CORRECTING and REPLACING Cimpress Reports Second Quarter Fiscal Year 2017 Financial Results
-
Second quarter 2017 results:
-
Revenue grew 16 percent year over year to
$576.9 million - Revenue grew 8 percent year over year excluding the impact of currency exchange rate fluctuations and revenue from businesses acquired during the past twelve months
-
GAAP income from operations was
$33.7 million in the current period versus$67.6 million in the year-ago period, due in part to planned increases in investments -
GAAP net income per diluted share was
$1.07 in the second quarter of 2017 versus$1.81 in the year-ago period -
Adjusted net operating profit after tax (adjusted NOPAT) was
$50.6 million versus$82.5 million in the year-ago period
-
Revenue grew 16 percent year over year to
VENLO,
The corrected release reads:
CIMPRESS REPORTS SECOND QUARTER FISCAL YEAR 2017 FINANCIAL RESULTS
-
Second quarter 2017 results:
-
Revenue grew 16 percent year over year to
$576.9 million - Revenue grew 8 percent year over year excluding the impact of currency exchange rate fluctuations and revenue from businesses acquired during the past twelve months
-
GAAP income from operations was
$33.7 million in the current period versus$67.6 million in the year-ago period, due in part to planned increases in investments -
GAAP net income per diluted share was
$1.07 in the second quarter of 2017 versus$1.81 in the year-ago period -
Adjusted net operating profit after tax (adjusted NOPAT) was
$50.6 million versus$82.5 million in the year-ago period
-
Revenue grew 16 percent year over year to
"We delivered another solid quarter and we continue to execute well
against our plans to invest in a broad spectrum of long-term organic
investments as outlined at the beginning of the fiscal year," said
"Importantly," Keane continued, "we achieved a significant milestone
with our mass customization platform this quarter against our goal to
materially increase platform order flow in fiscal 2017. The Vistaprint
business unit fulfilled approximately 2.5 million orders for holiday
products across the platform and
"One noticeable aspect of this quarter's results is the decline in gross margin of about 800 basis points year over year," continued Quinn. "About three-quarters of this impact is from a combination of the increased weighting of our Upload and Print business units, planned investments, and unfavorable currency changes that are offset elsewhere in the income statement. The remainder was primarily caused by a tight temporary labor market impacting our Canadian production facility that increased our internal costs and also drove us to turn quickly to more expensive fulfillment alternatives during our seasonal peak."
GAAP operating income was negatively influenced by the following year-over-year items in the second quarter:
- Increased organic investments in fiscal year 2017 compared to fiscal year 2016, which materially weigh on profitability. These investments include costs that impact our gross margin, including shipping price reductions, expanded design services, and new product introduction.
- The impact of about 200 basis points on consolidated gross margin described above that we believe resulted from production inefficiencies during the quarter.
-
Approximately
$6 million of profit decline due to the termination of two partner contracts as previously described. -
An increase in share-based compensation expense of
$5.2 million , due to the August, 2016 implementation of our previously described long-term incentive program, partially offset by a roll-off of expenses from past grants. -
An increase in earn-out related charges of
$3.6 million . The second quarter fiscal year 2017 charge is primarily associated with the acquisition of WIRmachenDRUCK, due to a$6.7 million increase in fair value of the liability as a result of its continued strong performance. - A significant year-over-year currency impact, which is offset in "other income, net" by the year-over-year change in realized gains on currency hedges.
Consolidated Financial Metrics:
-
Revenue for the second quarter of fiscal year 2017 was
$576.9 million , a 16 percent increase compared to revenue of$496.3 million in the same quarter a year ago. Excluding the estimated impact from currency exchange rate fluctuations and revenue from businesses acquired during the past twelve months, revenue grew 8 percent year over year in the second quarter. The previously described loss of partner revenue and the material reduction in shipping prices to Vistaprint customers continues to negatively impact revenue growth. - Gross margin (revenue minus the cost of revenue as a percent of total revenue) in the second quarter was 52.0 percent, down from 60.2 percent in the same quarter a year ago due to the increased weighting of our Upload and Print business units, planned investments in cost of revenue, production and outsourcing inefficiencies during our holiday peak, and significant unfavorable currency changes.
