##### 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, 2004


Commission file number 1-9335


SCHAWK, INC.


(Exact name of Registrant as specified in its charter)


|                                                                                 |  |                                         
|-------------------------------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                                         |  | 36-2545354                              
|(State or other jurisdiction of
    incorporation or organization)               |  | (I.R.S. Employer
    Identification No.)
|                                                                                
|1695 River Road
    Des Plaines, Illinois(Address of principal executive office) |  | 60018(Zip Code)                         

(Registrants telephone number, including area code)


847-827-9494


Securities registered pursuant to Section 12(b) of
the Act:


|                                      |  |                                     
|------------------------------------- |  | ------------------------------------
|Title of Each Class                   |  | Name of Exchange on Which Registered
|                                      |  |                                     
|Class A Common Stock, $.008 par value |  | New York Stock Exchange             

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DOCUMENTS INCORPORATED BY REFERENCE












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SCHAWK INC


FORM 10-K ANNUAL REPORT


TABLE OF CONTENTS


DECEMBER 31, 2004


|                                                        |  |                                                                                           |    |      |    | 
|------------------------------------------------------- |  | ----------------------------------------------------------------------------------------- | -- | ---- | -- | 
|                                                        |  |                                                                                           |    | Page |   
|                                                        |  |                                                                                           |    |      |   
|PART I                                                 
|Item 1.                                                 |  | Business                                                                                  |    |      | 3  | 
|Item 2.                                                 |  | Properties                                                                                |    |      | 12 | 
|Item 3.                                                 |  | Legal Proceedings                                                                         |    |      | 14 | 
|Item 4.                                                 |  | Submission of Matters to a Vote of Security
    Holders                                   |    |      | 14 | 
|                                                       
|PART II                                                
|Item 5.                                                 |  | Market for the Registrants Common
    Stock and Related Stockholder Matters              |    |      | 14 | 
|Item 6.                                                 |  | Selected Financial Data                                                                   |    |      | 16 | 
|Item 7.                                                 |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations |    |      | 17 | 
|Item 7a.                                                |  | Quantitative and Qualitative Disclosures
    about Market Risk                            |    |      | 24 | 
|Item 8.                                                 |  | Financial Statements and Supplementary
    Data                                           |    |      | 26 | 
|Item 9.                                                 |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosures |    |      | 50 | 
|Item 9a.                                                |  | Controls and Procedures                                                                   |    |      | 50 | 
|                                                       
|PART III                                               
|Item 10.                                                |  | Directors and Executive Officers of the
    Registrant                                    |    |      | 50 | 
|Item 11.                                                |  | Executive Compensation                                                                    |    |      | 50 | 
|Item 12.                                                |  | Security Ownership of Certain Beneficial
    Owners and Management                        |    |      | 50 | 
|Item 13.                                                |  | Certain Relationships and Related
    Transactions                                        |    |      | 50 | 
|Item 14.                                                |  | Principal Accountant Fees and Services                                                    |    |      | 50 | 
|                                                       
|PART IV                                                
|Item 15.                                                |  | Exhibits, Financial Statement Schedules and
    Reports on Form 8-K                       |    |      | 51 | 
|Signatures                                              |  |                                                                                           | 54 |     
|List of Subsidiaries                                   
|Consent of Indpendent Registered Public Accounting Firm
|Certification of CEO                                   
|Certification of CFO                                   
|Certification of CEO and CFO                           



2



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PART I







|        |         
|------- | --------
|ITEM 1. | BUSINESS

General












Graphic Services Industry




3



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4



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The Companys Growth Strategy






| |                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Organic Growth. Historically the Company has primarily
    grown through acquisitions. As market conditions have created
    growing opportunities, the Company has realized greater
    opportunity for internal growth, and accordingly has increased
    its focus on organic growth, turning to its highly skilled sales
    force to be the primary growth driver for the Company.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Growth through Acquisitions. The Companys
    profitability and ready access to capital have enabled it to
    make strategic acquisitions of companies that range in size from
    $2 million to $38 million in revenues. In its 51-year
    business history, the Company has integrated approximately 50
    graphic and imaging businesses into its operations while
    streamlining overhead and improving margins in the aggregate.
    The acquisitions of consequence since 1999 were:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Blue Mint Associates, a San Francisco based $2 million
    in annual revenue brand strategy and creative design firm,
    acquired December 1, 2003;                                                                                                                                                                                                                                                      
|
| |  | Certain assets and the business of Pixxon, Inc., a
    San Francisco based $5 million in annual revenue
    prepress business acquired effective December 31, 2003                                                                                                                                                                                                                                        
|
| |  | Certain assets and the business of a Chicago-based
    $10 million in annual revenues prepress division of
    Fort Dearborn Company, a leading label printer, effective
    January 1, 2004; and                                                                                                                                                                                                         
|
| |  | Certain assets and the business of Weir Holdings, Ltd. a
    $38 million in revenue European graphic services business
    based in Leeds, England with operations in the United Kingdom,
    Belgium and Spain. The Weir Holdings acquisition was completed
    on December 31, 2004 and the acquired assets and
    liabilities are included in the Companys balance sheet as
    of December 31, 2004.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Subsequent to year end 2004, on January 31, 2005, the
    Company acquired Seven Worldwide, Inc. (formerly Applied
    Graphics Technologies, Inc.), a $370 million in revenue
    graphic services company with operations in 35 locations in the
    United States, Europe, Asia and Australia.                                                                                                                                                                                                     
|
| | Seven Worldwide, Inc. (Seven) provides graphic
    services to companies in the following market segments: Consumer
    Goods; Retail; Pharmaceutical; Media & Entertainment;
    Publishing; Advertising; and General Goods & Services.
    Sevens solutions enable these companies to create,
    distribute and manage communications assets, such as advertising
    and editorial pages, consumer goods packaging, out-of-home
    (point-of-sale, large format) signage and Internet content.
|
| | Sevens mission is to bring both process efficiency and
    messaging consistency to marketing execution. Seven has graphic
    services capabilities to support clients who use multiple forms
    of marketing methods to connect with targeted audiences
    worldwide. The Company believes that Sevens solution
    approach drives cost savings and streamlines execution as
    clients leverage Sevens talent, processes, technology and
    infrastructure.                                
|
| | Sevens graphic services solutions focus on both performing
    and coordinating key creative and production
    services  from planning and design through pre-press
    and media fulfillment.                                                                                                                                                                                                                                                                                                     
|
| | The Company intends to continue expanding through acquisitions
    of well-managed companies with solid market positions, a
    reputation for quality work and established client lists. The
    Company believes that an emphasis on complementary acquisitions
    of companies serving targeted markets will allow it to broaden                                                                                                                                                                  

5



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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | its service offerings and provide single source design, graphic
    image database services and workflow management services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | The Company believes it has greater versatility in meeting the
    various requirements of its clients than smaller, less
    integrated competitors lacking technical expertise, and that
    this versatility will result in greater opportunities for
    internal growth as well as enhancing the Companys image as
    an attractive purchaser for potential consolidation candidates.
    The Company believes that there will continue to be a number of
    attractive acquisition candidates in the fragmented and
    consolidating industry in which it operates. The Company expects
    to strengthen its market position by applying its management and
    operational philosophies and practices, which have been
    successful in its graphic arts businesses, to newly acquired
    businesses.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Capitalizing on Industry Trends; Outsourcing. The Company
    has historically attempted to strengthen its market position by
    identifying and capitalizing on industry trends. As a
    consequence, the Company has been uniquely positioned to benefit
    as consumer products companies continue to reduce both their
    graphic staffs and total number of suppliers. The Companys
    on-site strategy developed as clients outsource imaging
    functions in an attempt to cut costs and improve turnaround and
    delivery times. The Company intends to expand this effort, as
    clients increasingly require on-site service. As of
    December 31, 2004, the Company had 44 on-site locations
    staffed by over 150 Schawk employees, approximately 8% of its
    total workforce. Further, the Company believes that its
    commitment to client service and its broad array of premium
    service offerings position the Company as a cost effective,
    value-added supplier of digital imaging services. As clients
    continue to reduce their staffing levels, they are expanding the
    number of services required of their graphic services suppliers.
    Schawk has an advantage in the marketplace because it has the
    full complement of capabilities required by larger consumer
    products companies, capabilities that its competitors do not
    have.
|
| |  | Capitalizing on Technology Advancements. The Company is
    dedicated to keeping abreast of and initiating technological
    process developments in its industry. To build upon its
    leadership position, the Company actively evaluates systems and
    software products of various computer and software manufacturers
    and also independently develops software for implementation at
    its operating facilities. The Company continually invests in new
    technology designed to support its high quality graphic
    services. The Company concentrates its efforts on understanding
    the systems and equipment available in the marketplace and
    creating solutions using off-the-shelf products, customized to
    meet a variety of specific client and internal requirements.
    None of the Companys technology activities are deemed to
    be patentable other than its InterchangeDigital software
    development products, which represent approximately one percent
    of revenues.                                                                                                                                                                                                                                                                                                                                                                                 

Management Philosophy






| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The value and breadth of our services and capabilities will be
    driven first and foremost by the requirements and satisfaction
    of our clients... We will deliver value through ensuring global
    brand consistency and the premiere speed-to-market solution to
    those clients. By becoming an integrated strategic partner to
    our clients, we will demonstrate value and inspire their
    unwavering confidence and loyalty... We will become the most
    profitable company in our industry and we will reach a dominant
    market share globally... We will continue to invest in training
    and development so that our employees and their tools will be
    the best of the best... The Schawk brand name will be recognized
    as the highest value answer to clients brand image
    requirements.

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| |   |                                                             
| | - | ------------------------------------------------------------
| |  | Increase Global Coverage through Acquisitions Worldwide     
|
| |  | Redefine Our Source of Revenue and Profit for the future    
|
| |  | Invent/ Reinvent Solutions for Our Clients                  
|
| |  | Increase Organic Growth                                     
|
| |  | Hire and Retain the Best of the Best Employees              
|
| |  | Measure Customer Satisfaction and Improve on our performance



Client Service.


Employee Training and Investment in Equipment.


Technical Expertise.


Services










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Brand Strategy and Creative Design.


Graphic Services.


Enterprise Products.






Acquisitions and Start-Up Operations






8



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Research and Development


tm




Marketing and Distribution






9



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Clients








Competition








10



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Purchasing and Raw Materials




Intellectual Property




Employees




Backlog




Seasonality and Cyclicality




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Available Information


www.schawk.com









|        |           
|------- | ----------
|ITEM 2. | PROPERTIES



|                         |  |           |        |  |        |        |         |                                     |            |                |          |                      
|------------------------ |  | --------- | ------ |  | ------ | ------ | ------- | ----------------------------------- | ---------- | -------------- | -------- | ---------------------
|                         |  |           |        |  |        |        |         | Lease                               |            |               
|                         |  | Square    |        |  | Owned/ |        |         |                                     | Expiration |                |         
|Location                 |  | Feet      |        |  | Leased |        | Purpose |                                     | Date       |                | Division
|                         |  |           |        |  |        |        |         |                                     |            |                |         
|                         |  | (Approx.) |        |  |        |        |         |                                     |            |                |         
|Antwerp, Belgium         |  |           | 39,000 |  |        | Owned  |         | Operating Facility                  |            | N/A            |          | Winnetts  Belgium   
|                        
|Bristol, England         |  |           | 7,700  |  |        | Leased |         | Operating Facility                  |            | September 2014 |          | Winnetts  UK        
|                        
|Cherry Hill, New Jersey  |  |           | 10,000 |  |        | Leased |         | General Offices, Operating Facility |            | January 2007   |          | Schawk Cherry Hill   
|                        
|Chicago, Illinois        |  |           | 15,200 |  |        | Leased |         | General Offices, Operating Facility |            | May 2005       |          | Anthem Chicago       
|                        
|Cincinnati, Ohio         |  |           | 74,200 |  |        | Leased |         | General Offices, Operating Facility |            | August 2009    |          | Schawk Cincinnati 446
|                        
|Cincinnati, Ohio         |  |           | 12,000 |  |        | Leased |         | General Offices Operating Facility  |            | August 2009    |          | Schawk Cincinnati 447
|                        
|Costa Mesa, California   |  |           | 3,000  |  |        | Leased |         | General Offices, Operating Facility |            | April 2004     |          | Anthem Los Angeles   
|                        
|Des Plaines, Illinois    |  |           | 18,200 |  |        | Owned  |         | Executive Offices                   |            | N/A            |          | Corporate Office     
|                        
|Des Plaines, Illinois    |  |           | 55,000 |  |        | Leased |         | General Offices, Operating Facility |            | December 2010  |          | Schawk Chicago       
|                        
|Franklin Park, Illinois  |  |           | 62,000 |  |        | Owned  |         | General Offices, Operating Facility |            | N/A            |          | Schawk Chicago       
|                        
|Hackettstown, New Jersey |  |           | 3,000  |  |        | Leased |         | General Offices, Operating Facility |            | September 2005 |          | Anthem New Jersey    
|                        
|Kalamazoo, Michigan      |  |           | 67,000 |  |        | Owned  |         | General Offices, Operating Facility |            | N/A            |          | Schawk Kalamazoo     
|                        
|Kobe, Japan              |  |           | 800    |  |        | Leased |         | General Offices, Operating Facility |            | February 2006  |          | Schawk Japan         
|                        
|Leeds, England           |  |           | 16,200 |  |        | Leased |         | General Offices Operating Facility  |            | January 2010   |          | Winnetts  UK        

