
Accrued
customer
rebates
|
$
|
19,579
|
$
|
19,135
|
||
Other
accrued
liabilities
|
59,975
|
44,677
|
||||
$
|
79,554
|
$
|
63,812
|
December
31
|
||||||
2007
|
2006
|
|||||
Term
Loan, due
2013
|
$
|
715,100
|
$
|
324,188
|
||
7⅞%
Senior Subordinated Notes, due 2013
|
320,000
|
320,000
|
||||
8⅜%
Senior Subordinated Notes, due 2014 ($104.1 million
outstanding
principal
amount)
|
106,220
|
—
|
||||
Senior
Unsecured Loan, due
2015
|
175,000
|
—
|
||||
Revolving
Credit Facility, due
2012
|
91,200
|
15,500
|
||||
9⅝%
Senior Notes, due
2012
|
—
|
10,498
|
||||
Other
|
37,117
|
5,109
|
||||
1,444,637
|
675,295
|
|||||
Less
current
maturities
|
(18,752
|
)
|
(7,513
|
)
|
||
Long-term
debt
|
$
|
1,425,885
|
$
|
667,782
|
2008
|
$
|
18,752
|
|
2009
|
15,073
|
||
2010
|
13,612
|
||
2011
|
11,946
|
||
2012
|
99,956
|
||
Thereafter
|
1,283,199
|
||
$
|
1,442,538
|
||
2007
|
2006
|
2005
|
|||||||
Domestic
|
$
|
35,712
|
$
|
(33,975
|
)
|
$
|
(105,403
|
)
|
|
Foreign
|
(1,827
|
)
|
1,689
|
(350
|
)
|
||||
$
|
33,885
|
$
|
(32,286
|
)
|
$
|
(105,753
|
)
|
2007
|
2006
|
2005
|
|||||||
Current
tax expense (benefit):
|
|||||||||
Federal
|
$
|
747
|
$
|
3,082
|
$
|
5,839
|
|||
Foreign
|
(1,300
|
)
|
247
|
595
|
|||||
State
|
1,690
|
375
|
249
|
||||||
1,137
|
3,704
|
6,683
|
|||||||
Deferred
expense (benefit):
|
|||||||||
Federal
|
7,400
|
(23,353
|
)
|
31,853
|
|||||
Foreign
|
(703
|
)
|
33
|
(239
|
)
|
||||
State
|
2,066
|
(1,522
|
)
|
4,051
|
|||||
8,763
|
(24,842
|
)
|
35,665
|
||||||
Income
tax expense (benefit)
|
$
|
9,900
|
$
|
(21,138
|
)
|
$
|
42,348
|
2007
|
2006
|
2005
|
|||||||
Expected
tax expense (benefit) at federal statutory income tax
|
|||||||||
Rate
|
$
|
11,860
|
$
|
(11,300
|
)
|
$
|
(37,013
|
)
|
|
State
and local income tax expense (benefit)
|
2,352
|
(1,130
|
)
|
(3,701
|
)
|
||||
Change
in valuation allowance
|
(4,621
|
)
|
(11,593
|
) |
79,951
|
||||
Change
in contingency reserves
|
299
|
—
|
2,073
|
||||||
Utilization
of foreign tax credits, net
|
—
|
—
|
(91
|
)
|
|||||
Non-U.S.
tax rate
differences
|
(478
|
)
|
(306
|
)
|
524
|
||||
Non-deductible
expenses
|
1,349
|
873
|
709
|
||||||
Non-deductible
investment expense
|
274
|
1,248
|
254
|
||||||
Expiration
of net operating losses
|
—
|
565
|
516
|
||||||
Statutory
foreign rate
change
|
(921
|
)
|
—
|
—
|
|||||
Other
|
(214
|
)
|
505
|
(874
|
)
|
||||
Income
tax expense
(benefit)
|
$
|
9,900
|
$
|
(21,138
|
)
|
$
|
42,348
|
2007
|
2006
|
|||||
Deferred
tax assets:
|
||||||
Net
operating loss carryforwards
|
$
|
85,873
|
$
|
74,094
|
||
Capital
loss
carryback
|
3,621
|
—
|
||||
Compensation
and benefit related accruals
|
32,424
|
15,986
|
||||
Foreign
tax credit carryforwards
|
16,661
|
16,662
|
||||
Alternative
minimum tax credit carryforwards
|
8,119
|
9,180
|
||||
Accounts
receivable
|
3,808
|
1,288
|
||||
Restructuring
accruals
|
6,539
|
4,769
|
||||
Gain
on discontinued operations
|
—
|
13,879
|
||||
Accrued
tax and
interest
|
12,128
|
—
|
||||
Other
|
9,779
|
7,996
|
||||
Valuation
allowance
|
(30,780
|
)
|
(55,746
|
)
|
||
Total
deferred tax
assets
|
148,172
|
88,108
|
||||
Deferred
tax liabilities:
|
||||||
Property,
plant and
equipment
|
(68,085
|
)
|
(48,697
|
)
|
||
Goodwill
and other intangible assets
|
(118,686
|
)
|
(26,954
|
)
|
||
Inventory
|
842
|
(2,659
|
)
|
|||
Other
|
531
|
(2,425
|
)
|
|||
Total
deferred tax
liabilities
|
(185,398
|
)
|
(80,735
|
)
|
||
Net
deferred tax (liability)
asset
|
$
|
(37,226
|
)
|
$
|
7,373
|
2007
|
2006
|
|||||
Current
deferred tax asset (included in prepaid and other current assets)
|
$
|
17,955
|
$
|
4,070
|
||
Long-term
deferred tax asset (included in other assets, net)
|
—
|
7,659
|
||||
Long-term
deferred tax
liability
|
(55,181
|
)
|
(4,356
|
)
|
||
Total
|
$
|
(37,226
|
)
|
$
|
7,373
|
Unrecognized
tax benefit – January 1, 2007
|
$
|
10,748
|
||
Gross
increases - tax positions in prior period
|
540
|
|||
Gross
decreases - tax positions in prior period
|
—
|
|||
Gross
increases - tax positions in current period
|
6,743
|
|||
Settlements
|
—
|
|||
Lapse
of statute of limitations
|
—
|
|||
Unrecognized
tax benefit – December 31, 2007
|
$
|
18,031
|
Envelopes,
Forms
and
Labels
|
Commercial
Printing
|
Total
|
||||||||||
Employee
separation
costs
|
$ | 2,381 | $ | 2,684 | $ | 5,065 | ||||||
Asset
impairments
|
3,989 | 4,159 | 8,148 | |||||||||
Equipment
moving
expenses
|
1,389 | 1,166 | 2,555 | |||||||||
Lease
termination expenses
|
126 | 3,773 | 3,899 | |||||||||
Multi-employer
pension withdrawal expenses
|
— | 2,092 | 2,092 | |||||||||
Building
clean-up and other expenses
|
885 | 1,784 | 2,669 | |||||||||
Total
restructuring and impairment charges
|
$ | 8,770 | $ | 15,658 | $ | 24,428 |
Lease
Termination
Costs
|
Employee
Separation
Costs
|
Pension
Withdrawal
Liabilities
|
Total
|
|||||||||||||
Balance
at December 31, 2006
|
$ | — | $ | — | $ | — | $ | — | ||||||||
Accruals,
net
|
3,899 | 5,065 | 2,092 | 11,056 | ||||||||||||
Payments
|
(317 | ) | (4,524 | ) | — | (4,841 | ) | |||||||||
Balance
at December 31, 2007
|
$ | 3,582 | $ | 541 | $ | 2,092 | $ | 6,215 |
Envelopes,
Forms
and
Labels
|
Commercial
Printing
|
Corporate
|
Total
|
|||||||||||||
Employee
separation
costs
|
$ | 1,888 | $ | 2,960 | $ | 251 | $ | 5,099 | ||||||||
Asset
impairments, net of gain on sale
|
(349 | ) | 4,242 |
—
|
3,893 | |||||||||||
Equipment
moving expenses
|
792 | 554 |
—
|
1,346 | ||||||||||||
Lease
termination
expenses
|
(132 | ) | 1,471 | 112 | 1,451 | |||||||||||
Building
clean-up and other expenses
|
381 | 3,394 | 94 | 3,869 | ||||||||||||
Total
restructuring and impairment charges
|
$ | 2,580 | $ | 12,621 | $ | 457 | $ | 15,658 |
Envelopes,
Forms
and
Labels
|
Commercial
Printing
|
Corporate
|
Total
|
|||||||||||||
Employee
separation
costs
|
$ | 6,746 | $ | 11,663 | $ | 1,438 | $ | 19,847 | ||||||||
Asset
impairments, net of gain on sale
|
2,697 | 935 | — | 3,632 | ||||||||||||
Equipment
moving expenses
|
4,972 | 1,398 | — | 6,370 | ||||||||||||
Lease
termination expense (income), net
|
2,187 | 2,104 | (276 | ) | 4,015 | |||||||||||
Building
clean-up and other expenses
|
1,734 | 5,460 | 38 | 7,232 | ||||||||||||
Total
restructuring and impairment charges
|
$ | 18,336 | $ | 21,560 | $ | 1,200 | $ | 41,096 |
Envelopes,
Forms
and
Labels
|
Commercial
Printing
|
Corporate
|
Total
|
|||||||||||||
Employee
separation costs
|
$ | 6,487 | $ | 9,348 | $ | 10,572 | $ | 26,407 | ||||||||
Asset
impairments
|
5,066 | 20,340 | 853 | 26,259 | ||||||||||||
Equipment
moving expenses
|
338 | 454 | — | 792 | ||||||||||||
Lease
termination expenses
|
41 | 1,586 | 4,124 | 5,751 | ||||||||||||
Multi-employer
pension withdrawal expenses
|
541 | 409 | — | 950 | ||||||||||||
Building
clean-up and other expenses
|
67 | 313 | — | 380 | ||||||||||||
Total
restructuring charges
|
12,540 | 32,450 | 15,549 | 60,539 | ||||||||||||
Other
charges
|
— | 3,917 | 12,798 | 16,715 | ||||||||||||
Total
restructuring, impairment and other
charges
|
$ | 12,540 | $ | 36,367 | $ | 28,347 | $ | 77,254 |
|
·
|
In
April 2005, the Company engaged an investment banking firm as a financial
advisor to assist the then current board of directors in its evaluation of
the Company’s strategic alternatives and incurred fees of $3.2
million.
|
|
·
|
Legal
and other fees incurred in connection with the special meeting of
shareholders of $4.9 million.
|
|
·
|
In
January 2005, the Company’s Chief Executive Officer resigned and the cost
incurred as a result of this resignation was $2.1
million.
