EXHIBIT 99.1
[CADMUS LOGO]
FOR IMMEDIATE RELEASE Contact: David E. Bosher
Senior Vice President and CFO
(804) 287-5685
CADMUS COMMUNICATIONS REPORTS FIRST QUARTER EARNINGS OF $0.25 PER SHARE
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RESULTS CONTINUE POSITIVE TRENDS FROM FOURTH QUARTER OF FISCAL 2000
RICHMOND, VA (October 31, 2000) - Cadmus Communications Corporation (Nasdaq/NM:
CDMS) today announced results for the first quarter of its fiscal year 2001.
Financial highlights for the three months ended September 30, 2000, were as
follows:
. Net sales totaled $115.7 million, up from $113.3 million last year,
adjusted for divested and closed operations;
. STM journal services and special interest magazines sales rose 5% and 6%,
respectively, offsetting continued softness in specialty packaging sales;
. Operating margins, excluding restructuring and other charges, expanded to
8.4% of sales;
. EBITDA rose to $16.4 million compared with $15.5 million last year; and,
. Debt, before securitization, was reduced by $9.9 million, to $236.1 million.
"These results were in line with our business plan and our expectations for the
quarter," commented Bruce V. Thomas, president and chief executive officer.
"Our STM journal services business closed last year with a strong performance,
and that momentum has continued into fiscal 2001. In addition, we experienced
higher net sales from our special interest magazines and book and directory
businesses. Our specialty packaging operations were adversely affected in July
and August by the continued softness in their markets, but rebounded strongly as
the quarter ended. Significant new orders have built the sales backlog in this
business, and we expect improved performance in sales and operating income
throughout the second fiscal quarter. "
Continuing, Thomas said, "Each of our businesses is responding positively to our
market-focused approach and renewed emphasis on growth. Following the
integration of Mack and the completion of our restructuring activities, we now
have four strong, market-focused operating units. The cornerstone of our plan
remains to leverage this market-focus by developing innovative, distinctive, and
even proprietary, products and services that will differentiate Cadmus from our
competitors and drive sustained top-line growth and consistent margin
improvement. We are pleased with the early results of this new approach,
especially the initial success of several of the new products we have recently
introduced. In particular, customer interest has been excellent for Rapid
Review, our web-based peer review system for the STM journal services market.
This early success is generating significant interest in the remaining
components of our integrated electronic publishing system, which are under
development."
David E. Bosher, senior vice president and chief financial officer, added, "We
are optimistic that results in the second fiscal quarter will reflect a positive
year-to-year comparison to the $.34 per share we earned last year, adjusted for
the impact of closed operations. However, we continue to face significant
industry competition and pricing pressure from a consolidating base of
customers. Our focus remains on sustaining revenue growth, managing that growth
as efficiently as possible, and controlling our cost structure. We believe
these actions will continue to help offset those competitive pressures."
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Mr. Bosher noted further, "A key advantage of Cadmus is our ability to generate
strong and predictable cash flows, not only to provide the funding for
investments in new technology, but also to strengthen our financial position
through the reduction of our debt. In fact, we lowered debt by another $9.9
million during the first quarter and are on plan to achieve our full year debt
reduction goal of $25 million."
Fiscal First Quarter Operating Results - Detailed Review
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Net sales for the first quarter totaled $115.7 million, compared with $124.8
million last year. Adjusted for divested and closed operations, net sales
increased 2% for the first quarter from $113.3 million. Publication Services
segment (STM journal services, special interest magazines, and book and
directory businesses) sales increased 6% from a year ago, reflecting growth from
existing customers, new business development activities, and higher paper
prices. Other segment sales fell 15% in the quarter due primarily to lower
specialty packaging sales, which were attributable to continued industry-wide
softness and reduced promotional expenditures from high-tech customers. However,
packaging experienced stronger results in September. Significant new business
wins and a pick-up in orders from existing customers have built sales backlogs
meaningfully in recent weeks.
Operating income before restructuring and other charges increased 15% from $8.5
million to $9.8 million, and adjusted operating margins, as a percent of net
sales, improved to 8.4% from 6.8%. EBITDA in the first quarter totaled $16.4
million, up from $15.5 million a year ago, adjusted for restructuring and other
charges. Cash flow from operations and proceeds from the sale of the Company's
Dynamic Diagrams business resulted in a reduction in total debt of $9.9 million
for the quarter, bringing total debt, before securitization, down to $236.1
million at September 30, 2000.
Net income for the first quarter totaled $2.3 million, or $0.25 per share,
compared with $1.5 million, or $0.17 per share, last year, excluding
restructuring and other charges. After restructuring and other charges, the
Company recorded a net loss in the first quarter a year ago of $12.6 million, or
$1.40 per share. Restructuring and other charges recorded in the first quarter
a year ago included the write-off of intangible assets related to the Company's
point-of-purchase business, the write-off of redundant manufacturing software
resulting from the integration of Mack, and a net gain on the closure and
divestiture of two marketing agencies.
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) continuing
competitive pricing in the markets in which the Company competes, (2) the gain
or loss of significant customers or the decrease in demand from existing
customers, (3) the ability of the Company to continue to obtain improved
efficiencies and lower overall production costs, (4) changes in the Company's
product sales mix, (5) the performance of new management and leadership teams in
the Company and its divisions, (6) the impact of industry consolidation among
key customers, (7) the ability of the Company to operate profitably and
effectively with higher levels of indebtedness, and (8) the ability to retain
key employees and managers. 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)
Three Months Ended
September 30,
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2000 1999
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Net sales $ 115,732 $ 124,757
Operating expenses:
Cost of sales 90,883 98,697
Selling and administrative 15,082 17,547
Restructuring charges - 16,590
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105,965 132,834
Operating income (loss) 9,767 (8,077)
Interest and other expenses:
Interest 5,240 6,167
Securitization costs 760 -
Other, net (82) (306)
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5,918 5,861
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Income (loss) before income taxes 3,849 (13,938)
Income tax expense (benefit) 1,598 (1,305)
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Net income (loss) $ 2,251 $ (12,633)
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Net income (loss) per share, assuming dilution $ 0.25 $ (1.40)
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Weighted-average common shares outstanding 8,940 9,013
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SELECTED HIGHLIGHTS
(In thousands, except per share data and percents)
(Unaudited)
Three Months Ended
September 30,
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2000 1999
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Operating data, before restructuring charges*:
Operating income $ 9,767 $ 8,513
Income 2,251 1,512
EBITDA 16,445 15,540
Depreciation & amortization expense 6,596 6,721
Percent to net sales
Gross profit 21.5% 20.9%
Selling, general and administrative expenses 13.0% 14.1%
Operating income 8.4% 6.8%
EBITDA 14.2% 12.5%
Earnings per share, assuming dilution $ .25 $ .17
*Before restructuring charges of $16.6 million ($14.1 million net of tax) in
fiscal 2000.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
September 30, June 30,
2000 2000
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(Unaudited)
Assets:
Cash and cash equivalents $ 1,942 $ 6,411
Other current assets 85,356 70,097
Property, plant and equipment, net 147,392 150,979
Other assets 191,795 195,697
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Total assets $ 426,485 $ 423,184
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Liabilities and shareholders' equity:
Current liabilities, excluding current debt 72,325 65,661
Total debt 193,096 201,705
Other long-term liabilities 41,318 37,876
Shareholders'equity 119,746 117,942
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Total liabilities and shareholders' equity $ 426,485 $ 423,184
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