Cimpress N.V. (Nasdaq: CMPR), the world leader in mass customization, today announced financial results for the three month period ended March 31, 2016, the third quarter of its 2016 fiscal year.
"We progressed toward our strategic objectives and deployed capital and resources across both organic opportunities and acquisitions," said Robert Keane, president and chief executive officer. "We improved the Vistaprint business unit across key customer, product, revenue, and profitability metrics and we grew our Upload and Print business units both organically and through acquisition, including through the recently closed WIRmachenDRUCK transaction. We also built foundations in our Most of World and Corporate Solutions business units. Our mass customization platform team increased product selection, including the launch of several products fulfilled via the platform to multiple Cimpress business units."
As a reminder, in fiscal 2016 Cimpress is increasing investments in its mass customization platform, product expansion, Most of World business units, post-merger integration, and other key areas.
"We grew constant-currency organic revenue by 10% for the quarter," said Sean Quinn, chief financial officer. "This was our fifth consecutive quarter of 10% or better constant-currency organic revenue growth: the Vistaprint business unit grew 10% and Pixartprinting and Printdeal, the business units in our Upload and Print segment that we have owned for at least a year, delivered a combined 25% growth. This was partially offset by anticipated and previously described partner revenue declines in the All Other business units segment."
Quinn continued, "Our GAAP operating income and net income were impacted this quarter by a goodwill impairment charge related to one of our 2015 acquisitions in Europe. Although we are disappointed that the outlook that prompted the partial impairment for this particular business is less favorable than originally expected, we still expect the upload and print portfolio as a whole to return above the 15 percent hurdle rate we use for M&A. Adjusted NOPAT, which excludes non-operational items such as this impairment charge, grew strongly, reflecting our underlying profitability improvements even as we continue to make significant operating expense investments in a number of strategic areas.
"Our approach to capital allocation remains unchanged and we continue to invest across the categories we described in depth at our August 2015 investor day," Quinn continued. "Nine months into fiscal year 2016, we are making good progress across the focus areas described at our investor day, though aggregate year-to-date investments across a few categories are lower than originally planned. We now expect the full year adjusted NOPAT burden of our 'major organic' investments, such as the plant network component of our mass customization platform, Columbus, Most of World, and post-merger integration, will be slightly lower versus our original expectations. At our August investor day we also said that, on an adjusted NOPAT basis, we expected our 'diverse other' investments, which include those in technology and advertising for the Vistaprint business unit, product selection, and other items, to grow in line with revenue for fiscal 2016. We now expect the growth of investments to be slower than the growth of our consolidated revenue in fiscal 2016 primarily due to leverage in certain investment categories, as well as the increased revenue from our acquisition of WIRmachenDRUCK. Additionally, aggregate capital expenditures have been lower than expected year-to-date, which should increase free cash flow relative to the expectations we outlined earlier this year. As we complete fiscal year 2016 and look ahead to fiscal 2017, we will continue to evaluate additional opportunities to deploy capital to value-creating investments."
Consolidated Financial Metrics:
- Revenue for the third quarter of fiscal year 2016 was $436.8 million, a 29 percent increase compared to revenue of $339.9 million in the same quarter a year ago. The year-over-year strengthening of the U.S. dollar negatively impacted our revenue growth rate. Excluding the estimated impact from currency exchange rate fluctuations, revenue growth was 31 percent. Excluding both the currency impact and revenue from businesses acquired during the past twelve months, revenue grew 10 percent year over year in the third quarter.
- Gross margin (revenue minus the cost of revenue as a percent of total revenue) in the third quarter was 54.8 percent, down from 63.1 percent in the same quarter a year ago due primarily to the increased weighting of our Upload and Print business units and a $6.7 million impairment charge related to the write-down of proprietary technology investments in the quarter.
- Adjusted NOPAT for the third quarter, which is defined at the end of this press release, was $24.0 million, or 5.5 percent of revenue, up from $15.5 million, or 4.6 percent of revenue, in the same quarter a year ago.
- Operating loss in the third quarter was $17.5 million, or (4.0) percent of revenue, a decrease in both absolute dollars and as a percent of revenue compared to operating income of $4.3 million, or 1.3 percent of revenue, in the same quarter a year ago.
- GAAP net loss for the third quarter was $33.4 million, or (7.6) percent of revenue, compared to GAAP net income of $8.6 million, or 2.5 percent of revenue in the same quarter a year ago. During the current period, both operating loss and GAAP net loss were significantly influenced by a goodwill impairment charge related to one of our acquired businesses in Europe and the write-down of proprietary technology investments. GAAP net loss was also impacted by year-over-year non-operational, non-cash currency impacts.
