UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________
Form 8-K
_________________________________________
CURRENT REPORT |
Pursuant to Section 13 or 15(d) |
of the Securities Exchange Act of 1934 |
Date of Report (Date of earliest event reported): January 31, 2018 |
__________________________________________
Cimpress N.V.
(Exact Name of Registrant as Specified in Its Charter)
__________________________________________
The Netherlands | 000-51539 | 98-0417483 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
Hudsonweg 8 | ||
Venlo | 5928 LW | |
The Netherlands | (Zip Code) | |
(Address of Principal Executive Offices) | ||
Registrant’s telephone number, including area code: 31-77-850-7700
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
__________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): | ||||
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||
Indicate by check mark whether the registrant is an emerging growth company, as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12.b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02. Results of Operations and Financial Condition
On January 31, 2018, Cimpress N.V. posted on its web site its Q2 Fiscal Year 2018 Quarterly Letter to Investors announcing and discussing its financial results for the second quarter ended December 31, 2017. The full text of the letter is furnished as Exhibit 99.1 to this report.
The information in this Item 2.02 and the exhibit to this report are not "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor are they incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit | ||
No. | Description | |
Q2 Fiscal Year 2018 Quarterly Letter to Investors dated January 31, 2018 | ||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
January 31, 2018 Cimpress N.V.
By: | /s/ Sean E. Quinn | |
Sean E. Quinn | ||
Executive Vice President and Chief Financial Officer | ||
TABLE OF CONTENTS
Page
OUR UPPERMOST OBJECTIVES & STRATEGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
LETTER FROM CEO ROBERT KEANE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SUMMARY CONSOLIDATED RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
INCOME STATEMENT HIGHLIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
CASH FLOW AND RETURN ON INVESTED CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SEGMENT RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
VISTAPRINT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
UPLOAD AND PRINT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
NATIONAL PEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ALL OTHER BUSINESSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
CENTRAL AND CORPORATE COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
CURRENCY IMPACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ADJUSTED EBITDA, DEBT AND SHARE REPURCHASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
HOUSEKEEPING ITEMS (INCLUDING COMMENTARY ON U.S. TAX REFORM). . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
BALANCE SHEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
INCOME STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
CASH FLOW STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SEGMENT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ABOUT NON-GAAP MEASURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
NON-GAAP RECONCILIATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ABOUT CIMPRESS, SAFE HARBOR STATEMENT AND CONTACT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . 34
Page 2 of 34
IMPORTANT REMINDER OF CIMPRESS' UPPERMOST OBJECTIVES
We ask investors and potential investors in Cimpress to understand the uppermost 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, Adjusted EBITDA, and Adjusted Net
Operating Profit (Adjusted NOP).
Our uppermost objectives are:
• Strategic: 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: To maximize intrinsic value per share (“IVPS”). We define IVPS as (a) the unlevered free cash
flow per diluted 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 diluted share. We define
unlevered free cash flow as free cash flow plus cash interest expense related to borrowing.
To understand these objectives and their implications, Cimpress encourages investors to read Robert Keane’s letter
to investors published on July 26, 2017 at ir.cimpress.com and to review materials that were presented at our
annual investor day meeting on August 8, 2017.
OUR STRATEGY
Cimpress invests in and builds customer-focused, entrepreneurial, mass-customization businesses for the long
term, which we manage in a decentralized, autonomous manner.
We drive competitive advantage across Cimpress by investing in a select few shared capabilities that have the
greatest potential to create company-wide value.
We limit all other central activities to only those which absolutely must be performed centrally.
Page 3 of 34
CHANGES TO INVESTOR RELATIONS REPORTING FORMAT
You will note from this document that we changed our investor relations reporting format. Starting with today's Q2
FY 2018 results, in addition to the Form 10-Q (or 10-K) that we file with the U.S. Securities and Exchange
Commission, for each quarter we will:
• Publish a quarterly letter to investors, similar to this one, communicating and commenting on our results
• Make available for download at ir.cimpress.com an accompanying spreadsheet of key data that is
discussed in the quarterly letters, and which provides the same type of data for multiple prior fiscal years
Starting in Q3 FY2018 (next quarter), we will no longer host a public Q&A conference call the morning after we
issue our financial results. The new document format will replace multiple components of our prior process, such as
a long press release, a presentation, commentary to that presentation, a conference call with Q&A, and an edited
transcript of the conference call. We believe this will present all of the same information as before but eliminate
repetition and thus be more efficient, both for Cimpress to produce and for current and potential investors to review.
