UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
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[ ] Definitive Proxy Statement
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CENVEO, INC.
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VIDEO TRANSCRIPT
AUGUST, 2005 MESSAGE FROM JIM
DVD MENU TITLE: MESSAGE FROM JIM, AUGUST, 2005
VIDEO:
SUPER: JIM MALONE, PRESIDENT & CEO
Good afternoon or morning, depending on where you are. It's August, the
afternoon of August 10th and I'm on my way to Minneapolis and looking forward to
giving you an update on what I've been doing, where I've been, and maybe more
importantly, where I think we're going in the next few weeks.
By the end of this week I will, I believe, have visited 26 different facilities.
I will have been able to have seen or talked to several thousand of our
employees. I will have been in touch on an eyeball-to-eyeball basis with about
25% of our shareholders. So, everything that we're doing is aimed towards
restructuring the company along the lines that I mentioned to you the first time
I had the opportunity to talk like this.
And just to refresh your memory, what we have done is dramatically flattened the
organization. We have reorganized the company so that I have five people from
different business segments reporting directly to me from an operating point of
view. We have two staff people reporting to me instead of kind of the reverse,
if you will, when I, when I came in here. So this company has two focuses - our
operational excellence, our operational efficiency and effectiveness, if you
will, and a customer focus - and those that are the things that will drive our
profitable growth.
The corporate or central office, if you will, as you know, is being downsized.
We've got the office itself up for lease and those people who are left in the
corporate office will be moving to smaller quarters as soon as we can get that
transaction in place and ongoing.
As an integral part of that, the corporate office function and sole purpose in
this world is twofold. One is to make it easier for our operations and to
support our operations in their customer focus and in their operational
excellence. That's number one. And number two is our regulatory requirements,
obligations, duties both moral, ethical and, and legal. And that is the function
of the central office - no more, no less.
TITLE: FINANCIAL PERFORMANCE...
I'd like to spend a few minutes talking about our financial performance in the
period just ended, then talk maybe more importantly about what I see going
forward. I'm not going to sit here and go through with you all the quarterly
numbers. Let me just say simply - they don't work, they're not sustainable for
this company or any company, and those numbers are available in any number of
public forums, and I would really rather focus on where we're going and the
numbers that I see not only necessary but obtainable on a go-forward basis. And
I think that will provide a perspective for you and then you at
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your own leisure can delve into whatever level of detail you want to on the, on
the second quarterly numbers.
But let me just sum it up by saying that once again, they're not sustainable,
they're not where you want to be, they're not where any company can be or should
be on a go-forward basis. And that's part of what we're all doing here together
is how do we change the performance level and activity of this company as we
take it forward.
And I'm not in the habit of making predictions that we don't think are doable,
and in fact the things that we have said that we're going to be doing for '06
and '07 are well underway and being in place and I have every reason to believe
that as a total organization we'll be there. But that number is an EBITDA number
of $190 million for '06 ...
TITLE: EBITDA: EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
...and that compares with the guidance that the street has been given with about
130 to 135 million for this year. And for '07 we have said publicly and given
the guidance towards a number of around 250-ish uh, in terms of EBITDA number
again for '07.
So, what that means, obviously, is the completion of the $55 million cost
reduction that we have talked about and further - which gets us to the 190
million number for '06. But then when you go into a fiscal year with that run
rate it's only natural to assume that there's going to be some opportunity on
the upside, and I think that is absolutely and positively the case here. We
still have growth opportunities both at the national and local levels, we have
margin opportunities with our supply base, and we certainly still have overhead
opportunities on the cost side of this business.
So I think that there's a tremendous amount of momentum that we can do with this
company and I sense that kind of energy as I'm in the plants and talking to
people and seeing your enthusiasm for what this company can be, what on an
individual basis this company has been in the past and the enthusiasm and the
willingness and the desire to get it there on a go-forward basis. And it's not
an easy thing to do by any manner, shape or form. This is not going to be a walk
in the park, but nothing worthwhile ever is, and I don't think this situation is
any different. It's worth the energy, it's worth the focus, and it's worth the
sacrifice on all of our parts to get the company there so that we can become the
leader in the different segments of, of the industries that we're a part of, and
whether we become an agent for change, not a reactor to change. And once we're
in that kind of a position, both from a growth standpoint, from a cost
standpoint and on a strategic point of view, then, then we're doing what we need
to be doing for the shareholders, and that's adding value every single quarter.
And that by adding value to there for the shareholders and doing it in a
responsible, methodical, strategic, sustainable way that is the ultimate test of
a great company and the sustainability of that great company.
I've had the opportunity to meet with several of our customers and we have
received tremendous support from them in what we're doing and what we're trying
to do. I have not met as many of our suppliers as I would like to do, and I will
focus on a couple of our big ones in the next three to four weeks, but then the
post 15, should that be the
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success that I think it will be and that I hope it will be, then that will
certainly be among the first of my next stops.
TITLE: STATUS OF SEPTEMBER 14, FILING 13D...
The last thing I want to talk to you about is where we are in the special
shareholders meeting for September 14th and where we stand in the whole proxy
issue and how that is going to progress and then what is essentially going to
occur.
The fact of the matter is a significant shareholder group asked for a special
meeting to put up their slate of board members and to install their strategy, if
you will, and we are opposing that. We want to do it the way that we have
outlined about what the new strategy for a new Cenveo needs to be going forward.