- GAAP net loss per diluted share for the third quarter was $1.06, versus net income of $0.25 in the same quarter a year ago.
- Capital expenditures in the third quarter were $19.1 million, or 4.4 percent of revenue.
- During the third quarter, the company generated $23.9 million of cash from operations and $(1.3) million in free cash flow, which is defined at the end of this press release.
- As of March 31, 2016, the company had $76.7 million in cash and cash equivalents and $696.6 million of debt, net of issuance costs. After considering debt covenant limitations, as of March 31, 2016 the company had $414.7 million available for borrowing under its committed credit facility.
- During the quarter, the company purchased 156,778 of its ordinary shares for $11.3 million, inclusive of transaction costs, at an average per-share cost of $71.84, as part of the share repurchase program authorized by our supervisory board in December 2014.
- During the third quarter of fiscal 2016, we issued 112,364 of our ordinary shares as part of our acquisition of WIRmachenDRUCK.
Cimpress has posted an end-of-quarter presentation with accompanying prepared remarks at ir.cimpress.com. On Thursday, April 28, 2016 at 7:30 a.m. (EDT) the company will host a live Q&A conference call with management to discuss the financial results, which will be available via webcast at ir.cimpress.com and via dial-in at +1 (855) 319-5923, conference ID 90505846. A replay of the Q&A session will be available on the company’s website following the call on April 28, 2016.
Important Reminder of Cimpress’ Priorities
We ask investors and potential investors in Cimpress to understand the upper-most objectives by which we endeavor to make all decisions, including investment decisions. Often we make decisions in service of these priorities that could be considered non-optimal were they to be evaluated based on other criteria such as (but not limited to) near- and mid-term cash flow, EBITDA, EPS and adjusted NOPAT.
Our priorities are:
- Strategic Objective: To be the world leader in mass customization. By mass customization, we mean producing, with the reliability, quality and affordability of mass production, small individual orders where each and every one embodies the personal relevance inherent to customized physical products.
- Financial Objective: To maximize intrinsic value per share, defined as (a) the unlevered free cash flow per share that, in our best judgment, will occur between now and the long-term future, appropriately discounted to reflect our cost of capital, minus (b) net debt per share.
To understand these objectives and their implications, Cimpress encourages investors to read Robert Keane’s letter to investors published on July 29, 2015.
About non-GAAP financial measures
To supplement Cimpress’ consolidated financial statements presented in accordance with U.S. generally accepted accounting principles, or GAAP, Cimpress has used the following measures defined as non-GAAP financial measures by Securities and Exchange Commission, or SEC, rules: adjusted net operating profit after tax, free cash flow, constant-currency revenue growth and constant-currency revenue growth excluding revenue from acquisitions made in the last twelve months. Adjusted net operating profit after tax is defined as GAAP operating income, less cash taxes attributable to current period operations and interest expense associated with our Waltham lease, excluding M&A related items including acquisition-related amortization and depreciation, changes in the fair value of contingent consideration, and expense for deferred payments or equity awards that are treated as compensation expense, plus the impact of certain unusual items such as discontinued operations, restructuring charges, or impairments, plus realized gains or losses on currency forward contracts that are not included in operating income. Free cash flow is defined as net cash provided by operating activities less purchases of property, plant and equipment, purchases of intangible assets not related to acquisitions, and capitalization of software and website development costs, plus payment of contingent consideration in excess of acquisition-date fair value, plus gains on proceeds from insurance. Constant-currency revenue growth is estimated by translating all non-U.S. dollar denominated revenue generated in the current period using the prior year period’s average exchange rate for each currency to the U.S. dollar. Third quarter constant-currency revenue growth excluding revenue from acquisitions made during the past twelve months excludes the impact of currency as defined above and revenue from druck.at, Easyflyer (FL Print), Exagroup, Alcione, Tradeprint and WIRmachenDRUCK.
The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliations of Non-GAAP Financial Measures” included at the end of this release. The tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliation between these financial measures.
Cimpress’ management believes that these non-GAAP financial measures provide meaningful supplemental information in assessing our performance and liquidity by excluding certain items that may not be indicative of our recurring core business operating results, which could be non-cash charges or discrete cash charges that are infrequent in nature. These non-GAAP financial measures also have facilitated management’s internal comparisons to Cimpress’ historical performance and our competitors’ operating results.
