UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
--------------------------------------------------------------------------------------------------
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
[ ] Definitive Proxy Statement ONLY (AS PERMITTED BY RULE 14A-6(e)(2))
[ ] Definitive Additional Materials
[X] Soliciting Material Under Rule 14a-12
--------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
CENVEO, INC.
-------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
-------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
______________________
(2) Aggregate number of securities to which transaction applies:
______________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
____________________________________________________________________
(4) Proposed maximum aggregate value of transaction:____________________
(5) Total fee paid:_____________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:________________________________________________
(2) Form, schedule or registration statement no.:__________________________
(3) Filing party:__________________________________________________________
(4) Date filed:____________________________________________________________
-------------------------------------------------------------------------------
FINAL TRANSCRIPT
-------------------------------------------------------------------------------
>>>
-------------------------------------------------------------------------------
CONFERENCE CALL TRANSCRIPT
CVO - Q2 2005 CENVEO EARNINGS CONFERENCE CALL
EVENT DATE/TIME: AUG. 02. 2005 / 2:00PM ET
EVENT DURATION: 1 HR 10 MIN
-------------------------------------------------------------------------------
C O R P O R A T E P A R T I C I P A N T S
JIM MALONE
Cenveo Incorporated - President & CEO
MICHEL SALBAING
Cenveo Incorporated - SVP Finance & CFO
P R E S E N T A T I O N
-------------------------------------------------------------------------------
OPERATOR
Good morning, everyone, and welcome to Cenveo Incorporated's Second Quarter
Earnings Call. As a reminder, today's conference call is being recorded.
With us, today, are Mr. Jim Malone, President and Chief Executive Officer,
and Mr. Michel Salbaing, Senior Vice President and Chief Financial Officer.
For opening remarks and introductions, I would like to turn the proceedings
over to Mr. Malone. Please go ahead, sir.
-------------------------------------------------------------------------------
JIM MALONE - CENVEO INCORPORATED - PRESIDENT & CEO
Well, good afternoon, ladies and gentlemen, and thanks for joining us today.
During the conference call, we're going to cover several items in the
following order.
First of all, Michel will quickly review our second-quarter results, which
by the way came in $2 million better than last year's EBITDA level and we
believe are reflective of some of the changes that we're aggressively moving
forward with. And, secondly, I will describe what we're doing to
dramatically change the profitability and focus of Cenveo and, finally, how
I see the strategy of the company on a go forward basis.
What I would like to do now is turn this portion of the call over to Michel
for the required Safe Harbor comments as well as his review of the financial
reports, attached to the press release. And then, I will come back to
discuss where the company is and what I see as its future. Michel?
-------------------------------------------------------------------------------
MICHEL SALBAING - CENVEO INCORPORATED - SVP FINANCE & CFO
Thank you, Jim. And again, good day, ladies and gentlemen. During the
course of this conference today, we will be making certain forward-looking
statements that are subject to various uncertainties and risks that could
affect their outcome. These uncertainties and risks are set out, in more
detail, in the invitation you received to this call as well as in our
filings with the SEC. We invite you to refer to them in conjunction with
this call.
All forward-looking statements we make today are intended to come within the
SEC's Safe Harbor with respect to such statements. In keeping with the
Company's policies and SEC regulations, any estimates or forecasts discussed
in this conference call are effective as of the date of this conference, and
we assume no obligation to update or reaffirm any such estimates or
forecasts.
Let's turn, now, to the summary of financial results. As shown in the
financial highlights attached to the press release as well as in the
supplementary information to the press release, Cenveo's sales in the second
quarter of 2005 were $421.7 million compared to $409.4 million in the same
period last year, a $12 million or 3% increase.
Sales growth continues to reflect more robust markets, but mostly it
reflects the success of our strategy and our ability to capture market share
even in this traditionally soft quarter in the year for our businesses. We
have had year-over-year organic growth in our quarterly sales for every
quarter now for a year.
EBITDA in the second quarter was $30 million compared to $28 million in the
second quarter of 2004. The 7.1% EBITDA margins to sales we realized during
the second quarter were 30 basis points better than the 6.8% achieved
last year in the same period. This improvement should have been more
significant, had not some plants under-performed last year's results.
For the six months ended June 30th, sales reached $871.3 million, up $38.2
million or 4.6% from the $833.1 million of sales in the first half of last
year. Our EBITDA margin at 6.4% was down from the 7.1% achieved last year
during the same period.