Page 4 of 34
LETTER FROM ROBERT
Dear Investor,
I would like to highlight the following results and activities for Q2 FY 2018:
• Our businesses delivered strong results and we remain on track relative to our internal objectives for all of
fiscal year 2018.
• Consolidated revenue grew 32% year over year, and organic constant-currency revenue grew 11%.
• Cash flow from operations and free cash flow improved materially, in line with our expectations.
• Vistaprint implemented the organizational restructuring, as announced in last quarter's earnings materials.
The restructuring charge was lower than we originally estimated; however we believe the anticipated
savings will materialize as expected.
• National Pen delivered substantial growth in its seasonally important December quarter, its first such
quarter as part of Cimpress. Thirteen months following the transaction, we remain pleased with the National
Pen acquisition.
• We repurchased 121,444 of our own shares during Q2 for $14.5 million at an average price per share of
$119.11. We repurchased an additional 321,113 shares for $39.6 million at an average price of $123.23
subsequent to the end of that quarter.
• We reduced our leverage ratio from 3.39 times trailing-twelve month EBITDA at the end of September,
2017 to 2.58 at the end of December, 2017, through a combination of EBITDA expansion and debt
repayment.
Across Cimpress, we see evidence that the decentralization of the past year is helping us to "stay small as we get
big". That organizational change has significantly increased the accountability for key success drivers, including but
not limited to customer value improvements, the attraction and motivation of talented team members, the operation
of our businesses in a socially responsible manner, and the delivery of attractive returns on investment.
In summary, Q2 was a strong quarter and we are on track to deliver on our plans for the remainder of this fiscal
year. We believe the capital we are allocating across our company, combined with the organizational and strategic
changes we have implemented recently, are solidifying our leadership position in mass customization and
continuing to increase our intrinsic value per share.
Sincerely,
Robert S. Keane
Founder, President & CEO
Please see non-GAAP reconciliations at the end of this document. Page 5 of 34
SUMMARY CONSOLIDATED RESULTS - Q2 FY 2018
$ in millions, except percentages and share data
Revenue & Revenue Growth
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$496
$437
$479
$444
$577
$551 $564 $563
$762
13%
29%
26%
18%
16%
26%
18%
27%
32%
Organic Constant-Currency Revenue Growth
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
10% 10%
11%
6%
8%
11%
9%
12%
11%
Cash Flow from Operations
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$135
$33
$52
$10
$105
$9
$33
$16
$160
FCF Interest
Free Cash Flow &
Cash Interest Related to Borrowing
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218
FCF $110 $8 $35 ($18) $77 ($21) $7 ($13) $133
Interest $13 $3 $13 $3 $13 $5 $16 $7 $16
Please see non-GAAP reconciliations at the end of this document. Page 6 of 34
SUMMARY CONSOLIDATED RESULTS (CONT.)
$ in millions, except percentages and share data
GAAP OI (Loss) Adjusted NOP
GAAP Operating Income (Loss)
& Adjusted Net Operating Profit
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$68
($18)
$16
($28)
$34
($42)
($10)
$47
$73
$87
$32 $30
$3
$57
$14
$22
$10
$94
Net Income (Loss) Attributable to Cimpress
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$59
($33)
$17
($29)
$35
($43)
($35)
$23
$30
Long-Term Short-Term
Debt*
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$547
$697 $679 $682
$876 $891 $877
$821
$701
Basic Diluted
Weighted Average Shares Outstanding* (M)
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
31.3 31.3 31.4 31.6 31.3 31.1 31.2 31.2 31.0
32.7
31.3
33.0
31.6 32.6 31.1 31.2 32.3 32.3
* Debt net of issuance costs and discounts * Q3FY16, Q1FY17, Q3FY17 & Q4FY17 basic and diluted shares are
the same because we had a GAAP net loss in these periods.
Please see non-GAAP reconciliations at the end of this document. Page 7 of 34
INCOME STATEMENT HIGHLIGHTS
Second quarter FY 2018 results were strong due to a
combination of factors, including the following year-over-
year items which positively influenced GAAP operating
income:
• Revenue growth was solid, in line with our expectations.