About Cimpress
Cimpress N.V. (Nasdaq: CMPR) is the world leader in mass customization. For more than 20 years, the company has been producing, with the reliability, quality and affordability of mass production, small individual orders where each and every one embodies the personal relevance inherent to customized physical products. The company produces more than 46 million uniquely designed items a year. Cimpress’ portfolio of brands includes Vistaprint, Albelli, Drukwerkdeal, Pixartprinting, Exaprint and others. That portfolio serves multiple customer segments across many applications for mass customization. To learn more, visit www.cimpress.com.
Cimpress and the Cimpress logo are trademarks of Cimpress N.V. or its subsidiaries. All other brand and product names appearing on this announcement may be trademarks or registered trademarks of their respective holders.
This press release contains statements about our future expectations, plans, and prospects of our business that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995, including but not limited to our expectations for the growth and development of our business and our acquired businesses, our planned investments in our business, and anticipated effects of those investments. Forward-looking projections and expectations are inherently uncertain, are based on assumptions and judgments by management, and may turn out to be wrong. Our actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including but not limited to flaws in the assumptions and judgments upon which our forecasts are based; our failure to execute our strategy; our inability to make the investments in our business that we plan to make; costs and disruptions caused by acquisitions and strategic investments; the failure of the businesses we acquire or invest in to perform as expected; unanticipated changes in our markets, customers, or business; competitive pressures; our failure to maintain compliance with the covenants in our revolving credit facility and senior notes or to pay our debts when due; general economic conditions; and other factors described in our Form 10-Q for the fiscal quarter ended December 31, 2015 and the other documents we periodically file with the U.S. Securities and Exchange Commission.
In addition, the statements and projections in this press release represent our expectations and beliefs as of the date of this press release, and subsequent events and developments may cause these expectations, beliefs, and projections to change. We specifically disclaim any obligation to update any forward-looking statements. These forward-looking statements should not be relied upon as representing our expectations or beliefs as of any date subsequent to the date of this press release.
Operational Metrics & Financial Tables to Follow
CIMPRESS N.V. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(unaudited in thousands, except share and per share data) | ||||||||
March 31, 2016 | June 30, 2015 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 76,726 | $ | 103,584 | ||||
Marketable securities | 6,194 | 6,910 | ||||||
Accounts receivable, net of allowances of $425 and $372, respectively | 36,992 | 32,145 | ||||||
Inventory | 19,640 | 18,356 | ||||||
Prepaid expenses and other current assets | 64,656 | 55,103 | ||||||
Total current assets | 204,208 | 216,098 | ||||||
Property, plant and equipment, net | 497,182 | 467,511 | ||||||
Software and web site development costs, net | 31,850 | 22,109 | ||||||
Deferred tax assets | 21,560 | 17,172 | ||||||
Goodwill | 474,736 | 400,629 | ||||||
Intangible Assets, net | 232,100 | 151,063 | ||||||
Other assets | 24,905 | 25,213 | ||||||
Total assets | $ | 1,486,541 | $ | 1,299,795 | ||||
Liabilities and shareholders’ equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 72,068 | $ | 65,875 | ||||
Accrued expenses | 191,757 | 172,826 | ||||||
Deferred revenue | 29,383 | 23,407 | ||||||
