##### Table of Contents





SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
  For the fiscal year ended December 31, 2007
  Commission file number
    001-09335
  SCHAWK, INC.
 (Exact name of Registrant as
    specified in its charter)
  Delaware

66-0323724(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)1695 River Road
    Des Plaines, Illinois

60018(Zip Code)(Address of principal executive
    office)   847-827-9494
 (Registrants telephone number, including area code)
  Securities registered pursuant to Section 12 (b) of
    the Act:
  Title of Each Class

Name of Exchange on Which RegisteredClass A Common Stock, $.008 par value

New York Stock Exchange   o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





SCHAWK,
    INC
  FORM 10-K
    ANNUAL REPORT
  TABLE OF
    CONTENTS
  DECEMBER
    31, 2007
   
 PagePART IItem 1.


Business


3Item 1A.


Risk Factors


11Item 1B.


Unresolved Staff Comments


15Item 2.


Properties


15Item 3.


Legal Proceedings


16Item 4.


Submission of Matters to a Vote of Security
    Holders


17PART IIItem 5.


Market for the Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


17Item 6.


Selected Financial Data


19Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


20Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


35Item 8.


Financial Statements and Supplementary Data


37Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosures


83Item 9A.


Controls and Procedures


83Item 9B.


Other Information


88PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


88Item 11.


Executive Compensation


88Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Matters


88Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


88Item 14.


Principal Accountant Fees and Services


88PART IVItem 15.


Exhibits and Financial Statement Schedules


89Signatures





93Addendum to Restated Employment Agreement - Clarence W. SchawkList of SubsidiariesConsent of Independent Registered Public Accounting FirmCertification of Chief Executive OfficerCertification of Chief Financial OfficerSection 906 Certification of CEO and CFO   2




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##### Table of Contents



PART I  ITEM 1.
    BUSINESS  General
        
    ability to service our clients graphic requirements
    throughout the world;
    rapid turnaround and delivery times;
    comprehensive, up-to-date knowledge of the printing press
    specifications of converters and printers located throughout the
    world;
    high quality creative design capabilities and production art
    expertise;
    consistent reproduction of colors across multiple packaging and
    promotional media;
    digital imaging asset management; and
    efficient workflow management.      Graphic
    Services Industry
  Industry services. and/or
 3




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Size of industry.
  start-ups
  Graphic services for consumer products
    companies.
   4




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##### Table of Contents



Factors driving increased demand for our brand image
    solutions.
  Services
  3-D
    Graphic services.
  Brand strategy and creative design. start-ups
  Enterprise products. 3-D
 5




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##### Table of Contents



Competitive
    Strengths
    The Company is a leader in a highly fragmented
    market.
  The Company has direct client
    relationships. on-site on-site
  The Company has a comprehensive service
    offering.
  The Company has unique global
    capabilities.
 6




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The Company generates strong cash flow.
  Strategy
    Capitalizing on our recently enhanced
    platform.
  Matching our services to the needs of our
    clients.
  Pursuing acquisitions opportunistically
  Acquisitions
  and/or
  
    expanding our geographic reach to Europe, Australia and India,
    which benefits our existing clients as they seek to establish
    global brand consistency; and
    increasing and expanding the scope of our global service
    offerings, such as creative design and high end retouching, and
    entering into new markets, such as retail and media.  non-U.S. divisions
 7




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##### Table of Contents



Marketing
    and Distribution
    Clients
  on-site on-site
  and/or
 8




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##### Table of Contents



Competition
        Research
    and Development
  3-D
    Employees
   9




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##### Table of Contents



Backlog
    Seasonality
    and Cyclicality
    Purchasing
    and Raw Materials
    Intellectual
    Property
  ® tm tm tm tm tm tm tm tm tm tm tm tm tm 3-D,
 10




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##### Table of Contents



Available
    Information
  Form 10-K, Form 10-Q, Form 8-K,
  ITEM 1a.
    RISK
    FACTORS  The
    Companys business is sensitive to general economic
    conditions. An economic decline or other circumstances that
    result in reductions in our clients marketing and
    advertising budgets could negatively impact the Companys
    sales volume and revenues and the ability to respond to
    competition or take advantage of business
    opportunities.
    If we
    fail to maintain an effective system of internal controls or
    rectify identified material weaknesses in our internal controls,
    we may not be able to accurately report our financial
    results.
  Form 10-K.
  The
    Companys operating results fluctuate from quarter to
    quarter.
    
    timing of the completion of particular projects or orders;
    material reduction or cancellation of major projects or the loss
    of a major client;
    timing of new business;
    differences in order flows;
    sensitivity to general economic conditions;
    the health of the consumer products industry;
    the relative mix of different types of work with differing
    margins;
    costs relating to the expansion of operations, including costs
    to integrate current and future acquisitions; 11




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##### Table of Contents




    changes in interest costs and tax rates; and
    costs associated with compliance with legal and regulatory
    requirements.    The
    Company is subject to unpredictable order flows.
  project-by-project
  The
    Company is dependent on certain key clients.
    The
    Companys foreign operations are subject to currency
    exchange, political, investment and other risks that could
    hinder the Company from transferring funds out of a foreign
    country, delay our debt service payments, cause the
    Companys operating costs to increase and adversely affect
    its results of operations.
        
    political, social and economic instability;
    war, civil disturbance or acts of terrorism;
    taking of property by nationalization or expropriation without
    fair compensation;
    changes in government policies and regulations;
    imposition of limitations on conversions of foreign currencies
    into dollars or remittance of dividends and other payments by
    foreign subsidiaries; 12




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##### Table of Contents




    imposition or increase of withholding and other taxes on
    remittances and other payments by foreign subsidiaries;
    hyperinflation in certain foreign countries; and
    impositions or increase of investment and other restrictions or
    requirements by foreign governments.  The
    Company operates in a highly competitive industry.
      Failure
    to properly manage the Companys expanding operations may
    adversely impact our business.
    The
    Company may encounter difficulties arising from future
    acquisitions or consolidation efforts.
    
    difficulty in assimilating the operations and personnel of the
    acquired company with our existing operations and realizing
    anticipated synergies;
    the loss of key employees or key clients of the acquired company;
    difficulty in maintaining uniform standards, controls,
    procedures and policies; and
    unrecorded liabilities of acquired companies that the Company
    failed to discover during our due diligence investigations.   13




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The
    loss of key personnel could adversely affect the Companys
    current operations and its ability to achieve continued
    growth.
      Work
    stoppages and other labor relations matters may make it
    substantially more difficult or expensive for us to produce our
    products and services, which could result in decreased sales or
    increased costs, either of which would negatively impact our
    financial condition and results of operations.
    The
    Company is subject to restrictive debt covenants.
    The
    Company remains susceptible to risks associated with
    technological change, including risks based on the services the
    Company provides and may seek to provide in the future as a
    result of technological changes.
   14




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##### Table of Contents



The
    Company may be subject to losses that might not be covered in
    whole or in part by existing insurance coverage. These uninsured
    losses could result in substantial liabilities to us that would
    negatively impact our financial condition.
    ITEM 1b.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    LeaseSquare


Owned/



ExpirationLocation

Feet


Leased

Purpose

Date

DivisionAddison, Texas


3,400


Leased

Operating Facility

July, 2008

Schawk U.S.A.Antwerp, Belgium


39,000


Owned

Operating Facility

N/A

Schawk BelgiumBattle Creek, Michigan


8,862


Leased

Operating Facility

December, 2009

Schawk U.S.A.Bristol, U.K.


9,200


Leased

Subletting

September, 2014

Schawk U.K.Carlstadt, New Jersey


45,000


Vacant

Subletting

February, 2011

Schawk U.S.AChennai, India


10,682


Leased

Operating Facility

September, 2008

Schawk AsiaCherry Hill, New Jersey


10,000


Leased

Operating Facility

January, 2009

Schawk U.S.A.Chicago, Illinois


45,000


Leased

Vacant

September, 2009

N/AChicago, Illinois


68,000


Leased

Operating Facility

December, 2012

AmbrosiChicago, Illinois


42,000


Leased

Operating Facility

June, 2019

Schawk U.S.A.Chicago, Illinois


87,000


Owned

Operating Facility

N/A

AmbrosiChicago, Illinois


11,900


Leased

General Offices

April, 2010

General OfficesCincinnati, Ohio


74,200


Leased

Operating Facility

August, 2009

Schawk U.S.A.Cincinnati, Ohio


12,000


Leased

Operating Facility

August, 2009

Schawk U.S.A.Cincinnati, Ohio


13,200


Leased

Operating Facility

February, 2009

Anthem U.S.A.Cincinnati, Ohio


12,200


Leased

Operating Facility

August, 2012

Anthem U.S.A.Crystal Lake, Illinois


78,800


Owned

Leased

N/A

N/ADes Plaines, Illinois


18,200


Owned

Executive Offices

N/A

Corporate OfficeDes Plaines, Illinois


55,000


Leased

Operating Facility

December, 2010

Schawk U.S.A.Kalamazoo, Michigan


67,000


Owned

Operating Facility

N/A

Schawk U.S.A.Kobe, Japan


800


Leased

Operating Facility

February, 2009

Anthem  AsiaLeeds, U.K.


16,200


Leased

Operating Facility

January, 2010

Schawk U.K.Lithia Springs, Georgia


79,700


Leased

Operating Facility

July, 2009

AmbrosiLondon, U.K.


42,700


Leased

Operating Facility

March, 2015

Schawk U.K.London, U.K.


