Condensed Consolidating Financial Information

9 Months Ended

Sep. 30, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Information

Condensed Consolidating Financial Information

Cenveo, Inc. is a holding company (the "Parent Company"), which is the ultimate parent of all Cenveo subsidiaries. The Parent Company’s wholly-owned subsidiary, Cenveo Corporation (the "Subsidiary Issuer"), issued the 6.000% senior priority secured notes due 2019, the 8.500% junior priority secured notes due 2022, the 6.000% Unsecured Notes, the 7% Notes, the 11.5% Notes and the 4% senior secured notes (collectively, 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 domestic subsidiaries, other than the Subsidiary Issuer (the "Guarantor Subsidiaries").

Presented below is condensed consolidating financial information for the Parent Company, the Subsidiary Issuer, the Guarantor Subsidiaries and the Parent Company's subsidiaries other than the Subsidiary Issuer and the Guarantor Subsidiaries (the "Non-Guarantor Subsidiaries") as of September 30, 2017, and December 31, 2016, and for the three and nine months ended September 30, 2017, and October 1, 2016. The condensed consolidating financial information has been presented to show the financial position, results of operations and cash flows of the Parent Company, the Subsidiary Issuer, the Guarantor Subsidiaries and the 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 the Non-Guarantor Subsidiaries using the equity method of accounting. The Parent Company’s primary transactions with its subsidiaries, other than the investment account and related equity in net income (loss) of subsidiaries, are the intercompany payables and receivables between its subsidiaries.

CENVEO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEET September 30, 2017 (in thousands)
	Parent Company			Subsidiary Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—		$	5,805		$	—	$	501	$	—		$	6,306
Accounts receivable, net	—			79,651			93,316		—		—			172,967
Inventories, net	—			46,065			45,305		—		—			91,370
Intercompany receivable	—			—			1,805,515		273		(1,805,788		)	—
Notes receivable from subsidiaries	—			36,938			3,245		—		(40,183		)	—
Prepaid and other current assets	—			34,173			2,404		1,309		—			37,886
Assets of discontinued operations - current	—			59,768			—		—		—			59,768
Total current assets	—			262,400			1,949,785		2,083		(1,845,971		)	368,297
Investment in subsidiaries	(618,921		)	2,131,028			5,631		7,829		(1,525,567		)	—
Property, plant and equipment, net	—			93,631			96,291		1,247		—			191,169
Goodwill	—			38,001			130,550		5,054		—			173,605
Other intangible assets, net	—			4,234			104,064		—		—			108,298
Other assets, net	—			18,898			2,266		1,720		(1,086		)	21,798
Assets of discontinued operations - long-term	—			6,850			—		—		—			6,850
Total assets	$	(618,921	)	$	2,555,042		$	2,288,587	$	17,933	$	(3,372,624	)	$	870,017
Liabilities and Shareholders’ (Deficit) Equity
Current liabilities:
Current maturities of long-term debt	$	—		$	6,236		$	2,361	$	—	$	—		$	8,597
Accounts payable	—			94,416			58,674		87		—			153,177
Accrued compensation and related liabilities	—			14,698			3,821		370		—			18,889
Other current liabilities	—			38,118			11,647		771		—			50,536
Liabilities of discontinued operations - current	—			24,249			—		—		—			24,249
Intercompany payable	—			1,805,788			—		—		(1,805,788		)	—
Notes payable to issuer	—			—			36,938		3,245		(40,183		)	—
Total current liabilities	—			1,983,505			113,441		4,473		(1,845,971		)	255,448
Long-term debt	—			1,046,587			3,854		—		—			1,050,441
Other liabilities	—			143,720			40,264		—		(1,086		)	182,898
Liabilities of discontinued operations - long-term	—			151			—		—		—			151
Shareholders’ (deficit) equity	(618,921		)	(618,921		)	2,131,028		13,460		(1,525,567		)	(618,921		)
Total liabilities and shareholders’ (deficit) equity	$	(618,921	)	$	2,555,042		$	2,288,587	$	17,933	$	(3,372,624	)	$	870,017

