UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION




Washington,
D.C. 20549









FORM
10-Q




QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934




For
the quarterly period ended March 28, 2009




Commission
file number 1-12551









CENVEO,
INC.


(Exact
name of Registrant as specified in its charter.)




COLORADO
            84-1250533(State
      or other jurisdiction of
              incorporation
      or organization)
            (I.R.S.
      Employer Identification No.)ONE
      CANTERBURY GREEN
              201
      BROAD STREETSTAMFORD,
      CT
            06901(Address
      of principal executive offices)
            (Zip
      Code)203-595-3000(Registrant’s
      telephone number, including area
code)











Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x
  No o




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  Yes o  No o




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer”, “accelerated filer”, and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.   Large
accelerated filer o   Accelerated
filer x
  Non-accelerated filer oSmaller reporting company o




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o  No
x




As of May
4, 2009 the registrant had 54,606,238 shares of common stock
outstanding.












PART
I. FINANCIAL INFORMATION




Item
      1.   Financial
Statements




CENVEO,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED BALANCE SHEETS


(in
thousands)


(unaudited)




March
      28, 2009
                        
                        
                        January
      3, 2009AssetsCurrent
      assets:Cash
      and cash equivalents
                        
                        $
                        10,207
                        
                        
                        $
                        10,444Accounts
      receivable, net
                        
                        
                        249,998
                        
                        
                        
                        270,145Inventories
                        
                        
                        149,653
                        
                        
                        
                        159,569Prepaid
      and other current assets
                        
                        
                        68,544
                        
                        
                        
                        74,890Total
      current assets
                        
                        
                        478,402
                        
                        
                        
                        515,048Property,
      plant and equipment, net
                        
                        
                        409,831
                        
                        
                        
                        420,457Goodwill
                        
                        
                        311,183
                        
                        
                        
                        311,183Other
      intangible assets, net
                        
                        
                        274,628
                        
                        
                        
                        276,944Other
      assets, net
                        
                        
                        27,401
                        
                        
                        
                        28,482Total
      assets
                        
                        $
                        1,501,445
                        
                        
                        $
                        1,552,114Liabilities
      and Shareholders’ DeficitCurrent
      liabilities:Current
      maturities of long-term debt
                        
                        $
                        16,481
                        
                        
                        $
                        24,314Accounts
      payable
                        
                        
                        181,422
                        
                        
                        
                        174,435Accrued
      compensation and related liabilities
                        
                        
                        32,953
                        
                        
                        
                        37,319Other
      current liabilities
                        
                        
                        83,553
                        
                        
                        
                        88,870Total
      current liabilities
                        
                        
                        314,409
                        
                        
                        
                        324,938Long-term
      debt
                        
                        
                        1,244,741
                        
                        
                        
                        1,282,041Deferred
      income taxes
                        
                        
                        25,955
                        
                        
                        
                        26,772Other
      liabilities
                        
                        
                        137,717
                        
                        
                        
                        139,318Commitments
      and contingenciesShareholders’
      deficit:Preferred
      stock
                        
                        
                        —
                        
                        
                        
                        —Common
      stock
                        
                        
                        545
                        
                        
                        
                        542Paid-in
      capital
                        
                        
                        274,852
                        
                        
                        
                        271,821Retained
      deficit
                        
                        
                        (451,277
                        )
                        
                        
                        (446,966
                        )Accumulated
      other comprehensive loss
                        
                        
                        (45,497
                        )
                        
                        
                        (46,352
                        )Total
      shareholders’ deficit
                        
                        
                        (221,377
                        )
                        
                        
                        (220,955
                        )Total
      liabilities and shareholders’ deficit
                        
                        $
                        1,501,445
                        
                        
                        $
                        1,552,114




See notes
to condensed consolidated financial statements.


1




CENVEO,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


(in
thousands, except per share data)


(unaudited)




Three
      Months EndedMarch
      28, 2009
                
                
                March
      29, 2008Net
      sales
                
                $
                412,100
                
                
                $
                534,328Cost
      of sales
                
                
                348,316
                
                
                
                436,298Selling,
      general and administrative
                
                
                52,515
                
                
                
                63,126Amortization
      of intangible assets
                
                
                2,316
                
                
                
                2,175Restructuring,
      impairment and other charges
                
                
                8,732
                
                
                
                9,749Operating
      income
                
                
                221
                
                
                
                22,980Interest
      expense, net
                
                
                22,545
                
                
                
                26,978Gain
      on early extinguishment of debt
                
                
                (17,642
                )
                
                
                —Other
      expense, net
                
                
                35
                
                
                
                461Loss
      from continuing operations before income taxes
                
                
                (4,717
                )
                
                
                (4,459
                )Income
      tax benefit
                
                
                (530
                )
                
                
                (1,716
                )Loss
      from continuing operations
                
                
                (4,187
                )
                
                
                (2,743
                )Loss
      from discontinued operations, net of taxes
                
                
                (124
                )
                
                
                (656
                )Net
      loss
                
                $
                (4,311
                )
                
                $
                (3,399
                )Loss
      per share – basic and diluted:Continuing
      operations
                
                $
                (0.08
                )
                
                $
                (0.05
                )Discontinued
      operations
                
                
                —
                
                
                
                (0.01
                )Net
      loss
                
                $
                (0.08
                )
                
                $
                (0.06
                )Weighted
      average shares:Basic
      and diluted
                
                
                54,352
                
                
                
                53,715




See notes
to condensed consolidated financial statements.


2


CENVEO,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(in
thousands)


(unaudited)




Three
      Months EndedMarch
      28, 2009
                              
                              
                              March
      29, 2008Cash
      flows from operating activities:Net
      loss
                              
                              $
                              (4,311
                              )
                              
                              $
                              (3,399
                              )Adjustments
      to reconcile net loss to net cash provided by operating
      activities:Loss
      from discontinued operations, net of taxes
                              
                              
                              124
                              
                              
                              
                              656Depreciation
      and amortization, excluding non-cash interest expense
                              
                              
                              17,450
                              
                              
                              
                              18,013Non-cash
      interest expense, net
                              
                              
                              485
                              
                              
                              
                              390Gain
      on early extinguishment of debt
                              
                              
                              (17,642
                              )
                              
                              
                              —Stock-based
      compensation provision
                              
                              
                              3,462
                              
                              
                              
                              2,692Non-cash
      restructuring, impairment and other charges
                              
                              
                              3,334
                              
                              
                              
                              3,456Deferred
      income taxes
                              
                              
                              (1,154
                              )
                              
                              
                              (1,775
                              )Gain
      on sale of assets
                              
                              
                              (47
                              )
                              
                              
                              (294
                              )Other
      non-cash charges, net
                              
                              
                              1,556
                              
                              
                              
                              3,140Changes
      in operating assets and liabilities:Accounts
      receivable
                              
                              
                              19,329
                              
                              
                              
                              35,195Inventories
                              
                              
                              9,040
                              
                              
                              
                              (10,106
                              )Accounts
      payable and accrued compensation and related liabilities
                              
                              
                              4,051
                              
                              
                              
                              (3,442
                              )Other
      working capital changes
                              
                              
                              2,268
                              
                              
                              
                              12,955Other,
      net
                              
                              
                              (1,527
                              )
                              
                              
                              (3,050
                              )Net
      cash provided by operating activities
                              
                              
                              36,418
                              
                              
                              
                              54,431Cash
      flows from investing activities:Capital
      expenditures
                              
                              
                              (9,150
                              )
                              
                              
                              (9,097
                              )Proceeds
      from sale of property, plant and equipment
                              
                              
                              363
                              
                              
                              
                              348Net
      cash used in investing activities
                              
                              
                              (8,787
                              )
                              
                              
                              (8,749
                              )Cash
      flows from financing activities:Repayment
      of term loans
                              
                              
                              (19,328
                              )
                              
                              
                              (1,800
                              )Repayment
      of 83⁄8% senior subordinated notes
                              
                              
                              (18,959
                              )
                              
                              
                              —Repayment
      of 101⁄2% senior notes
                              
                              
                              (3,250
                              )
                              
                              
                              —Repayment
      of 77⁄8% senior subordinated notes
                              
                              
                              (3,125
                              )
                              
                              
                              —Repayments
      of other long-term debt
                              
                              
                              (2,242
                              )
                              
                              
                              (1,806
                              )Purchase
      and retirement of common stock upon vesting  of
    RSUs
                              
                              
                              (431
                              )
                              
                              
                              —Payment
      of fees on early extinguishment of debt
                              
                              
                              (94
                              )
                              
                              
                              —(Repayments)
      borrowings under revolving credit facility, net
                              
                              
                              19,750
                              
                              
                              
                              (45,200
                              )Proceeds
      from exercise of stock options
                              
                              
                              —
                              
                              
                              
                              288Net
      cash used in financing activities
                              
                              
                              (27,679
                              )
                              
                              
                              (48,518
                              )Effect
      of exchange rate changes on cash and cash equivalents
                              
                              
                              (189
                              )
                              
                              
                              9Net
      decrease in cash and cash equivalents
                              
                              
                              (237
                              )
                              
                              
                              (2,827
                              )Cash
      and cash equivalents at beginning of year
                              
                              
                              10,444
                              
                              
                              
                              15,882Cash
      and cash equivalents at end of quarter
                              
                              $
                              10,207
                              
                              
                              $
                              13,055




See notes
to condensed consolidated financial statements.


3




CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




1.
Basis of Presentation




The
accompanying unaudited condensed consolidated financial statements (the
“Financial Statements”) of Cenveo, Inc. and subsidiaries (collectively, “Cenveo”
or the “Company”) have been prepared in accordance with Rule 10-01 of Regulation
S-X promulgated by the Securities and Exchange Commission (the “SEC”) and,
therefore, do not include all information and footnotes necessary for a fair
presentation of financial position, results of operations and cash flows in
conformity with accounting principles generally accepted in the United States of
America (“GAAP”). In the opinion of the Company, however, the Financial
Statements contain all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the Company’s financial position,
results of operations and cash flows as of and for the three month period ended
March 28, 2009. The results of operations for the three month period ended March
28, 2009 are generally not indicative of the results to be expected for the full
year. These Financial Statements should be read in conjunction with the audited
consolidated financial statements and notes thereto included in the Company’s
Annual Report on Form 10-K for the fiscal year ended January 3, 2009 (the “Form
10-K”).




It is the
Company’s practice to close its quarters on the Saturday closest to the last day
of the calendar quarter. The reporting periods ending on March 28, 2009 and
March 29, 2008 consist of 12 and 13 weeks, respectively.




New
Accounting Pronouncements




Effective
January 4, 2009, the Company adopted Statement of Financial Accounting Standards
(“SFAS”) No. 141R, Business Combinations (“SFAS 141R”). SFAS 141R establishes
revised principles and requirements for how the Company will recognize and
measure assets and liabilities acquired in a business combination. SFAS 141R is
effective for business combinations completed on or after January 4, 2009 for
the Company.  In accordance with the transition guidance in SFAS 141R,
the Company recorded a charge in the fourth quarter of 2008 to write-off
acquisition-related costs. Acquisition-related costs are included in selling,
general and administrative expenses in its condensed consolidated statement of
operations. SFAS 141R did not have a material impact on the Company’s condensed
consolidated statement of operations for the three months ended March 28,
2009.




Effective
January 4, 2009, the Company adopted SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51” (“SFAS 160”).
SFAS 160 establishes accounting and reporting standards for the noncontrolling
interests in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160
had no impact on the Company’s condensed consolidated financial statements at
January 4, 2009.




Effective
January 4, 2009, the Company adopted SFAS No. 161, “Disclosures about
Derivative Instruments and Hedging Activities: an amendment of FASB Statement
No. 133” (“SFAS 161”). SFAS 161 changes the disclosure requirements for
derivative instruments and hedging activities. SFAS 161 had no impact on the
Company’s condensed consolidated financial statements at January 4,
2009.




2.
Stock-Based Compensation




The
Company did not issue any form of stock-based compensation in the first quarter
of 2009. The only changes to the Company’s stock-based compensation awards from
the amounts presented as of January 3, 2009 were the vesting of 445,063
restricted stock units for shares of the Company’s common stock and the
cancellation or forfeiture of 20,000 stock options and 13,098 restricted share
units.




Total
stock-based compensation expense recognized in selling, general and
administrative expenses in the Company’s condensed consolidated statements of
operations was $3.5 million and $2.7 million for the three months ended March
28, 2009 and March 29, 2008, respectively.




4




CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




3.
Inventories




Inventories
by major category are as follows (in thousands):




March
      28, 2009
                      
                      
                      January
      3, 2009Raw
      materials
                      
                      $
                      63,166
                      
                      
                      $
                      67,236Work
      in process
                      
                      
                      22,734
                      
                      
                      
                      27,011Finished
      goods
                      
                      
                      63,753
                      
                      
                      
                      65,322$
                      149,653
                      
                      
                      $
                      159,569




4. Property, Plant and
Equipment




Property,
      plant and equipment are as follows (in
  thousands):




March
      28,
                    2009
                  
                  
                  January
      3, 2009Land
      and land improvements
                  
                  $
                  21,412
                  
                  
                  $
                  21,421Buildings
      and building improvements
                  
                  
                  111,142
                  
                  
                  
                  111,208Machinery
      and equipment
                  
                  
                  618,256
                  
                  
                  
                  622,929Furniture
      and fixtures
                  
                  
                  12,772
                  
                  
                  
                  12,589Construction
      in progress
                  
                  
                  16,229
                  
                  
                  
                  14,558779,811
                  
                  
                  
                  782,705Accumulated
      depreciation
                  
                  
                  (369,980
                  )
                  
                  
                  (362,248
                  )$
                  409,831
                  
                  
                  $
                  420,457




5.
Other Intangible Assets




Other
intangible assets are as follows (in thousands):







March
      28, 2009
                
                
                January
      3, 2009Gross
                  Carrying
                  Amount
                
                
                Accumulated
                  Amortization
                
                
                Net
                  Carrying
                  Amount
                
                
                Gross
                  Carrying
                  Amount
                
                
                Accumulated
                  Amortization
                
                
                Net
                  Carrying
                  AmountIntangible
      assets with determinable lives:Customer
      relationships
                
                $
                159,206
                
                
                $
                (31,825
                )
                
                $
                127,381
                
                
                $
                159,206
                
                
                $
                (29,875
                )
                
                $
                129,331Trademarks
      and tradenames
                
                
                21,011
                
                
                
                (4,307
                )
                
                
                16,704
                
                
                
                21,011
                
                
                
                (4,089
                )
                
                
                16,922Patents
                
                
                3,028
                
                
                
                (1,817
                )
                
                
                1,211
                
                
                
                3,028
                
                
                
                (1,755
                )
                
                
                1,273Non-compete
      agreements
                
                
                2,456
                
                
                
                (1,712
                )
                
                
                744
                
                
                
                2,456
                
                
                
                (1,634
                )
                
                
                822Other
                
                
                768
                
                
                
                (400
                )
                
                
                368
                
                
                
                768
                
                
                
                (392
                )
                
                
                376186,469
                
                
                
                (40,061
                )
                
                
                146,408
                
                
                
                186,469
                
                
                
                (37,745
                )
                
                
                148,724Intangible
      assets with indefinite lives:Trademarks
                
                
                127,500
                
                
                
                —
                
                
                
                127,500
                
                
                
                127,500
                
                
                
                —
                
                
                
                127,500Pollution
      credits
                
                
                720
                
                
                
                —
                
                
                
                720
                
                
                
                720
                
                
                
                —
                
                
                
                720Total
                
                $
                314,689
                
                
                $
                (40,061
                )
                
                $
                274,628
                
                
                $
                314,689
                
                
                $
                (37,745
                )
                
                $
                276,944




As of
March 28, 2009, the weighted average remaining amortization period for customer
relationships was 17 years, trademarks and tradenames was 24 years, patents was
five years, non-compete agreements was three years and other was 27
years.