Deferred tax liabilities | — | 1,043 | ||||||
Short-term debt | 19,842 | 21,057 | ||||||
Other current liabilities | 24,900 | 21,470 | ||||||
Total current liabilities | 337,950 | 305,678 | ||||||
Deferred tax liabilities | 72,792 | 48,007 | ||||||
Lease financing obligation | 111,109 | 93,841 | ||||||
Long-term debt | 676,805 | 493,039 | ||||||
Other liabilities | 71,231 | 52,073 | ||||||
Total liabilities | 1,269,887 | 992,638 | ||||||
Commitments and contingencies | ||||||||
Redeemable noncontrolling interests | 64,871 | 57,738 | ||||||
Shareholders’ equity: | ||||||||
Preferred shares, par value €0.01 per share, 100,000,000 shares authorized; none issued and outstanding | — | — | ||||||
Ordinary shares, par value €0.01 per share, 100,000,000 shares authorized; 44,080,627 shares issued; and 31,465,174 and 33,203,065 shares outstanding, respectively | 615 | 615 | ||||||
Treasury shares, at cost, 12,615,453 and 10,877,562 shares, respectively | (550,766 | ) | (412,132 | ) | ||||
Additional paid-in capital | 335,272 | 324,281 | ||||||
Retained earnings | 465,168 | 435,052 | ||||||
Accumulated other comprehensive loss | (98,864 | ) | (98,909 | ) | ||||
Total shareholders’ equity attributable to Cimpress N.V. | 151,425 | 248,907 | ||||||
Noncontrolling interest | 358 | 512 | ||||||
Total shareholders equity | 151,783 | 249,419 | ||||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 1,486,541 | $ | 1,299,795 | ||||
CIMPRESS N.V. | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(unaudited in thousands, except share and per share data) | ||||||||||||||||
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenue | $ | 436,817 | $ | 339,901 | $ | 1,308,839 | $ | 1,113,738 | ||||||||
Cost of revenue (1) | 197,365 | 125,540 | 552,219 | 412,381 | ||||||||||||
Technology and development expense (1) | 57,392 | 48,311 | 160,358 | 138,841 | ||||||||||||
Marketing and selling expense (1) | 132,352 | 120,795 | 397,158 | 371,680 | ||||||||||||
General and administrative expense (1) | 36,398 | 40,914 | 106,100 | 109,748 | ||||||||||||
Impairment of goodwill | 30,841 | — | 30,841 | — | ||||||||||||
(Loss) Income from operations | (17,531 | ) | 4,341 | 62,163 | 81,088 | |||||||||||
Other (expense) income, net | (9,003 | ) | 8,291 | 7,929 | 30,282 | |||||||||||
Interest expense, net | (10,091 | ) | (3,131 | ) | (28,377 | ) | (9,508 | ) | ||||||||
(Loss) Income before income taxes | (36,625 | ) | 9,501 | 41,715 | 101,862 | |||||||||||
Income tax (benefit) provision | (162 | ) | 1,576 | 10,857 | 7,658 | |||||||||||
Net (loss) income | (36,463 | ) | 7,925 | 30,858 | 94,204 | |||||||||||
Add: Net loss attributable to noncontrolling interest | 3,100 | 686 | 4,177 | 1,710 | ||||||||||||
Net (loss) income attributable to Cimpress N.V. | $ | (33,363 | ) | $ | 8,611 | $ | 35,035 | $ | 95,914 | |||||||
Basic net (loss) income per share attributable to Cimpress N.V. | $ | (1.06 | ) | $ | 0.26 | $ | 1.10 | $ | 2.95 | |||||||
Diluted net (loss) income per share attributable to Cimpress N.V. | $ | (1.06 | ) | $ | 0.25 | $ | 1.07 | $ | 2.85 | |||||||
Weighted average shares outstanding — basic | 31,343,711 | 32,694,354 | 31,734,226 | 32,537,940 | ||||||||||||
Weighted average shares outstanding — diluted | 31,343,711 | 34,180,563 | 32,792,355 | 33,637,567 | ||||||||||||
____________________________________________ | ||||||||||||||||
(1) Share-based compensation is allocated as follows: | ||||||||||||||||
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Cost of revenue | $ | 3 | $ | 17 | $ | 57 | $ | 62 | ||||||||
Technology and development expense | 1,606 | 1,032 | 4,358 | 2,961 | ||||||||||||
Marketing and selling expense | 387 | 465 | 1,223 | 1,437 | ||||||||||||
General and administrative expense | 3,957 | 5,124 | 12,571 | 14,304 | ||||||||||||
CIMPRESS N.V. | ||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
(unaudited, in thousands) | ||||||||||||||||
