Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - SCHAWK INC | f8k_110211.htm |
EXHIBIT 99.1
|
AT SCHAWK, INC.:
Timothy Allen
Vice President, Finance
Operations and Investor Relations
Timothy.Allen@schawk.com
|
AT DRESNER CORPORATE SERVICES:
Investors: Philip Kranz
312-780-7240
pkranz@dresnerco.com
|
SCHAWK ANNOUNCES 2011 THIRD-QUARTER RESULTS
GAAP Net Income and EPS of $8.1 Million and $0.31, Respectively
Des Plaines, IL, November 2, 2011—Schawk, Inc. (NYSE: SGK), a leading provider of brand development and deployment services, enabling companies of all sizes to connect their brands with consumers, reported third-quarter 2011 results. Net income in the third quarter of 2011 was $8.1 million, or $0.31 per diluted share, versus $7.8 million, or $0.30 per diluted share, in the third quarter of 2010.
On a non-GAAP basis, adjusting for certain financial and tax impacts further detailed in this earnings release, Adjusted net income was $5.6 million, or $0.22 per diluted share, in the third quarter of 2011 compared to $8.8 million, or $0.34 per diluted share, during the prior-year comparable period.
President and Chief Executive Officer David A. Schawk commented, “We continue to pursue opportunities for growth in emerging markets and to further enhance and integrate our services. During the third quarter, we expanded our business with certain key global clients as they advanced into developing and emerging markets and took advantage of our portfolio of integrated services, including our expanded digital services gained from our 2010 acquisitions. This increased client activity remains evident in our European segment where sales have increased over nine percent in the third quarter and first nine months of 2011 compared to the prior-year periods. In addition, we are excited about our recent acquisition of Brandimage which will further enhance our brand development services in emerging markets as well as in more established markets. Finally, we believe that our integrated and expanded service offering as well as our global capabilities align with our clients’ goals to differentiate their brands and will position us well for future growth opportunities.”
Consolidated Results for Third Quarter Ended September 30, 2011
Consolidated net sales in the third quarter of 2011 were $112.3 million compared to $112.6 million in the same period of 2010, a decrease of approximately $0.3 million, or 0.2 percent, principally driven by a decline in advertising and retail account sales partially offset by increased consumer packaged goods (CPG) account sales. Included in the quarter-over-quarter sales decline was an increase of $2.3 million in net sales related to foreign currency translation gains, as the U.S. dollar declined in value relative to the local currencies of certain of the Company’s non-U.S. subsidiaries.
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Schawk Announces 2011 Third-Quarter Results
Page 2
CPG accounts sales in the third quarter of 2011 were $86.6 million, or 77.1 percent of total sales, compared to $85.3 million in the same period of 2010, an increase of 1.6 percent. The increase over the prior-year quarter was primarily driven by higher product and brand activity by the Company’s CPG clients. Advertising and retail accounts sales of $18.7 million, or 16.7 percent of total sales, in the third quarter of 2011 decreased 7.0 percent, from $20.1 million in the prior-year period driven by lower retail promotional activity. Entertainment accounts sales declined $0.1 million to $7.0 million, or 6.2 percent of total sales, for the third quarter of 2011 compared to $7.1 million in the same period of 2010.
Gross profit was $42.1 million in the third quarter of 2011, a decrease of $1.7 million from the third quarter of 2010. Third-quarter 2011 gross profit as a percentage of sales decreased to 37.5 percent from 38.9 percent in the 2010 third-quarter period. The decline in gross profit percent was largely driven by increased employee related costs.
Selling, general and administrative (SG&A) expenses increased approximately $2.5 million to $31.2 million in the third quarter of 2011 from $28.7 million in the third quarter of 2010 principally driven by $1.4 million of certain insurance recoveries during the third quarter of 2010, which is further detailed in the Company’s third quarter 2011 Form 10-Q. The balance of the year-over-year change was driven by increased employee related costs.
During the third quarter of 2011, the Company reported business and systems integration expenses of $2.0 million compared to $0.1 million in the prior-year comparable period. As previously disclosed, these expenses relate to the Company’s ongoing information technology and business process improvement initiative.