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|                            |  |           |        |  |        |        |         |                                     |            |                |          |                     
|--------------------------- |  | --------- | ------ |  | ------ | ------ | ------- | ----------------------------------- | ---------- | -------------- | -------- | --------------------
|                            |  |           |        |  |        |        |         | Lease                               |            |               
|                            |  | Square    |        |  | Owned/ |        |         |                                     | Expiration |                |         
|Location                    |  | Feet      |        |  | Leased |        | Purpose |                                     | Date       |                | Division
|                            |  |           |        |  |        |        |         |                                     |            |                |         
|                            |  | (Approx.) |        |  |        |        |         |                                     |            |                |         
|                           
|London, England             |  |           | 2,000  |  |        | Leased |         | Operating Facility                  |            | December 2009  |          | Winnetts  UK       
|                           
|Minneapolis, Minnesota      |  |           | 31,000 |  |        | Owned  |         | General Offices, Operating Facility |            | N/A            |          | Schawk Minneapolis  
|                           
|Mississauga, Ontario Canada |  |           | 58,000 |  |        | Leased |         | General Offices, Operating Facility |            | December 2014  |          | Schawk Toronto      
|                           
|New Berlin, Wisconsin       |  |           | 43,000 |  |        | Leased |         | General Offices, Operating Facility |            | June 2008      |          | Schawk Milwaukee    
|                           
|New York, New York          |  |           | 31,000 |  |        | Leased |         | General Offices, Operating Facility |            | April 2006     |          | Schawk New York     
|                           
|Penang, Malaysia            |  |           | 34,000 |  |        | Owned  |         | General Offices, Operating Facility |            | N/A            |          | Schawk Imaging      
|                           
|Penang, Malaysia            |  |           | 1,706  |  |        | Owned  |         | General Offices, Operating Facility |            | N/A            |          | Schawk Penang       
|                           
|Penang, Malaysia            |  |           | 2,330  |  |        | Owned  |         | General Offices, Operating Facility |            | N/A            |          | Laserscan Technology
|                           
|Queretaro, Mexico           |  |           | 18,000 |  |        | Owned  |         | General Offices, Operating Facility |            | N/A            |          | Schawk Mexico       
|                           
|Roseville, Minnesota        |  |           | 28,000 |  |        | Leased |         | General Offices, Operating Facility |            | May 2007       |          | Schawk St. Paul     
|                           
|Salford, England            |  |           | 45,200 |  |        | Leased |         | Operating Facility                  |            | September 2023 |          | Winnetts  UK       
|                           
|San Francisco, California   |  |           | 8,000  |  |        | Leased |         | General Offices, Operating Facility |            | January 2009   |          | Schawk San Francisco
|                           
|San Francisco, California   |  |           | 8,100  |  |        | Leased |         | General Offices, Operating Facility |            | September 2008 |          | Anthem San Francisco
|                           
|Shanghai, China             |  |           | 19,400 |  |        | Leased |         | General Offices, Operating Facility |            | November 2005  |          | Schawk Shanghai     
|                           
|Shenzhen, China             |  |           | 1,800  |  |        | Leased |         | General Offices Operating Facility  |            | December 2005  |          | Schawk Shenzhen     
|                           
|Singapore                   |  |           | 7,500  |  |        | Leased |         | General Offices                     |            | December 2004  |          | Schawk Singapore    
|                           
|Slough, England             |  |           | 3,000  |  |        | Leased |         | Operating Facility                  |            | January 2010   |          | Winnetts  UK       
|                           
|Smyrna, Georgia             |  |           | 25,200 |  |        | Leased |         | General Offices, Operating Facility |            | October 2008   |          | Schawk Atlanta      

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|                         |  |           |        |  |        |        |         |                                     |            |               |          |                
|------------------------ |  | --------- | ------ |  | ------ | ------ | ------- | ----------------------------------- | ---------- | ------------- | -------- | ---------------
|                         |  |           |        |  |        |        |         | Lease                               |            |              
|                         |  | Square    |        |  | Owned/ |        |         |                                     | Expiration |               |         
|Location                 |  | Feet      |        |  | Leased |        | Purpose |                                     | Date       |               | Division
|                         |  |           |        |  |        |        |         |                                     |            |               |         
|                         |  | (Approx.) |        |  |        |        |         |                                     |            |               |         
|                        
|Stamford, Connecticut    |  |           | 20,000 |  |        | Leased |         | General Offices, Operating Facility |            | August 2005   |          | Schawk Stamford
|                        
|Toronto, Ontario, Canada |  |           | 8,292  |  |        | Leased |         | General Offices, Operating Facility |            | January 2005  |          | Anthem Toronto 
|                        
|Toronto, Ontario, Canada |  |           | 17,500 |  |        | Leased |         | General Offices, Operating Facility |            | November 2007 |          | Schawk Cactus  






|        |                  
|------- | -----------------
|ITEM 3. | LEGAL PROCEEDINGS








|        |                                                    
|------- | ---------------------------------------------------
|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS






PART II







|        |                                                                             
|------- | ----------------------------------------------------------------------------
|ITEM 5. | MARKET FOR THE REGISTRANTS COMMON STOCK AND RELATED
    STOCKHOLDER MATTERS

Recent Sales of Unregistered Securities




Stock Prices






|               |  |               |               |  |               |   |               | 
|-------------- |  | ------------- | ------------- |  | ------------- | - | ------------- | 
|Quarter Ended: |  | 2004 High/Low |               |  | 2003 High/Low |  
|               |  |               |               |  |               |  
|March 31       |  | $             | 15.65 - 12.48 |  |               | $ | 9.90 -  8.99  | 
|June 30        |  |               | 14.50 - 12.76 |  |               |   | 10.97 -  9.25 | 
|September 30   |  |               | 14.70 - 13.10 |  |               |   | 12.52 - 10.40 | 
|December 31    |  |               | 18.90 - 14.43 |  |               |   | 13.95 - 11.95 | 

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Dividends Declared Per Class A Common Share


|               |       |      |        |        |      |   |        |        | 
|-------------- | ----- | ---- | ------ | ------ | ---- | - | ------ | ------ | 
|Quarter Ended: |       | 2004 |        |        | 2003 |  
|               |       |      |        |        |      |  
|March 31       |       | $    | 0.0325 |        |      | $ | 0.0325 |       
|June 30        |       |      | 0.0325 |        |      |   | 0.0325 |       
|September 30   |       |      | 0.0325 |        |      |   | 0.0325 |       
|December 31    |       |      | 0.0325 |        |      |   | 0.0325 |       
|               |       |      |        |        |      |  
|               | Total |      | $      | 0.1300 |      |   | $      | 0.1300 | 
|               |       |      |        |        |      |  

Equity Compensation Plan Information




|                                                           |  |                         |       |  |                      |   |                      |                         |  |  |       | 
|---------------------------------------------------------- |  | ----------------------- | ----- |  | -------------------- | - | -------------------- | ----------------------- |  |  | ----- | 
|                                                           |  | Number of Securities    |       |  |                      |   | Number of Securities |                        
|                                                           |  | to be Issued Upon       |       |  | Weighted-Average     |   |                      | Remaining Available for | 
|                                                           |  | Exercise of Outstanding |       |  | Exercise Price of    |   |                      | Future Issuance Under   | 
|                                                           |  | Options, Warrants and   |       |  | Outstanding Options, |   |                      | Equity Compensation     | 
|Plan Category                                              |  | Rights                  |       |  | Warrants and Rights  |   |                      | Plans                   | 
|                                                           |  |                         |       |  |                      |   |                      |                         | 
|Equity compensation plans approved by security holders     |  |                         | 3,083 |  |                      | $ | 10.29                |                         |  |  | 1,646 | 
|Equity compensation plans not approved by security holders |  |                         |      |  |                      |   |                     |                         |  |  |      | 
|                                                           |  |                         |       |  |                      |   |                      |                         | 
|TOTAL                                                      |  |                         | 3,083 |  |                      | $ | 10.29                |                         |  |  | 1,646 | 
|                                                           |  |                         |       |  |                      |   |                      |                         | 

Purchases of Equity Securities by the Company




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|           |  |           |    |  |            |   |       |                      |  |  |                        |  |  |  |   | 
|---------- |  | --------- | -- |  | ---------- | - | ----- | -------------------- |  |  | ---------------------- |  |  |  | - | 
|           |  | Total No. |    |  | Avg. Price |   |       | No. Shares Purchased |  |  | Dollar Value of Shares | 
|           |  | Share     |    |  | Paid per   |   |       | as Part of Publicly  |  |  | that May be Purchased  | 
|Period     |  | Purchased |    |  | Share      |   |       | Announced Program    |  |  | under Program          | 
|           |  |           |    |  |            |   |       |                      |  |  |                        | 
|January    |  |           |   |  |            |   |      |                      |  |  |                       |  |  |  |  | 
|February   |  |           |   |  |            |   |      |                      |  |  |                       |  |  |  |  | 
|March      |  |           |   |  |            |   |      |                      |  |  |                       |  |  |  |  | 
|April      |  |           | 22 |  |            | $ | 13.90 |                      |  |  |                       |  |  |  |  | 
|May        |  |           | 22 |  |            | $ | 13.48 |                      |  |  |                       |  |  |  |  | 
|June       |  |           |   |  |            |   |      |                      |  |  |                       |  |  |  |  | 
|July       |  |           |   |  |            |   |      |                      |  |  |                       |  |  |  |  | 
|August     |  |           |   |  |            |   |      |                      |  |  |                       |  |  |  |  | 
|September  |  |           |   |  |            |   |      |                      |  |  |                       |  |  |  |  | 
|October    |  |           |   |  |            |   |      |                      |  |  |                       |  |  |  |  | 
|November   |  |           |   |  |            |   |      |                      |  |  |                       |  |  |  |  | 
|December   |  |           |   |  |            |   |      |                      |  |  |                       |  |  |  |  | 
|           |  |           |    |  |            |   |       |                      |  |  |                        | 
|2004 Total |  |           | 44 |  |            | $ | 13.69 |                      |  |  |                       |  |  |  |  | 
|           |  |           |    |  |            |   |       |                      |  |  |                        | 






|        |                        
|------- | -----------------------
|ITEM 6. | SELECTED FINANCIAL DATA

|                                                                                       |         |                                          |         |      |      |   |         |      |  |   |         |      |  |      |         |      |  |   |         |      | 
|-------------------------------------------------------------------------------------- | ------- | ---------------------------------------- | ------- | ---- | ---- | - | ------- | ---- |  | - | ------- | ---- |  | ---- | ------- | ---- |  | - | ------- | ---- | 
|                                                                                       |         | Year Ended December 31,                  |        
|                                                                                       |         |                                          |        
|                                                                                       |         | 2004                                     |         |      | 2003 |   |         | 2002 |  |   | 2001    |      |  | 2000 |        
|                                                                                       |         |                                          |         |      |      |   |         |      |  |   |         |      |  |      |        
|                                                                                       |         | (In thousands, except per share amounts) |        
|CONSOLIDATED INCOME STATEMENT INFORMATION                                              |         |                                          |         |      |      |   |         |      |  |   |         |      |  |      |         |      |  |   |         |     
|Net Sales                                                                              |         | $                                        | 238,345 |      |      | $ | 201,031 |      |  | $ | 186,189 |      |  | $    | 189,643 |      |  | $ | 210,804 |     
|Operating Income(a)                                                                    |         |                                          | 37,792  |      |      |   | 27,536  |      |  |   | 22,032  |      |  |      | 17,313  |      |  |   | 23,889  |     
|Income Before Income Taxes and Minority Interest                                       |         |                                          | 36,020  |      |      |   | 27,264  |      |  |   | 19,713  |      |  |      | 13,129  |      |  |   | 18,111  |     
|Income Taxes                                                                           |         |                                          | 13,342  |      |      |   | 10,280  |      |  |   | 6,203   |      |  |      | 5,320   |      |  |   | 7,567   |     
|Minority Interest in net loss of subsidiary                                            |         |                                          |        |      |      |   |        |      |  |   | 21      |      |  |      | 209     |      |  |   | 97      |     
|Net Income                                                                             |         |                                          | 22,678  |      |      |   | 16,984  |      |  |   | 13,531  |      |  |      | 8,018   |      |  |   | 10,641  |     
|Net Income Per Common Share Basic                                                      |         | $                                        | 1.05    |      |      | $ | 0.79    |      |  | $ | 0.63    |      |  | $    | 0.37    |      |  | $ | 0.50    |     
|                                                                                       | Diluted |                                          |         | 1.01 |      |   |         | 0.78 |  |   |         | 0.62 |  |      |         | 0.37 |  |   |         | 0.50 | 
|Prior-year amounts have been reclassified to conform to
    current-year presentation.
|CONSOLIDATED BALANCE SHEET INFORMATION                                                 |         |                                          |         |      |      |   |         |      |  |   |         |      |  |      |         |      |  |   |         |     
|Working Capital                                                                        |         | $                                        | 41,141  |      |      | $ | 30,526  |      |  | $ | 26,654  |      |  | $    | 26,796  |      |  | $ | 15,579  |     
|Total Assets                                                                           |         |                                          | 220,763 |      |      |   | 159,691 |      |  |   | 160,470 |      |  |      | 166,125 |      |  |   | 167,863 |     
|Long-Term Debt and Capital Lease Obligations                                           |         |                                          | 39,964  |      |      |   | 21,021  |      |  |   | 37,232  |      |  |      | 52,131  |      |  |   | 48,020  |     
|Stockholders Equity                                                                   |         |                                          | 131,440 |      |      |   | 106,372 |      |  |   | 89,767  |      |  |      | 79,537  |      |  |   | 74,508  |     

