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 October 1, 2011 and January 1, 2011 and for the three and nine months ended October 1, 2011 and October 2, 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
October 1, 2011

(in thousands)

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

Assets
Current assets:
Cash and cash equivalents	$ —	$ 19,243	$ 175	$ 2,159	$ —	$ 21,577
Accounts receivable, net	—	113,731	188,076	1,289	—	303,096
Inventories	—	68,933	91,487	138	—	160,558
Notes receivable from subsidiaries	—	40,838	—	—	(40,838)	—
Prepaid and other current assets	—	50,570	11,175	3,920	—	65,665
Total current assets	—	293,315	290,913	7,506	(40,838)	550,896

Investment in subsidiaries	(331,119)	1,655,497	10,874	6,725	(1,341,977)	—
Property, plant and equipment, net	—	103,799	241,760	1,290	—	346,849
Goodwill	—	29,244	171,498	7,020	—	207,762
Other intangible assets, net	—	6,887	231,223	2,780	—	240,890
Other assets, net	—	102,391	(43,914)	2,268	—	60,745
Total assets	$ (331,119)	$2,191,133	$ 902,354	$ 27,589	$ (1,382,815)	$ 1,407,142

Liabilities and Shareholders’ (Deficit) Equity
Current liabilities:
Current maturities of long-term debt	$ —	$ 4,435	$ 4,974	$ —	$ —	$ 9,409
Accounts payable	—	87,008	98,334	886	—	186,228
Accrued compensation and related liabilities	—	25,626	15,552	254	—	41,432
Other current liabilities	—	63,098	25,083	2,752	—	90,933
Intercompany payable (receivable)	—	957,719	(959,917)	2,198	—	—
Notes payable to issuer	—	—	36,938	3,900	(40,838)	—
Total current liabilities	—	1,137,886	(779,036)	9,990	(40,838)	328,002

Long-term debt	—	1,266,460	11,826	—	—	1,278,286
Other liabilities	—	117,906	14,067	—	—	131,973
Shareholders’ (deficit) equity	(331,119)	(331,119)	1,655,497	17,599	(1,341,977)	(331,119)
Total liabilities and shareholders’ (deficit) equity	$ (331,119)	$2,191,133	$902,354	$ 27,589	$ (1,382,815)	$ 1,407,142

CENVEO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the three months ended October 1, 2011

(in thousands)

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

Net sales	$ —	$ 194,126	$ 302,760	$ 3,666	$ —	$ 500,552
Cost of sales	—	160,241	238,182	3,734	—	402,157
Selling, general and administrative expenses	—	29,471	25,478	251	—	55,200
Amortization of intangible assets	—	123	2,548	134	—	2,805
Restructuring and impairment charges	—	2,907	1,778	—	—	4,685
Operating income (loss)	—	1,384	34,774	(453)	—	35,705
Gain on bargain purchase	—	(641)	—	—	—	(641)
Interest expense (income), net	—	28,257	187	(9)	—	28,435
Intercompany interest expense (income)	—	(292)	238	54	—	—
Other (income) expense, net	—	557	(758)	(703)	—	(904)
Income (loss) from continuing operations before income taxes and equity in income (loss) of unconsolidated subsidiaries	—	(26,497)	35,107	205	—	8,815
Income tax expense (benefit)	—	2,969	3,144	(103)	—	6,010
Income (loss) from continuing operations before equity in income (loss) of unconsolidated subsidiaries	—	(29,466)	31,963	308	—	2,805
Equity in income (loss) of unconsolidated subsidiaries	2,805	32,271	308	—	(35,384)	—
Net income (loss)	$ 2,805	$ 2,805	$ 32,271	$ 308	$ (35,384)	$ 2,805

CENVEO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the nine months ended October 1, 2011

(in thousands)

