Exhibit 99.1
[Mail-Well logo]
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8310 S. Valley Highway, #400
Englewood, CO 80112-5806
INVESTOR RELATIONS
PHONE: (303) 790-8023
FAX: (303) 566-7466
www.Mail-Well.com
For Immediate Release May 3rd, 2004
MAIL-WELL OPERATIONS CONTINUE THEIR IMPROVED PERFORMANCE
ENGLEWOOD, COLO. (MAY 3, 2004) -- Mail-Well, Inc., (NYSE: MWL)
announced its results for the first quarter ended March 31, 2004. The
net loss for the quarter was $16.5 million, or $0.35 per share on sales
of $424 million compared to a net income of $2.7 million, or $0.06 per
share on sales of $427 million during the same period of 2003. In the
three months ended March 31, 2004, Mail-Well's net loss included a
charge for early extinguishment of debt of $17.7 million or $0.35 per
share.
EBITDA for the first quarter of 2004 was $31.4 million compared to
ongoing EBITDA of $31.0 million achieved for the same period last year.
This represents the seventh quarter where year over year improvement of
results has occurred. An explanation of the Company's use of EBITDA for
comparative purposes is provided below.
Net cash used by operating activities in the quarter ended March 31,
2004 was $14.5 million compared to $13.1 million used during the same
period last year.
Paul Reilly, Chairman, President and CEO, stated, "The first quarter of
the year is traditionally not as robust as the third and fourth
quarters, so we are satisfied that the trend of year over year
improvement has continued. This has been done as we have continued
investing in sales expenditures with a view of increasing our market
share across all of our businesses. These first quarter results are
very much in line with the guidance we gave for the full year 2004 and
we see no reason at this point to change that guidance."
Reilly also stated, "We announced two weeks ago that we intended to
change our name to CENVEO, a change that our shareholders approved at
the annual meeting held this past Thursday. Our new ticker symbol on
the NYSE will be CVO. Trading under CVO will start May 17th, 2004. In
its ten-year history it will be the first time that the Company deals
with its customers under one name rather than under the approximately
40 brand names we have been using to date. The new name represents the
next step in the plan to unite the organization under one identity and
define a new category of visual communication provider that understands
customer communications needs, connects resources to address those
needs and delivers customized solutions." Mail-Well will hold a
conference call today, Monday May 3rd at 1:00 p.m. Eastern Time (12
noon Central, 11:00 a.m. Mountain Daylight Time, 10:00 a.m. Pacific
Time). To participate in the Mail-Well conference call, please dial in
to 1-800-419-0128 and provide conference ID 443653. Please call 5-7
minutes before the call is to begin. The conference call will also be
available via webcast. To listen to the webcast, go to
www.mail-well.com, www.streetevents.com, or www.fulldisclosure.com.
If you are unable to join the Mail-Well conference call, you may access
a replay of the call starting Monday, May 3rd, 2004 at 4:00 pm Eastern
Time until Midnight Eastern Time, May 10th, 2004. To access the replay,
please dial 866-219-1444 and reference the conference ID 443653.
EBITDA (earnings before interest, taxes, depreciation and amortization)
should not be considered as an alternative to any measure of operating
results as promulgated under accounting principles generally accepted
in the United States (such as operating income or net income), nor
should it be considered as an indicator of our overall financial
performance. EBITDA does not fully consider the impact of investing or
financing transactions as it specifically excludes depreciation and
interest charges, which should also be considered in the overall
evaluation of results. Additionally, our method of calculating EBITDA
may be different from the method used by other companies and therefore
comparability may be limited. EBITDA has not been provided as a measure
of liquidity. The Supplemental Information to the press release
includes the Company's Statement of Cash Flows.
We use EBITDA as a supplemental measure of performance because we
believe it gives the reader a more complete understanding of our
operating results before the impact of investing and financing
transactions. The comparison presented is net of certain adjustments
made in 2003 for divested operations and restructuring charges. A
reconciliation of net income (loss) under GAAP to EBITDA, and a
reconciliation of EBITDA as reported to ongoing EBITDA in 2003, are
presented in the Supplemental Information to this press release.
Mail-Well (NYSE: MWL) is one of North America's leading providers of
visual communications with one-stop services from design to
fulfillment. The company's broad portfolio of services and products
include e-services, envelopes, offset and digital printing, as well as
printed office products. The company is uniquely positioned by serving
both direct customers through its commercial segment as well as
wholesalers and value-added resellers through its resale segment.
Mail-Well currently has approximately 10,000 employees and operate more
than 80 printing facilities and five state-of-the-art print fulfillment
and distribution centers strategically located throughout North
America. The company is headquartered in Englewood, Colorado.