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|           |                                 |                                          |   |        |      |  |   |        |  |  |      |        |  |      |   |        |  |  |   |        | 
|---------- | ------------------------------- | ---------------------------------------- | - | ------ | ---- |  | - | ------ |  |  | ---- | ------ |  | ---- | - | ------ |  |  | - | ------ | 
|           |                                 | Year Ended December 31,                  |  
|           |                                 |                                          |  
|           |                                 | 2004                                     |   |        | 2003 |  |   | 2002   |  |  | 2001 |        |  | 2000 |  
|           |                                 |                                          |   |        |      |  |   |        |  |  |      |        |  |      |  
|           |                                 | (In thousands, except per share amounts) |  
|OTHER DATA |                                 |                                          |   |        |      |  |   |        |  |  |      |        |  |      |   |        |  |  |   |       
|           | Cash Dividends per Common Share |                                          | $ | 0.13   |      |  | $ | 0.13   |  |  | $    | 0.13   |  |      | $ | 0.13   |  |  | $ | 0.13   | 
|           | Depreciation and Amortization   |                                          |   | 12,726 |      |  |   | 11,416 |  |  |      | 11,977 |  |      |   | 14,138 |  |  |   | 14,278 | 
|           | Capital Expenditures            |                                          |   | 12,238 |      |  |   | 6,933  |  |  |      | 7,634  |  |      |   | 14,431 |  |  |   | 15,476 | 






|    |                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Years prior to adoption of SFAS No. 142 include
    goodwill amortization of $2,161 and $2,155 for the years ended
    December 31, 2001 and December 31, 2000, respectively.






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATIONS

(Thousands of dollars, except per share amounts)




EXECUTIVE-LEVEL OVERVIEW






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Important Acquisitions:








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RESULTS OF OPERATIONS


YEARS ENDED DECEMBER 31, 2004 and 2003


Schawk, Inc.


Comparative Consolidated Statements of Operations


Years Ended December 31, 2004 and 2003


|                                             |                              |                |         |        |      |   |         |        |   |   |        |       |   |  |      |     |  
|-------------------------------------------- | ---------------------------- | -------------- | ------- | ------ | ---- | - | ------- | ------ | - | - | ------ | ----- | - |  | ---- | --- | -
|                                             |                              |                |         |        |      | $ |         |        | % |  
|                                             |                              | 2004           |         |        | 2003 |   |         | Change |   |   | Change |      
|                                             |                              |                |         |        |      |   |         |        |   |   |        |      
|                                             |                              | (In thousands) |        
|Net sales                                    |                              | $              | 238,345 |        |      | $ | 201,031 |        |   | $ | 37,314 |       |   |  | 18.6 | %  
|Cost of sales                                |                              |                | 137,017 |        |      |   | 119,760 |        |   |   | 17,257 |       |   |  | 14.4 | %  
|                                             |                              |                |         |        |      |   |         |        |   |   |        |      
|Gross profit                                 |                              |                | 101,328 |        |      |   | 81,271  |        |   |   | 20,057 |       |   |  | 24.7 | %  
|Gross margin percentage                      |                              |                | 42.5    | %      |      |   | 40.4    | %      |   |   |        |       |   |  |      |    
|Selling, general and administrative expenses |                              |                | 63,536  |        |      |   | 53,735  |        |   |   | 9,801  |       |   |  | 18.2 | %  
|                                             |                              |                |         |        |      |   |         |        |   |   |        |      
|Operating income                             |                              |                | 37,792  |        |      |   | 27,536  |        |   |   | 10,256 |       |   |  | 37.2 | %  
|Operating margin percentage                  |                              |                | 15.9    | %      |      |   | 13.7    | %      |   |   |        |       |   |  |      |    
|Other income (expense)                       |                              |                |         |        |      |   |         |        |   |   |        |       |   |  |      |    
|                                             | Interest and dividend income |                |         | 188    |      |   |         | 72     |   |   |        | 116   |   |  |      | nm  |  
|                                             | Interest expense             |                |         | (1,960 | )    |   |         | (1,900 | ) |   |        | (60   | ) |  |      | 3.2 | %
|                                             | Other income (expense)       |                |         |       |      |   |         | 1,556  |   |   |        | 1,556 |   |  |      | nm  |  
|                                             |                              |                |         |        |      |   |         |        |   |   |        |      
|                                             |                              |                | (1,772  | )      |      |   | (272    | )      |   |   | (1,500 | )     |   |  | nm   |    
|Income before income taxes                   |                              |                | 36,020  |        |      |   | 27,264  |        |   |   | 8,756  |       |   |  | 32.1 | %  
|Income tax provision                         |                              |                | 13,342  |        |      |   | 10,280  |        |   |   | 3,062  |       |   |  | 29.8 | %  
|                                             |                              |                |         |        |      |   |         |        |   |   |        |      
|Effective income tax rate                    |                              |                | 37.0    | %      |      |   | 37.7    | %      |   |   |        |       |   |  |      |    
|                                             |                              |                |         |        |      |   |         |        |   |   |        |      
|Net income                                   |                              | $              | 22,678  |        |      | $ | 16,984  |        |   | $ | 5,694  |       |   |  | 33.5 | %  
|                                             |                              |                |         |        |      |   |         |        |   |   |        |      






Net sales


Gross margin


Operating income




| |   |                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | $4.1 million increase in sales compensation cost from the
    increased level of sales including sales costs at the acquired
    companies;                                                        
|
| |  | $1.8 million of increased corporate general and
    administrative costs with most of the increase from Sarbanes
    Oxley compliance work and related increased accounting and
    auditing costs;
|
| |  | $1.5 million of general and administrative costs associated
    with the acquired companies.                                                                                                       

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Other income (expense)


Income tax provision


Net income


Basic and diluted earnings per share


RESULTS OF OPERATIONS


YEARS ENDED DECEMBER 31, 2003 and 2002


Schawk, Inc.


Comparative Consolidated Statements of Operations


Years Ended December 31, 2003 and 2002


|                                                 |                              |                |         |        |      |   |         |        |   |   |        |       |   |  |      |       |   
|------------------------------------------------ | ---------------------------- | -------------- | ------- | ------ | ---- | - | ------- | ------ | - | - | ------ | ----- | - |  | ---- | ----- | --
|                                                 |                              |                |         |        |      | $ |         |        | % |  
|                                                 |                              | 2003           |         |        | 2002 |   |         | Change |   |   | Change |      
|                                                 |                              |                |         |        |      |   |         |        |   |   |        |      
|                                                 |                              | (In thousands) |        
|Net sales                                        |                              | $              | 201,031 |        |      | $ | 186,189 |        |   | $ | 14,842 |       |   |  | 8.0  | %    
|Cost of sales                                    |                              |                | 119,760 |        |      |   | 113,311 |        |   |   | 6,449  |       |   |  | 5.7  | %    
|                                                 |                              |                |         |        |      |   |         |        |   |   |        |      
|Gross profit                                     |                              |                | 81,271  |        |      |   | 72,878  |        |   |   | 8,393  |       |   |  | 11.5 | %    
|Gross margin percentage                          |                              |                | 40.4    | %      |      |   | 39.1    | %      |   |   |        |       |   |  |      |      
|Selling, general and administrative expenses     |                              |                | 53,735  |        |      |   | 48,215  |        |   |   | 5,520  |       |   |  | 11.4 | %    
|Restructuring and other charges                  |                              |                |        |        |      |   | 2,631   |        |   |   | (2,631 | )     |   |  | nm   |      
|                                                 |                              |                |         |        |      |   |         |        |   |   |        |      
|Operating income                                 |                              |                | 27,536  |        |      |   | 22,032  |        |   |   | 5,504  |       |   |  | 25.0 | %    
|Operating margin percentage                      |                              |                | 13.7    | %      |      |   | 11.8    | %      |   |   |        |       |   |  |      |      
|Other income (expense)                           |                              |                |         |        |      |   |         |        |   |   |        |       |   |  |      |      
|                                                 | Interest and dividend income |                |         | 72     |      |   |         | 236    |   |   |        | (164  | ) |  |      | (69.5 | )%
|                                                 | Interest expense             |                |         | (1,900 | )    |   |         | (2,789 | ) |   |        | 889   |   |  |      | (31.9 | )%
|                                                 | Other income (expense)       |                |         | 1,556  |      |   |         | 234    |   |   |        | 1,322 |   |  |      | nm    |   
|                                                 |                              |                |         |        |      |   |         |        |   |   |        |      
|                                                 |                              |                | (272    | )      |      |   | (2,319  | )      |   |   | 2,047  |       |   |  | nm   |      
|Income before income taxes and minority interest |                              |                | 27,264  |        |      |   | 19,713  |        |   |   | 7,551  |       |   |  | 38.3 | %    
|Income tax provision                             |                              |                | 10,280  |        |      |   | 6,203   |        |   |   | 4,077  |       |   |  | 65.7 | %    
|                                                 |                              |                |         |        |      |   |         |        |   |   |        |      
|Effective income tax rate                        |                              |                | 37.7    | %      |      |   | 31.5    | %      |   |   |        |       |   |  |      |      
|Income before minority interest                  |                              |                | 16,984  |        |      |   | 13,510  |        |   |   | 3,474  |       |   |  | 25.7 | %    
|Minority interest in net loss of subsidiary      |                              |                |        |        |      |   | 21      |        |   |   | (21    | )     |   |  | nm   |      
|                                                 |                              |                |         |        |      |   |         |        |   |   |        |      
|Net income                                       |                              | $              | 16,984  |        |      | $ | 13,531  |        |   | $ | 3,453  |       |   |  | 25.5 | %    
|                                                 |                              |                |         |        |      |   |         |        |   |   |        |      






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Net sales


Gross margin


Operating income


Other income (expense)


Income tax provision


Net income


Basic and diluted earnings per share


Liquidity and Capital Resources










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Off-Balance Sheet Arrangements and Contractual Obligations




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|                            |  |                        |        |      |        |   |        |       |      |     |        |  |      |         |        |  |  |   |        | 
|--------------------------- |  | ---------------------- | ------ | ---- | ------ | - | ------ | ----- | ---- | --- | ------ |  | ---- | ------- | ------ |  |  | - | ------ | 
|                            |  | Payments Due by Period |       
|                            |  |                        |       
|                            |  |                        |        | Less |        |   |        |       | More |    
|                            |  |                        |        | than |        |   | 1-3    |       |      | 3-5 |        |  | than |        
|Contractual Obligations     |  | Total                  |        |      | 1 Year |   |        | Years |      |     | Years  |  |      | 5 Years |       
|                            |  |                        |        |      |        |   |        |       |      |     |        |  |      |         |       
|Long-Term Debt Obligations  |  | $                      | 45,500 |      |        | $ | 6,000  |       |      | $   | 5,714  |  |      | $       | 25,213 |  |  | $ | 8,573  | 
|Capital Lease Obligations   |  |                        | 1,245  |      |        |   | 742    |       |      |     | 503    |  |      |         |       |  |  |   |       | 
|Operating Lease Obligations |  |                        | 32,645 |      |        |   | 5,970  |       |      |     | 12,247 |  |      |         | 6,915  |  |  |   | 7,513  | 
|Purchase Obligations        |  |                        |       |      |        |   |       |       |      |     |       |  |      |         |       |  |  |   |       | 
|Pension Obligations         |  |                        | 982    |      |        |   | 48     |       |      |     | 73     |  |      |         | 16     |  |  |   | 845    | 
|Total                       |  | $                      | 80,372 |      |        | $ | 12,760 |       |      | $   | 18,537 |  |      | $       | 32,144 |  |  | $ | 16,931 | 





Critical Accounting Policies






Accounts Receivable.


Impairment of Long-Lived Assets.