|
|
·
|
Under
the Company’s Long-Term Incentive Plan, the change in the board of
directors in September 2005 constituted a change of control and
accelerated the vesting of the restricted stock issued to certain
executives. The compensation expense recognized by the Company as a result
of the vesting of this restricted stock was $2.6
million.
|
Lease
Termination
Costs
|
Employee
Separation
Costs
|
Pension
Withdrawal
Liabilities
|
Total
|
||||||||||
Balance
at December 31, 2005
|
$
|
6,067
|
$
|
3,734
|
$
|
950
|
$
|
10,751
|
|||||
Accruals,
net
|
4,015
|
19,847
|
—
|
23,862
|
|||||||||
Payments
|
(4,541
|
)
|
(22,154
|
)
|
(308
|
)
|
(27,003
|
)
|
|||||
Balance
at December 31, 2006
|
5,541
|
1,427
|
642
|
7,610
|
|||||||||
Accruals,
net
|
1,451
|
5,099
|
—
|
6,550
|
|||||||||
Payments
|
(3,099
|
)
|
(4,463
|
)
|
(345
|
)
|
(7,907
|
)
|
|||||
Balance
at December 31, 2007
|
$
|
3,893
|
$
|
2,063
|
$
|
297
|
$
|
6,253
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
(In
Years)
|
Aggregate
Intrinsic
Value(a)
(in
thousands)
|
|||||||
Outstanding
at January 1, 2007
|
3,326,780
|
$
|
14.71
|
|||||||
Granted
|
780,000
|
17.89
|
||||||||
Exercised
|
(34,175
|
)
|
8.92
|
$
|
463
|
|||||
Forfeited
|
(222,625
|
)
|
18.84
|
|||||||
Outstanding
at December 31, 2007
|
3,849,980
|
15.14
|
4.8
|
$
|
13,661
|
|||||
Exercisable
at December 31, 2007
|
1,316,855
|
12.71
|
4.5
|
$
|
7,503
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
(In
Years)
|
Aggregate
Intrinsic
Value(a)
(in
thousands)
|
|||||||
Outstanding
at January 1, 2006
|
2,365,961
|
$
|
8.95
|
|||||||
Granted
|
1,570,000
|
20.55
|
||||||||
Exercised
|
(329,814
|
)
|
6.03
|
$
|
3,479
|
|||||
Forfeited
|
(279,367
|
)
|
8.99
|
|||||||
Outstanding
at December 31, 2006
|
3,326,780
|
14.71
|
5.7
|
$
|
21,589
|
|||||
Exercisable
at December 31, 2006
|
549,280
|
9.32
|
5.4
|
$
|
6,529
|
Options
|
Weighted
Average
Exercise
Price
|
|||||||
Options
outstanding at beginning of year
|
6,868,100 | $ | 5.55 | |||||
Granted
|
2,308,000 | 9.17 | ||||||
Exercised
|
(4,661,854 | ) | 4.82 | |||||
Expired/cancelled
|
(2,148,285 | ) | 7.06 | |||||
Options
outstanding at December 31, 2005
|
2,365,961 | 8.97 | ||||||
Options
exercisable at December 31, 2005
|
535,961 | 6.83 |
2007
|
2006
|
2005
|
||||||||||
Weighted
average fair value of option grants during the year
|
$ | 6.31 | $ | 9.56 | $ | 5.08 | ||||||
Assumptions:
|
||||||||||||
Expected option life in
years
|
4.25 | 4.27 | 4.81 | |||||||||
Risk-free interest
rate
|
4.05 | % | 4.75 | % | 4.40 | % | ||||||
Expected
volatility
|
0.363 | 0.516 | 0.624 | |||||||||
Expected dividend
yield
|
0.0 | % | 0.0 | % | 0.0 | % |
Restricted
Shares
|
Weighted
Average
Grant
Date
Fair
Value
|
RSUs
|
Weighted
Average
Grant
Date
Fair
Value
|
|||||||||||||
Outstanding
at January 1, 2005
|
932,788 | $ | 4.40 | — | — | |||||||||||
Granted
|
485,680 | 8.47 | 236,600 | $ | 9.69 | |||||||||||
Vested
|
(739,449 | ) | 5.48 | — | — | |||||||||||
Forfeited
|
(479,019 | ) | 4.72 | — | — | |||||||||||
Outstanding
at December 31, 2005
|
200,000 | 9.52 | 236,600 | 9.69 | ||||||||||||
Granted
|
— | — | 532,150 | 20.55 | ||||||||||||
Vested
|
(50,000 | ) | 9.52 | (141,600 | ) | 9.81 | ||||||||||
Forfeited
|
— | — | (20,000 | ) | 9.52 | |||||||||||
Outstanding
at December 31, 2006
|
150,000 | 9.52 | 607,150 | 19.19 | ||||||||||||
Granted
|
— | — | 761,750 | 17.89 | ||||||||||||
Vested
|
(50,000 | ) | 9.52 | (173,900 | ) | 20.55 | ||||||||||
Forfeited
|
— | — | (62,850 | ) | 18.97 | |||||||||||
Outstanding
at December 31, 2007
|
100,000 | 9.52 | 1,132,150 | 18.36 |
2005
|
||||
Net
loss as
reported
|
$ | 135,052 | ||
Reversal
of share-based compensation expense determined
under
the intrinsic value method included in net loss, net of
taxes
|
(2,505 | ) | ||
Recognition
of share-based compensation expense determined
under
the fair value method, net of taxes
|
8,962 | |||
Pro
forma net
loss
|
$ | 141,509 | ||
Net
loss per share—basic and
diluted:
|
||||
As
reported
|
$ | 2.70 | ||
Pro
forma
|
$ | 2.83 |
Before
Application
of
SFAS
158
|
Effect
of Applying
SFAS
158
|
After
Application
of
SFAS
158
|
||||||||||
Other
assets,
net
|
$ | 34,327 | $ | (42 | ) | $ | 34,285 | |||||
Total
assets
|
999,934 | (42 | ) | 999,892 | ||||||||
Other
liabilities
|
41,145 | 405 | 41,550 | |||||||||
Accumulated
other comprehensive income
|
3,111 | (363 | ) | 2,748 | ||||||||
Total
shareholders’ equity (deficit)
|
58,820 | (363 | ) | 58,457 | ||||||||
Total
liabilities and shareholders’ equity (deficit)
|
999,934 | (42 | ) | 999,892 |
Pension
Plans
|
SERPs |
OPEB
|
||||||||||||||||||
2007
|
2006
|
2007
|
2006
|
2007
|
||||||||||||||||
Change
in projected benefit obligation:
|
||||||||||||||||||||
Benefit
obligation at beginning of year
|
$ | 11,531 | $ | 11,888 | $ | 8,463 | $ | 8,023 | $ | — | ||||||||||
Projected
benefit obligation assumed from acquisitions
|
141,970 | — | 9,206 | — | 2,641 | |||||||||||||||
Service
cost
|
413 | 169 | — | — | — | |||||||||||||||
Interest
cost
|
7,605 | 668 | 1,002 | 1,393 | 124 | |||||||||||||||
Participant
contributions
|
— | — | — | — | — | |||||||||||||||
Actuarial
(gain)
loss
|
342 | (559 | ) | 760 | — | (99 | ) | |||||||||||||
Foreign
currency translation
|
— | — | — | — | — | |||||||||||||||
Benefits
paid
|
(6,068 | ) | (635 | ) | (2,216 | ) | (953 | ) | (241 | ) | ||||||||||
Benefit
obligation at end of year
|
$ | 155,793 | $ | 11,531 | $ | 17,215 | $ | 8,463 | $ | 2,425 | ||||||||||
Change
in plan assets:
|
||||||||||||||||||||
Fair
value of plan assets at beginning of year
|
$ | 9,522 | $ | 8,596 | $ | — | $ | — | $ | — | ||||||||||
Fair
value of plan assets assumed from acquisitions
|
113,701 | — | — | — | — | |||||||||||||||
Actual
return on plan assets
|
7,056 | 1,022 | — | — | — | |||||||||||||||
Participant
contributions
|
— | — | — | — | — | |||||||||||||||
Employer
contributions
|
8,778 | 539 | 2,216 | — | 241 | |||||||||||||||
Foreign
currency translation
|
— | — | — | — | — | |||||||||||||||
Benefits
paid
|
(6,068 | ) | (635 | ) | (2,216 | ) | — | (241 | ) | |||||||||||
Fair
value of plan assets at end of year
|
132,989 | 9,522 | — | — | — | |||||||||||||||
Funded
status
|
$ | (22,804 | ) | $ | (2,009 | ) | $ | (17,215 | ) | $ | (8,463 | ) | $ | (2,425 | ) | |||||
Amounts
recognized in accumulated other
comprehensive
loss:
|
||||||||||||||||||||
Net
actuarial
loss
|
$ | 4,720 | $ | (3,320 | ) | $ | 760 | $ | — | $ | (99 | ) | ||||||||
Prior
service
cost
|
26 | (34 | ) | — | — | — | ||||||||||||||
Total
|
$ | 4,746 | $ | (3,354 | ) | $ | 760 | $ | — | $ | (99 | ) | ||||||||
Amounts
recognized in the consolidated balance sheets
|
||||||||||||||||||||
Other
assets
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Total
assets
|
— | — | — | — | — | |||||||||||||||
Current
liabilities
|
— | — | 1,940 | 985 | 287 | |||||||||||||||
Long-term
liabilities
|
22,804 | 2,009 | 15,275 | 7,478 | 2,138 | |||||||||||||||
Total
liabilities
|
$ | 22,804 | $ | 2,009 | $ | 17,215 | $ | 8,463 | $ | 2,425 |
2007
|
2006
|
2005
|
||||||||||
Service
cost
|
$ | 413 | $ | 169 | $ | 173 | ||||||
Interest
cost on projected benefit obligation
|
8,731 | 2,061 | 1,196 | |||||||||
Expected
return on plan
assets
|
(8,339 | ) | (703 | ) | (710 | ) | ||||||
Net
amortization and
deferral
|
8 | 8 | 8 | |||||||||
Recognized
actuarial
loss
|
224 | 267 | 200 | |||||||||
Net
periodic pension
expense
|
$ | 1,037 | $ | 1,802 | $ | 867 |
2007
|
2006
|
2005
|
|||
Weighted
average discount
rate
|
6.00%
|
6.00%
|
5.50-5.75%
|
||
Expected
long-term rate of return on assets
|
8.00%
|
8.00%
|
8.00%
|
||
Rate
of compensation
increase
|
4.00%
|
4.00%
|
3.50-4.00%
|
U.S.
Plans
|
||||||||||||
2007
|
2006
|
Target
|
||||||||||
Equity
securities
|
56-75 | % | 67 | % | 68 | % | ||||||
Debt
securities, including
cash
|
14-35 | % | 27 | % | 27 | % | ||||||
Real
estate
|
4-11 | % | 6 | % | 5 | % | ||||||
100 | % | 100 | % | 100 | % |
U.S.