Acquisition integration and restructuring expenses increased from $0.3 million in the third quarter of 2010 to $0.5 million in the third quarter of 2011. The charges in the 2011 third quarter arose from the Company’s continued focus on consolidating, reducing and re-aligning its work force and operations and are for employee terminations and other associated costs. These actions are expected to result in annualized savings of approximately $0.7 million, with approximately $0.3 million to be realized during 2011.
The Company reported operating income of $8.2 million in the 2011 third quarter compared to $13.6 million in the third quarter of 2010. The decrease in operating income compared to the prior-year period was primarily the result of the Company’s business and systems integration expenses, third-quarter 2010 insurance recoveries and increased employee related expenses.
The Company recorded an income tax benefit of $1.1 million for the third quarter of 2011 compared to an income tax expense of $4.2 million in the third quarter of 2010. The income tax benefit in the third quarter of 2011, as compared to an income tax expense in the third quarter of 2010 is primarily due to discrete period tax benefits resulting from the release of certain valuation allowances for the Company’s United Kingdom subsidiary in the third quarter of 2011.
Adjusted EBITDA and Management Adjusted EBITDA Performance
Adjusted EBITDA for the third quarter of 2011 was $13.1 million compared to $18.3 million for the third quarter of 2010. Management adjusted EBITDA for the third quarter of 2011 was $15.7 million compared to $19.9 million for the third quarter of 2010. Please refer to the “Reconciliation of Non-GAAP Adjusted EBITDA and Management Adjusted EBITDA” table attached at the end of this earnings release for a reconciliation of these measures.
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Schawk Announces 2011 Third-Quarter Results
Page 3
Conference Call
Schawk invites you to join its third-quarter 2011 earnings conference call on Thursday, November 3, 2011, at 9:00 a.m. Central time. To participate in the conference call, please dial 800-320-2978 or 617-614-4923 at least five minutes prior to the start time and ask for the Schawk, Inc. conference call, or on the Internet, go to http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=82169&eventID=4226645. If you are unavailable to participate on the live call, a replay will be available through November 10 at 11:59 p.m. Central time. To access the replay, dial 888-286-8010 or 617-801-6888, enter conference ID 23999221, and follow the prompts. The replay will also be available on the Internet for 30 days at the following address http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=82169&eventID=4226645.
About Schawk, Inc.
Schawk, Inc. is a leading provider of brand development and deployment services, enabling companies of all sizes to connect their brands with consumers. With a global footprint of operations in 21 countries, Schawk helps companies create compelling and consistent brand experiences by providing integrated strategic, creative and executional services across brand touchpoints. Founded in 1953, Schawk is trusted by many of the world’s leading organizations to help them achieve global brand consistency. For more information about Schawk, visit http://www.schawk.com.
Non-GAAP Financial Measures
In addition to the presentation of Adjusted EBITDA and Management adjusted EBITDA in this release, the Company has presented certain other non-GAAP measures in the attachment entitled “Reconciliation of Non-GAAP measures to GAAP.” Management believes that the presentation of non-GAAP measures provides investors with greater transparency and supplemental data relating to the Company’s financial condition and results of operations and provides more consistent insight into the performance of the Company’s core operations from period to period by showing the effects of certain non-operating items. These non-GAAP measures are reconciled to the closest GAAP measures on the schedules attached to this earnings release. The non-GAAP measures should not be viewed as alternatives to GAAP and may not be consistent with similar measures provided by other companies.