As we discussed in our first-quarter conference, this reduction in
profitability came from our inability early on in the year to pass on
envelope paper price increases, and other raw material cost increases
immediately to some of our envelope customers; and also the generally lower
probability of the office products channel, where we have significant market
share; and finally, the cost of CEO transition in the first quarter.
SG&A expenses decreased $1.9 million this quarter as compared to last year.
This decrease was driven both by planned reduction and the initiative we
announced June 1st to reduce SG&A expenses by $20 million on an annual
basis.
During the quarter, we incurred $4.9 million of asset impairment and
restructuring charges, in addition to the $8.1 million incurred in the first
quarter. $4 million of the second-quarter charge are related to the $20
million of SG&A reductions, as I said earlier, announced at June 1st. We
also incurred impairment charges of $552,000 related to another plant that
we expect to close in the second half of this year.
The first-quarter asset impairment charge, representing $7.1 million of the
total of $7.7 million, related to operations in our commercial segment that
operated at a loss throughout 2004 and continued to perform poorly in the
first quarter 2005. By shutting these poorly performing plants, we expect to
save $5 million in 2006.
In Q2, we also incurred expenses of $588,000, the first part of our expenses
related to -- relating to our evaluation of strategic alternatives and the
special meeting of shareholders called for by a dissident shareholder group.
Net loss for the quarter was $10.6 million, or $0.22 per share, compared to a
net loss of $2.1 million last year, or $0.04 per share. As in the first
quarter, the tax expense we incurred during the quarter, notwithstanding the
fact that we had a loss before income taxes, was the result of the taxes we
are providing for in our Canadian operation. We expect to report tax expense
throughout 2005, since we are providing a valuation allowance against the
tax benefits we are accumulating on our net operating losses in the US.
During the quarter, the cash provided by the operations was approximately
$17 million, some $7 million more than in the second quarter last year. This
is much along the lines of our expectation and confirms our view that our
operations will generate $35 million of free cash flow during the whole of
2005.
Total debt, as of June 30th, was $784 million, down $18 million during the
quarter, but still $14 million higher than at the end of last year. We expect
our total debt to be reduced to the $730 million to $740 million range by
the end of the year 2005.
Now, an update by segment. Net sales of our commercial segment increased
$12.6 million to $320.2 million, or 4%, in the second quarter of 2005
compared to the second quarter of 2004. Net sales increased $35.2 million, or
6%, in the first six months of 2005.
This strong sales performance was driven primarily by the sales to our
strategic accounts, which grew 34% in the second quarter and 24% during the
first half of the year. Sales in our local markets, meantime, have been
relatively flat for the whole of the first year - for the first half of the
year.
The EBITDA for the commercial segment increased very slightly in the second
quarter of 2005 compared to last year and was consistent with the prior year
in the whole of the first six months of 2005. EBITDA as calculated, excludes
the restructuring and asset impairment charges and losses on the sale of
non-strategic businesses that we have incurred, as we are making sure that
we dispose of or close underperforming or non-core plants.
Other significant factors contributing to this quarter's results were as
follows. Due to contractual commitments and competitive pressures, we have
not fully recovered the higher cost of uncoated paper and other materials
used to produce our envelope products. We estimate the negative impact of
lower margins of our envelope products to have been approximately $2.2
million in the second quarter of 2005, which is less than the estimated
impact of $4.1 million in the first quarter. So we are progressing, but not
well enough yet.
The results at three plants -- another factor was the result at three plants
that performed poorly in 2004, which although they improved in the second
quarter of 2005 compared to 2004, they are still not at the level we want
them, as a matter of fact. The results at these plants have been $1.4
million lower than the first six months of 2004.
Finally, also affecting the results, the 2005 numbers include higher
incentive accruals than the results reported in 2004.
Now for the resale segment. Net sales of our resale segment were slightly
lower in second quarter of 2005 than in the second quarter of 2004, due
primarily to lower sales of the mailing supplies business that was sold
during the quarter. For the first six months of 2005, net sales increased $3
million compared to 2004.
Growth in sales for the quarter in the first six months reflect - one, the
sales -- that sales of office products to our retail, wholesale and trade
customers grew 17% in the second quarter of 2005 and 20% in the first six
months, reflective of the market share we have acquired now a year ago
almost. Lower net pricing, however, reduced our overall revenue growth in
these markets to $3 million in the second quarter and $6.7 million in the
first six months of 2005.
Sales of labels, documents and envelopes to our distribution customers
declined $1.7 million in the second quarter 2005 and $2.3 million for the
first six months of 2005. These declines were primarily due to the lower
sales of traditional business documents, specifically continuous forms and
lower prices for our specialty forms.