CENVEO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME For the three months ended September 30, 2017 (in thousands)
	Parent Company			Subsidiary Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	158,476		$	170,214		$	821		$	—		$	329,511
Cost of sales	—			106,101			171,487			—			—			277,588
Selling, general and administrative expenses	—			24,589			16,385			209			—			41,183
Amortization of intangible assets	—			93			1,116			—			—			1,209
Restructuring and other charges	—			1,385			8,640			—			—			10,025
Operating income (loss)	—			26,308			(27,414		)	612			—			(494		)
Interest expense, net	—			19,306			166			—			—			19,472
Intercompany interest (income) expense	—			(309		)	309			—			—			—
Loss on early extinguishment of debt, net	—			38			—			—			—			38
Other expense (income), net	—			488			(165		)	(30		)	—			293
Income (loss) from continuing operations before income taxes and equity in (loss) income of subsidiaries	—			6,785			(27,724		)	642			—			(20,297		)
Income tax expense (benefit)	—			1,703			(2,895		)	338			—			(854		)
Income (loss) from continuing operations before equity in (loss) income of subsidiaries	—			5,082			(24,829		)	304			—			(19,443		)
Equity in (loss) income of subsidiaries	(28,050		)	(24,525		)	304			—			52,271			—
(Loss) income from continuing operations	(28,050		)	(19,443		)	(24,525		)	304			52,271			(19,443		)
Loss from discontinued operations, net of taxes	—			(8,607		)	—			—			—			(8,607		)
Net (loss) income	(28,050		)	(28,050		)	(24,525		)	304			52,271			(28,050		)
Other comprehensive income(loss):
Other comprehensive income (loss) of subsidiaries	4,567			(6		)	(165		)	—			(4,396		)	—
Changes in pension and other employee benefit accounts, net of taxes	—			4,573			92			—			—			4,665
Currency translation adjustment, net	—			—			67			(165		)	—			(98		)
Total other comprehensive income (loss)	4,567			4,567			(6		)	(165		)	(4,396		)	4,567
Comprehensive (loss) income	$	(23,483	)	$	(23,483	)	$	(24,531	)	$	139		$	47,875		$	(23,483	)

CENVEO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) For the nine months ended September 30, 2017 (in thousands)
	Parent Company			Subsidiary Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	492,942		$	515,754		$	2,154	$	—		$	1,010,850
Cost of sales	—			401,358			439,638			—		—			840,996
Selling, general and administrative expenses	—			75,583			47,177			637		—			123,397
Amortization of intangible assets	—			280			3,337			213		—			3,830
Restructuring and other charges	—			9,881			10,159			—		—			20,040
Operating income (loss)	—			5,840			15,443			1,304		—			22,587
Interest expense, net	—			57,799			345			—		—			58,144
Intercompany interest (income) expense	—			(886		)	886			—		—			—
Loss on early extinguishment of debt, net	—			146			—			—		—			146
Other expense (income), net	—			464			(604		)	63		—			(77		)
(Loss) income from continuing operations before income taxes and equity in (loss) income of subsidiaries	—			(51,683		)	14,816			1,241		—			(35,626		)
Income tax (benefit) expense	—			(4,546		)	(2,586		)	428		—			(6,704		)
(Loss) income from continuing operations before equity in (loss) income of subsidiaries	—			(47,137		)	17,402			813		—			(28,922		)
Equity in (loss) income of subsidiaries	(38,593		)	18,215			813			—		19,565			—
(Loss) income from continuing operations	(38,593		)	(28,922		)	18,215			813		19,565			(28,922		)
(Loss) income from discontinued operations, net of taxes	—			(9,671		)	—			—		—			(9,671		)
Net (loss) income	(38,593		)	(38,593		)	18,215			813		19,565			(38,593		)
Other comprehensive income (loss):
Other comprehensive income (loss) of subsidiaries	8,264			682			649			—		(9,595		)	—
Changes in pension and other employee benefit accounts, net of taxes	—			7,582			272			—		—			7,854
Currency translation adjustment, net	—			—			(239		)	649		—			410
Total other comprehensive income (loss)	8,264			8,264			682			649		(9,595		)	8,264
Comprehensive (loss) income	$	(30,329	)	$	(30,329	)	$	18,897		$	1,462	$	9,970		$	(30,329	)

