Exhibit 99.1
NEWS RELEASE
David E. Bosher, Vice President and Treasurer (analysts)
Contact: (804) 287-5685
Teri Schrettenbrunner, Director of Public
Relations (media)
(804) 287-6260
CADMUS COMMUNICATIONS CORPORATION REPORTS
FISCAL 1999 FOURTH QUARTER AND FULL YEAR RESULTS
RICHMOND, VA, August 10, 1999 - Cadmus Communications Corporation (NASDAQ
NMS:CDMS) today announced results for its fourth quarter and fiscal year ended
June 30, 1999. Financial highlights were as follows:
o Fourth quarter income, adjusted for one-time items, was $2.8 million,
or $.30 per share. Full year income, adjusted for one-time items, was
$10.1 million, or $1.22 per share.
o Fourth quarter net sales rose 29% to $134.4 million, compared to $104.2
million in the fourth quarter of fiscal 1998. For the year, net sales
rose 12.5% to $443 million, compared to $393.8 million in fiscal 1998.
Adjusted for acquisitions and divestitures, fourth quarter and fiscal
1999 net sales rose 6%.
o Free cash flow was $7.9 million in the fourth quarter.
o EBITDA (earnings before interest, taxes, depreciation and
amortization), adjusted for one-time items, totaled $17.5 million in
the fourth quarter, up 43% from the fourth quarter of fiscal 1998.
C. Stephenson Gillispie, Jr., chairman, president and chief executive officer,
commented, "This quarter was an important period of transition and change for
Cadmus. We completed the acquisition of The Mack Printing Group, refinanced and
expanded our bank credit facility, and successfully completed the issuance of
$125 million in senior subordinated notes. These actions represent critical
steps in the strategic repositioning of Cadmus that we commenced in our fiscal
second quarter with the sale of our financial communications and custom
publishing businesses. As a result of these strategic moves, Cadmus is
positioned to be less cyclical, less volatile, and better able to compete in the
markets we serve."
Gillispie further noted, "We enter our fiscal 2000 with opportunities for
further growth and improved profitability. In our industry-leading journal
business, we have opportunities for even better margins and stronger cash flow
as we continue the integration of Mack. We also are expecting continued growth
and improved profitability in our marketing communications businesses,
particularly in our rapidly growing specialty packaging and graphic solutions
businesses. Finally, we look for very strong free cash flows throughout the
fiscal year. These opportunities provide a platform for improved earnings and
increased shareholder value in fiscal 2000."
David G. Wilson, Jr., chairman of Cadmus' Professional Communications sector,
added, "We are very pleased with the performance of Mack during the past
quarter. They are off to a good start and the integration of Mack is proceeding
on schedule and very much according to plan. We are more convinced than ever
that the combination of Mack and Cadmus Journal Services will meet our
expectations, both strategically and operationally, in the coming year."
Fiscal Fourth Quarter Operating Results - Detailed Review
Fourth quarter 1999 results include the results of Mack, acquired on April 1,
1999, and reflect the higher interest expense associated with the
acquisition-related financing. Results for the fourth quarter of fiscal 1998
included results of operations from the Company's financial communications and
custom publishing product lines, which were divested in the third quarter of
fiscal 1999.
Net sales in the fourth quarter rose 29% to a record $134.4 million. Adjusted
for the acquisition of Mack and divested operations, net sales grew 6% in the
fourth quarter. Professional Communications sector net sales, excluding Mack,
were flat in the fourth quarter, as higher STM journal sales offset a decline in
special interest magazine revenues. Marketing Communications sector net sales,
adjusted for divested businesses, rose 17%, as the Company's specialty packaging
and graphic solutions product lines registered net sales increases of 65% and
44%, respectively. These gains were partially offset by a 23% decline in net
sales from the Company's point of purchase product line.
Operating income before one-time items in the fourth quarter totaled $10.4
million compared to $7.2 million in the same period of fiscal 1998. Operating
margins improved to 7.7% of sales in fiscal 1999 compared to 6.9% in 1998, as
the inclusion of Mack's higher margin operations offset an operating loss in the
Company's point of purchase product line.
Income before restructuring and debt curtailment charges declined 17% in the
fourth quarter to $2.8 million, or $.30 per share, compared to $3.3 million, or
$.40 per share, in the fourth quarter of fiscal 1998. Net income in the fourth
quarter was $0.5 million, or $.06 per share, compared to $0.9 million, or $0.10
per share, in the fourth quarter of 1998. There were 9,124,000 weighted average
shares outstanding for the fourth quarter of 1999, compared to 8,285,000
weighted average shares outstanding for the same period last year.
Free cash flow (cash flow before financing activities, acquisitions and
divestitures) was $7.9 million. EBITDA adjusted for one-time items totaled $17.5
million in the fourth quarter.
Fiscal Full-Year Operating Results - Detailed Review
Net sales for fiscal 1999 rose 12% to a record $443.0 million. Adjusted for
acquisitions and divested businesses, consolidated sales growth was 6%. Net
sales for the Professional Communications sector rose 3% due to continued growth
from STM journals. Marketing Communications sector net sales, adjusted for
acquisitions and divestitures, increased 14% due to double-digit growth in its
specialty packaging and graphic solutions product lines.