4,000


Leased

Vacant

November, 2009

Schawk U.K.Los Angeles, California


100,500


Owned

Operating Facility

N/A

Schawk U.S.A.Manchester, U.K


45,200


Leased

Operating Facility

September, 2023

Schawk U.K. 15




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##### Table of Contents



LeaseSquare


Owned/



ExpirationLocation

Feet


Leased

Purpose

Date

DivisionMelbourne, Australia


4,089


Leased

Operating Facility

November, 2008

Anthem AustraliaMinneapolis, Minnesota


31,000


Owned

Operating Facility

N/A

Schawk U.S.A.Mississauga, Canada


58,000


Leased

Operating Facility

December, 2014

Schawk CanadaMt. Olive, New Jersey


12,904


Leased

Operating Facility

August, 2012

Anthem U.S.ANeenah, Wisconsin


1,350


Leased

Operating Facility

September, 2009

Schawk U.S.A.New Berlin, Wisconsin


43,000


Leased

Operating Facility

June, 2008

Schawk U.S.A.New York, New York


10,000


Leased

Operating Facility

December, 2008

Schawk U.S.A.New York, New York


52,500


Leased

Subletting

December, 2012

N/ANew York, New York


8,000


Leased

Subletting

January, 2011

N/ANew York, New York


6,400


Leased

Operating Facility

Month-to-month

AmbrosiNew York, New York


5,000


Leased

Operating Facility

May, 2010

Anthem  U.S.A.Newcastle, U.K.


17,000


Leased

Operating Facility

September, 2015

Schawk U.K.North Ryde, Australia


13,900


Leased

Operating Facility

May, 2011

Schawk AustraliaPenang, Malaysia


2,330


Owned

Operating Facility

N/A

Schawk AsiaPenang, Malaysia


34,000


Owned

Operating Facility

N/A

Schawk AsiaPenang, Malaysia


1,706


Owned

Operating Facility

N/A

Schawk AsiaPlano, Texas


12,300


Leased

Subletting

December, 2011

N/APontiac, Illinois


24,900


Owned

Vacant

N/A

N/AQueretaro, Mexico


18,000


Owned

Operating Facility

N/A

Schawk MexicoRedmond, Washington


24,000


Leased

Operating Facility

April, 2017

Schawk U.S.A.Roseville, Minnesota


28,000


Leased

Operating Facility

May, 2009

Schawk U.S.A.San Francisco, CA


18,200


Leased

Operating Facility

April, 2010

Schawk U.S.A.San Francisco, CA


8,100


Leased

Operating Facility

September, 2008

Anthem U.S.A.Santa Ana, CA


9,645


Leased

Operating Facility

July, 2011

Anthem  U.S.A.Shanghai, China


19,400


Leased

Operating Facility

November, 2008

Schawk AsiaShenzhen, China


7,100


Leased

Operating Facility

December, 2008

Schawk ShenzhenShenzhen, China


11,300


Leased

Operating Facility

July, 2008

Anthem  ShenzhenSingapore


7,750


Leased

Operating Facility

November, 2010

Schawk AsiaSlough, U.K


3,000


Leased

Subletting

January, 2010

Schawk U.K.Smyrna, Georgia


25,200


Leased

Operating Facility

October, 2008

Schawk U.S.A.Stamford, Connecticut


20,000


Leased

Operating Facility

August, 2010

Schawk U.S.A.Sterling Heights, MI


26,400


Leased

Operating Facility

December, 2012

Schawk U.S.A.Surry Hills, Australia


3,916


Leased

Operating Facility

November, 2008

Anthem AustraliaSwindon, U.K


39,000


Leased

Vacant

September, 2018

Schawk U.K.Tokyo, Japan


120


Leased

Operating Facility

January, 2009

Schawk AsiaToronto, Canada


8,300


Leased

Operating Facility

January, 2010

Anthem CanadaToronto, Canada


17,500


Leased

Operating Facility

November, 2008

Schawk CanadaToronto, Canada


13,600


Leased

Operating Facility

February, 2010

Schawk CanadaTunbridge Wells, U.K


6,400


Leased

Subletting

March, 2009

Schawk U.K.   ITEM 3.
    LEGAL
    PROCEEDINGS   16




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##### Table of Contents



ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II  ITEM 5.
    MARKET
    FOR THE REGISTRANTS COMMON STOCK, RELATED STOCKHOLDER
    MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES  Stock
    Prices
      Quarter Ended:

2007 High/Low


2006 High/LowMarch 31

$
19.62 - 17.00


$
26.22 - 20.27June 30


21.97 - 17.75



26.15 - 17.34September 30


23.89 - 17.21



19.57 - 15.11December 31


24.71 - 13.53



20.97 - 17.58   Dividends
    Declared Per Class A Common Share
  Quarter Ended:

2007


2006March 31

$
0.0325


$
0.0325June 30


0.0325



0.0325September 30


0.0325



0.0325December 31


0.0325



0.0325Total

$
0.1300


$
0.1300    17




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##### Table of Contents



Peer Group
  Comparison
    of 5 Year Cumulative Total Return
    Assumes Initial Investment of $100*
    December 2007
  
    *
    
    The graph assumes that $100 was invested on December 31,
    2002 in each of Schawk, Inc. common stock, the Russell 2000
    Index and the Peer Group Index, and that all dividends were
    reinvested. The Peer Group Index is weighted by market
    capitalization.  Equity
    Compensation Plan Information
    Number ofSecuritiesNumber of





Remaining AvailableSecurities to be





for Future IssuanceIssued Upon


Weighted-Average


Under EquityExercise of


Exercise Price of


Compensation PlansOutstanding


Outstanding


(Excluding SharesOptions, Warrants


Options, Warrants


Reflected in thePlan Category

and Rights


and Rights


First Column)Equity compensation plans approved by security holders


2,973


$
12.45



1,411Equity compensation plans not approved by security holders










TOTAL


2,973


$
12.45



1,411   Purchases
    of Equity Securities by the Company
   18




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##### Table of Contents



No. Shares


Dollar Value ofTotal No.


Avg. Price


Purchased as Part


Shares That may beShares


Paid per


of Publicly


Purchased UnderPeriod

Purchased


Share


Announced Program


ProgramJanuary














February














March














April














May


2,146


$
19.80







June














July














August














September














October














November














December














2007 Total


2,146


$
19.80







   ITEM 6.
    SELECTED
    FINANCIAL DATA  Year Ended December 31,2007


2006(1)


2005(2)


2004(3)


2003(Restated)


(Restated)


(Restated)(In thousands, except per share amounts)CONSOLIDATED INCOME STATEMENT INFORMATIONNet sales

$
544,409


$
546,118


$
565,485


$
237,219


$
201,031Income from continuing operations


30,598



25,949



28,522



21,303



16,984Income per common share from continuing operations:Basic

$
1.14


$
0.98


$
1.12


$
0.99


$
0.79Diluted

$
1.10


$
0.95



1.06



0.95



0.78CONSOLIDATED BALANCE SHEET INFORMATIONTotal assets


538,514



533,727



555,586



219,491



159,691Long-term debt


105,942



140,763



169,579



39,964



21,021OTHER DATACash dividends per common share

$
0.13


$
0.13


$
0.13


$
0.13


$
0.13       (1)
    
    Consolidated Income Statement and Balance Sheet Information was
    impacted by the disposition of the Book and Catalogue operations
    on February 28, 2006. See Note 4 to the Consolidated
    Financial Statements. 19




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##### Table of Contents



(2)
    
    Consolidated Income Statement and Consolidated Balance Sheet
    Information was impacted by the acquisition of Seven on
    January 31, 2005 and the acquisition of Winnetts on
    December 31, 2004. See Note 3 to the Consolidated
    Financial Statements.(3)
    
    Consolidated Balance Sheet Information was impacted by the
    acquisition of Winnetts on December 31, 2004. See
    Note 3 to the Consolidated Financial Statements.  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  (Thousands of dollars, except per share amounts)
  Cautionary
    Statement Regarding Forward-Looking Information
    EXECUTIVE-LEVEL OVERVIEW
      
    Planning and Messaging
    Strategic Design
    Content Creation
    File Building
    Retouching
    Art Production
    Pre-Media 20




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##### Table of Contents



Acquisitions
    Protopak Innovations, Inc.
 21




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##### Table of Contents



Perks Design Partners Pty Ltd.
  Benchmark Marketing Services, LLC.
  Schawk India, Ltd.
  WBK, Inc.
  Anthem York.
  Seven Worldwide, Inc.
   22




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##### Table of Contents



Business Combinations
  Winnetts.
      Discontinued
    Operations
    Restatement
    of Prior Period Financial Statements
   23




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##### Table of Contents



Internal
    Control
    Revenue
    Recognition
  Form 10-Q
  97-2 Software Revenue Recognition 98-9 Software Revenue Recognition, with Respect to Certain
    Transactions No. 00-21 Revenue Arrangements with Multiple
    Deliverables
  Accounting
    for Capitalized Software Costs
  Software developed for sale to third
    parties. Form 10-Q Accounting
    for the Costs of Computer Software to be Sold, Leased or
    Otherwise Marketed
  Software developed for internal
    use. 98-1 Accounting for the Costs of Computer Software Developed
    or Obtained for Internal Use.
  Accounting
    for Income Taxes
   24




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##### Table of Contents



Entity-level
    controls
    Form 10-K.
  Remediation
    of Material Weaknesses
    Revenue recognition.
  97-2 Software Revenue Recognition 98-9 Software Revenue Recognition, with Respect to Certain
    Transactions No. 00-21 Revenue Arrangements with Multiple
    Deliverables
  Accounting for Internal Use software
    costs. 98-1 Accounting for the Costs of Computer Software Developed
    or Obtained for Internal Use.
  Accounting for income taxes.
 25




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##### Table of Contents



Entity-level controls.
  RESULTS
    OF OPERATIONS
    YEARS ENDED DECEMBER 31, 2007 and 2006
  Schawk,
    Inc.
  Comparative
    Consolidated Statements of Operations
 Years
    Ended December 31, 2007 and 2006
  $


%2007


2006


Change


ChangeRestated(In thousands)Net sales

$
544,409


$
546,118


$
(1,709
)


(0.3
)%Cost of sales


352,015



356,149



(4,134
)