Total
pre-tax amortization expense for each of the five years in the period ending
March 29, 2014 is estimated to be as follows:  $9.5 million, $9.4
million, $9.3 million, $9.1 million and $8.9 million,
respectively.


5




CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




6.
Long-Term Debt




Long-term
debt is as follows (in thousands):




March
      28,
                        2009
                      
                      
                      January
      3,
                        2009Term
      loan, due 2013
                      
                      $
                      688,572
                      
                      
                      $
                      707,90077⁄8%
      senior subordinated notes, due 2013
                      
                      
                      298,370
                      
                      
                      
                      303,370101⁄2%
      senior notes, due 2016
                      
                      
                      170,000
                      
                      
                      
                      175,00083⁄8%
      senior subordinated notes, due 2014 ($39.6 million and $72.3 million
      outstanding principal amount as of March 28, 2009 and January 3, 2009,
      respectively)
                      
                      
                      40,268
                      
                      
                      
                      73,581Revolving
      credit facility, due 2012
                      
                      
                      27,750
                      
                      
                      
                      8,000Other
                      
                      
                      36,262
                      
                      
                      
                      38,5041,261,222
                      
                      
                      
                      1,306,355Less
      current maturities
                      
                      
                      (16,481
                      )
                      
                      
                      (24,314
                      )Long-term
      debt
                      
                      $
                      1,244,741
                      
                      
                      $
                      1,282,041


Extinguishments





During
the first quarter of 2009, the Company purchased in the open market and retired
principal amounts of approximately $32.7 million, $5.0 million and $5.0 million
of its 83⁄8% senior subordinated notes due 2014 (the “83⁄8% Notes”), 101⁄2%
senior notes due 2016 (the “101⁄2% Notes”) and 77⁄8% senior subordinated notes due
2013 (the “77⁄8% Notes”), respectively, for approximately $19.0 million, $3.3
million and $3.1 million, respectively, plus accrued and unpaid
interest.  In connection with these repurchases, the Company recorded
gains on early extinguishment of debt of $17.6 million, which included the
write-off of $0.6 million of fair value increase related to the 83⁄8%
Notes, $0.2 million of previously unamortized debt issuance costs and fees
paid of $0.1 million. These open market purchases were made within permitted
restricted payment limits under the Company’s debt agreements.




From
March 29, 2009 through April 8, 2009, the Company purchased in the open market
and retired principal amounts of approximately $7.4 million of its 83⁄8% Notes and
approximately $2.1 million of its 77⁄8% Notes for approximately $4.1 million and
$1.2 million, respectively, plus accrued and unpaid interest.  In
connection with these purchases, the Company will record gains on early
extinguishment of debt of approximately $4.3 million during the second quarter
of 2009. These open market purchases were made within permitted restricted
payment limits under the Company’s debt agreements at the time of
purchase.





Debt
Compliance and Amendment of Amended Credit Facilities




The
Company’s revolving credit facility due 2012 (the “Revolving Credit Facility”),
and its term loans and delayed-draw term loans due 2013 (the “Term Loans” and
collectively with the Revolving Credit Facility the “Amended Credit
Facilities”), contain two financial covenants that must be complied with: a
minimum consolidated interest coverage ratio (“Interest Coverage Covenant”) and
a maximum consolidated leverage ratio (“Leverage Covenant”). The Company was in
compliance with all debt agreement covenants as of March 28, 2009.





On April
24, 2009, the Company amended its Amended Credit Facilities with the consent of
the lenders thereunder, which included, among other things, modifications
to the Leverage Covenant and the Interest Coverage Covenant.  The
Company’s Leverage Covenant, which it must be in pro forma compliance with at
all times, has been increased through March 31, 2010, and then proceeds to step
down through the end of the term of the Amended Credit Facilities. The Company’s
Interest Coverage Covenant, which it must be in compliance with on a quarterly
basis, has been reduced through December 31, 2009, and then proceeds to step up
through the end of the term of the Amended Credit Facilities. Additionally, the
calculations of the two financial covenants discussed above have been modified
to permit the adding back of certain amounts.


6


CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




6.
Long-Term Debt (Continued)


As
conditions to the amendment, the Company agreed, among other things, to increase
the pricing on all outstanding Revolving Credit Facility balances and Term Loans
to include interest at the three-month London Interbank Offered Rate (LIBOR)
plus a spread ranging from 400 basis points to 450 basis points, depending on
the quarterly Leverage Covenant then in effect. Previously, the Company’s LIBOR
borrowing spread under the Revolving Credit Facility ranged from 175 basis
points to 200 basis points, based upon the Leverage Covenant, and the LIBOR
borrowing spread on the Term Loans was 200 basis
points.   Further, the amendment: (i) reduces the Revolving
Credit Facility from $200.0 million to $172.5 million; (ii) increases the
unfunded commitment fee paid to revolving credit lenders from 50 basis points to
75 basis points; (iii) eliminates the Company’s ability to request a $300.0
million incremental term loan facility; (iv) limits new unsecured debt and debt
assumed from acquisitions; (v) eliminates the restricted payments basket while
leverage exceeds certain thresholds; (vi) requires that certain additional
financial information be delivered; (vii) lowers the annual amount that can be
spent on capital expenditures; and (viii) increases certain mandatory
prepayments.  An amendment fee of 50 basis points was paid to all
consenting lenders who approved the amendment. Except as provided in the
amendment, all other provisions of the Company’s Amended Credit Facilities
remain in full force and effect.
 
 In
connection with the above amendment in the second quarter of 2009, the Company
will incur a loss on extinguishment of debt of approximately $5.0 million, of
which approximately $3.9 million relates to fees paid to consenting lenders and
approximately $1.1 million relates to the write-off of previously unamortized
debt issuance costs.  In addition, the Company will capitalize
approximately $3.4 million of third party costs and fees paid to consenting
lenders and amortize them over the remaining life of the Amended Credit
Facilities.


Interest
Rate and Forward Starting Interest Rate Swaps





The
Company enters into interest rate swap agreements to hedge interest rate
exposure of notional amounts of its floating rate debt.  As of March
28, 2009 and January 3, 2009, the Company had $595.0 million of such interest
rate swaps.  The Company’s hedges of interest rate risk were
designated and documented at inception as cash flow hedges and are evaluated for
effectiveness at least quarterly. Effectiveness of the hedges is calculated by
comparing the fair value of the derivatives to hypothetical derivatives that
would be a perfect hedge of floating rate debt. The accounting for gains and
losses associated with changes in the fair value of cash flow hedges and the
effect on the Company’s condensed consolidated financial statements depends on
whether the hedge is highly effective in achieving offsetting changes in fair
value of cash flows of the liability hedged. As of March 28, 2009, the Company
does not anticipate reclassifying any ineffectiveness into its results of
operations for the next twelve months.




In June
2009, $220.0 million of the $595.0 million interest rate swap agreements will
mature. In the fourth quarter of 2008, the Company entered into $75.0 million of
forward starting interest rate swaps to partially replace these maturing swap
agreements.





The
Company’s interest rate swaps are valued using discounted cash flows, as no
quoted market prices exist for the specific instruments. The primary inputs to
the valuation are maturity and interest rate yield curves, specifically
three-month LIBOR, using commercially available market sources. The interest
rate swaps are categorized as Level 2 under SFAS No. 157, Fair value Measurements
(“SFAS 157”). The table below presents the fair value of the Company’s interest
rate swaps (in thousands):





March
      28, 2009
                      
                      
                      January
      3, 2009Current
      Liabilities:Interest
      Rate Swaps
                      
                      $
                      2,394
                      
                      
                      $
                      4,483Long-Term
      Liabilities:Interest
      Rate Swaps
                      
                      
                      21,930
                      
                      
                      
                      23,180Forward
      Starting Swaps
                      
                      
                      1,512
                      
                      
                      
                      943





7




CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




7.
Restructuring, Impairment and Other Charges




The
Company has one active and two residual cost savings plans: (i) the 2009 Cost
Savings and Restructuring Plan and (ii) the 2007 Cost Savings and Integration
Plan and the 2005 Cost Savings and Restructuring Plan.




2009
Cost Savings and Restructuring Plan




In the
first quarter of 2009, the Company developed and implemented a cost savings and
restructuring plan to reduce its operating costs and realign its manufacturing
platform in order to compete effectively during the current economic downturn.
Accordingly, in the first quarter of 2009, the Company implemented cost savings
initiatives throughout its operations and closed three envelope plants in Deer
Park, New York, Boone, Iowa and Carlstadt, New Jersey, as well as one commercial
printing plant in Easton, Maryland and consolidated their operations into other
existing operations.  As a result of these actions in the first
quarter of 2009, the Company reduced headcount by approximately 400. The
following tables present the details of the expenses recognized as a result of
this plan.




2009
Activity




Restructuring
and impairment charges for the three months ended March 28, 2009 were as follows
(in thousands):




Envelopes,
                    Forms
      and
                    Labels
                  
                  
                  Commercial
                    Printing
                  
                  
                  TotalEmployee
      separation costs
                  
                  $
                  1,999
                  
                  
                  $
                  3,194
                  
                  
                  $
                  5,193Asset
      impairments
                  
                  
                  2,571
                  
                  
                  
                  147
                  
                  
                  
                  2,718Equipment
      moving expenses
                  
                  
                  133
                  
                  
                  
                  18
                  
                  
                  
                  151Lease
      termination expenses
                  
                  
                  —
                  
                  
                  
                  184
                  
                  
                  
                  184Building
      clean-up and other expenses
                  
                  
                  7
                  
                  
                  
                  187
                  
                  
                  
                  194Total
      restructuring and impairment charges
                  
                  $
                  4,710
                  
                  
                  $
                  3,730
                  
                  
                  $
                  8,440




A summary
of the activity charged to the restructuring liabilities for the 2009 Cost
Savings and Restructuring Plan is as follows (in thousands):





Lease
                        Termination
                        Costs
                      
                      
                      Employee
                        Separation
                        Costs
                      
                      
                      Other
                        Exit
      Costs
                      
                      
                      TotalBalance
      at January 3, 2009
                      
                      $
                      —
                      
                      
                      $
                      —
                      
                      
                      $
                      —
                      
                      
                      $
                      —Accruals,
      net
                      
                      
                      184
                      
                      
                      
                      5,193
                      
                      
                      
                      345
                      
                      
                      
                      5,722Payments
                      
                      
                      —
                      
                      
                      
                      (875
                      )
                      
                      
                      (244
                      )
                      
                      
                      (1,119
                      )Balance
      at March 28, 2009
                      
                      $
                      184
                      
                      
                      $
                      4,318
                      
                      
                      $
                      101
                      
                      
                      $
                      4,603




2007
Cost Savings and Integration Plan




The
following tables present the details of the expenses recognized as a result of
this plan.




2009
Activity




Restructuring
and impairment charges for the three months ended March 28, 2009 were as follows
(in thousands):




Envelopes,
                      Forms
      and
                      Labels
                    
                    
                    Commercial
                      Printing
                    
                    
                    Corporate
                    
                    
                    TotalEmployee
      separation costs
                    
                    $
                    61
                    
                    
                    $
                    82
                    
                    
                    $
                    29
                    
                    
                    $
                    172Asset
      impairments, net of gain on sale
                    
                    
                    —
                    
                    
                    
                    17
                    
                    
                    
                    —
                    
                    
                    
                    17Equipment
      moving expenses
                    
                    
                    —
                    
                    
                    
                    8
                    
                    
                    
                    —
                    
                    
                    
                    8Lease
      termination expenses
                    
                    
                    13
                    
                    
                    
                    54
                    
                    
                    
                    3
                    
                    
                    
                    70Building
      clean-up and other expenses
                    
                    
                    8
                    
                    
                    
                    192
                    
                    
                    
                    18
                    
                    
                    
                    218Total
      restructuring and impairment charges
                    
                    $
                    82
                    
                    
                    $
                    353
                    
                    
                    $
                    50
                    
                    
                    $
                    485







8




CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




7.
Restructuring, Impairment and Other Charges (Continued)




2008
Activity




Restructuring
and impairment charges for the three months ended March 29, 2008 were as follows
(in thousands):




Envelopes,
                          Forms
      and
                          Labels
                        
                        
                        Commercial
                          Printing
                        
                        
                        TotalEmployee
      separation costs
                        
                        $
                        813
                        
                        
                        $
                        730
                        
                        
                        $
                        1,543Asset
      impairments
                        
                        
                        152
                        
                        
                        
                        —
                        
                        
                        
                        152Equipment
      moving expenses
                        
                        
                        48
                        
                        
                        
                        67
                        
                        
                        
                        115Lease
      termination expenses
                        
                        
                        294
                        
                        
                        
                        —
                        
                        
                        
                        294Building
      clean-up and other expenses
                        
                        
                        155
                        
                        
                        
                        228
                        
                        
                        
                        383Total
      restructuring and impairment charges
                        
                        $
                        1,462
                        
                        
                        $
                        1,025
                        
                        
                        $
                        2,487




A summary
of the activity charged to the restructuring liabilities for the 2007 Cost
Savings and Integration Plan is as follows (in thousands):





Lease
                      Termination
                      Costs
                    
                    
                    Employee
                      Separation
                      Costs
                    
                    
                    Pension
                      Withdrawal
                      Liabilities
                    
                    
                    TotalBalance
      at January 3, 2009
                    
                    $
                    3,589
                    
                    
                    $
                    1,975
                    
                    
                    $
                    1,800
                    
                    
                    $
                    7,364Accruals,
      net
                    
                    
                    70
                    
                    
                    
                    172
                    
                    
                    
                    —
                    
                    
                    
                    242Payments
                    
                    
                    (434
                    )
                    
                    
                    (1,218
                    )
                    
                    
                    —
                    
                    
                    
                    (1,652
                    )Balance
      at March 28, 2009
                    
                    $
                    3,225
                    
                    
                    $
                    929
                    
                    
                    $
                    1,800
                    
                    
                    $
                    5,954




2005
Cost Savings and Restructuring Plan




The
following tables present the details of the expenses recognized as a result of
this plan.