- Contribution margin (revenue minus the cost of revenue, the cost of advertising and payment processing as a percent of total revenue) in the second quarter was 34.0 percent, down from 41.2 percent in the same quarter a year ago. The year-over-year reduction in gross margin described above was partially offset by an 80 basis point reduction in advertising as a percent of revenue, which was also driven by the mix shift toward our Upload and Print businesses.
-
GAAP operating income in the second quarter was
$33.7 million , or 5.8 percent of revenue, a decrease compared to$67.6 million , or 13.6 percent of revenue, in the same quarter a year ago. The drivers of this significant decrease are described above, before the "Consolidated Financial Metrics" section of this release. -
Adjusted NOPAT for the second quarter, which is defined at the end of
this press release, was
$50.6 million , or 8.8 percent of revenue, down from$82.5 million , or 16.6 percent of revenue, in the same quarter a year ago. The profit impacts described above that also impact adjusted NOPAT are the increased organic investments, production inefficiencies, the reduction in partner profits, and the implementation of our new long-term incentive program. -
GAAP net income attributable to
Cimpress for the second quarter was$35.0 million , or 6.1 percent of revenue, compared to$59.3 million , or 12.0 percent of revenue in the same quarter a year ago. In addition to the impacts described above, GAAP net income was positively influenced by year-over-year non-operational, non-cash currency impacts, and a gain on the sale of marketable securities, partially offset by a significant increase in our tax provision in the current period compared to the year-ago period. This year-over-year tax increase is due to the combination of a higher forecasted effective tax rate as a result of a less favorable mix of projected income for the full year, as well as the true-up effect from more volatile quarter-to-quarter earnings in fiscal year 2017 compared to 2016. -
GAAP net income per diluted share for the second quarter was
$1.07 , versus$1.81 in the same quarter a year ago. -
Capital expenditures in the second quarter were
$16.9 million , or 2.9 percent of revenue, versus$19.2 million , or 3.9 percent of revenue in the same quarter a year ago. -
During the quarter, the company increased its ownership of
Pixartprinting and its business in
Japan to 100% for$24.0 million ($20.2 million through financing activities and$3.8 million through operating activities). As part of the transaction inJapan ,Cimpress also sold its shares in the former joint venture partner for$6.3 million . The gain on the sale of those securities of$2.3 million was recorded in other income, net on the income statement. -
During the second quarter, the company generated
$105.1 million of cash from operations and$77.3 million in free cash flow, a non-GAAP financial measure, which is defined at the end of this press release. -
As of
December 31, 2016 , the company had$49.6 million in cash and cash equivalents and$876.1 million of debt, net of issuance costs.Cimpress completed the previously announced acquisition of National Pen onDecember 30, 2016 for$206.2 million , net of cash acquired. This is subject to customary post closing adjustments based on acquired cash, debt and working capital balances. As discussed with theDecember 12, 2016 announcement of our National Pen acquisition,Cimpress expected that its total leverage ratio (which is debt to trailing twelve month EBITDA) would increase above its long-term target of 3 times trailing twelve month EBITDA as defined by its debt covenants. Based onCimpress' debt covenant definitions, its total leverage ratio was 3.43 as ofDecember 31, 2016 . As often described,Cimpress is willing to temporarily go above its long-term total leverage ratio target of 3 times trailing twelve month EBITDA for the right opportunity and with a clear path to de-lever below that target quickly, which in this case is expected to be within one year. After considering debt covenant limitations, as ofDecember 31, 2016 the company had$220.7 million available for borrowing under its committed credit facility. -
During the quarter,
Cimpress purchased 593,763 of its own shares for$50.0 million inclusive of transaction costs, at an average price per share of$84.22 .
Supplemental Materials and January 26, 2017 Conference Call
Information
Investor Meeting and Webcast on
In addition
to the investor conference call on
Important Reminder of Cimpress’ Priorities
We ask investors
and potential investors in
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,
About non-GAAP financial measures
To supplement Cimpress’
consolidated financial statements presented in accordance with U.S.
generally accepted accounting principles, or GAAP,
-
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 such as 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.
