Schawk, Inc.
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
Three Months Ended Year Ended
December 31, December 31,
------------------------ ------------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
Net sales $ 108,895 $ 141,256 $ 494,184 $ 544,409
Cost of sales 77,445 91,682 329,814 352,015
----------- ----------- ----------- -----------
Gross profit 31,450 49,574 164,370 192,394
Selling, general and
administrative
expenses 39,018 32,286 148,596 131,024
Impairment of goodwill 48,041 -- 48,041 --
Acquisition integration
and restructuring
expenses 5,274 -- 10,390 --
Multiemployer pension
plan withdrawal
expense 7,254 -- 7,254 --
Impairment of
long-lived assets 387 1,197 6,644 1,197
----------- ----------- ----------- -----------
Operating income (loss) (68,524) 16,091 (56,555) 60,173
Other income (expense):
Interest income 90 122 291 297
Interest expense (1,753) (2,156) (6,852) (9,214)
----------- ----------- ----------- -----------
(1,663) (2,034) (6,561) (8,917)
----------- ----------- ----------- -----------
Income (loss) before
income taxes (70,187) 14,057 (63,116) 51,256
Income tax provision
(benefit) (11,821) 6,259 (3,110) 20,658
----------- ----------- ----------- -----------
Net income (loss) ($ 58,366) $ 7,798 ($ 60,006) $ 30,598
=========== =========== =========== ===========
Net earnings (loss) per
share:
Basic ($ 2.27) $ 0.29 ($ 2.24) $ 1.14
Diluted ($ 2.27) $ 0.28 ($ 2.24) $ 1.10
Weighted average shares
outstanding:
Basic 25,741 26,987 26,739 26,869
Diluted 25,741 27,745 26,739 27,701
Dividends per common
share $ 0.0325 $ 0.0325 $ 0.13 $ 0.13
Schawk, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Amounts)
Dec. 31, Dec. 31,
2008 2007
----------- -----------
(Restated)
Assets
Current assets:
Cash and cash equivalents $ 20,205 $ 11,754
Trade accounts receivable, less allowance for
doubtful accounts of $3,138
at December 31, 2008 and $2,063 at December
31, 2007 83,218 113,215
Inventories 23,617 21,902
Prepaid expenses and other current assets 11,243 13,524
Income tax receivable 3,348 --
Assets held for sale 6,555 --
Deferred income taxes 2,765 4,755
----------- -----------
Total current assets 150,951 165,150
Property and equipment, less accumulated
depreciation of $92,583 at December 31, 2008
and $96,183 at December 31, 2007 58,325 77,083
Goodwill 184,037 246,368
Other intangible assets, net 39,125 41,528
Deferred income taxes 2,752 --
Other assets 5,163 4,858
----------- -----------
Total assets $ 440,353 $ 534,987
=========== ===========
Liabilities and Stockholders’ Equity
Current liabilities:
Trade accounts payable $ 20,694 $ 26,308
Accrued expenses 52,016 52,420
Income taxes payable -- 4,754
Current portion of long-term debt 23,563 4,433
----------- -----------
Total current liabilities 96,273 87,915
Long-term debt 112,264 105,942
Deferred income taxes 1,858 15,814
Other liabilities 29,137 24,547
Stockholders’ equity:
Common stock, $0.008 par value, 40,000,000
shares authorized, 29,478,456 and 29,213,166
shares issued at December 31, 2008 and
December 31, 2007, respectively; 25,218,566
and 27,013,482 shares outstanding at December
31, 2008 and December 31, 2007, respectively 217 216
Additional paid-in capital 187,801 184,110
Retained earnings 68,016 131,457
Accumulated comprehensive income 1,368 14,162
----------- -----------
257,402 329,945
Treasury stock, at cost, 4,259,890 and
2,199,684 shares of common stock at
December 31, 2008 and December 31, 2007,
respectively (56,581) (29,176)
----------- -----------
Total stockholders’ equity 200,821 300,769
----------- -----------
Total liabilities and stockholders’ equity $ 440,353 $ 534,987
=========== ===========
Schawk, Inc.
Reconciliation of Non-GAAP measures to GAAP
(In Thousands, Except Share Amounts)
Three Months Ended
December 31,
2008 2007
----------- -----------
Income (loss) before income taxes per GAAP ($ 70,187) $ 14,057
Plus: Impairment of goodwill 48,041 -
Plus: Acquisition integration and restructuring
expenses 5,274 -
Plus: Pension withdrawal expense 7,254 -
Plus: Remediation and related expenses 2,860 -
Plus: Impairment of long-lived assets 387 1,197
Plus: Foreign exchange (gain) loss 2,885 -
Less: Gain on sale of real estate and other - (430)
----------- -----------
Adjusted income (loss) before income tax
(non-GAAP) (3,486) 14,824
----------- -----------
Adjusted income tax provision (benefit)
(non-GAAP) (3,176) 6,581
----------- -----------
Adjusted net income (loss) (non-GAAP) ($ 310) $ 8,243
=========== ===========
Weighted average number of common and common
stock equivalent shares outstanding (GAAP) 25,741 27,745
=========== ===========
Net income (loss) per diluted share per GAAP ($ 2.27) $ 0.28
Adjustments: net of tax effects
Plus: Impairment of goodwill 1.77 -
Plus: Acquisition integration and restructuring
expenses 0.13 -
Plus: Pension withdrawal expense 0.20 -
Plus: Remediation and related expenses 0.09 -
Plus: Impairment of long-lived assets 0.01 0.03
Plus: Foreign exchange (gain) loss 0.08 -
Less: Gain on sale of real estate and other - (0.01)
Less: Uncertain tax positions and other discreet
tax adjustments (0.02) -
----------- -----------
Adjusted net income (loss) per diluted share
(non-GAAP) ($ 0.01) $ 0.30
=========== ===========
Income tax provision (benefit) per GAAP ($ 11,821) $ 6,259
Plus: Tax effect of Goodwill Impairment 2,480 -
Plus: Tax effect of acquisition integration and
restructuring expense 1,864 -
Plus: Tax effect of pension withdrawal expense 2,231 -
Plus: Tax effect of remediation and related
expenses 662 -
Plus: Tax effect of impairment of long-lived
assets 135 419
Plus: Tax effect of foreign exchange (gain)
loss 721 -
Plus: Tax effect of gain on sale of real estate
and other - (97)
Plus: Uncertain tax positions and other discreet
tax adjustments 552 -
----------- -----------
Adjusted income tax provision (benefit)
(non-GAAP) ($ 3,176) $ 6,581
=========== ===========
Schawk, Inc.