Plans
|
||||||||
2007
|
2006
|
|||||||
Projected
benefit
obligation
|
$ | 173,008 | $ | 11,531 | ||||
Accumulated
benefit
obligation
|
172,365 | 11,202 | ||||||
Fair
value of plan
assets
|
132,989 | 9,522 |
Pension Plans
|
SERP
|
OPEB | ||||||
2008
|
$
|
8,036
|
$
|
1,895
|
|
$ |
295
|
|
2009
|
8,331
|
1,869
|
276
|
|||||
2010
|
8,481
|
1,729
|
260
|
|||||
2011
|
8,621
|
1,656
|
242
|
|||||
2012
|
8,924
|
1,751
|
224
|
|||||
2013 – 2017
|
48,150
|
7,028
|
928
|
2008
|
$ | 34,944 | ||
2009
|
27,555 | |||
2010
|
21,251 | |||
2011
|
16,613 | |||
2012
|
12,833 | |||
Thereafter
|
33,514 | |||
Total
|
$ | 146,710 |
December
31
|
||||||||
2007
|
2006
|
|||||||
Currency
translation adjustments
|
$ | 8,595 | $ | 7,945 | ||||
Unrealized
loss on cash flow hedges, net of tax benefit of $4,986
|
(10,772 | ) | (2,992 | ) | ||||
Pension
liability adjustments, net of tax expense of $1,294
|
(4,336 | ) | (2,205 | ) | ||||
Accumulated
other comprehensive (loss) income
|
$ | (6,513 | ) | $ | 2,748 |
2007
|
2006
|
2005
|
||||||||||
Numerator
for basic and diluted income (loss) per share
|
||||||||||||
Income
(loss) from continuing
operations
|
$ | 23,985 | $ | (11,148 | ) | $ | (148,101 | ) | ||||
Income
from discontinued operations, net of taxes
|
16,796 | 126,519 | 13,049 | |||||||||
Net
income
(loss)
|
$ | 40,781 | $ | 115,371 | $ | (135,052 | ) | |||||
Denominator
weighted average common shares outstanding:
|
||||||||||||
Basic
shares
|
53,584 | 53,288 | 50,038 | |||||||||
Dilutive
effect of equity
awards
|
1,061 | — | — | |||||||||
Diluted
shares
|
54,645 | 53,288 | 50,038 | |||||||||
Income
(loss) per share - basic:
|
||||||||||||
Continuing
operations
|
$ | 0.45 | $ | (0.21 | ) | $ | (2.96 | ) | ||||
Discontinued
operations
|
0.31 | 2.38 | 0.26 | |||||||||
Net
income
(loss)
|
$ | 0.76 | $ | 2.17 | $ | (2.70 | ) | |||||
Income
(loss) per share - diluted:
|
||||||||||||
Continuing
operations
|
$ | 0.44 | $ | (0.21 | ) | $ | (2.96 | ) | ||||
Discontinued
operations
|
0.31 | 2.38 | 0.26 | |||||||||
Net
income
(loss)
|
$ | 0.75 | $ | 2.17 | $ | (2.70 | ) |
2007
|
2006
|
2005
|
||||||||||
Net
sales:
|
||||||||||||
Envelopes,
Forms and
Labels
|
$ | 897,722 | $ | 780,696 | $ | 767,403 | ||||||
Commercial
Printing
|
1,148,994 | 730,528 | 827,378 | |||||||||
Total
|
$ | 2,046,716 | $ | 1,511,224 | $ | 1,594,781 | ||||||
Operating
income (loss):
|
||||||||||||
Envelopes,
Forms and
Labels
|
$ | 117,342 | $ | 82,753 | $ | 51,830 | ||||||
Commercial
Printing
|
55,085 | 13,606 | (30,675 | ) | ||||||||
Corporate
|
(34,877 | ) | (32,964 | ) | (47,465 | ) | ||||||
Total
|
$ | 137,550 | $ | 63,395 | $ | (26,310 | ) | |||||
Restructuring,
asset impairment and other charges:
|
||||||||||||
Envelopes,
Forms and
Labels
|
$ | 11,350 | $ | 18,336 | $ | 12,540 | ||||||
Commercial
Printing
|
28,279 | 21,560 | 36,367 | |||||||||
Corporate
|
457 | 1,200 | 28,347 | |||||||||
Total
|
$ | 40,086 | $ | 41,096 | $ | 77,254 | ||||||
Significant
noncash charges (credits):
|
||||||||||||
Envelopes,
Forms and
Labels
|
$ | 3,640 | $ | 6,880 | $ | 5,107 | ||||||
Commercial
Printing
|
16,089 | 3,821 | 21,926 | |||||||||
Corporate
|
— | (355 | ) | 4,977 | ||||||||
Total
|
$ | 19,729 | $ | 10,346 | $ | 32,010 | ||||||
Depreciation
and intangible asset amortization:
|
||||||||||||
Envelopes,
Forms and
Labels
|
$ | 21,015 | $ | 16,438 | $ | 17,728 | ||||||
Commercial
Printing
|
43,346 | 23,567 | 29,978 | |||||||||
Corporate
|
1,147 | 688 | 542 | |||||||||
Total
|
$ | 65,508 | $ | 40,693 | $ | 48,248 | ||||||
Capital
expenditures:
|
||||||||||||
Envelopes,
Forms and
Labels
|
$ | 5,145 | $ | 4,837 | $ | 3,884 | ||||||
Commercial
Printing
|
24,546 | 12,974 | 23,065 | |||||||||
Corporate
|
1,847 | 2,119 | 1,205 | |||||||||
Total
|
$ | 31,538 | $ | 19,930 | $ | 28,154 | ||||||
Net
sales by product line:
|
||||||||||||
Envelopes
|
$ | 604,351 | $ | 582,460 | $ | 594,327 | ||||||
Commercial
Printing
|
823,195 | 727,611 | 812,194 | |||||||||
Journals
and
periodicals
|
323,370 | — | — | |||||||||
Labels
and Business
Forms
|
295,800 | 201,153 | 188,260 | |||||||||
Total
|
$ | 2,046,716 | $ | 1,511,224 | $ | 1,594,781 | ||||||
Intercompany
sales:
|
||||||||||||
Envelopes,
Forms and Labels to Commercial
Printing
|
$ | 8,802 | $ | 13,254 | $ | 12,629 | ||||||
Commercial
Printing to Envelopes, Forms and Labels
|
6,985 | 15,855 | 19,977 | |||||||||
Total
|
$ | 15,787 | $ | 29,109 | $ | 32,606 |
December
31
|
||||||||
2007
|
2006
|
|||||||
Identifiable
assets:
|
||||||||
Envelopes,
Forms and
Labels
|
$ | 833,337 | $ | 494,321 | ||||
Commercial
Printing
|
1,105,832 | 393,954 | ||||||
Corporate
|
63,553 | 111,617 | ||||||
Total
|
$ | 2,002,722 | $ | 999,892 |
2007
|
2006
|
2005
|
||||||||||
Net
sales:
|
||||||||||||
U.S.
|
$ | 1,961,505 | $ | 1,452,453 | $ | 1,535,281 | ||||||
Foreign
|
85,211 | 58,771 | 59,500 | |||||||||
Total
|
$ | 2,046,716 | $ | 1,511,224 | $ | 1,594,781 |
2007
|
2006
|
|||||||
Long-lived
assets (property plant and equipment and intangible
assets):
|
||||||||
U.S.