Safe Harbor Statement
Certain statements in this earnings release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. These statements are made based upon current expectations and beliefs that are subject to risk and uncertainty. Actual results might differ materially from those contained in the forward-looking statements because of factors, such as, among other things, our ability to maintain an effective system of disclosure and internal controls and the discovery of any future control deficiencies or weaknesses, which may require substantial costs and resources to rectify; higher than expected costs, or unanticipated difficulties associated with, integrating acquired operations; higher than expected costs associated with compliance with legal and regulatory requirements; higher-than-anticipated costs or lower-than-anticipated benefits associated with the Company’s ongoing information technology and business process improvement initiative; the strength of the United States economy in general and, specifically, market conditions for the consumer products industry; the level of demand for Schawk's services; changes in or weak consumer confidence and consumer spending; unfavorable foreign exchange rate fluctuations; loss of key management and operational personnel; our ability to implement our growth strategy, rebranding initiatives and cost reduction plans and to realize anticipated cost savings; the ability of the Company to comply with the financial covenants contained in its debt agreements and obtain waivers or amendments in the event of non-compliance with such covenants; the stability of state, federal and foreign tax laws; our continued ability to identify and exploit industry trends and exploit technological advances in the imaging industry; the stability of political conditions in foreign countries in which we have production capabilities; terrorist attacks and the U.S. response to such attacks; as well as other factors detailed in Schawk, Inc.'s filings with the Securities and Exchange Commission.
The discussion of the Company’s financial results within this earnings release should be read and considered in context of the Company’s most recent Form 10-K and Form 10-Q filings with the Securities and Exchange Commission.
For more information about Schawk, visit its website at http://www.schawk.com.
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Schawk Announces 2011 Third-Quarter Results
Page 4
Schawk Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
|
Three Months Ended
|
||||||||||||||||
|
September 30,
|
Increase (Decrease)
|
|||||||||||||||
|
2011
|
2010
|
Amount
|
Percent
|
|||||||||||||
|
Net sales
|
$ | 112,298 | $ | 112,562 | $ | (264 | ) | (0.2 | )% | |||||||
|
Cost of sales
|
70,235 | 68,768 | 1,467 | 2.1 | % | |||||||||||
|
Gross profit
|
42,063 | 43,794 | (1,731 | ) | (4.0 | )% | ||||||||||
|
Selling, general and administrative expenses
|
31,240 | 28,675 | 2,565 | 8.9 | % | |||||||||||
|
Business and systems integration expenses
|
1,997 | 85 | 1,912 |
nm
|
||||||||||||
|
Multiemployer pension withdrawal expense
|
— | 500 | (500 | ) |
nm
|
|||||||||||
|
Acquisition integration and restructuring expenses
|
468 | 286 | 182 | 63.6 | % | |||||||||||
|
Foreign exchange loss
|
121 | 694 | (573 | ) | (82.6 | )% | ||||||||||
|
Operating income
|
8,237 | 13,554 | (5,317 | ) | (39.2 | )% | ||||||||||
|
Other income (expense)
|
||||||||||||||||
|
Interest income
|
4 | 15 | (11 | ) | (73.3 | )% | ||||||||||
|
Interest expense
|
(1,212 | ) | (1,642 | ) | 430 | (26.2 | )% | |||||||||
|
Income before income taxes
|
7,029 | 11,927 | (4,898 | ) | (41.1 | )% | ||||||||||
|
Income tax provision (benefit)
|
(1,057 | ) | 4,154 | (5,211 | ) |
nm
|
||||||||||
|
Net income
|
$ | 8,086 | $ | 7,773 | $ | 313 | 4.0 | % | ||||||||
|
Earnings per share:
|
||||||||||||||||
|
Basic
|
$ | 0.31 | $ | 0.30 | $ | 0.01 | ||||||||||
|
Diluted
|
$ | 0.31 | $ | 0.30 | $ | 0.01 | ||||||||||
|
Weighted average number of common and common equivalent shares outstanding:
|
||||||||||||||||
|
Basic
|
25,771 | 25,577 | ||||||||||||||
|
Diluted
|
25,976 | 25,923 | ||||||||||||||
nm = not meaningful