This press release may contain certain forward-looking statements of
management. It should be understood that all such statements are
subject to various uncertainties and risks that could affect their
outcome. Factors which could cause or contribute to such differences
include, but are not limited to, the ability to execute strategic
initiatives, economic conditions, product demand and sales, ability to
obtain assumed productivity and cost savings, interest rates, foreign
currency exchange rates, paper and raw material costs and the ability
to pass them through to customers, waste paper prices, postage rates,
union relations, competition and competitors' actions, availability of
financing, and changes in the direct mail industry. Please refer to the
company's 10-K, 10-Q and other SEC filings for a more detailed
discussion of the risks. None of management's statements in this
release should be considered an offer to sell or a solicitation of an
offer to buy Mail-Well securities.
CONTACT: Mr. Michel P. Salbaing
Senior Vice President and Chief Financial Officer
MAIL-WELL, INC.
(303) 790-8023
NOTE: News Releases and other information on Mail-Well can be accessed
at www.mail-well.com
# # #
[Mail-Well logo]
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
(unaudited)
THREE MONTHS ENDED MARCH 31
2004 2003
CONSOLIDATED RESULTS
Net sales $ 423,742 $ 427,320
Gross profit 88,420 83,920
Operating income 18,914 19,279
Income (loss) from continuing operations (16,535) 532
Gain on disposal of discontinued operations - 2,500
Cumulative effect of change in accounting principle - (322)
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Net income (loss) $ (16,535) $ 2,710
Income (loss) per share from continuing operations - assuming dilution $ (0.35) $ 0.01
Net income (loss) per share - assuming dilution $ (0.35) $ 0.06
========================================================================================================================
SEGMENT INFORMATION
NET SALES:
Commercial $ 323,849 $ 324,063
Resale 99,893 103,257
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Total $ 423,742 $ 427,320
OPERATING INCOME (EXPENSE):
Commercial $ 11,996 $ 12,481
Resale 11,463 11,851
Corporate services and other charges (4,545) (5,053)
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Total $ 18,914 $ 19,279
OPERATING INCOME MARGINS:
Commercial 3.7% 3.9%
Resale 11.5% 11.5%
EBITDA (1):
Commercial $ 22,207 $ 21,915
Resale 13,818 14,405
Corporate (4,601) (5,005)
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Total $ 31,424 $ 31,315
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FINANCIAL POSITION MARCH 31, 2004 DECEMBER 31, 2003
Working capital $ 114,352 $ 102,773
Total assets 1,111,973 1,107,393
Total debt 777,337 748,961
Shareholders' equity 49,658.00 68,019.00
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<FN>
(1) See Appendix 1 in the Supplemental Information to the Press Release for
the definition of EBITDA, the reconciliation of net income to EBITDA and the
reason why EBITDA is a relevant non-GAAP financial measure for Mail-Well.
[Mail-Well logo]
Supplemental Information to the Press Release
For the First Quarter Ended
March 31, 2004
Released May 3, 2004
[Mail-Well logo]
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First quarter ended March 31, 2004
Page
Financial and Operational Summary and Recent Developments 1
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Consolidated Balance Sheets 3
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Consolidated Statements of Operations 4
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Consolidated Cash Flow Statements 5
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Segment Results 6
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Appendix 1 - Impacts of Divestitures and Restructuring Activities on
Ongoing Operations 7
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Financial and Operational Summary and Recent Developments
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Three months ended March 31, 2004
Financial and Operational Summary
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CONSOLIDATED RESULTS: As announced at the time of the issue, the loss for
the quarter was directly related to the costs of replacing the $300 million
8 3/4% bonds due in 2008 by $320 million 7 7/8% bonds due in 2013.
COMMERCIAL: With same store sales slightly improved year over year, the
Commercial segment's operations, as reflected by the EBITDA* achieved,
continued their year over year improvement.
RESALE: Sales and profitability declined in the quarter in comparison to the
same period last year as the office products channel was particularly
affected.
DEBT: Cash flow used in the operations in the quarter was approximately
$14.5 million. This was a result of the $13.5 redemption premium paid to the
holders of the 2008 bonds. Total debt increased $28.4 million in the
quarter, $20 million of which was in fixed rate debt.
CAPITAL EXPENDITURES: During the quarter ended March 31, 2004, capital
expenditures were $5.6 million as compared to $6.5 million in the same
period last year. It is anticipated that full year capital expenditures will
be approximately $25 million.
AVAILABILITY: Credit available under our credit facility was $119.2 million
based on the certificate filed for the activity ending March 31, 2004.