|
$ | 1,335,213 | $ | 517,018 | ||||
Foreign
|
33,552 | 29,918 | ||||||
Total
|
$ | 1,368,765 | $ | 546,936 |
Parent
|
Subsidiary
|
Guarantor
|
Non-Guarantor
|
|||||||||||||||||||||
Company
|
Issuer
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Current
assets:
|
||||||||||||||||||||||||
Cash
and cash equivalents
|
$ | — | $ | 13,091 | $ | 882 | $ | 1,909 | $ | — | $ | 15,882 | ||||||||||||
Accounts
receivable, net
|
— | 164,815 | 175,746 | 4,073 | — | 344,634 | ||||||||||||||||||
Inventories
|
— | 89,259 | 72,782 | 867 | — | 162,908 | ||||||||||||||||||
Notes
receivable from subsidiaries
|
— | 40,108 | — | — | (40,108 | ) | — | |||||||||||||||||
Prepaid
and other current assets
|
— | 57,484 | 15,160 | 714 | — | 73,358 | ||||||||||||||||||
Total
current assets
|
— | 364,757 | 264,570 | 7,563 | (40,108 | ) | 596,782 | |||||||||||||||||
Investment
in subsidiaries
|
99,326 | 1,461,662 | 2,058 | — | (1,563,046 | ) | — | |||||||||||||||||
Property,
plant and equipment, net
|
— | 173,103 | 254,378 | 860 | — | 428,341 | ||||||||||||||||||
Goodwill
|
— | 175,220 | 494,582 | — | — | 669,802 | ||||||||||||||||||
Other
intangible assets, net
|
— | 9,512 | 261,110 | — | — | 270,622 | ||||||||||||||||||
Other
assets, net
|
— | 22,949 | 13,833 | 393 | — | 37,175 | ||||||||||||||||||
Total
assets
|
$ | 99,326 | $ | 2,207,203 | $ | 1,290,531 | $ | 8,816 | $ | (1,603,154 | ) | $ | 2,002,722 | |||||||||||
|
||||||||||||||||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||||||
Current
maturities of long-term debt
|
$ | — | $ | 8,769 | $ | 9,983 | $ | — | $ | — | $ | 18,752 | ||||||||||||
Accounts
payable
|
— | 98,111 | 65,130 | 2,217 | — | 165,458 | ||||||||||||||||||
Accrued
compensation and related liabilities
|
— | 23,792 | 23,361 | — | — | 47,153 | ||||||||||||||||||
Other
current liabilities
|
— | 57,845 | 20,495 | 1,214 | — | 79,554 | ||||||||||||||||||
Intercompany
payable (receivable)
|
— | 479,191 | (482,518 | ) | 3,327 | — | — | |||||||||||||||||
Notes
payable to issuer
|
— | — | 40,108 | — | (40,108 | ) | — | |||||||||||||||||
Total
current liabilities
|
— | 667,708 | (323,441 | ) | 6,758 | (40,108 | ) | 310,917 | ||||||||||||||||
Long-term
debt
|
— | 1,400,620 | 25,265 | — | — | 1,425,885 | ||||||||||||||||||
Deferred
income tax liability (asset)
|
— | (17,162 | ) | 72,343 | — | — | 55,181 | |||||||||||||||||
Other
liabilities
|
— | 56,711 | 54,702 | — | — | 111,413 | ||||||||||||||||||
Shareholders’
equity
|
99,326 | 99,326 | 1,461,662 | 2,058 | (1,563,046 | ) | 99,326 | |||||||||||||||||
Total
liabilities and shareholders’ equity
|
$ | 99,326 | $ | 2,207,203 | $ | 1,290,531 | $ | 8,816 | $ | (1,603,154 | ) | $ | 2,002,722 |
Parent
|
Subsidiary
|
Guarantor
|
Non-Guarantor
|
|||||||||||||||||||||
Company
|
Issuer
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Net
sales
|
$ | — | $ | 1,162,075 | $ | 872,947 | $ | 11,694 | $ | — | $ | 2,046,716 | ||||||||||||
Cost
of sales
|
— | 954,373 | 665,472 | 8,861 | — | 1,628,706 | ||||||||||||||||||
Selling,
general and administrative
|
— | 164,620 | 64,907 | 434 | — | 229,961 | ||||||||||||||||||
Amortization
of intangible assets
|
— | 4,826 | 5,587 | — | — | 10,413 | ||||||||||||||||||
Restructuring
and impairment charges
|
— | 39,956 | 130 | — | — | 40,086 | ||||||||||||||||||
Operating
income (loss)
|
— | (1,700 | ) | 136,851 | 2,399 | — | 137,550 | |||||||||||||||||
Gain
on sale of non-strategic businesses
|
— | (189 | ) | — | — | — | (189 | ) | ||||||||||||||||
Interest
expense, net
|
— | 90,070 | 1,411 | (14 | ) | — | 91,467 | |||||||||||||||||
Intercompany
interest expense (income)
|
— | (3,598 | ) | 3,598 | — | — | — | |||||||||||||||||
Loss
on early extinguishment of debt
|
— | 9,186 | 70 | — | — | 9,256 | ||||||||||||||||||
Other
expense, net
|
— | 1,091 | 1,681 | 359 | — | 3,131 | ||||||||||||||||||
Income
(loss) from continuing operations before income taxes and equity in income
of unconsolidated subsidiaries
|
— | (98,260 | ) | 130,091 | 2,054 | — | 33,885 | |||||||||||||||||
Income
tax expense (benefit)
|
— | 12,303 | (2,504 | ) | 101 | — | 9,900 | |||||||||||||||||
Income
(loss) from continuing operations before equity in income of
unconsolidated subsidiaries
|
— | (110,563 | ) | 132,595 | 1,953 | — | 23,985 | |||||||||||||||||
Equity
in income of unconsolidated subsidiaries
|
40,781 | 134,548 | 1,953 | — | (177,282 | ) | — | |||||||||||||||||
Income
(loss) from continuing operations
|
40,781 | 23,985 | 134,548 | 1,953 | (177,282 | ) | 23,985 | |||||||||||||||||
Income
from discontinued operations, net of taxes
|
— | 16,796 | — | — | — | 16,796 | ||||||||||||||||||
Net
income (loss)
|
$ | 40,781 | $ | 40,781 | $ | 134,548 | $ | 1,953 | $ | (177,282 | ) | $ | 40,781 |
Parent
|
Subsidiary
|
Guarantor
|
Non-Guarantor
|
|||||||||||||||||||||
Company
|
Issuer
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Cash
flows from operating activities:
|
||||||||||||||||||||||||
Net
cash (used in) provided by continuing operating activities
|
$ | 10,280 | $ | (65,159 | ) | $ | 139,178 | $ | 1,909 | $ | — | $ | 86,208 | |||||||||||
Net
cash provided by discontinued operating activities
|
— | 2,198 | — | — | — | 2,198 | ||||||||||||||||||
Net
cash (used in) provided by operating activities
|
10,280 | (62,961 | ) | 139,178 | 1,909 | — | 88,406 | |||||||||||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||||||
Cost
of business acquisitions, net of cash acquired
|
— | (627,304 | ) | — | — | — | (627,304 | ) | ||||||||||||||||
Capital
expenditures
|
— | (14,016 | ) | (17,522 | ) | — | — | (31,538 | ) | |||||||||||||||
Intercompany
note
|
— | 2,733 | — | — | (2,733 | ) | — | |||||||||||||||||
Acquisition
payments
|
— | (3,653 | ) | — | — | — | (3,653 | ) | ||||||||||||||||
Proceeds
from sale of property, plant and equipment
|
— | 8,702 | 247 | — | — | 8,949 | ||||||||||||||||||
Proceeds
from divestitures, net
|
— | 431 | — | — | — | 431 | ||||||||||||||||||
Net
cash provided by (used in) investing activities of continuing
operations
|
— | (633,107 | ) | (17,275 | ) | — | (2,733 | ) | (653,115 | ) | ||||||||||||||
Proceeds
from the sale of discontinued operations
|
— | 73,628 | — | — | — | 73,628 | ||||||||||||||||||
Net
cash provided by investing activities of discontinued
operations
|
— | 73,628 | — | — | — | 73,628 | ||||||||||||||||||
Net
cash provided by (used in) investing activities
|
— | (559,479 | ) | (17,275 | ) | — | (2,733 | ) | (579,487 | ) | ||||||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||||||
Proceeds
from issuance of Term Loans
|
— | 720,000 | — | — | — | 720,000 | ||||||||||||||||||
Proceeds
from Unsecured Loan
|
— | 175,000 | — | — | — | 175,000 | ||||||||||||||||||
Borrowings
under Revolving Credit Facility, net
|
— | 75,700 | — | — | — | 75,700 | ||||||||||||||||||
Proceeds
from exercise of stock options
|
304 | — | — | — | — | 304 | ||||||||||||||||||
Proceeds
from excess tax benefit from stock based compensation
|
67 | — | — | — | — | 67 | ||||||||||||||||||
Repayment
of Term Loan B
|
— | (324,188 | ) | — | — | — | (324,188 | ) | ||||||||||||||||
Repayment
of Cadmus revolving senior bank credit facility
|
— | (70,100 | ) | — | — | — | (70,100 | ) | ||||||||||||||||
Repayment
of 8 ⅜% Senior Subordinated Notes
|
— | (20,880 | ) | — | — | — | (20,880 | ) | ||||||||||||||||
Repayment
of 9 ⅝% Notes
|
— | (10,498 | ) | — | — | — | (10,498 | ) | ||||||||||||||||
Repayments
of Term Loans
|
— | (4,900 | ) | — | — | — | (4,900 | ) | ||||||||||||||||
Repayments
of other long-term debt
|
— | (2,477 | ) | (26,576 | ) | — | — | (29,053 | ) | |||||||||||||||
Payment
of refinancing fees, redemption, premiums and expenses
|
— | (8,045 | ) | — | — | — | (8,045 | ) | ||||||||||||||||
Payment
of debt issuance costs
|
— | (5,906 | ) | — | — | — | (5,906 | ) | ||||||||||||||||
Purchase
and retirement of common stock upon vesting of RSUs
|
(1,302 | ) | — | — | — | — | (1,302 | ) | ||||||||||||||||
Intercompany
note
|
— | — | (2,733 | ) | — | 2,733 | — | |||||||||||||||||
Intercompany
advances
|
(9,349 | ) | 103,170 | (93,821 | ) | — | — | — | ||||||||||||||||
Net
cash provided by (used in) financing activities
|
(10,280 | ) | 626,876 | (123,130 | ) | — | 2,733 | 496,199 | ||||||||||||||||
Effect
of exchange rate changes on cash and cash equivalents of continuing
operations
|
— | — | 206 | — | — | 206 | ||||||||||||||||||
Net
increase (decrease) in cash and cash equivalents
|
— | 4,436 | (1,021 | ) | 1,909 | — | 5,324 | |||||||||||||||||
Cash
and cash equivalents at beginning of year
|
— | 8,655 | 1,903 | — | — | 10,558 | ||||||||||||||||||
Cash
and cash equivalents at end of year
|
$ | — | $ | 13,091 | $ | 882 | $ | 1,909 | $ | — | $ | 15,882 |
Parent
|
Subsidiary
|
Guarantor
|
Non-Guarantor
|
As
Restated
|
||||||||||||||||||||
Company
|
Issuer
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Current
assets:
|
||||||||||||||||||||||||
Cash
and cash equivalents
|
$ | — | $ | 8,655 | $ | 1,903 | $ | — | $ | — | $ | 10,558 | ||||||||||||
Accounts
receivable, net
|
— | 200,140 | 28,772 | — | — | 228,912 | ||||||||||||||||||
Inventories
|
— | 80,724 | 10,810 | — | — | 91,534 | ||||||||||||||||||
Notes
receivable from subsidiaries
|
— | 42,841 | — | — | (42,841 | ) | — | |||||||||||||||||
Assets
held for sale
|
— | 51,966 | — | — | — | 51,966 | ||||||||||||||||||
Prepaid
and other current assets
|
— | 39,461 | 1,952 | — | — | 41,413 | ||||||||||||||||||
Total
current assets
|
— | 423,787 | 43,437 | — | (42,841 | ) | 424,383 | |||||||||||||||||
Investment
in subsidiaries
|
58,457 | 438,793 | — | — | (497,250 | ) | — | |||||||||||||||||
Property,
plant and equipment, net
|
— | 203,036 | 48,067 | — | — | 251,103 | ||||||||||||||||||
Goodwill
|
— | 173,718 | 84,418 | — | — | 258,136 | ||||||||||||||||||
Other
intangible assets, net
|
— | 14,340 | 17,645 | — | — | 31,985 | ||||||||||||||||||
Other
assets, net
|
— | 34,243 | 42 | — | — | 34,285 | ||||||||||||||||||
