15. 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 7⅞% senior subordinated notes due 2013 and the 8⅞% senior second lien notes due 2018 and, in connection with the acquisition of Cadmus Communications Corporation (“Cadmus”) in 2007, assumed Cadmus’ 8⅜% senior subordinated notes due 2014 (collectively referred to as 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 the Non-Guarantor Subsidiaries as of July 2, 2011 and January 1, 2011 and for the three and six months ended July 2, 2011 and July 3, 2010. 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 Company’s primary transactions with its subsidiaries other than the investment account and related equity in net income (loss) of unconsolidated subsidiaries are the intercompany payables and receivables between its subsidiaries.

CENVEO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
July 2, 2011

(in thousands)

	Parent	Subsidiary	Guarantor	Non-Guarantor
	Company	Issuer	Subsidiaries	Subsidiaries	Eliminations	Consolidated

Assets
Current assets:
Cash and cash equivalents	$ —	$ 7,004	$ 445	$ 4,187	$ —	$ 11,636
Accounts receivable, net	—	100,387	174,267	9,004	—	283,658
Inventories	—	75,868	98,005	1,330	—	175,203
Notes receivable from subsidiaries	—	46,438	—	—	(46,438)	—
Prepaid and other current assets	—	52,352	9,624	4,241	—	66,217
Total current assets	—	282,049	282,341	18,762	(46,438)	536,714

Investment in subsidiaries	(330,137)	1,629,404	12,785	6,725	(1,318,777)	—
Property, plant and equipment, net	—	104,099	252,716	1,815	—	358,630
Goodwill	—	29,244	172,738	7,020	—	209,002
Other intangible assets, net	—	6,987	232,481	2,914	—	242,382
Other assets, net	—	103,747	(42,007)	2,323	—	64,063
Total assets	$(330,137)	$2,155,530	$ 911,054	$ 39,559	$ (1,365,215)	$ 1,410,791

Liabilities and Shareholders’ (Deficit) Equity
Current liabilities:
Current maturities of long-term debt	$ —	$ 7,958	$ 4,975	$ —	$ —	$ 12,933
Accounts payable	—	89,681	86,259	1,391	—	177,331
Accrued compensation and related liabilities	—	19,154	14,299	292	—	33,745
Other current liabilities	—	61,569	25,248	2,470	—	89,287
Intercompany payable (receivable)	—	907,099	(913,495)	6,396	—	—
Notes payable to issuer	—	—	36,938	9,500	(46,438)	—
Total current liabilities	—	1,085,461	(745,776)	20,049	(46,438)	313,296

Long-term debt	—	1,272,209	12,685	—	—	1,284,894
Other liabilities	—	127,997	14,741	—	—	142,738
Shareholders’ (deficit) equity	(330,137)	(330,137)	1,629,404	19,510	(1,318,777)	(330,137)
Total liabilities and shareholders’ (deficit) equity	$(330,137)	$2,155,530	$ 911,054	$ 39,559	$ (1,365,215)	$ 1,410,791

CENVEO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the three months ended July 2, 2011

(in thousands)

	Parent	Subsidiary	Guarantor	Non- Guarantor
	Company	Issuer	Subsidiaries	Subsidiaries	Eliminations	Consolidated

Net sales	$ —	$ 176,036	$ 314,105	$ 5,058	$ —	$ 495,199
Cost of sales	—	144,736	253,722	4,452	—	402,910
Selling, general and administrative expenses	—	28,799	25,545	278	—	54,622
Amortization of intangible assets	—	101	2,576	134	—	2,811
Restructuring and impairment charges	—	2,529	2,932	4	—	5,465
Operating income (loss)	—	(129)	29,330	190	—	29,391
Gain on bargain purchase	—	(540)	—	—	—	(540)
Interest expense (income), net	—	29,220	200	(8)	—	29,412
Intercompany interest expense (income)	—	(316)	242	74	—	—
Other (income) expense, net	—	(69)	256	(38)	—	149
Income (loss) from continuing operations before income taxes and equity in income (loss) of unconsolidated subsidiaries	—	(28,424)	28,632	162	—	370
Income tax expense (benefit)	—	(1,195)	1,126	65	—	(4)
Income (loss) from continuing operations before equity in income (loss) of unconsolidated subsidiaries	—	(27,229)	27,506	97	—	374
Equity in income (loss) of unconsolidated subsidiaries	374	27,603	97	—	(28,074)	—
Net income (loss)	$ 374	$ 374	$ 27,603	$ 97	$ (28,074)	$ 374

