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EXHIBIT 99.1
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FOR IMMEDIATE RELEASE Contact: David E. Bosher
Senior Vice President and CFO
(804) 287-5685
CADMUS COMMUNICATIONS EXTENDS POSITIVE TREND IN EARNINGS
FOURTH QUARTER EARNINGS TOTAL $0.37 PER SHARE
BEFORE RESTRUCTURING AND ONE-TIME CHARGES
RICHMOND, VA (Aug. 2, 2000) -- Cadmus Communications Corporation (Nasdaq/NM:
CDMS) today announced earnings for the fourth fiscal quarter of $3.3 million, or
$0.37 per share, before restructuring and one-time charges. Financial
highlights for the quarter and fiscal year ended June 30, 2000, included the
following:
o Net sales reached a record in fiscal 2000 of $496.3 million, up 12%
from the prior year;
o Operating income before restructuring and one-time charges rose 12% in
the fourth quarter, and operating margins rose to 9.8% of sales;
o Cash flow totaled $8.0 million in the fourth quarter, bringing
full-year cash flow to $31.2 million;
o Total debt (adjusted for the impact of securitization) declined $3.0
million in the fourth quarter, bringing the full-year reduction in
debt to $30.0 million; and
o EBITDA, adjusted for restructuring and one-time charges, rose 38% to
$68.9 million for the year.
"We ended fiscal 2000 with the highest quarterly earnings for the year,
continued improvement in operating margins, and strong cash flow," commented
Bruce V. Thomas, Cadmus' president and chief executive officer. "Our financial
results for the fourth period were again aided by increased sales from our
professional communications business and a reduced cost structure resulting from
our restructuring actions. The positive impact on earnings from these factors
was offset somewhat by both higher short-term interest rates and by an industry-
wide slowdown in the specialty packaging portion of our business."
Commenting on the fiscal year, Thomas stated, "In fiscal 2000, we successfully
integrated Mack, our largest acquisition to date, and completed our
restructuring plan in line with our initial estimates. In addition, our
financial performance included much improved operating margins, strong cash
flow, meaningful debt reduction, sustained growth from our specialty packaging
business, and renewed new business momentum in our STM journal services
business. These achievements certainly indicate a positive trend. However, we
still are not yet where we need to be in terms of financial or operating
performance. We must move more aggressively to exploit our enhanced operating
platform. The printing industry remains very competitive, and we must continue
to contain costs and strive for further efficiency gains. Those are a given.
But, we must do more. We must use our expertise and capabilities to stimulate
change in our markets by providing customers more innovative and value-added
products and services. We will move faster and more aggressively down this path,
and we are optimistic about the prospect of sustaining the trends of revenue
growth and improved profitability."
Thomas added, "We also achieved record cash flow for the year of $31.2 million,
or $3.47 per share. We used these internally generated funds to reduce debt by
$30.0 million from a year ago, which has lowered our financial leverage and
reduced our exposure to future fluctuations in short-term interest rates. We
expect to generate substantial cash flow again in fiscal 2001, and plan to use
those funds to further strengthen our balance sheet and to increase the
Company's ability to support the growth of our existing operations and fund
other strategic expansion opportunities."
Fiscal Fourth Quarter Operating Results - Detailed Review
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Consolidated net sales for the fourth quarter, adjusted for divested and closed
operations, were essentially flat. Professional Communications sector net sales
rose 3% in the period due primarily to continued growth in the Company's STM
journal services product line. Specialty packaging net sales declined 17% in
the fourth quarter due to apparent softness in the packaging industry and delays
in the timing of promotions and direct marketing campaigns by several customers.
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Operating income before restructuring and one-time charges totaled $11.6 million
in the fourth quarter compared to $10.4 million last year. Operating margins
improved to 9.8% of net sales compared to 7.7% last year as margin improvement
from STM journal services, the positive impact of the divested operations, and
lower corporate expenses offset soft results from the Company's specialty
packaging and graphic solutions product lines.
Interest expense (including securitization costs) declined $0.2 million in the
fourth quarter as the positive impact of significantly lower debt levels and the
implementation of a receivables securitization program in fiscal 2000 offset
increases in short-term interest rates.
Income before restructuring and one-time charges rose 19% in the fourth quarter
to $3.3 million, or $.37 per share, compared to $2.8 million, or $.30 per share,
in the fourth quarter of fiscal 1999. Net income in the fourth quarter was $2.0
million, or $.23 per share, compared to $0.5 million, or $.06 per share, in
fiscal 1999. The Company recorded a one-time charge in the fourth quarter of
$2.4 million before taxes, or $.14 per share after tax, related to certain costs
associated with the retirement of its former chairman, president and chief
executive officer.
Cash flow in the fourth quarter totaled $8.0 million and the Company's total
debt declined $3.0 million to $246.0 million from $249.0 million at March 31,
2000.
Fiscal Full Year Operating Results - Detailed Review
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Net sales, adjusted for acquisitions and divested operations, rose 5%. Net
sales from the Professional Communications sector rose 49% for the year due to
the inclusion of a full year's results from the acquired Mack businesses and
modest growth in the Company's base STM journal business. Specialty packaging
net sales rose 21% in fiscal 2000.