Goodwill and Other Acquired Intangible Assets.


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Customer Rebates.


Income Taxes.




Restructuring Reserves.


New Accounting Pronouncements


Share-Based Payment Accounting for Stock-Based
Compensation, Accounting for Stock Issued to Employees.


Impact of Inflation









|         |                                                               
|-------- | --------------------------------------------------------------
|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK

Interest Rate Exposure




24



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Foreign Exchange Exposure




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|        |                                            
|------- | -------------------------------------------
|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

|                                                                                                       |  |      |    | 
|------------------------------------------------------------------------------------------------------ |  | ---- | -- | 
|Index to Financial Statements                                                                          |  | Page |   
|                                                                                                       |  |      |   
|Managements Responsibilities for
    Financial Reporting                                              |  |      | 27 | 
|Report of Independent Registered Public
    Accounting Firm                                            |  |      | 28 | 
|FINANCIAL STATEMENTS:                                                                                  |  |      |    | 
|Consolidated Balance Sheets 
    December 31, 2004 and 2003                                           |  |      | 29 | 
|Consolidated Statements of
    Operations  Years Ended December 31, 2004, 2003
    and 2002           |  |      | 30 | 
|Consolidated Statements of Cash
    Flows  Years Ended December 31, 2004, 2003 and
    2002           |  |      | 31 | 
|Consolidated Statements of
    Stockholders Equity  Years Ended
    December 31, 2004, 2003 and 2002 |  |      | 32 | 
|Notes to Consolidated Financial
    Statements                                                         |  |      | 33 | 
|FINANCIAL STATEMENT SCHEDULES:                                                                         |  |      |    | 
|SCHEDULE II  Valuation
    Reserves                                                                   |  |      | 53 | 

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MANAGEMENTS RESPONSIBILITIES FOR FINANCIAL
REPORTING






























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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM














| |                  
| | -----------------
| | Ernst & Young LLP





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Schawk, Inc.


Consolidated Balance Sheets


|                                           |                                                                                                          |                |         |         |      |   |         |         |  
|------------------------------------------ | -------------------------------------------------------------------------------------------------------- | -------------- | ------- | ------- | ---- | - | ------- | ------- | -
|                                           |                                                                                                          | December 31    |        
|                                           |                                                                                                          |                |        
|                                           |                                                                                                          | 2004           |         |         | 2003 |  
|                                           |                                                                                                          |                |         |         |      |  
|                                           |                                                                                                          | (In thousands) |        
|ASSETS                                    
|Current assets:                            |                                                                                                          |                |         |         |      |   |         |        
|                                           | Cash and cash equivalents                                                                                |                | $       | 7,268   |      |   | $       | 5,227   |  
|                                           | Trade accounts receivable, less allowance for doubtful accounts
    of $1,773 in 2004 and $1,595 in 2003 |                |         | 56,332  |      |   |         | 35,642  |  
|                                           | Inventories                                                                                              |                |         | 10,339  |      |   |         | 8,085   |  
|                                           | Prepaid expenses and other                                                                               |                |         | 4,702   |      |   |         | 3,902   |  
|                                           | Refundable income taxes                                                                                  |                |         | 1,832   |      |   |         | 1,204   |  
|                                           | Deferred income taxes                                                                                    |                |         | 2,353   |      |   |         | 2,086   |  
|                                           |                                                                                                          |                |         |         |      |  
|Total current assets                       |                                                                                                          |                | 82,826  |         |      |   | 56,146  |        
|Property and equipment, net                |                                                                                                          |                | 46,431  |         |      |   | 36,372  |        
|Goodwill                                   |                                                                                                          |                | 71,720  |         |      |   | 62,936  |        
|Intangible assets                          |                                                                                                          |                | 12,754  |         |      |   | 1,912   |        
|Other assets                               |                                                                                                          |                | 7,032   |         |      |   | 2,325   |        
|                                           |                                                                                                          |                |         |         |      |  
|Total assets                               |                                                                                                          | $              | 220,763 |         |      | $ | 159,691 |        
|                                           |                                                                                                          |                |         |         |      |  
|                                          
|LIABILITIES AND STOCKHOLDERS EQUITY      
|Current liabilities:                       |                                                                                                          |                |         |         |      |   |         |        
|                                           | Trade accounts payable                                                                                   |                | $       | 8,424   |      |   | $       | 5,108   |  
|                                           | Accrued expenses                                                                                         |                |         | 26,578  |      |   |         | 14,004  |  
|                                           | Income taxes payable                                                                                     |                |         |        |      |   |         | 446     |  
|                                           | Current portion of long-term debt and capital lease obligations                                          |                |         | 6,683   |      |   |         | 6,062   |  
|                                           |                                                                                                          |                |         |         |      |  
|Total current liabilities                  |                                                                                                          |                | 41,685  |         |      |   | 25,620  |        
|Long-term debt                             |                                                                                                          |                | 39,500  |         |      |   | 21,000  |        
|Capital lease obligations                  |                                                                                                          |                | 464     |         |      |   | 21      |        
|Other                                      |                                                                                                          |                | 979     |         |      |   | 970     |        
|Deferred income taxes                      |                                                                                                          |                | 6,695   |         |      |   | 5,708   |        
|Stockholders Equity:                      |                                                                                                          |                |         |         |      |   |         |        
|                                           | Common stock                                                                                             |                |         | 191     |      |   |         | 187     |  
|                                           | Additional paid-in capital                                                                               |                |         | 92,350  |      |   |         | 87,928  |  
|                                           | Retained earnings                                                                                        |                |         | 61,330  |      |   |         | 41,461  |  
|                                           | Accumulated comprehensive income (loss), net                                                             |                |         | 2,442   |      |   |         | 1,087   |  
|                                           |                                                                                                          |                |         |         |      |  
|                                           |                                                                                                          |                | 156,313 |         |      |   | 130,663 |        
|                                           | Treasury stock, at cost                                                                                  |                |         | (24,873 | )    |   |         | (24,291 | )
|                                           |                                                                                                          |                |         |         |      |  
|Total stockholders equity                 |                                                                                                          |                | 131,440 |         |      |   | 106,372 |        
|                                           |                                                                                                          |                |         |         |      |  
|Total liabilities and stockholders equity |                                                                                                          | $              | 220,763 |         |      | $ | 159,691 |        
|                                           |                                                                                                          |                |         |         |      |  



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Schawk, Inc.


Consolidated Statements of Operations


|                                                 |  |                         |         |   |      |   |         |      |  |   |         |  
|------------------------------------------------ |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                 |  | Years Ended December 31 |        
|                                                 |  |                         |        
|                                                 |  | 2004                    |         |   | 2003 |   |         | 2002 | 
|                                                 |  |                         |         |   |      |   |         |      | 
|                                                 |  | (In thousands, except   |        
|                                                 |  | per share amounts)      |        
|Net sales                                        |  | $                       | 238,345 |   |      | $ | 201,031 |      |  | $ | 186,189 |  
|Cost of sales                                    |  |                         | 137,017 |   |      |   | 119,760 |      |  |   | 113,311 |  
|                                                 |  |                         |         |   |      |   |         |      | 
|Gross profit                                     |  |                         | 101,328 |   |      |   | 81,271  |      |  |   | 72,878  |  
|Selling, general, and administrative expenses    |  |                         | 63,536  |   |      |   | 53,735  |      |  |   | 48,215  |  
|Restructuring and other charges                  |  |                         |        |   |      |   |        |      |  |   | 2,631   |  
|                                                 |  |                         |         |   |      |   |         |      | 
|Operating income                                 |  |                         | 37,792  |   |      |   | 27,536  |      |  |   | 22,032  |  
|Other income (expense):                          |  |                         |         |   |      |   |         |      |  |   |         |  
|Interest and dividend income                     |  |                         | 188     |   |      |   | 72      |      |  |   | 236     |  
|Interest expense                                 |  |                         | (1,960  | ) |      |   | (1,900  | )    |  |   | (2,789  | )
|Other                                            |  |                         |        |   |      |   | 1,556   |      |  |   | 234     |  
|                                                 |  |                         |         |   |      |   |         |      | 
|                                                 |  |                         | (1,772  | ) |      |   | (272    | )    |  |   | (2,319  | )
|                                                 |  |                         |         |   |      |   |         |      | 
|Income before income taxes and minority interest |  |                         | 36,020  |   |      |   | 27,264  |      |  |   | 19,713  |  
|Income tax provision                             |  |                         | 13,342  |   |      |   | 10,280  |      |  |   | 6,203   |  
|                                                 |  |                         |         |   |      |   |         |      | 
|Income before minority interest                  |  |                         | 22,678  |   |      |   | 16,984  |      |  |   | 13,510  |  
|Minority interest in net loss of subsidiary      |  |                         |        |   |      |   |        |      |  |   | 21      |  
|                                                 |  |                         |         |   |      |   |         |      | 
|Net income                                       |  | $                       | 22,678  |   |      | $ | 16,984  |      |  | $ | 13,531  |  
|                                                 |  |                         |         |   |      |   |         |      | 
|Earnings per share:                              |  |                         |         |   |      |   |         |      |  |   |         |  
|Basic                                            |  | $                       | 1.05    |   |      | $ | 0.79    |      |  | $ | 0.63    |  
|Diluted                                          |  | $                       | 1.01    |   |      | $ | 0.78    |      |  | $ | 0.62    |  
|Weighted average shares outstanding:             |  |                         |         |   |      |   |         |      |  |   |         |  
|Basic                                            |  |                         | 21,603  |   |      |   | 21,379  |      |  |   | 21,469  |  
|Diluted                                          |  |                         | 22,515  |   |      |   | 21,839  |      |  |   | 21,675  |  
|Dividends per Class A common share               |  | $                       | 0.13    |   |      | $ | 0.13    |      |  | $ | 0.13    |  



30



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Schawk, Inc.