(1.2
)%Gross profit


192,394



189,969



2,425



1.3
%Gross margin percentage


35.3
%


34.8
%Selling, general and administrative expenses


132,221



137,995



(5,774
)


(4.2
)%Acquisition integration and restructuring expenses






3,933



(3,933
)


nmReserve reversal from litigation settlements






(6,871
)


6,871



nmOperating income


60,173



54,912



5,261



9.6
%Operating margin percentage


11.1
%


10.1
%Other income (expense):Interest and dividend income


297



467



(170
)


(36.4
)%Interest expense


(9,214
)


(10,617
)


1,403



(13.2
)%(8,917
)


(10,150
)


1,233



12.1
%Income from continuing operations before income taxes


51,256



44,762



6,494



14.5
%Income tax provision


20,658



18,813



1,845



9.8
%Income from continuing operations


30,598



25,949



4,649



17.9
%Income (loss) from discontinued operations






(1,332
)


1,332



nmNet income

$
30,598


$
24,617


$
5,981



24.3
%Effective income tax rate


40.3
%


42.0
%         Net Sales
 26




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##### Table of Contents



Gross margin
  Operating income
    Other income (expense)
  Income tax provision
  Business
    Combinations,
   27




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##### Table of Contents



RESULTS
    OF OPERATIONS
    YEARS ENDED DECEMBER 31, 2006 and 2005
  Schawk,
    Inc.
  Comparative
    Consolidated Statements of Operations
    Years Ended December 31, 2006 and 2005
  $


%2006


2005


Change


ChangeRestated


Restated(In thousands)Net sales

$
546,118


$
565,485


$
(19,367
)


(3.4
)%Cost of sales


356,149



370,413



(14,264
)


(3.9
)%Gross profit


189,969



195,072



(5,103
)


(2.6
)%Gross margin percentage


34.8
%


34.5
%Selling, general and administrative expenses


137,995



134,612



3,383



2.5
%Acquisition integration and restructuring expenses


3,933



6,898



(2,965
)


(43.0
)%Reserve reversal from litigation settlements


(6,871
)






(6,871
)


nmOperating income


54,912



53,562



1,350



2.5
%Operating margin percentage


10.1
%


9.5
%Other income (expense):Interest and dividend income


467



359



108



30.1
%Interest expense


(10,617
)


(9,003
)


(1,614
)


(17.9
)%Other income (expense)






498



(498
)


nm(10,150
)


(8,146
)


(2,004
)


(24.6
)%Income from continuing operations before income taxes


44,762



45,416



(654
)


(1.4
)%Income tax provision


18,813



16,894



1,919



11.4
%Income from continuing operations


25,949



28,522



(2,573
)


(9.0
)%Income (loss) from discontinued operations


(1,332
)


982



(2,314
)


nmNet income

$
24,617


$
29,504


$
(4,887
)


(16.6
)%Effective income tax rate


42.0
%


37.2
%         Net sales
   28




---



##### Table of Contents



Gross margin
  Operating income
        Other income (expense)
  Income tax provision
 29




---



##### Table of Contents



LIQUIDITY
    AND CAPITAL RESOURCES
    Cash
    provided by (used in) Operating Activities
      Cash
    used in Investing Activities
    Cash
    provided by (used in) Financing Activities
       30




---



##### Table of Contents



SEASONALITY
    Off-Balance
    Sheet Arrangements and Contractual Obligations
     31




---



##### Table of Contents



Payments Due by PeriodLess








MoreThan 1


1-3


3-5


Than 5Contractual Obligations

Total


Year


Years


Years


YearsLong-Term Debt Obligations

$
110,375


$
4,433


$
53,799


$
47,142


$
5,001Interest on Long-Term Debt(1)


12,668



3,605



6,322



2,494



247Operating Lease Obligations


66,557



14,885



22,672



14,082



14,918Purchase Obligations


4,735



4,735











Deferred Compensation


1,975



12



11



11



1,941Uncertain tax positions(2),(3)


16,188



8,142



8,046







Total

$
212,498


$
35,812


$
90,850


$
63,729


$
22,107     (1)
    
    Reflects scheduled interest payments on fixed-rate debt.
    Variable-rate interest on approximately $37,500 of variable rate
    debt under our revolving credit agreement as of
    December 31, 2007 is excluded because regular interest
    payments are not scheduled and fluctuate depending on
    outstanding principal balance and market-rate interest levels.(2)
    
    Represents liability related to uncertain tax positions.
    Excludes $1,751 of uncertain tax positions for which payment
    dates cannot be reasonably estimated.(3)
    
    Included in the amount due in less than one year is $6,000 paid
    in February 2008 to settle IRS audits of Seven, Inc for
    pre-acquisition years
    1996-2003.
    The Company believes it is entitled to a reimbursement of this
    amount from an escrow account established as part of the
    Companys acquisition of Seven in 2005. See Kohlberg
    Indemnity discussion in the Acquisitions  Seven
    Worldwide, Inc. section of Managements Discussion and
    Analysis for more information.      Critical
    accounting estimates
    Accounts Receivable.
 32




---



##### Table of Contents



Impairment of Long-Lived Assets.
  Goodwill and Other Acquired Intangible
    Assets.
  Goodwill and Other
    Intangible Assets (as amended) Disclosures about
    Segments of an Enterprise and Related Information and/or
 33




---



##### Table of Contents



Income Taxes. Accounting for Uncertainty in Income Taxes (as
    amended)  an interpretation of FASB Statement
    No. 109
    Exit Reserves.
  New
    Accounting Pronouncements
  Fair Value Measurements (SFAS No. 157
  The Fair Value Option for Financial Assets and
    Financial Liabilities
    (SFAS No. 159
 34




---



##### Table of Contents



Business Combinations (SFAS No. 141(R) Business Combinations
    Non-controlling Interests in Consolidated Financial
    Statements  an amendment of
    ARB No. 51
    (SFAS No. 160
  Impact
    of Inflation
    ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Interest
    Rate Exposure
   35




---



##### Table of Contents



Foreign
    Exchange Exposure
  non-U.S. based
 36




---



##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Index
    to Financial Statements
  PageReport of Independent Registered Public
    Accounting Firm


38FINANCIAL STATEMENTS:Consolidated Balance Sheets 
    December 31, 2007 and 2006


39Consolidated Statements of Operations 
    Years Ended December 31, 2007, 2006 and 2005


40Consolidated Statements of Cash Flows 
    Years Ended December 31, 2007, 2006 and 2005


41Consolidated Statements of Stockholders
    Equity  Years Ended December 31, 2007, 2006 and
    2005


42Notes to Consolidated Financial Statements


43FINANCIAL STATEMENT SCHEDULES:SCHEDULE II  Valuation
    Reserves


92  37




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm                 
    38




---



##### Table of Contents



Schawk,
    Inc.
  Consolidated
    Balance Sheets
  December 312007


2006(Restated)(In thousands)ASSETSCurrent assets:Cash and cash equivalents

$
11,754


$
10,177Trade accounts receivable, less allowance for doubtful accounts
    of $2,063 in 2007 and $2,255 in 2006


113,215



128,623Inventories


21,902



22,220Prepaid expenses and other


13,524



11,039Deferred income taxes


4,755



8,580Total current assets


165,150



180,639Property and equipment, net


77,083



75,850Goodwill


249,895



236,972Intangible assets


41,528



35,755Other assets


4,858



4,511Total assets

$
538,514


$
533,727LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Trade accounts payable

$
26,308


$
25,738Accrued expenses


52,420



52,487Income taxes payable


4,754



7,112Current portion of long-term debt


4,433



2,177Total current liabilities


87,915



87,514Long-term debt


105,942



140,763Other long-term liabilities


24,547



25,181Deferred income taxes


15,814



16,103Stockholders Equity:Common stock, $0.008 par value, 40,000,000 shares
    authorized, 29,213,166 and 28,821,875 shares issued at
    December 31, 2007 and 2006, respectively; 27,013,482 and
    26,620,810 shares outstanding at December 31, 2007 and
    2006, respectively


216



212Additional paid-in capital


184,110



178,432Retained earnings


133,648



107,251Accumulated comprehensive income, net


15,498



7,431333,472



293,326Treasury stock, at cost, 2,199,684 and 2,201,065 shares of
    common stock at December 31, 2007 and 2006, respectively


(29,176
)


(29,160
)Total stockholders equity


304,296



264,166Total liabilities and stockholders equity

$
538,514


$
533,727    39




---



##### Table of Contents



Schawk,
    Inc.
  Consolidated
    Statements of Operations
  Years Ended December 312007


2006


2005(Restated)


(Restated)(In thousands, except per share amounts)Net sales

$
544,409


$
546,118


$
565,485Cost of sales


352,015



356,149



370,413Gross profit


192,394



189,969



195,072Selling, general, and administrative expenses


132,221



137,995



134,612Acquisition integration and restructuring expenses






3,933



6,898Reserve reversal from litigation settlement






(6,871
)


Operating income


60,173



54,912



53,562Other income (expense):Interest and dividend income


297



467



359Interest expense


(9,214
)


(10,617
)


(9,003
)Other










498(8,917
)


(10,150
)


(8,146
)Income from continuing operations before income taxes


51,256



44,762



45,416Income tax provision


20,658



18,813



16,894Income from continuing operations


30,598



25,949



28,522Income (loss) from discontinued operations, net of tax (benefit)
    expense of ($851) in 2006 and $617 in 2005






(1,332
)


982Net income

$
30,598


$
24,617


$
29,504Earnings per share:Basic:Income from continuing operations

$
1.14


$
0.98


$
1.12Income (loss) from discontinued operations

$



$
(0.05
)

$
0.04Net income per common share

$
1.14


$
0.93


$
1.16Diluted:Income from continuing operations

$
1.10


$
0.95


$
1.06Income (loss) from discontinued operations

$



$
(0.05
)