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Operating activities | ||||||||||||||||
Net (loss) income | $ | (36,463 | ) | $ | 7,925 | $ | 30,858 | $ | 94,204 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 34,454 | 22,402 | 96,517 | 69,756 | ||||||||||||
Impairment of goodwill | 30,841 | — | 30,841 | — | ||||||||||||
Share-based compensation expense | 5,897 | 6,638 | 18,153 | 18,764 | ||||||||||||
Excess tax benefits derived from share-based compensation awards | (9,044 | ) | (1,344 | ) | (11,683 | ) | (2,686 | ) | ||||||||
Deferred taxes | (2,842 | ) | (424 | ) | (12,176 | ) | (8,666 | ) | ||||||||
Abandonment of long-lived assets | 6,741 | — | 9,763 | — | ||||||||||||
Unrealized loss (gain) on derivative instruments included in net income | 2,897 | (3,953 | ) | 979 | (7,435 | ) | ||||||||||
Change in fair value of contingent consideration | — | 7,512 | — | 14,890 | ||||||||||||
Payment of contingent consideration in excess of acquisition date fair value | — | (1,249 | ) | — | (1,249 | ) | ||||||||||
Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency | 7,657 | 2,665 | (3,172 | ) | (15,932 | ) | ||||||||||
Other non-cash items | 1,265 | 1,354 | 2,795 | 3,126 | ||||||||||||
Gain on proceeds from insurance | — | — | (3,136 | ) | — | |||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | 3,999 | 6,086 | 2,370 | (855 | ) | |||||||||||
Inventory | 1,771 | 1,055 | (1,316 | ) | (2,201 | ) | ||||||||||
Prepaid expenses and other assets | (1,875 | ) | 3,326 | (4,269 | ) | 18,064 | ||||||||||
Accounts payable | (8,283 | ) | (26,660 | ) | 12,496 | (5,049 | ) | |||||||||
Accrued expenses and other liabilities | (13,156 | ) | (23,763 | ) | 14,515 | 17,683 | ||||||||||
Net cash provided by operating activities | 23,859 | 1,570 | 183,535 | 192,414 | ||||||||||||
Investing activities | ||||||||||||||||
Purchases of property, plant and equipment | (19,092 | ) | (15,153 | ) | (62,641 | ) | (50,105 | ) | ||||||||
Business acquisitions, net of cash acquired | (134,908 | ) | — | (162,440 | ) | (22,997 | ) | |||||||||
Purchases of intangible assets, net | (51 | ) | (56 | ) | (453 | ) | (201 | ) | ||||||||
Capitalization of software and website development costs | (6,057 | ) | (5,068 | ) | (18,184 | ) | (12,517 | ) | ||||||||
Proceeds from insurance related to investing activities | — | — | 3,624 | — | ||||||||||||
Other investing activities | — | — | 775 | — | ||||||||||||
Net cash used in investing activities | (160,108 | ) | (20,277 | ) | (239,319 | ) | (85,820 | ) | ||||||||
Financing activities | ||||||||||||||||
Proceeds from borrowings of debt | 246,009 | 79,000 | 516,008 | 218,500 | ||||||||||||
Proceeds from issuance of senior notes | — | 275,000 | — | 275,000 | ||||||||||||
Payments of debt and debt issuance costs | (96,859 | ) | (275,358 | ) | (332,191 | ) | (518,624 | ) | ||||||||
Payment of purchase consideration included in acquisition-date fair value | (4,350 | ) | (7,021 | ) | (4,350 | ) | (7,021 | ) | ||||||||
Payments of withholding taxes in connection with equity awards | (1,522 | ) | (1,533 | ) | (5,768 | ) | (4,297 | ) | ||||||||
Payments of capital lease obligations | (3,760 | ) | (1,473 | ) | (10,137 | ) | (4,315 | ) | ||||||||
Excess tax benefits derived from share-based compensation awards | 9,044 | 1,344 | 11,683 | 2,686 | ||||||||||||
Purchase of ordinary shares | (11,263 | ) | — | (153,467 | ) | — | ||||||||||
Proceeds from issuance of ordinary shares | 1,327 | 6,185 | 3,379 | 10,967 | ||||||||||||
Capital contribution from noncontrolling interest | — | 4,160 | 5,141 | 4,160 | ||||||||||||
Other financing activities | — | (26 | ) | (303 | ) | (118 | ) | |||||||||
Net cash provided by (used in) financing activities | 138,626 | 80,278 | 29,995 | (23,062 | ) | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | 1,148 | (5,240 | ) | (1,069 | ) | (11,828 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | 3,525 | 56,331 | (26,858 | ) | 71,704 | |||||||||||