CENVEO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the nine months ended September 30, 2017  (in thousands)
	Parent Company			Subsidiary Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities of continuing operations	$	619		$	(34,202	)	$	26,349		$	1,070		$	—	$	(6,164	)
Net cash used in operating activities of discontinued operations	—			(3,447		)	—			—			—		(3,447		)
Net cash provided by (used in) operating activities	619			(37,649		)	26,349			1,070			—		(9,611		)
Cash flows from investing activities:
Capital expenditures	—			(11,391		)	(7,849		)	(682		)	—		(19,922		)
Proceeds from sale of property, plant and equipment	—			1,265			—			—			—		1,265
Premiums for company owned life insurance policies, net	—			(410		)	—			—			—		(410		)
Net cash used in investing activities of continuing operations	—			(10,536		)	(7,849		)	(682		)	—		(19,067		)
Net cash used in investing activities of discontinued operations	—			(201		)	—			—			—		(201		)
Net cash used in investing activities	—			(10,737		)	(7,849		)	(682		)	—		(19,268		)
Cash flows from financing activities:
Payment of financing-related costs and expenses and debt issuance discounts	—			(398		)	—			—			—		(398		)
Proceeds from issuance of other long-term debt	—			11,646			—			—			—		11,646
Repayments of other long-term debt	—			(7,827		)	3,071			—			—		(4,756		)
Repayment of 11.5% senior notes due 2017	—			(20,465		)	—			—			—		(20,465		)
Repayment of 7% senior exchangeable notes due 2017	—			(5,493		)	—			—			—		(5,493		)
Purchase and retirement of common stock upon vesting of RSUs	(55		)	—			—			—			—		(55		)
Borrowings under ABL Facility due 2021	—			311,054			—			—			—		311,054
Repayments under ABL Facility due 2021	—			(261,966		)	—			—			—		(261,966		)
Intercompany advances	(564		)	22,962			(21,657		)	(741		)	—		—
Net cash (used in) provided by financing activities	(619		)	49,513			(18,586		)	(741		)	—		29,567
Effect of exchange rate changes on cash and cash equivalents	—			—			86			—			—		86
Net increase (decrease) in cash and cash equivalents	—			1,127			—			(353		)	—		774
Cash and cash equivalents at beginning of period	—			4,678			—			854			—		5,532
Cash and cash equivalents at end of period	$	—		$	5,805		$	—		$	501		$	—	$	6,306

CENVEO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2016 (in thousands)
	Parent Company			Subsidiary Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—		$	4,678		$	—	$	854	$	—		$	5,532
Accounts receivable, net	—			94,572			102,417		—		—			196,989
Inventories, net	—			40,996			39,771		—		—			80,767
Intercompany receivable	—			—			1,783,858		—		(1,783,858		)	—
Notes receivable from subsidiaries	—			36,938			3,245		—		(40,183		)	—
Prepaid and other current assets	—			34,771			4,789		1,128		—			40,688
Assets of discontinued operations - current	—			59,269			—		—		—			59,269
Total current assets	—			271,224			1,934,080		1,982		(1,824,041		)	383,245
Investment in subsidiaries	(589,157		)	2,112,403			4,173		7,829		(1,535,248		)	—
Property, plant and equipment, net	—			99,628			98,255		1,029		—			198,912
Goodwill	—			47,370			121,181		4,858		—			173,409
Other intangible assets, net	—			4,702			114,914		147		—			119,763
Other assets, net	—			18,208			3,100		1,694		(1,116		)	21,886
Assets of discontinued operations - long-term	—			15,744			—		—		—			15,744
Total assets	$	(589,157	)	$	2,569,279		$	2,275,703	$	17,539	$	(3,360,405	)	$	912,959
Liabilities and Shareholders’ (Deficit) Equity
Current liabilities:
Current maturities of long-term debt	$	—		$	30,709		$	1,018	$	—	$	—		$	31,727
Accounts payable	—			104,667			61,098		265		—			166,030
Accrued compensation and related liabilities	—			18,470			4,699		740		—			23,909
Other current liabilities	—			54,119			11,962		819		—			66,900
Liabilities of discontinued operations - current	—			26,640			—		—		—			26,640
Intercompany payable	—			1,783,390			—		468		(1,783,858		)	—
Notes payable to issuer	—			—			36,938		3,245		(40,183		)	—
Total current liabilities	—			2,017,995			115,715		5,537		(1,824,041		)	315,206
Long-term debt	—			984,833			2,106		—		—			986,939
Other liabilities	—			155,484			45,479		—		(1,116		)	199,847
Liabilities of discontinued operations - long-term	—			124			—		—		—			124
Shareholders’ (deficit) equity	(589,157		)	(589,157		)	2,112,403		12,002		(1,535,248		)	(589,157		)
Total liabilities and shareholders’ (deficit) equity	$	(589,157	)	$	2,569,279		$	2,275,703	$	17,539	$	(3,360,405	)	$	912,959