That's what this is about.
But the way that's going to work is, we have our proxy of the companies, and
Cenveo has its proxy out. I suspect that Burton will have his out very shortly
and the owners of this company are going to vote on, on which way to go. And as
a part of that effort, I will be in front of every shareholder group that I can
possibly be in front of, and, and part of my enthusiasm in being in all the
plants that I can possibly physically be in is because all of you are just as
much a stakeholder in this company as anybody else.
So, by the time all of you will have seen this those of you who are shareholders
will have received from Cenveo and a letter from me, the proxy, and that will
have a gold card on it. We are soliciting your vote and your support and hope
that you will choose to support your colleagues in this effort and the direction
that we see for Cenveo on a go-forward basis.
I'll be spending virtually every day from now forward in front of different
shareholder groups all over the country and we will be telling our story of
where the company was, what we have done with the company so far, what is in
place and where we can take the company on a definitive basis and then where we
see some of the upsides for this company and for this industry.
So that's the way the process works. As you all know, there's a number that you
can certainly call in. Any other questions that you might have around the proxy
you can call um, our proxy solicitor.
TITLE:
FOR PROXY INFORMATION...
INNISFREE M&A
(888) 750-5834
(TOLL-FREE)
I urge all of you to gather all the information that you can and read and listen
to what everybody's got to say in terms of their view of the industry and the
company and the part that it can play on a go-forward basis and then, once
again, I'm going to solicit your support and your vote.
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I'm sorry that we have to spend all this time and effort and energy and money on
dealing with a shareholder suit. But I will also tell you, in all sincerity,
that the focus this brings to our performance and the way we view our strategies
going forward, the way we view the discipline that we must all have going
forward, I think is a very, very good thing. And I think it's the right thing
for us to do and it's the right thing for us to be focused on - not just today,
not just for September 14th, but for here and evermore.
TITLE: LET'S WIN...
In closing, there are a couple things that I want to remind you about and I like
to remind myself. That what we're doing with this company is focusing on adding
value and driving the performance of the company around these several words that
we talked about before. That if we are on a daily basis growing the company,
being profitable and having fun that drives the value for our shareholders, for
our employees, for our customers and for our suppliers. And if we're doing that
day in, day out, there is virtually no question in my mind that we will be
successful in getting to the numbers that I've talked about, and maybe more
importantly than those numbers themselves is transforming this company to being
a leader in all the different business units and different segments that we've
involved in. And that all of you and all of us together can make that happen and
can create this company and, and place it on a different level of performance
standards and expectations that our investors have and that we have of each
other.
That's our challenge. We don't have much time to make it happen, but again, let
me reiterate what I talked about when we first opened. The energy, the
enthusiasm and the focus that I see in this company, there is little or no
question in my mind that we can make it happen. Thanks for listening; thanks for
your time.
TITLE: COPYRIGHT 2005 CENVEO
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IMPORTANT INFORMATION
On August 5, 2005, Cenveo, Inc. filed with the Securities and Exchange
Commission a definitive proxy statement on Schedule 14A in connection with a
special meeting of its shareholders. CENVEO'S SHAREHOLDERS ARE STRONGLY
ENCOURAGED TO READ CAREFULLY THE DEFINITIVE PROXY STATEMENT, BECAUSE IT CONTAINS
IMPORTANT INFORMATION.
Free copies of the definitive proxy statement are available at the SEC's web
site at www.sec.gov, at the Cenveo's web site at www.cenveo.com, or by directing
requests to Cenveo's proxy solicitor, Innisfree M&A Incorporated, toll free at
1-888 750-5834.
USE OF NON-GAAP MEASURES
EBITDA (earnings before interest, taxes, depreciation and amortization) should
not be considered as an alternative to any measure of operating results as
promulgated under accounting principles generally accepted (GAAP) in the United
States (such as operating income or net income), nor should it be considered as
an indicator of our overall financial performance. Cenveo uses EBITDA internally
to evaluate and manage the Company's operations. EBITDA does not fully consider
the impact of investing or financing transactions as it specifically excludes
depreciation and interest charges, which should also be considered in the
overall evaluation of results.
Additionally, our method of calculating EBITDA may be different from the method
used by other companies and therefore comparability may be limited. EBITDA has
not been provided as a measure of liquidity.
We use EBITDA as a supplemental measure of performance because we believe it
gives the reader a more complete understanding of our operating results before
the impact of investing and financing transactions.
This transcript is based in part on management's estimate of EBITDA for the
years ended December 31, 2005 and 2006 . Management believes the most directly
comparable GAAP measure would be net income. Due to the difficulty in
forecasting and quantifying the amounts that would be required to be included in
this comparable GAAP measure, the Company in not providing an estimate of
year-end net income at this time. Cenveo expects certain known GAAP charges for
2005 and 2006, such as $5.1 million and $5 million, respectively, of
amortization of purchased intangibles, interest expense of $73.3 million and $65
million, respectively, and depreciation of $47.7 million and $45 million,
respectively. Other GAAP charges excluded from the estimated EBITDA are
possible, but their amounts are dependent on numerous factors that we currently
cannot ascertain with sufficient certainty or are presently unknown. These GAAP
charges, such as potential asset impairment charges, potential restructuring
costs or potential tax valuation allowances are dependent upon future events and
valuations that have not yet been performed.
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