The EBITDA for the resale segment declined $900,000 in the second quarter of
2005. For the first six months of 2005, EBITDA has declined $3.7 million.
These declines in EBITDA were primarily the result of lower net selling
price for office products and higher distribution expenses in the retail and
wholesale market segment.
EBITDA of our operations, selling labels, documents and envelopes through
distributors has improved in 2005, despite the lower sales I referred to
earlier. Higher incentive accruals in 2005 here also contributed to lower
operating income in 2005.
Finally, in the corporate section, corporate and other expenses not
allocated to our segments were down $2.2 million in Q2 from the same period
last year to $5.2 million, driven by lower workers' comp cost and lower
personnel cost.
So, in summary, Q2 results came in a little better than what we had
indicated in our general discussion of guidance last May, when we released
our first-quarter results. In the second quarter, we continued to increase
our topline through organic growth, and our margins also increased in the
quarter. We expect to see that trend continue in the second half of the
year.
I will now turn the call back over to Jim Malone.
-------------------------------------------------------------------------------
JIM MALONE - CENVEO INCORPORATED - PRESIDENT & CEO
Thanks, Michel. As I go through a number of the points that I'd like to
make, I am not going to read from a script. I'm terrible at doing that. So
I'm just simply going to talk from those issues and around those points
that I think are important for all of us to be aware of and try to focus
on as we go forward.
The way I'm going to do this is I'm going to start off with talking to you
about two numbers. Then, I'm going to discuss several of our strategic
things that I see in the business, the actions that we are taking or have
taken, where I see growth for the company, the progress that we've made to
date, and then I'm going to have three or four points in conclusion that
maybe deal with a review of some of the strategic numbers that I'm starting
with here.
But, essentially, two things to remember. We have identified or are already
in place $55 million of cost issue. This equates to a run rate going into
2006 of $190 million of EBITDA. Now, with that as a focus, let me move into
some of the strategic points that, I think, are worthy of being made. It may
stimulate some conversation after my remarks.
First of all, I really do believe that after a grand total of a month here in
the saddle that Cenveo can, in fact, be a great company. And I think that
for a number of issues that I will refer to, as we go through this.
First of all, I think that Cenveo is structuring itself and will continue,
as we go through some of the cost-cutting initiatives and focus that we're
doing with the company, to be a value-added company. Now, that means several
things to me and, I believe, to our organization.
And it does not mean that it is necessarily, diabolically, opposite of being
a low-cost producer. I believe that being a low-cost producer and being a
value-added supplier is eminently doable, strategically the right thing for
our company, and arguably for the industry the opportunity is to be able to
have both those capabilities within the Company.
And by doing that, we believe that we can bring our customers a margin that
they wouldn't get having to go to a number of different suppliers for their
needs and just as importantly for this call is we believe that our margin
enhancement opportunities are substantial in that area itself.
Having said that, we understand perfectly that even though printing per se
is at most 50% of the volume of this company that there are opportunities
for cost, there are opportunities for cost benefits and savings, and there
are opportunities to drive a substantial amount of margin improvement on
that side of the business. And when I tell you later how we've organized to
get after that, I think you will share my enthusiasm for the additional
opportunities there.
Now, when you have an industry, the size of the graphics of printing
industry, and I certainly do not want to pretend to be one of the great
experts in the world at this moment in time in the industry as a whole, but
I think I've been able to have a pretty steep learning curve both inside our
own company and outside with things from the trade press and our own
expertise inside the company. And additionally so far, I believe I have
visited 26 of our facilities and out of that, I come away with a feeling
that as long as you've got an industry of -- pick a number -- $60 to
$90 billion, depending on how you define it in size, and you take that
industry and say you look at the technology change that's going on in all
aspects of it, you look at the financial cost, if you will, of getting to
that new technology, that's driven by a changing customer profile and a
changing customer demand, and you got industry that is in some level of
chaos; maybe too strong of a word, but certainly a rapid level of change,
would be polite in describing what can go on.
And with that kind of scale and with that kind of drive for change and with
the capabilities that I see within Cenveo itself, I believe we are pretty
well-positioned to be able to fix the foundation of this company, refocus
the efforts of this company into two simple things. One, driving our
customer response and driving a value for a customer where we can increase
our margins; and secondly, driving the efficiencies in the productivity at
the plant level to satisfy those customer demands, and also help them create
some needs, if you will, that will be additive, we believe, to them, and
just as importantly, additive to us and our bottom line.