- Second 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 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 benefits or discrete cash charges or benefits 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
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 and revenue, the expected
results of the organizational changes, and the effects of our
investments in our business, including our investments in our mass
customization platform. 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
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; our failure to develop our mass
customization platform or the failure of the platform to drive the
efficiencies and competitive advantage we expect; our ability to
accurately forecast the savings and charges relating to our
organizational changes; unanticipated changes in our markets, customers,
or business; our loss of key personnel; our failure to reposition our
Vistaprint brand and to promote and strengthen all of our brands; our
failure to attract new customers and retain our current customers; 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; the willingness of purchasers of customized
products and services to shop online; competitive pressures; general
economic conditions; and other factors described in our Form 10-Q for
the fiscal quarter ended
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) |
|||||||||
December 31, |
June 30, 2016 |
||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 49,588 | $ | 77,426 | |||||
Marketable securities | — | 7,893 | |||||||
Accounts receivable, net of allowances of $508 and $490, respectively | 52,179 | 32,327 | |||||||
Inventory | 41,422 | 18,125 | |||||||
Prepaid expenses and other current assets | 98,786 | 64,997 | |||||||
Total current assets | 241,975 | 200,768 | |||||||
Property, plant and equipment, net | 505,278 | 493,163 | |||||||
Software and web site development costs, net | 42,856 | 35,212 | |||||||
Deferred tax assets |
18,344 |
26,093 | |||||||
Goodwill | 528,895 | 466,005 | |||||||
Intangible assets, net | 292,591 | 216,970 | |||||||
Other assets | 34,007 | 25,658 | |||||||
Total assets | $ |
1,663,946 |
$ | 1,463,869 | |||||
Liabilities, noncontrolling interests and shareholders’ equity |
|||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 116,251 | $ | 86,682 | |||||
Accrued expenses | 223,932 | 178,987 | |||||||
Deferred revenue | 25,503 | 25,842 | |||||||
Short-term debt | 46,115 | 21,717 | |||||||
Other current liabilities | 24,234 | 22,635 | |||||||
Total current liabilities | 436,035 | 335,863 | |||||||
Deferred tax liabilities |
69,676 |
69,430 | |||||||
Lease financing obligation | 108,481 | 110,232 | |||||||
Long-term debt | 829,998 | 656,794 | |||||||
Other liabilities | 78,113 | 60,173 | |||||||
Total liabilities |
1,522,303 |
1,232,492 | |||||||
Commitments and contingencies | |||||||||
Redeemable noncontrolling interests | 41,824 | 65,301 | |||||||
Shareholders’ equity: | |||||||||
Preferred shares, par value €0.01 per share, 100,000,000 shares
authorized; none issued and |
— | — | |||||||
Ordinary shares, par value €0.01 per share, 100,000,000 shares
authorized; 44,080,627 shares |
615 | 615 | |||||||
Treasury shares, at cost, 12,986,320 and 12,543,895 shares, respectively | (598,343 | ) | (548,549 | ) | |||||
Additional paid-in capital | 348,732 | 335,192 | |||||||
Retained earnings | 492,407 | 486,482 | |||||||
Accumulated other comprehensive loss | (143,915 | ) | (108,015 | ) | |||||
Total shareholders’ equity attributable to Cimpress N.V. | 99,496 | 165,725 | |||||||
Noncontrolling interest | 323 | 351 | |||||||
Total shareholders' equity | 99,819 | 166,076 | |||||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ |
1,663,946 |
$ | 1,463,869 | |||||
CIMPRESS N.V. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited in thousands, except share and per share data) |
