Cenveo Completes Sale of Packaging Business; Announces Expected 2015 Financial Results
Cenveo Inc., Stamford, Conn., has completed the previously disclosed sale of its packaging business to WestRock Converting Company (WestRock).
The company also reported expected results for the three months and year ended Jan. 2, 2016. The results are both preliminary and unaudited, and may be adjusted as a result of, among other things, completion of customary financial close review and independent audit procedures. The company expects preliminary net sales for the fourth quarter 2015 to be at least $470 million, compared to net sales of $453 million during the same period in 2014. For the full year 2015, the company expects net sales to be approximately $1.74 billion compared to $1.76 billion for the prior year. The company also expects adjusted EBITDA for the full year to be near the high end of the previously issued guidance of between $153 million and $160 million. The expected results exclude the operations of the packaging business as it has been classified in the company’s consolidated financial statements as discontinued operations.
“We are pleased not only to complete the sale of our packaging business to WestRock, but also with our expected operating results for the fourth quarter,” said Robert Burton Sr., chairman and CEO for Cenveo Inc. “We saw solid performances by each of our operations, highlighted by continued margin expansion in our envelope segment as compared to the prior year. Additionally, we ended 2015 in an improved liquidity position, reflecting our cash flow generation capability during the last three months of the year. Finally, with the sale of the packaging business now complete, we will turn our attention to addressing our nearest bond maturities. I look forward to updating you further on our operating performance, as well as our financing plans during our fourth-quarter-earnings call to be held next month.”
The company also announced that on Jan. 19, 2016, it received notice from the New York Stock Exchange (NYSE) that it does not presently satisfy the NYSE’s continued listing standard requiring the average closing price of the company’s common stock to be at least $1 per share for 30 consecutive trading days. The notice has no immediate impact on the listing of the company’s common stock. In accordance with the NYSE rules, the company will respond to the notice within 10 business days of its receipt as to how Cenveo Inc. intends to cure the deficiency and return to full compliance with the NYSE continued listing standards. The company will actively monitor its stock price and evaluate all available options in order to regain that compliance within the prescribed six-month time frame. During that six-month period, the company’s common stock will continue to be listed and traded on the NYSE, subject to compliance with other continued listing standards. The deficiency does not affect the company’s ongoing business operations or its SEC reporting requirements.
“While the recent significant volatility across the global financial markets along with other factors has negatively impacted our share price, we remain confident that our plan will create value over the long term,” Burton continued. “The completion of the sale of the packaging business and our stronger fourth-quarter results were important pieces to that plan and reflect some of the momentum that we are seeing toward achieving that plan. Further, we intend to fully satisfy our listing deficiency as soon as practical and within the required time frame.”
For more information, visit www.cenveo.com.
Related story: Cenveo Inc. to Sell Packaging Business to WestRock