Mail-Well Inc. lowered its projected earnings for the second quarter of 2002 by more than $10 million yesterday, citing lower-than-expected revenues due to an ongoing downturn in the commercial print market.
The company revised its projected sales for the quarter to $345 million, down from $380 million originally. Its earnings forecast was lowered to $16 million to $17 million, down from $26 million to $30 million.
In response, Mail-Well has decided to cancel the planned sales of PrintXcel, its printed office products unit. Keeping PrintXcel will result in approximately $6 million more in additional earnings for the quarter and an additional $50 million in sales, the company said.
According to Mail-Well chairman, president/CEO Paul Reilly, the market downturn has lasted longer than expected, and efforts to streamline the company alone were not sufficient to offset the fall in sales. Reilly also said that due to the present tight banking market the prospective buyer of the PrintXcel unit was unable to provide an adequate offer.
Mail-Well will release its full earnings for the second quarter of 2002 on July 18.