2009
Activity




Restructuring
and impairment charges (income) for the three months ended March 28, 2009 were
as follows (in thousands):




Envelopes,
                    Forms
      and
                    Labels
                  
                  
                  Commercial
                    Printing
                  
                  
                  Corporate
                  
                  
                  TotalEmployee
      separation costs
                  
                  $
                  —
                  
                  
                  $
                  —
                  
                  
                  $
                  —
                  
                  
                  $
                  —Asset
      impairments
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —Equipment
      moving expenses
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —Lease
      termination expenses
                  
                  
                  (41
                  )
                  
                  
                  20
                  
                  
                  
                  67
                  
                  
                  
                  46Building
      clean-up and other expenses
                  
                  
                  5
                  
                  
                  
                  (244
                  )
                  
                  
                  —
                  
                  
                  
                  (239
                  )Total
      restructuring and impairment charges (income)
                  
                  $
                  (36
                  )
                  
                  $
                  (224
                  )
                  
                  $
                  67
                  
                  
                  $
                  (193
                  )






9


CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)





7.
Restructuring, Impairment and Other Charges (Continued)




2008
Activity




Restructuring
and impairment charges for the three months ended March 29, 2008 were as follows
(in thousands):




Envelopes,
                    Forms
      and
                    Labels
                  
                  
                  Commercial
                    Printing
                  
                  
                  Corporate
                  
                  
                  TotalEmployee
      separation costs
                  
                  $
                  13
                  
                  
                  $
                  122
                  
                  
                  $
                  68
                  
                  
                  $
                  203Asset
      impairments, net of gain on sale
                  
                  
                  —
                  
                  
                  
                  (476
                  )
                  
                  
                  —
                  
                  
                  
                  (476
                  )Equipment
      moving expenses
                  
                  
                  —
                  
                  
                  
                  322
                  
                  
                  
                  —
                  
                  
                  
                  322Lease
      termination expenses
                  
                  
                  32
                  
                  
                  
                  —
                  
                  
                  
                  34
                  
                  
                  
                  66Building
      clean-up and other expenses
                  
                  
                  148
                  
                  
                  
                  361
                  
                  
                  
                  —
                  
                  
                  
                  509Total
      restructuring and impairment charges
                  
                  $
                  193
                  
                  
                  $
                  329
                  
                  
                  $
                  102
                  
                  
                  $
                  624





A summary
of the activity charged to the restructuring liabilities for the 2005 Cost
Savings and Restructuring Plan is as follows (in thousands):




Lease
                        Termination
                        Costs
                      
                      
                      Employee
                        Separation
                        Costs
                      
                      
                      Pension
                        Withdrawal
                        Liabilities
                      
                      
                      TotalBalance
      at January 3, 2009
                      
                      $
                      3,877
                      
                      
                      $
                      —
                      
                      
                      $
                      208
                      
                      
                      $
                      4,085Accruals,
      net
                      
                      
                      46
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      46Payments
                      
                      
                      (948
                      )
                      
                      
                      —
                      
                      
                      
                      (29
                      )
                      
                      
                      (977
                      )Balance
      at March 28, 2009
                      
                      $
                      2,975
                      
                      
                      $
                      —
                      
                      
                      $
                      179
                      
                      
                      $
                      3,154




Other
Charges




In
connection with the internal review conducted by outside counsel under the
direction of the Company’s audit committee in the first quarter of 2008, the
Company incurred a non-recurring charge in 2008 of approximately $6.7 million
for professional fees.




Liabilities
Related to Exit Activities from Acquisitions




The
Company recorded liabilities in the purchase price allocation in connection with
its plans to exit certain activities of prior year acquisitions. A summary of
the activity recorded for these liabilities is as follows (in
thousands):




Lease
                                                        Termination
                                                        CostsBalance
      at January 3, 2009
                                                      
                                                      $
                                                      2,264Accruals,
      net
                                                      
                                                      
                                                      —Payments
                                                      
                                                      
                                                      (134
                                                      )Balance
      at March 28, 2009
                                                      
                                                      $
                                                      2,130




10


CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




8.
Pension Plans




The
components of the net periodic pension expense for the Company’s pension plans
and other postretirement benefit plans are as follows (in
thousands):







Pension
      and
                      Postretirement
      PlansThree
      Months EndedMarch
      28,
                      2009
                    
                    
                    March
      29,
                      2008Service
      cost
                    
                    $
                    99
                    
                    
                    $
                    119Interest
      cost
                    
                    
                    2,493
                    
                    
                    
                    2,581Expected
      return on plan assets
                    
                    
                    (1,926
                    )
                    
                    
                    (2,685
                    )Net
      amortization and deferral
                    
                    
                    —
                    
                    
                    
                    2Recognized
      net actuarial loss
                    
                    
                    588
                    
                    
                    
                    56Net
      periodic pension expense
                    
                    $
                    1,254
                    
                    
                    $
                    73




Interest
cost on projected benefit obligation includes $0.2 million and $0.3 million
related to the Company’s postretirement plans in the three months ended March
28, 2009 and March 29, 2008, respectively.




For the
three months ended March 28, 2009, the Company made contributions of $1.2
million to its pension plans and postretirement plans. The Company expects to
contribute approximately $6.1 million to its pension plans and postretirement
plans for the remainder of 2009.





9.
Commitments and Contingencies





The
Company is party to various legal actions that are ordinary and incidental to
its business. While the outcome of pending legal actions cannot be predicted
with certainty, management believes the outcome of these various proceedings
will not have a material adverse effect on the Company’s consolidated financial
condition or results of operations.




10.
Comprehensive Loss




A summary
of comprehensive loss is as follows (in thousands):





Three
      Months EndedMarch
      28,
                        2009
                      
                      
                      March
      29,
                        2008Net
      loss
                      
                      $
                      (4,311
                      )
                      
                      $
                      (3,399
                      )Other
      comprehensive income (loss):Unrealized
      gain (loss) on cash flow hedges
                      
                      
                      1,555
                      
                      
                      
                      (9,359
                      )Currency
      translation adjustment
                      
                      
                      (700
                      )
                      
                      
                      (1,250
                      )Comprehensive
      loss
                      
                      $
                      (3,456
                      )
                      
                      $
                      (14,008
                      )




11.
Loss per Share




Basic
loss per share is computed based upon the weighted average number of common
shares outstanding for the period. Diluted loss per share reflects the potential
dilution that could occur if options, restricted stock and restricted share
units (“RSUs”) to issue common stock were exercised under the treasury stock
method. The only Company securities as of March 28, 2009 that could dilute basic
loss per share for periods subsequent to March 28, 2009 that were not included
in the computation of diluted earnings per share are (i) outstanding stock
options which are exercisable into 2,901,975 shares of the Company’s common
stock and (ii) 2,122,628 shares of restricted stock and RSUs.













11


CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




11.
Loss per Share (Continued)




The
following table sets forth the computation of basic and diluted loss per share
for the periods ended (in thousands, except per share data):




Three
      Months EndedMarch
      28, 2009
                          
                          
                          March
      29, 2008Numerator
      for basic and diluted loss per share:Loss
      from continuing operations
                          
                          $
                          4,187
                          
                          
                          $
                          2,743Loss
      from discontinued operations, net of taxes
                          
                          
                          124
                          
                          
                          
                          656Net
      loss
                          
                          $
                          4,311
                          
                          
                          $
                          3,399Denominator
      weighted average common shares outstanding:Basic
      and diluted shares
                          
                          
                          54,352
                          
                          
                          
                          53,715Loss
      per share – basic and diluted:Continuing
      operations
                          
                          $
                          0.08
                          
                          
                          $
                          0.05Discontinued
      operations
                          
                          
                          —
                          
                          
                          
                          0.01Net
      loss
                          
                          $
                          0.08
                          
                          
                          $
                          0.06




12.
Segment Information




The
Company operates in two segments: the envelopes, forms and labels segment and
the commercial printing segment. The envelopes, forms and labels segment
specializes in the design, manufacturing and printing of: (i) custom and direct
mail envelopes developed for the advertising, billing and remittance needs of a
variety of customers, including financial services companies; (ii) custom labels
and specialty forms sold through an extensive network of resale distributors for
industries including food and beverage, manufacturing and pharmacy chains; and
(iii) stock envelopes, labels and business forms generally sold to independent
distributors, office-products suppliers and office-products retail
chains.  The commercial printing segment provides print, design and
content management offerings, including: (i) high-end printed materials, which
includes a wide range of premium products for major national and regional
customers; (ii) general commercial printing products for regional and local
customers; (iii) scientific, technical and medical journals and special interest
and trade magazines for non-profit organizations, educational institutions and
specialty publishers; and (iv) specialty packaging and high quality promotional
materials for multinational consumer products companies.




Operating
income of each segment includes substantially all costs and expenses directly
related to the segment’s operations. Corporate expenses include corporate
general and administrative expenses (Note 2).




Corporate
identifiable assets primarily consist of cash and cash equivalents, deferred
financing fees, deferred tax assets and other assets.







12


CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




12.
Segment Information (Continued)




The
following tables present certain segment information (in
thousands):




Three
      Months EndedMarch
      28, 2009
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              March
      29, 2008Net
      sales:Envelopes,
      forms and labels
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              182,431
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              238,137Commercial
      printing
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              229,669
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              296,191Total
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              412,100
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              534,328Operating
      income (loss):Envelopes,
      forms and labels
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              8,406
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              25,626Commercial
      printing
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              1,430
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              11,278Corporate
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              (9,615
                                                                                                                                                              )
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              (13,924
                                                                                                                                                              )Total
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              221
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              22,980Restructuring,
      impairment and other charges:Envelopes,
      forms and labels
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              4,756
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              1,655Commercial
      printing
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              3,859
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              1,354Corporate
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              117
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              6,740Total
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              8,732
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              9,749150Net
      sales by product line:Envelopes
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              126,675
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              165,668Commercial
      printing
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              155,775
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              201,405Journals
      and periodicals
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              73,333
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              93,845Labels
      and business forms
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              56,317
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              73,410Total
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              412,100
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              534,328Intercompany
      sales:Envelopes,
      forms and labels to commercial printing
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              1,367
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              1,234Commercial
      printing to envelopes, forms and labels
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              540
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              1,514Total
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              1,907
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              2,748March
      28,
                                                                                                                                                                2009
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              January
      3, 2009Identifiable
      assets:Envelopes,
      forms and labels
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              601,180
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              624,760Commercial
      printing
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              837,310
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              863,224Corporate
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              62,955
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              64,130Total
                                                                                                                                                              
                                                                                                                                                              $
                                                                                                                                                              1,501,445
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              
                                                                                                                                                              1,552,114


13




CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




13.
Condensed Consolidating Financial Information




Cenveo is
a holding company (“Parent Company”), which is the ultimate parent of all Cenveo
subsidiaries. In January 2004, the Parent Company’s wholly owned subsidiary,
Cenveo Corporation (the “Subsidiary Issuer”), issued 77⁄8% Notes and, in
connection with the acquisition of Cadmus Communications Corporation (“Cadmus”),
assumed Cadmus’ 83⁄8% Notes (the “Subsidiary Issuer Notes”), which are fully and
unconditionally guaranteed, on a joint and several basis, by the Parent Company
and substantially all of its wholly-owned subsidiaries (the “Guarantor
Subsidiaries”).





Presented
below is condensed consolidating financial information for the Parent Company,
the Subsidiary Issuer, the Guarantor Subsidiaries and Non-Guarantor Subsidiaries
for the three months ended March 28, 2009 and March 29, 2008.  The
condensed consolidating financial information has been presented to show the
nature of assets held, results of operations and cash flows of the Parent
Company, the Subsidiary Issuer, the Guarantor Subsidiaries and Non-Guarantor
Subsidiaries, assuming the guarantee structure of the Subsidiary Issuer Notes
was in effect at the beginning of the periods presented.




The
supplemental condensed consolidating financial information reflects the
investments of the Parent Company in the Subsidiary Issuer, the Guarantor
Subsidiaries and Non-Guarantor Subsidiaries using the equity method of
accounting. The Company’s primary transactions with its subsidiaries other than
the investment account and related equity in net loss of unconsolidated
subsidiaries are the intercompany payables and receivables between its
subsidiaries.




