Schawk, Inc.
Consolidated Statements of Operations
Three Months Ended September 30, 2007 and 2006
(Unaudited)
(In Thousands, Except Share Amounts)
2007 2006
--------- ---------
Net sales $ 130,874 $ 134,779
Cost of sales 89,394 86,430
Selling, general, and administrative expenses 32,577 32,546
--------- ---------
Operating income 8,903 15,803
Other income (expense):
Interest income 85 84
Interest expense (2,303) (2,720)
--------- ---------
(2,218) (2,636)
--------- ---------
Income from continuing operations before income taxes 6,685 13,167
Income tax provision 2,567 4,961
--------- ---------
Income from continuing operations 4,118 8,206
Loss from discontinued operations, net of tax benefit
of $1 -- (57)
--------- ---------
Net income $ 4,118 $ 8,149
========= =========
Earnings per share:
Basic:
Income from continuing operations $ 0.15 $ 0.31
Income from discontinued operations -- 0.00
--------- ---------
Net income per common share $ 0.15 $ 0.31
========= =========
Diluted:
Income from continuing operations $ 0.15 $ 0.30
Income from discontinued operations -- 0.00
--------- ---------
Net income per common share $ 0.15 $ 0.30
========= =========
Weighted average number of common and common
equivalent shares outstanding:
Basic 26,891 26,446
Diluted 27,797 27,496
Dividends per common share $ 0.0325 $ 0.0325
Schawk, Inc.
Consolidated Statements of Operations
Nine Months Ended September 30, 2007 and 2006
(Unaudited)
(In Thousands, Except Share Amounts)
2007 2006
--------- ---------
Net sales $ 404,884 $ 408,628
Cost of sales 263,790 264,807
Selling, general, and administrative expenses 98,456 101,527
Acquisition integration expenses -- 758
Reserve reversal from litigation settlement -- (2,120)
--------- ---------
Operating income 42,638 43,656
Other income (expense):
Interest income 175 280
Interest expense (7,133) (8,039)
--------- ---------
(6,958) (7,759)
--------- ---------
Income from continuing operations before income taxes 35,680 35,897
Income tax provision 13,772 13,550
--------- ---------
Income from continuing operations 21,908 22,347
Loss from discontinued operations, net of tax benefit
of $241 -- (446)
--------- ---------
Net income $ 21,908 $ 21,901
========= =========
Earnings per share:
Basic:
Income from continuing operations $ 0.82 $ 0.85
Loss from discontinued operations -- (0.02)
--------- ---------
Net income per common share $ 0.82 $ 0.83
========= =========
Diluted:
Income from continuing operations $ 0.79 $ 0.81
Loss from discontinued operations -- (0.02)
--------- ---------
Net income per common share $ 0.79 $ 0.79
========= =========
Weighted average number of common and common
equivalent shares outstanding:
Basic 26,764 26,357
Diluted 27,625 27,682
Dividends per common share $ 0.0975 $ 0.0975
Schawk, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Amounts)
Sep. 30,
2007 Dec. 31,
(Unaudited) 2006
----------- ----------
Assets
Current assets:
Cash and cash equivalents $ 10,614 $ 10,177
Trade accounts receivable, less allowance for
doubtful accounts of $2,310 at September 30,
2007 and $4,621 at December 31, 2006 117,666 127,627
Inventories 24,617 23,575
Prepaid expenses and other 10,991 10,171
Deferred income taxes 8,791 8,580
----------- ----------
Total current assets 172,679 180,130
Property and equipment, less accumulated
depreciation of $91,236 at September 30, 2007
and $82,256 at December 31, 2006 78,269 82,227
Goodwill 259,485 235,501
Intangible assets, net 36,957 35,755
Other assets 4,618 4,633
----------- ----------
Total assets $ 552,008 $ 538,246
=========== ==========
Liabilities and Stockholders’ Equity
Current liabilities:
Trade accounts payable $ 20,557 $ 26,522
Accrued expenses 49,986 51,489
Income taxes payable 15,796 10,249
Current portion of long-term debt and capital
lease obligations 3,590 2,177
----------- ----------
Total current liabilities 89,929 90,437
Long-term debt 126,675 140,751
Capital lease obligations 2 12
Other liabilities 20,048 23,461
Deferred income taxes 11,718 14,657
Stockholders’ equity:
Common stock, $0.008 par value, 40,000,000 shares
authorized, 29,339,862 and 28,989,013 shares
issued at September 30, 2007 and December 31,
2006, respectively; 26,904,799 and 26,555,119
shares outstanding at September 30, 2007 and
December 31, 2006, respectively
232 229
Additional paid-in capital 183,336 178,415
Retained earnings 131,961 113,365
Accumulated comprehensive income 17,295 6,079
----------- ----------
332,824 298,088
Treasury stock, at cost, 2,435,063 and 2,433,894
shares of common stock at September 30, 2007
and December 31, 2006, respectively (29,188) (29,160)
----------- ----------
Total stockholders’ equity 303,636 268,928
----------- ----------
Total liabilities and stockholders’ equity $ 552,008 $ 538,246
=========== ==========
Schawk, Inc.