Cash and cash equivalents at beginning of period | 73,201 | 77,881 | 103,584 | 62,508 | ||||||||||||
Cash and cash equivalents at end of period | $ | 76,726 | $ | 134,212 | $ | 76,726 | $ | 134,212 | ||||||||
CIMPRESS N.V. | ||||||||||||||||
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||
(Unaudited, in thousands) | ||||||||||||||||
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Adjusted net operating profit after tax reconciliation: | ||||||||||||||||
GAAP operating (loss) income | $ | (17,531 | ) | $ | 4,341 | $ | 62,163 | $ | 81,088 | |||||||
Less: Cash taxes attributable to current period (see below) | (8,392 | ) | (4,666 | ) | (19,587 | ) | (17,332 | ) | ||||||||
Exclude expense (benefit) impact of: | ||||||||||||||||
Acquisition-related amortization and depreciation | 10,879 | 4,515 | 30,316 | 16,891 | ||||||||||||
Earn-out related charges¹ | 883 | 7,512 | 4,585 | 14,890 | ||||||||||||
Share-based compensation related to investment consideration | 1,168 | 1,499 | 3,705 | 3,096 | ||||||||||||
Certain impairments² | 37,582 | — | 40,604 | — | ||||||||||||
Restructuring costs | — | 520 | 381 | 674 | ||||||||||||
Less: Interest expense associated with Waltham lease | (1,975 | ) | — | (4,326 | ) | — | ||||||||||
Include: Realized gains on currency forward contracts not included in operating income | 1,391 | 1,802 | 5,026 | 5,963 | ||||||||||||
Adjusted NOPAT | $ | 24,005 | $ | 15,523 | $ | 122,867 | $ | 105,270 | ||||||||
Cash taxes paid in the current period³ | $ | 344 | $ | 3,089 | $ | 11,089 | $ | 10,646 | ||||||||
Less: cash taxes (paid) received and related to prior periods³ | 4,760 | (1,103 | ) | 2,656 | (4,551 | ) | ||||||||||
Plus: cash taxes attributable to the current period but not yet paid | 2,343 | 1,420 | 3,982 | 2,964 | ||||||||||||
Plus: cash impact of excess tax benefit on equity awards attributable to current period | 1,705 | 2,115 | 4,350 | 10,838 | ||||||||||||
Less: installment payment related to the transfer of IP in a prior year | (760 | ) | (855 | ) | (2,490 | ) | (2,565 | ) | ||||||||
Cash taxes attributable to current period | $ | 8,392 | $ | 4,666 | $ | 19,587 | $ | 17,332 | ||||||||
¹Includes expense recognized for the change in fair value of contingent
consideration and compensation expense related to earn-out mechanisms
dependent upon continued employment.
²Includes the impact of
impairments or abandonments of goodwill and other long-lived assets as
defined by ASC 350 - "Intangibles - Goodwill and Other" or ASC 360 -
"Property, plant, and equipment."
³For the three and nine
months ended March 31, 2016, cash taxes paid in the current period
includes a cash tax refund of $8,479, which is subsequently eliminated
from cash taxes attributable to the current period as it relates to a
refund of a prior years' taxes generated as a result of a prior year
excess share-based compensation deduction. Therefore, the impact is not
included in adjusted NOPAT for the current period.
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Free cash flow reconciliation: | ||||||||||||||||
Net cash provided by operating activities | $ | 23,859 | $ | 1,570 | $ | 183,535 | $ | 192,414 | ||||||||
Purchases of property, plant and equipment | (19,092 | ) | (15,153 | ) | (62,641 | ) | (50,105 | ) | ||||||||
Purchases of intangible assets not related to acquisitions | (51 | ) | (56 | ) | (453 | ) | (201 | ) | ||||||||
Capitalization of software and website development costs | (6,057 | ) | (5,068 | ) | (18,184 | ) | (12,517 | ) | ||||||||
Payment of contingent consideration in excess of acquisition-date fair value | — | 1,249 | — | 1,249 | ||||||||||||
Proceeds from insurance related to investing activities | — | — | 3,624 | — | ||||||||||||
Free cash flow | $ | (1,341 | ) | $ | (17,458 | ) | $ | 105,881 | $ | 130,840 | ||||||
CIMPRESS N.V. | ||||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (CONTINUED) | ||||||||||||||||||