Consolidated Statements of Cash Flows


|                                                                                  |                                                                                    |                                             |         |        |         |   |         |        |       |   |         |        |        |  
|--------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------- | ------------------------------------------- | ------- | ------ | ------- | - | ------- | ------ | ----- | - | ------- | ------ | ------ | -
|                                                                                  |                                                                                    | Years Ended December 31                     |        
|                                                                                  |                                                                                    |                                             |        
|                                                                                  |                                                                                    | 2004                                        |         |        | 2003    |   |         | 2002   |      
|                                                                                  |                                                                                    |                                             |         |        |         |   |         |        |      
|                                                                                  |                                                                                    | (In thousands)                              |        
|Operating activities                                                              |                                                                                    |                                             |         |        |         |   |         |        |       |   |         |       
|Net income                                                                        |                                                                                    | $                                           | 22,678  |        |         | $ | 16,984  |        |       | $ | 13,531  |       
|Adjustments to reconcile net income to cash provided by
    operating activities: |                                                                                    |                                             |         |        |         |   |         |        |       |   |         |       
|                                                                                  | Depreciation                                                                       |                                             |         | 11,803 |         |   |         | 11,416 |       |   |         | 11,977 |       
|                                                                                  | Amortization                                                                       |                                             |         | 923    |         |   |         |       |       |   |         |       |       
|                                                                                  | Deferred income taxes                                                              |                                             |         | (789   | )       |   |         | 917    |       |   |         | (497   | )     
|                                                                                  | Asset impairment charge                                                            |                                             |         |       |         |   |         |       |       |   |         | 2,210  |       
|                                                                                  | Loss (gain) realized on sale of equipment                                          |                                             |         | 101    |         |   |         | (635   | )     |   |         | (84    | )     
|                                                                                  | Minority interest in net loss of subsidiary                                        |                                             |         |       |         |   |         |       |       |   |         | (21    | )     
|                                                                                  | Changes in operating assets and liabilities, net of effects from
    acquisitions: |                                             |         |        |         |   |         |        |       |   |         |        |       
|                                                                                  |                                                                                    | Trade accounts receivable                   |         |        | (14,230 | ) |         |        | 2,863 |   |         |        | 356    |  
|                                                                                  |                                                                                    | Inventories                                 |         |        | (231    | ) |         |        | 455   |   |         |        | (538   | )
|                                                                                  |                                                                                    | Prepaid expenses and other                  |         |        | 431     |   |         |        | (363  | ) |         |        | 906    |  
|                                                                                  |                                                                                    | Trade accounts payable and accrued expenses |         |        | 4,562   |   |         |        | 448   |   |         |        | 2,113  |  
|                                                                                  |                                                                                    | Income taxes refundable/payable             |         |        | 1,185   |   |         |        | 131   |   |         |        | (2,094 | )
|                                                                                  |                                                                                    |                                             |         |        |         |   |         |        |      
|Net cash provided by operating activities                                         |                                                                                    |                                             | 26,433  |        |         |   | 32,216  |        |       |   | 27,859  |       
|Investing activities                                                              |                                                                                    |                                             |         |        |         |   |         |        |       |   |         |       
|Proceeds from disposal of property and equipment                                  |                                                                                    |                                             | 248     |        |         |   | 1,713   |        |       |   | 1,040   |       
|Purchases of property and equipment                                               |                                                                                    |                                             | (12,238 | )      |         |   | (6,933  | )      |       |   | (7,634  | )     
|Acquisitions, net of cash acquired                                                |                                                                                    |                                             | (29,278 | )      |         |   | (2,170  | )      |       |   | (2,069  | )     
|Contingent acquisition purchase price paid to escrow account                      |                                                                                    |                                             | (2,574  | )      |         |   |        |        |       |   |        |       
|Other                                                                             |                                                                                    |                                             | (527    | )      |         |   | (160    | )      |       |   | (401    | )     
|                                                                                  |                                                                                    |                                             |         |        |         |   |         |        |      
|Net cash used in investing activities                                             |                                                                                    |                                             | (44,369 | )      |         |   | (7,550  | )      |       |   | (9,064  | )     
|Financing activities                                                              |                                                                                    |                                             |         |        |         |   |         |        |       |   |         |       
|Proceeds from debt                                                                |                                                                                    |                                             | 33,200  |        |         |   | 19,562  |        |       |   | 14,266  |       
|Issuance of common stock                                                          |                                                                                    |                                             | 4,428   |        |         |   | 2,012   |        |       |   | 787     |       
|Principal payments on debt                                                        |                                                                                    |                                             | (14,700 | )      |         |   | (39,062 | )      |       |   | (28,729 | )     
|Principal payments on capital lease obligations                                   |                                                                                    |                                             | (66     | )      |         |   | (255    | )      |       |   | (351    | )     
|Cash dividends                                                                    |                                                                                    |                                             | (2,790  | )      |         |   | (2,758  | )      |       |   | (2,773  | )     
|Purchase of common stock                                                          |                                                                                    |                                             | (603    | )      |         |   | (2,278  | )      |       |   | (987    | )     
|                                                                                  |                                                                                    |                                             |         |        |         |   |         |        |      
|Net cash provided by (used in) financing activities                               |                                                                                    |                                             | 19,469  |        |         |   | (22,779 | )      |       |   | (17,787 | )     
|Effect of foreign currency rate changes                                           |                                                                                    |                                             | 508     |        |         |   | 1,289   |        |       |   | (69     | )     
|                                                                                  |                                                                                    |                                             |         |        |         |   |         |        |      
|Net increase in cash and cash equivalents                                         |                                                                                    |                                             | 2,041   |        |         |   | 3,176   |        |       |   | 939     |       
|Cash and cash equivalents beginning of period                                     |                                                                                    |                                             | 5,227   |        |         |   | 2,051   |        |       |   | 1,112   |       
|                                                                                  |                                                                                    |                                             |         |        |         |   |         |        |      
|Cash and cash equivalents end of period                                           |                                                                                    | $                                           | 7,268   |        |         | $ | 5,227   |        |       | $ | 2,051   |       
|                                                                                  |                                                                                    |                                             |         |        |         |   |         |        |      
|Supplementary disclosure of cash flow information:                                |                                                                                    |                                             |         |        |         |   |         |        |       |   |         |       
|Dividends issued in the form of Class A common stock                              |                                                                                    | $                                           | 19      |        |         | $ | 18      |        |       | $ | 17      |       
|Cash paid for interest                                                            |                                                                                    |                                             | 1,876   |        |         |   | 1,865   |        |       |   | 2,630   |       
|Cash paid for income taxes                                                        |                                                                                    |                                             | 13,025  |        |         |   | 9,215   |        |       |   | 8,071   |       

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Schawk, Inc.


Consolidated Statements of Stockholders Equity


Years Ended December 31, 2002, 2003 and 2004


|                                                                         |  |                |     |  |            |   |        |          |  |             |               |   |  |          |        |   |              |   |         |   |  |   |         |  
|------------------------------------------------------------------------ |  | -------------- | --- |  | ---------- | - | ------ | -------- |  | ----------- | ------------- | - |  | -------- | ------ | - | ------------ | - | ------- | - |  | - | ------- | -
|                                                                         |  | Class A        |     |  | Additional |   |        |          |  | Accumulated |               |   |  |          | Total  |  
|                                                                         |  | Common         |     |  | Paid-In    |   |        | Retained |  |             | Comprehensive |   |  | Treasury |        |   | Stockholders |  
|                                                                         |  | Stock          |     |  | Capital    |   |        | Earnings |  |             | Income        |   |  | Stock    |        |   | Equity       |  
|                                                                         |  |                |     |  |            |   |        |          |  |             |               |   |  |          |        |   |              |  
|                                                                         |  | (In thousands) |    
|Balance at December 31, 2001                                             |  | $              | 185 |  |            | $ | 85,157 |          |  | $           | 16,512        |   |  | $        | (1,247 | ) |              | $ | (21,070 | ) |  | $ | 79,537  |  
|Net income                                                               |  |                |    |  |            |   |       |          |  |             | 13,531        |   |  |          |       |   |              |   |        |   |  |   | 13,531  |  
|Sale of Class A common stock                                             |  |                |    |  |            |   | 180    |          |  |             |              |   |  |          |       |   |              |   |        |   |  |   | 180     |  
|Purchase of Class A treasury stock                                       |  |                |    |  |            |   |       |          |  |             |              |   |  |          |       |   |              |   | (987    | ) |  |   | (987    | )
|Stock issued under employee stock purchase plan                          |  |                | 1   |  |            |   | 507    |          |  |             |              |   |  |          |       |   |              |   |        |   |  |   | 508     |  
|Foreign currency translation adjustment                                  |  |                |    |  |            |   |       |          |  |             |              |   |  |          | (311   | ) |              |   |        |   |  |   | (311    | )
|Issuance of Class A common stock under dividend
    reinvestment program |  |                |    |  |            |   |       |          |  |             | (17           | ) |  |          |       |   |              |   | 21      |   |  |   | 4       |  
|Cash dividends                                                           |  |                |    |  |            |   |       |          |  |             | (2,773        | ) |  |          |       |   |              |   |        |   |  |   | (2,773  | )
|Issuance of Class A common restricted shares to employees                |  |                |    |  |            |   | 78     |          |  |             |              |   |  |          |       |   |              |   |        |   |  |   | 78      |  
|                                                                         |  |                |     |  |            |   |        |          |  |             |               |   |  |          |        |   |              |  
|Balance at December 31, 2002                                             |  | $              | 186 |  |            | $ | 85,922 |          |  | $           | 27,253        |   |  | $        | (1,558 | ) |              | $ | (22,036 | ) |  | $ | 89,767  |  
|Net income                                                               |  |                |    |  |            |   |       |          |  |             | 16,984        |   |  |          |       |   |              |   |        |   |  |   | 16,984  |  
|Sale of Class A common stock                                             |  |                | 1   |  |            |   | 1,355  |          |  |             |              |   |  |          |       |   |              |   |        |   |  |   | 1,356   |  
|Purchase of Class A treasury stock                                       |  |                |    |  |            |   |       |          |  |             |              |   |  |          |       |   |              |   | (2,278  | ) |  |   | (2,278  | )
|Stock issued under employee stock purchase plan                          |  |                |    |  |            |   | 616    |          |  |             |              |   |  |          |       |   |              |   |        |   |  |   | 616     |  
|Foreign currency translation adjustment                                  |  |                |    |  |            |   |       |          |  |             |              |   |  |          | 2,645  |   |              |   |        |   |  |   | 2,645   |  
|Issuance of Class A common stock under dividend
    reinvestment program |  |                |    |  |            |   |       |          |  |             | (18           | ) |  |          |       |   |              |   | 23      |   |  |   | 5       |  
|Cash dividends                                                           |  |                |    |  |            |   |       |          |  |             | (2,758        | ) |  |          |       |   |              |   |        |   |  |   | (2,758  | )
|Issuance of Class A common restricted shares to employees                |  |                |    |  |            |   | 35     |          |  |             |              |   |  |          |       |   |              |   |        |   |  |   | 35      |  
|                                                                         |  |                |     |  |            |   |        |          |  |             |               |   |  |          |        |   |              |  
|Balance at December 31, 2003                                             |  | $              | 187 |  |            | $ | 87,928 |          |  | $           | 41,461        |   |  | $        | 1,087  |   |              | $ | (24,291 | ) |  | $ | 106,372 |  
|Net income                                                               |  |                |    |  |            |   |       |          |  |             | 22,678        |   |  |          |       |   |              |   |        |   |  |   | 22,678  |  
|Sale of Class A common stock                                             |  |                | 3   |  |            |   | 3,672  |          |  |             |              |   |  |          |       |   |              |   |        |   |  |   | 3,675   |  
|Purchase of Class A treasury stock                                       |  |                |    |  |            |   |        |          |  |             |              |   |  |          |       |   |              |   | (603    | ) |  |   | (603    | )
|Stock issued under employee stock purchase plan                          |  |                | 1   |  |            |   | 750    |          |  |             |              |   |  |          |       |   |              |   |        |   |  |   | 751     |  
|Foreign currency translation adjustment                                  |  |                |    |  |            |   |       |          |  |             |              |   |  |          | 1,355  |   |              |   |        |   |  |   | 1,355   |  
|Issuance of Class A common stock under dividend
    reinvestment program |  |                |    |  |            |   |       |          |  |             | (19           | ) |  |          |       |   |              |   | 21      |   |  |   | 2       |  
|Cash dividends                                                           |  |                |    |  |            |   |       |          |  |             | (2,790        | ) |  |          |       |   |              |   |        |   |  |   | (2,790  | )
|                                                                         |  |                |     |  |            |   |        |          |  |             |               |   |  |          |        |   |              |  
|Balance at December 31, 2004                                             |  | $              | 191 |  |            | $ | 92,350 |          |  | $           | 61,330        |   |  | $        | 2,442  |   |              | $ | (24,873 | ) |  | $ | 131,440 |  
|                                                                         |  |                |     |  |            |   |        |          |  |             |               |   |  |          |        |   |              |  



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Schawk, Inc.





Notes to Consolidated Financial Statements


(In thousands, except per share amounts)




|        |                                                  
|------- | -------------------------------------------------
|NOTE 1. | Basis of Presentation and Description of Business







|        |                                           
|------- | ------------------------------------------
|NOTE 2. | Summary of Significant Accounting Policies

Principles of Consolidation




Revenue Recognition




Cash Equivalents




Accounts Receivable and Concentration of Credit Risk




Inventories




Property and Equipment




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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)


Goodwill


Business Combinations Goodwill and
Other Intangible Assets.




Long-lived Assets


Accounting for the Impairment or Disposal of Long-lived
Assets.


Customer Rebates




Shipping and Handling Fees and Costs


Net sales Cost of sales


Income Taxes






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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)


Use of Estimates




Foreign Currency Translation




Fair Value of Financial Instruments




Comprehensive Income




|                                         |  |      |        |  |      |   |        |      |  |   |        |  
|---------------------------------------- |  | ---- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | -
|                                         |  | 2004 |        |  | 2003 |   |        | 2002 | 
|                                         |  |      |        |  |      |   |        |      | 
|Net income                               |  | $    | 22,678 |  |      | $ | 16,984 |      |  | $ | 13,531 |  
|Foreign currency translation adjustments |  |      | 1,355  |  |      |   | 2,645  |      |  |   | (311   | )
|                                         |  |      |        |  |      |   |        |      | 
|Comprehensive income                     |  | $    | 24,033 |  |      | $ | 19,629 |      |  | $ | 13,220 |  
|                                         |  |      |        |  |      |   |        |      | 

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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)


Stock Based Compensation




|                                                                                                                                                  |         |                        |        |      |      |   |        |      |  |   |        |      | 
|------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | ---------------------- | ------ | ---- | ---- | - | ------ | ---- |  | - | ------ | ---- | 
|                                                                                                                                                  |         | Year Ended December 31 |       
|                                                                                                                                                  |         |                        |       
|                                                                                                                                                  |         | 2004                   |        |      | 2003 |   |        | 2002 | 
|                                                                                                                                                  |         |                        |        |      |      |   |        |      | 
|Net income, as reported                                                                                                                           |         | $                      | 22,678 |      |      | $ | 16,984 |      |  | $ | 13,531 |     
|Less: Total stock-based employee compensation expense determined
    under fair value based method for all awards, net of related tax
    effects |         |                        | 1,064  |      |      |   | 719    |      |  |   | 865    |     
|                                                                                                                                                  |         |                        |        |      |      |   |        |      | 
|Net income, pro forma                                                                                                                             |         | $                      | 21,614 |      |      | $ | 16,265 |      |  | $ | 12,666 |     
|                                                                                                                                                  |         |                        |        |      |      |   |        |      | 
|Earnings per share                                                                                                                                |         |                        |        |      |      |   |        |      |  |   |        |     
|                                                                                                                                                  | Basic   |                        | $      | 1.05 |      |   | $      | 0.79 |  |   | $      | 0.63 | 
|                                                                                                                                                  | Diluted |                        | $      | 1.01 |      |   | $      | 0.78 |  |   | $      | 0.62 | 
|Pro forma earnings per share                                                                                                                      |         |                        |        |      |      |   |        |      |  |   |        |     
|                                                                                                                                                  | Basic   |                        | $      | 1.00 |      |   | $      | 0.76 |  |   | $      | 0.59 | 
|                                                                                                                                                  | Diluted |                        | $      | 0.96 |      |   | $      | 0.74 |  |   | $      | 0.58 | 