$
0.03Net income per common share

$
1.10


$
0.90


$
1.09Weighted average shares outstanding:Basic


26,869



26,393



25,529Diluted


27,701



27,395



26,963Dividends per Class A common share

$
0.13


$
0.13


$
0.13    40




---



##### Table of Contents



Schawk,
    Inc.
  Consolidated
    Statements of Cash Flows
  Years Ended December 312007


2006


2005(Restated)


(Restated)(In thousands)Operating activitiesNet income

$
30,598


$
24,617


$
29,504Adjustments to reconcile net income to cash provided by
    operating activities:Depreciation


17,574



19,051



20,323Amortization


3,779



3,466



4,443Impairment write-down of fixed assets










1,022Impairment write-down of intangible assets


1,197







Deferred income taxes


1,323



(9,826
)


2,761Reserve reversal from litigation settlement






(6,871
)


Loss (gain) realized on sale of equipment


(852
)


532



295Share-based compensation expense


1,011



1,059



Tax benefit from stock options exercised


(608
)


(1,662
)


1,657Changes in operating assets and liabilities, net of effects from
    acquisitions:Trade accounts receivable


21,204



(3,568
)


(6,997
)Inventories


883



1,564



2,961Prepaid expenses and other


(3,971
)


11



(1,114
)Trade accounts payable and accrued expenses


(5,884
)


(20,130
)


(22,918
)Income taxes refundable/payable


4,175



19,952



(522
)Net cash provided by operating activities


70,429



28,195



31,415Investing activitiesProceeds from disposal of property and equipment


2,605



4,551



2,213Proceeds from sale of business






28,184



Purchases of property and equipment


(18,121
)


(24,662
)


(18,779
)Acquisitions, net of cash acquired


(21,384
)


(9,747
)


(135,301
)Other


(261
)


(112
)


19Net cash used in investing activities


(37,161
)


(1,786
)


(151,848
)Financing activitiesProceeds from debt










151,825Issuance of common stock


4,116



6,921



4,284Principal payments on debt


(33,408
)


(27,514
)


(27,841
)Principal payments on capital lease obligations


(37
)


(492
)


(647
)Tax benefit from stock options exercised


608



1,662



Cash dividends


(3,474
)


(3,424
)


(3,354
)Purchase of common stock


(42
)


(1,223
)


(3,115
)Capitalized loan fees










(580
)Increase in deferred compensation liability










302Net cash provided by (used in) financing activities


(32,237
)


(24,070
)


120,874Effect of foreign currency rate changes


546



319



(190
)Net increase in cash and cash equivalents


1,577



2,658



251Cash and cash equivalents beginning of period


10,177



7,519



7,268Cash and cash equivalents end of period

$
11,754


$
10,177


$
7,519Supplementary disclosure of cash flow information:Dividends issued in the form of Class A common stock

$
24


$
23


$
24Cash paid for interest


7,574



8,898



7,355Cash paid for income taxes


15,923



3,686



14,559Common stock issued for acquisitions










70,520    41




---



##### Table of Contents



Schawk,
    Inc.



Consolidated
    Statements of Stockholders Equity

Years
    Ended December 31, 2005 (Restated), 2006 (Restated) and
    2007  Class ACommon


Class A


Additional





Accumulated





TotalShares


Common


Paid-In


Retained


Comprehensive


Treasury


StockholdersOutstanding


Stock


Capital


Earnings


Income


Stock


Equity(In thousands except share amounts)Balance at December 31, 2004 (As Originally Reported)


21,816,879


$
191


$
92,350


$
61,330


$
2,442


$
(24,873
)

$
131,440Restatement adjustments






(17
)


17



(1,375
)










(1,375
)Balance at December 31, 2004 (Restated)


21,816,879



174



92,367



59,955



2,442



(24,873
)


130,065Net income














29,504











29,504Foreign currency translation adjustment


















(509
)






(509
)Total comprehensive income


























28,995Sale of Class A common stock


779,025



1



2,963















2,964Tax benefit from stock options exercised










1,657















1,657Purchase of Class A treasury stock


(611,554
)


















(3,115
)


(3,115
)Stock issued under employee stock purchase plan


85,187



1



1,319















1,320Stock issued for acquisitions


4,000,000



32



70,488















70,520Issuance of Class A common stock under dividend
    reinvestment program


1,210











(24
)






25



1Cash dividends














(3,354
)










(3,354
)Balance at December 31, 2005


26,070,747



208



168,794



86,081



1,933



(27,963
)


229,053Net income














24,617











24,617Foreign currency translation adjustment


















5,498







5,498Total comprehensive income


























30,115Sale of Class A common stock


559,086



3



5,814















5,817Tax benefit from stock options exercised










1,662















1,662Purchase of Class A treasury stock


(64,281
)


















(1,223
)


(1,223
)Stock issued under employee stock purchase plan


53,929



1



1,103















1,104Stock-based compensation expense










1,059















1,059Issuance of Class A common stock under dividend
    reinvestment program


1,329











(23
)






26



3Cash dividends














(3,424
)










(3,424
)Balance at December 31, 2006


26,620,810



212



178,432



107,251



7,431



(29,160
)


264,166Net income














30,598











30,598Foreign currency translation adjustment


















8,067







8,067Total comprehensive income


























38,665Adoption of FIN 48










(53
)


(703
)










(756
)Sale of Class A common stock


345,754



3



3,266















3,269Tax benefit from stock options exercised










608















608Purchase of Class A treasury stock


(2,146
)


















(42
)


(42
)Stock issued under employee stock purchase plan


47,683



1



846















847Stock-based compensation expense










1,011















1,011Issuance of Class A common stock under dividend
    reinvestment program


1,381











(24
)






26



2Cash dividends














(3,474
)










(3,474
)Balance at December 31, 2007


27,013,482


$
216


$
184,110


$
133,648


$
15,498


$
(29,176
)

$
304,296    42




---



##### Table of Contents



Schawk,
    Inc.
  Notes
    to Consolidated Financial Statements
 (In
    thousands, except per share amounts)
  NOTE 1.
    Basis of
    Presentation, Restatement of Previously Issued Financial
    Statements and Description of Business      Computer
    software capitalized for sale to customers
  Accounting
    for the Costs of Computer Software to be Sold, Leased or
    Otherwise Marketed
  Software
    developed for internal use
  98-1 Accounting for the Costs of Computer Software Developed
    or Obtained for Internal Use (SOP 98-1).
  Software
    revenue recognition
  97-2 Software Revenue Recognition 98-9 Software Revenue Recognition, with Respect to Certain
    Transactions No. 00-21 Revenue Arrangements with Multiple
    Deliverables. 98-9
 43




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  Other
    revenue recognition adjustments
  Revenue Recognition
  Reserve
    reversal from litigation settlements
    Inventory
    valuation adjustments
  work-in-process work-in-process
  Goodwill
    adjustments
    Other
    adjustments
    Income
    tax adjustments
   44




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
    January 1, 2005Net Income


Retained2006


2005


EarningsAs reported  retained earnings January 1, 2005









$
61,330As reported  income from continuing operations

$
29,523


$
29,687Pre-tax adjustments:Software capitalized for sale to customers


(1,482
)


(341
)


(1,344
)Software developed for internal use


(1,433
)


(1,777
)Software revenue recognition


(440
)


84



(496
)Other revenue recognition adjustments


(384
)


693Reserve reversal from litigation settlements


1,751



Inventory valuation adjustments


(651
)


(629
)Goodwill adjustments






119Other adjustments, net


(840
)


(183
)


(452
)Total adjustments to income from continuing operations before
    taxes


(3,479
)


(2,034
)Related tax effects of adjustments noted above 
    (provision) benefit


1,351



869Tax adjustment  UK valuation allowance


(1,446
)Total adjustments to income from continuing operations after
    taxes


(3,574
)


(1,165
)As restated  income from continuing operations

$
25,949


$
28,522As reported  income (loss) from discontinued
    operations

$
(1,135
)

$
785Other revenue recognition adjustments, net of tax


(197
)


197As restated  income (loss) from discontinued
    operations

$
(1,332
)

$
982As restated  net income

$
24,617


$
29,504Total adjustments to retained earnings before tax










(2,292
)Total adjustments to retained earnings  tax effect










917Total adjustments to retained earnings after tax










(1,375
)As restated  retained earnings January 1, 2005









$
59,955  45




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
    2006


2005Basic earnings per share:Income from continuing operationsAs reported

$
1.12


$
1.16Adjustments

$
(0.14
)

$
(0.04
)As restated

$
0.98


$
1.12Income (loss) from discontinued operationsAs reported

$
(0.04
)

$
0.03Adjustments

$
(0.01
)

$
0.01As restated

$
(0.05
)

$
0.04Net income per common shareAs reported

$
1.08


$
1.19Adjustments

$
(0.15
)

$
(0.03
)As restated

$
0.93


$
1.16Diluted earnings per share:Income from continuing operationsAs reported

$
1.08


$
1.10Adjustments

$
(0.13
)

$
(0.04
)As restated

$
0.95


$
1.06Income (loss) from discontinued operationsAs reported

$
(0.04
)

$
0.03Adjustments

$
(0.01
)

$
0.00As restated

$
(0.05
)

$
0.03Net income per common shareAs reported

$
1.04


$
1.13Adjustments

$
(0.14
)

$
(0.04
)As restated

$
0.90


$
1.09  46




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
    Consolidated
    Statement of Operations
  2006


2005Previously





PreviouslyReported


Restated


Reported


RestatedNet sales

$
548,406


$
546,118


$
562,104


$
565,485Cost of sales


355,375



356,149



367,455



370,413Gross profit


193,031



189,969



194,649



195,072Selling, general, and administrative expenses


135,728



137,995



132,559



134,612Acquisition integration and restructuring expenses


3,933



3,933



6,898



6,898Reserve reversal from litigation settlements


(5,120
)


(6,871
)






Operating income


58,490



54,912



55,192



53,562Other income (expense):Interest and dividend income


467



467



359



359Interest expense


(10,716
)