||||||||||||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||||
Revenue | $ | 576,851 | $ | 496,274 | $ | 1,020,564 | $ | 872,022 | ||||||||||||||||||
Cost of revenue (1, 2) | 277,027 | 197,571 | 490,758 | 354,855 | ||||||||||||||||||||||
Technology and development expense (1, 2) | 59,252 | 51,880 | 121,330 | 102,966 | ||||||||||||||||||||||
Marketing and selling expense (1, 2) | 157,825 | 142,671 | 297,176 | 264,806 | ||||||||||||||||||||||
General and administrative expense (1) | 49,042 | 36,543 | 105,403 | 69,701 | ||||||||||||||||||||||
Income from operations | 33,705 | 67,609 | 5,897 | 79,694 | ||||||||||||||||||||||
Other income, net | 30,549 | 7,690 | 28,417 | 16,932 | ||||||||||||||||||||||
Interest expense, net | (9,631 | ) | (10,160 | ) | (19,535 | ) | (18,286 | ) | ||||||||||||||||||
Income before income taxes | 54,623 | 65,139 | 14,779 | 78,340 | ||||||||||||||||||||||
Income tax provision | 19,601 | 6,148 | 9,787 | 9,327 | ||||||||||||||||||||||
Net income | 35,022 | 58,991 | 4,992 | 69,013 | ||||||||||||||||||||||
Add: Net loss attributable to noncontrolling interest | 6 | 328 | 933 | 1,077 | ||||||||||||||||||||||
Net income attributable to Cimpress N.V. | $ | 35,028 | $ | 59,319 | $ | 5,925 | $ | 70,090 | ||||||||||||||||||
Basic net income per share attributable to Cimpress N.V. | $ | 1.12 | $ | 1.89 | $ | 0.19 | $ | 2.20 | ||||||||||||||||||
Diluted net income per share attributable to Cimpress N.V. | $ | 1.07 | $ | 1.81 | $ | 0.18 | $ | 2.11 | ||||||||||||||||||
Weighted average shares outstanding — basic | 31,291,356 | 31,326,141 | 31,431,090 | 31,927,362 | ||||||||||||||||||||||
Weighted average shares outstanding — diluted | 32,614,013 | 32,735,447 | 32,846,275 | 33,246,412 |
____________________________________________
(1) Share-based compensation is allocated as follows:
Three Months Ended |
Six Months Ended |
||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Cost of revenue | $ | 75 | $ | 28 | $ | 118 | $ | 54 | |||||||||||
Technology and development expense | 3,118 | 1,422 | 5,443 | 2,752 | |||||||||||||||
Marketing and selling expense | 1,480 | 425 | 2,300 | 836 | |||||||||||||||
General and administrative expense | 6,604 | 4,191 | 14,987 | 8,614 | |||||||||||||||
(2) Amortization of acquired intangibles is allocated as follows:
Three Months Ended |
Six Months Ended |
||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Cost of revenue | $ | 660 | $ | — | $ | 1,342 | $ | — | |||||||||||
Technology and development expense | 2,752 | 2,343 | 5,601 | 4,636 | |||||||||||||||
Marketing and selling expense | 6,467 | 7,245 | 13,149 | 14,666 | |||||||||||||||
*During the fourth quarter of fiscal 2016, we adopted Accounting Standards Update (ASU) 2016-09 requiring the recognition of excess tax benefits as a component of income tax expense which were historically recognized in equity. As required, prior year 2016 results are adjusted to reflect the impact of the new standard, which is comparable to the accounting treatment in the current period.
CIMPRESS N.V. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands) |
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Three Months Ended |
Six Months Ended |
||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||
Operating activities | |||||||||||||||||||||||
Net income | $ | 35,022 | $ | 58,991 | $ | 4,992 | $ | 69,013 | |||||||||||||||
Adjustments to reconcile net income to net cash provided by
operating |
|||||||||||||||||||||||
Depreciation and amortization | 36,977 | 31,805 | 72,382 | 62,063 | |||||||||||||||||||
Share-based compensation expense | 11,277 | 6,066 | 22,848 | 12,256 | |||||||||||||||||||
Deferred taxes | 655 | (5,690 | ) | (17,508 | ) | (8,339 | ) | ||||||||||||||||
Abandonment of long-lived assets | — | 3,022 | — | 3,022 | |||||||||||||||||||
Change in contingent earn-out liability | 6,746 | — | 22,766 | — | |||||||||||||||||||