14




CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




13.
Condensed Consolidating Financial Information (Continued)





CENVEO,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATING BALANCE SHEET


March
28, 2009


(in
thousands)




Parent
                
                
                Subsidiary
                
                
                Guarantor
                
                
                Non-GuarantorCompany
                
                
                Issuer
                
                
                Subsidiaries
                
                
                Subsidiaries
                
                
                Eliminations
                
                
                ConsolidatedAssetsCurrent
      assets:Cash
      and cash equivalents
                
                $
                —
                
                
                $
                5,040
                
                
                $
                634
                
                
                $
                4,533
                
                
                $
                —
                
                
                $
                10,207Accounts
      receivable, net
                
                
                —
                
                
                
                124,066
                
                
                
                119,627
                
                
                
                6,305
                
                
                
                —
                
                
                
                249,998Inventories
                
                
                —
                
                
                
                81,209
                
                
                
                67,018
                
                
                
                1,426
                
                
                
                —
                
                
                
                149,653Notes
      receivable from subsidiaries
                
                
                —
                
                
                
                39,213
                
                
                
                —
                
                
                
                —
                
                
                
                (39,213
                )
                
                
                —Prepaid
      and other current assets
                
                
                —
                
                
                
                54,658
                
                
                
                11,671
                
                
                
                2,215
                
                
                
                —
                
                
                
                68,544Total
      current assets
                
                
                —
                
                
                
                304,186
                
                
                
                198,950
                
                
                
                14,479
                
                
                
                (39,213
                )
                
                
                478,402Investment
      in subsidiaries
                
                
                (221,377
                )
                
                
                1,385,122
                
                
                
                8,739
                
                
                
                —
                
                
                
                (1,172,484
                )
                
                
                —Property,
      plant and equipment, net
                
                
                —
                
                
                
                162,143
                
                
                
                247,294
                
                
                
                394
                
                
                
                —
                
                
                
                409,831Goodwill
                
                
                —
                
                
                
                29,245
                
                
                
                281,938
                
                
                
                —
                
                
                
                —
                
                
                
                311,183Other
      intangible assets, net
                
                
                —
                
                
                
                8,988
                
                
                
                265,640
                
                
                
                —
                
                
                
                —
                
                
                
                274,628Other
      assets, net
                
                
                —
                
                
                
                21,172
                
                
                
                5,903
                
                
                
                326
                
                
                
                —
                
                
                
                27,401Total
      assets
                
                $
                (221,377
                )
                
                $
                1,910,856
                
                
                $
                1,008,464
                
                
                $
                15,199
                
                
                $
                (1,211,697
                )
                
                $
                1,501,445Liabilities
      and Shareholders’ Equity (Deficit)Current
      liabilities:Current
      maturities of long-term debt
                
                $
                —
                
                
                $
                8,466
                
                
                $
                8,015
                
                
                $
                —
                
                
                $
                —
                
                
                $
                16,481Accounts
      payable
                
                
                —
                
                
                
                107,481
                
                
                
                72,142
                
                
                
                1,799
                
                
                
                —
                
                
                
                181,422Accrued
      compensation and related liabilities
                
                
                —
                
                
                
                20,596
                
                
                
                12,357
                
                
                
                —
                
                
                
                —
                
                
                
                32,953Other
      current liabilities
                
                
                —
                
                
                
                66,963
                
                
                
                15,574
                
                
                
                1,016
                
                
                
                —
                
                
                
                83,553Intercompany
      payable (receivable)
                
                
                —
                
                
                
                691,345
                
                
                
                (695,793
                )
                
                
                4,448
                
                
                
                —
                
                
                
                —Notes
      payable to issuer
                
                
                —
                
                
                
                —
                
                
                
                39,213
                
                
                
                —
                
                
                
                (39,213
                )
                
                
                —Total
      current liabilities
                
                
                —
                
                
                
                894,851
                
                
                
                (548,492
                )
                
                
                7,263
                
                
                
                (39,213
                )
                
                
                314,409Long-term
      debt
                
                
                —
                
                
                
                1,223,619
                
                
                
                21,122
                
                
                
                —
                
                
                
                —
                
                
                
                1,244,741Deferred
      income tax liability (asset)
                
                
                —
                
                
                
                (59,585
                )
                
                
                86,343
                
                
                
                (803
                )
                
                
                —
                
                
                
                25,955Other
      liabilities
                
                
                —
                
                
                
                73,348
                
                
                
                64,369
                
                
                
                —
                
                
                
                —
                
                
                
                137,717Shareholders’
      equity (deficit)
                
                
                (221,377
                )
                
                
                (221,377
                )
                
                
                1,385,122
                
                
                
                8,739
                
                
                
                (1,172,484
                )
                
                
                (221,377
                )Total
      liabilities and shareholders’ equity (deficit)
                
                $
                (221,377
                )
                
                $
                1,910,856
                
                
                $
                1,008,464
                
                
                $
                15,199
                
                
                $
                (1,211,697
                )
                
                $
                1,501,445










15




CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




13.
Condensed Consolidating Financial Information (Continued)





CENVEO,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATING STATEMENT OF OPERATIONS


For
the three months ended March 28, 2009


(in
thousands)




Parent
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            Subsidiary
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            Guarantor
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            Non-
                                                                                                                                                                              GuarantorCompany
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            Issuer
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            Subsidiaries
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            Subsidiaries
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            Eliminations
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            ConsolidatedNet
      sales
                                                                                                                                                                            
                                                                                                                                                                            $
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            $
                                                                                                                                                                            194,866
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            $
                                                                                                                                                                            212,442
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            $
                                                                                                                                                                            4,792
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            $
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            $
                                                                                                                                                                            412,100Cost
      of sales
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            166,643
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            178,831
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            2,842
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            348,316Selling,
      general and administrative
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            31,384
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            21,028
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            103
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            52,515Amortization
      of intangible assets
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            101
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            2,215
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            2,316Restructuring,
      impairment and other charges
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            4,229
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            4,503
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            8,732Operating
      income (loss)
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (7,491
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            5,865
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            1,847
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            221Interest
      expense (income), net
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            22,235
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            336
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (26
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            22,545Intercompany
      interest expense (income)
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (284
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            284
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —Gain
      on early extinguishment of debt
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (17,642
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (17,642
                                                                                                                                                                            )Other
      (income) expense, net
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            248
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            54
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (267
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            35Income
      (loss) from continuing operations before income taxes and equity in income
      of unconsolidated subsidiaries
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (12,048
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            5,191
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            2,140
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (4,717
                                                                                                                                                                            )Income
      tax expense (benefit)
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (2,362
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            1,778
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            54
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (530
                                                                                                                                                                            )Income
      (loss) from continuing operations before equity in income of
      unconsolidated subsidiaries
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (9,686
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            3,413
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            2,086
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (4,187
                                                                                                                                                                            )Equity
      in income of unconsolidated subsidiaries
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (4,311
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            5,499
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            2,086
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (3,274
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —Income
      (loss) from continuing operations
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (4,311
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (4,187
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            5,499
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            2,086
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (3,274
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (4,187
                                                                                                                                                                            )Loss
      from discontinued operations, net of taxes
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (124
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            —
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            (124
                                                                                                                                                                            )Net
      income (loss)
                                                                                                                                                                            
                                                                                                                                                                            $
                                                                                                                                                                            (4,311
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            $
                                                                                                                                                                            (4,311
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            $
                                                                                                                                                                            5,499
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            $
                                                                                                                                                                            2,086
                                                                                                                                                                            
                                                                                                                                                                            
                                                                                                                                                                            $
                                                                                                                                                                            (3,274
                                                                                                                                                                            )
                                                                                                                                                                            
                                                                                                                                                                            $
                                                                                                                                                                            (4,311
                                                                                                                                                                            )







16




CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




13.
Condensed Consolidating Financial Information (Continued)





CENVEO,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATING STATEMENT OF CASH FLOWS


For
the three months ended March 28, 2009


(in thousands)




Parent
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                Subsidiary
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                Guarantor
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                Non-
                                                                                                                                                                                                                  GuarantorCompany
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                Issuer
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                Subsidiaries
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                Subsidiaries
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                Eliminations
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                ConsolidatedCash
      flows from operating activities:Net
      cash provided by (used in) operating activities
                                                                                                                                                                                                                
                                                                                                                                                                                                                $
                                                                                                                                                                                                                3,462
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                $
                                                                                                                                                                                                                (5,730
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                $
                                                                                                                                                                                                                38,636
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                $
                                                                                                                                                                                                                50
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                $
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                $
                                                                                                                                                                                                                36,418Cash
      flows from investing activities:Capital
      expenditures
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (4,258
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (4,892
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (9,150
                                                                                                                                                                                                                )Intercompany
      note
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (18
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                18
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —Proceeds
      from sale of property, plant and equipment
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                1
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                362
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                363Net
      cash (used in) provided by investing activities
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (4,275
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (4,530
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                18
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (8,787
                                                                                                                                                                                                                )Cash
      flows from financing activities:Repayment
      of term loans
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (19,328
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (19,328
                                                                                                                                                                                                                )Repayment
      of 83⁄8% senior subordinated notes
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (18,959
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (18,959
                                                                                                                                                                                                                )Repayment
      of 101⁄2% senior notes
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (3,250
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (3,250
                                                                                                                                                                                                                )Repayment
      of 77⁄8% senior subordinated notes
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (3,125
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (3,125
                                                                                                                                                                                                                )Repayments
      of other long-term debt
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (155
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (2,087
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (2,242
                                                                                                                                                                                                                )Purchase
      and retirement of common stock upon vesting  of
    RSUs
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (431
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (431
                                                                                                                                                                                                                )Payment
      of fees on early extinguishment of debt
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (94
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (94
                                                                                                                                                                                                                )(Repayments)
      borrowings under revolving credit facility, net
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                19,750
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                19,750Intercompany
      note
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                18
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (18
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —Intercompany
      advances
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (3,031
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                35,491
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (32,456
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (4
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —Net
      cash (used in) provided by financing activities
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (3,462
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                10,330
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (34,525
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (4
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (18
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (27,679
                                                                                                                                                                                                                )Effect
      of exchange rate changes on cash and cash equivalents
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (189
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (189
                                                                                                                                                                                                                )Net
      (decrease) increase  in cash and cash
equivalents
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                325
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (419
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (143
                                                                                                                                                                                                                )
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                (237
                                                                                                                                                                                                                )Cash
      and cash equivalents at beginning of year
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                4,715
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                1,053
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                4,676
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                10,444Cash
      and cash equivalents at end of quarter
                                                                                                                                                                                                                
                                                                                                                                                                                                                $
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                $
                                                                                                                                                                                                                5,040
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                $
                                                                                                                                                                                                                634
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                $
                                                                                                                                                                                                                4,533
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                $
                                                                                                                                                                                                                —
                                                                                                                                                                                                                
                                                                                                                                                                                                                
                                                                                                                                                                                                                $
                                                                                                                                                                                                                10,207





17




CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




13.
Condensed Consolidating Financial Information (Continued)





CENVEO,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATING BALANCE SHEET


January
3, 2009


(in
thousands)




Parent
                  
                  
                  Subsidiary
                  
                  
                  Guarantor
                  
                  
                  Non-GuarantorCompany
                  
                  
                  Issuer
                  
                  
                  Subsidiaries
                  
                  
                  Subsidiaries
                  
                  
                  Eliminations
                  
                  
                  ConsolidatedAssetsCurrent
      assets:Cash
      and cash equivalents
                  
                  $
                  —
                  
                  
                  $
                  4,715
                  
                  
                  $
                  1,053
                  
                  
                  $
                  4,676
                  
                  
                  $
                  —
                  
                  
                  $
                  10,444Accounts
      receivable, net
                  
                  
                  —
                  
                  
                  
                  127,634
                  
                  
                  
                  137,746
                  
                  
                  
                  4,765
                  
                  
                  
                  —
                  
                  
                  
                  270,145Inventories
                  
                  
                  —
                  
                  
                  
                  86,219
                  
                  
                  
                  72,149
                  
                  
                  
                  1,201
                  
                  
                  
                  —
                  
                  
                  
                  159,569Notes
      receivable from subsidiaries
                  
                  
                  —
                  
                  
                  
                  39,195
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  (39,195
                  )
                  
                  
                  —Prepaid
      and other current assets
                  
                  
                  —
                  
                  
                  
                  62,961
                  
                  
                  
                  9,879
                  
                  
                  
                  2,050
                  
                  
                  
                  —
                  
                  
                  
                  74,890Total
      current assets
                  
                  
                  —
                  
                  
                  
                  320,724
                  
                  
                  
                  220,827
                  
                  
                  
                  12,692
                  
                  
                  
                  (39,195
                  )
                  
                  
                  515,048Investment
      in subsidiaries
                  
                  
                  (220,955
                  )
                  
                  
                  1,380,326
                  
                  
                  
                  7,063
                  
                  
                  
                  —
                  
                  
                  
                  (1,166,434
                  )
                  
                  
                  —Property,
      plant and equipment, net
                  
                  
                  —
                  
                  
                  
                  165,140
                  
                  
                  
                  254,841
                  
                  
                  
                  476
                  
                  
                  
                  —
                  
                  
                  
                  420,457Goodwill
                  
                  
                  —
                  
                  
                  
                  29,245
                  
                  
                  
                  281,938
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  311,183Other
      intangible assets, net
                  
                  
                  —
                  
                  
                  
                  9,089
                  
                  
                  
                  267,855
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  276,944Other
      assets, net
                  
                  
                  —
                  
                  
                  
                  21,936
                  
                  
                  
                  6,205
                  
                  
                  
                  341
                  
                  
                  
                  —
                  
                  
                  
                  28,482Total
      assets
                  
                  $
                  (220,955
                  )
                  
                  $
                  1,926,460
                  
                  
                  $
                  1,038,729
                  
                  
                  $
                  13,509
                  
                  
                  $
                  (1,205,629
                  )
                  
                  $
                  1,552,114Liabilities
      and Shareholders’ (Deficit) EquityCurrent
      liabilities:Current
      maturities of long-term debt
                  
                  $
                  —
                  
                  
                  $
                  15,956
                  
                  
                  $
                  8,358
                  
                  
                  $
                  —
                  
                  
                  $
                  —
                  
                  
                  $
                  24,314Accounts
      payable
                  
                  
                  —
                  
                  
                  
                  99,150
                  
                  
                  
                  73,402
                  
                  
                  
                  1,883
                  
                  
                  
                  —
                  
                  
                  
                  174,435Accrued
      compensation and related liabilities
                  
                  
                  —
                  
                  
                  
                  21,311
                  
                  
                  
                  16,008
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  37,319Other
      current liabilities
                  
                  
                  —
                  
                  
                  
                  74,653
                  
                  
                  
                  13,302
                  
                  
                  
                  915
                  
                  
                  
                  —
                  
                  
                  
                  88,870Intercompany
      payable (receivable)
                  
                  
                  —
                  
                  
                  
                  658,885
                  
                  
                  
                  (663,337
                  )
                  
                  
                  4,452
                  
                  
                  
                  —
                  
                  
                  