Total
assets
|
$ | 58,457 | $ | 1,287,917 | $ | 193,609 | $ | — | $ | (540,091 | ) | $ | 999,892 | |||||||||||
|
||||||||||||||||||||||||
Liabilities
and Shareholders’ Equity
|
||||||||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||||||
Current
maturities of long-term debt
|
$ | — | $ | 7,434 | $ | 79 | $ | — | $ | — | $ | 7,513 | ||||||||||||
Accounts
payable
|
— | 105,978 | 10,202 | — | — | 116,180 | ||||||||||||||||||
Accrued
compensation and related liabilities
|
— | 36,103 | 4,139 | — | — | 40,242 | ||||||||||||||||||
Other
current liabilities
|
— | 60,383 | 3,429 | — | — | 63,812 | ||||||||||||||||||
Intercompany
payable (receivable)
|
— | 322,265 | (322,265 | ) | — | — | — | |||||||||||||||||
Notes
payable to issuer
|
— | — | 42,841 | — | (42,841 | ) | — | |||||||||||||||||
Total
current liabilities
|
— | 532,163 | (261,575 | ) | — | (42,841 | ) | 227,747 | ||||||||||||||||
Long-term
debt
|
— | 667,103 | 679 | — | — | 667,782 | ||||||||||||||||||
Deferred
income tax liability (asset)
|
— | (3,062 | ) | 7,418 | — | — | 4,356 | |||||||||||||||||
Other
liabilities
|
— | 33,256 | 8,294 | — | — | 41,550 | ||||||||||||||||||
Shareholders’
equity
|
58,457 | 58,457 | 438,793 | — | (497,250 | ) | 58,457 | |||||||||||||||||
Total
liabilities and shareholders’ equity
|
$ | 58,457 | $ | 1,287,917 | $ | 193,609 | $ | — | $ | (540,091 | ) | $ | 999,892 |
Parent
|
Subsidiary
|
Guarantor
|
Non-Guarantor
|
As Restated | ||||||||||||||||||||
Company
|
Issuer
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Net
sales
|
$ | — | $ | 1,295,870 | $ | 215,354 | $ | — | $ | — | $ | 1,511,224 | ||||||||||||
Cost
of sales
|
— | 1,049,846 | 161,938 | — | — | 1,211,784 | ||||||||||||||||||
Selling,
general and administrative
|
— | 169,357 | 20,119 | — | — | 189,476 | ||||||||||||||||||
Amortization
of intangible assets
|
— | 4,957 | 516 | — | — | 5,473 | ||||||||||||||||||
Restructuring
and impairment charges
|
— | 40,948 | 148 | — | — | 41,096 | ||||||||||||||||||
Operating
income
|
— | 30,762 | 32,633 | — | — | 63,395 | ||||||||||||||||||
Loss
on sale of non-strategic businesses
|
— | 2,035 | — | — | — | 2,035 | ||||||||||||||||||
Interest
expense, net
|
— | 60,928 | 52 | — | — | 60,980 | ||||||||||||||||||
Intercompany
interest expense (income)
|
— | (1,338 | ) | 1,338 | — | — | — | |||||||||||||||||
Loss
on early extinguishment of debt
|
— | 32,744 | — | — | — | 32,744 | ||||||||||||||||||
Other
income, net
|
— | (13 | ) | (65 | ) | — | — | (78 | ) | |||||||||||||||
(Loss)
income from continuing operations before income taxes and equity
in income of unconsolidated subsidiaries
|
— | (63,594 | ) | 31,308 | — | — | (32,286 | ) | ||||||||||||||||
Income
tax (benefit) expense
|
— | (21,701 | ) | 563 | — | — | (21,138 | ) | ||||||||||||||||
(Loss)
income from continuing operations before equity in income of
unconsolidated subsidiaries
|
— | (41,893 | ) | 30,745 | — | — | (11,148 | ) | ||||||||||||||||
Equity
in income of unconsolidated subsidiaries
|
115,371 | 39,179 | — | — | (154,550 | ) | — | |||||||||||||||||
Income
(loss) from continuing operations
|
115,371 | (2,714 | ) | 30,745 | — | (154,550 | ) | (11,148 | ) | |||||||||||||||
Income
from discontinued operations, net of taxes
|
— | 118,085 | 8,434 | — | — | 126,519 | ||||||||||||||||||
Net
income (loss)
|
$ | 115,371 | $ | 115,371 | $ | 39,179 | $ | — | $ | (154,550 | ) | $ | 115,371 |
Parent
|
Subsidiary
|
Guarantor
|
Non-Guarantor
|
As Restated | ||||||||||||||||||||
Company
|
Issuer
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Cash
flows from operating activities:
|
||||||||||||||||||||||||
Net
cash provided by (used in) continuing operating activities
|
$ | 5,954 | $ | (56,113 | ) | $ | 64,683 | $ | — | $ | — | $ | 14,524 | |||||||||||
Net
cash provided by discontinued operating activities
|
— | 6,215 | 2,617 | — | — | 8,832 | ||||||||||||||||||
Net
cash provided by (used in) operating activities
|
5,954 | (49,898 | ) | 67,300 | — | — | 23,356 | |||||||||||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||||||
Cost
of business acquisitions, net of cash acquired
|
— | (49,425 | ) | — | — | — | (49,425 | ) | ||||||||||||||||
Intercompany
note
|
— | (42,841 | ) | — | — | 42,841 | — | |||||||||||||||||
Capital
expenditures
|
— | (16,695 | ) | (3,235 | ) | — | — | (19,930 | ) | |||||||||||||||
Acquisition
payments
|
— | (4,653 | ) | — | — | — | (4,653 | ) | ||||||||||||||||
Proceeds
from sale of property, plant and equipment
|
— | 11,380 | 95 | — | — | 11,475 | ||||||||||||||||||
Proceeds
from divestitures, net
|
— | 3,189 | — | — | — | 3,189 | ||||||||||||||||||
Net
cash used in investing activities of continuing operations
|
— | (99,045 | ) | (3,140 | ) | — | 42,841 | (59,344 | ) | |||||||||||||||
Proceeds
from the sale of discontinued operations
|
— | 211,529 | — | — | — | 211,529 | ||||||||||||||||||
Capital
expenditures for discontinued operations
|
— | — | (632 | ) | — | — | (632 | ) | ||||||||||||||||
Net
cash provided by investing activities of discontinued
operations
|
— | 211,529 | (632 | ) | — | — | 210,897 | |||||||||||||||||
Net
cash (used in) provided by investing activities
|
— | 112,484 | (3,772 | ) | — | 42,841 | 151,553 | |||||||||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||||||
Proceeds
from issuance of Term Loans
|
— | 325,000 | — | — | — | 325,000 | ||||||||||||||||||
Borrowings
under Revolving Credit Facility, net
|
— | 15,574 | (74 | ) | — | — | 15,500 | |||||||||||||||||
Proceeds
from exercise of stock options
|
1,956 | — | — | — | — | 1,956 | ||||||||||||||||||
Proceeds
from excess tax benefit from stock based compensation
|
1,168 | — | — | — | — | 1,168 | ||||||||||||||||||
Repayment
of 9 ⅝% Notes
|
— | (339,502 | ) | — | — | — | (339,502 | ) | ||||||||||||||||
Repayments
of Term Loans
|
— | (813 | ) | — | — | — | (813 | ) | ||||||||||||||||
(Repayments)
borrowings under senior secured revolving credit facility,
net
|
— | (123,931 | ) | — | — | — | (123,931 | ) | ||||||||||||||||
Repayments
of other long-term debt
|
— | (12,465 | ) | (630 | ) | — | — | (13,095 | ) | |||||||||||||||
Payment
of refinancing fees, redemption, premiums and expenses
|
— | (26,142 | ) | — | — | — | (26,142 | ) | ||||||||||||||||
Payment
of debt issuance costs
|
— | (3,770 | ) | — | — | — | (3,770 | ) | ||||||||||||||||
Purchase
and retirement of common stock upon vesting of RSUs
|
(1,786 | ) | — | — | — | — | (1,786 | ) | ||||||||||||||||
Intercompany
note
|
— | — | 42,841 | — | (42,841 | ) | — | |||||||||||||||||
Intercompany
advances
|
(7,292 | ) | 112,118 | (104,826 | ) | — | — | — | ||||||||||||||||
Net
cash used in financing activities
|
(5,954 | ) | (53,931 | ) | (62,689 | ) | — | (42,841 | ) | (165,415 | ) | |||||||||||||
Effect
of exchange rate changes on cash and cash equivalents of continuing
operations
|
— | — | 14 | — | — | 14 | ||||||||||||||||||
Effect
of exchange rate changes on cash and cash equivalents of discontinued
operations
|
— | — | 15 | — | — | 15 | ||||||||||||||||||
Net
increase in cash and cash equivalents
|
— | 8,655 | 868 | — | — | 9,523 | ||||||||||||||||||
Cash
and cash equivalents at beginning of year
|
— | — | 1,035 | — | — | 1,035 | ||||||||||||||||||
Cash
and cash equivalents at end of year
|
$ | — | $ | 8,655 | $ | 1,903 | $ | — | $ | — | $ | 10,558 |
Parent
|
Subsidiary
|
Guarantor
|
Non-Guarantor
|
|||||||||||||||||||||
Company
|
Issuer
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Net
sales
|
$ | — | $ | 1,390,751 | $ | 204,030 | $ | — | $ | — | $ | 1,594,781 | ||||||||||||
Cost
of sales
|
— | 1,166,718 | 153,232 | — | — | 1,319,950 | ||||||||||||||||||
Selling,
general and administrative
|
— | 195,866 | 22,874 | — | — | 218,740 | ||||||||||||||||||
Amortization
of intangible assets
|
— | 4,971 | 176 | — | — | 5,147 | ||||||||||||||||||
Restructuring,
impairment and other charges
|
— | 76,938 | 316 | — | — | 77,254 | ||||||||||||||||||
Operating
(loss) income
|
— | (53,742 | ) | 27,432 | — | — | (26,310 | ) | ||||||||||||||||
Loss
on sale of non-strategic businesses
|
— | 3,370 | 1,109 | — | — | 4,479 | ||||||||||||||||||
Interest
expense, net
|
— | 73,741 | 80 | — | — | 73,821 | ||||||||||||||||||
Intercompany
interest expense (income)
|
— | 697 | (697 | ) | — | — | — | |||||||||||||||||
Other
expense (income), net
|
— | 1,464 | (321 | ) | — | — | 1,143 | |||||||||||||||||
(Loss)
income from continuing operations before income taxes and equity in income
of unconsolidated subsidiaries
|
— | (133,014 | ) | 27,261 | — | — | (105,753 | ) | ||||||||||||||||
Income
tax expense
|
— | 41,939 | 409 | — | — | 42,348 | ||||||||||||||||||
(Loss)
income from continuing operations before equity in income of
unconsolidated subsidiaries
|
— | (174,953 | ) | 26,852 | — | — | (148,101 | ) | ||||||||||||||||
Equity
in income of unconsolidated subsidiaries
|
(135,052 | ) | 39,901 | — | — | 95,151 | — | |||||||||||||||||
(Loss)
income from continuing operations
|
(135,052 | ) | (135,052 | ) | 26,852 | — | 95,151 | (148,101 | ) | |||||||||||||||
Income
from discontinued operations, net of taxes
|
— | — | 13,049 | — | — | 13,049 | ||||||||||||||||||
Net
(loss) income
|
$ | (135,052 | ) | $ | (135,052 | ) | $ | 39,901 | $ | — | $ | 95,151 | $ | (135,052 | ) |
Parent
|
Subsidiary
|
Guarantor
|
Non-Guarantor
|
|||||||||||||||||||||
Company
|
Issuer
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||||||
Cash
flows from operating activities:
|
||||||||||||||||||||||||
Net
cash (used in) provided by continuing operating activities
|
$ | 2,505 | $ | (112,443 | ) | $ | 45,935 | $ | — | $ | — | $ | (64,003 | ) | ||||||||||
Net
cash provided by discontinued operating activities
|
— | — | 25,330 | — | — | 25,330 | ||||||||||||||||||
Net
cash (used in) provided by operating activities
|
2,505 | (112,443 | ) | 71,265 | — | — | (38,673 | ) | ||||||||||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||||||
Cost