Gross profit margins declined to 20.1% of sales from 22.8% last year due to
operating losses from the Company's point of purchase product line. Selling,
general and administrative expenses fell as a percent of sales to 13.0% from
15.8% last year due to reduced corporate expenses and overall cost controls.
Operating income before one-time items rose 9% for the year to a record $28.3
million, while comparable operating margins fell slightly to 6.4% of sales,
compared to 6.6% in fiscal 1998.
Net income for the fiscal year ended June 30, 1999 was $13.7 million, or $1.65
per share, compared to $9.1 million, or $1.11 per share, for fiscal 1998. Income
before one-time items was $10.1 million, or $1.22 per share, down 12% from the
$11.5 million, or $1.41 per share, earned in 1998. Weighted average shares
outstanding were 8,336,000 and 8,176,000 for fiscal years 1999 and 1998,
respectively.
Company Description
Headquartered in Richmond, Virginia, 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 is the
largest printer and producer of scientific, technical and medical journals and
publications in the United States, and is a leading national printer and
producer of special interest magazines, point of purchase materials and
specialty packaging materials. Additional Cadmus services include commercial
printing, advertising, direct marketing, software duplication, catalog
production and interactive media.
"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) the effective
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, (9) the ability to retain key employees and managers in light
of lower incentives and benefits, and (10) other factors discussed from time to
time in the filings we make with the Securities and Exchange Commission. We are
not required to, and may not, update any forward-looking statements we make.
**(See attached financial highlights)**
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
June 30, June 30,
--------------------- --------------------
1999 1998 1999 1998
------- -------- -------- --------
Net sales $134,449 $104,179 $443,045 $393,823
Operating expenses:
Cost of sales 106,979 80,308 353,973 304,014
Selling and administrative 15,625 16,208 57,846 62,141
Amortization of goodwill 1,431 434 2,884 1,731
Restructuring charge -- 3,950 -- 3,950
Net gain on divestitures -- -- (9,521) --
------- -------- -------- --------
124,035 100,900 405,182 371,836
Operating income 10,414 3,279 37,863 21,987
Interest and other expenses:
Interest 6,119 2,031 12,204 7,595
Interest rate swap
settlement charges 2,101 -- 2,101 --
Other, net (432) (151) (498) (388)
------- ------- ------- -------
7,788 1,880 13,807 7,207
Income before income taxes and
and extraordinary item 2,626 1,399 24,056 14,780
Income tax expense 1,163 539 9,414 5,690
------- ------- ------- -------
Income before extraordinary item 1,463 860 14,642 9,090
Extraordinary loss on early
extinguishment
of debt (net of income tax
benefit of $574) 929 -- 929 --
------- ------- ------- -------
Net income $ 534 $ 860 $13,713 $ 9,090
======= ======= ======= ========
Earnings per share
(fully-diluted):
Income before extraordinary
item $ .16 $ .10 $ 1.76 $ 1.11
Extraordinary loss on early
extinguishment of debt (.10) -- (.11) --
------- -------- -------- --------
Net income $ .06 $ .10 $ 1.65 $ 1.11
======= ======== ======== ========
Weighted-average common shares
outstanding 9,124 8,285 8,336 8,176
======= ======== ======== ========
SELECTED HIGHLIGHTS
(In thousands, except per share data and percents)
(Unaudited)
Three Months Ended Twelve Months Ended
June 30, June 30,
--------------------- --------------------
1999 1998 1999 1998
------- -------- -------- --------
Operating income $10,414 $ 3,279 $ 37,863 $ 21,987
Net income 534 860 13,713 9,090
Depreciation & amortization expense 6,668 4,838 20,995 18,444
EBITDA 17,514 8,268 59,356 40,819
Percentage of net sales:
Gross profit 20.4% 22.9% 20.1% 22.8%
Selling, general and administrative
expenses 11.6% 15.6% 13.0% 15.8%
Amortization of goodwill 1.1% .4% .6% .4%
Operating income 7.7% 3.1% 8.5% 5.6%
EBITDA 13.0% 7.9% 13.4% 10.4%
Earnings per share (fully-diluted) $ .06 $ .10 $ 1.65 $ 1.11
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
June 30, June 30,
1999 1998
------------ -----------
(unaudited)
Assets:
Cash and cash equivalents $ 5,068 $ --
Accounts receivable, net 92,532 70,571
Inventories 30,586 25,610
Property plant and equipment, net 173,085 133,836
Other assets 225,575 61,735
----------- ----------
Total assets $ 526,846 $ 291,752
=========== ==========
Liabilities and shareholders' equity:
Short-term borrowings and current
maturities of long-term debt $ 6,637 $ 8,531
Long-term debt, less current maturities 269,242 93,224
Other liabilities 114,434 80,181
Shareholders' equity 136,533 109,816
----------- ----------
Total liabilities and shareholders' equity $ 526,846 $ 291,752
=========== ==========