                  —Notes
      payable to issuer
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  39,195
                  
                  
                  
                  —
                  
                  
                  
                  (39,195
                  )
                  
                  
                  —Total
      current liabilities
                  
                  
                  —
                  
                  
                  
                  869,955
                  
                  
                  
                  (513,072
                  )
                  
                  
                  7,250
                  
                  
                  
                  (39,195
                  )
                  
                  
                  324,938Long-term
      debt
                  
                  
                  —
                  
                  
                  
                  1,259,175
                  
                  
                  
                  22,866
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  1,282,041Deferred
      income tax liability (asset)
                  
                  
                  —
                  
                  
                  
                  (56,500
                  )
                  
                  
                  84,076
                  
                  
                  
                  (804
                  )
                  
                  
                  —
                  
                  
                  
                  26,772Other
      liabilities
                  
                  
                  —
                  
                  
                  
                  74,785
                  
                  
                  
                  64,533
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  139,318Shareholders’
      (deficit) equity
                  
                  
                  (220,955
                  )
                  
                  
                  (220,955
                  )
                  
                  
                  1,380,326
                  
                  
                  
                  7,063
                  
                  
                  
                  (1,166,434
                  )
                  
                  
                  (220,955
                  )Total
      liabilities and shareholders’ (deficit) equity
                  
                  $
                  (220,955
                  )
                  
                  $
                  1,926,460
                  
                  
                  $
                  1,038,729
                  
                  
                  $
                  13,509
                  
                  
                  $
                  (1,205,629
                  )
                  
                  $
                  1,552,114








18


CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




13.
Condensed Consolidating Financial Information (Continued)





CENVEO,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATING STATEMENT OF OPERATIONS


For
the three months ended March 29, 2008


(in
thousands)





Parent
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  Subsidiary
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  Guarantor
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  Non-
                                                                                                                                                                    GuarantorCompany
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  Issuer
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  Subsidiaries
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  Subsidiaries
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  Eliminations
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  ConsolidatedNet
      sales
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  260,292
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  269,624
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  4,412
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  534,328Cost
      of sales
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  218,786
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  214,254
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  3,258
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  436,298Selling,
      general and administrative
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  36,468
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  26,507
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  151
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  63,126Amortization
      of intangible assets
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  111
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  2,064
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  2,175Restructuring,
      impairment and other charges
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  9,708
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  41
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  9,749Operating
      income (loss)
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (4,781
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  26,758
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  1,003
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  22,980Interest
      expense, net
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  26,560
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  437
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (19
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  26,978Intercompany
      interest expense (income)
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (944
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  944
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —Other
      expense, net
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  186
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  275
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  461Income
      (loss) from continuing operations before income taxes and equity in income
      of unconsolidated subsidiaries
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (30,583
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  25,102
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  1,022
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (4,459
                                                                                                                                                                  )Income
      tax expense (benefit)
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (3,823
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  2,107
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (1,716
                                                                                                                                                                  )Income
      (loss) from continuing operations before equity in income of
      unconsolidated subsidiaries
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (26,760
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  22,995
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  1,022
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (2,743
                                                                                                                                                                  )Equity
      in income of unconsolidated subsidiaries
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (3,399
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  24,017
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  1,022
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (21,640
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —Income
      (loss) from continuing operations
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (3,399
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (2,743
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  24,017
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  1,022
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (21,640
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (2,743
                                                                                                                                                                  )Loss
      from discontinued operations, net of taxes
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (656
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  —
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  (656
                                                                                                                                                                  )Net
      income (loss)
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  (3,399
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  (3,399
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  24,017
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  1,022
                                                                                                                                                                  
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  (21,640
                                                                                                                                                                  )
                                                                                                                                                                  
                                                                                                                                                                  $
                                                                                                                                                                  (3,399
                                                                                                                                                                  )







19




CENVEO,
INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)




13.
Condensed Consolidating Financial Information (Continued)





CENVEO,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATING STATEMENT OF CASH FLOWS


For
the three months ended March 29, 2008


(in
thousands)




Parent
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    Subsidiary
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    Guarantor
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    Non-
                                                                                                                                                                                                                      GuarantorCompany
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    Issuer
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    Subsidiaries
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    Subsidiaries
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    Eliminations
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    ConsolidatedCash
      flows from operating activities:Net
      cash provided by operating activities
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    $
                                                                                                                                                                                                                    2,692
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    $
                                                                                                                                                                                                                    13,903
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    $
                                                                                                                                                                                                                    37,668
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    $
                                                                                                                                                                                                                    168
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    $
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    $
                                                                                                                                                                                                                    54,431Cash
      flows from investing activities:Intercompany
      note
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    683
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (683
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —Capital
      expenditures
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (1,712
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (7,385
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (9,097
                                                                                                                                                                                                                    )Proceeds
      from sale of property, plant and equipment
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    195
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    153
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    348Net
      cash used in investing activities
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (834
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (7,232
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (683
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (8,749
                                                                                                                                                                                                                    )Cash
      flows from financing activities:Repayments
      under revolving credit facility, net
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (45,200
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (45,200
                                                                                                                                                                                                                    )Proceeds
      from exercise of stock options
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    288
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    288Repayments
      of term loans
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (1,800
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (1,800
                                                                                                                                                                                                                    )Repayments
      of other long-term debt
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (97
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (1,709
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (1,806
                                                                                                                                                                                                                    )Intercompany
      note
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (683
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    683
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —Intercompany
      advances
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (2,980
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    29,630
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (26,841
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    191
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —Net
      cash (used in) provided by financing activities
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (2,692
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (17,467
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (29,233
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    191
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    683
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (48,518
                                                                                                                                                                                                                    )Effect
      of exchange rate changes on cash and cash equivalents
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    9
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    9Net
      (decrease) increase in cash and cash equivalents
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (4,398
                                                                                                                                                                                                                    )
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    1,212
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    359
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    (2,827
                                                                                                                                                                                                                    )Cash
      and cash equivalents at beginning of year
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    13,091
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    882
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    1,909
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    15,882Cash
      and cash equivalents at end of quarter
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    $
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    $
                                                                                                                                                                                                                    8,693
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    $
                                                                                                                                                                                                                    2,094
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    $
                                                                                                                                                                                                                    2,268
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    $
                                                                                                                                                                                                                    —
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    $
                                                                                                                                                                                                                    13,055












20




Item
2.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations




This
Management’s Discussion and Analysis of Financial Condition and Results of
Operations, of Cenveo, Inc. and its subsidiaries, which we refer to as Cenveo,
should be read in conjunction with the accompanying condensed consolidated
financial statements and “Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in our Annual Report on Form 10-K
for the fiscal year ended January 3, 2009, which we refer to as our 2008 Form
10-K. Item 7 of our 2008 Form 10-K describes the application of our critical
accounting policies, for which there have been no significant changes as of
March 28, 2009.




Forward-Looking
Statements




Certain
statements in this report may constitute “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements generally can be identified by the use of terminology such as “may,”
“expect,” “intend,” “estimate,” “anticipate,” “plan,” “foresee,” “believe” or
“continue” and similar expressions, or as other statements that do not relate
solely to historical facts. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that could cause
actual results to differ materially from what is expressed or forecasted in
these forward-looking statements. In view of such uncertainties, investors
should not place undue reliance on our forward-looking statements. Such
statements speak only as of the date they were made, and we undertake no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.




Factors
that could cause actual results to differ materially from management’s
expectations include, without limitation: (i) a decline of our consolidated or
individual reporting units operating performance as a result of the current
economic environment could a ffect the
results of our operations and financial position, including theimpairment of our goodwill and other long-lived assets; (ii) our
substantial indebtedness could impair our financial condition and prevent us
from fulfilling our business obligations; (iii) our ability to service or
refinance our debt; (iv) the terms of our indebtedness imposing significant
restrictions on our operating and financial flexibility; (v) additional
borrowings are available to us that could further exacerbate our risk exposure
from debt;  (vi) our ability to successfully integrate acquisitions;
(vii) intense competition in our industry; (viii) the absence of long-term
customer agreements in our industry, subjecting our business to quarterly and
cyclical fluctuations; (ix) factors affecting the U.S. postal services impacting
demand for our products; (x) the availability of the Internet and other
electronic media affecting demand for our products; (xi) increases in paper
costs and decreases in its availability; (xii) our labor relations; (xiii)
compliance with environmental rules and regulations; and (xiv) dependence on key
management personnel. This list of factors is not exhaustive, and new factors
may emerge or changes to the foregoing factors may occur that would
impact our business. Additional information regarding these and other
factors can be found elsewhere in this report and in our other filings with the
Securities and Exchange Commission, which we refer to as the SEC.




Business
Overview




We are
the third largest diversified printing company in North America. Our broad
portfolio of products includes envelope, form, and label manufacturing,
commercial printing and packaging and publisher offerings. We operate from a
global network of approximately 70 printing and manufacturing, content
management and distribution facilities, which we refer to as manufacturing
facilities, serving a diverse base of over 100,000 customers. Since current
management took over in late 2005, we have consolidated and closed plants,
centralized and leveraged our purchasing spend, sought operational efficiencies
and reduced corporate and field staff. In addition, we have made investments in
our businesses through acquisition of highly complementary companies and capital
expenditures, while also divesting non-strategic businesses.




We
operate our business in two complementary segments: envelopes, forms and labels
and commercial printing.




Envelopes,
Forms and Labels




We
are a leading North American direct mail envelope manufacturer, a leading forms
and labels provider, and the largest North American prescription labels
manufacturer for the retail pharmacy chains. Our envelopes, forms and labels
segment represented approximately 44% of our net sales for the three months
ended March 28, 2009. The segment operates approximately 30 manufacturing
facilities in North America and primarily specializes in the design,
manufacturing and printing of:





·
            direct
      mail and customized envelopes for advertising, billing and
      remittance;


·
            custom
      labels and specialty forms; and


·
            stock
      envelopes, labels and business
forms.


21




Our
envelopes, forms and labels segment serves customers ranging from Fortune 50
companies to middle market and small companies serving niche markets. We offer
direct mail products used for customer solicitations and custom envelopes used
for billing and remittance by end users including banks, brokerage firms and
credit card companies in addition to a broad group of other customers in varying
industries. We manufacture and print customized envelopes used as inserts within
wholesale and retail product catalogs.  We print a diverse line of
custom labels and specialty forms for a broad range of industries including
manufacturing, warehousing, packaging, food and beverage, and health and beauty,
which we sell through an extensive network of resale distributors.  We
produce a diverse line of custom products for our small and mid-size business
forms and labels customers, including both traditional and specialty forms and
labels for use with desktop PCs and laser printers.  Our printed
office products include business documents, specialty documents and short-run
secondary labels, which are made of paper or film affixed with pressure
sensitive adhesive and are used for mailing, messaging, bar coding and other
applications by large through smaller-sized customers across a wide spectrum of
industries.  We produce pressure-sensitive prescription labels for the
retail pharmacy chain market.  We also produce a broad line of stock
envelopes, labels and traditional business forms that are sold through
independent distributors, contract stationers, national catalogs for the office
products market and office products superstores.




Commercial
Printing





We are
one of the leading commercial printing companies in North America and one of the
largest providers of editorial, content processing and production assistance to
scientific, technical and medical publishers, which we refer to as STM
publishers.  In 2008, we added to our commercial printing business
with the acquisition of Rex Corporation and its manufacturing facility, which we
refer to as Rex. Prior to our acquisition, Rex had annual revenues of
approximately $40.0 million. Our commercial printing segment represented
approximately 56% of our net sales for the three months ended March 28,
2009.The segment
operates approximately 40 manufacturing facilities in the United States,
Canada, Latin America and Asia and provides one-stop print, design and
content management offerings, including:





·
            high-end
      color printing of a wide range of premium products for national and
      regional customers;


·
            general
      commercial printing for regional and local
  customers;


·
            STM
      publishers and special interest and trade magazines for not-for-profit
      organizations, educational institutions and specialty publishers;
      and


·
            specialty
      packaging and high quality promotional materials for multinational
      consumer products companies.




Our
commercial printing segment primarily serves the consumer products, 
pharmaceutical, financial services, publishing and
telecommunications industries, with customers ranging from Fortune 50
companies to middle market and small companies operating in niche
markets.  We provide a wide array of commercial print offerings to our
customers including electronic prepress, digital asset archiving,
direct-to-plate technology, high-quality color printing on web and sheet-fed
presses and digital printing. The broad array of commercial printing products we
produce also includes annual reports, car brochures, direct mail products,
specialty packaging, journals and specialized periodicals, advertising
literature, corporate identity materials, financial printing, books,
directories, calendars, brand marketing materials, catalogs, and
maps.  In our journal and specialty magazine business, we offer
complete solutions, including editing, content processing, content management,
electronic peer review, production and reprint marketing.  Our primary
customers for our specialty packaging and promotional products are
pharmaceutical, apparel, technology and other large multi-national consumer
product companies.




Consolidated
Operating Results




Management’s
Discussion and Analysis of Financial Condition and Results of Operations
includes an overview of our condensed consolidated results for the three month
period ended March 28, 2009 followed by a discussion of the results of each of
our reported segments for the same period. Our results for the three month
period ended March 29, 2008 did not include the operating results of
Rex.




In the
first quarter of 2009, the economic downturn that accelerated in the second half
of 2008 continued to significantly impact the results of our operations. Our
commercial printing segment experienced volume declines as compared to the
prior year in substantially all of the markets we serve primarily due to the
economic downturn and excess capacity and intense pricing
pressures.  Our envelopes, forms and labels segment experienced
volume declines as compared to the prior year primarily due to the economic
downturn and our financial services customers who historically reached targeted
customers via our direct mail capabilities suspending this
practice.  In order to compete effectively in this current
environment, we continue to focus on improving productivity and creating
operating efficiencies by reducing our costs.  For example, in the
first quarter of 2009, we reduced our employee headcount by approximately 400
primarily resulting from the closure of three envelope plants and a commercial
printing plant and consolidating them into existing
operations.




The
current U.S. and global economic conditions have affected and, most likely, will
continue to affect our results of operations and financial position. These
uncertainties about future economic conditions in a very challenging environment
make it more difficult for us to forecast our future operating results. We are
pursuing additional cost savings opportunities in an effort to mitigate the
impacts of the current economic conditions. As a result, we are developing plans
for additional plant closures and/or consolidations and employee headcount
reductions to ensure our cost structure is aligned with our estimated net
sales.