Gain on sale of available-for-sale securities | (2,268 | ) | — | (2,268 | ) | — | |||||||||||||||||
Unrealized (gain) loss on derivatives not designated as hedging
instruments |
(6,384 | ) | 134 | (4,573 | ) | (1,918 | ) | ||||||||||||||||
Effect of exchange rate changes on monetary assets and liabilities |
(16,273 | ) | (3,036 | ) | (13,246 | ) | (10,829 | ) | |||||||||||||||
Other non-cash items | 1,049 | 643 | 1,719 | 1,530 | |||||||||||||||||||
Gain on proceeds from insurance | — | (1,549 | ) | — | (3,136 | ) | |||||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||||
Accounts receivable | (2,095 | ) | 4,314 | 822 | (1,629 | ) | |||||||||||||||||
Inventory | (2,967 | ) | (1,377 | ) | (4,187 | ) | (3,087 | ) | |||||||||||||||
Prepaid expenses and other assets | (14,961 | ) | (5,551 | ) | (14,290 | ) | (2,394 | ) | |||||||||||||||
Accounts payable | 29,760 | 10,259 | 21,808 | 20,779 | |||||||||||||||||||
Accrued expenses and other liabilities | 28,521 | 36,858 | 23,394 | 24,984 | |||||||||||||||||||
Net cash provided by operating activities | 105,059 | 134,889 | 114,659 | 162,315 | |||||||||||||||||||
Investing activities |
|||||||||||||||||||||||
Purchases of property, plant and equipment | (16,941 | ) | (19,156 | ) | (36,260 | ) | (43,549 | ) | |||||||||||||||
Business acquisitions, net of cash acquired | (206,236 | ) | (4,717 | ) | (206,816 | ) | (27,532 | ) | |||||||||||||||
Purchases of intangible assets | (62 | ) | (45 | ) | (88 | ) | (402 | ) | |||||||||||||||
Capitalization of software and website development costs | (10,798 | ) | (7,217 | ) | (19,110 | ) | (12,127 | ) | |||||||||||||||
Proceeds from sale of available-for-sale securities | 6,346 | — | 6,346 | — | |||||||||||||||||||
Proceeds from insurance related to investing activities | — | 1,549 | — | 3,624 | |||||||||||||||||||
Other investing activities | 442 | 775 | 1,227 | 775 | |||||||||||||||||||
Net cash used in investing activities | (227,249 | ) | (28,811 | ) | (254,701 | ) | (79,211 | ) | |||||||||||||||
Financing activities | |||||||||||||||||||||||
Proceeds from borrowings of debt | 360,000 | 55,000 | 447,000 | 269,999 | |||||||||||||||||||
Payments of debt and debt issuance costs | (165,046 | ) | (162,014 | ) | (247,771 | ) | (235,332 | ) | |||||||||||||||
Payments of withholding taxes in connection with equity awards | (1,315 | ) | (1,505 | ) | (8,864 | ) | (4,246 | ) | |||||||||||||||
Payments of capital lease obligations | (3,538 | ) | (4,194 | ) | (6,814 | ) | (6,377 | ) | |||||||||||||||
Purchase of ordinary shares | (50,008 | ) | (14,411 | ) | (50,008 | ) | (142,204 | ) | |||||||||||||||
Purchase of noncontrolling interests | (20,230 | ) | — | (20,230 | ) | — | |||||||||||||||||
Proceeds from issuance of ordinary shares | 257 | 1,770 | 257 | 2,052 | |||||||||||||||||||
Capital contribution from noncontrolling interest | 1,404 | — | 1,404 | 5,141 | |||||||||||||||||||
Other financing activities | 1,281 | (218 | ) | 1,281 | (303 | ) | |||||||||||||||||
Net cash provided by (used in) financing activities | 122,805 | (125,572 | ) | 116,255 | (111,270 | ) | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (4,652 | ) | (1,121 | ) | (4,051 | ) | (2,217 | ) | |||||||||||||||
Net (decrease) increase in cash and cash equivalents | (4,037 | ) | (20,615 | ) | (27,838 | ) | (30,383 | ) | |||||||||||||||
Cash and cash equivalents at beginning of period | 53,625 | 93,816 | 77,426 | 103,584 | |||||||||||||||||||
Cash and cash equivalents at end of period | $ | 49,588 | $ | 73,201 | $ | 49,588 | $ | 73,201 |
Note: During fiscal 2016, we adopted the new share-based compensation accounting standard, ASU 2016-09 and elected to apply the amendment related to the presentation of excess tax benefits on the consolidated statements of cash flows on a retrospective basis. As required, prior year results are adjusted to reflect the impact of the new standard, which is comparable to the accounting treatment in the current period.