<FN>
* see page 2 of Press Release for explanation of the use of EBITDA
Financial and Operational Summary and Recent Developments
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Recent Developments
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o In the first quarter 2004, we completed the offer of $320 million
in aggregate principal amount of 7 7/8% senior subordinated notes
due December 2013. The Company used the proceeds from the new
issue to retire its entire $300 million outstanding principal
amount of its 8 3/4% Senior Subordinated Notes due 2008.
o On March 25, 2004, we announced the extension of our banking
agreement to June 2008. As part of the amendment to the Senior
Credit Facility, financial and other covenants were eased in
recognition of the improved credit profile of the company. As part
of their rating of the new facility, both Moody's and Standard &
Poors reaffirmed the company's ratings.
o We secured two major customer agreements in the quarter. Both are
top office products distributors and both signed three year
multi-million dollar contract for envelopes and printed products.
This will significantly increase the market share of our Resale
Segment in this channel.
o During the quarter, we installed and started up a new Komori 6
color press in our Glen Burnie, MD sheetfed operation. This will
allow us to better serve our Baltimore-Washington area customers.
CONSOLIDATED BALANCE SHEETS
Mail-Well, Inc. and Subsidiaries
(in thousands)
MARCH 31 DECEMBER 31
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $ 259 $ 307
Accounts receivable, net 224,034 223,541
Inventories, net 99,639 91,402
Other current assets 50,236 48,135
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Total current assets 374,168 363,385
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Property, plant and equipment, net 380,328 388,240
Goodwill 298,885 299,392
Other intangible assets, net 18,281 19,687
Other assets, net 40,311 36,689
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TOTAL ASSETS $ 1,111,973 $ 1,107,393
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 151,188 $ 140,468
Accrued compensation and related liabilities 53,938 53,209
Other current liabilities 52,102 64,360
Current maturities of long-term debt 2,588 2,575
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Total current liabilities 259,816 260,612
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Long-term debt, less current maturities 774,749 746,386
Deferred income taxes 1,507 6,717
Other liabilities 26,243 25,659
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Total liabilities 1,062,315 1,039,374
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Shareholders' equity:
Common stock 484 484
Paid-in capital 213,857 213,850
Retained deficit (166,866) (150,331)
Deferred compensation (1,569) (1,714)
Accumulated other comprehensive income 3,752 5,730
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Total shareholders' equity 49,658 68,019
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,111,973 $ 1,107,393
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CONSOLIDATED STATEMENTS OF OPERATIONS
Mail-Well, Inc. and Subsidiaries
(in thousands, except per share data)
(unaudited)
THREE MONTHS ENDED
MARCH 31
2004 2003
Net sales $ 423,742 $ 427,320
Cost of sales 335,322 343,400
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Gross profit 88,420 83,920
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Operating expenses:
Selling, general and administrative expenses 67,998 63,425
Amortization of intangibles 1,405 445
Restructuring charges 103 771
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Operating income 18,914 19,279
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Other expense:
Interest expense 18,399 18,214
Loss on early extinguishment of debt 17,748 -
Other 441 132
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Income (loss) from continuing operations before
income taxes and cumulative effect of a change in
accounting principle (17,674) 933
Income tax benefit (expense) 1,139 (401)
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Income (loss) from continuing operations before
cumulative effect of a change in accounting principle (16,535) 532
Gain on disposal of discontinued operations - 2,500
Cumulative effect of a change in accounting principle - (322)
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Net income (loss) $ (16,535) $ 2,710
===============================================================================================================================
Income (loss) per share - basic and diluted:
Continuing operations $ (0.35) $ 0.01
Discontinued operations - 0.05
Cumulative effect of a change in accounting principle - -
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Income (loss) per share - basic and diluted $ (0.35) $ 0.06
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Weighted averages shares - basic 47,739 47,668
Weighted averages shares - diluted 47,739 48,376
CONSOLIDATED CASH FLOW STATEMENTS
Mail-Well, Inc. and Subsidiaries
(in thousands)
(unaudited)
THREE MONTHS ENDED
MARCH 31,
2004 2003
Cash flows from operating activities:
Income (loss) from continuing operations $ (16,535) $ 532
Adjustments to reconcile income (loss) from continuing operations to net cash
provided by (used in) operating activities:
Depreciation 11,465 11,723
Amortization 2,549 1,383
Write-off of deferred financing fees 4,220 -
Deferred income tax benefit (4,672) (2,072)
Loss (gain) on disposal of assets (39) 258
Other noncash charges, net (281) 1,012
Changes in operating assets and liabilities, excluding effects of operations sold:
