Schawk, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
March 31,
--------------------
2010 2009
--------- ---------
Net sales $ 111,708 $ 105,088
Cost of sales 69,833 71,994
--------- ---------
Gross profit 41,875 33,094
Selling, general and administrative expenses 32,524 33,969
Foreign exchange (gain) loss 1,817 (126)
Impairment of long-lived assets 680 58
Acquisition integration and restructuring expenses 329 817
--------- ---------
Operating income (loss) 6,525 (1,624)
Other income (expense)
Interest income 8 70
Interest expense (1,988) (1,449)
--------- ---------
(1,980) (1,379)
--------- ---------
Income (loss) before income taxes 4,545 (3,003)
Income tax provision (benefit) 2,025 (707)
--------- ---------
Net income (loss) $ 2,520 $ (2,296)
========= =========
Earnings (loss) per share:
Basic $ 0.10 $ (0.09)
Diluted $ 0.10 $ (0.09)
Weighted average number of common and
common equivalent shares outstanding:
Basic 25,183 24,936
Diluted 25,557 24,936
Dividends per Class A common share $ 0.0400 $ 0.0325
Schawk, Inc.
Consolidated Balance Sheets
(In thousands, except share amounts)
March 31, December 31,
2010 2009
----------- -----------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 12,119 $ 12,167
Trade accounts receivable, less allowance for
doubtful accounts of $1,522 at March 31, 2010
and $1,619 at December 31, 2009 90,982 88,822
Inventories 22,599 20,536
Prepaid expenses and other current assets 8,090 8,192
Income tax receivable 2,697 2,565
Deferred income taxes 1,012 992
----------- -----------
Total current assets 137,499 133,274
Property and equipment, less accumulated
depreciation of $98,534 at March 31, 2010
and $96,440 at December 31, 2009 48,316 50,247
Goodwill 188,009 187,664
Other intangible assets, net 35,928 37,605
Deferred income taxes 1,456 1,424
Other assets 6,798 6,005
----------- -----------
Total assets $ 418,006 $ 416,219
=========== ===========
Liabilities and stockholders' equity
Current liabilities:
Trade accounts payable $ 17,496 $ 16,957
Accrued expenses 56,916 64,079
Deferred income taxes 5,504 205
Income taxes payable 9,247 14,600
Current portion of long-term debt 20,278 12,858
----------- -----------
Total current liabilities 109,441 108,699
----------- -----------
Long-term liabilities:
Long-term debt 61,652 64,707
Other long-term liabilities 15,772 15,920
Deferred income taxes 2,174 2,059
----------- -----------
Total long-term liabilities 79,598 82,686
----------- -----------
Stockholders' equity:
Common stock, $0.008 par value, 40,000,000
shares authorized, 30,025,551 and 29,855,796
shares issued at March 31, 2010 and December
31, 2009, respectively, 25,279,083 and
25,108,894 shares outstanding at March 31,
2010 and December 31, 2009, respectively 220 220
Additional paid-in capital 192,936 191,701
Retained earnings 87,463 85,953
Accumulated comprehensive income, net 9,184 7,804
=========== ===========
289,803 285,678
Treasury stock, at cost, 4,746,468 and 4,746,902
shares of common stock at March 31, 2010 and
December 31, 2009, respectively (60,836) (60,844)
----------- -----------
Total stockholders' equity 228,967 224,834
----------- -----------
Total liabilities and stockholders' equity $ 418,006 $ 416,219
=========== ===========
Schawk, Inc.
Segment Financial Data
(Unaudited)
(In Thousands)
Three Months Ended
March 31,
--------------------
2010 2009
--------- ---------
Sales to external clients:
North America $ 96,318 $ 91,170
Europe 17,374 15,583
Asia Pacific 6,822 5,909
Intercompany sales elimination (8,806) (7,574)
--------- ---------
Total $ 111,708 $ 105,088
========= =========
Operating segment income (loss):
North America $ 14,024 $ 5,691
Europe 548 627
Asia Pacific 879 803
Corporate (8,926) (8,745)
--------- ---------
Operating income (loss) $ 6,525 $ (1,624)
========= =========
Schawk, Inc.