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Schawk Announces 2011 Third-Quarter Results
Page 5
Schawk Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
|
Nine Months Ended
|
||||||||||||||||
|
September 30,
|
Increase (Decrease)
|
|||||||||||||||
|
2011
|
2010
|
Amount
|
Percent
|
|||||||||||||
|
Net sales
|
$ | 332,861 | $ | 342,110 | $ | (9,249 | ) | (2.7 | )% | |||||||
|
Cost of sales
|
210,129 | 209,617 | 512 | 0.2 | % | |||||||||||
|
Gross profit
|
122,732 | 132,493 | (9,761 | ) | (7.4 | )% | ||||||||||
|
Selling, general and administrative expenses
|
92,270 | 91,619 | 651 | 0.7 | % | |||||||||||
|
Business and systems integration expenses
|
5,385 | 379 | 5,006 |
nm
|
||||||||||||
|
Multiemployer pension withdrawal expense
|
1,846 | 500 | 1,346 |
nm
|
||||||||||||
|
Acquisition integration and restructuring expenses
|
1,590 | 1,007 | 583 | 57.9 | % | |||||||||||
|
Foreign exchange loss
|
829 | 2,244 | (1,415 | ) | (63.1 | )% | ||||||||||
|
Impairment of long-lived assets
|
— | 680 | (680 | ) |
nm
|
|||||||||||
|
Operating income
|
20,812 | 36,064 | (15,252 | ) | (42.3 | )% | ||||||||||
|
Other income (expense)
|
||||||||||||||||
|
Interest income
|
43 | 31 | 12 | 38.7 | % | |||||||||||
|
Interest expense
|
(3,772 | ) | (5,401 | ) | 1,629 | (30.2 | )% | |||||||||
|
Income before income taxes
|
17,083 | 30,694 | (13,611 | ) | (44.3 | )% | ||||||||||
|
Income tax provision
|
2,246 | 4,596 | (2,350 | ) | (51.1 | )% | ||||||||||
|
Net income
|
$ | 14,837 | $ | 26,098 | $ | (11,261 | ) | (43.1 | )% | |||||||
|
Earnings per share:
|
||||||||||||||||
|
Basic
|
$ | 0.57 | $ | 1.03 | $ | (0.46 | ) | |||||||||
|
Diluted
|
$ | 0.57 | $ | 1.01 | $ | (0.44 | ) | |||||||||
|
Weighted average number of common and common equivalent shares outstanding:
|
||||||||||||||||
|
Basic
|
25,830 | 25,387 | ||||||||||||||
|
Diluted
|
26,171 | 25,794 | ||||||||||||||
nm = not meaningful
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Schawk Announces 2011 Third-Quarter Results
Page 6
Schawk Inc.
(Unaudited)
(In thousands)
|
Three Months Ended
|
||||||||||||||||
|
September 30,
|
Increase (Decrease)
|
|||||||||||||||
|
2011
|
2010
|
Amount
|
Percent
|
|||||||||||||
|
Sales to external clients:
|
||||||||||||||||
|
North America
|
$ | 95,213 | $ | 97,360 | $ | (2,147 | ) | (2.2 | )% | |||||||
|
Europe
|
18,328 | 16,724 | 1,604 | 9.6 | % | |||||||||||
|
Asia Pacific
|
8,451 | 7,547 | 904 | 12.0 | % | |||||||||||
|
Intercompany sales elimination
|
(9,694 | ) | (9,069 | ) | (625 | ) | (6.9 | )% | ||||||||
|
Sales to external clients
|
$ | 112,298 | $ | 112,562 | $ | (264 | ) | (0.2 | )% | |||||||
|
Operating segment income (loss):
|
||||||||||||||||
|
North America
|
$ | 14,936 | $ | 17,627 | $ | (2,691 | ) | (15.3 | )% | |||||||
|
Europe
|
1,157 | 1,490 | (333 | ) | (22.3 | )% | ||||||||||
|
Asia Pacific
|
1,533 | 982 | 551 | 56.1 | % | |||||||||||
|
Corporate
|
(9,389 | ) | (6,545 | ) | (2,844 | ) | (43.5 | )% | ||||||||
|
Operating segment income
|
$ | 8,237 | $ | 13,554 | $ | (5,317 | ) | (39.2 | )% | |||||||
|
Nine Months Ended
|
||||||||||||||||
|
September 30,
|
Increase (Decrease)
|
|||||||||||||||
| 2011 | 2010 |
Amount
|
Percent
|
|||||||||||||
|
Sales to external clients:
|
||||||||||||||||
|
North America
|
$ | 284,262 | $ | 297,996 | $ | (13,734 | ) | (4.6 | )% | |||||||
|
Europe
|
53,663 | 49,099 | 4,564 | 9.3 | % | |||||||||||
|
Asia Pacific
|
23,852 | 22,609 | 1,243 | 5.5 | % | |||||||||||
|
Intercompany sales elimination
|
(28,916 | ) | (27,594 | ) | (1,322 | ) | (4.8 | )% | ||||||||
|
Sales to external clients
|
$ | 332,861 | $ | 342,110 | $ | (9,249 | ) | (2.7 | )% | |||||||
|
Operating segment income (loss):
|
||||||||||||||||
|
North America
|
$ | 40,383 | $ | 50,906 | $ | (10,523 | ) | (20.7 | )% | |||||||
|
Europe
|
4,160 | 2,853 | 1,307 | 45.8 | % | |||||||||||
|
Asia Pacific
|
2,941 | 3,637 | (696 | ) | (19.1 | )% | ||||||||||
|
Corporate
|
(26,672 | ) | (21,332 | ) | (5,340 | ) | (25.0 | )% | ||||||||
|
Operating segment income
|
$ | 20,812 | $ | 36,064 | $ | (15,252 | ) | (42.3 | )% | |||||||
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Schawk Announces 2011 Third-Quarter Results
Page 7
Schawk, Inc.