A summary
of our condensed consolidated statements of operations is presented below. The
summary presents reported net sales and operating income (loss). See Segment
Operations below for a summary of net sales and operating income (loss) of our
operating segments that we use internally to assess our operating performance.
Our fiscal quarters end on the Saturday closest to the last day of the calendar
month. The reporting periods in this report consist of the 12 weeks ending on
March 28, 2009 and the 13 weeks ending on March 29, 2008.


22




Three
      Months EndedMarch
      28,
                                                                        2009
                                                                      
                                                                      
                                                                      March
      29,
                                                                        2008(in
      thousands, except
                                                                        per
      share amounts)Net
      sales
                                                                      
                                                                      $
                                                                      412,100
                                                                      
                                                                      
                                                                      $
                                                                      534,328Operating
      income (loss):Envelopes,
      forms and labels
                                                                      
                                                                      
                                                                      8,406
                                                                      
                                                                      
                                                                      
                                                                      25,626Commercial
      printing
                                                                      
                                                                      
                                                                      1,430
                                                                      
                                                                      
                                                                      
                                                                      11,278Corporate
                                                                      
                                                                      
                                                                      (9,615
                                                                      )
                                                                      
                                                                      
                                                                      (13,924
                                                                      )Total
      operating income
                                                                      
                                                                      
                                                                      221
                                                                      
                                                                      
                                                                      
                                                                      22,980Interest
      expense, net
                                                                      
                                                                      
                                                                      22,545
                                                                      
                                                                      
                                                                      
                                                                      26,978Gain
      on early extinguishment of debt
                                                                      
                                                                      
                                                                      (17,642
                                                                      )
                                                                      
                                                                      
                                                                      —Other
      expense, net
                                                                      
                                                                      
                                                                      35
                                                                      
                                                                      
                                                                      
                                                                      461Loss
      from continuing operations before income taxes
                                                                      
                                                                      
                                                                      (4,717
                                                                      )
                                                                      
                                                                      
                                                                      (4,459
                                                                      )Income
      tax benefit
                                                                      
                                                                      
                                                                      (530
                                                                      )
                                                                      
                                                                      
                                                                      (1,716
                                                                      )Loss
      from continuing operations
                                                                      
                                                                      
                                                                      (4,187
                                                                      )
                                                                      
                                                                      
                                                                      (2,743
                                                                      )Loss
      from discontinued operations, net of taxes
                                                                      
                                                                      
                                                                      (124
                                                                      )
                                                                      
                                                                      
                                                                      (656
                                                                      )Net
      loss
                                                                      
                                                                      $
                                                                      (4,311
                                                                      )
                                                                      
                                                                      $
                                                                      (3,399
                                                                      )Loss
      per share−basic and diluted:Continuing
      operations
                                                                      
                                                                      $
                                                                      (0.08
                                                                      )
                                                                      
                                                                      $
                                                                      (0.05
                                                                      )Discontinued
      operations
                                                                      
                                                                      
                                                                      —
                                                                      
                                                                      
                                                                      
                                                                      (0.01
                                                                      )Net
      loss
                                                                      
                                                                      $
                                                                      (0.08
                                                                      )
                                                                      
                                                                      $
                                                                      (0.06
                                                                      )




Net
Sales




Net sales
decreased $122.2 million in the first quarter of 2009, as compared to the first
quarter of 2008, due to lower sales from our commercial printing segment of
$66.5 million and from our envelopes, forms and labels segment of $55.7 million.
These decreases were primarily due to having one less week in the first quarter
of 2009, as compared to the first quarter of 2008, and volume
declines, pricing pressures and changes in product mix, primarily due to current
general economic conditions. See Segment Operations below for a detailed
discussion of the primary factors affecting the change in our net sales by
reportable segment.




Operating
Income




Operating
income decreased $22.8 million in the first quarter of 2009, as compared to the
first quarter of 2008. This decrease was primarily due to decreases in operating
income from our envelopes, forms and labels segment of $17.2 million and from
our commercial printing segment of $9.8 million.  These declines were
primarily due to the fact that the first quarter of 2009 had one less week than
the first quarter of 2008, and due to the current general economic conditions.
See Segment Operations below for a more detailed discussion of the primary
factors for the changes in operating income by reportable segment.





Interest
Expense





Interest
expense decreased $4.4 million to $22.5 million in the first quarter of 2009, as
compared to $27.0 million in the first quarter of 2008. This decrease in 2009
was primarily due to repayments of our long-term debt, lower interest rates and
the fact that there was one less week of interest expense. Interest expense in
the first quarter of 2009 reflected average outstanding debt of approximately
$1.3 billion and a weighted average interest rate of 7.0%, as compared to
average outstanding debt of $1.4 billion and a weighted average interest rate of
7.3% in the first quarter of 2008. As a result of the amendment to our
existing senior secured credit facilities, which we refer to as the Amended
Credit Facilities, which became effective on April 24, 2009, we expect to
have higher interest expense for the remainder of 2009.





Gain
on Early Extinguishment of Debt




In the
first quarter of 2009, we repurchased and retired principal amounts of
approximately $32.7 million of our 83⁄8% senior subordinated notes due 2014, which
we refer to as the 83⁄8% Notes; $5.0 million of our 101⁄2% senior notes, due 2016,
which we refer to as the 101⁄2% Notes; and $5.0 million of our 77⁄8% senior
subordinated notes, due 2013, which we refer to as the 77⁄8% Notes, and recognized
gains on early extinguishment of debt of $17.6 million.




23


Income
Taxes




Three
      Months EndedMarch
      28, 2009
                                                                                                                                
                                                                                                                                
                                                                                                                                March
      29, 2008(in
      thousands)Income
      tax benefit from U.S. operations
                                                                                                                                
                                                                                                                                $
                                                                                                                                (644
                                                                                                                                )
                                                                                                                                
                                                                                                                                $
                                                                                                                                (1,745
                                                                                                                                )Income
      tax expense from foreign operations
                                                                                                                                
                                                                                                                                
                                                                                                                                114
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                29Income
      tax benefit
                                                                                                                                
                                                                                                                                $
                                                                                                                                (530
                                                                                                                                )
                                                                                                                                
                                                                                                                                $
                                                                                                                                (1,716
                                                                                                                                )Effective
      income tax rate
                                                                                                                                
                                                                                                                                
                                                                                                                                11.2
                                                                                                                                %
                                                                                                                                
                                                                                                                                
                                                                                                                                38.5
                                                                                                                                %




In the
first quarter of 2009, we had an income tax benefit of $0.5 million, compared to
an income tax benefit of $1.7 million in the first quarter of 2008, which
primarily relates to income tax benefits from taxes on our domestic operations,
partially offset by discrete items. Our effective tax rate in the first quarter
of both years was lower than the statutory rate, primarily due to non-deductible
expenses and state income taxes.




We assess
the recoverability of our deferred tax assets and, based upon this assessment,
record a valuation allowance against deferred tax assets to the extent
recoverability does not satisfy the “more likely than not” recognition criteria
in Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes. We consider our recent operating results and anticipated future taxable
income in assessing the need for a valuation allowance. As of March 28, 2009,
the total valuation allowance on our net U.S. deferred tax assets was
approximately $28.1 million.




Segment
Operations




Our Chief
Executive Officer monitors the performance of the ongoing operations of our two
reportable segments. We assess performance based on net sales and operating
income (loss).




Envelopes,
Forms and Labels


Three
      Months EndedMarch
      28, 2009
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  March
      29, 2008(in
      thousands)Segment
      net sales
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  182,431
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  238,137Segment
      operating income
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  8,406
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  25,626Operating
      income margin
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  4.6
                                                                                                                                                  %
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  10.8
                                                                                                                                                  %Restructuring
      and impairment charges
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  4,756
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  $
                                                                                                                                                  1,655




Segment
Net Sales





Segment
net sales for our envelopes, forms and labels segment decreased $55.7 million,
or 23.4%, in the first quarter of 2009, as compared to the first quarter of
2008.  This decrease was primarily due to lower sales volume of
approximately $60.9 million, primarily due to having one less week in the first
quarter of 2009, as compared to the first quarter of 2008, and current general
economic conditions which have had a significant impact on our envelope
business, for which we have seen a shift from direct mail and customized
envelopes to generic transactional envelopes. As a result of current conditions,
in March of 2009 we closed and consolidated three envelope plants into existing
operations. This decrease was offset in part by higher sales of approximately
$5.2 million, primarily due to price increases, including material price
increases that are generally passed onto our envelope customers, net of changes
in product mix.




Segment
Operating Income




Segment
operating income for our envelopes, forms and labels segment decreased $17.2
million, or 67.2%, in the first quarter of 2009, as compared to the first
quarter of 2008. This decrease was primarily due to lower gross margins of $18.8
million primarily due to having one less week in the first quarter of 2009, as
compared to the first quarter of 2008, and the current general economic
conditions, which has resulted in pricing pressure and product mix changes from
high color direct mail envelopes to transactional envelope products and
increased restructuring and impairment charges of $3.1 million, primarily due to
the closure of three envelope plants. These decreases were partially offset by
lower selling, general and administrative expenses of $4.7 million primarily due
to our cost reduction programs and lower commission expenses resulting from
lower sales.


24




Commercial
Printing




Three
      Months EndedMarch
      28, 2009
                                                                                                                                                    
                                                                                                                                                    
                                                                                                                                                    March
      29, 2008(in
      thousands)Segment
      net sales
                                                                                                                                                    
                                                                                                                                                    $
                                                                                                                                                    229,669
                                                                                                                                                    
                                                                                                                                                    
                                                                                                                                                    $
                                                                                                                                                    296,191Segment
      operating income
                                                                                                                                                    
                                                                                                                                                    $
                                                                                                                                                    1,430
                                                                                                                                                    
                                                                                                                                                    
                                                                                                                                                    $
                                                                                                                                                    11,278Operating
      income margin
                                                                                                                                                    
                                                                                                                                                    
                                                                                                                                                    0.6
                                                                                                                                                    %
                                                                                                                                                    
                                                                                                                                                    
                                                                                                                                                    3.8
                                                                                                                                                    %Restructuring
      and impairment charges
                                                                                                                                                    
                                                                                                                                                    $
                                                                                                                                                    3,859
                                                                                                                                                    
                                                                                                                                                    
                                                                                                                                                    $
                                                                                                                                                    1,354




Segment
Net Sales




Segment
net sales for our commercial printing segment decreased $66.5 million, or 22.5%,
in the first quarter of 2009, as compared to the first quarter of 2008. This
decrease was primarily due to lower sales of approximately $76.5 million from
having one less week in the first quarter of 2009, as compared to the first
quarter of 2008 and pricing pressures, volume declines and changes in product
mix, primarily due to current general economic conditions, offset in part by
higher sales due to material price increases. This decrease was partially offset
by $10.0 million of sales generated from the integration of Rex into our
operations, as Rex was not included in our results in the first quarter of
2008.




Segment
Operating Income




Segment
operating income for our commercial printing segment decreased $9.8 million, or
87.3%, in the first quarter of 2009, as compared to the first quarter of 2008.
This decrease was primarily due to lower gross margins of approximately $14.6
million primarily due to having one less week in the first quarter of 2009, as
compared to the first quarter of 2008, and the current general economic
conditions, which has resulted in pricing pressure and product mix changes from
high color to transactional commercial print products, partially offset by gross
margins from Rex, as Rex was not included in our results in the first quarter of
2008, and increased restructuring and impairment charges of $2.5 million
primarily due to the closure and consolidation of a print plant into other
operations in March of 2009. These decreases were partially offset by lower
selling, general and administrative expenses of $7.3 million primarily due to
our cost reduction programs and lower commission expenses resulting from lower
sales, partially offset by selling, general and administrative expenses of Rex,
as Rex was not included in our results in the first quarter of
2008.




Corporate
Expenses




Corporate
expenses include the costs of running our corporate headquarters. Corporate
expenses were lower in the first quarter of 2009, as compared to the first
quarter of 2008, primarily due to the $6.7 million non-recurring charge incurred
in 2008 for professional fees in connection with an internal review conducted by
our audit committee, offset in part by higher stock-based compensation
expense.




Restructuring,
Impairment and Other Charges




In
the first quarter of 2009, we developed and implemented a cost savings and
restructuring plan, which we refer to as the 2009 Plan, to reduce our operating
costs and realign our manufacturing platform in order to compete effectively
during the current economic downturn.  As a result, in the first
quarter of 2009, we closed four manufacturing facilities and reduced headcount
by approximately 400. We
anticipate further headcount reductions and plant closures in 2009. In April
2009, we announced the closure of a commercial printing plant on the West
Coast, which is being consolidated into other existing operations.As of
March 28, 2009, our total restructuring liability was $15.8
million.




During
the first quarter of 2009, we incurred $8.7 million of restructuring, impairment
and other charges, which included $5.4 million of employee separation costs,
asset impairments, net of $2.7 million, equipment moving expenses of $0.2
million, lease termination expenses of $0.3 million, and building clean-up and
other expenses of $0.1 million. During the first quarter of 2008, we incurred
$9.7 million of restructuring, impairment and other charges, which included a
$6.7 million non-recurring charge for professional fees related to an internal
review initiated by our audit committee, $1.7 million of employee separation
costs, asset impairments, net of $(0.3) million which includes the gain on sale
of equipment, equipment moving expenses of $0.4 million, lease termination
expenses of $0.4 million, and building clean-up and other expenses of $0.9
million.


25




Liquidity
and Capital Resources




Net Cash Provided by Operating
Activities. Net cash provided by operating activities was $36.4 million
in the first three months of 2009, which was primarily due to a decrease in our
working capital of $34.7 million and net income adjusted for non-cash items of
$3.3 million. The decrease in our working capital primarily resulted from a
decrease in receivables, primarily due to the timing of collections from our
customers and lower sales due to one less week in the first quarter of 2009, as
compared to 2008, and a decrease in inventories, primarily due to the timing of
work performed for our customers.




Net cash
provided by operating activities was $54.4 million in the first three months of
2008, which was primarily due to a decrease in our working capital of $34.6
million and net income adjusted for non-cash items of $22.9 million. The
decrease in our working capital primarily resulted from a decrease in
receivables primarily due to the timing of collections and the timing of sales
to our customers and the timing of interest payments, partially offset by an
increase in inventories primarily due to the timing of work performed for our
customers.




