Wednesday, Cenveo, Inc. (CVO) revealed its financial results for the third quarter, reporting a decline in profit mainly due to a significant drop in sales, which more than offset decline in expenses.
For the quarter, the company reported a net income of $1.1 million or $0.02 per share, compared with $12.3 million or $0.23 per share for the comparable period year-ago. On a Non-GAAP basis, income from continuing operations was $9.9 million or $0.18 per share, compared with $32.68 million or $0.60 per share year-ago.
Net sales for the quarter declined to $448.03 million from $522.70 million in the year-ago period.
Cost of sales for the quarter declined to $359.34 million from $406.90 million in the year-ago period. Selling, general and administrative expenses declined to $52.57 million from $58.45 million in the year-ago period. Amortization of intangible assets increased to $2.58 million from $2.29 million year-ago. Restructuring, impairment and other charges increased to $8.53 million from $6.87 million in the prior year period.
Cenveo's net interest expense for the quarter increased to $29.03 million from $26.79 million in the comparable period year-ago. For the quarter, the company recorded neither a gain nor loss on early extinguishment of debt, while there was a loss of $371 thousand towards the same a year-ago. Other net income during the quarter was $266 thousand, compared with a loss of $695 thousand year-ago.
According to Robert Burton, chairman and chief executive officer, despite the limited sales visibility during the quarter, the company was able to match its cost structure with its revenue stream, delivering a non-GAAP operating income margin of 9.0%. "We continue to focus on generating strong cash flows which has allowed us to reduce our debt by $94 million over the past twelve months," he added.
Going forward, Cenveo expects fourth quarter results to show continued improvement over the third quarter. The company expects that 2010 will be significantly stronger than 2009 from a revenue and profitability standpoint.
For the nine month period, net loss was $21.49 million or $0.39 per share, compared with a net income of $11.59 million or $0.21 per share in the prior year period. Year-to-date non-GAAP income from continuing operations declined to $10.42 million or $0.19 per share, compared with $62.07 million or $1.15 per share a year-ago.
Year-to-date net sales declined to $1.25 billion from $1.58 billion in the prior year period.
CVO closed Wednesday's last trade on the New York Stock Exchange at $7.35, down $0.10 or 1.34%.
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