Consolidated Balance Sheets
(In thousands, except share amounts)
|
September 30,
|
December 31,
|
|||||||
|
2011
|
2010
|
|||||||
|
(Unaudited)
|
||||||||
|
Assets
|
||||||||
|
CCurrent assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 10,620 | $ | 36,889 | ||||
|
Trade accounts receivable, less allowance for doubtful accounts
of $1,717 at September 30, 2011 and $1,525 at December 31, 2010
|
86,154 | 95,207 | ||||||
|
Inventories
|
24,419 | 18,250 | ||||||
|
Prepaid expenses and other current assets
|
11,201 | 9,356 | ||||||
|
Income tax receivable
|
1,531 | 2,943 | ||||||
|
Deferred income taxes
|
1,108 | 347 | ||||||
|
Total current assets
|
135,033 | 162,992 | ||||||
|
Property and equipment, net
|
56,872 | 48,684 | ||||||
|
Goodwill, net
|
192,629 | 193,626 | ||||||
|
Other intangible assets, net:
|
||||||||
|
Customer relationships
|
33,126 | 36,461 | ||||||
|
Other
|
465 | 817 | ||||||
|
Deferred income taxes
|
4,998 | 868 | ||||||
|
Other assets
|
5,796 | 6,411 | ||||||
|
Total assets
|
$ | 428,919 | $ | 449,859 | ||||
|
Liabilities and stockholders’ equity
|
||||||||
|
Current liabilities:
|
||||||||
|
Trade accounts payable
|
$ | 17,001 | $ | 21,930 | ||||
|
Accrued expenses
|
55,138 | 64,007 | ||||||
|
Deferred income taxes
|
3,255 | 3,260 | ||||||
|
Income taxes
|
1,476 | 1,038 | ||||||
|
Current portion of long-term debt
|
48,687 | 29,587 | ||||||
|
Total current liabilities
|
125,557 | 119,822 | ||||||
|
Long-term liabilities:
|
||||||||
|
Long-term debt
|
6,396 | 37,080 | ||||||
|
Deferred income taxes
|
9,154 | 9,135 | ||||||
|
Other long-term liabilities
|
16,820 | 19,696 | ||||||
|
Total long-term liabilities
|
32,370 | 65,911 | ||||||
|
Stockholders’ equity:
|
||||||||
|
Common stock, $0.008 par value, 40,000,000 shares authorized,
30,684,172 and 30,506,252 shares issued at September 30, 2011 and
December 31, 2010, respectively, 25,627,504 and 25,761,334 shares
outstanding at September 30, 2011 and December 31, 2010, respectively
|
225 | 224 | ||||||
|
Additional paid-in capital
|
202,913 | 200,205 | ||||||
|
Retained earnings
|
121,901 | 113,258 | ||||||
|
Accumulated comprehensive income, net
|
10,686 | 11,247 | ||||||
|
Treasury stock, at cost, 5,056,668 and 4,744,918 shares of common
stock at September 30, 2011 and December 31, 2010, respectively
|
(64,733 | ) | (60,808 | ) | ||||
|
Total stockholders’ equity
|
270,992 | 264,126 | ||||||
|
Total liabilities and stockholders’ equity
|
$ | 428,919 | $ | 449,859 | ||||
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Schawk Announces 2011 Third-Quarter Results
Page 8
Schawk, Inc.