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

Net sales	$ —	$ 553,345	$930,132	$15,339	$ —	$1,498,816
Cost of sales	—	459,035	747,194	12,659	—	1,218,888
Selling, general and administrative expenses	—	91,180	78,323	811	—	170,314
Amortization of intangible assets	—	324	7,665	402	—	8,391
Restructuring and impairment charges	—	7,783	6,190	4	—	13,977
Operating income (loss)	—	(4,977)	90,760	1,463	—	87,246
Gain on bargain purchase	—	(11,720)	—	—	—	(11,720)
Interest expense (income), net	—	87,489	615	(40)	—	88,064
Intercompany interest expense (income)	—	(919)	736	183	—	—
Other (income) expense, net	—	134	(4)	(696)	—	(566)
Income (loss) from continuing operations before income taxes and equity in income (loss) of unconsolidated subsidiaries	—	(79,961)	89,413	2,016	—	11,468
Income tax expense	—	4,505	789	211	—	5,505
Income (loss) from continuing operations before equity in income (loss) of unconsolidated subsidiaries	—	(84,466)	88,624	1,805	—	5,963
Equity in income (loss) of unconsolidated subsidiaries	5,963	90,429	1,805	—	(98,197)	—
Net income (loss)	$ 5,963	$ 5,963	$90,429	$1,805	$ (98,197)	$5,963

CENVEO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the nine months ended October 1, 2011

(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	$ 7,129	$ (95,991)	$ 122,463	$ 5,280	$ —	$ 38,881
Cash flows from investing activities:
Cost of business acquisitions, net of cash acquired	—	(59,719)	—	—	—	(59,719)
Capital expenditures	—	(7,172)	(3,507)	(538)	—	(11,217)
Proceeds from sale of property, plant and equipment	—	1,288	9,701	—	—	10,989
Intercompany note	—	5,600	—	—	(5,600)	—
Net cash (used in) provided by investing activities	—	(60,003)	6,194	(538)	(5,600)	(59,947)
Cash flows from financing activities:
Repayments of other long-term debt	—	(14)	(4,491)	—	—	(4,505)
Repayment of term loan B due 2016	—	(2,850)	—	—	—	(2,850)
Purchase and retirement of common stock upon vesting RSUs	(1,283)	—	—	—	—	(1,283)
Proceeds from exercise of stock options	350	—	—	—	—	350
Intercompany note	—	—	—	(5,600)	5,600	—
Intercompany advances	(6,196)	131,219	(125,067)	44	—	—
Net cash (used in) provided by financing activities	(7,129)	128,355	(129,558)	(5,556)	5,600	(8,288)
Effect of exchange rate changes on cash and cash equivalents	—	—	66	1,109	—	1,175
Net increase (decrease) in cash and cash equivalents	—	(27,639)	(835)	295	—	(28,179)
Cash and cash equivalents at beginning of period	—	46,882	1,010	1,864	—	49,756
Cash and cash equivalents at end of period	$ —	$ 19,243	$ 175	$ 2,159	$ —	$ 21,577

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 October 2, 2010

(in thousands)

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

Net sales	$ —	$ 182,220	$ 265,559	$ 7,348	$ —	$ 455,127
Cost of sales	—	151,774	208,524	5,223	—	365,521
Selling, general and administrative expenses	—	28,892	25,144	508	—	54,544
Amortization of intangible assets	—	114	2,803	159	—	3,076
Restructuring and impairment charges	—	2,836	185,279	—	—	188,115
Operating income (loss)	—	(1,396)	(156,191)	1,458	—	(156,129)
Interest expense (income), net	—	30,744	255	(46)	—	30,953
Intercompany interest expense (income)	—	(326)	255	71	—	—
Other (income) expense, net	—	604	(602)	81	—	83
Income (loss) from continuing operations before income taxes and equity in income (loss) of unconsolidated subsidiaries	—	(32,418)	(156,099)	1,352	—	(187,165)
Income tax expense (benefit)	—	(4,268)	(23,477)	569	—	(27,176)
Income (loss) from continuing operations before equity in income (loss) of unconsolidated subsidiaries	—	(28,150)	(132,622)	783	—	(159,989)
Equity in income (loss) of unconsolidated subsidiaries	(157,189)	(131,839)	783	—	288,245	—
Income (loss) from continuing operations	(157,189)	(159,989)	(131,839)	783	288,245	(159,989)
Income from discontinued operations, net of taxes	—	2,800	—	—	—	2,800
Net income (loss)	$(157,189)	$ (157,189)	$ (131,839)	$ 783	$ 288,245	$ (157,189)