(10,617
)


(8,599
)


(9,003
)Other










498



498(10,249
)


(10,150
)


(7,742
)


(8,146
)Income from continuing operations before income taxes


48,241



44,762



47,450



45,416Income tax provision


18,718



18,813



17,763



16,894Income from continuing operations


29,523



25,949



29,687



28,522Income (loss) from discontinued operations, net of tax


(1,135
)


(1,332
)


785



982Net income

$
28,388


$
24,617


$
30,472


$
29,504  47




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  Consolidated
    Balance Sheets
  December 31, 2006PreviouslyReported


RestatedAssetsCurrent assets:Cash and cash equivalents

$
10,177


$
10,177Trade accounts receivable, less allowance for doubtful accounts
    of $4,621 and $2,255, respectively


127,627



128,623Inventories


23,575



22,220Prepaid expenses and other


10,171



11,039Deferred income taxes


8,580



8,580Total current assets


180,130



180,639Property and equipment, net


82,227



75,850Goodwill


235,501



236,972Intangible assets


35,755



35,755Other assets


4,633



4,511Total assets

$
538,246


$
533,727Liabilities and Stockholders EquityCurrent liabilities:Trade accounts payable

$
26,522


$
25,738Accrued expenses


51,489



52,487Income taxes payable


10,249



7,112Current portion of long-term debt


2,177



2,177Total current liabilities


90,437



87,514Long-term debt


140,763



140,763Other long-term liabilities


23,461



25,181Deferred income taxes


14,657



16,103Stockholders Equity:Common stock


229



212Additional paid-in capital


178,415



178,432Retained earnings


113,365



107,251Accumulated comprehensive income, net


6,079



7,431298,088



293,326Treasury stock, at cost


(29,160
)


(29,160
)Total stockholders equity


268,928



264,166Total liabilities and stockholders equity

$
538,246


$
533,727  48




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  Consolidated
    Statements of Cash Flow
  2006


2005Previously





PreviouslyReported


Restated


Reported


RestatedOperating activitiesNet income

$
28,388


$
24,617


$
30,472


$
29,504Adjustments to reconcile net income to cash provided by
    operating activities:Depreciation


21,245



19,051



22,606



20,323Amortization


3,466



3,466



4,443



4,443Impairment write-down of fixed assets














1,022Deferred income taxes


(11,272
)


(9,826
)


2,761



2,761Reserve reversal from litigation settlements


(5,120
)


(6,871
)






Gain realized on sale of equipment


532



532



295



295Share-based compensation expense


1,059



1,059







Tax benefit from stock options exercised


(1,662
)


(1,662
)


1,657



1,657Changes in operating assets and liabilities, net of effects from
    acquisitions:Trade accounts receivable


(4,650
)


(3,568
)


(4,919
)


(6,997
)Inventories


2,223



1,564



947



2,961Prepaid expenses and other


817



11



(1,033
)


(1,114
)Trade accounts payable and accrued expenses


(22,918
)


(20,130
)


(22,795
)


(22,918
)Income taxes refundable/payable


21,303



19,952



347



(522
)Net cash provided by operating activities


33,411



28,195



34,781



31,415Investing activitiesProceeds from disposal of property and equipment


4,551



4,551



2,213



2,213Proceeds from sale of business


28,184



28,184







Purchases of property and equipment


(29,771
)


(24,662
)


(22,158
)


(18,779
)Acquisitions, net of cash acquired


(9,747
)


(9,747
)


(205,702
)


(135,301
)Other


(219
)


(112
)


(87
)


19Net cash used in investing activities


(7,002
)


(1,786
)


(225,734
)


(151,848
)Financing activitiesProceeds from debt










151,825



151,825Issuance of common stock


6,921



6,921



74,805



4,284Principal payments on debt


(27,514
)


(27,514
)


(27,841
)


(27,841
)Principal payments on capital lease obligations


(492
)


(492
)


(648
)


(647
)Tax benefit from stock options exercised


1,662



1,662







Cash dividends


(3,424
)


(3,424
)


(3,354
)


(3,354
)Purchase of common stock


(1,223
)


(1,223
)


(3,115
)


(3,115
)Capitalized loan fees










(580
)


(580
)Increase in deferred compensation liability










302



302Net cash provided by (used in) financing activities


(24,070
)


(24,070
)


191,394



120,874Effect of foreign currency rate changes on cash


319



319



(190
)


(190
)Net increase in cash and cash equivalents


2,658



2,658



251



251Cash and cash equivalents beginning of period


7,519



7,519



7,268



7,268Cash and cash equivalents end of period

$
10,177


$
10,177


$
7,519


$
7,519Supplementary disclosure of cash flow information:Dividends issued in the form of Class A common stock

$
23


$
23


$
24


$
24Cash paid for interest


8,898



8,898



7,355



7,355Cash paid for income taxes


3,686



3,686



14,559



14,559Common stock issued for acquisitions














70,520  49




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  NOTE 2.
    Summary
    of Significant Accounting Policies  Principles
    of Consolidation
    Cash
    Equivalents
    Accounts
    Receivable and Concentration of Credit Risk
    Inventories
  Work-in-process
  Property
    and Equipment
    Goodwill
   50




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
    Software
    Developed for Internal Use
  98-1 Accounting for the Costs of Computer Software Developed
    or Obtained for Internal Use.
  Software
    Developed for Sale to Customers
  Accounting for the Costs of Computer
    Software to be Sold, Leased or Otherwise Marketed.
  Long-lived
    Assets
    Revenue
    Recognition
    and/or No. 00-21, (EITF 00-21). EITF 00-21
 51




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  97-2,
  Vendor
    Rebates
  EITF 02-16,
  Customer
    Rebates
    Shipping
    and Handling Fees and Costs
  Net sales jobs-in-progress Cost of sales
  Income
    Taxes
     52




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
    Use of
    Estimates
    Foreign
    Currency Translation
    Fair
    Value of Financial Instruments
    December 31,2007

2006Fair value of fixed-rate notes payable

$
71,487


$
72,625Carrying value of fixed-rate notes payable


72,857



75,000   Stock
    Based Compensation
  Share-Based Payments,
    (SFAS 123R Accounting for Stock Issued to
    Employees (APB 25
 53




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
      New
    Accounting Pronouncements
  Fair Value Measurements (SFAS No. 157
  The Fair Value Option for Financial Assets and
    Financial Liabilities
    (SFAS No. 159
  Business Combinations (SFAS No. 141(R) Business Combinations
   54




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
    Non controlling Interests in Consolidated Financial
    Statements  an amendment of
    ARB No. 51
    (SFAS No. 160
  NOTE 3.
    Acquisitions  Perks
    Design Partners Pty Ltd.
      Trade accounts receivable

$
790Inventory


40Other current assets


10Fixed assets


330Goodwill


859Customer relationships


1,117Non compete agreement


52Trade name


43Other assets


8Accounts payable


(258
)Income tax payable


(123
)Other current liabilities


(306
)Total cash paid at closing, net of $876 cash acquired

$
2,562  55




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
      Protopak
    Innovations, Inc.
  U.S.-based
    Trade accounts receivable

$
836Other current assets


132Fixed assets


480Goodwill


7,287Customer relationships


4,736Non-compete agreement


379Trade names


284Accounts payable


(52
)Income tax payable


(84
)Deferred income taxes


(2,176
)Total cash paid at closing, net of $269 cash acquired

$
11,822    56




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
    Schawk
    India, Ltd.
      Benchmark
    Marketing Services, LLC
   57




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
    Trade accounts receivable

$
1,854Inventory


84Other current assets


26Fixed assets


234Goodwill


2,638Customer relationships


2,100Non-compete agreement


10Other assets


10Accounts payable


(72
)Other current liabilities


(1,052
)Total cash paid, net of $1 cash acquired

$
5,832       WBK,
    Inc
     58




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  Anthem
    York
      Seven
    Worldwide Holdings, Inc.
      No. 95-3 Recognition of Liabilities in Connection with a
    Purchase Business Combination. (EITF 95-3)
    Balance








BalanceJanuary 31,








December 31,2005


Adjustments


Payments


2005Employee severance

$
7,075


$
5,092


$
(6,721
)

$
5,446Facility closure cost


5,700



5,171



(1,223
)


9,648Total

$
12,775


$
10,263


$
(7,944
)

$
15,094  59




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  Balance








BalanceDecember 31,








December 31,2005


Adjustments


Payments


2006Employee severance

$
5,446


$
155


$
(5,263
)

$
338Facility closure cost


9,648



1,873



(2,930
)


8,591Total

$
15,094


$
2,028


$
(8,193
)

$
8,929   Balance








BalanceDecember 31,








December 31,2006


Adjustments


Payments


2007Employee severance

$
338


$
(81
)

$
(187
)

$
70Facility closure cost


8,591



(3,183
)

$
(1,557
)


3,851Total

$
8,929


$
(3,264
)

$
(1,744
)

$
3,921     Weir
    Holdings Limited
    No. 95-3 Recognition of Liabilities in Connection with a
    Purchase Business Combination. (EITF 95-3)
    Balance








BalanceDecember 31,








December 31,2004


Adjustments


Payments


2005Employee severance

$
1,254


$
65


$
(902
)

$
417Facility closure cost


1,246



718



(632
)


1,332Total

$
2,500


$
783


$
(1,534
)

$
1,749   60




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  Balance








BalanceDecember 31,








December 31,2005


Adjustments


Payments


2006Employee severance

$
417


$



$
(417
)

$
Facility closure cost


1,332



(686
)


(245
)


401Total

$
1,749


$
(686
)

$
(662
)

$
401   Balance








BalanceDecember 31,








December 31,2006


Adjustments


Payments


2007Employee severance

$



$



$



$
Facility closure cost


401



24


$
(16
)


409Total

$
401


$
24


$
(16
)