Reclassifications






|        |                          
|------- | -------------------------
|NOTE 3. | New Accounting Principles

Share-Based Payment Accounting for Stock-Based
Compensation, Accounting for Stock Issued to Employees.




|        |                                
|------- | -------------------------------
|NOTE 4. | Restructuring and Other Charges

2002 Actions




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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)






Summary:


|                                               |  |      |   |  |      |  |   |      |  |   |       | 
|---------------------------------------------- |  | ---- | - |  | ---- |  | - | ---- |  | - | ----- | 
|                                               |  | 2004 |   |  | 2003 |  |   | 2002 | 
|                                               |  |      |   |  |      |  |   |      | 
|Restructuring and Other Charges                |  |      |   |  |      |  |   |      |  |   |       | 
|Severance and other employee termination costs |  |      |  |  |      |  |  |      |  | $ | 421   | 
|Impairment Charges (see Note 5)                |  |      |   |  |      |  |   |      |  |   |       | 
|Computer equipment and software                |  |      |  |  |      |  |  |      |  |   | 1,851 | 
|Other                                          |  |      |  |  |      |  |  |      |  |   | 359   | 
|                                               |  |      |   |  |      |  |   |      | 
|                                               |  |      |  |  |      |  |  |      |  |   | 2,210 | 
|                                               |  |      |   |  |      |  |   |      | 
|Restructuring and Other Charges                |  |      |  |  |      |  |  |      |  | $ | 2,631 | 
|                                               |  |      |   |  |      |  |   |      | 



|        |                                
|------- | -------------------------------
|NOTE 5. | Impairment of Long-lived Assets





|        |             
|------- | ------------
|NOTE 6. | Acquisitions





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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|                                       |  |   |        |  
|-------------------------------------- |  | - | ------ | -
|Trade accounts receivable              |  | $ | 6,460  |  
|Inventory                              |  |   | 1,340  |  
|Other current assets                   |  |   | 1,231  |  
|Deferred income tax asset              |  |   | 750    |  
|Fixed assets                           |  |   | 9,078  |  
|Customer relationship intangible asset |  |   | 8,717  |  
|Goodwill                               |  |   | 5,939  |  
|Current liabilities                    |  |   | (7,519 | )
|Capital leases                         |  |   | (464   | )
|Reserve for restructuring              |  |   | (2,500 | )
|                                       |  |   |       
|Net cash consideration                 |  | $ | 23,032 |  







|                              |  |      |         |  |      |   |         | 
|----------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                              |  | 2004 |         |  | 2003 |  
|                              |  |      |         |  |      |  
|Sales                         |  | $    | 276,150 |  |      | $ | 236,831 | 
|Net income                    |  |      | 22,484  |  |      |   | 18,633  | 
|Net income per share, basic   |  | $    | 1.04    |  |      | $ | 0.87    | 
|Net income per share, diluted |  | $    | 1.00    |  |      | $ | 0.85    | 





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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)






|                                       |  |   |       |  
|-------------------------------------- |  | - | ----- | -
|Inventory                              |  | $ | 683   |  
|Machinery and equipment                |  |   | 150   |  
|Employee liabilities assumed           |  |   | (121  | )
|Customer relationship intangible asset |  |   | 2,300 |  
|Non-compete intangible asset           |  |   | 100   |  
|Goodwill                               |  |   | 1,817 |  
|                                       |  |   |      
|Net cash consideration                 |  | $ | 4,929 |  











|                                                    |  |   |       | 
|--------------------------------------------------- |  | - | ----- | 
|Fair value of assets acquired, net of cash received |  | $ | 996   | 
|Customer relationship intangible asset              |  |   | 500   | 
|Non-compete intangible asset                        |  |   | 60    | 
|Goodwill                                            |  |   | 2,245 | 
|                                                    |  |   |      
|Net cash consideration                              |  | $ | 3,801 | 

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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)








|        |                           
|------- | --------------------------
|NOTE 7. | Related Party Transactions









|        |            
|------- | -----------
|NOTE 8. | Inventories



|                   |  |              |        |   |      |   |        |  
|------------------ |  | ------------ | ------ | - | ---- | - | ------ | -
|                   |  | December 31, |       
|                   |  |              |       
|                   |  | 2004         |        |   | 2003 |  
|                   |  |              |        |   |      |  
|Raw materials      |  | $            | 3,768  |   |      | $ | 2,129  |  
|Work in process    |  |              | 7,653  |   |      |   | 7,033  |  
|                   |  |              |        |   |      |  
|                   |  |              | 11,421 |   |      |   | 9,162  |  
|Less: LIFO reserve |  |              | (1,082 | ) |      |   | (1,077 | )
|                   |  |              |        |   |      |  
|                   |  | $            | 10,339 |   |      | $ | 8,085  |  
|                   |  |              |        |   |      |  



|        |                       
|------- | ----------------------
|NOTE 9. | Property and Equipment



|                                          |  |              |         |   |      |   |         |  
|----------------------------------------- |  | ------------ | ------- | - | ---- | - | ------- | -
|                                          |  | December 31, |        
|                                          |  |              |        
|                                          |  | 2004         |         |   | 2003 |  
|                                          |  |              |         |   |      |  
|Land and improvements                     |  | $            | 725     |   |      | $ | 715     |  
|Buildings and improvements                |  |              | 14,815  |   |      |   | 13,171  |  
|Machinery and equipment                   |  |              | 71,112  |   |      |   | 68,623  |  
|Leasehold improvements                    |  |              | 15,716  |   |      |   | 9,931   |  
|Computer software                         |  |              | 13,731  |   |      |   | 11,355  |  
|                                          |  |              |         |   |      |  
|                                          |  |              | 116,099 |   |      |   | 103,795 |  
|Accumulated depreciation and amortization |  |              | (69,668 | ) |      |   | (67,423 | )
|                                          |  |              |         |   |      |  
|                                          |  | $            | 46,431  |   |      | $ | 36,372  |  
|                                          |  |              |         |   |      |  

40



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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|         |                  
|-------- | -----------------
|NOTE 10. | Intangible Assets



|                         |  |              |        |   |      |   |       |  
|------------------------ |  | ------------ | ------ | - | ---- | - | ----- | -
|                         |  | December 31, |       
|                         |  |              |       
|                         |  | 2004         |        |   | 2003 |  
|                         |  |              |        |   |      |  
|Customer relationships   |  | $            | 12,632 |   |      | $ | 1,111 |  
|Non-compete agreements   |  |              | 681    |   |      |   | 535   |  
|Patents                  |  |              | 311    |   |      |   | 295   |  
|                         |  |              |        |   |      |  
|                         |  |              | 13,624 |   |      |   | 1,941 |  
|Accumulated amortization |  |              | (870   | ) |      |   | (29   | )
|                         |  |              |        |   |      |  
|                         |  | $            | 12,754 |   |      | $ | 1,912 |  
|                         |  |              |        |   |      |  





|         |                 
|-------- | ----------------
|NOTE 11. | Accrued Expenses



|                                       |  |              |        |  |      |   |        | 
|-------------------------------------- |  | ------------ | ------ |  | ---- | - | ------ | 
|                                       |  | December 31, |       
|                                       |  |              |       
|                                       |  | 2004         |        |  | 2003 |  
|                                       |  |              |        |  |      |  
|Accrued compensation and payroll taxes |  | $            | 13,102 |  |      | $ | 8,246  | 
|Accrued customer rebates               |  |              | 1,059  |  |      |   | 1,699  | 
|Accrued professional fees              |  |              | 2,765  |  |      |   | 397    | 
|Accrued interest                       |  |              | 178    |  |      |   | 148    | 
|Accrued property taxes                 |  |              | 518    |  |      |   | 473    | 
|Restructuring reserve                  |  |              | 2,514  |  |      |   | 105    | 
|Other                                  |  |              | 6,442  |  |      |   | 2,936  | 
|                                       |  |              |        |  |      |  
|                                       |  | $            | 26,578 |  |      | $ | 14,004 | 
|                                       |  |              |        |  |      |  

41



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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|         |     
|-------- | ----
|NOTE 12. | Debt



|                                         |  |              |        |   |      |   |        |  
|---------------------------------------- |  | ------------ | ------ | - | ---- | - | ------ | -
|                                         |  | December 31, |       
|                                         |  |              |       
|                                         |  | 2004         |        |   | 2003 |  
|                                         |  |              |        |   |      |  
|Series A senior note payable  Tranche A |  | $            | 15,000 |   |      | $ | 15,000 |  
|Series A senior note payable  Tranche B |  |              | 10,000 |   |      |   | 0      |  
|Series B senior note payable             |  |              | 6,000  |   |      |   | 12,000 |  
|U.S. bank credit agreement               |  |              | 14,500 |   |      |   | 0      |  
|                                         |  |              |        |   |      |  
|                                         |  |              | 45,500 |   |      |   | 27,000 |  
|Less amounts due in one year or less     |  |              | (6,000 | ) |      |   | (6,000 | )
|                                         |  |              |        |   |      |  
|                                         |  | $            | 39,500 |   |      | $ | 21,000 |  
|                                         |  |              |        |   |      |  











|           |  |   |        | 
|---------- |  | - | ------ | 
|2005       |  | $ | 6,000  | 
|2006       |  |   | 0      | 
|2007       |  |   | 2,143  | 
|2008       |  |   | 3,571  | 
|2009       |  |   | 18,071 | 
|Thereafter |  |   | 15,715 | 
|           |  |   |       
|           |  | $ | 45,500 | 
|           |  |   |       

42



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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|         |                     
|-------- | --------------------
|NOTE 13. | Stockholders Equity



|                                                                                                                                                                                                                                                              |                                                                                                        |              |     |        |      |   |     |        | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------ | ------------ | --- | ------ | ---- | - | --- | ------ | 
|                                                                                                                                                                                                                                                              |                                                                                                        | December 31, |    
|                                                                                                                                                                                                                                                              |                                                                                                        |              |    
|                                                                                                                                                                                                                                                              |                                                                                                        | 2004         |     |        | 2003 |  
|                                                                                                                                                                                                                                                              |                                                                                                        |              |     |        |      |  
|Common stock:                                                                                                                                                                                                                                                 |                                                                                                        |              |     |        |      |   |     |       
|Class A voting, $0.008 par value,
    40,000,000 shares authorized; 24,025,915 and
    23,602,330 shares issued at December 31, 2004 and
    2003, respectively; 21,816,879 and 21,435,877 shares
    outstanding at December 31, 2004 and 2003, respectively |                                                                                                        | $            | 191 |        |      | $ | 187 |       
|                                                                                                                                                                                                                                                              |                                                                                                        |              |     |        |      |  
|Treasury stock:                                                                                                                                                                                                                                               |                                                                                                        |              |     |        |      |   |     |       
|                                                                                                                                                                                                                                                              | 2,209,036 and 2,166,443 shares of Class A common stock
    at December 31, 2004 and 2003, respectively |              | $   | 24,873 |      |   | $   | 24,291 | 
|                                                                                                                                                                                                                                                              |                                                                                                        |              |     |        |      |  



|         |             
|-------- | ------------
|NOTE 14. | Income Taxes



|          |         |                          |        |        |      |  |        |        |   |  |       |       |  
|--------- | ------- | ------------------------ | ------ | ------ | ---- |  | ------ | ------ | - |  | ----- | ----- | -
|          |         | Years Ended December 31, |       
|          |         |                          |       
|          |         | 2004                     |        |        | 2003 |  |        | 2002   |  
|          |         |                          |        |        |      |  |        |        |  
|Current:  |         |                          |        |        |      |  |        |        |   |  |       |      
|          | Federal |                          | $      | 11,205 |      |  | $      | 9,088  |   |  | $     | 4,283 |  
|          | State   |                          |        | 186    |      |  |        | 1,057  |   |  |       | 450   |  
|          | Foreign |                          |        | 1,162  |      |  |        | 1,052  |   |  |       | 973   |  
|          |         |                          |        |        |      |  |        |        |  
|          |         |                          | 12,553 |        |      |  | 11,197 |        |   |  | 5,706 |      
|Deferred: |         |                          |        |        |      |  |        |        |   |  |       |      
|          | Federal |                          |        | 663    |      |  |        | (487   | ) |  |       | 858   |  
|          | State   |                          |        | 298    |      |  |        | (57    | ) |  |       | 95    |  
|          | Foreign |                          |        | (172   | )    |  |        | (373   | ) |  |       | (456  | )
|          |         |                          |        |        |      |  |        |        |  
|          |         |                          | 789    |        |      |  | (917   | )      |   |  | 497   |      
|          |         |                          |        |        |      |  |        |        |  
|          | Total   |                          | $      | 13,342 |      |  | $      | 10,280 |   |  | $     | 6,203 |  
|          |         |                          |        |        |      |  |        |        |  