Net Cash Used in Investing
Activities. Net cash used in investing activities was $8.8 million and
$8.7 million in the first three months of 2009 and 2008, respectively, primarily
resulting from capital expenditures.




Net Cash Used in Financing
Activities. Net cash used in financing activities was $27.7 million in
the first three months of 2009, primarily due to (i) the repayment of $19.3
million of term loans under our term loan and delayed-draw term loan
facility, which collectively we refer to as the Term Loans, primarily related to
our excess cash flow sweep requirement under our Amended Credit Facilities, (ii)
repurchases of $19.0 million,  $3.3 million and $3.1 million of our
83⁄8% Notes, 101⁄2% Notes, and 77⁄8% Notes, respectively, and (iii) the repayment of
other long-term debt of $2.2 million, offset in part by the proceeds on
borrowings under our revolving
credit facility, which we refer to as the Revolving Credit Facility,of
$19.8 million.




Net cash
used in financing activities was $48.5 million in the first three months of
2008, primarily due to the repayment of our Revolving Credit Facility of $45.2
million, our term loans of $1.8 million and $1.8 million of other long-term
debt.




Cash
provided by operating activities is generally sufficient to meet daily
disbursement needs.  On days when our cash receipts exceed
disbursements, we reduce our revolving credit balance or place excess funds in
conservative, short-term investments until there is an opportunity to pay down
debt.  On days when our cash disbursements exceed cash receipts, we
use invested cash balances and/or our revolving credit to fund the difference.
As a result, our daily revolving credit balance fluctuates depending on working
capital needs.  Regardless, at all times we believe we have sufficient
liquidity available to us to fund our cash needs.




Long-Term Debt. Our total
outstanding long-term debt, including current maturities, was approximately $1.3
billion as of March 28, 2009, a decrease of $45.1 million from January 3, 2009.
This decrease was primarily due to: (i) paying down our debt with cash flows
provided by operating activities and (ii) the repurchase of a portion of our 83⁄8%
Notes, 101⁄2% Notes and 77⁄8% Notes during the first quarter of 2009. As of March
28, 2009, approximately 90% of our outstanding debt was subject to fixed
interest rates. From time to time we may seek to retire our outstanding debt
through open market purchases, privately negotiated transactions or otherwise.
Such repurchases, if any, will depend on prevailing market conditions, our
liquidity requirements, contractual restrictions and other factors. See the
remainder of this Long-Term Debt section that follows. As of May 4, 2009, we had
approximately $37.6 million borrowing availability under our Revolving Credit
Facility.




Extinguishments





During
the first quarter of 2009, we purchased in the open market and retired principal
amounts of approximately $32.7 million, $5.0 million and $5.0 million of our 83⁄8%
Notes, 101⁄2% Notes and 77⁄8% Notes, respectively, for approximately $19.0 million,
$3.3 million and $3.1 million, respectively, plus accrued and unpaid
interest.  In connection with these repurchases, we recorded gains on
early extinguishment of debt of $17.6 million, which included the write-off of
$0.6 million of fair value increase related to the 83⁄8% Notes, $0.2 million of
previously unamortized debt issuance costs and fees paid of $0.1 million. These
open market purchases were made within permitted restricted payment limits under
our debt agreements.




From
March 29, 2009 through April 8, 2009, we purchased in the open market and
retired principal amounts of approximately $7.4 million of our 83⁄8% Notes
and approximately $2.1 million of our 77⁄8% Notes for approximately $4.1
million and $1.2 million, respectively, plus accrued and unpaid
interest.  In connection with these purchases, we will record gains on
early extinguishment of debt of approximately $4.3 million during the second
quarter of 2009. These open market purchases were all made within permitted
restricted payment limits under our debt agreements at the time of
purchase.


26




Interest
Rate and Forward Starting Interest Rate Swaps




We enter
into interest rate swap agreements to hedge interest rate exposure of our
notional floating rate debt.  As of March 28, 2009 we had $595.0
million of such interest rate swaps. In June 2009, $220.0 million of these
interest rate swaps mature, of which $75.0 million have been replaced with
forward starting swaps entered into during 2008. We
continue to monitor interest rate-related developments and may execute
additional interest rate swaps should conditions suggest there may be a
benefit. If we do not enter into cash flow hedges for the remaining $145.0
million of interest rate swaps maturing in June 2009, our exposure to floating
rate interest rate will increase.




Letters
of Credit




On March
28, 2009, we had outstanding letters of credit of approximately $17.4 million
and a de minimis amount of surety bonds related to performance and payment
guarantees. Based on our experience with these arrangements, we do not believe
that any obligations that may arise will be significant.





Debt
Compliance and Amendment of Amended Credit Facilities




Our
Amended Credit Facilities, contain two financial covenants that we must comply
with: a minimum consolidated interest coverage ratio, which we refer to as the
Interest Coverage Covenant, and a maximum consolidated leverage ratio, which we
refer to as the Leverage Covenant. We were in compliance with all debt agreement
covenants as of March 28, 2009.
  On
April 24, 2009, we amended our Amended Credit Facilities with the consent of the
lenders thereunder, which included, among other things, modifications to the
Leverage Covenant and the Interest Coverage Covenant.  Our Leverage
Covenant, which we must be in pro forma compliance with at all times, has been
increased through March 31, 2010, and then proceeds to step down through the end
of the term of the Amended Credit Facilities. Our Interest Coverage Covenant,
which we must be in compliance with on a quarterly basis, has been reduced
through December 31, 2009, and then proceeds to step up through the end of the
term of the Amended Credit Facilities. Additionally, the calculations of the two
financial covenants discussed above have been modified to permit the adding back
of certain amounts.
  As
conditions to the amendment, we agreed, among other things, to increase the
pricing on all outstanding Revolving Credit Facility balances and Term Loans to
include interest at the three-month London Interbank Offered Rate (LIBOR) plus a
spread ranging from 400 basis points to 450 basis points, depending on the
quarterly Leverage Covenant then in effect. Previously, our LIBOR borrowing
spread under the Revolving Credit Facility ranged from 175 basis points to 200
basis points, based upon the Leverage Covenant, and the LIBOR borrowing spread
on the Term Loans was 200 basis points.   Further, the
amendment: (i) reduces the Revolving Credit Facility from $200.0 million to
$172.5 million; (ii) increases the unfunded commitment fee paid to revolving
credit lenders from 50 basis points to 75 basis points; (iii) eliminates our
ability to request a $300.0 million incremental term loan facility; (iv) limits
new unsecured debt and debt assumed from acquisitions; (v) eliminates the
restricted payments basket while leverage exceeds certain thresholds; (vi)
requires that certain additional financial information be delivered; (vii)
lowers the annual amount that can be spent on capital expenditures; and (viii)
increases certain mandatory prepayments.  An amendment fee of 50 basis
points was paid to all consenting lenders who approved the amendment. Except as
provided in the amendment, all other provisions of our Amended Credit Facilities
remain in full force and effect.
  In
connection with the above amendment in the second quarter of 2009, we will incur
a loss on extinguishment of debt of approximately $5.0 million, of which
approximately $3.9 million relates to fees paid to consenting lenders and
approximately $1.1 million relates to the write-off of previously unamortized
debt issuance costs.  In addition, we will capitalize approximately
$3.4 million of third party costs and fees paid to consenting lenders and
amortize them over the remaining life of the Amended Credit
Facilities.




Credit
Ratings




Our
current credit ratings are as follows:




Rating
      Agency
              
              Corporate
                Rating
              
              Amended
                Credit
                Facilities
              
              101⁄2%
                Notes
              
              77⁄8%
                Notes
              
              83⁄8%
                Notes
              
              Outlook
              
              
              Last
      UpdateStandard
      & Poor’s
              
              B+
              
              BB-
              
              B-
              
              B-
              
              B-
              
              Negative
              
              
              March
      2009Moody’s
              
              B1
              
              Ba2
              
              B2
              
              B3
              
              B3
              
              Negative
              
              
              June
      2008




In March
2009, Standard & Poor's Ratings Services, which we refer to as Standard
& Poor’s, lowered our Corporate Rating from BB- to B+ and all of our debt
credit ratings citing the negative impact of the current general economic
environment and its anticipated impact on our results of
operations.  Moody’s Investors Services,
which


27


we refer
to as Moody’s, placed us on negative ratings outlook prior to our acquisition of
Cadmus in 2007, which we believe was due to our business strategy of pursuing
strategic acquisitions and our level of debt.




The terms
of our existing debt do not have any rating triggers that impact our funding
availability or unduly influence our daily operations, including planned capital
expenditures. We do not believe that our current ratings will unduly influence
our ability to raise additional capital. Some of our constituents closely track
rating agency actions and would note any raising or lowering of our credit
ratings; however, we believe that along with reviewing our credit ratings,
additional quantitative and qualitative analyses must be performed to accurately
judge our financial condition.




The
current credit markets downturn that began in 2007 and continues through the
date hereof makes raising additional capital expensive for any issuer. We do not
have plans to enter the current credit market for new financing given that we
have no significant debt maturities until 2013. Further, we expect that our
internally generated cash flows and financing available under our Revolving
Credit Facility will be sufficient to fund our working capital needs and
short-term growth for the next 12 months; however, this cannot be
assured.




Share Repurchase Plan. On July
31, 2008, our Board of Directors authorized a program for the repurchase of up
to $15.0 million of our common stock, which we refer to as the Share Repurchase
Plan. The Share Repurchase Plan is effective for 12 months and may be limited or
terminated at any time without prior notice. Share repurchases under the Share
Repurchase Plan may be made through open-market and privately negotiated
transactions within the governing limits of our credit agreement and bond
indentures. The timing and actual number of shares, if any, that we actually
repurchase will depend on a variety of factors including price, regulatory
requirements, contractual agreements and market conditions. No purchases had
been made under the Share Repurchase Plan as of March 28, 2009.




Off-Balance Sheet
Arrangements. It is not our business practice to enter into off-balance
sheet arrangements. Accordingly, as of March 28, 2009, we do not have any
off-balance sheet arrangements.




Guarantees. In connection with the
disposition of certain operations, we have indemnified the purchasers for
certain contingencies as of the date of disposition. We have accrued the
estimated probable cost of these contingencies.




Seasonality




Our
commercial printing plants experience seasonal variations. Revenues from annual
reports are generally concentrated from February through April. Revenues
associated with consumer publications, such as holiday catalogs and automobile
brochures, tend to be concentrated from July through October. Revenues
associated with the educational and scholarly market and promotional materials
tend to decline in the summer. In addition, several envelope market segments and
certain segments of the direct mail market have historically experienced
seasonality with a higher percentage of volume of products sold to these markets
occurring during the fourth quarter of the year. This seasonality is due to the
increase in sales to the direct mail market related to holiday purchases. As a
result of these seasonal variations, some of our operations operate at or near
capacity at certain times throughout the year.




New
Accounting Pronouncements




We are
required to adopt certain new accounting pronouncements. See Note 1 to our
condensed consolidated financial statements included herein.




Available
Information




Our
Internet address is: www.cenveo.com. We make available free of charge through
our website our Annual Report on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and amendments to those reports filed pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as
reasonably practicable after such documents are filed electronically with the
SEC. In addition, our earnings conference calls are archived for replay on our
website and presentations to securities analysts are also included on our
website.




Legal
Proceedings




From time
to time, we are involved in litigation that we consider to be ordinary and
incidental to our business. While the outcome of pending legal actions cannot be
predicted with certainty, we believe the outcome of these proceedings will not
have a material adverse effect on our consolidated financial position, results
of operations or liquidity.


28


Item
3.  Quantitative and Qualitative Disclosures About Market Risk




We are
exposed to market risks such as changes in interest and foreign currency
exchange rates, which may adversely affect results of operations and financial
position. Risks from interest rate fluctuations and changes in foreign currency
exchange rates are managed through normal operating and financing activities. We
do not utilize derivatives for speculative purposes.




Exposure
to market risk from changes in interest rates relates primarily to our variable
rate debt obligations. The interest on this debt is LIBOR plus a margin. At
March 28, 2009, we had variable rate debt outstanding of $130.4 million, after
considering our interest rate swaps. A 1% increase in LIBOR on debt outstanding
subject to variable interest rates would increase our annual interest expense by
approximately $1.3 million.




We have
foreign operations, primarily in Canada, and thus are exposed to market risk for
changes in foreign currency exchange rates. For the three months ended March 28,
2009, a uniform 10% strengthening of the U.S. dollar relative to the local
currency of our foreign operations would have resulted in a decrease in sales
and operating income of approximately $1.8 million and $0.2 million,
respectively. The effects of foreign currency exchange rates on future results
would also be impacted by changes in sales levels or local currency
prices.




29


Item
4.  Controls and Procedures




Evaluation
of Disclosure Controls and Procedures




Our
management, with the participation of our Chief Executive Officer and our Chief
Financial Officer, carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) as of the end of the period covered by this quarterly
report. Based on that evaluation, our Chief Executive Officer and our Chief
Financial Officer concluded that our disclosure controls and procedures were
effective as of March 28, 2009 in order to provide reasonable assurance that
information required to be disclosed by the Company in its filings under the
Exchange Act was recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the Securities and Exchange
Commission.




Changes
in Internal Control over Financial Reporting




There
were no changes in our internal control over financial reporting during the
quarter ended March 28, 2009 that have materially affected or are reasonably
likely to materially affect, our internal control over financial
reporting.




Inherent
Limitations on Effectiveness of Controls




Our
management, including our Chief Executive Officer and our Chief Financial
Officer, does not expect that our disclosure controls or our internal control
over financial reporting will prevent or detect all error and all fraud. A
control system, no matter how well designed and operated, can provide only
reasonable, not absolute, assurance that the control system’s objectives will be
met. Our disclosure controls and procedures are designed to provide reasonable
assurance of achieving their objectives. The design of a control system must
reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Further, because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that misstatements due to error or fraud will not
occur or that all control issues and instances of fraud, if any, within the
Company have been detected. These inherent limitations include the realities
that judgments in decision-making can be faulty and that breakdowns can occur
because of simple error or mistake. Controls can also be circumvented by the
individual acts of some persons, by collusion of two or more people, or by
management override of the controls. The design of any system of controls is
based in part on certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions. Projections of any evaluation of
controls effectiveness to future periods are subject to risks. Over time,
controls may become inadequate because of changes in conditions or deterioration
in the degree of compliance with policies or procedures.