$
409     Other
    acquisitions
    NOTE 4.
    Discontinued
    Operations      Year Ended

Year EndedDecember 31,

December 31,2006

2005(Restated)

(Restated)Revenues

$
8,137


$
52,744Operating income (loss)

$
(1,988
)

$
2,850    61




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
    Current assets

$
16,189Other non-current assets


2,303Intangible assets


15,327Assets of discontinued operations

$
33,819Current liabilities

$
5,635Liabilities of discontinued operations

$
5,635   NOTE 5.
    Reserve
    Reversal from Litigation Settlements    Note 1-Basis
  NOTE 6.
    Acquisition
    Integration and Restructuring   62




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
    NOTE 7.
    Inventories    December 31,2007


2006(Restated)Raw materials

$
3,393


$
4,043Work in process


19,466



19,23922,859



23,282Less: LIFO reserve


(957
)


(1,062
)$
21,902


$
22,220     NOTE 8.
    Property
    and Equipment    Estimated


December 31,Useful Life


2007


2006(Restated)Land and improvements


10 - 15 years


$
10,602


$
10,614Buildings and improvements


15 - 30 years



20,878



20,970Machinery and equipment


3 - 7 years



92,085



86,233Leasehold improvements


Life of lease



16,329



14,979Computer software and licenses


3 - 5 years



26,904



21,799166,798



154,595Accumulated depreciation and amortization






(89,715
)


(78,745
)$
77,083


$
75,850  63




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  NOTE 9.
    Goodwill
    and Intangible Assets    North America/


Other OperatingEurope Segment


Segment


TotalBalance at December 31, 2005 (restated)

$
223,239


$
10,718


$
233,957Acquisitions


1,004



6,887



7,891Additional purchase accounting adjustments


(9,384
)






(9,384
)Adjustments to exit reserves


1,342







1,342Adjustments to exit reserve present value


(220
)






(220
)Foreign currency translation


2,441



945



3,386Balance at December 31, 2006 (restated)


218,422



18,550



236,972Acquisitions


7,864



4,041



11,905Additional purchase accounting adjustments


(876
)






(876
)Adjustments to exit reserves


(3,240
)






(3,240
)Adjustments to exit reserve present value


643







643Foreign currency translation


2,916



1,575



4,491Balance at December 31, 2007

$
225,729


$
24,166


$
249,895         December 31, 2007Weighted





AccumulatedAverage Life


Cost


Amortization


NetCustomer relationships


15.0 years


$
49,722


$
(10,013
)

$
39,709Digital images


5.0 years



935



(493
)


442Developed technologies


3.0 years



712



(687
)


25Non-compete agreements


3.4 years



1,201



(717
)


484Patents


20.0 years



326



(326
)


Trade names


2.2 years



658



(361
)


297Contract acquisition cost


3.0 years



935



(364
)


57114.1 years


$
54,489


$
(12,961
)

$
41,528   64




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  December 31, 2006Weighted





AccumulatedAverage Life


Cost


Amortization


NetCustomer relationships


15.0 years


$
40,579


$
(6,261
)

$
34,318Digital images


5.0 years



928



(303
)


625Developed technologies


3.0 years



712



(384
)


328Non-compete agreements


3.6 years



731



(622
)


109Patents


20.0 years



326



(76
)


250Trade names


2.0 years



308



(287
)


21Contract acquisition cost


3.0 years



156



(52
)


10414.3 years


$
43,740


$
(7,985
)

$
35,755     NOTE 10.
    Accrued
    Expenses    December 31,2007


2006(Restated)Accrued compensation and payroll taxes

$
26,466


$
27,614Facility exit reserve


2,303



4,204Accrued property taxes


1,293



2,614Vacant property reserve


3,085



2,019Unearned revenue


4,817



2,792Accrued professional fees


2,968



1,787Deferred lease costs


2,722



1,703Accrued customer rebates


1,340



1,796Restructuring reserve






1,100Accrued interest


651



757Accrued sales & use tax


608



634Other


6,167



5,467$
52,420


$
52,487  65




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  NOTE 11.
    Other
    Long-Term Liabilities    December 31,2007


2006(Restated)Vacant property reserve

$
8,321


$
12,772Facility exit reserve


2,364



4,446FIN48 reserves


8,425



2,366Deferred revenue


1,815



855Other


3,622



4,742$
24,547


$
25,181   No. 95-3 Recognition of Liabilities in Connection with a
    Purchase Business Combination. (EITF 95-3).
  NOTE 12.
    Debt    December 31,2007


2006Revolving credit agreement

$
36,655


$
67,891Series A senior note payable  Tranche A


12,857



15,000Series A senior note payable  Tranche B


10,000



10,000Series C senior note payable


10,000



10,000Series D senior note payable


20,000



20,000Series E senior note payable


20,000



20,000Canadian bank credit line


851



Other


12



49110,375



142,940Less amounts due in one year or less


(4,433
)


(2,177
)$
105,942


$
140,763    66




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
             2008

$
4,4332009


3,5732010


50,2262011


23,5712012


23,571Thereafter


5,001$
110,375   NOTE 13.  Income
    Taxes
    Years Ended December 31,2007


2006


2005(Restated)


(Restated)Current:Federal

$
12,433


$
16,409


$
5,024State


3,199



3,934



2,559Foreign


3,703



8,296



6,55019,335



28,639



14,133Deferred:Federal


(264
)


(4,380
)


6,192State


(154
)


(386
)


83Foreign


1,741



(5,060
)


(3,514
)1,323



(9,826
)


2,761Total

$
20,658


$
18,813


$
16,894  67




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
    December 31,2007


2006(Restated)Deferred income tax assets:Inventory

$
113


$
102Accruals and reserves not currently deductible


3,427



5,795Bad debt reserve


384



1,502Accrued vacation


1,729



1,699Other


3,374



Restructuring reserves


5,204



7,827Net operating losses


14,088



12,366Income tax credits


6,162



5,913Capital losses


9,182



9,597Deferred income tax assets before valuation allowances


43,663



44,801Valuation allowances


(27,346
)


(24,492
)Deferred income tax assets

$
16,317


$
20,309Deferred income tax liabilities:Prepaid expenses

$
(627
)

$
(749
)Property and equipment


(3,372
)


(3,891
)Customer intangibles


(12,980
)


(12,190
)Domestic subsidiary stock


(9,790
)


(9,805
)Other


(607
)


(1,197
)Deferred income tax liabilities

$
(27,376
)

$
(27,832
)     Year Ended December 31,2007


2006


2005(Restated)


(Restated)Income taxes at statutory rate


35.0
%


35.0
%


35.0
%Nondeductible expenses


0.8



1.7



1.1State income taxes


3.6



4.7



3.0Foreign rate differential


(0.7
)


1.5



(0.9
)Income tax reserve adjustments


1.8



(0.1
)


(2.1
)Other


(0.2
)


(0.8
)


1.140.3
%


42.0
%


37.2
%     Year Ended December 31,2007


2006


2005(Restated)


(Restated)Domestic

$
33,034


$
39,210


$
37,531Foreign


18,222



5,552



7,885Total

$
51,256


$
44,762


$
45,416  68




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  Business
    Combinations,
      Accounting for Uncertainty in Income
    Taxes  an interpretation of FASB Statement
    No. 109, Accounting for Income Taxes
    Business
    Combinations,
   69




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  Note 22-Contingencies)
        Balance at January 1, 2007

$
13,550Additions related to tax positions in prior years


805Reductions for tax positions in prior years


(764
)Foreign currency translation


6Balance at December 31, 2007

$
13,597   NOTE 14.
    Related
    Party Transactions  Note 4-
    NOTE 15.
    Leases
    and Commitments     70




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
     Operating LeasesGross Rents


Subleases


Net Rent2008

$
16,610


$
(1,725
)

$
14,8852009


14,740



(1,941
)


12,7992010


11,732



(1,859
)


9,8732011


7,918



(1,162
)


6,7562012


8,080



(754
)


7,326Thereafter


16,028



(1,110
)


14,918$
75,108


$
(8,551
)

$
66,557       NOTE 16.
    Employee
    Benefit Plans       71




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
     NOTE 17.
    Stock
    Based Compensation      2006
    Long-Term Incentive Plan
      Options
   72




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
           Year Ended December 31,2007

2006

2005Expected dividend yield

0.63% - 0.71%

0.70% - 0.76%

0.70%Expected stock price volatility

28.24% - 29.97%

27.33% - 27.40%

19.78% - 20.34%Risk-free interest rate range

3.96% - 4.54%

4.28% - 4.83%

4.0%Weighted-average expected life

5.5 - 6 years

6 years

7 yearsForfeiture rate

2.72%

2.65%

naTotal fair value of options granted

$1,216

$870

$3,057     Weighted Average


Weighted AverageNumber of


Exercise Price


Remaining


AggregateShares


per Share


Contractual Term


Intrinsic ValueOutstanding December 31, 2004


3,083


$
10.29Granted


574


$
18.79Exercised


(324
)

$
9.54Cancelled






Outstanding December 31, 2005


3,333


$
11.73Granted


144


$
17.75Exercised


(326
)

$
9.84Cancelled






Outstanding December 31, 2006


3,151


$
12.11Granted


190


$
18.70Exercised


(313
)

$
10.44Cancelled


(55
)

$
18.51Outstanding December 31, 2007


2,973


$
12.45



5.03


$
10,859Vested at December 31, 2007


2,718


$
12.17



4.57


$
10,859Exercisable at December 31, 2007


2,718


$
12.17



4.57


$
10,859    73




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
       Options Outstanding


Options ExercisableWeighted Average








WeightedRemaining


Weighted





Average ofNumber


Contractual Life


Average


Number


ExercisableRange of Exercise Price

Outstanding


(Years)