Cenveo, I believe, must and can, can and must play a part in the
consolidation opportunities in the industry. And as it relates to strategic
alliances, as it relates to acquisitions, as it relates to mergers, as it
relates to all that kind of activity, when you have this kind of possibility
going on and given the company's position in dealing with a 13D and a
hostile shareholder, I think it would be absolutely the wrong thing for us
to do is to overlook all those opportunities that exist for this company as
it positions itself to be in a position as a player. And so, with the
consolidation opportunities will come a number of strategic alternatives
that I believe we will constantly be looking at. I believe it's our
obligation, I believe it's our responsibility to constantly be in that game
and to be a part of it.
Now, you should also know that I believe, and I think I've practiced over
the last 20, 25 years, that no company or very few at least achieve true
greatness with a sole focus on cutting itself to excellence. You can cut
yourself to immediate prosperity, but that only lasts so long and that
arguably only gets you a onetime benefit. What in my view is happening in
this company and will continue to happen in this company as long as I'm
around it and the colleagues that I think are now in place in the company
around it is that we will be constantly pruning and growing. And with the
change in opportunities, we must grow from a technology standpoint and a
capability standpoint.
But at the same time, any company, if you equate it to a great tree in an
arboretum, you got to give it room to grow, you got to give it strength,
resources to grow, but at the same time you have to keep it pruned, you have
to keep it clean, and you cannot let a whole bunch of the analogy I use as
"sucker branches" stay around that tree. You constantly got to get rid of them.
And that's one of the things that we have focused on that I'll get to in a
few moments here.
As a part of continuing to prune and continuing to grow, that really goes
around to our fairly simple philosophy. And that is that this company has
four constituencies that we need to or will pay any attention to. And
they're very simply our owners, our customers, our employees and our
suppliers. And I believe and I am preaching to this corporation, and I
couldn't be more happy with the employees or with the way employees are
responding to it, that the four ways -- the three ways to satisfy the needs
of those four constituencies -- let me repeat; our owners, our customers,
employees and our suppliers, is to simply be profitable, to grow that
profitability and the topline, and to have some fun doing it. And in my
experience, you show me a company where those three things are going on, and
I'll show you a place where the owners are getting satisfied on a regular
basis. And the other three constituencies follow with the same level of
satisfaction.
Now, it's easy to talk about, how do we do it? How do we implement it? And
what are the things that we focus on? And as I get into that let me say what
I am not. I am not a slash-and-burn executive. I have not spent my life
doing that to the exclusivity of looking to the future. But, I think those
of you who know me and have been around me for any period of time knows that
I will have zero hesitancy about taking the necessary actions to constantly
right the cost structure. And those people that will be successful at Cenveo
will have exactly the same focus that it's not singular, it is not just cost
driven, but we must add value all along the way.
And, certainly, in the condition that this company was in, the first place
to look was obviously on the cost side. And with $55 million -- I'll repeat;
with $55 million located so far and with the prediction of $190 million run
rate by the beginning of -- excuse me, as we go into '06, than I think, you
can share some passion for the way that we feel about it. And we've got to
be honest with ourselves. And we have to look inward for some of these
issues and it's a very simple fact, that our margins are not where they
should be when we compare ourselves to our competition or are best in class
or maybe more importantly, when we really think we can be on our own and
where we can become best in class.
And for us to think that we can go on with the same kind of margins that we
have had in the recent past is nonsense. And there isn't anybody in this
company or on the board that believes that's the right thing to do. And you
should know that I have had absolute 100% total support -enthusiastic
support from our board in driving this philosophy throughout the company.
And as we continue to pursue the growth platform, including our strategic
and national sales, we must, in my humble opinion, reinforce the regional
local aspect of the business. I believe in any number of different
situations our best profit margin, is back at the local kind of businesses,
and that probably leads into the actions and to what we've done in the
organization. In the last few weeks we have flattened the organization
substantially.
We've taken at least one layer and number of different ways, we've taken two
layers of management out of the company. By way of example, myself included,
there are five layers of management from me to the plant floor and the
reason we have done that is twofold. One, so that we will respond much
quicker to opportunities and also respond much quicker to problems and
marshal the resources necessary to take advantage of the opportunity and to
diminish whatever downside there is inevitably in the problems that any
operating company finds itself faced with on a daily basis.