CENVEO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the six months ended July 2, 2011

(in thousands)

	Parent	Subsidiary	Guarantor	Non- Guarantor
	Company	Issuer	Subsidiaries	Subsidiaries	Eliminations	Consolidated

Net sales	$ —	$ 359,219	$ 627,372	$ 11,673	$ —	$ 998,264
Cost of sales	—	298,794	509,012	8,925	—	816,731
Selling, general and administrative expenses	—	61,709	52,845	560	—	115,114
Amortization of intangible assets	—	201	5,117	268	—	5,586
Restructuring and impairment charges	—	4,876	4,412	4	—	9,292
Operating income (loss)	—	(6,361)	55,986	1,916	—	51,541
Gain on bargain purchase	—	(11,079)	—	—	—	(11,079)
Interest expense (income), net	—	59,232	428	(31)	—	59,629
Intercompany interest expense (income)	—	(627)	498	129	—	—
Other (income) expense, net	—	(423)	754	7	—	338
Income (loss) from continuing operations before income taxes and equity in income (loss) of unconsolidated subsidiaries	—	(53,464)	54,306	1,811	—	2,653
Income tax expense (benefit)	—	1,536	(2,355)	314	—	(505)
Income (loss) from continuing operations before equity in income (loss) of unconsolidated subsidiaries	—	(55,000)	56,661	1,497	—	3,158
Equity in income (loss) of unconsolidated subsidiaries	3,158	58,158	1,497	—	(62,813)	—
Net income (loss)	$ 3,158	$ 3,158	$ 58,158	$ 1,497	$ (62,813)	$ 3,158

CENVEO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the six months ended July 2, 2011

(in thousands)

	Parent	Subsidiary	Guarantor	Non- Guarantor
	Company	Issuer	Subsidiaries	Subsidiaries	Eliminations	Consolidated
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$ 5,018	$ (62,822)	$ 71,000	$ (1,347)	$ —	$ 11,849
Cash flows from investing activities:
Cost of business acquisitions, net of cash acquired	—	(54,784)	—	—	—	(54,784)
Capital expenditures	—	(5,283)	(2,726)	(538)	—	(8,547)
Proceeds from sale of property, plant and equipment	—	1,163	9,701	—	—	10,864
Net cash (used in) provided by investing activities	—	(58,904)	6,975	(538)	—	(52,467)
Cash flows from financing activities:
Borrowings under revolving credit facility due 2014	—	8,200	—	—	—	8,200
Proceeds from exercise of stock options	318	—	—	—	—	318
Borrowings (repayments) of other long-term debt	—	75	(3,631)	—	—	(3,556)
Repayment of term loan B due 2016	—	(1,900)	—	—	—	(1,900)
Purchase and retirement of common stock upon vesting RSUs	(496)	—	—	—	—	(496)
Intercompany advances	(4,840)	75,473	(74,875)	4,242	—	—
Net cash (used in) provided by financing activities	(5,018)	81,848	(78,506)	4,242	—	2,566
Effect of exchange rate changes on cash and cash equivalents	—	—	(34)	(34)	—	(68)
Net increase (decrease) in cash and cash equivalents	—	(39,878)	(565)	2,323	—	(38,120)
Cash and cash equivalents at beginning of period	—	46,882	1,010	1,864	—	49,756
Cash and cash equivalents at end of period	$ —	$ 7,004	$ 445	$ 4,187	$ —	$ 11,636