Operating income before restructuring and one-time items rose 49% in fiscal 2000
to $42.2 million, from $28.3 million last year, due primarily to the full-year
inclusion of Mack and the elimination of losses from the divested and closed
operations. Operating margins improved to 8.5% of sales in fiscal 2000 from
6.4% of sales last year. Income before restructuring and one-time items was
$10.7 million in fiscal 2000, or $1.19 per share, compared to $10.1 million, or
$1.22 per share, in fiscal 1999. Weighted-average common shares outstanding
were 8,990,000 in fiscal 2000 compared to 8,336,000 in 1999.
Cadmus Communications Corporation provides end-to-end, integrated graphic
communications services to professional publishers, not-for-profit societies and
corporations. Cadmus is the largest provider of production services to
scientific, technical and medical journal publishers in the world, the fourth
largest publications printer in
North America, and a leading national provider of specialty packaging products
and services. Additional information about Cadmus is available at
www.cadmus.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Information in this release relating to Cadmus' future prospects and
performance are "forward-looking statements" and, as such, are subject to risks
and uncertainties that could cause actual results to differ materially.
Potential risks and uncertainties include but are not limited to: (1) the
effective execution of the restructuring plan and the successful integration of
recent acquisitions, (2) continuing competitive pricing in the markets in which
the Company competes, (3) the gain or loss of significant customers or the
decrease in demand from existing customers, (4) the ability of the Company to
continue to obtain improved efficiencies and lower overall production costs, (5)
changes in the Company's product sales mix, (6) the performance of new
management and leadership teams in the Company and its divisions, (7) the impact
of industry consolidation among key customers, (8) the ability of the Company to
operate profitably and effectively with higher levels of indebtedness, and (9)
the ability to retain key employees and managers in light of lower-than-planned
incentives and benefits. The information included in this release is
representative only on the date hereof, and the Company undertakes no obligation
to update any forward-looking statements made.
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CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
June 30, June 30,
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<S> <C> <C> <C> <C>
2000 1999 2000 1999
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Net sales $ 118,452 $ 134,449 $ 496,311 $ 443,045
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Operating expenses:
Cost of sales 92,949 106,704 388,103 352,970
Selling and administrative 13,881 17,331 66,034 61,733
Net gain on divestitures -- -- -- (9,521)
Restructuring and other charges 2,400 -- 36,544 --
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109,230 124,035 490,681 405,182
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Operating income 9,222 10,414 5,630 37,863
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Interest and other expenses:
Interest 5,344 6,119 23,002 12,204
Securitization cost 613 -- 1,489 --
Interest rate swap settlement charges -- 2,101 -- 2,101
Other, net 37 (432) (660) (498)
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5,994 7,788 23,831 13,807
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Income (loss) before income taxes and
extraordinary item 3,228 2,626 (18,201) 24,056
Income tax expense (benefit) 1,185 1,163 (2,191) 9,414
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Income (loss) before extraordinary item 2,043 1,463 (16,010) 14,642
Extraordinary loss on early extinguishment of
debt (net of income tax benefit of $574) -- 929 -- 929
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Net income (loss) $ 2,043 $ 534 $ (16,010) $ 13,713
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Earnings per share, assuming dilution:
Income (loss) before extraordinary item $ .23 .16 $ (1.78) $ 1.76
Extraordinary loss on early extinguishment of
debt -- (.10) -- (.11)
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Net income (loss) per share $ .23 .06 $ (1.78) $ 1.65
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Weighted-average common shares
outstanding 8,946 9,124 8,990 8,336
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Cash dividends per common share $ .05 .05 $ .20 $ .20
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SELECTED HIGHLIGHTS
(In thousands, except per share data and percentages)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Twelve months Ended
June 30, June 30,
--------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
2000 1999 2000 1999
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Operating data, before restructuring and one-time
charges:
Value added revenue $82,913 $89,836 $342,002 $281,872
Operating income 11,622 10,414 42,174 28,342
Income 3,294 2,762 10,732 10,133
EBITDA* 18,094 17,514 68,881 49,835
Depreciation & amortization expense 6,509 6,668 26,047 20,995
Percent to net sales:
Gross profit 21.5% 20.6% 21.8% 20.3%
Selling, general and administrative
expenses 11.7% 12.9% 13.3% 13.9%
Operating income 9.8% 7.7% 8.5% 6.4%
EBITDA* 15.3% 13.0% 13.9% 11.2%
Earnings per share, assuming dilution $ .37 $ .30 $ 1.19 $ 1.22
</TABLE>
* Earnings before interest, taxes, depreciation, amortization and securitization
costs
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
<TABLE>
<CAPTION>
June 30, 2000 June 30,1999
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(unaudited)
Assets:
<S> <C> <C>
Cash and cash equivalents $ 6,411 $ 5,068
Accounts receivable, net 31,992 92,532
Inventories 25,297 30,586
Other current assets 12,808 12,072
Property plant and equipment, net 150,979 173,085
Other assets, net 195,697 210,503
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Total assets $ 423,184 $ 523,846
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Liabilities and shareholders' equity:
Current liabilities, excluding current debt 60,666 73,292
Total debt 201,705 275,879
Other long-term liabilities 42,871 38,142
Shareholders' equity 117,942 136,533
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Total liabilities and shareholders' equity $ 423,184 $ 523,846
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