• The acquisition of National Pen, which we did not own in
the year-ago period, was partially offset by the divestiture
of Albumprinter, which we owned in the year-ago period
but not the current period. Both businesses deliver a
significant portion of their annual profits during the
December quarter. The net impact of these items
resulted in $11.8 million of additional operating profit year
over year (excluding acquisition-related amortization of
intangible assets, which is described below).
• The non-recurrence of about $10 million of production
inefficiencies in the year-ago period in the Vistaprint
business.
• Restructuring charges increased $10.4 million compared
to the year-ago period. This was more than offset by
restructuring savings of approximately $16 million related
to the decentralization announced on January 25, 2017,
as well as the Vistaprint restructuring announced last
quarter. These savings were realized across multiple P&L
line items, with the most significant impact in technology
and development and general and administrative costs.
From a segment reporting perspective, about 70% of the
savings benefited Vistaprint's Segment Profit, with the
bulk of the remaining benefit in our central and corporate
costs.
• A year-over-year decrease in acquisition-related charges
as follows: First, earn-out related charges were $5.8
million lower in the second quarter of fiscal year 2018
compared to the prior-year period. This was partially
offset by increases in share-based compensation related
to investment consideration of $0.4 million, and
acquisition-related amortization of intangible assets of
$2.6 million.
• Favorable year-over-year currency fluctuations that were
offset below the line by year-over-year changes in
realized gains and losses from certain hedging contracts
in other (expense) income, net.
Adjusted NOP increased significantly year over year
primarily due to the same reasons as GAAP operating
income, although Adjusted NOP excludes the impact of
restructuring charges and acquisition-related charges, and
includes realized gains or losses on our currency hedges.
In addition to the positive factors described above, year-
over-year GAAP net income was negatively influenced by
non-operational, non-cash currency impacts in other
(expense) income, net, as well as an increase in our tax
provision. Please see the "Housekeeping" section on page
20 for our commentary on how the recent U.S. tax changes
impacted our GAAP and cash taxes in Q2 and how we
Earlier period Later period
2-Year Stacked Reported Revenue Growth
Q2
'15
+Q
2'1
6
Q3
'15
+Q
3'1
6
Q4
'15
+Q
4'1
6
Q1
'16
+Q
1'1
7
Q2
'16
+Q
2'1
7
Q3
'16
+Q
3'1
7
Q4
'16
+Q
4'1
7
Q1
'17
+Q
1'1
8
Q2
'17
+Q
2'1
8
19% 19% 13% 13% 13%
29% 26% 18% 16%
13%
32% 29%
48%
26%
39%
18%
31%
16%
29% 26%
55%
18%
44%
27%
45%
32%
48%
Earlier period Later period
2-Year Stacked Constant-Currency Organic
Revenue Growth
Q2
'15
+Q
2'1
6
Q3
'15
+Q
3'1
6
Q4
'15
+Q
4'1
6
Q1
'16
+Q
1'1
7
Q2
'16
+Q
2'1
7
Q3
'16
+Q
3'1
7
Q4
'16
+Q
4'1
7
Q1
'17
+Q
1'1
8
Q2
'17
+Q
2'1
8
7% 11% 13% 11% 10% 10% 11% 6% 8%
10%
17%
10%
21%
11%
24%
6%
17%
8%
18%
11%
21%
9%
20%
12%
18%
11%
19%
GAAP Operating Income (Loss) & Margin (%)
Q2 F
Y16
Q3 F
Y16
Q4 F
Y16
Q1 F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$68
($18)
$16
($28)
$34
($42)
($10)
$47
$73
14%
(4)% 3% (6)%
6%
(8)%
(2)%
8% 10%
Adjusted Net Operating Profit & Margin (%)
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$87
$32 $30
$3
$57
$14
$22
$10
$94
18%
7% 6%
1%
10%
3% 4% 2%
12%
Please see non-GAAP reconciliations at the end of this document. Page 8 of 34
believe the new U.S. tax legislation will impact our taxes in
future periods.
GAAP net income per diluted share for the second quarter
was $0.93, versus $1.07 in the same quarter a year ago.
Gross margin (revenue minus the cost of revenue
expressed as a percent of revenue) in the second quarter
was 52.7%, up from 52.1% in the same quarter a year ago
due to the following items:
• The non-recurrence of production inefficiencies in the
prior year period as described above.