43



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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|                                  |                                                |              |        |        |      |   |        |        |  
|--------------------------------- | ---------------------------------------------- | ------------ | ------ | ------ | ---- | - | ------ | ------ | -
|                                  |                                                | December 31, |       
|                                  |                                                |              |       
|                                  |                                                | 2004         |        |        | 2003 |  
|                                  |                                                |              |        |        |      |  
|Current deferred income taxes:    |                                                |              |        |        |      |   |        |       
|                                  | Inventory                                      |              | $      | 40     |      |   | $      | 44     |  
|                                  | Accruals and reserves not currently deductible |              |        | 1,367  |      |   |        | 1,432  |  
|                                  | Foreign deferred taxes                         |              |        | 946    |      |   |        | 610    |  
|                                  |                                                |              |        |        |      |  
|Net current asset                 |                                                | $            | 2,353  |        |      | $ | 2,086  |       
|                                  |                                                |              |        |        |      |  
|Noncurrent deferred income taxes: |                                                |              |        |        |      |   |        |       
|                                  | Property and equipment                         |              | $      | (3,282 | )    |   | $      | (1,885 | )
|                                  | Goodwill on asset acquisitions                 |              |        | (1,218 | )    |   |        | (917   | )
|                                  | Other                                          |              |        | (2,195 | )    |   |        | (2,906 | )
|                                  |                                                |              |        |        |      |  
|Net noncurrent liability          |                                                | $            | (6,695 | )      |      | $ | (5,708 | )     
|                                  |                                                |              |        |        |      |  



|                                          |  |                         |      |   |      |  |      |      |  |  |      |  
|----------------------------------------- |  | ----------------------- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                          |  | Year Ended December 31, |     
|                                          |  |                         |     
|                                          |  | 2004                    |      |   | 2003 |  |      | 2002 | 
|                                          |  |                         |      |   |      |  |      |      | 
|Income taxes at statutory rate            |  |                         | 35.0 | % |      |  | 35.0 | %    |  |  | 35.0 | %
|Nondeductible expenses                    |  |                         | .2   |   |      |  | (.1  | )    |  |  | .5   |  
|State income taxes                        |  |                         | 3.0  |   |      |  | 1.9  |      |  |  | 1.8  |  
|Foreign rate differential                 |  |                         | 1.2  |   |      |  | .9   |      |  |  | 1.6  |  
|Reduction of accrual for prior year taxes |  |                         |     |   |      |  |     |      |  |  | (4.8 | )
|Prior year state refunds received         |  |                         | (2.4 | ) |      |  |     |      |  |  | (2.7 | )
|                                          |  |                         |      |   |      |  |      |      | 
|                                          |  |                         | 37.0 | % |      |  | 37.7 | %    |  |  | 31.4 | %
|                                          |  |                         |      |   |      |  |      |      | 



|         |  |      |        |  |      |   |        |      |  |   |        | 
|-------- |  | ---- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|         |  | 2004 |        |  | 2003 |   |        | 2002 | 
|         |  |      |        |  |      |   |        |      | 
|Domestic |  | $    | 32,923 |  |      | $ | 25,404 |      |  | $ | 18,289 | 
|Foreign  |  | $    | 3,097  |  |      |   | 1,860  |      |  |   | 1,424  | 
|         |  |      |        |  |      |   |        |      | 
|Total    |  | $    | 36,020 |  |      | $ | 27,264 |      |  | $ | 19,713 | 





44



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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|         |                       
|-------- | ----------------------
|NOTE 15. | Leases and Commitments







|                                    |  |         |       |  |           |   |        | 
|----------------------------------- |  | ------- | ----- |  | --------- | - | ------ | 
|                                    |  | Capital |       |  | Operating |  
|                                    |  | Leases  |       |  | Leases    |  
|                                    |  |         |       |  |           |  
|2005                                |  | $       | 742   |  |           | $ | 5,970  | 
|2006                                |  |         | 486   |  |           |   | 4,636  | 
|2007                                |  |         | 17    |  |           |   | 4,059  | 
|2008                                |  |         |      |  |           |   | 3,552  | 
|2009                                |  |         |      |  |           |   | 2,728  | 
|Thereafter                          |  |         |      |  |           |   | 11,700 | 
|                                    |  |         |       |  |           |  
|                                    |  | $       | 1,245 |  |           | $ | 32,645 | 
|                                    |  |         |       |  |           |  
|Less: Amounts representing interest |  |         | 98    |  |           |   |        | 
|                                    |  |         |       |  |           |  
|                                    |  |         | 1,147 |  |           |   |        | 
|Less: Current portion               |  |         | 683   |  |           |   |        | 
|                                    |  |         |       |  |           |  
|                                    |  | $       | 464   |  |           |   |        | 
|                                    |  |         |       |  |           |  





|         |                       
|-------- | ----------------------
|NOTE 16. | Employee Benefit Plans







45



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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)






|         |                           
|-------- | --------------------------
|NOTE 17. | Stock/ Equity Option Plans





|                           |  |                     |       |   |                  |   |       | 
|-------------------------- |  | ------------------- | ----- | - | ---------------- | - | ----- | 
|                           |  | Outstanding Options |       |   |                 
|                           |  | of Class A          |       |   | Weighted Average |  
|                           |  | Common Stock        |       |   | Exercise Price   |  
|                           |  |                     |       |   |                  |  
|Balance, December 31, 2001 |  |                     | 1,934 |   |                  |   | 9.42  | 
|Granted                    |  |                     | 626   |   |                  |   | 9.66  | 
|Exercised                  |  |                     | (18   | ) |                  |   | 8.59  | 
|Cancelled                  |  |                     |      |   |                  |   |      | 
|                           |  |                     |       |   |                  |  
|Balance, December 31, 2002 |  |                     | 2,542 |   |                  |   | 9.48  | 
|                           |  |                     |       |   |                  |  
|Granted                    |  |                     | 530   |   |                  |   | 9.31  | 
|Exercised                  |  |                     | (177  | ) |                  |   | 8.77  | 
|Cancelled                  |  |                     |      |   |                  |   |      | 
|                           |  |                     |       |   |                  |  
|Balance, December 31, 2003 |  |                     | 2,895 |   |                  |   | 9.49  | 
|                           |  |                     |       |   |                  |  
|Granted                    |  |                     | 576   |   |                  |   | 14.21 | 
|Exercised                  |  |                     | (360  | ) |                  |   | 10.20 | 
|Cancelled                  |  |                     | (28   | ) |                  |   | 9.47  | 
|                           |  |                     |       |   |                  |  
|Balance December 31, 2004  |  |                     | 3,083 |   |                  | $ | 10.29 | 
|                           |  |                     |       |   |                  |  



|                        |  |                     |       |                  |                       |  |          |                  |  |   |             |          |  |                   |       |  |  |   |       | 
|----------------------- |  | ------------------- | ----- | ---------------- | --------------------- |  | -------- | ---------------- |  | - | ----------- | -------- |  | ----------------- | ----- |  |  | - | ----- | 
|                        |  | Options Outstanding |       |                  | Options Exercisable   | 
|                        |  |                     |       |                  |                       | 
|                        |  |                     |       | Weighted Average |                       |  | Weighted |                  |  |   |             | Weighted | 
|                        |  | Number              |       |                  | Remaining Contractual |  |          | Average Exercise |  |   | Number      |          |  | Average of        |      
|Range of Exercise Price |  | Outstanding         |       |                  | Life (Years)          |  |          | Price            |  |   | Exercisable |          |  | Exercisable Price |      
|                        |  |                     |       |                  |                       |  |          |                  |  |   |             |          |  |                   |      
|$ 6.00 - $ 7.50         |  |                     | 35    |                  |                       |  | 1.0      |                  |  | $ | 7.00        |          |  |                   | 35    |  |  | $ | 7.00  | 
|7.51 -   9.00           |  |                     | 752   |                  |                       |  | 4.5      |                  |  |   | 8.23        |          |  |                   | 752   |  |  |   | 8.23  | 
|9.01 -  10.50           |  |                     | 1,438 |                  |                       |  | 6.7      |                  |  |   | 9.48        |          |  |                   | 1,271 |  |  |   | 9.52  | 
|10.51 -  12.00          |  |                     | 203   |                  |                       |  | 4.2      |                  |  |   | 11.31       |          |  |                   | 197   |  |  |   | 11.33 | 
|12.01 -  13.50          |  |                     | 20    |                  |                       |  | 9.4      |                  |  |   | 12.98       |          |  |                   | 7     |  |  |   | 12.98 | 
|13.51 -  15.00          |  |                     | 635   |                  |                       |  | 8.5      |                  |  |   | 14.32       |          |  |                   | 262   |  |  |   | 14.43 | 
|                        |  |                     |       |                  |                       |  |          |                  |  |   |             |          |  |                   |      
|                        |  |                     | 3,083 |                  |                       |  |          |                  |  |   |             |          |  |                   | 2,524 |  |  |   |       | 
|                        |  |                     |       |                  |                       |  |          |                  |  |   |             |          |  |                   |      

46



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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)








|                                          |  |      |          |  |      |  |          |      |  |  |          | 
|----------------------------------------- |  | ---- | -------- |  | ---- |  | -------- | ---- |  |  | -------- | 
|                                          |  | 2004 |          |  | 2003 |  |          | 2002 | 
|                                          |  |      |          |  |      |  |          |      | 
|Expected dividend yield                   |  |      | 0.90%    |  |      |  | 1.30%    |      |  |  | 1.30%    | 
|Expected stock price volatility           |  |      | 16.60%   |  |      |  | 16.40%   |      |  |  | 17.20%   | 
|Risk-free interest rate range             |  |      | 4.0%     |  |      |  | 4.0%     |      |  |  | 4.0%     | 
|Weighted-average expected life of options |  |      | 7  years |  |      |  | 7  years |      |  |  | 7  years | 





|         |                   
|-------- | ------------------
|NOTE 18. | Earnings Per Share





|                                                         |  |      |        |  |      |   |        |      |  |   |        | 
|-------------------------------------------------------- |  | ---- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|                                                         |  | 2004 |        |  | 2003 |   |        | 2002 | 
|                                                         |  |      |        |  |      |   |        |      | 
|Net Income                                               |  | $    | 22,678 |  |      | $ | 16,984 |      |  | $ | 13,531 | 
|                                                         |  |      |        |  |      |   |        |      | 
|Weighted average shares                                  |  |      | 21,603 |  |      |   | 21,379 |      |  |   | 21,469 | 
|Effect of dilutive employee stock options                |  |      | 912    |  |      |   | 460    |      |  |   | 206    | 
|                                                         |  |      |        |  |      |   |        |      | 
|Adjusted weighted average shares and assumed conversions |  |      | 22,515 |  |      |   | 21,839 |      |  |   | 21,675 | 
|                                                         |  |      |        |  |      |   |        |      | 
|Basic earnings per share                                 |  | $    | 1.05   |  |      | $ | 0.79   |      |  | $ | 0.63   | 
|Diluted earnings per share                               |  | $    | 1.01   |  |      | $ | 0.78   |      |  | $ | 0.62   | 



47



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##### Table of Contents



Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)






NOTE 19.     Geographic
Reporting




|                  |  |               |         |  |        |        |        |        |       |   |         |  |  |       |        |   |  |   |         | 
|----------------- |  | ------------- | ------- |  | ------ | ------ | ------ | ------ | ----- | - | ------- |  |  | ----- | ------ | - |  | - | ------- | 
|                  |  |               |         |  |        | UK and |        |        | Other |   |         | 
|                  |  | United States |         |  | Canada |        |        | Europe |       |   | Foreign |  |  | Total |       
|                  |  |               |         |  |        |        |        |        |       |   |         |  |  |       |       
|2004              |  |               |         |  |        |        |        |        |       |   |         |  |  |       |        |   |  |   |         | 
|Sales             |  | $             | 190,983 |  |        | $      | 33,398 |        |       |   |        |  |  | $     | 13,964 |   |  | $ | 238,345 | 
|Long-lived assets |  |               | 87,863  |  |        |        | 19,196 |        |       | $ | 23,734  |  |  |       | 7,144  |   |  |   | 137,937 | 
|Net assets        |  |               | 121,329 |  |        |        | 12,479 |        |       |   |        |  |  |       | (2,368 | ) |  |   | 131,440 | 
|2003              |  |               |         |  |        |        |        |        |       |   |         |  |  |       |        |   |  |   |         | 
|Sales             |  | $             | 159,861 |  |        | $      | 30,648 |        |       |   |        |  |  | $     | 10,522 |   |  | $ | 201,031 | 
|Long-lived assets |  |               | 78,807  |  |        |        | 16,999 |        |       |   |        |  |  |       | 7,739  |   |  |   | 103,545 | 
|Net assets        |  |               | 98,588  |  |        |        | 10,192 |        |       |   |        |  |  |       | (2,408 | ) |  |   | 106,372 | 
|2002              |  |               |         |  |        |        |        |        |       |   |         |  |  |       |        |   |  |   |         | 
|Sales             |  | $             | 153,056 |  |        | $      | 25,448 |        |       |   |        |  |  | $     | 7,685  |   |  | $ | 186,189 | 
|Long-lived assets |  |               | 81,400  |  |        |        | 15,940 |        |       |   |        |  |  |       | 8,452  |   |  |   | 105,792 | 
|Net assets        |  |               | 84,162  |  |        |        | 7,187  |        |       |   |        |  |  |       | (1,582 | ) |  |   | 89,767  | 



