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
Schawk, Inc. Announces Preliminary Estimate of Full-Year 2008 Results
| Source: Schawk, Inc.
DES PLAINES, IL--(Marketwire - March 17, 2009) - Schawk, Inc. (NYSE : SGK ), a leading
provider of brand point management services, enabling companies of all
sizes to connect their brands with consumers to create deeper brand
affinity, announced that it anticipates that it will report net sales of
approximately $489.2 million for the year ended December 31, 2008, an
approximate 9.2 percent decrease in net sales relative to the comparable
prior-year period. After giving effect to the estimated goodwill
impairment charge described below, the Company expects to report a
full-year operating loss in the range of $30 to $40 million versus
operating income of $60.5 million in the comparable prior-year period. In
addition, the Company expects to report that its operating results for
full-year 2008 were negatively impacted by approximately $10.4 million of
restructuring related charges, $4.3 million of foreign currency transaction
losses, $6.8 million in increased professional and consulting fees related
to the Company's internal control remediation and related matters, $7.3
million in multi-employer pension plan withdrawal expense, and $6.6 million
of impairment charges related to long-lived assets. The total of these
items is $35.4 million (of which $8.3 million is non-cash) excluding the
goodwill impairment charges as described below. The Company is in the
process of finalizing its results for the year and quarter ended December
31, 2008, and therefore the above estimates are preliminary and subject to
change.
Due to deteriorating economic conditions experienced during the latter half
of 2008, the Company is in the process of determining the amount of certain
impairments for the fourth quarter of 2008 related to goodwill. Although
management is currently completing the valuations required to determine the
extent of the impairment charges, the Company expects the total amount of
the non-cash goodwill impairment charges to be in the range of $20 to $30
million for the fourth quarter and full year of 2008. As the Company has
not completed its analysis of the impairment charges, the foregoing
estimate is preliminary based upon management's current expectations and is
subject to change.
Given the Company's current expectations as to its full-year 2008 operating
results, it is evaluating its compliance with the financial covenants under
its debt agreements. If the Company determines it is not in compliance
with such covenants, it would seek any necessary waivers or amendments from
its lenders. Failure to obtain such waivers or amendments could result in
a default and related acceleration of the Company's debt and render
unavailable additional borrowings under the Company's credit facility. Any
of these events could have a material adverse effect on the Company's
business, financial condition and results of operations. There can be no
assurance that, if the Company determines it is not in compliance with
applicable covenants, it will be able to obtain the necessary waivers or
amendments on commercially reasonable terms, or at all.
The Company is working diligently to finalize its results for the quarter
and year ended December 31, 2008, and will file its Form 10-K for the year
ended December 31, 2008, as soon as its internal review of its financial
results and the audit by the Company's external audit firm is complete.
About Schawk, Inc.
Schawk, Inc., (NYSE : SGK ), is a leading provider of brand point management
services, enabling companies of all sizes to connect their brands with
consumers to create deeper brand affinity. With a global footprint of more
than 60 offices, Schawk helps companies create compelling and consistent
brand experiences by providing integrated strategic, creative and
executional services across brand touchpoints. Founded in 1953, Schawk is
trusted by many of the world's leading organizations to help them achieve
global brand consistency. For more information about Schawk, visit
http://www.schawk.com
Safe Harbor Statement
Certain statements in this press release are forward-looking statements
within the meaning of Section 21E of the Securities and Exchange Act of
1934, as amended and are subject to the safe harbor created thereby. Such
statements are indicated by words such as "anticipate," "expect,"
"believe," other formulations of those terms and similar terms. These
statements are made based upon current expectations and beliefs that are
subject to risk and uncertainty. Actual results might differ materially
from those contained in the forward-looking statements because of factors,
such as, among other things, whether the Company's audited financial
results for the year ended December 31, 2008 will comport with the
preliminary information summarized herein; unanticipated difficulties
associated with our ability to timely complete our review of the accounting
matters described herein; as well as other factors detailed in the
Company's filings with the Securities and Exchange Commission.