By flattening the organization, we certainly become much more customer
focused and operationally oriented and those are the two things that this
company has to focus on. And just drive it into everybody's head constantly,
customer focused, operationally oriented. And every single one of the staff
functions on this company are now and if they're going to be successful will
be in the future focused on doing two things, serving the operations and
meeting our regulatory and compliance requirements of this company. And if
it doesn't meet those two tests, it's a waste of time, money, energy, and we
aren't doing it, and that's part of the reason that we have been able to
downsize the corporate office.
We are putting our current office up for lease and we will be out of there
just as quickly as we can get that done. And there will be nobody in the
corporate office except those headquarters people that as a public company,
like it or not, we must have and part of the number of people in corporate
office are clearly driven by internal audit, by the legal, by the HR
requirements in terms of the legal and the regulatory environment that we
live in today, and a decision that was made in the company, I don't know
Michel, what about three, four years ago to centralize the accounting.
And frankly I'm not sure that that's what I would have done. But now having
seen the way it was done and the speed and the reporting control that that
gives us and as we migrate to being more operationally oriented, the access
to good information by the local operations, I think it was the right thing,
and I have zero intention of tearing down the centralization that was
created out of the accounting department.
I think that was prescient in many ways because it has -- there are not very
many companies our size that became SOX compliant the first time out of the
box with as few issues as our auditors have had. And we expect the same kind
of situation this year. So that wouldn't be my knee-jerk reaction that
wouldn't be my instinct, but in this situation I think it's absolutely the
right thing to do and I have no intention of changing it.
But that does mean with accounting, with HR, with legal just to name the
three biggies, as well as internal audit that like it or not we need to have
a central office or corporate office, whatever the heck you want to call up.
And I think it would be pennywise and pound foolish to lose all that tribal
knowledge by simply picking it up and saying I don't like it being in
Denver, so I'm going to move it to whatever suits me personally. Selfishly,
I would like that. That's not in my opinion the right thing to do for the
company or the; right way to spend the Company's money, and I think the loss
of tribal knowledge would be a detriment to the Company as a whole.
Now in terms of growing the company, we know and we see and I am absolutely
convinced that our strategic sales strategy is beginning to work, and I
believe it's only in its beginning stages of working. We have achieved about
a $40 million growth in that area this year, and we expect a $60 million and
I could foresee a way of $60 million to a $100 million in a year in a go
forward basis.
It doesn't take to many of -- multibillion dollar companies' business to
all of a sudden add 5, 10, 15 and $20 million incremental pieces of business
as we go forward. So that itself is a 3% organic growth just for Cenveo as a
whole. And then if we think about what we can do on the local level to
reenergize, refocus -- I begin to believe that we do not have to be a victim
of historically pretty low growth rate for the "industry" as a whole.
A part of ensuring that this happens has been the creation of a new title,
if not position. We've -- and that is President of the Strategic Sales
Group. And he along with the four other operating groups will report
directly to me. So, reporting to me we will have five operations groups and
two staff groups. The staff group will be Michel as the CFO, and Brain
Hairston as the head of Human Resources. And then we'll have a President of
SSP, we will have the President of the Print Group, we will have the
President of Envelope, President of the Canadian operations, and the
President of Resale. And with that focus, it goes right back into what I
said 5 or 10 minutes ago.
The focus of this company is customer and operations. And that's what the
five people reporting directly to me will do that allows me direct access to
our customers, and I fully intend to spend a substantial amount of my time
on a go forward basis, both at our own operations level and in our customers
offices helping them grow and by that helping us grow by primary focus
obviously being us.
I think credibly it's probably a little early for me to quantify just the
exactly the robustness of our top line growth on an all in basis, but I
think it doesn't take too much back of the envelope figuring that if we can
do 3% organic growth in Cenveo as a whole just off our SSP that I believe
that we -- that there is growth there and I think it's growth that should
carry a substantially better margin with it. I mean for example, just the
SSP strategy itself has generally a 10 to 15% higher margin than overall --
actually better than that, our actual margins are in the 15% range on the
strategic sales.
So, as we drive strategically the company that way, I think it only gets
better. I mean the only way that gets to the bottom line is though for us
not to take our eye off the ball on the cost side of this business. But in
that regard I intend to give this organization a goal, and have given it the
goal of doubling our EBITDA for -- by the end of the year 2007. Double our
2004 figure, which I think puts us in the 250ish range depending on how you
normalize the 204 number, 250 we think is a very doable number. And that
--at that level we generate about $100 million of free cash flow a year.