Reconciliation of Non-GAAP measures to GAAP
(In Thousands, Except Share Amounts)
Twelve Months Ended
December 31,
2008 2007
----------- -----------
Income (loss) before income taxes per GAAP ($ 63,116) $ 51,256
Plus: Impairment of goodwill 48,041 -
Plus: Acquisition integration and restructuring
expenses 10,390 -
Plus: Pension withdrawal expense 7,254 -
Plus: Remediation and related expenses 6,813 -
Plus: Impairment of long-lived assets 6,644 1,197
Plus: Foreign exchange (gain) loss 4,268 (208)
Less: Gain on sale of real estate and other - (1,540)
----------- -----------
Adjusted income before income tax (non-GAAP) 20,294 50,705
----------- -----------
Adjusted income tax provision (non-GAAP) 6,700 20,488
----------- -----------
Adjusted net income (non-GAAP) $ 13,594 $ 30,217
=========== ===========
Weighted average number of common and common
stock equivalent shares outstanding (GAAP) 26,739 27,701
=========== ===========
Net income (loss) per diluted share per GAAP ($ 2.24) $ 1.10
Adjustments: Net of Tax effects
Plus: Impairment of goodwill 1.70 -
Plus: Acquisition integration and restructuring
expenses 0.25 -
Plus: Pension withdrawal expense 0.16 -
Plus: Remediation and related expenses 0.17 -
Plus: Impairment of long-lived assets 0.16 0.03
Plus: Foreign exchange (gain) loss 0.12 (0.01)
Less: Gain on sale of real estate and other - (0.04)
Less: Uncertain tax positions and other discreet
tax adjustments 0.18 -
----------- -----------
Adjusted net income (loss) per diluted share
(non-GAAP) $ 0.51 $ 1.09
=========== ===========
Income tax provision (benefit) per GAAP ($ 3,110) $ 20,658
Plus: Tax effect of Goodwill Impairment 2,480 -
Plus: Tax effect of acquisition integration and
restructuring expense 3,637 -
Plus: Tax effect of pension withdrawal expense 2,880 -
Plus: Tax effect of remediation and related
expenses 2,231 -
Plus: Tax effect of impairment of long-lived
assets 2,325 419
Plus: Tax effect of foreign exchange (gain)
loss 1,067 (52)
Plus: Tax effect of gain on sale of real estate
and other - (537)
Plus: Uncertain tax positions and other discreet
tax adjustments (4,810) -
----------- -----------
Adjusted income tax provision (non-GAAP) $ 6,700 $ 20,488
=========== ===========
Schawk, Inc.
Reconciliation of Non-GAAP EBITDA and Adjusted EBITDA
(In Thousands)
Three Months Ended Year Ended
December 31, December 31,
--------- ---------- --------- ---------
2008 2007 2008 2007
--------- ---------- --------- ---------
(Unaudited) (Unaudited)
Net Income (loss) ($ 58,366) $ 7,798 ($ 60,006) $ 30,598
Interest expense, net of
interest income 1,663 2,034 6,561 8,917
Income tax expense (benefit) (11,821) 6,259 (3,110) 20,658
--------- ---------- --------- ---------
Operating Income (68,524) 16,091 (56,555) 60,173
Depreciation and amortization 4,688 5,725 20,751 21,353
Impairment of long-lived
assets 387 1,197 6,644 1,197
Impairment of goodwill 48,041 - 48,041 -
Non-cash restructuring charge 36 - 628 -
Unrealized foreign exchange
(gain) loss 1,097 124 1,097 (243)
Share-based compensation 1,385 235 1,385 1,011
--------- ---------- --------- ---------
EBITDA (12,890) 23,372 21,991 83,491
Permitted add backs on amended
debt agreements:
(Gain) loss on sale of
equipment 524 143 362 (852)
Permitted acquisitions 2,027 - 2,519 -
Interest income 90 122 291 297
Restructuring charge 5,238 - 9,762 -
Pension withdrawal expense 7,254 - 7,254 -
--------- ---------- --------- ---------
Adjusted EBITDA $ 2,243 $ 23,637 $ 42,179 $ 82,936
========= ========== ========= =========
EBITDA is defined as earnings before interest, income taxes, depreciation
and amortization, and other certain non-cash items. Adjusted EBITDA, as
defined in the covenants under the Company's amended debt agreements, is
EBITDA as adjusted to exclude certain items, including items that are
generally considered non-operating. Both measures are important indicators
of performance under the Company's amended debt agreements and provide
management with a consistent measurement tool for evaluating the operating
activities of the Company from period to period. These measures do not
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.
Contact Information: AT SCHAWK, INC.: Timothy Allen Vice President, Finance Operations and Investor Relations 847-827-9494 Timothy.Allen@schawk.com AT DRESNER CORPORATE SERVICES: Investors: Philip Kranz 312-780-7240 pkranz@dresnerco.com