CIMPRESS N.V. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited, in thousands) |
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|
Three Months Ended |
Six Months Ended |
||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||||
Adjusted net operating profit after tax reconciliation: | ||||||||||||||||||||||||||
GAAP operating income | $ | 33,705 | $ | 67,609 | $ | 5,897 | $ | 79,694 | ||||||||||||||||||
Less: Cash taxes attributable to current period (see below) | (6,704 | ) | (4,362 | ) | (14,123 | ) | (11,195 | ) | ||||||||||||||||||
Exclude expense impact of: | ||||||||||||||||||||||||||
Acquisition-related amortization and depreciation | 10,019 | 9,655 | 20,232 | 19,437 | ||||||||||||||||||||||
Earn-out related charges¹ | 7,010 | 3,413 | 23,257 | 3,702 | ||||||||||||||||||||||
Share-based compensation related to investment consideration | 601 | 1,735 | 4,704 | 2,537 | ||||||||||||||||||||||
Certain impairments² |
— | 3,022 | — | 3,022 | ||||||||||||||||||||||
Restructuring related charges | 1,100 | 110 | 1,100 |
|
381 | |||||||||||||||||||||
Less: Interest expense associated with Waltham lease | (1,956 | ) | (2,001 | ) | (3,926 | ) | (2,351 | ) | ||||||||||||||||||
Include: Realized gains on currency forward contracts not included in operating income | 6,839 | 3,319 | 8,727 | 3,635 | ||||||||||||||||||||||
Adjusted NOPAT² |
$ | 50,614 | $ | 82,500 | $ | 45,868 | $ | 98,862 | ||||||||||||||||||
Cash taxes paid in the current period | $ | 11,754 | $ | 6,036 | $ | 20,309 | $ | 10,745 | ||||||||||||||||||
Less: cash taxes (paid) received and related to prior periods | (5,097 | ) | (2,463 | ) | (9,324 | ) | (2,104 | ) | ||||||||||||||||||
Plus: cash taxes attributable to the current period but not yet (received) paid | 528 | 718 | 178 | 1,639 | ||||||||||||||||||||||
Plus: cash impact of excess tax benefit on equity awards
attributable to current |
342 | 936 | 4,606 | 2,645 | ||||||||||||||||||||||
Less: installment payment related to the transfer of IP in a prior year | (823 | ) | (865 | ) | (1,646 | ) | (1,730 | ) | ||||||||||||||||||
Cash taxes attributable to current period | $ | 6,704 | $ | 4,362 | $ | 14,123 | $ | 11,195 | ||||||||||||||||||
¹Includes expense recognized for the change in fair value of contingent consideration and compensation expense related to earn-out mechanisms dependent upon continued employment.
²Adjusted NOPAT will include the impact of impairments of goodwill and other long-lived assets as defined by ASC 350 - "Intangibles - Goodwill and Other" and discontinued operations as defined by ASC 205-20 in periods in which they occur.
Three Months Ended |
Six Months Ended |
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2016 | 2015 | 2016 | 2015 | |||||||||||||||||||
Free cash flow reconciliation: | ||||||||||||||||||||||
Net cash provided by operating activities | $ | 105,059 | $ | 134,889 | $ | 114,659 | $ | 162,315 | ||||||||||||||
Purchases of property, plant and equipment | (16,941 | ) | (19,156 | ) | (36,260 | ) | (43,549 | ) | ||||||||||||||
Purchases of intangible assets not related to acquisitions | (62 | ) | (45 | ) | (88 | ) | (402 | ) | ||||||||||||||
Capitalization of software and website development costs | (10,798 | ) | (7,217 | ) | (19,110 | ) | (12,127 | ) | ||||||||||||||
Proceeds from insurance related to investing activities | — | 1,549 | — | 3,624 | ||||||||||||||||||
Free cash flow | $ | 77,258 | $ | 110,020 | $ | 59,201 | $ | 109,861 | ||||||||||||||
Note: During fiscal 2016, we adopted the new share-based compensation accounting standard, ASU 2016-09 and elected to apply the amendment related to the presentation of excess tax benefits on the consolidated statements of cash flows on a retrospective basis. We have updated our previously filed consolidated statements of cash flows for all prior presented periods. This change is reflected in the free cash flow reconciliation above.