CENVEO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
January 1, 2011

(in thousands)

	Parent	Subsidiary	Guarantor	Non-Guarantor
	Company	Issuer	Subsidiaries	Subsidiaries	Eliminations	Consolidated

Assets
Current assets:
Cash and cash equivalents	$ —	$ 46,882	$ 1,010	$ 1,864	$ —	$ 49,756
Accounts receivable, net	—	104,071	154,340	4,953	—	263,364
Inventories	—	68,080	79,676	1,395	—	149,151
Notes receivable from subsidiaries	—	46,438	—	—	(46,438)	—
Prepaid and other current assets	—	52,088	9,580	4,467	—	66,135
Total current assets	—	317,559	244,606	12,679	(46,438)	528,406

Investment in subsidiaries	(341,331)	1,514,329	11,239	6,725	(1,190,962)	—
Property, plant and equipment, net	—	109,945	236,696	1,280	—	347,921
Goodwill	—	29,244	172,897	7,020	—	209,161
Other intangible assets, net	—	7,188	236,054	3,182	—	246,424
Other assets, net	—	104,781	(41,146)	2,183	—	65,818
Total assets	$(341,331)	$2,083,046	$ 860,346	$ 33,069	$ (1,237,400)	$ 1,397,730

Liabilities and Shareholders’ (Deficit) Equity
Current liabilities:
Current maturities of long-term debt	$ —	$ 3,896	$ 6,202	$ —	$ —	$ 10,098
Accounts payable	—	82,974	82,713	781	—	166,468
Accrued compensation and related liabilities	—	17,385	12,915	372	—	30,672
Other current liabilities	—	71,158	25,015	2,298	—	98,471
Intercompany payable (receivable)	—	846,814	(848,968)	2,154	—	—
Notes payable to issuer	—	—	36,938	9,500	(46,438)	—
Total current liabilities	—	1,022,227	(685,185)	15,105	(46,438)	305,709

Long-term debt	—	1,268,816	15,089	—	—	1,283,905
Other liabilities	—	133,334	16,113	—	—	149,447
Shareholders’ (deficit) equity	(341,331)	(341,331)	1,514,329	17,964	(1,190,962)	(341,331)
Total liabilities and shareholders’ (deficit) equity	$(341,331)	$2,083,046	$ 860,346	$ 33,069	$ (1,237,400)	$ 1,397,730

CENVEO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the three months ended July 3, 2010

(in thousands)

	Parent	Subsidiary	Guarantor	Non- Guarantor
	Company	Issuer	Subsidiaries	Subsidiaries	Eliminations	Consolidated

Net sales	$ —	$ 170,419	$ 268,563	$ 6,282	$ —	$ 445,264
Cost of sales	—	139,793	215,895	4,329	—	360,017
Selling, general and administrative expenses	—	26,415	24,868	201	—	51,484
Amortization of intangible assets	—	101	2,800	—	—	2,901
Restructuring and impairment charges	—	6,266	5,210	—	—	11,476
Operating income (loss)	—	(2,156)	19,790	1,752	—	19,386
Interest expense (income), net	—	31,219	278	(5)	—	31,492
Intercompany interest expense (income)	—	(254)	254	—	—	—
Other (income) expense, net	—	186	206	(87)	—	305
Income (loss) from continuing operations before income taxes and equity in income (loss) of unconsolidated subsidiaries	—	(33,307)	19,052	1,844	—	(12,411)
Income tax expense (benefit)	—	(5,559)	1,364	76	—	(4,119)
Income (loss) from continuing operations before equity in income (loss) of unconsolidated subsidiaries	—	(27,748)	17,688	1,768	—	(8,292)
Equity in income (loss) of unconsolidated subsidiaries	(8,327)	19,456	1,768	—	(12,897)	—
Income (loss) from continuing operations	(8,327)	(8,292)	19,456	1,768	(12,897)	(8,292)
Loss from discontinued operations, net of taxes	—	(35)	—	—	—	(35)
Net income (loss)	$ (8,327)	$ (8,327)	$ 19,456	$ 1,768	$ (12,897)	$ (8,327)