CENVEO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) For the three months ended October 1, 2016 (in thousands)
	Parent Company		Subsidiary Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	—	$	188,245		$	193,945		$	485	$	—		$	382,675
Cost of sales	—		163,516			151,267			—		—			314,783
Selling, general and administrative expenses	—		26,377			17,526			179		—			44,082
Amortization of intangible assets	—		98			1,116			111		—			1,325
Restructuring and other charges	—		2,493			(167		)	—		—			2,326
Operating (loss) income	—		(4,239		)	24,203			195		—			20,159
Interest expense, net	—		20,272			46			—		—			20,318
Intercompany interest (income) expense	—		(249		)	249			—		—			—
Gain on early extinguishment of debt, net	—		(7,442		)	—			—		—			(7,442		)
Other (income) expense, net	—		(1,905		)	100			42		—			(1,763		)
(Loss) income from continuing operations before income taxes and equity in income (loss) of subsidiaries	—		(14,915		)	23,808			153		—			9,046
Income tax expense	—		774			160			53		—			987
(Loss) income from continuing operations before equity in income (loss) of subsidiaries	—		(15,689		)	23,648			100		—			8,059
Equity in income (loss) of subsidiaries	9,431		24,927			163			—		(34,521		)	—
Income (loss) from continuing operations	9,431		9,238			23,811			100		(34,521		)	8,059
Income (loss) from discontinued operations, net of taxes	—		193			1,116			63		—			1,372
Net income (loss)	9,431		9,431			24,927			163		(34,521		)	9,431
Other comprehensive income (loss):
Other comprehensive income (loss) of subsidiaries	3,064		363			213			—		(3,640		)	—
Changes in pension and other employee benefit accounts, net of taxes	—		2,701			(194		)	—		—			2,507
Currency translation adjustment, net	—		—			344			213		—			557
Total other comprehensive income (loss)	3,064		3,064			363			213		(3,640		)	3,064
Comprehensive income (loss)	$	12,495	$	12,495		$	25,290		$	376	$	(38,161	)	$	12,495