of business acquisitions, net of cash acquired
|
— | (3,552 | ) | — | — | — | (3,552 | ) | ||||||||||||||||
Intercompany
note
|
— | 20,400 | — | — | (20,400 | ) | — | |||||||||||||||||
Capital
expenditures
|
— | (21,371 | ) | (6,783 | ) | — | — | (28,154 | ) | |||||||||||||||
Acquisition
payments
|
— | (4,053 | ) | — | — | — | (4,053 | ) | ||||||||||||||||
Proceeds
from sale of property, plant and equipment
|
— | 3,481 | 315 | — | — | 3,796 | ||||||||||||||||||
Proceeds
from divestitures, net
|
— | 5,622 | 2,755 | — | — | 8,377 | ||||||||||||||||||
Net
cash used in investing activities of continuing operations
|
— | 527 | (3,713 | ) | — | (20,400 | ) | (23,586 | ) | |||||||||||||||
Proceeds
from the sale of property, plant and equipment of discontinued
operations
|
— | — | 211 | — | — | 211 | ||||||||||||||||||
Capital
expenditures for discontinued operations
|
— | — | (2,603 | ) | — | — | (2,603 | ) | ||||||||||||||||
Net
cash used in investing activities of discontinued
operations
|
— | — | (2,392 | ) | — | — | (2,392 | ) | ||||||||||||||||
Net
cash used in investing activities
|
— | 527 | (6,105 | ) | — | (20,400 | ) | (25,978 | ) | |||||||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||||||
Proceeds
from exercise of stock options
|
22,433 | — | — | — | — | 22,433 | ||||||||||||||||||
(Repayments)
borrowings under senior secured revolving credit facility,
net
|
— | 45,490 | — | — | — | 45,490 | ||||||||||||||||||
Repayments
of other long-term debt
|
— | (2,947 | ) | (176 | ) | — | — | (3,123 | ) | |||||||||||||||
Purchase
and retirement of common stock upon vesting of RSUs
|
(187 | ) | — | — | — | — | (187 | ) | ||||||||||||||||
Intercompany
note
|
— | — | (20,400 | ) | — | 20,400 | — | |||||||||||||||||
Intercompany
advances
|
(24,751 | ) | 68,577 | (43,826 | ) | — | — | — | ||||||||||||||||
Net
cash provided by financing activities
|
(2,505 | ) | 111,120 | (64,402 | ) | — | 20,400 | 64,613 | ||||||||||||||||
Effect
of exchange rate changes on cash and cash equivalents of continuing
operations
|
— | — | 107 | — | — | 107 | ||||||||||||||||||
Effect
of exchange rate changes on cash and cash equivalents of discontinued
operations
|
— | — | 170 | — | — | 170 | ||||||||||||||||||
Net
increase (decrease) in cash and cash equivalents
|
— | (796 | ) | 1,035 | — | — | 239 | |||||||||||||||||
Cash
and cash equivalents at beginning of year
|
— | 796 | — | — | — | 796 | ||||||||||||||||||
Cash
and cash equivalents at end of year
|
$ | — | $ | — | $ | 1,035 | $ | — | $ | — | $ | 1,035 |
As
Restated
First
Quarter
|
As
Restated
Second
Quarter
|
As
Restated
Third
Quarter
|
Fourth
Quarter
|
|||||||||||||
Year
Ended 2007
|
||||||||||||||||
Net
sales
|
$ | 414,714 | $ | 496,960 | $ | 550,601 | $ | 584,441 | ||||||||
Gross
profit
|
82,178 | 94,743 | 114,492 | 126,597 | ||||||||||||
Operating
income
|
28,239 | 27,951 | 27,711 | 53,649 | ||||||||||||
Income
from continuing operations
|
1,780 | 2,570 | 2,511 | 17,124 | ||||||||||||
Income
(loss) from discontinued operations, net of taxes
|
16,293 | (342 | ) | (810 | ) | 1,655 | ||||||||||
Net
income
|
18,073 | 2,228 | 1,701 | 18,779 | ||||||||||||
Income
per share from continuing operations—Basic(1)
|
0.03 | 0.05 | 0.04 | 0.32 | ||||||||||||
Income
per share from continuing operations—Diluted(1)
|
0.03 | 0.05 | 0.04 | 0.31 | ||||||||||||
Income
(loss) per share from discontinued operations—Basic(1)
|
0.31 | (0.01 | ) | (0.01 | ) | 0.03 | ||||||||||
Income
(loss) per share from discontinued operations—Diluted(1)
|
0.30 | (0.01 | ) | (0.01 | ) | 0.03 | ||||||||||
Net
income per share—basic(1)
|
0.34 | 0.04 | 0.03 | 0.35 | ||||||||||||
Net
income per share—diluted(1)
|
0.33 | 0.04 | 0.03 | 0.34 |
Condensed
consolidated statements of operations line items (in thousands, except per share
data):
|
||||||||||||||||||||||||
Three
Months Ended
March
31, 2007
|
Three
Months Ended
June
30, 2007
|
Three
Months Ended
September
30, 2007
|
||||||||||||||||||||||
As
Reported
|
As
Restated
|
As
Reported
|
As
Restated
|
As
Reported
|
As
Restated
|
|||||||||||||||||||
Cost
of sales
|
$ | 331,490 | $ | 332,536 | $ | 401,220 | $ | 402,217 | $ | 433,774 | $ | 436,109 | ||||||||||||
Operating
income
|
29,285 | 28,239 | 28,948 | 27,951 | 30,046 | 27,711 | ||||||||||||||||||
Income
from continuing operations before taxes
|
4,081 | 3,035 | 5,973 | 4,976 | 4,002 | 1,667 | ||||||||||||||||||
Income
tax expense (benefit)
|
1,684 | 1,255 | 2,855 | 2,406 | 160 | (844 | ) | |||||||||||||||||
Income
from continuing operations
|
2,397 | 1,780 | 3,118 | 2,570 | 3,842 | 2,511 | ||||||||||||||||||
Net
income
|
18,690 | 18,073 | 2,776 | 2,228 | 3,032 | 1,701 | ||||||||||||||||||
Income
per share – basic:
|
||||||||||||||||||||||||
Continuing
operations
|
0.04 | 0.03 | 0.06 | 0.05 | 0.07 | 0.04 | ||||||||||||||||||
Net
income
|
0.35 | 0.34 | 0.05 | 0.04 | 0.06 | 0.03 | ||||||||||||||||||
Income
per share – diluted:
|
||||||||||||||||||||||||
Continuing
operations
|
0.04 | 0.03 | 0.06 | 0.05 | 0.07 | 0.04 | ||||||||||||||||||
Net
income
|
0.34 | 0.33 | 0.05 | 0.04 | 0.06 | 0.03 |
Condensed
consolidated balance sheets line items (in
thousands):
|
||||||||||||||||||||||||
March
31, 2007
|
June
30, 2007
|
September
30, 2007
|
||||||||||||||||||||||
As
Reported
|
As
Restated
|
As
Reported
|
As
Restated
|
As
Reported
|
As
Restated
|
|||||||||||||||||||
Accounts
receivable, net
|
$ | 286,603 | $ | 284,884 | $ | 290,791 | $ | 288,410 | $ | 345,858 | $ | 344,179 | ||||||||||||
Inventories
|
135,485 | 134,132 | 140,870 | 138,900 | 175,329 | 172,502 | ||||||||||||||||||
Total
current assets
|
470,228 | 467,156 | 490,941 | 486,590 | 585,561 | 582,059 | ||||||||||||||||||
Total
assets
|
1,589,719 | 1,586,647 | 1,610,423 | 1,606,072 | 2,025,787 | 2,022,285 | ||||||||||||||||||
Accounts
payable
|
145,321 | 145,473 | 133,383 | 133,277 | 169,846 | 171,857 | ||||||||||||||||||
Other
current liabilities
|
82,729 | 82,496 | 87,178 | 86,472 | 88,054 | 87,413 | ||||||||||||||||||
Total
current liabilities
|
303,027 | 302,946 | 294,699 | 293,887 | 334,440 | 335,810 | ||||||||||||||||||
Other
liabilities
|
75,735 | 76,645 | 74,756 | 75,666 | 97,208 | 98,118 | ||||||||||||||||||
Retained
deficit
|
(167,746 | ) | (171,647 | ) | (164,970 | ) | (169,419 | ) | (161,938 | ) | (167,720 | ) | ||||||||||||
Total
shareholders’ equity
|
77,589 | 73,688 | 89,723 | 85,274 | 87,474 | 81,692 | ||||||||||||||||||
Total
liabilities and shareholders’ equity
|
1,589,719 | 1,586,647 | 1,610,423 | 1,606,072 | 2,025,787 | 2,022,285 |
Condensed
consolidated statements of cash flows line items (in
thousands):
|
||||||||||||||||||||||||
Three
Months Ended
March
31, 2007
|
Six
Months Ended
June
30, 2007
|
Nine
Months Ended
September
30, 2007
|
||||||||||||||||||||||
As
Reported
|
As
Restated
|
As
Reported
|
As
Restated
|
As
Reported
|
As
Restated
|
|||||||||||||||||||
Net
income
|
$ | 18,690 | $ | 18,073 | $ | 21,466 | $ | 20,301 | $ | 24,498 | $ | 22,002 | ||||||||||||
Accounts
receivable
|
9,102 | 9,635 | 4,962 | 6,157 | (5,542 | ) | (5,049 | ) | ||||||||||||||||
Inventories
|
(4,868 | ) | (4,387 | ) | (6,949 | ) | (5,851 | ) | (16,845 | ) | (14,890 | ) | ||||||||||||
Accounts
payable and accrued compensation and related liabilities
|
(1,545 | ) | (1,506 | ) | (18,528 | ) | (18,747 | ) | (2,276 | ) | (378 | ) | ||||||||||||
Other
working capital changes
|
4,201 | 3,765 | (515 | ) | (1,424 | ) | (10,502 | ) | (12,352 | ) | ||||||||||||||
Net
cash provided by continuing operating activities
|
38,288 | 31,888 | ||||||||||||||||||||||
Proceeds
from the sale of discontinued operations
|
67,228 | 73,628 | ||||||||||||||||||||||
Net
cash provided by investing activities of discontinued
operations
|
67,228 | 73,628 | ||||||||||||||||||||||
Net
cash (used in) provided by investing activities
|
(266,840 | ) | (260,440 | ) |
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
|||||||||||||||||||||||||||||
As
Reported
|
As
Restated
|
As
Reported
|
As
Restated
|
As
Reported
|
As
Restated
|
As
Reported
|
As
Restated
|
|||||||||||||||||||||||||
YEAR
ENDED 2006
|
||||||||||||||||||||||||||||||||
Net
sales
|
$ | 385,286 | $ | 385,286 | $ | 357,895 | $ | 357,895 | $ | 383,868 | $ | 383,868 | $ | 384,175 | $ | 384,175 | ||||||||||||||||
Gross
Profit
|
75,642 | 74,353 | 73,319 | 72,314 | 76,855 | 75,380 | 76,908 | 77,393 | ||||||||||||||||||||||||
Operating
income
|
9,854 | 8,565 | 5,685 | 4,680 | 25,028 | 23,553 | 26,112 | 26,597 | ||||||||||||||||||||||||
Income
(loss) from continuing operations
|
(8,848 | ) | (10,456 | ) | (45,801 | ) | (23,710 | ) | 9,290 | 5,722 | 23,534 | 17,296 | ||||||||||||||||||||
Income
from discontinued operations, net of taxes
|
121,050 | 121,369 | 12,707 | (10,389 | ) | 2,326 | 4,419 | 4,397 | 11,120 | |||||||||||||||||||||||
Net
income (loss)
|
112,202 | 110,913 | (33,094 | ) | (34,099 | ) | 11,616 | 10,141 | 27,931 | 28,416 | ||||||||||||||||||||||
Income
(loss) per share from
continuing
operations—
basic(1)
|
(0.17 | ) | (0.20 | ) | (0.86 | ) | (0.44 | ) | 0.18 | 0.11 | 0.44 | 0.32 | ||||||||||||||||||||
Income
(loss) per share from continuing operations—diluted(1)
|
(0.17 | ) | (0.20 | ) | (0.86 | ) | (0.44 | ) | 0.17 | 0.11 | 0.43 | 0.32 | ||||||||||||||||||||
Income
per share from discontinued operations—basic(1)
|
2.28 | 2.29 | 0.24 | (0.20 | ) | 0.04 | 0.08 | 0.08 | 0.21 | |||||||||||||||||||||||
Income
per share from discontinued operations—diluted(1)
|
2.28 | 2.29 | 0.24 | (0.20 | ) | 0.04 | 0.08 | 0.08 | 0.20 | |||||||||||||||||||||||
Net
income (loss) per share—basic(1)
|
2.11 | 2.09 | (0.62 | ) | (0.64 | ) | 0.22 | 0.19 | 0.52 | 0.53 | ||||||||||||||||||||||
Net
income (loss) per share—diluted(1)
|
2.11 | 2.09 | (0.62 | ) | (0.64 | ) | 0.21 | 0.19 | 0.51 | 0.52 |
(1)
|
The
quarterly earnings per share information is computed separately for each
period. Therefore, the sum of such quarterly per share amounts may differ
from the total for the year.