Reconciliation of Non-GAAP measures to GAAP
(Unaudited)
(In Thousands, Except Share Amounts)
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
Income before income taxes - GAAP
|
$ | 7,029 | $ | 11,927 | $ | 17,083 | $ | 30,694 | ||||||||
|
Adjustments:
|
||||||||||||||||
|
Acquisition integration and restructuring expenses
|
468 | 286 | 1,590 | 1,007 | ||||||||||||
|
Business and systems integration expenses
|
1,997 | 85 | 5,385 | 379 | ||||||||||||
|
Impairment of long-lived assets(1)
|
— | — | — | 680 | ||||||||||||
|
Multiemployer pension withdrawal expense
|
— | 500 | 1,846 | 500 | ||||||||||||
|
Foreign currency loss
|
121 | 694 | 829 | 2,244 | ||||||||||||
|
Adjusted income before income tax – non-GAAP
|
9,615 | 13,492 | 26,733 | 35,504 | ||||||||||||
|
Adjusted income tax provision – non-GAAP
|
3,976 | 4,676 | 9,949 | 11,808 | ||||||||||||
|
Adjusted net income – non-GAAP
|
$ | 5,639 | $ | 8,816 | $ | 16,784 | $ | 23,696 | ||||||||
|
Weighted average common and common stock
|
||||||||||||||||
|
equivalents outstanding – GAAP (diluted)
|
25,976 | 25,923 | 26,171 | 25,794 | ||||||||||||
|
Earnings per diluted share - GAAP
|
$ | 0.31 | $ | 0.30 | $ | 0.57 | $ | 1.01 | ||||||||
|
Adjustments – net of tax effects:
|
||||||||||||||||
|
Acquisition integration and restructuring expenses
|
0.01 | 0.01 | 0.04 | 0.02 | ||||||||||||
|
Business and systems integration expenses
|
0.05 | — | 0.12 | 0.01 | ||||||||||||
|
Impairment of long-lived assets
|
— | — | — | 0.02 | ||||||||||||
|
Multiemployer pension withdrawal expense
|
— | 0.01 | 0.04 | 0.01 | ||||||||||||
|
Foreign currency loss
|
— | 0.02 | 0.02 | 0.07 | ||||||||||||
|
Discrete tax adjustments - UK
|
(0.15 | ) | — | (0.15 | ) | (0.22 | ) | |||||||||
|
Adjusted earnings per diluted share – non- GAAP
|
$ | 0.22 | $ | 0.34 | $ | 0.64 | $ | 0.92 | ||||||||
|
Income tax provision (benefit) - GAAP
|
$ | (1,057 | ) | $ | 4,154 | $ | 2,246 | $ | 4,596 | |||||||
|
Adjustments:(2)
|
||||||||||||||||
|
Acquisition integration and restructuring expenses
|
167 | 127 | 565 | 389 | ||||||||||||
|
Business and systems integration expenses
|
793 | 34 | 2,139 | 150 | ||||||||||||
|
Impairment of long-lived assets
|
— | — | — | 270 | ||||||||||||
|
Multiemployer pension withdrawal expense
|
— | 199 | 733 | 199 | ||||||||||||
|
Foreign currency loss
|
65 | 162 | 258 | 574 | ||||||||||||
|
Discrete tax adjustments - UK
|
4,008 | — | 4,008 | 5,630 | ||||||||||||
|
Adjusted income tax provision – non-GAAP
|
$ | 3,976 | $ | 4,676 | $ | 9,949 | $ | 11,808 | ||||||||
|
(1)
|
Please see the Company’s discussion related to certain insurance recoveries in its September 30, 2011 Form 10-Q.
|
|
(2)
|
Adjustments have been tax-effected at the jurisdictions’ statutory rates.
|
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Schawk Announces 2011 Third-Quarter Results
Page 9
Schawk, Inc.