Regulation G: Reconciliation of Non-GAAP measures to GAAP
Three Months Ended September 30, 2007 and 2006
(In thousands, Except Share Amounts)
2007 2006
-------- ---------
Operating income per GAAP $ 8,903 $ 15,803
Plus: Write off of capitalized internally developed
software costs (Non-GAAP) 4,234 --
-------- ---------
Operating income before write off of capitalized
internally developed software costs (Non-GAAP) $ 13,137 $ 15,803
======== =========
Income from continuing operations before income taxes
per GAAP $ 6,685 $ 13,167
Plus: Write off of capitalized internally developed
software costs (Non-GAAP) 4,234 --
-------- ---------
Income from continuing operations before income taxes
and write off of capitalized internally developed
software costs (Non-GAAP) 10,919 13,167
Income tax provision on Non-GAAP income from continuing
operations 4,193 4,961
-------- ---------
Income from continuing operations before write off of
capitalized internally developed software costs
(Non-GAAP) $ 6,726 $ 8,206
======== =========
Weighted average number of common and common stock
equivalent shares outstanding (GAAP) 27,797 27,496
======== =========
Earnings per share fully diluted from continuing
operations before write off of capitalized internally
developed software costs (Non-GAAP) $ 0.24 $ 0.30
Less: write off of capitalized internally developed
software costs per share fully diluted (Non-GAAP) (.09) --
-------- ---------
Earnings per share fully diluted from continuing
operations per GAAP $ 0.15 $ 0.30
======== =========
Schawk, Inc.
Regulation G: Reconciliation of Non-GAAP measures to GAAP
Nine Months Ended September 30, 2007 and 2006
(In thousands, Except Share Amounts)
2007 2006
--------- ---------
Operating income per GAAP $ 42,638 $ 43,656
Plus: Write off of capitalized internally developed
software costs (Non-GAAP) 4,234 --
Plus: Acquisition integration expenses (Non-GAAP) -- 758
Less: Gain on sale of Orlando facility (Non-GAAP) (1,110) --
Less: Reserve reversal from lawsuit settlement
(Non-GAAP) -- (2,120)
--------- ---------
Operating income before write off of capitalized
internally developed software costs, acquisition
integration expenses, gain on sale of facility and
reserve reversal from lawsuit settlement (Non-GAAP) $ 45,762 $ 42,294
========= =========
Income from continuing operations before income taxes
per GAAP $ 35,680 $ 35,897
Plus: Write off of capitalized internally developed
software costs (Non-GAAP) 4,234 --
Plus: Acquisition integration and restructuring
expenses (Non-GAAP) -- 758
Less: Gain on sale of Orlando facility (Non-GAAP) (1,110) --
Less: Reserve reversal from lawsuit settlement
(Non-GAAP) -- (2,120)
--------- ---------
Income from continuing operations before income
taxes, write off of capitalized internally developed
software costs, integration expenses, gain on sale
of facility and reserve reversal from litigation
settlement (Non-GAAP) 38,804 34,535
Income tax provision on Non-GAAP income from
continuing operations 14,978 13,020
--------- ---------
Income from continuing operations before write off of
capitalized internally developed software costs,
integration expenses, gain on sale of facility and
reserve reversal from litigation settlement
(Non-GAAP) $ 23,826 $ 21,515
========= =========
Weighted average number of common and common stock
equivalent shares outstanding (GAAP) 27,625 27,682
========= =========
Earnings per share fully diluted from continuing
operations before write off of capitalized
internally developed software costs, acquisition
integration expenses, gain on sale of facility and
reserve reversal from litigation settlement
(Non-GAAP) $ 0.86 $ 0.78
Less: write off of capitalized internally developed
software costs per share fully diluted (Non-GAAP) (.09) --
Less: Acquisition integration and restructuring
expenses after tax per share fully diluted
(Non-GAAP) -- (0.02)
Plus: Gain on sale of Orlando facility after tax per
share fully diluted (Non-GAAP) 0.02 --
Plus: Reserve reversal from lawsuit settlement after
tax per share fully diluted (Non-GAAP) -- 0.05
--------- ---------
Earnings per share fully diluted from continuing
operations per GAAP $ 0.79 $ 0.81
========= =========
Contact Information: AT SCHAWK, INC.: James J. Patterson Sr. VP and CFO 847-827-9494 jpatterson@schawk.com AT DRESNER CORPORATE SERVICES: Investors: Philip Kranz 312-780-7240 pkranz@dresnerco.com