AND SUPPLEMENTAL INFORMATION (Unaudited, in thousands) | ||||||||||||||||||
GAAP Revenue | ||||||||||||||||||
Three Months Ended |
Currency |
Constant- |
Impact of |
Constant- | ||||||||||||||
2016 | 2015 | % |
(Favorable)/ |
Revenue |
(Favorable)/ |
Excluding | ||||||||||||
Revenue growth reconciliation by reportable segment: | ||||||||||||||||||
Vistaprint business unit | $ | 289,901 | $ | 268,490 | 8% | 2% | 10% | —% | 10% | |||||||||
Upload and Print business units | 116,356 | 38,674 | 201% | 2% | 203% | (178)% | 25% | |||||||||||
All Other business units | 30,560 | 32,737 | (7)% | 4% | (3)% | —% | (3)% | |||||||||||
Total revenue | $ | 436,817 | $ | 339,901 | 29% | 2% | 31% | (21)% | 10% | |||||||||
GAAP Revenue | ||||||||||||||||||
Nine Months Ended |
Currency |
Constant- |
Impact of |
Constant- | ||||||||||||||
2016 | 2015 | % |
(Favorable)/ |
Revenue |
(Favorable)/ |
Excluding | ||||||||||||
Revenue growth reconciliation by reportable segment: | ||||||||||||||||||
Vistaprint business unit | $ | 912,153 | $ | 875,184 | 4% | 5% | 9% | —% | 9% | |||||||||
Upload and Print business units | 286,171 | 121,382 | 136% | 13% | 149% | (120)% | 29% | |||||||||||
All Other business units | 110,515 | 117,172 | (6)% | 10% | 4% | —% | 4% | |||||||||||
Total revenue | $ | 1,308,839 | $ | 1,113,738 | 18% | 6% | 24% | (13)% | 11% | |||||||||
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||
Adjusted net operating profit by reportable segment: | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Vistaprint business unit | $ | 79,791 | $ | 69,255 | $ | 263,974 | $ | 249,049 | ||||||||
Upload and Print business units | 15,880 | 3,438 | 42,004 | 13,575 | ||||||||||||
All Other business units | (3,895 | ) | 451 | 1,901 | 10,319 | |||||||||||
Total | 91,776 | 73,144 | 307,879 | 272,943 | ||||||||||||
Corporate and global functions | (60,770 | ) | (54,757 | ) | (170,451 | ) | (156,304 | ) | ||||||||
Acquisition-related amortization and depreciation | (10,879 | ) | (4,515 | ) | (30,316 | ) | (16,891 | ) | ||||||||
Earn-out related charges¹ | (883 | ) | (7,512 | ) | (4,585 | ) | (14,890 | ) | ||||||||
Share-based compensation related to investment consideration | (1,168 | ) | (1,499 | ) | (3,705 | ) | (3,096 | ) | ||||||||
Certain impairments² | (37,582 | ) | — | (40,604 | ) | — | ||||||||||
Restructuring charges | — | (520 | ) | (381 | ) | (674 | ) | |||||||||
Interest expense for Waltham lease | 1,975 | — | 4,326 | — | ||||||||||||
Total income from operations | $ | (17,531 | ) | $ | 4,341 | $ | 62,163 | $ | 81,088 | |||||||
¹Includes expense recognized for the change in fair value of contingent
consideration and compensation expense related to earn-out mechanisms
dependent upon continued employment.
²Includes the impact of
impairments or abandonments of goodwill and other long-lived assets as
defined by ASC 350 - "Intangibles - Goodwill and Other" or ASC 360 -
"Property, plant, and equipment."
Note: The following factors, among others, may limit the comparability of adjusted net operating profit by segment:
• We do not allocate support costs across operating segments or corporate and global functions.
• Some of our acquired business units in our Upload and Print business units and All Other business units segments are burdened by the costs of their local finance, HR, and other administrative support functions, whereas other business units leverage our global functions and do not receive an allocation for these services.
• Our All Other business units reporting segment includes our Most of World business unit, which has adjusted NOP losses as it is in its early stage of investment relative to the scale of the underlying business.
Adjusted NOP by segment may be different than the major investment assessment that we publish via letter to investors at year end, where we do estimate and allocate some of the costs included in the “Corporate and Global Functions” expense category.
