2007 per earnings release 4th Quarter Full Year ------------ ------------ Income from continuing operations before income taxes $ 14,054 $ 51,253 Income tax provision 7,273 21,672 Income from continuing operations 6,781 29,581 Earnings per share from continuing operations, fully diluted $ 0.24 $ 1.07 2007 corrected 4th Quarter Full Year ------------ ------------ Income from continuing operations before income taxes $ 14,057 $ 51,256 Income tax provision 6,259 20,658 Income from continuing operations 7,798 30,598 Earnings per share from continuing operations, fully diluted $ 0.28 $ 1.10 2006 restated per earnings release 4th Quarter Full Year ------------ ------------ Income from continuing operations before income taxes $ 11,889 $ 44,762 Income tax provision 5,440 17,813 Income from continuing operations 6,449 26,949 Earnings per share from continuing operations, fully diluted $ 0.24 $ 0.98 2006 restated corrected 4th Quarter Full Year ------------ ------------ Income from continuing operations before income taxes $ 11,889 $ 44,762 Income tax provision 6,440 18,813 Income from continuing operations 5,449 25,949 Earnings per share from continuing operations, fully diluted $ 0.20 $ 0.95The corrected effective tax rate for the fourth quarter and full year of 2007 was 44.5 percent and 40.3 percent, respectively. The corrected effective tax rate for the fourth quarter and full year of 2006 was 54.2 percent and 42.0 percent, respectively. Enclosed with this press release are the final statements of operations for the years ended December 31, 2007 and 2006 as included in the Company's Form 10-K. Also enclosed are the final unaudited quarterly results for the fourth quarters ended December 31, 2007 and 2006. As part of the Company's program to remediate internal control weaknesses that were reported in connection with its 2007 audit, the Company has hired consultants to oversee the remediation effort. The Company has also initiated the process to hire a new chief financial officer. The Company intends to provide updates quarterly as to its progress on improving its system of internal controls. First quarter 2008 reporting to be delayed Due to the delays in the reporting of the Company's fiscal 2007 financial results and the preparation of the fiscal 2007 Form 10-K, the Company expects that its first quarter 2008 results will be delayed beyond its normal expected due date, as the Company will require additional time to complete its preparation and internal review of the first quarter's financial statements, Form 10-Q and earnings release, as well as the quarterly review by the company's external audit firm. At this time, the Company cannot suggest a certain date for reporting its first quarter 2008 results. About Schawk, Inc. Schawk, Inc. is the leading provider of brand management services, enabling companies of all sizes to connect their brands with consumers to create deeper brand affinity. With a global footprint of more than 60 offices, Schawk helps companies create consistent and compelling brand experiences by providing integrated strategic, creative and implementation services across brand touch points. 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 Safe Harbor Statement Certain statements in this press release are forward-looking statements within the meaning of Section 21E of the Securities and 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, unanticipated difficulties associated with additional accounting issues, if any, which may cause our investors to lose confidence in our reported financial information and may have a negative impact on the trading price of our stock; our ability to remedy known internal control deficiencies and weaknesses and the discovery of future control deficiencies or weaknesses, which may require substantial costs and resources to rectify; higher than expected costs, or unanticipated difficulties associated with, integrating the acquired operations; higher than expected costs associated with compliance with legal and regulatory requirements; 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; loss of key management and operational personnel; our ability to implement our growth strategy; 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; our ability to implement restructuring plans; the stability of political conditions in Asia and other 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.
Schawk, Inc. Consolidated Statements of Operations Three Months Ended December 31, 2007 and 2006 (Unaudited) (In Thousands, Except Share Amounts) 2007 2006 ----------- ----------- (Restated) Net sales $ 141,256 $ 139,970 Cost of sales 91,682 92,001 Selling, general, and administrative expenses 33,483 35,190 Acquisition integration and restructuring expenses -- 3,175 Reserve reversal from litigation settlement -- (4,751) ----------- ----------- Operating income 16,091 14,355 Other income (expense): Interest income 122 187 Interest expense (2,156) (2,653) ----------- ----------- (2,034) (2,466) ----------- ----------- Income from continuing operations before income taxes 14,057 11,889 Income tax provision 6,259 6,440 ----------- ----------- Income from continuing operations 7,798 5,449 Loss from discontinued operations, net of tax benefit of $479 -- (689) ----------- ----------- Net income $ 7,798 $ 4,760 =========== =========== Earnings per share: Basic: Income from continuing operations $ 0.29 $ 0.21 Loss from discontinued operations -- ($ 0.03) ----------- ----------- Net income per common share $ 0.29 $ 0.18 =========== =========== Diluted: Income from continuing operations $ 0.28 $ 0.20 Loss from discontinued operations -- ($ 0.03) ----------- ----------- Net income per common share $ 0.28 $ 0.17 =========== =========== Weighted average number of common and common equivalent shares outstanding: - Basic 26,987 26,504 - Diluted 27,745 27,421 Dividends per common share $ 0.0325 $ 0.0325 Schawk, Inc. Consolidated Statements of Operations Year Ended December 31, 2007 and 2006 (In Thousands, Except Share Amounts) 2007 2006 ----------- ----------- (Restated) Net sales $ 544,409 $ 546,118 Cost of sales 352,015 356,149 Selling, general, and administrative expenses 132,221 137,995 Acquisition integration and restructuring expenses -- 3,933 Reserve reversal from litigation settlements -- (6,871) ----------- ----------- Operating income 60,173 54,912 Other income (expense): Interest income 297 467 Interest expense (9,214) (10,617) ----------- ----------- (8,917) (10,150) ----------- ----------- Income from continuing operations before income taxes 51,256 44,762 Income tax provision 20,658 18,813 ----------- ----------- Income from continuing operations 30,598 25,949 Loss from discontinued operations, net of tax Benefit of $851 -- (1,332) ----------- ----------- Net income $ 30,598 $ 24,617 =========== =========== Earnings per share: Basic: Income from continuing operations $ 1.14 $ 0.98 Loss from discontinued operations -- (0.05) ----------- ----------- Net income per common share $ 1.14 $ 0.93 =========== =========== Diluted: Income from continuing operations $ 1.10 $ 0.95 Loss from discontinued operations -- (0.05) ----------- ----------- Net income per common share $ 1.10 $ 0.90 =========== =========== Weighted average number of common and Common equivalent shares outstanding: - Basic 26,869 26,393 - Diluted 27,701 27,395 Dividends per common share $ 0.13 $ 0.13
Contact Information: AT SCHAWK, INC.: James J. Patterson Sr. VP and CFO (847) 827-9494 jpatterson@schawk.com AT DRESNER CORPORATE SERVICES: Philip Kranz 312-780-7240 pkranz@dresnerco.com