NOTE 20.     Other Income








48



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Schawk, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|         |                  
|-------- | -----------------
|NOTE 21. | Subsequent Events













|         |                                     
|-------- | ------------------------------------
|NOTE 22. | Quarterly Financial Data (unaudited)



|                   |         |                                          |        |      |          |   |        |          |  |   |         |      |  |           |        |      |          |   |        |          |  |   |         |      |  |   |        |      |  |   |        |      | 
|------------------ | ------- | ---------------------------------------- | ------ | ---- | -------- | - | ------ | -------- |  | - | ------- | ---- |  | --------- | ------ | ---- | -------- | - | ------ | -------- |  | - | ------- | ---- |  | - | ------ | ---- |  | - | ------ | ---- | 
|                   |         | March 31,                                |        |      | June 30, |   |        | Sept 30, |  |   | Dec 31, |      |  | March 31, |        |      | June 30, |   |        | Sept 30, |  |   | Dec 31, |     
|                   |         | 2003                                     |        |      | 2003     |   |        | 2003     |  |   | 2003    |      |  | 2004      |        |      | 2004     |   |        | 2004     |  |   | 2004    |     
|                   |         |                                          |        |      |          |   |        |          |  |   |         |      |  |           |        |      |          |   |        |          |  |   |         |     
|                   |         | (In thousands, except per share amounts) |       
|Net sales          |         | $                                        | 48,705 |      |          | $ | 51,635 |          |  | $ | 50,500  |      |  | $         | 50,191 |      |          | $ | 52,077 |          |  | $ | 64,456  |      |  | $ | 62,245 |      |  | $ | 59,567 |     
|Cost of sales      |         |                                          | 27,849 |      |          |   | 30,947 |          |  |   | 29,864  |      |  |           | 31,101 |      |          |   | 31,310 |          |  |   | 37,025  |      |  |   | 34,027 |      |  |   | 34,655 |     
|                   |         |                                          |        |      |          |   |        |          |  |   |         |      |  |           |        |      |          |   |        |          |  |   |         |     
|Gross Profit       |         |                                          | 20,856 |      |          |   | 20,688 |          |  |   | 20,636  |      |  |           | 19,090 |      |          |   | 20,767 |          |  |   | 27,431  |      |  |   | 28,218 |      |  |   | 24,912 |     
|Net income         |         | $                                        | 4,201  |      |          | $ | 4,578  |          |  | $ | 4,309   |      |  | $         | 3,896  |      |          | $ | 3,627  |          |  | $ | 6,621   |      |  | $ | 7,317  |      |  | $ | 5,113  |     
|                   |         |                                          |        |      |          |   |        |          |  |   |         |      |  |           |        |      |          |   |        |          |  |   |         |     
|Earnings per share |         |                                          |        |      |          |   |        |          |  |   |         |      |  |           |        |      |          |   |        |          |  |   |         |      |  |   |        |      |  |   |        |     
|                   | Basic   |                                          | $      | 0.20 |          |   | $      | 0.21     |  |   | $       | 0.20 |  |           | $      | 0.18 |          |   | $      | 0.17     |  |   | $       | 0.31 |  |   | $      | 0.34 |  |   | $      | 0.23 | 
|                   | Diluted |                                          |        | 0.19 |          |   |        | 0.21     |  |   |         | 0.20 |  |           |        | 0.18 |          |   |        | 0.16     |  |   |         | 0.30 |  |   |        | 0.33 |  |   |        | 0.22 | 



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|        |                                                                        
|------- | -----------------------------------------------------------------------
|ITEM 9. | CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL
    DISCLOSURE








|         |                        
|-------- | -----------------------
|ITEM 9A. | CONTROLS AND PROCEDURES










PART III







|         |                                                   
|-------- | --------------------------------------------------
|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT








|         |                       
|-------- | ----------------------
|ITEM 11. | EXECUTIVE COMPENSATION








|         |                                                                   
|-------- | ------------------------------------------------------------------
|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT








|         |                                               
|-------- | ----------------------------------------------
|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS








|         |                                       
|-------- | --------------------------------------
|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES



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PART IV







|         |                                                                    
|-------- | -------------------------------------------------------------------
|ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
    FORM 8-K

The following financial statements of Schawk, Inc
are filed as part of this report under Item 8-Financial
Statements and Supplementary Data:














Financial statement schedules required to be filed by
Item 8 of this form, and by Item 15(d) below:




Exhibits


| |    |       |  |                                                                                                                                                                 |  |                                      |           | 
| | -- | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | --------- | 
| |    |       |  | Incorporated Herein by                                                                                                                                         
| |    |       |  | Reference to                                                                                                                                                   
| |    |       |  |                                                                                                                                                                
| | 3  | .1    |  | Certificate of Incorporation of Schawk, Inc., as amended.                                                                                                       |  | Registration Statement No. 33-85152 
|
| | 3  | .3    |  | By-Laws of Schawk, Inc., as amended.                                                                                                                            |  | Registration Statement No. 333-39113
|
| | 4  | .1    |  | Specimen Class A Common Stock Certificate.                                                                                                                      |  | Registration Statement No. 33-85152 
|
| | 10 | .12*  |  | Schawk, Inc. 1988 Equity Option Plan.                                                                                                                           |  |                                      | 1988 10-K | 
|
| | 10 | .13a* |  | First Amendment to Schawk, Inc. 1988 Equity Option Plan.                                                                                                        |  |                                      | 1992 10-K | 
|
| | 10 | .13b* |  | Second Amendment to Schawk, Inc. 1988 Equity Option Plan.                                                                                                       |  | Registration Statement No. 33-85152 
|
| | 10 | .22   |  | 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. 33-85152 
|
| | 10 | .23   |  | 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. 33-85152 
|
| | 10 | .26*  |  | Schawk, Inc. 1991 Outside Directors Formula Stock Option
    Plan, as amended.                                                                                 |  | Registration Statement No. 33-85152 
|
| | 10 | .27*  |  | Form of Clarence W. Schawk Amended and Restated Employment
    Agreement between Clarence W. Schawk and Schawk, Inc.                                            |  | Registration Statement No. 33-85152 
|
| | 10 | .28*  |  | Form of David A. Schawk Amended and Restated Employment
    Agreement between David A. Schawk and Schawk, Inc.                                                  |  | Registration Statement No. 33-85152 
|
| | 10 | .31   |  | Form of Registration Rights Agreement dated December 30,
    1994, by and among Schawk, Inc. and certain investors.                                             |  | Registration Statement No. 33-85152 
|
| | 10 | .32   |  | Money Market Demand Note dated February 7, 1997 from
    Schawk, Inc., borrower, to the Northern Trust Company, lender.                                         |  | Registration Statement No. 333-39113
|
| | 10 | .33   |  | Demand Note Agreement dated September 12, 1996 between
    Schawk Canada, Inc. and First Chicago NBD Canada and related
    continuing Guaranty of Schawk, Inc. |  | Registration Statement No. 33-39113 
|
| | 10 | .35   |  | Letter of Agreement dated September 21, 1992, by and
    between Schawk, Inc. and Judith W. McCue.                                                              |  | Registration Statement No. 33-85152 
|
| | 10 | .37*  |  | Schawk, Inc. Retirement Trust effective January 1, 1996.                                                                                                        |  |                                      | 1996 10-K | 

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| |      |      |  |                                                                                                                                                                                |  |                                      |           | 
| | ---- | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------ | --------- | 
| |      |      |  | Incorporated Herein by                                                                                                                                                         | 
| |      |      |  | Reference to                                                                                                                                                                   | 
| |      |      |  |                                                                                                                                                                                | 
|
| | 10   | .38* |  | Schawk, Inc. Retirement Plan for Imaging Employees Amended and
    Restated effective January 1, 1996.                                                                         |  |                                      | 1996 10-K | 
|
| | 10   | .42  |  | Schawk, Inc. Note Agreement dated as of August 18,
    1995.                                                                                                                   |  |                                      | 1996 10-K | 
|
| | 10   | .43  |  | Stockholder Investment Program dated July 28, 1995.                                                                                                                            |  | Registration Statement No. 33-61375 
|
| | 10   | .44a |  | Credit Agreement dated January 23, 1999, by and between
    Schawk, Inc. and The First National Bank of Chicago.                                                               |  | Form 8-K dated January  28, 1999    
|
| | 10   | .44b |  | Amendment No. 1 to Credit Agreement dated March 15,
    1999 by and between Schawk, Inc. and The First National Bank of
    Chicago.                                           |  | Form 8-K dated March  17, 1999      
|
| | 10   | .45* |  | Schawk, Inc. Employee Stock Purchase Plan effective
    January 1, 1999.                                                                                                       |  | Registration Statement No. 333-68521
|
| | 10   | .46  |  | Second Amended and Restated Credit Agreement dated as of
    October 29, 1999, by and between Schawk, Inc. and Bank One,
    NA, excluding exhibits.                           |  |                                      | 1999 10-K | 
|
| | 10   | .47  |  | Note Purchase Agreement dated December 23, 2003 by and
    between Schawk, Inc and Massachusetts Mutual Life Insurance
    Company.                                            |  |                                      | 2003 10-K | 
|
| | 10   | .48  |  | Credit Agreement dated June 11, 2004 by and between Schawk
    Inc. and Bank One, N. A.                                                                                        |  | Form 8-K dated June  16, 2004       
|
| | 21** |      |  | List of Subsidiaries.                                                                                                                                                          |  |                                      |           | 
|
| | 23** |      |  | Consent of Independent Registered Public Accounting Firm.                                                                                                                      |  |                                      |           | 
|
| | 31   | .1** |  | Certification of Chief Executive Officer pursuant to
    Rule 13a-14(a) and Rule 15d-14(a) of the Securities
    Exchange Act, as amended.                                     |  |                                      |           | 
|
| | 31   | .2** |  | Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a) and rule 15d-14(a) of the Securities
    Exchange Act, as amended.                                     |  |                                      |           | 
|
| | 32** |      |  | 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.

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Schawk, Inc.





SCHEDULE II  VALUATION AND QUALIFYING
ACCOUNTS


ALLOWANCE FOR DOUBTFUL ACCOUNTS


|                          |  |                         |       |  |      |   |       |      |  |   |       | 
|------------------------- |  | ----------------------- | ----- |  | ---- | - | ----- | ---- |  | - | ----- | 
|                          |  | Year Ended December 31, |      
|                          |  |                         |      
|                          |  | 2004                    |       |  | 2003 |   |       | 2002 | 
|                          |  |                         |       |  |      |   |       |      | 
|                          |  | (In thousands)          |      
|Balance beginning of year |  | $                       | 1,595 |  |      | $ | 1,269 |      |  | $ | 813   | 
|Provision                 |  |                         | 752   |  |      |   | 613   |      |  |   | 745   | 
|Deductions(1)             |  |                         | 574   |  |      |   | 287   |      |  |   | 289   | 
|                          |  |                         |       |  |      |   |       |      | 
|Balance end of year       |  | $                       | 1,773 |  |      | $ | 1,595 |      |  | $ | 1,269 | 






|    |                                                       
|--- | ------------------------------------------------------
|(1) | Uncollectible accounts written off, net of recoveries.

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SIGNATURES


th




| |             
| | ------------
| | Schawk, Inc.



| |     |                       
| | --- | ----------------------
| | By: | /s/ Clarence W. Schawk

| |                      
| | ---------------------
| |                      
| | Clarence W. Schawk   
| | Chairman of the Board

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          
|                                                      
|/s/ A. Alex Sarkisian, Esq.A.
    Alex Sarkisian, Esq. |  | Executive Vice President, Corporate Secretary and Director
|                                                      
|/s/ James J. PattersonJames
    J. Patterson           |  | Senior Vice President and Chief Financial Officer         
|                                                      
|/s/ John T. McEnroe, Esq.John
    T. McEnroe, Esq.     |  | General Counsel, Assistant Secretary, and Director        
|                                                      
|/s/ Leonard S. CaroniaLeonard
    S. Caronia           |  | Director                                                  
|                                                      
|/s/ Judith W. McCue, Esq.Judith
    W. McCue, Esq.     |  | Director                                                  
|                                                      
|/s/ Hollis W. RademacherHollis
    W. Rademacher       |  | Director                                                  

54