Exercise Price


Exercisable


price$6.20 - $8.26


185



2.1


$
7.69



185


$
7.698.26  - 10.33


1,329



3.6


$
9.29



1,329


$
9.2910.33 - 12.39


102



2.3


$
11.19



102


$
11.1912.39 - 14.45


498



6.2


$
14.20



498


$
14.2014.45 - 16.52


63



0.8


$
14.95



63


$
14.9516.52 - 18.58


265



9.0


$
18.02



40


$
17.4318.58 - 20.65


531



7.5


$
18.89



501


$
18.842,973











2,718     Weighted AverageGrant DateNumber of


Fair ValueShares


per ShareNonvested at January 1, 2006


570


$
4.85Granted


144


$
6.02Vested


(388
)

$
4.58Forfeited






Nonvested at December 31, 2006


326


$
5.70Granted


191


$
6.38Vested


(232
)

$
5.65Forfeited


(30
)

$
6.55Nonvested at December 31, 2007


255


$
6.25   Restricted
    Stock
   74




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
       Weighted AverageNumber of


Grant DateShares


Fair ValueOutstanding at January 1, 2006






Granted


25


$
17.43Forfeited


Outstanding at December 31, 2006


25


$
17.43Granted


35


$
18.47Forfeited


(2
)

$
17.93Outstanding at December 31, 2007


58


$
18.04     Employee
    Share-Based Compensation Expense
    Year Ended


Year EndedDecember 31, 2007


December 31, 2006Total cost of share-based compensation

$
1,011


$
1,059Income tax


(287
)


(387
)Amount charged against income

$
724


$
672Impact on net income per common share:Basic

$
0.03


$
0.03Diluted

$
0.03


$
0.02    75




---



##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
   Pro
    Forma Employee Share-Based Compensation Expense
    Year EndedDecember 31, 2005(Restated)Net income

$
29,504Less: Total stock-based employee compensation expense determined
    under fair value based method for all awards, net of related tax
    effects


(1,503
)Net income, pro forma

$
28,001Earnings per share (restated)Basic

$
1.16Diluted

$
1.09Pro forma earnings per shareBasic

$
1.10Diluted

$
1.04   NOTE 18.
    Earnings
    Per Share      2007


2006


2005Weighted average shares-Basic


26,869



26,393



25,529Effect of dilutive stock options


832



1,002



1,434Weighted average shares-Diluted


27,701



27,395



26,963         NOTE 19.
    Segment
    and Geographic Reporting   76




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##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  Note 2-Significant
    2007


2006


2005(Restated)


(Restated)Sales to External Customers:North America and Europe

$
479,430


$
497,684


$
530,579Other operating segments


64,979



48,434



34,906Total

$
544,409


$
546,118


$
565,485North America and Europe

$
73,831


$
68,960


$
73,533Other operating segments


4,597



2,037



1,124Corporate and other business activities


(18,255
)


(16,085
)


(21,095
)Operating income


60,173



54,912



53,562Interest expense  net


(8,917
)


(10,150
)


(8,644
)Other income










498Income from continuing operations before income taxes

$
51,256


$
44,762


$
45,416Depreciation and amortization expense:North America and Europe

$
17,787


$
16,884


$
18,911Other operating segments


2,034



1,640



3,886Corporate and other business activities


1,532



3,993



1,175Total

$
21,353


$
22,517


$
23,972     2007


2006(Restated)Total Assets:North America and Europe

$
478,887


$
490,235Other operating segments


59,627



43,492Total

$
538,514


$
533,727  77




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##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
    Expenditures for long-lived assets:North America and Europe

$
7,233


$
12,564Other operating segments


4,065



581Corporate and other business activities


6,823



11,517Total

$
18,121


$
24,662     OtherUnited States


Canada


Europe


Foreign


Total2007Sales

$
392,375


$
45,580


$
77,839


$
28,615


$
544,409Long-lived assets


65,117



5,589



7,292



3,943



81,9412006 (Restated)Sales

$
405,360


$
34,533


$
81,102


$
25,123


$
546,118Long-lived assets


63,148



4,597



8,900



3,716



80,3612005 (Restated)Sales

$
424,129


$
36,801


$
82,021


$
22,534


$
565,485       NOTE 20.
    Other
    Income   78




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##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  NOTE 21.
    Quarterly
    Financial Data (unaudited)  4-Discontinued
  March 31, 2007


June 30, 2007Previously





PreviouslyReported


Restated


Reported


Restated(In thousands, except per share amounts)Net sales

$
130,884


$
129,624


$
143,126


$
142,740Cost of sales


83,526



84,602



90,870



91,337Gross profit


47,358



45,022



52,256



51,403Selling, general, and administrative expenses


33,240



32,863



32,639



32,909Operating income


14,118



12,159



19,617



18,494Other income (expense):Interest and dividend income


90



90







Interest expense


(2,423
)


(2,398
)


(2,407
)


(2,382
)(2,333
)


(2,308
)


(2,407
)


(2,382
)Income before income taxes


11,785



9,851



17,210



16,112Income tax provision


4,598



3,839



6,607



6,170Net income

$
7,187


$
6,012


$
10,603


$
9,942Earnings per share:Basic

$
0.27


$
0.23


$
0.40


$
0.37Diluted

$
0.26


$
0.22


$
0.38


$
0.36   79




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##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  September 30, 2007Previously





December 31,Reported


Restated


2007(In thousands, except per share amounts)Net sales

$
130,874


$
130,789


$
141,256Cost of sales


89,394



84,394



91,682Gross profit


41,480



46,395



49,574Selling, general, and administrative expenses


32,577



32,966



33,483Operating income


8,903



13,429



16,091Other income (expense):Interest and dividend income


85



85



122Interest expense


(2,303
)


(2,278
)


(2,156
)Other










(2,218
)


(2,193
)


(2,034
)Income before income taxes


6,685



11,236



14,057Income tax provision


2,567



4,390



6,259Net income

$
4,118


$
6,846


$
7,798Earnings per share:Basic

$
0.15


$
0.25


$
0.29Diluted

$
0.15


$
0.25


$
0.28   80




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##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  March 31, 2006


June 30, 2006Previously





PreviouslyReported


Restated


Reported


Restated(In thousands, except per share amounts)Net sales

$
133,754


$
131,658


$
140,095


$
140,108Cost of sales


88,038



86,462



90,339



91,053Gross profit


45,716



45,196



49,756



49,055Selling, general, and administrative expenses


34,316



34,853



34,665



35,055Acquisition integration and restructuring expenses


530



530



228



228Reserve reversal from litigation settlements










(2,120
)


(2,120
)Operating income


10,870



9,813



16,983



15,892Other income (expense):Interest and dividend income


119



119



77



77Interest expense


(2,581
)


(2,556
)


(2,738
)


(2,713
)(2,462
)


(2,437
)


(2,661
)


(2,636
)Income from continuing operations before income taxes


8,408



7,376



14,322



13,256Income tax provision


3,193



2,808



5,396



4,972Income from continuing operations


5,215



4,568



8,926



8,284Income (loss) from discontinued operations, net of tax


(433
)


(630
)


44



44Net income

$
4,782


$
3,938


$
8,970


$
8,328Earnings per share from continuing operations:Basic

$
0.20


$
0.17


$
0.34


$
0.31Diluted

$
0.19


$
0.16


$
0.32


$
0.30Earnings per share from discontinued operations:Basic

$
(0.02
)

$
(0.02
)

$
0.00


$
0.00Diluted

$
(0.02
)

$
(0.02
)

$
0.00


$
0.00Net earnings per share:Basic

$
0.18


$
0.15


$
0.34


$
0.31Diluted

$
0.17


$
0.14


$
0.32


$
0.30   81




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##### Table of Contents



Schawk,
    Inc.
    Notes to Consolidated Financial
    Statements  (Continued)
  September 30, 2006


December 31, 2006Previously





PreviouslyReported


Restated


Reported


Restated(In thousands, except per share amounts)Net sales

$
134,779


$
134,382


$
139,778


$
139,970Cost of sales


86,430



86,633



90,568



92,001Gross profit


48,349



47,749



49,210



47,969Selling, general, and administrative expenses


32,546



32,897



34,201



35,190Acquisition integration and restructuring expenses










3,175



3,175Reserve reversal from litigation settlements










(3,000
)


(4,751
)Operating income


15,803



14,852



14,834



14,355Other income (expense):Interest and dividend income


84



84



187



187Interest expense


(2,720
)


(2,695
)


(2,677
)


(2,653
)(2,636
)


(2,611
)


(2,490
)


(2,466
)Income from continuing operations before income taxes


13,167



12,241



12,344



11,889Income tax provision


4,961



4,593



5,168



6,440Income from continuing operations


8,206



7,648



7,176



5,449Income (loss) from discontinued operations, net of tax


(57
)


(57
)


(689
)


(689
)Net income

$
8,149


$
7,591


$
6,487


$
4,760Earnings per share from continuing operations:Basic

$
0.31


$
0.29


$
0.27


$
0.21Diluted

$
0.30


$
0.28


$
0.26


$
0.20Earnings per share from discontinued operations:Basic

$
0.00


$
0.00


$
(0.03
)

$
(0.03
)Diluted

$
0.00


$
0.00


$
(0.02
)

$
(0.03
)Net earnings per share:Basic

$
0.31


$
0.29


$
0.24


$
0.18Diluted

$
0.30


$
0.28


$
0.24


$
0.17   NOTE 22.
    Contingencies  Kohlberg &
    Company Indemnity
   82




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##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURES.    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e) Form 10-K.
  Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f)
      Revenue
    Recognition
  Form 10-Q
   83




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##### Table of Contents



97-2 Software Revenue Recognition 98-9 Software Revenue Recognition, with Respect to Certain
    Transactions No. 00-21 Revenue Arrangements with Multiple
    Deliverables
  Accounting
    for Capitalized Software Costs
  Software developed for sale to third
    parties. Form 10-Q Accounting for the Costs of Computer
    Software to be Sold, Leased or Otherwise Marketed
  Software developed for internal
    use. 98-1 Accounting for the Costs of Computer Software Developed
    or Obtained for Internal Use.
  Accounting
    for Income Taxes
    Entity-level
    controls
    Form 10-K.
  Remediation
    of Material Weaknesses
    Revenue recognition.
 84




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##### Table of Contents



97-2 Software Revenue Recognition 98-9 Software Revenue Recognition, with Respect to Certain
    Transactions No. 00-21 Revenue Arrangements with Multiple
    Deliverables
  Accounting for Internal Use software
    costs. Position 98-1 Accounting for the Costs of Computer Software Developed
    or Obtained for Internal Use.
  Accounting for income taxes.
  Entity-level controls.
  /s/  David
    A. Schawk

/s/  James
    J. PattersonPresident and

Senior Vice President andChief Executive Officer

Chief Financial Officer   Changes
    in Internal Control over Financial Reporting
   85




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
 on Internal Control over Financial Reporting
                    86




---



##### Table of Contents



87




---



##### Table of Contents



ITEM 9B.
    OTHER
    INFORMATION.   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.        ITEM 11.
    EXECUTIVE
    COMPENSATION.    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS  Form 10-K.
  ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE.    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES.   88




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##### Table of Contents



PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Item 8-Financial
                    Incorporated HereinBy Reference to3.1

Certificate of Incorporation of Schawk, Inc., as amended.