CENVEO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the nine months ended October 2, 2010

(in thousands)

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

Net sales	$ —	$ 532,492	$ 803,364	$ 18,469	$ —	$ 1,354,325
Cost of sales	—	445,885	642,057	12,786	—	1,100,728
Selling, general and administrative expenses	—	83,478	75,759	833	—	160,070
Amortization of intangible assets	—	318	8,384	159	—	8,861
Restructuring and impairment charges	—	12,945	196,273	—	—	209,218
Operating income (loss)	—	(10,134)	(119,109)	4,691	—	(124,552)
Interest expense (income), net	—	91,223	889	(53)	—	92,059
Intercompany interest expense (income)	—	(821)	750	71	—	—
Loss on early extinguishment of debt	—	2,598	—	—	—	2,598
Other expense, net	—	906	57	152	—	1,115
Income (loss) from continuing operations before income taxes and equity in income (loss) of unconsolidated subsidiaries	—	(104,040)	(120,805)	4,521	—	(220,324)
Income tax expense (benefit)	—	(22,497)	(19,165)	640	—	(41,022)
Income (loss) from continuing operations before equity in income (loss) of unconsolidated subsidiaries	—	(81,543)	(101,640)	3,881	—	(179,302)
Equity in income (loss) of unconsolidated subsidiaries	(176,624)	(97,759)	3,881	—	270,502	—
Income (loss) from continuing operations	(176,624)	(179,302)	(97,759)	3,881	270,502	(179,302)
Income from discontinued operations, net of taxes	—	2,678	—	—	—	2,678
Net income (loss)	$(176,624)	$ (176,624)	$ (97,759)	$ 3,881	$ 270,502	$ (176,624)

CENVEO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the nine months ended October 2, 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	$ 8,791	$ (81,809)	$ 88,453	$ 8,257	$ —	$ 23,692
Cash flows from investing activities:
Cost of business acquisitions, net of cash acquired	—	(10,307)	—	(11,200)	—	(21,507)
Capital expenditures	—	(6,617)	(6,961)	—	—	(13,578)
Intercompany note	—	(9,500)	—	—	9,500	—
Proceeds from sale of property, plant and equipment	—	1,759	1,159	—	—	2,918
Net cash (used in) provided by investing activities	—	(24,665)	(5,802)	(11,200)	9,500	(32,167)
Cash flows from financing activities:
Proceeds from issuance of 8⅞% senior second lien notes	—	397,204	—	—	—	397,204
Proceeds from exercise of stock options	1,670	—	—	—	—	1,670
Repayment of term loans	—	(312,902)	—	—	—	(312,902)
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	—	(66)	(5,547)	—	—	(5,613)
Purchase and retirement of common stock upon vesting of RSUs	(1,001)	—	—	—	—	(1,001)
Intercompany note	—	—	—	9,500	(9,500)	—
Intercompany advances	(9,460)	92,611	(77,468)	(5,683)	—	—
Net cash (used in) provided by financing activities	(8,791)	141,338	(83,015)	3,817	(9,500)	43,849
Effect of exchange rate changes on cash and cash equivalents	—	—	24	876	—	900
Net increase (decrease) in cash and cash equivalents	—	34,864	(340)	1,750	—	36,274
Cash and cash equivalents at beginning of period	—	8,971	764	1,061	—	10,796
Cash and cash equivalents at end of period	$ —	$ 43,835	$ 424	$ 2,811	$ —	$ 47,070