Exhibit 99.1
NEWS RELEASE
Contact: David E. Bosher, Vice President and Treasurer (analysts)
(804) 287-5685
Teri Schrettenbrunner, Director of Public Relations (media)
(804) 287-6260
CADMUS COMMUNICATIONS CORPORATION ANNOUNCES
RECORD FIRST QUARTER RESULTS
RICHMOND, VA, October 22, 1998 -- Cadmus Communications Corporation (NASDAQ NMS:
CDMS) today reported record results for the fiscal first quarter ended September
30, 1998. Financial highlights were as follows:
o Net income rose 24% to $2.5 million, or $.31 per share.
o Sales rose 8% to $99.8 million, led by an 18% increase from the
Marketing Communications sector.
o Operating income rose 16% to $6.6 million and operating margins
improved to 6.6% of sales from 6.2% in fiscal 1998.
C. Stephenson Gillispie, Jr., chairman, president and chief executive officer,
stated, "We are pleased with our first quarter performance - our seventh
consecutive quarter of year-over-year improvement in operating earnings before
restructuring charges. Our Professional Communications sector again demonstrated
the strength of its market position and the non-cyclical nature of its business,
posting impressive earnings growth and continued margin expansion. In our
Marketing Communications sector, earnings rebounded in our tactical marketing
businesses and we achieved double-digit sales growth from our packaging and
promotional printing, and graphic solutions groups. These performances helped to
offset the negative impact on our financial communications group of the downturn
in capital markets activity as well as higher costs associated with the
integration of our point of purchase businesses."
Gillispie added, "Despite these near-term challenges, which we believe will
continue into our fiscal second quarter, we remain confident that Cadmus will
continue to produce solid earnings growth and improved profitability throughout
fiscal 1999."
Fiscal First Quarter Operating Results - Detailed Review
Net income for the first quarter rose 24% to $2.5 million, or $.31 per share,
for the period ended September 30, 1998, compared to net income of $2.0 million
or $.25 per share last year. There were 8,206,000 weighted-average shares
outstanding for the first quarter of fiscal 1999, compared to 8,109,000
weighted-average shares outstanding for the same period of last year.
First quarter sales were a record $99.8 million, up 8% from sales of $92.4
million in the first quarter of fiscal 1998. Sales for the Professional
Communications sector increased 1% as continued growth in journal services was
offset by the impact of lower average paper prices. In the Marketing
Communications sector, sales rose 18% due to the acquisition of Germersheim and
strong growth from the Company's packaging and promotional printing and graphic
solutions businesses.
Operating income rose 16% in the first quarter to $6.6 million compared to $5.7
million last year as the Company's operating margin improved as a percent of
sales to 6.6% from 6.2% last year.
Company Description
Cadmus Communications Corporation provides customers with integrated, end-to-end
information and communications solutions. The Company is organized around two
primary business sectors: Professional Communications serving customers who
publish information, and Marketing Communications serving customers who convey
marketing messages. Cadmus' services include advertising, catalog services,
commercial printing, custom publishing, direct marketing, financial
communications, journal and magazine services, point-of-purchase, specialty
packaging, and software duplication. Headquartered in Richmond, Virginia, Cadmus
is the 22nd largest graphic communications company in North America.
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"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 certain 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 effective integration of recent acquisitions, (6) the
performance of new management and leadership teams in the Company and its
divisions, (7) the impact of industry consolidation among key customers, and (8)
continued strength in the U.S. capital markets.
**(See attached financial highlights)**
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended
September 30,
------------------------------
1998 1997
------------ ------------
Net sales $ 99,784 $ 92,362
Operating expenses:
Cost of sales 79,119 71,814
Selling and administrative 14,063 14,858
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93,182 86,672
Operating income 6,602 5,690
Interest and other expenses:
Interest 2,143 1,933
Other, net 343 392
------------ ------------
2,486 2,325
Income before income taxes 4,116 3,365
Income tax expense 1,585 1,329
------------ ------------
Net income $ 2,531 $ 2,036
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Net income per share, assuming dilution $ .31 $ .25
============ ============
Weighted-average common shares outstanding 8,206 8,109
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SELECTED HIGHLIGHTS
(In thousands, except per share data and percents)
(Unaudited)
Three Months Ended
September 30,
---------------------------------
1998 1997
---------------- -------------
Operating income $ 6,602 $ 5,690
Net income 2,531 2,036
Depreciation & amortization expense 4,873 4,477
Percent to net sales:
Gross profit 20.7% 22.2%
Selling, general and administrative expenses 14.1% 16.1%
Operating income 6.6% 6.2%
Earnings per share, assuming dilution .31 .25
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
September 30, June 30,
1998 1998
(unaudited)
------------------ -----------------
Assets:
Cash and cash equivalents $ 895 $ --
Other current assets 109,505 104,120
Property plant and equipment, net 129,858 133,836
Goodwill and other intangibles (net), and other assets 53,439 53,796
----------------- ---------------
Total assets $ 293,697 $ 291,752
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Liabilities and shareholders' equity:
Short-term borrowings and current
maturities of long-term debt $ 7,090 $ 8,531
Other current liabilities 51,566 64,652
Long-term debt, less current maturities 106,962 93,224
Other long-term liabilities 16,261 15,529
Shareholders'equity 111,818 109,816
----------------- ---------------
Total liabilities and shareholders' equity $ 293,697 $ 291,752
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