Exhibit 4.2 to Registration Statement
    No. 333-391133.3

By-Laws of Schawk, Inc., as amended.

Exhibit 3.2 to Form 8-K filed with the SEC December 18, 2007
    (file no. 001-09335)4.1

Specimen Class A Common Stock Certificate.

Exhibit 4.1 to Registration Statement
    No. 33-8515210.1

Lease Agreement dated as of July 1, 1987, and between
    Process Color Plate, a division of Schawk, Inc. and The Clarence
    W. Schawk 1979 Childrens Trust.

Registration Statement
    No. 33-8515210.2

Lease Agreement dated as of June 1, 1989, by and between
    Schawk Graphics, Inc., a division of Schawk, Inc. and C.W.
    Properties.

Registration Statement
    No. 33-8515210.3*

Schawk, Inc. 1991 Outside Directors Formula Stock Option
    Plan, as amended.

Appendix C to Proxy Statement for the 2001 Annual Meeting of
    Stockholders
    (File No. 001-09335)10.4*

Form of Clarence W. Schawk Amended and Restated Employment
    Agreement between Clarence W. Schawk and Schawk, Inc.

Registration Statement
    No. 33-8515210.4.1

Addendum to Restated Employment Agreement dated March 9,
    1998 between Schawk, Inc. and Clarence W. Schawk**10.5*

Form of David A. Schawk Amended and Restated Employment
    Agreement between David A. Schawk and Schawk, Inc.

Registration Statement
    No. 33-8515210.6

Letter of Agreement dated September 21, 1992, by and
    between Schawk, Inc. and Judith W. McCue.

Registration Statement
    No. 33-8515210.7*

Schawk, Inc. Retirement Trust effective January 1, 1996.

1996 10-K (File No. 001-09335)10.8*

Schawk, Inc. Retirement Plan for Imaging Employees Amended and
    Restated effective January 1, 1996.

1996 10-K (File No. 001-09335) 89




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##### Table of Contents



Incorporated HereinBy Reference to10.9

Stockholder Investment Program dated July 28, 1995.

Registration Statement
    No. 33-6137510.10*

Schawk, Inc. Employee Stock Purchase Plan effective
    January 1, 1999.

Registration Statement
    No. 333-6852110.11

Note Purchase Agreement dated December 23, 2003 by and
    between Schawk, Inc. and Massachusetts Mutual Life Insurance
    Company

2003 10-K (File No. 001-09335)10.12

Credit Agreement dated June 11, 2004 by and between Schawk
    Inc. and Bank One, N. A.

Form 8-K dated June 16, 2004
    (File
    No. 001-09335)10.13

Schawk, Inc. 2001 Equity Option Plan

Appendix B to Proxy Statement for the 2001 Annual Meeting of
    Stockholders
    (File
    No. 001-09335)10.14

Schawk, Inc. 2003 Equity Option Plan

Appendix A to Proxy Statement for the 2003 Annual Meeting of
    Stockholders
    (File No. 001-09335)10.15

Stock Purchase Agreement by and among Schawk, Inc., Seven
    Worldwide, Inc., KAGT Holdings, Inc. and the Stockholders of
    KAGT Holdings, Inc. dated as of December 17, 2004.

Exhibit 2.1 to Form 8-K filed with the SEC on December 20, 2004
    (file no. 001-09335)10.16

Business Sale Deed by and among Schawk, Inc., Schawk UK Limited,
    Sokaris XXI, S.L., Schawk Belgium B.V.B.A. and Weir Holdings
    Limited dated December 31, 2004.

Exhibit 2.1 to Form 8-K filed with the SEC on January 6, 2005
    (file no. 001-09335)10.17

Amended and Restated Registration Rights Agreement, dated as of
    January 31, 2005, among Schawk, Inc. and certain principal
    stockholders of Schawk, Inc.

Exhibit 10.1 to Form 8-K filed with the SEC on February 2, 2005
    (file no. 001-09335)10.18

Credit Agreement, dated as of January 28, 2005, among
    Schawk, Inc., certain subsidiaries of Schawk, Inc. from time to
    time party thereto, certain financial institutions from time to
    time party thereto as lenders, and JPMorgan Chase Bank, N.A., as
    agent.

Exhibit 10.4 to Form 8-K filed with the SEC on February 2, 2005
    (file no. 001-09335)10.19

Note Purchase and Private Shelf Agreement, dated as of
    January 28, 2005, among Schawk, Inc., Prudential Investment
    Management, Inc., The Prudential Insurance Company of America,
    and RGA Reinsurance Company.

Exhibit 10.5 to Form 8-K filed with the SEC on February 2, 2005
    (file no. 001-09335)10.20

First Amendment to Note Purchase Agreement, dated as of
    January 28, 2005, among Schawk, Inc. and the institutional
    purchasers party thereto.

Exhibit 10.6 to Form 8-K filed with the SEC on February 2, 2005
    (file no. 001-09335)10.21

Description of executive compensation arrangements

Form 8-K filed with the SEC on June 6, 2005 (file no. 001-09335)10.22

Asset Purchase Agreement, dated as of March 3, 2006, by and
    between CAPS Group Acquisition, LLC and Schawk, Inc.

Exhibit 10.1 to Form 10-Q filed with the SEC on May 10, 200610.23

Schawk, Inc. 2006 Long-term Incentive Plan

Annex A to the Proxy Statement for the 2006 Annual Meeting filed
    with the SEC on April 21, 2006 (file no. 001-09335))10.24

Description of executive equity awards

Form 8-K filed with the SEC on August 14, 2006 (file no.
    001-09335) 90




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##### Table of Contents



Incorporated HereinBy Reference to10.25

Amendment No. 1, dated February 28, 2008 to Credit
    Agreement dated as of January 28, 2005, among Schawk, Inc.,
    certain subsidiaries of Schawk, Inc., certain lenders, and
    JPMorgan Chase Bank, N.A., as agent.

Exhibit 10.1 to Form 8-K filed  with the SEC on March 5, 2008
    (file no. 001-09335)21 **

List of Subsidiaries.23 **

Consent of Independent Registered Public Accounting Firm31.1 **

Certification of Chief Executive Officer pursuant to
    Rule 13a-14(a)
    and
    Rule 15d-14(a)
    of the Securities Exchange Act of 1934, as amended31.2 **

Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a)
    and
    rule 15d-14(a)
    of the Securities Exchange Act of 1934, as amended32 **

Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002     *
    
    Represents management contract or compensation plan or
    arrangement required to be filed pursuant to Item 14 (c).**
    
    Document filed herewith. 91




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##### Table of Contents



Schawk,
    Inc.
  SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
 ALLOWANCE
    FOR DOUBTFUL ACCOUNTS
  Year Ended December 31,2007


2006


2005(In thousands)RestatedBalance beginning of year

$
2,255


$
5,940


$
1,632Acquisitions


98



5



5,846Provision (reversal of provision)


515



(180
)


(627
)Deductions(1)


(879
)


(3,618
)


(776
)Foreign currency adjustment


74



108



(135
)Balance end of year

$
2,063


$
2,255


$
5,940     (1)
    
    Uncollectible accounts written off, net of recoveries. 92




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##### Table of Contents



SIGNATURES



Pursuant to the requirement of Section 13 or 15(d) of the
    Securities Exchange Act of 1934, the registrant has duly caused
    this report to be signed on its behalf by the undersigned,
    thereunto duly authorized, in Cook County, State of Illinois, on
    the 28th day of April 2008.



Schawk, Inc. By:
    /s/  David
    A. Schawk     th
  /s/  Clarence
    W. SchawkClarence
    W. Schawk

Chairman of the Board and Director/s/  David
    A. SchawkDavid
    A. Schawk

President, Chief Executive Officer, and Director 
    (Principal Executive Officer)/s/  A.
    Alex Sarkisian, Esq.A.
    Alex Sarkisian, Esq.

Executive Vice President, Chief Operating Officer and Director/s/  James
    J. PattersonJames
    J. Patterson

Senior Vice President and Chief Financial Officer 
    (Principal Financial Officer and
    Principal Accounting Officer)/s/  John
    T. McEnroe, Esq.John
    T. McEnroe, Esq.

Director and Assistant Secretary/s/  Leonard
    S. CaroniaLeonard
    S. Caronia

Director/s/  Judith
    W. McCue, Esq.Judith
    W. McCue, Esq.

Director/s/  Hollis
    W. RademacherHollis
    W. Rademacher

Director/s/  Michael
    G. ORourkeMichael
    G. ORourke

Director/s/  Stanley
    N. LoganStanley
    N. Logan

Director  93