|
●
|
There
was not an adequate review over the journal entry process and account
reconciliations at the plant level, which allowed the controller for
Dallas and Jacksonville to record and conceal unsupported journal
entries.
|
●
|
Corporate
management did not obtain from the persons responsible for oversight of
the Dallas and Jacksonville plants a certification as to the accuracy of
the plants' books and records prior to filing the Company's September
30, 2007 Form 10-Q.
|
●
|
All
significant account reconciliations at the plant level are reviewed
in more detail.
|
●
|
All
certifications as to the accuracy of the Company's books and records
are obtained from all persons responsible for oversight of the
Company's plants and operations.
|
Page
|
||
Schedule
II
|
Valuation
and Qualifying Accounts for the Years Ended
|
|
December
31, 2007, 2006, and 2005
|
89
|
Exhibit
Number
|
Description
|
|
2.1
|
Agreement
of Merger dated as of December 26, 2006 among Cenveo, Inc., Mouse
Acquisition Corp. and Cadmus Communications Corporation—incorporated by
reference to Exhibit 2.1 to registrant’s current report on Form 8-K filed
December 27, 2006.
|
|
2.2
|
Stock
Purchase Agreement dated as of July 17, 2007 among Cenveo Corporation,
Commercial Envelope Manufacturing Co., Inc. and its
shareholders—incorporated by reference to Exhibit 2.1 to registrant’s
current report on Form 8-K filed July 20, 2007.
|
|
3.1
|
Articles
of Incorporation—incorporated by reference to Exhibit 3(i) of the
registrant’s quarterly report on Form 10-Q for the quarter ended June 30,
1997, filed August 14, 1997.
|
|
3.2
|
Articles
of Amendment to the Articles of Incorporation dated May 17,
2004—incorporated by reference to Exhibit 3.2 to registrant’s quarterly
report on Form 10-Q for the quarter ended June 30, 2004, filed August 2,
2004.
|
|
3.3
|
Amendment
to Articles of Incorporation and Certificate of Designations of Series A
Junior Participating Preferred Stock of the Registrant dated April 20,
2005—incorporated by reference to Exhibit 3.1 to registrant’s current
report on Form 8-K filed April 21, 2005.
|
|
3.4
|
Bylaws
as amended and restated effective February 22, 2007—incorporated by
reference to Exhibit 3.2 to registrant’s current report on Form 8-K filed
August 30, 2007.
|
|
4.1
|
Indenture
dated as of February 4, 2004 between Mail-Well I Corporation, the
Guarantors named therein and U.S. Bank National Association, as Trustee,
and Form of Senior Subordinated Note and Guarantee relating to Mail-Well I
Corporation’s 7⅞% Senior Subordinated Notes due 2013—incorporated by
reference to Exhibit 4.5 to registrant’s annual report on Form 10-K for
the year ended December 31, 2003, filed February 27,
2004.
|
|
4.2
|
Supplemental
Indenture, dated as of June 21, 2006 among Cenveo Corporation (f/k/a
Mail-Well I Corporation), the Guarantors named therein and U.S. Bank
National Association, as Trustee, to the Indenture dated as of February 4,
2004 relating to the 7⅞% Senior Subordinated Notes due 2013—incorporated
by reference to Exhibit 4.2 to registrant’s current report on Form 8-K
filed June 27, 2006.
|
|
4.3
|
Third
Supplemental Indenture, dated as of March 7, 2007 among Cenveo Corporation
(f/k/a Mail-Well I Corporation), the Guarantors named therein and U.S.
Bank National Association, as Trustee, to the Indenture dated as of
February 4, 2004 relating to the 7⅞% Senior Subordinated Notes due 2013—
incorporated by reference to Exhibit 4.7 to registrant’s quarterly report
on Form 10-Q for the quarter ended March 31, 2007, filed May 9,
2007.
|
|
4.4
|
Fourth
Supplemental Indenture, dated as of July 9, 2007 among Cenveo Corporation
(f/k/a Mail-Well I Corporation), the Guarantors named therein and U.S.
Bank National Association, as Trustee, to the Indenture dated as of
February 4, 2004 relating to the 7⅞% Senior Subordinated Notes due 2013—
incorporated by reference to Exhibit 4.8 to registrant’s quarterly report
on Form 10-Q for the quarter ended June 30, 2007, filed August 8,
2007.
|
|
4.5
|
Fifth
Supplemental Indenture, dated as of August 30, 2007 among Cenveo
Corporation (f/k/a Mail-Well I Corporation), the Guarantors named therein
and U.S. Bank National Association, as Trustee, to the Indenture dated as
of February 4, 2004 relating to the 7⅞% Senior Subordinated Notes due
2013—incorporated by reference to Exhibit 4.6 to registrant’s quarterly
report on Form 10-Q for the quarter ended September 30, 2007, filed
November 8, 2007.
|
|
4.6
|
Indenture,
dated as of June 15, 2004, among Cadmus Communications Corporation, the
Guarantors named therein and Wachovia Bank, National Association, as
Trustee, relating to the 8⅜% Senior Subordinated Notes due
2014—incorporated by reference to Exhibit 4.9 to Cadmus Communications
Corporation’s registration statement on Form S-4 filed August 24,
2004.
|
4.7
|
First
Supplemental Indenture, dated as of March 1, 2005, to the Indenture dated
as of June 15, 2004, among Cadmus Communications Corporation, the
Guarantors named therein, Mack Printing, LLC and Wachovia
Bank,
|
|
National
Association, as Trustee, relating to the 8⅜% Senior Subordinated Notes due
2014—incorporated by reference to Exhibit 4.9.1 to Cadmus Communications
Corporation’s quarterly report on Form 10-Q for the quarter ended March
31, 2005, filed May 13, 2005.
|
4.8
|
Second
Supplemental Indenture, dated as of May 19, 2006, to the Indenture dated
as of June 15, 2004, among Cadmus Communications Corporation, the
Guarantors named therein and U.S. Bank National Association (successor to
Wachovia Bank, National Association), as Trustee, relating to the 8⅜%
Senior Subordinated Notes due 2014—incorporated by reference to Exhibit
4.9.2 to Cadmus Communications Corporation’s annual report on Form 10-K
for the year ended June 30, 2006, filed September 13,
2006.
|
4.9
|
Third
Supplemental Indenture, dated as of March 7, 2007, to the Indenture dated
as of June 15, 2004, among Cenveo Corporation (as successor to Cadmus
Communications Corporation), the Guarantors named therein and U.S. Bank
National Association (successor to Wachovia Bank, National Association),
as Trustee, relating to the 8⅜% Senior Subordinated Notes due
2014—incorporated by reference to Exhibit 4.11 to registrant’s quarterly
report on Form 10-Q for the quarter ended March 31, 2007, filed May 9,
2007.
|
|
4.10
|
Fourth
Supplemental Indenture, dated as of July 9, 2007, to the Indenture dated
as of June 15, 2004, among Cenveo Corporation (as successor to Cadmus
Communications Corporation), the Guarantors named therein and U.S. Bank
National Association (successor to Wachovia Bank, National Association),
as Trustee, relating to the 8⅜% Senior Subordinated Notes due 2014—
incorporated by reference to Exhibit 4.13 to registrant’s quarterly report
on Form 10-Q for the quarter ended June 30, 2007, filed August 8,
2007.
|
|
4.11
|
Fifth
Supplemental Indenture, dated as of August 30, 2007, to the Indenture
dated as of June 15, 2004, among Cenveo Corporation (as successor to
Cadmus Communications Corporation), the Guarantors named therein and U.S.