30




PART
II. OTHER INFORMATION




Item
1A.  Risk Factors




In
addition to the other information set forth in this report, you should carefully
consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the year ended January 3, 2009, which could materially
affect our business, financial condition or future results. The risks described
in our Annual Report on Form 10-K are not the only risks facing our Company.
Additional risks and uncertainties not currently known to us or that we
currently deem to be immaterial also may materially adversely affect our
business, financial condition and/or operating results.







Item
      6.
              ExhibitsExhibit
                Number
              
              
              Description2.1
              Agreement
      of Merger dated as of December 26, 2006 among Cenveo, Inc., Mouse
      Acquisition Corp. and Cadmus Communications Corporation—incorporated by
      reference to Exhibit 2.1 to registrant’s current report on Form 8-K filed
      December 27, 2006.2.2
              Stock
      Purchase Agreement dated as of July 17, 2007 among Cenveo Corporation,
      Commercial Envelope Manufacturing Co., Inc. and its
      shareholders—incorporated by reference to Exhibit 2.1 to registrant’s
      current report on Form 8-K filed July 20, 2007.3.1
              Articles
      of Incorporation—incorporated by reference to Exhibit 3(i) of the
      registrant’s quarterly report on Form 10-Q for the quarter ended June 30,
      1997, filed August 14, 1997.3.2
              Articles
      of Amendment to the Articles of Incorporation dated May 17,
      2004—incorporated by reference to Exhibit 3.2 to registrant’s quarterly
      report on Form 10-Q for the quarter ended June 30, 2004, filed August 2,
      2004.3.3
              Amendment
      to Articles of Incorporation and Certificate of Designations of Series A
      Junior Participating Preferred Stock of the Registrant dated April 20,
      2005—incorporated by reference to Exhibit 3.1 to registrant’s current
      report on Form 8-K filed April 21, 2005.3.4
              Bylaws
      as amended and restated effective February 22, 2007—incorporated by
      reference to Exhibit 3.2 to registrant’s current report on Form 8-K filed
      August 30, 2007.3.5
              Registration
      Statement on Form S-8 dated September 11, 2008 registering shares under
      the Cenveo, Inc. 2007 Long-Term Equity Incentive Plan, and filed with the
      Securities & Exchange Commission on September 11, 2008—incorporated by
      reference to Exhibit 3.5 to registrant’s quarterly report on Form 10-Q for
      the quarter ended September 27, 2008.3.6
              Registration
      Statement on Form S-8 dated September 11, 2008 de-registering shares under
      the Cenveo, Inc. 2001 Long-Term Equity Incentive Plan, and filed with the
      Securities & Exchange Commission on September 11, 2008—incorporated by
      reference to Exhibit 3.6 to registrant’s quarterly report on Form 10-Q for
      the quarter ended September 27, 2008.4.1
              Indenture
      dated as of February 4, 2004 between Mail-Well I Corporation and U.S. Bank
      National Association, as Trustee, and Form of Senior Subordinated Note and
      Guarantee relating to Mail-Well I Corporation’s 77⁄8% Senior Subordinated
      Notes due 2013—incorporated by reference to Exhibit 4.5 to registrant’s
      annual report on Form 10-K for the year ended December 31,
      2003.4.2
              Registration
      Rights Agreement dated February 4, 2004, between Mail-Well I Corporation
      and Credit Suisse First Boston LLC, as Initial Purchaser, relating to
      Mail-Well I Corporation’s 77⁄8% Senior Subordinated Notes due
      2013—incorporated by reference to Exhibit 4.6 to registrant’s annual
      report on Form 10-K for the year ended December 31,
  2003.


31




Exhibit
                Number
              Description4.3
              Supplemental
      Indenture, dated as of June 21, 2006 among Cenveo Corporation (f/k/a
      Mail-Well I Corporation), the Guarantors named therein and U.S. Bank
      National Association, as Trustee, to the Indenture dated as of February 4,
      2004 relating to the 77⁄8% Senior Subordinated Notes due 2013—incorporated
      by reference to Exhibit 4.2 to registrant’s current report on Form 8-K
      filed June 27, 2006.4.4
              Third
      Supplemental Indenture, dated as of March 7, 2007 among Cenveo Corporation
      (f/k/a Mail-Well I Corporation), the Guarantors named therein and U.S.
      Bank National Association, as Trustee, to the Indenture dated as of
      February 4, 2004 relating to the 77⁄8% Senior Subordinated Notes due
      2013—incorporated by reference to Exhibit 4.7 to registrant’s quarterly
      report on Form 10-Q for the quarter ended March 31,
  2007.





4.5
              Fourth
      Supplemental Indenture, dated as of July 9, 2007 among Cenveo Corporation
      (f/k/a Mail-Well I Corporation), the Guarantors named therein and U.S.
      Bank National Association, as Trustee, to the Indenture dated as of
      February 4, 2004 relating to the 77⁄8% Senior Subordinated Notes due
      2013—incorporated by reference to Exhibit 4.8 to registrant’s quarterly
      report on Form 10-Q for the quarter ended June 30,
2007.4.6
              Fifth
      Supplemental Indenture, dated as of August 30, 2007 among Cenveo
      Corporation (f/k/a Mail-Well I Corporation), the Guarantors named therein
      and U.S. Bank National Association, as Trustee, to the Indenture dated as
      of February 4, 2004 relating to the 77⁄8% Senior Subordinated Notes due
      2013—incorporated by reference to Exhibit 4.6 to registrant’s quarterly
      report on Form 10-Q for the quarter ended September 29,
    2007.4.7
              Sixth
      Supplemental Indenture, dated as of April 16, 2008 among Cenveo
      Corporation (f/k/a Mail-Well I Corporation), the Guarantors named therein
      and U.S. Bank National Association, as Trustee, to the Indenture dated as
      of February 4, 2004 relating to the 77⁄8% Senior Subordinated Notes due
      2013—incorporated by reference to Exhibit 4.7 to registrant’s quarterly
      report on Form 10-Q for the quarter ended June 28,
2008.4.8
              Seventh
      Supplemental Indenture, dated as of August 20, 2008 among Cenveo
      Corporation (f/k/a Mail-Well I Corporation), the Guarantors named therein
      and U.S. Bank National Association, as Trustee, to the Indenture dated as
      of February 4, 2004 relating to the 77⁄8% Senior Subordinated Notes due
      2013—incorporated by reference to Exhibit 4.8 to registrant’s quarterly
      report on Form 10-Q for the quarter ended September 27,
    2008.4.9
              Indenture,
      dated as of June 15, 2004, among Cadmus Communications Corporation, the
      Guarantors named therein and Wachovia Bank, National Association, as
      Trustee, relating to the 83⁄8% Senior Subordinated Notes due
      2014—incorporated by reference to Exhibit 4.9 to Cadmus Communications
      Corporation’s registration statement on Form S-4 filed August 24,
      2004.4.10
              Registration
      Rights Agreement, dated June 15, 2004, among Cadmus Communications
      Corporation, the Guarantors named therein and Wachovia Capital Markets,
      LLC and Banc of America Securities LLC on behalf of the Initial
      Purchasers, relating to the 83⁄8% Senior Subordinated Notes due
      2014—incorporated by reference to Exhibit 4.10 to Cadmus Communications
      Corporation’s registration statement on Form S-4 filed August 24,
      2004.4.11
              First
      Supplemental Indenture, dated as of March 1, 2005, to the Indenture dated
      as of June 15, 2004, among Cadmus Communications Corporation, the
      Guarantors named therein and Wachovia Bank, National Association, as
      Trustee, relating to the 83⁄8% Senior Subordinated Notes due
      2014—incorporated by reference to Exhibit 4.9.1 to Cadmus Communications
      Corporation’s quarterly report on Form 10-Q for the quarter ended March
      31, 2005, filed May 13, 2005.


32




Exhibit
                Number
              Description4.12
              Second
      Supplemental Indenture, dated as of May 19, 2006, to the Indenture dated
      as of June 15, 2004, among Cadmus Communications Corporation, the
      Guarantors named therein and U.S. Bank National Association (successor to
      Wachovia Bank, National Association), as Trustee, relating to the 83⁄8%
      Senior Subordinated Notes due 2014—incorporated by reference to Exhibit
      4.9.2 to Cadmus Communications Corporation’s annual report on Form 10-K
      for the year ended June 30, 2006, filed September 13,
  2006.4.13
              Third
      Supplemental Indenture, dated as of March 7, 2007, to the Indenture dated
      as of June 15, 2004, among Cenveo Corporation (as successor to Cadmus
      Communications Corporation), the Guarantors named therein and U.S. Bank
      National Association (successor to Wachovia Bank, National Association),
      as Trustee, relating to the 83⁄8% Senior Subordinated Notes due
      2014—incorporated by reference to Exhibit 4.11 to registrant’s quarterly
      report on Form 10-Q for the quarter ended March 31,
  2007.4.14
              Fourth
      Supplemental Indenture, dated as of July 9, 2007, to the Indenture dated
      as of June 15, 2004, among Cenveo Corporation (as successor to Cadmus
      Communications Corporation), the Guarantors named therein and U.S. Bank
      National Association (successor to Wachovia Bank, National Association),
      as Trustee, relating to the 83⁄8% Senior Subordinated Notes due
      2014—incorporated by reference to Exhibit 4.13 to registrant’s quarterly
      report on Form 10-Q for the quarter ended June 30,
2007.4.15
              Fifth
      Supplemental Indenture, dated as of August 30, 2007, to the Indenture
      dated as of June 15, 2004, among Cenveo Corporation (as successor to
      Cadmus Communications Corporation), the Guarantors named therein and U.S.
      Bank National Association (successor to Wachovia Bank, National
      Association), as Trustee, relating to the 83⁄8% Senior Subordinated Notes
      due 2014—incorporated by reference to Exhibit 4.13 to registrant’s
      quarterly report on Form 10-Q for the quarter ended September 29,
      2007.4.16
              Sixth
      Supplemental Indenture, dated as of November 7, 2007, to the Indenture
      dated as of June 15, 2004, among Cenveo Corporation (as successor to
      Cadmus Communications Corporation), the Guarantors named therein and U.S.
      Bank National Association (successor to Wachovia Bank, National
      Association), as Trustee, relating to the 83⁄8% Senior Subordinated Notes
      due 2014—incorporated by reference to Exhibit 4.12 to registrant’s annual
      report on Form 10-K for the year ended December 29,
  2007.4.17
              Seventh
      Supplemental Indenture, dated as of April 16, 2008, to the Indenture dated
      as of June 15, 2004, among Cenveo Corporation (as successor to Cadmus
      Communications Corporation), the Guarantors named therein and U.S. Bank
      National Association (successor to Wachovia Bank, National Association),
      as Trustee, relating to the 83⁄8% Senior Subordinated Notes due
      2014—incorporated by reference to Exhibit 4.16 to registrant’s quarterly
      report on Form 10-Q for the quarter ended June 28,
2008.4.18
              Eighth
      Supplemental Indenture, dated as of August 20, 2008, to the Indenture
      dated as of June 15, 2004, among Cenveo Corporation (as successor to
      Cadmus Communications Corporation), the Guarantors named therein and U.S.
      Bank National Association (successor to Wachovia Bank, National
      Association), as Trustee, relating to the 83⁄8% Senior Subordinated Notes
      due 2014—incorporated by reference to Exhibit 4.18 to registrant’s
      quarterly report on Form 10-Q for the quarter ended September 27,
      2008.


33




Exhibit
                Number
              Description4.19
              Indenture,
      dated as of June 13, 2008, between Cenveo Corporation, the other
      guarantors named therein and U.S. Bank National Association, as Trustee,
      relating to the 101⁄2% Notes of Cenveo Corporation—incorporated by reference
      to Exhibit 4.1 to registrant’s current report on Form 8-K dated (date of
      earliest event reported) June 9, 2008, filed June 13,
  2008.4.20
              Guarantee
      by Cenveo, Inc. and the other guarantors named therein relating to the
      101⁄2% Notes of Cenveo Corporation—incorporated by reference to Exhibit 4.2
      to registrant’s current report on Form 8-K dated (date of earliest event
      reported) June 9, 2008, filed June 13, 2008.4.21
              First
      Supplemental Indenture, dated as of August 20, 2008, to the Indenture of
      June 13, 2008 between Cenveo Corporation, the other guarantors named
      therein and U.S. Bank National Association, as Trustee, relating to the
      101⁄2% Notes of Cenveo Corporation—incorporated by reference to Exhibit 4.21
      to registrant’s quarterly report on Form 10-Q for the quarter ended
      September 27, 2008.





4.22
                    Registration
      Rights Agreement dated as June 13, 2008, among Cenveo Corporation, Cenveo
      Inc., the other guarantors named therein and Lehman Brothers
      Inc.—incorporated by reference to Exhibit 10.1 to registrant’s current
      report on Form 8-K dated (date of earliest event reported) June 9, 2008,
      filed June 13, 2008.10.1
                    Third
      Amendment, dated as of April 24, 2009, to Credit Agreement, dated as of
      June 21, 2006, as amended, among Cenveo Corporation, Cenveo, Inc., Bank of
      America, N.A., as Administrative Agent, and the other lenders party
      thereto—incorporated by reference to the registrant’s current report on
      Form 8-K filed April 27, 2009.31.1*
                    Certification
      by Robert G. Burton, Sr., Chief Executive Officer, pursuant to Section 302
      of the Sarbanes-Oxley Act of 2002.31.2*
                    Certification
      by Mark S. Hiltwein, Chief Financial Officer, pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002.32.1*
                    Certification
      of the Chief Executive Officer and of the Chief Financial Officer pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002, furnished as an exhibit
      to this report on Form
10-Q.




________________________




*Filed
herewith.















34




SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Stamford, State of
Connecticut, on May 6, 2009.







CENVEO,
      INC.By:
            /s/
      Robert
      G. Burton, Sr.Robert
      G. Burton, Sr.Chairman
      and Chief Executive Officer(Principal
      Executive Officer)By:
            /s/
      Mark
      S. HiltweinMark
      S. HiltweinChief
      Financial Officer(Principal
      Financial Officer andPrincipal
      Accounting Officer)