VENLO, Netherlands--(BUSINESS WIRE)--Jan. 25, 2017--
Cimpress N.V. (Nasdaq: CMPR) the world leader in mass customization,
today announced its intention to implement organizational changes that
will deeply decentralize the company’s operations in order to improve
accountability for customer satisfaction and capital returns, simplify
decision-making, improve the speed of execution, further develop the
company’s cadre of general managers, and preserve and release
entrepreneurial energy.
Cimpress intends to implement these changes to accelerate progress
toward its established vision, strategy, and long-term objectives, all
of which remain unchanged. Many Cimpress teams that are currently part
of company-wide central groups in technology, manufacturing and supply
chain and other corporate functions will become part of one of the
company’s business units or related portfolio-management teams. After
the changes, Cimpress’ central groups will be limited to global
procurement and supplier research, a central technology team whose
primary focus is building the Cimpress mass customization platform, and
essential corporate services. The portion of Cimpress team members in
business units will grow from approximately 66 percent as of the end of
December 2016 to approximately 97 percent as of the end of March 2017,
with most of the remaining central team members in the central Cimpress
Technology team.
Robert Keane, chief executive officer, said, “This decentralization is a
natural outgrowth of our strategy and consistent with the evolution of
our organization as we pursue that strategy. We started out as a single
line of business; however, today Cimpress consists of more than 15
distinct business units. We employ almost 10,000 team members in about
50 locations, more than 30 countries and across six continents, and we
aspire to continue growing for many years to come. It is important that,
culturally speaking, we stay small as we get big. As we have evolved
from Vistaprint to Cimpress and become a much larger and more diverse
company, we need to give our businesses more accountability and reduce
the weight of our central organization. The changes we plan to make are
driven by the many opportunities we now see in front of us as well as
our own audacious vision to extend our position as the world leader in
mass customization. We will place responsibility for operating results,
along with all the resources needed to deliver those results, directly
in the hands of the highly capable men and women who lead our business
units. We expect that doing so will make Cimpress more entrepreneurial,
nimble and competitive. It will also simplify our assessment of the
return on invested capital that each business unit delivers, which we
believe will help us make better capital allocation decisions. As a
result, our centrally managed activities will be limited to only those
which have the highest company-wide strategic and financial impact.”
Cimpress intends to transfer approximately 3,000 team members that are
currently part of central teams into its business units. It also intends
to reduce the scope of certain other roles and functions that are
currently performed centrally, which would lead to the elimination of
approximately 160 positions, or approximately 1.6 percent of its current
workforce, and reduce planned hiring in targeted areas. As part of the
changes, the company announced that it intends to eliminate the
positions of four Cimpress executive officers who, as a result, will
leave the company.
Keane continued, “Even though these changes are the right thing to do
for the future of Cimpress, it was a difficult decision that we did not
take lightly due to the job loss for many highly capable colleagues,
including but not limited to four strong executive team leaders. I would
like to express my heartfelt respect, empathy and gratitude to each of
the people, at all levels, who will leave Cimpress as a result of these
organizational changes. Across the board, they have been instrumental
contributors to Cimpress. Their departure is in no way a reflection on
their accomplishments and talents, and we wish them great success in the
future.”
Cimpress also announced the following promotions and additions to its
executive team:
-
Trynka Shineman, previously president of Vistaprint, has been promoted
to chief executive officer of Vistaprint to reflect the substantially
increased scope of her responsibilities after the decentralization
-
Maarten Wensveen, previously senior vice president, Technology, has
been promoted to chief technology officer and will join the Cimpress
executive team
-
Peter Kelly, chief executive officer of National Pen, will join the
Cimpress executive team
Cimpress expects to complete the majority of the changes during the
third quarter of fiscal 2017. Certain of the planned actions are subject
to mandatory consultations with employees, works councils and
governmental authorities. Cimpress estimates it will incur an aggregate
pre-tax restructuring charge of approximately $28 million to $31
million, which includes $22 million to $25 million of severance-related
expense and approximately $6 million of other restructuring charges. Of
the total estimated restructuring charge, Cimpress expects approximately
$19 million to $21 million of cash expenditures, and approximately $9
million to $10 million of non-cash expenditures, consisting primarily of
accelerated share-based compensation expense.
Once the actions are complete, Cimpress expects annualized pre-tax
operating expense savings of approximately $55 million to $60 million
and pre-tax free cash flow savings of approximately $45 million to $50
million. The primary difference between the operating expense and free
cash flow savings is share-based compensation. These estimates include
estimated savings from headcount reductions, a targeted reduction of
previously planned new hires in fiscal year 2017, and related
non-compensation savings.
“We are making these changes proactively from a position of strength and
we maintain our uppermost objectives to be the world leader in mass
customization and to maximize our intrinsic value per share,” said
Keane. “We also remain committed to our vision to empower millions of
customers to make an impression through individually meaningful physical
products, to connecting our business units through a mass customization
platform, to developing an ecosystem of partnerships with third parties
who buy and sell via the Cimpress MCP, and to providing rewarding and
engaging career opportunities to our team members.”
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 net income, operating income, EPS, cash flow, EBITDA, 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 27, 2016 at ir.cimpress.com and to review materials
presented at our annual investor day meeting on August 10, 2016.
About Cimpress
Cimpress N.V. (Nasdaq: CMPR) is the world
leader in mass customization. For more than 20 years, the company has
focused on developing software and manufacturing capabilities that
transform traditional markets in order to make customized products
accessible and affordable to everyone. Cimpress brings its products to
market via a portfolio of more than 20 brands including Vistaprint,
Albelli, Drukwerkdeal, Pixartprinting, Exaprint, WIRmachenDRUCK,
National Pen and many others. That portfolio serves multiple customer
segments across many applications for mass customization. The company
produces more than 46 million unique ordered items a year. To learn
more, visit http://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 our expectations for
the growth and development of our business, the expected results of the
organizational changes, and our projections of restructuring charges and
anticipated savings resulting from the organizational changes.
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 our ability to recognize
the expected savings from the organizational changes associated with the
decentralization of our operations; our ability to realize the
anticipated benefits of the decentralization of our operations; our
failure to execute our strategy; our inability to make the investments
in our business that we plan to make or the failure of those investments
to achieve the results we expect; unanticipated changes in our markets,
customers, or business; our failure to manage the growth and complexity
of our business and expand our operations; the failure of the businesses
we acquire or invest in to perform as expected; competitive pressures;
general economic conditions; and other factors described in our
Form 10-Q for the quarter ended September 30, 2016 and the other
documents we periodically file with the U.S. SEC.
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170125006051/en/
Source: Cimpress N.V.
Cimpress N.V.
Investor Relations:
Meredith Burns,
+1-781-652-6480
ir@cimpress.com
or
Media
Relations:
Paul McKinlay
mediarelations@cimpress.com