CIMPRESS N.V. | |||||||||||||||||||||||||||
Supplemental Information | |||||||||||||||||||||||||||
(Unaudited, in thousands) | |||||||||||||||||||||||||||
Supplemental Financial and Operating Information | |||||||||||||||||||||||||||
In $ millions, except where noted | FY2014 |
Q1 |
Q2 |
Q3 |
Q4 | FY2015 |
Q1 |
Q2 |
Q3 | ||||||||||||||||||
Revenue - Consolidated as Reported | $1,270.2 | $333.9 | $439.9 | $339.9 | $380.5 | $1,494.2 | $375.7 | $496.3 | $436.8 | ||||||||||||||||||
y/y growth | 9 | % | 21 | % | 19 | % | 19 | % | 13 | % | 18 | % | 13 | % | 13 | % | 29 | % | |||||||||
y/y growth in constant currency | 8 | % | 21 | % | 23 | % | 26 | % | 22 | % | 23 | % | 21 | % | 20 | % | 31 | % | |||||||||
Vistaprint ² | $1,103.2 | $261.2 | $345.5 | $268.5 | $274.5 | $1,149.7 | $267.5 | $354.8 | $289.9 | ||||||||||||||||||
y/y growth | n/a | 6 | % | 3 | % | 4 | % | 5 | % | 4 | % | 2 | % | 3 | % | 8 | % | ||||||||||
y/y growth in constant currency | n/a | 5 | % | 7 | % | 11 | % | 11 | % | 9 | % | 8 | % | 8 | % | 10 | % | ||||||||||
as % of revenue | 86 | % | 78 | % | 78 | % | 79 | % | 72 | % | 77 | % | 71 | % | 71 | % | 66 | % | |||||||||
Upload and Print | $43.6 | $38.7 | $44.0 | $38.7 | $75.7 | $197.1 | $76.5 | $93.3 | $116.4 | ||||||||||||||||||
y/y growth | n/a | n/a | n/a | n/a | 74 | % | 352 | % | 98 | % | 112 | % | 201 | % | |||||||||||||
y/y growth in constant currency | n/a | n/a | n/a | n/a | 100 | % | 352 | % | 118 | % | 128 | % | 203 | % | |||||||||||||
as % of revenue | 4 | % | 12 | % | 10 | % | 11 | % | 20 | % | 13 | % | 20 | % | 19 | % | 27 | % | |||||||||
All Other ² | $123.4 | $34.0 | $50.5 | $32.7 | $30.3 | $147.4 | $31.7 | $48.2 | $30.6 | ||||||||||||||||||
y/y growth | n/a | 24 | % | 44 | % | 13 | % | (5 | )% | 18 | % | (6 | )% | (4 | )% | (7 | )% | ||||||||||
y/y growth in constant currency | n/a | 24 | % | 48 | % | 26 | % | 7 | % | 19 | % | 7 | % | 8 | % | (3 | )% | ||||||||||
as % of revenue | 10 | % | 10 | % | 12 | % | 10 | % | 8 | % | 10 | % | 9 | % | 10 | % | 7 | % | |||||||||
Physical printed products and other | $1,189.9 | $315.1 | $422.1 | $322.6 | $363.3 | $1,423.1 | $359.0 | $480.2 | $421.4 | ||||||||||||||||||
Digital products/services | $80.3 | $18.8 | $17.8 | $17.3 | $17.2 | $71.1 | $16.7 | $16.1 | $15.4 | ||||||||||||||||||
Advertising & commissions expense - consolidated | $267.7 | $63.9 | $85.6 | $72.1 | $64.8 | $286.4 | $70.2 | $85.0 | $74.3 | ||||||||||||||||||
as % of revenue | 21 | % | 19 | % | 19 | % | 21 | % | 17 | % | 19 | % | 19 | % | 17 | % | 17 | % | |||||||||
TTM Bookings - Vistaprint | |||||||||||||||||||||||||||
% TTM Bookings from repeat orders ² | 72 | % | 73 | % | 73 | % | 73 | % | 73 | % | 74 | % | 74 | % | |||||||||||||
% TTM Bookings from first-time orders ² | 28 | % | 27 | % | 27 | % | 27 | % | 27 | % | 26 | % | 26 | % | |||||||||||||
Advertising & commissions expense - Vistaprint | $256.5 | $56.4 | $75.7 | $64.8 | $59.1 | $256.0 | $62.4 | $73.3 | $64.5 | ||||||||||||||||||
as % of revenue | 23 | % | 22 | % | 22 | % | 24 | % | 22 | % | 22 | % | 23 | % | 21 | % | 22 | % | |||||||||
Headcount at end of period | 5,127 | 5,336 | 5,859 | 5,839 | 6,552 | 6,836 | 7,463 | 7,585 | |||||||||||||||||||
Full-time employees | 4,901 | 5,040 | 5,203 | 5,534 | 6,168 | 6,447 | 6,845 | 7,226 | |||||||||||||||||||
Temporary employees | 226 | 296 | 656 | 305 | 384 | 389 | 618 | 359 | |||||||||||||||||||
Some numbers may not add due to rounding. Metrics are unaudited.
¹For the three months ended March 31, 2016, constant-currency revenue growth excluding acquisitions excludes the impact of currency and revenue from druck.at, Easyflyer, Exagroup, Alcione, Tradeprint and WIRmachenDRUCK.
²In Q2 2016, revenue and TTM bookings from the Corporate Solutions business unit was recast to reflect a change in the calculation approach, resulting in an immaterial change to historical revenue for the Vistaprint and All Other reportable segments, as well as TTM bookings from repeat and first-time orders.
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