CENVEO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) For the nine months ended October 1, 2016 (in thousands)
	Parent Company		Subsidiary Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—	$	574,496		$	587,116		$	1,291		$	—		$	1,162,903
Cost of sales	—		508,140			457,413			—			—			965,553
Selling, general and administrative expenses	—		80,738			51,747			557			—			133,042
Amortization of intangible assets	—		292			3,576			333			—			4,201
Restructuring and other charges	—		6,270			1,926			—			—			8,196
Operating (loss) income	—		(20,944		)	72,454			401			—			51,911
Interest expense, net	—		65,779			146			—			—			65,925
Intercompany interest (income) expense	—		(740		)	740			—			—			—
Gain on early extinguishment of debt, net	—		(80,328		)	—			—			—			(80,328		)
Other income, net	—		(945		)	(1,848		)	(100		)	—			(2,893		)
(Loss) income from continuing operations before income taxes and equity in income (loss) of subsidiaries	—		(4,710		)	73,416			501			—			69,207
Income tax expense	—		2,827			402			831			—			4,060
(Loss) income from continuing operations before equity in income (loss) of subsidiaries	—		(7,537		)	73,014			(330		)	—			65,147
Equity in income (loss) of subsidiaries	68,190		70,889			715			—			(139,794		)	—
Income (loss) from continuing operations	68,190		63,352			73,729			(330		)	(139,794		)	65,147
Income (loss) from discontinued operations, net of taxes	—		4,838			(2,840		)	1,045			—			3,043
Net income (loss)	68,190		68,190			70,889			715			(139,794		)	68,190
Other comprehensive income (loss):
Other comprehensive income (loss) of subsidiaries	9,609		2,401			140			—			(12,150		)	—
Changes in pension and other employee benefit accounts, net of taxes	—		7,208			259			—			—			7,467
Currency translation adjustment, net	—		—			2,002			140			—			2,142
Total other comprehensive income (loss)	9,609		9,609			2,401			140			(12,150		)	9,609
Comprehensive income (loss)	$	77,799	$	77,799		$	73,290		$	855		$	(151,944	)	$	77,799

CENVEO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the nine months ended October 1, 2016  (in thousands)
	Parent Company			Subsidiary Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities of continuing operations	$	1,230		$	(91,850	)	$	92,403		$	1,496		$	—	$	3,279
Net cash provided by (used in) operating activities of discontinued operations	—			12,586			(10,072		)	(438		)	—		2,076
Net cash provided by (used in) operating activities	1,230			(79,264		)	82,331			1,058			—		5,355
Cash flows from investing activities:
Capital expenditures	—			(12,262		)	(16,255		)	(601		)	—		(29,118		)
Proceeds from sale of property, plant and equipment	—			8,131			141			—			—		8,272
Premiums for company owned life insurance policies, net	—			(245		)	—			—			—		(245		)
Proceeds from sale of assets	—			—			2,000			—			—		2,000
Net cash used in investing activities of continuing operations	—			(4,376		)	(14,114		)	(601		)	—		(19,091		)
Net cash (used in) provided by investing activities of discontinued operations	—			(2,055		)	87,877			6,487			—		92,309
Net cash (used in) provided by investing activities	—			(6,431		)	73,763			5,886			—		73,218
Cash flows from financing activities:
Proceeds from issuance of 4% secured notes due 2021	—			50,000			—			—			—		50,000
Payment of financing-related costs and expenses and debt issuance discounts	—			(12,182		)	—			—			—		(12,182		)
Repayments of other long-term debt	—			(4,136		)	21			—			—		(4,115		)
Repayment of 11.5% senior notes due 2017	—			(4,725		)	—			—			—		(4,725		)
Repayment of 7% senior exchangeable notes due 2017	—			(40,207		)	—			—			—		(40,207		)
Purchase and retirement of common stock upon vesting of RSUs	(341		)	—			—			—			—		(341		)
Borrowings under ABL Facility due 2021	—			368,600			—			—			—		368,600
Repayments under ABL Facility due 2021	—			(441,700		)	—			—			—		(441,700		)
Intercompany advances	(889		)	169,051			(159,218		)	(8,944		)	—		—
Net cash (used in) provided by financing activities of continuing operations	(1,230		)	84,701			(159,197		)	(8,944		)	—		(84,670		)
Net cash used in financing activities of discontinued operations	—			—			(8		)	—			—		(8		)
Net cash (used in) provided by financing activities	(1,230		)	84,701			(159,205		)	(8,944		)	—		(84,678		)
Effect of exchange rate changes on cash and cash equivalents	—			—			316			127			—		443
Net decrease in cash and cash equivalents	—			(994		)	(2,795		)	(1,873		)	—		(5,662		)
Cash and cash equivalents at beginning of period	—			5,558			3,006			1,992			—		10,556
Cash and cash equivalents at end of period	$	—		$	4,564		$	211		$	119		$	—	$	4,894