Now what kind of progress have we've made to date? I think we have started
to change the management style of the company. And I feel that we've the
expertise of 9,400 employees to lead this company to a level of excellence
that I think can be an example for the whole industry. And I think the
dependency on that is simply our continued enthusiastic support of our
employees.
And I have just one comment on that and Brian Hairston mentioned this to me
earlier today that he thought it was interesting and important that you all
know and this is from his point of view, not necessarily my own, although I
feel like what he is saying is true, but you know it's easy for the boss to
hear only what he wants to hear, and so I constantly have to be careful of
that. But I'm told that our employees are embracing what we are talking
about. And that our employees are enthusiastic about doing this. And I will
tell you that my experience in situations in turnarounds, is that 99.5% of
the people in this or most companies want to win, they want to be
successful.
And when you think about it -- I mean this is a roll-up of God knows, how
many different companies. The reason these companies were bought for God's
sake is that they were successful. They knew what they were doing. And they
were used to winning. And we fully intend to recreate that kind of a
situation. This company is not made up of losers, this company is made up of
winners. And I think, frankly, they are pretty sick of being on the downside
of the earnings stream. And I couldn't be happy, which is a long way of
saying, I couldn't be happier with the enthusiastic support, I am getting.
Now, it's a lot easier for me to sit here, and talk about it than it is to
do it. And I did not just fall off the back of a turnip truck. I know that
that's the case, but you got to start, and that's what we have done. I think
we have made huge progress in a very, very short period of time. And I think
more importantly, there's a lot of upside to this company. And when you get
9500 people behind you and when you get a bunch of your customer bases
behind you, I think that speaks volumes.
Just as a little anecdotal side story, I have been involved in a lot of
different industries in my life and a lot of different unpleasant
situations, but I got a letter this week from the President of a union, one
of our unions. And that letter was complimentary, and that letter was
enthusiastic about being supportive, and that letter was a reach out on the
part of a national president of the union to say we want to be a part of
moving this company forward. And for those of you who know me, in a couple
of different situations, you know that I have been hung in effigy by the
best of them. And I take this as a real great sign that we have got that
kind of enthusiastic support, throughout our company. And even though, I
think only by 18% of our work force is unionized, I welcome and I am
delighted to know that that portion of our work force shares our enthusiasm
for the future.
So, let me conclude here and shut up and we will take questions. The second
quarter came in better than the public guidance of indications, that we've
put in place a much more focused organization that is dedicated on getting
results. And we understand the basic premise. Our performance has not been
there. And the company knows it, and we're going to deal with it. We've got
saving plans under way, in progress of $55 million bucks. And on a run rate
basis, we expect that puts us at $190 million EBITDA run rate for next year,
as I mentioned earlier.
And then lastly, and probably as importantly as anything, is the board and I
and, I believe, the entire work force of this company are committed to
acting in all times in the best interest of all our shareholders. And I
mean, all of our shareholders. And we will continue to examine the
alternatives, and the strategic alternatives, the consolidation alternatives
that are available to us as a part of being a significant player in this
industry. I'm pleased to be a part of it. I'm pleased to be a part of this
company.
And with that, Michel, I wanted to turn it back to you and let's do what we
need to do to get open to questions.
14a-12 Disclosure
-----------------
The material contained in this filing is not a proxy statement. On July 12,
2005, Cenveo filed with the Securities and Exchange Commission a proxy
statement in connection with a special meeting of its shareholders. Cenveo
will file with the SEC, and will furnish to Cenveo shareholders, a
definitive proxy statement and may file other proxy soliciting materials.
CENVEO SHAREHOLDERS SHOULD READ THE PROXY STATEMENT AND OTHER RELEVANT
MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. In addition to the documents described above, Cenveo files
annual, quarterly and current reports, proxy statements and other
information with the SEC. The proxy statement and other relevant materials
(when they become available), and any other documents filed with the SEC by
Cenveo are available without charge at the SEC's website, at
http://www.sec.gov, or from Company's Web site at http://www.cenveo.com.
Cenveo and its officers and directors may be deemed to be participants in
the solicitation of proxies from its shareholders in connection with the
requested special meeting of its shareholders. A description of certain
interests of the directors and executive officers of Cenveo is set forth in
Cenveo's proxy statement for its 2005 annual meeting which was filed with
the SEC on March 7, 2005. Additional information regarding the interests of
such potential participants is available in the preliminary proxy statement
that Cenveo has filed with the SEC, and will be included in the definitive
proxy statement and other relevant documents to be filed with the SEC in
connection with the requested special meeting of its shareholders.