Reconciliation of Non-GAAP EBITDA and Management Adjusted EBITDA
(Unaudited)
(In Thousands)
|
Three Months Ended
|
Nine Months Ended
|
Trailing 12 Months
|
||||||||||||||||||||||
|
September 30,
|
September 30,
|
Ended September 30,
|
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2011
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2010
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2011
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2010
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2011
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2010
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Net income - GAAP
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$ | 8,086 | $ | 7,773 | $ | 14,837 | $ | 26,098 | $ | 21,159 | $ | 29,817 | ||||||||||||
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Interest expense
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1,212 | 1,642 | 3,772 | 5,401 | 5,572 | 7,829 | ||||||||||||||||||
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Income tax provision (benefit)
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(1,057 | ) | 4,154 | 2,246 | 4,596 | 7,634 | 9,030 | |||||||||||||||||
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Adjusted Income – non-GAAP
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8,241 | 13,569 | 20,855 | 36,095 | 34,365 | 46,676 | ||||||||||||||||||
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Depreciation and amortization expense
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4,358 | 4,358 | 13,140 | 13,258 | 17,492 | 17,703 | ||||||||||||||||||
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Impairment of long-lived assets
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— | — | — | 680 | 8 | 1,985 | ||||||||||||||||||
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Stock based compensation
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508 | 373 | 1,578 | 1,414 | 2,050 | 1,861 | ||||||||||||||||||
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Adjusted EBITDA – non-GAAP
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13,107 | 18,300 | 35,573 | 51,447 | 53,915 | 68,225 | ||||||||||||||||||
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Permitted add backs on debt covenants:
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Proforma effect of acquisitions and asset sales
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— | 337 | — | 1,023 | 81 | 1,023 | ||||||||||||||||||
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Acquisition integration and restructuring expenses
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— | — | 239 | — | 239 | — | ||||||||||||||||||
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Adjusted EBITDA for covenant compliance – non-GAAP
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13,107 | 18,637 | 35,812 | 52,470 | 54,235 | 69,248 | ||||||||||||||||||
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Acquisition integration and restructuring expenses
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468 | 286 | 1,590 | 1,007 | 2,588 | 3,819 | ||||||||||||||||||
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Business and systems integration expenses
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1,997 | 85 | 5,385 | 379 | 6,301 | 379 | ||||||||||||||||||
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Proforma effect of acquisitions and asset sales
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— | (337 | ) | — | (1,023 | ) | (81 | ) | (1,023 | ) | ||||||||||||||
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Multiemployer pension plan withdrawal expense
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— | 500 | 1,846 | 500 | 1,146 | 2,300 | ||||||||||||||||||
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Foreign exchange loss
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121 | 694 | 829 | 2,244 | 891 | 2,791 | ||||||||||||||||||
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Remediation and related expenses
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— | — | — | — | — | 415 | ||||||||||||||||||
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Management adjusted EBITDA – non-GAAP
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$ | 15,693 | $ | 19,865 | $ | 45,462 | $ | 55,577 | $ | 65,080 | $ | 77,929 | ||||||||||||
Use of Non-GAAP Adjusted EBITDA, Adjusted EBITDA for covenant compliance, and Management adjusted EBITDA
Adjusted EBITDA, as presented within this release, is defined as earnings before interest, income taxes, depreciation and amortization, and other certain non-cash items. Adjusted EBITDA for covenant compliance, as defined in the Company’s current debt agreements, is defined as Adjusted EBITDA excluding certain items, including items that are generally considered non-operating, as permitted under the Company’s current revolving credit facility, and is used by management to gauge its ongoing compliance with the Company’s principal debt covenants, as well as pricing on its revolving credit facility. Management adjusted EBITDA is used to evaluate the core operating activities of the Company from period to period. None of the measures presented above represent cash flows from operations as defined by generally accepted accounting principles, should not be considered as an alternative to net income or cash flow from operations as an indicator of our operating performance, and are not indicative of cash available to fund all cash flow needs. These measures also may be inconsistent with similar measures presented by other companies or EBITDA as defined under guidance from the Securities and Exchange Commission.