Accounts receivable (649) (5,716)
Inventories (8,038) (414)
Accounts payable and accrued compensation 11,752 (12,668)
Income taxes payable (801) (2,379)
Other working capital changes (11,369) (5,388)
Other, net (2,080) 662
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Net cash used in operating activities (14,478) (13,067)
Cash flows from investing activities:
Capital expenditures (5,647) (6,416)
Proceeds from divestitures, net - 3,864
Proceeds from sales of property, plant and equipment 229 515
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Net cash used in investing activities (5,418) (2,037)
Cash flows from financing activities:
Proceeds from long-term debt 1,174,037 485,122
Repayment of long-term debt (1,145,661) (472,188)
Proceeds from the issuance of common stock 7 -
Capitalized loan fees (8,291) (316)
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Net cash provided by financing activities 20,092 12,618
Effect of exchange rate changes on cash and cash equivalents (244) 180
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Net decrease in cash and cash equivalents (48) (2,306)
Cash and cash equivalents at beginning of year 307 2,650
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Cash and cash equivalents at end of quarter $ 259 $ 344
===============================================================================================================================
SEGMENT RESULTS
Mail-Well, Inc. and Subsidiaries
(in thousands)
(unaudited)
THREE MONTHS ENDED
MARCH 31
2004 2003
Net sales:
Commercial $ 323,849 $ 324,063
Resale 99,893 103,257
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Total net sales $ 423,742 $ 427,320
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Operating income (expense):
Commercial $ 11,996 $ 12,481
Resale 11,463 11,851
Corporate services (4,545) (5,053)
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Total operating income $ 18,914 $ 19,279
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EBITDA (1):
Commercial $ 22,207 $ 21,915
Resale 13,818 14,405
Corporate services (4,601) (5,005)
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Total EBITDA $ 31,424 $ 31,315
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Net sales by product line:
Commercial printing $ 198,647 $ 196,830
Envelopes 173,764 180,190
Business forms and labels 51,331 50,300
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Total net sales $ 423,742 $ 427,320
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<FN>
(1) See Appendix 1 in the Supplemental Information to the Press
Release for the definition of EBITDA, the reconciliation of net
income to EBITDA and the reason why EBITDA is a relevant non-GAAP
financial measure for Mail-Well.
APPENDIX 1 - RECONCILIATION OF NET INCOME TO EBITDA
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
Mail-Well, Inc. and Subsidiaries
(in thousands)
(unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 2004
COMMERCIAL RESALE CORPORATE TOTAL
Net income (loss) $ 11,932 $11,410 $ (39,877) $ (16,535)
Loss on early extinguishment of debt - - 17,748 17,748
Interest - - 18,399 18,399
Taxes - - (1,139) (1,139)
Depreciation 9,024 2,272 169 11,465
Amortization 1,251 136 99 1,486
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EBITDA $ 22,207 $13,818 $ (4,601) $31,424
FOR THE THREE MONTHS ENDED MARCH 31, 2003
COMMERCIAL RESALE CORPORATE TOTAL
Net income (loss) $ 12,471 $11,817 $ (21,578) $ 2,710
Gain on disposal of discontinued operations - - (2,500) (2,500)
Cumulative effect of a change in accounting
principle - - 322 322
Interest - - 18,214 18,214
Taxes - - 401 401
Depreciation 9,236 2,352 135 11,723
Amortization 208 236 1 445
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EBITDA $ 21,915 $14,405 $ (5,005) $31,315
<FN>
Note: This schedule is a reconciliation of net income to EBITDA
which we define as earnings before interest, taxes, depreciation
and amortization and excluding the loss from the early
extinguishment of debt recorded in 2004 and the gain of the
disposal of discontinued operations and the cumulative effect of
a change in accounting principle recorded in 2003. We believe
EBITDA provides useful supplemental information to investors
since it excludes the impact of investing or financing
transactions on our operating results.
Certification of Financial Statements
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The following certifications will be furnished to the SEC as Exhibits
to the Company's 10-Q for the period ending March 31, 2004.
CERTIFICATION OF PERIODIC REPORT
--------------------------------
I Paul V. Reilly, chairman, president and chief executive officer of
Mail-Well, Inc. (the "Company"), certify pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:
(1) the Quarterly Report on Form 10-Q of the Company for the quarterly
period ended March 31, 2004 (the "Report") fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
Dated: April 28, 2004
/s/ Paul V. Reilly
--------------------------------
Paul V. Reilly
Chairman, President and CEO
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CERTIFICATION OF PERIODIC REPORT
I Michel P. Salbaing, senior vice president and chief financial officer of
Mail-Well, Inc. (the "Company"), certify pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:
(1) the Quarterly Report on Form 10-Q of the Company for the quarterly
period ended March 31, 2004 (the "Report") fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
Dated: April 28, 2004
/s/ Michel P. Salbaing
--------------------------------
Michel P. Salbaing
Senior Vice President and CFO