Reconciliation of Non-GAAP measures to GAAP
(Unaudited)
(In Thousands, Except Share Amounts)
Three Months Ended
March 31,
------------------
2010 2009
--------- --------
Income (loss) before income taxes - GAAP $ 4,545 $ (3,003)
Adjustments:
Foreign currency (gain) loss 1,817 (126)
Impairment of long-lived assets 680 58
Acquisition integration and restructuring expenses 329 817
Remediation and related expenses -- 2,028
--------- --------
Adjusted income (loss) before income tax - non GAAP 7,371 (226)
Adjusted income tax provision - non GAAP 2,904 351
--------- --------
Adjusted net income (loss) - non GAAP $ 4,467 $ (577)
========= ========
Weighted average common and common stock
equivalents outstanding - GAAP 25,557 24,936
========= ========
Earnings (loss) per diluted share - GAAP $ 0.10 $ (0.09)
Adjustments - net of tax effects:
Foreign currency (gain) loss 0.05 --
Impairment of long-lived assets 0.01 --
Acquisition integration and restructuring expenses 0.01 0.02
Remediation and related expenses -- 0.05
--------- --------
Adjusted earnings (loss) per diluted share - non GAAP $ 0.17 $ (0.02)
========= ========
Income tax provision (benefit) - GAAP $ 2,025 $ (707)
Adjustments:(1)
Foreign currency (gain) loss 484 (39)
Impairment of long-lived assets 270 23
Acquisition integration and restructuring expenses 125 269
Remediation and related expenses -- 805
--------- --------
Adjusted income tax provision - non GAAP $ 2,904 $ 351
========= ========
(1) Adjustments have been tax-effected at the jurisdictions'
statutory rates.
Schawk, Inc.
Reconciliation of Non-GAAP EBITDA and Management Adjusted EBITDA
(Unaudited)
(In Thousands)
Three Months Ended Trailing 12 Months
March 31, Ended March 31,
------------------ ------------------
2010 2009 2010 2009
--------- -------- --------- --------
Net income (loss) - GAAP $ 2,520 $ (2,296) $ 24,313 $(66,562)
Interest expense 1,988 1,449 9,763 6,523
Income tax expense (benefit) 2,025 (707) 10,329 (4,549)
--------- -------- --------- --------
Adjusted Income (loss) - non GAAP 6,533 (1,554) 44,405 (64,588)
Depreciation and amortization
expense 4,494 4,778 18,369 20,011
Impairment of goodwill -- -- -- 48,041
Impairment of long-lived assets 680 58 2,063 6,702
Non-cash restructuring charges -- -- 210 628
Stock based compensation 457 378 1,816 1,763
--------- -------- --------- --------
EBITDA - non GAAP 12,164 3,660 66,863 12,557
Permitted add backs on debt
covenants:
(Gain) loss on sale of property and
equipment -- (28) 143 339
Proforma effect of acquisitions and
asset sales -- -- -- 2,566
Acquisition integration and
restructuring expenses(1) -- 817 2,183 10,579
Multiemployer pension plan
withdrawal expense -- -- -- 7,254
--------- -------- --------- --------
EBITDA for covenant
compliance - non GAAP 12,164 4,449 69,189 33,295
Acquisition integration and
restructuring expenses 329 -- 3,578 --
Multiemployer pension plan
withdrawal expense -- -- 1,800 --
Indemnity settlement income -- -- (4,986) --
Foreign exchange (gain) loss 1,817 (126) 1,402 971
Remediation and related expenses -- 2,028 2,455 2,028
--------- -------- --------- --------
Management adjusted EBITDA - non
GAAP $ 14,310 $ 6,351 $ 73,438 $ 36,294
========= ======== ========= ========
(1) Capped at $3.0 million for 2009 per the Company's new debt agreements.
Amounts in excess of $3.0 million are included as an adjustment for
Management adjusted EBITDA.
Use of Non-GAAP EBITDA, EBITDA for covenant compliance, and Management
adjusted EBITDA
EBITDA is defined as earnings before interest, income taxes, depreciation
and amortization, and other certain non-cash items. EBITDA for covenant
compliance, as defined in the Company's January 2010 debt agreements, is
defined as EBITDA adjusted to exclude 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.
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