CIMPRESS N.V. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (CONT.) AND SEGMENT INFORMATION (unaudited in thousands) |
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GAAP Revenue | ||||||||||||||||||||||||||||||
Three Months Ended |
Currency Impact: |
Constant- Currency |
Impact of |
Constant- |
||||||||||||||||||||||||||
2016 | 2015 |
% Change |
(Favorable)/ |
Revenue |
(Favorable)/ |
Excluding |
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Revenue growth reconciliation by reportable segment: | ||||||||||||||||||||||||||||||
Vistaprint business unit | $ | 379,414 | $ | 354,783 | 7 | % | 2 | % | 9 | % | — | % | 9 | % | ||||||||||||||||
Upload and Print business units | 152,388 | 93,277 | 63 | % | 3 | % | 66 | % | (55 | )% | 11 | % | ||||||||||||||||||
All Other business units | 45,049 | 48,214 | (7 | )% | — | % | (7 | )% | — | % | (7 | )% | ||||||||||||||||||
Total revenue | $ | 576,851 | $ | 496,274 | 16 | % | 2 | % | 18 | % | (10 | )% | 8 | % | ||||||||||||||||
GAAP Revenue | |||||||||||||||||||||||||||||||
Six Months Ended |
Currency |
Constant- |
Impact of |
Constant- |
|||||||||||||||||||||||||||
2016 | 2015 |
% |
(Favorable)/ |
Revenue |
(Favorable)/ |
Excluding |
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Revenue growth reconciliation by reportable segment: | |||||||||||||||||||||||||||||||
Vistaprint business unit | $ | 664,836 | $ | 622,252 | 7 | % | 2 | % | 9 | % | — | % | 9 | % | |||||||||||||||||
Upload and Print business units | 284,345 | 169,815 | 67 | % | 2 | % | 69 | % | (57 | )% | 12 | % | |||||||||||||||||||
All Other business units | 71,383 | 79,955 | (11 | )% | (1 | )% | (12 | )% | — | % | (12 | )% | |||||||||||||||||||
Total revenue | $ | 1,020,564 | $ | 872,022 | 17 | % | 1 | % | 18 | % | (11 | )% | 7 | % | |||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||||
Adjusted net operating profit by reportable segment: | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||
Vistaprint business unit | $ | 101,572 | $ | 115,734 | $ | 159,789 | $ | 180,196 | ||||||||||||||||
Upload and Print business units | 19,338 | 15,520 | 35,452 | 26,970 | ||||||||||||||||||||
All Other business units | (1,968 | ) | 6,881 | (11,577 | ) | 5,796 | ||||||||||||||||||
Total | 118,942 | 138,135 | 183,664 | 212,962 | ||||||||||||||||||||
Corporate and global functions | (68,463 | ) | (54,592 | ) | (132,400 | ) | (106,540 | ) | ||||||||||||||||
Acquisition-related amortization and depreciation | (10,019 | ) | (9,655 | ) | (20,232 | ) | (19,437 | ) | ||||||||||||||||
Earn-out related charges¹ | (7,010 | ) | (3,413 | ) | (23,257 | ) | (3,702 | ) | ||||||||||||||||
Share-based compensation related to investment consideration | (601 | ) | (1,735 | ) | (4,704 | ) | (2,537 | ) | ||||||||||||||||
Certain impairments² | — | (3,022 | ) | — | (3,022 | ) | ||||||||||||||||||
Restructuring related charges | (1,100 | ) | (110 | ) | (1,100 | ) | (381 | ) | ||||||||||||||||
Interest expense for Waltham lease | 1,956 | 2,001 | 3,926 | 2,351 | ||||||||||||||||||||
Total income from operations | $ | 33,705 | $ | 67,609 | $ | 5,897 | $ | 79,694 |
¹Includes expense recognized for the change in fair value of contingent consideration and compensation expense related to earn-out mechanisms dependent upon continued employment.
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 businesses which have adjusted NOP losses as they are in early stages of investment relative to the scale of the underlying businesses.