CENVEO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the six months ended July 3, 2010

(in thousands)

	Parent	Subsidiary	Guarantor	Non- Guarantor
	Company	Issuer	Subsidiaries	Subsidiaries	Eliminations	Consolidated

Net sales	$ —	$ 350,272	$ 537,805	$ 11,121	$ —	$ 899,198
Cost of sales	—	294,111	433,533	7,563	—	735,207
Selling, general and administrative expenses	—	54,586	50,615	325	—	105,526
Amortization of intangible assets	—	204	5,581	—	—	5,785
Restructuring and impairment charges	—	10,109	10,994	—	—	21,103
Operating income (loss)	—	(8,738)	37,082	3,233	—	31,577
Interest expense (income), net	—	60,479	634	(7)	—	61,106
Intercompany interest expense (income)	—	(495)	495	—	—	—
Loss on early extinguishment of debt	—	2,598	—	—	—	2,598
Other (income) expense, net	—	302	659	71	—	1,032
Income (loss) from continuing operations before income taxes and equity in income (loss) of unconsolidated subsidiaries	—	(71,622)	35,294	3,169	—	(33,159)
Income tax expense (benefit)	—	(18,229)	4,312	71	—	(13,846)
Income (loss) from continuing operations before equity in income (loss) of unconsolidated subsidiaries	—	(53,393)	30,982	3,098	—	(19,313)
Equity in income (loss) of unconsolidated subsidiaries	(19,435)	34,080	3,098	—	(17,743)	—
Income (loss) from continuing operations	(19,435)	(19,313)	34,080	3,098	(17,743)	(19,313)
Loss from discontinued operations, net of taxes	—	(122)	—	—	—	(122)
Net income (loss)	$ (19,435)	$ (19,435)	$ 34,080	$ 3,098	$ (17,743)	$ (19,435)

CENVEO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the six months ended July 3, 2010

(in thousands)

	Parent	Subsidiary	Guarantor	Non- Guarantor
	Company	Issuer	Subsidiaries	Subsidiaries	Eliminations	Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$ 5,625	$ (39,182)	$ 57,441	$ 5,711	$ —	$ 29,595
Cash flows from investing activities:
Cost of business acquisitions, net of cash acquired	—	(10,283)	—	(11,200)	—	(21,483)
Capital expenditures	—	(3,081)	(5,155)	—	—	(8,236)
Intercompany note	—	(9,500)	—	—	9,500	—
Proceeds from sale of property, plant and equipment	—	1,025	451	—	—	1,476
Net cash (used in) provided by investing activities	—	(21,839)	(4,704)	(11,200)	9,500	(28,243)
Cash flows from financing activities:
Proceeds from issuance of 8⅞% senior second lien notes	—	397,204	—	—	—	397,204
Proceeds from exercise of stock options	1,281	—	—	—	—	1,281
Repayment of term loans	—	(311,944)	—	—	—	(311,944)
Repayments under revolving credit facility due 2012	—	(22,500)	—	—	—	(22,500)
Payment of refinancing or repurchase fees, redemption premiums and expenses	—	(13,009)	—	—	—	(13,009)
Repayments of other long-term debt	—	(43)	(4,021)	—	—	(4,064)
Intercompany note	—	—	—	9,500	(9,500)	—
Intercompany advances	(6,906)	54,402	(47,284)	(212)	—	—
Net cash (used in) provided by financing activities	(5,625)	104,110	(51,305)	9,288	(9,500)	46,968
Effect of exchange rate changes on cash and cash equivalents	—	—	(135)	952	—	817
Net increase in cash and cash equivalents	—	43,089	1,297	4,751	—	49,137
Cash and cash equivalents at beginning of period	—	8,971	764	1,061	—	10,796
Cash and cash equivalents at end of period	$ —	$ 52,060	$ 2,061	$ 5,812	$ —	$ 59,933