Bank National Association (successor to Wachovia Bank, National
Association), as Trustee, relating to the 8⅜% Senior Subordinated Notes
due 2014—incorporated by reference to Exhibit 4.13 to registrant’s
quarterly report on Form 10-Q for the quarter ended September 30, 2007,
filed November 8, 2007.
|
4.12*
|
Sixth
Supplemental Indenture, dated as of November 7, 2007, to the Indenture
dated as of June 15, 2004, among Cenveo Corporation (as successor to
Cadmus Communications Corporation), the Guarantors named therein and U.S.
Bank National Association (successor to Wachovia Bank, National
Association), as Trustee, relating to the 8⅜% Senior Subordinated Notes
due 2014.
|
10.1+
|
Form
of Indemnity Agreement between Mail-Well, Inc. and each of its officers
and directors—incorporated by
reference from Exhibit 10.17 of the registrant’s Registration Statement on
Form S-1 dated March 25, 1994.
|
||
10.2+
|
Employment
Agreement dated as of October 27, 2005 between the registrant and Robert
G. Burton, Sr.—incorporated by
reference to Exhibit 10.29 of registrant’s annual report on Form 10-K
filed for the year ended December 31, 2005, filed March 2,
2006.
|
||
10.3+
|
Amendment,
dated November 8, 2006, to Employment Agreement dated as of October 27,
2005 between the registrant and Robert G. Burton, Sr. — incorporated by
reference to Exhibit 10.19 of registrant’s annual report on Form 10-K
filed for the year ended December 31, 2006, filed February 28,
2007.
|
||
10.4+*
|
Amendment,
dated November 6, 2007, to Employment Agreement dated as of October 27,
2005, as amended, between the registrant and Robert G. Burton,
Sr.
|
||
10.5+*
|
Employment
Agreement dated as of February 1, 2008 between the registrant and Dean
Cherry.
|
||
10.6+
|
Employment
Agreement dated as of July 11, 2007 between the registrant and Mark
Hiltwein—incorporated by reference to Exhibit 10.2 to registrant’s
quarterly report on Form 10-Q for the quarter ended September 30, 2007,
filed November 8, 2007.
|
||
10.7+
|
Employment
Agreement dated as of June 22, 2006 between the registrant and Thomas
Oliva—incorporated by
reference to Exhibit 10.19 to registrant’s quarterly report on Form 10-Q
for the quarter ended June 30, 2006, filed August 9, 2006.
|
||
10.8+
|
Employment
Agreement dated as of June 22, 2006 between the registrant and Timothy
Davis—incorporated by
reference to Exhibit 10.22 to registrant’s quarterly report on Form 10-Q
for the quarter ended June 30, 2006, filed August 9, 2006.
|
10.9+
|
Employment
Agreement dated as of June 22, 2006 between the registrant and Sean
Sullivan—incorporated by
reference to Exhibit 10.20 to registrant’s quarterly report on Form 10-Q
for the quarter ended June 30, 2006, filed August 9, 2006.
|
||
10.10
|
Settlement
and Governance Agreement by and among the registrant, Burton Capital
Management, LLC and Robert G. Burton, Sr., dated September 9, 2005—incorporated by
reference to Exhibit 10.1 to the registrant’s current report on Form 8-K
dated (date of earliest event reported) September 9, 2005 and filed with
the SEC on September 12, 2005.
|
||
10.11+
|
Cenveo,
Inc. 2001 Long-Term Equity Incentive Plan, as amended—incorporated by
reference to Exhibit 10.24 to registrant’s quarterly report on Form 10-Q
for the quarter ended June 30, 2004, filed August 2,
2004.
|
||
10.12+
|
Form
of Non-Qualified Stock Option Agreement under 2001 Long-Term Equity
Incentive Plan—incorporated by
reference from Exhibit 10.28 to the registrant’s quarterly report on Form
10-Q for the quarter ended June 30, 2001, filed August 13,
2001.
|
||
10.13+
|
Form
of Incentive Stock Option Agreement under 2001 Long-Term Equity Incentive
Plan—incorporated
by reference from Exhibit 10.29 to the registrant’s quarterly report on
Form 10-Q for the quarter ended June 30, 2001, filed August 13,
2001.
|
||
10.14+
|
Form
of Restricted Stock Award Agreement under 2001 Long-Term Equity Incentive
Plan—incorporated
by reference from Exhibit 10.30 to the registrant’s quarterly report on
Form 10-Q for the quarter ended June 30, 2001, filed August 13,
2001.
|
||
10.15+
|
Form
of Restricted Share Unit Award Agreement under 2001 Long-Term Equity
Incentive Plan—incorporated by
reference to Exhibit 10.13 of the registrant’s annual report on Form 10-K
filed for the year ended December 31, 2005, filed March 2,
2006.
|
||
10.16+
|
Cenveo,
Inc. 2007 Long-Term Equity Incentive Plan—incorporated by reference to
Exhibit 10.1 to registrant’s quarterly report on Form 10-Q for the quarter
ended June 30, 2007, filed August 8, 2007.
|
||
10.17+*
|
Form
of Non-Qualified Stock Option Agreement for Employees under 2007 Long-Term
Equity Incentive Plan.
|
||
10.18+*
|
Form
of Restricted Share Unit Award Agreement for Employees under 2007
Long-Term Equity Incentive Plan.
|
||
10.19+*
|
Form
of Restricted Share Unit Award Agreement for Non- Employee Directors under
2007 Long-Term Equity Incentive
Plan.
|
10.20
|
Credit
Agreement dated as of June 21, 2006 among Cenveo Corporation, Cenveo,
Inc., Bank of America, N.A., as Administrative Agent, Swing Line Lender
and L/C Issuer, and the other lenders party thereto—incorporated by
reference to Exhibit 4.1 to registrant’s current report on Form 8-K dated
(date of earliest event reported) June 21, 2006 and filed with the SEC on
June 27, 2006.
|
|
10.21
|
First
Amendment, dated as of March 7, 2007, to Credit Agreement dated as of June
21, 2006, among Cenveo Corporation, Cenveo, Inc., Bank of America, N.A.,
as Administrative Agent, and the other lenders party thereto— incorporated
by reference to Exhibit 10.1 to registrant’s quarterly report on Form 10-Q
for the quarter ended March 31, 2007, filed May 9,
2007.
|
|
10.22
|
Credit
Agreement Supplement, dated as of July 9, 2007, to Credit Agreement dated
as of June 21, 2006, among Cenveo Corporation, Cenveo, Inc., Bank of
America, N.A., as Administrative Agent, and the other lenders party
thereto—incorporated by reference to Exhibit 10.2 to registrant’s
quarterly report on Form 10-Q for the quarter ended June 30, 2007, filed
August 8, 2007.
|
|
10.23
|
Loan
Agreement, dated as of August 30, 2007, among Cenveo Corporation, Cenveo,
Inc., Lehman Commercial Paper Inc., as Administrative Agent, the lenders
party thereto and Lehman Brothers Inc., as Sole Lead Arranger and Sole
Book Manager—incorporated by reference to Exhibit 10.3 to registrant’s
quarterly report on Form 10-Q for the quarter ended September 30, 2007,
filed November 8, 2007.
|
|
21.1*
|
Subsidiaries
of the registrant.
|
|
23.1*
|
Consent
of Ernst & Young LLP.
|
|
23.2*
|
Consent
of Deloitte & Touche LLP.
|
|
24.1
|
Power
of Attorney—incorporated by reference to page 91.
|
|
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 Mark S. Hiltwein, Chief Financial Officer, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
|
32.1*
|
Certification
of the Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, furnished as an exhibit to this report on Form
10-K.
|
|
32.2*
|
Certification
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-K.
|
+
|
Management
contract or compensatory plan or
arrangement.
|
*
|
Filed
herewith.
|
(b)
|
Exhibits
Filed
|
|
Included
in Item 15(a)(3) of this Report.
|
(c)
|
Financial
Statement Schedules Filed
|
For
The Years Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Accounts
receivable allowances
|
||||||||||||
Balance
at beginning of
year
|
$ | 4,802 | $ | 5,236 | $ | 4,738 | ||||||
Charged
to costs and
expenses
|
5,363 | 4,345 | 3,427 | |||||||||
Recoveries
and other charges(2)
|
3,466 | (735 | ) | 808 | ||||||||
Deductions(1)
|
(3,720 | ) | (4,044 | ) | (3,737 | ) | ||||||
Balance
at end of
year
|
$ | 9,911 | $ | 4,802 | $ | 5,236 |
For
The Years Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Inventory
reserves
|
||||||||||||
Balance
at beginning of
year
|
$ | 4,926 | $ | 5,899 | $ | 4,700 | ||||||
Charged
to costs and
expenses
|
2,851 | 1,900 | 3,000 | |||||||||
Recoveries
and other charges(2)
|
844 | (1,209 | ) | (458 | ) | |||||||
Deductions(1)
|
(1,166 | ) | (1,664 | ) | (1,343 | ) | ||||||
Balance
at end of
year
|
$ | 7,455 | $ | 4,926 | $ | 5,899 |
(1)
|
Amounts
written off.
|
CENVEO,
INC.
|
||
By:
|
/S/ ROBERT
G. BURTON, SR.
|
|
Robert
G. Burton, Sr., Chairman and
Chief
Executive Officer
(Principal
Executive Officer)
|
||
By:
|
/S/ MARK
S. HILTWEIN
|
|
Mark
S. Hiltwein,
Chief
Financial Officer
(Principal
Financial Officer and
Principal
Accounting Officer)
|
||
Signature
|
Title
|
Date
|
|||
/s/ Robert G.
Burton, Sr.
|
Chairman
and Chief Executive Officer
|
March
28, 2008
|
|||
Robert
G. Burton, Sr.
|
(Principal
Executive Officer)
|
||||
/s/ Mark S.
Hiltwein
|
Chief
Financial Officer
|
March
28, 2008
|
|||
Mark
S. Hiltwein
|
(Principal
Financial Officer and
|
||||
Principal
Accounting Officer)
|
|||||
/s/ Sean
Sullivan
|
President,
Commercial Printing
|
March
28, 2008
|
|||
Sean
S. Sullivan
|
and
Packaging
|
||||
/s/ Gerald S.
Armstrong
|
Director
|
March
28, 2008
|
|||
Gerald
S. Armstrong
|
|||||
/s/ Patrice
M. Daniels
|
Director
|
March
28, 2008
|
|||
Patrice
M. Daniels
|
|||||
/s/ Leonard
C. Green
|
Director
|
March
28, 2008
|
|||
Leonard
C. Green
|
|||||
/s/ Mark J.
Griffin
|
Director
|
March
28, 2008
|
|||
Mark
J. Griffin
|
|||||
/s/ Robert
Obernier
|
Director
|
March
28, 2008
|
|||
Robert
Obernier
|