CIMPRESS N.V. Supplemental Information (unaudited, in thousands) |
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In $ millions, except where noted | FY2015 |
Q1 |
Q2 FY2016 |
Q3 FY2016 |
Q4 FY2016 |
FY2016 |
Q1 FY2017 |
Q2 FY2017 |
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Revenue - Consolidated as Reported | $1,494.2 | $375.7 | $496.3 | $436.8 | $479.2 | $1,788.0 | $443.7 | $576.9 | |||||||||||||||||||||||||||
y/y growth | 18 | % | 13 | % | 13 | % | 29 | % | 26 | % | 20 | % | 18 | % | 16 | % | |||||||||||||||||||
y/y growth in constant currency | 23 | % | 21 | % | 20 | % | 31 | % | 26 | % | 24 | % | 19 | % | 18 | % | |||||||||||||||||||
Vistaprint (1) | $1,149.7 | $267.5 | $354.8 | $289.9 | $305.0 | $1,217.2 | $285.4 | $379.4 | |||||||||||||||||||||||||||
y/y growth | 4 | % | 2 | % | 3 | % | 8 | % | 11 | % | 6 | % | 7 | % | 7 | % | |||||||||||||||||||
y/y growth in constant currency | 9 | % | 8 | % | 8 | % | 10 | % | 12 | % | 10 | % | 8 | % | 9 | % | |||||||||||||||||||
as % of revenue | 77 | % | 71 | % | 71 | % | 66 | % | 64 | % | 68 | % | 64 | % | 66 | % | |||||||||||||||||||
Upload and Print | $197.1 | $76.5 | $93.3 | $116.4 | $146.5 | $432.6 | $132.0 | $152.4 | |||||||||||||||||||||||||||
y/y growth | 352 | % | 98 | % | 112 | % | 201 | % | 94 | % | 120 | % | 72 | % | 63 | % | |||||||||||||||||||
y/y growth in constant currency | 352 | % | 118 | % | 128 | % | 203 | % | 92 | % | 127 | % | 73 | % | 66 | % | |||||||||||||||||||
as % of revenue | 13 | % | 20 | % | 19 | % | 27 | % | 30 | % | 24 | % | 30 | % | 26 | % | |||||||||||||||||||
All Other (1) | $147.4 | $31.7 | $48.2 | $30.6 | $27.7 | $138.2 | $26.3 | $45.0 | |||||||||||||||||||||||||||
y/y growth | 18 | % | (6 | )% | (4 | )% | (7 | )% | (8 | )% | (6 | )% | (17 | )% | (7 | )% | |||||||||||||||||||
y/y growth in constant currency | 19 | % | 7 | % | 8 | % | (3 | )% | (8 | )% | 2 | % | (19 | )% | (7 | )% | |||||||||||||||||||
as % of revenue | 10 | % | 9 | % | 10 | % | 7 | % | 6 | % | 8 | % | 6 | % | 8 | % | |||||||||||||||||||
Physical printed products and other | $1,423.1 | $359.0 | $480.2 | $421.4 | $464.0 | $1,724.6 | $428.7 | $562.2 | |||||||||||||||||||||||||||
Digital products/services | $71.1 | $16.7 | $16.1 | $15.4 | $15.2 | $63.4 | $15.0 | $14.6 | |||||||||||||||||||||||||||
Advertising & commissions expense - |
$286.4 | $70.2 | $85.0 | $74.3 | $76.4 | $305.9 | $78.3 | $94.1 | |||||||||||||||||||||||||||
as % of revenue | 19 | % | 19 | % | 17 | % | 17 | % | 16 | % | 17 | % | 18 | % | 16 | % | |||||||||||||||||||
TTM Bookings - Vistaprint (1) | |||||||||||||||||||||||||||||||||||
% TTM Bookings from repeat orders (1) | 73 | % | 74 | % | 74 | % | 74 | % | 75 | % | 75 | % | |||||||||||||||||||||||
% TTM Bookings from first-time orders (1) | 27 | % | 26 | % | 26 | % | 26 | % | 25 | % | 25 | % | |||||||||||||||||||||||
Advertising & commissions expense - |
$256.0 | $62.4 | $73.3 | $64.5 | $65.3 | $265.5 | $68.6 | $79.6 | |||||||||||||||||||||||||||
as % of revenue | 22 | % | 23 | % | 21 | % | 22 | % | 21 | % | 22 | % | 24 | % | 21 | % | |||||||||||||||||||
Headcount at end of period | 6,836 | 7,463 | 7,585 | 7,995 | 8,522 | 11,312 | |||||||||||||||||||||||||||||
Full-time employees | 6,447 | 6,845 | 7,226 | 7,468 | 8,066 | 9,923 | |||||||||||||||||||||||||||||
Temporary employees | 389 | 618 | 359 | 527 | 456 | 1,389 |
Some numbers may not add due to rounding. Metrics are unaudited.
(1) In 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170125006006/en/
Source:
Cimpress N.V.
Investor Relations:
Meredith Burns,
+1-781-652-6480
ir@cimpress.com
or
Media
Relations:
Paul McKinlay
mediarelations@cimpress.com