• The addition of National Pen to the portfolio which has a
higher than average gross margin.
• The above benefits were partially offset by the divestiture
of Albumprinter in our All Other Businesses segment, as
well as a continued mix shift due to strong growth in our
Upload and Print businesses, which have a lower gross
margin than our Vistaprint and National Pen businesses.
Contribution margin (revenue minus the cost of revenue,
the cost of advertising and payment processing, expressed
as a percent of revenue) in the second quarter was 34.3%,
up slightly from 34.1% in the same quarter a year ago.
Advertising as a percent of revenue increased year over
year for the second quarter from 16.3% to 17.0%, which
offset the increase in gross margin as described above.
The mix shift driven by our acquisition of National Pen and
our divestiture of Albumprinter accounted for most of this
change in advertising as a percent of revenue.
TTM OI (Loss) TTM Adjusted NOP
GAAP Operating Income (Loss) &
Adjusted Net Operating Profit
(TTM)
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$99
$77 $78
$38
$4
($20) ($46)
$29
$68
$158 $170 $172 $151
$122
$103 $96 $103
$140
Gross Profit Gross Margin %
Gross Profit
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$299
$240 $257 $231
$300 $282 $285 $280
$402
60.2% 54.9% 53.7% 52.0% 52.1% 51.2% 50.5% 49.6% 52.7%
Contribution Profit Contribution Margin %
Contribution Profit & Contribution Margin
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$205
$159 $173 $144
$197 $173 $186 $175
$261
41.3%
36.3% 36.1%
32.5% 34.1% 31.4% 32.9% 31.0%
34.3%
Please see non-GAAP reconciliations at the end of this document. Page 9 of 34
CASH FLOW & RETURN ON INVESTED CAPITAL
For the second quarter of fiscal 2018, we generated $160.4
million in cash from operations, compared with $105.1
million in the second quarter of fiscal 2017. The year-over-
year increase was primarily due to revenue growth, savings
from restructuring, the non-recurrence of production
inefficiencies in the year-ago period, lower cash taxes,
seasonal working capital benefits at Vistaprint, and our
acquisition of National Pen which also earns a significant
portion of its annual cash flow in the December quarter.
These year-over-year operating cash flow benefits were
partially offset by approximately $6.8 million of severance
payments made in the quarter (primarily related to the
Vistaprint restructuring), higher cash interest costs, and the
Q1 FY 2018 sale of our Albumprinter business which
historically earned a significant portion of its operating cash
flow in the second quarter.
Free cash flow was $132.7 million in the second quarter of
fiscal 2018 compared to $77.3 million in the same period a
year ago due to the same reasons as our operating cash
flow trends. There was a slight decrease in the combination
of capital expenditures and capitalized software and
development costs relative to the year-ago period. The
trend in our cash interest expense and cash restructuring
payments, both of which are included in our free cash flow,
can be found in the "Certain Cash Payments Impacting
Cash Flow From Operations" chart on the next page.
Internally, our most important quarterly and annual
performance metric is "unlevered free cash flow", which we
define as free cash flow plus cash interest expense related
to borrowing. The top two charts at the right illustrate these
components on a quarterly and trailing-twelve month basis.
Year-over-year growth in trailing-twelve month cash from
operations and free cash flow was more muted due to
higher cash interest and restructuring costs over the past
year.
The GAAP operating measures that we use as a basis to
calculate Return on Invested Capital (ROIC) are total debt,
total shareholders equity, and operating income. The year-
over-year trend in these GAAP measures was favorable to
ROIC, as operating income increased significantly and debt
decreased significantly.
On a trailing twelve-month basis, adjusted ROIC as of
December 31, 2017 returned to approximately the same
level as the prior-year Q2 TTM period. TTM adjusted ROIC
was approximately 10% including share-based
compensation not related to investment consideration, and
14% excluding all share-based compensation expense.
Adjusted ROIC now reflects a full year of National Pen
operating results, which are highly seasonal and
significantly improve this sequential and year-over-year
view.
FCF Interest
Free Cash Flow &
Cash Interest Related to Borrowing
(Quarterly)
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218
FCF $110 $8 $35 ($18) $77 ($21) $7 ($13) $133
Interest $13 $3 $13 $3 $13 $5 $16 $7 $16
FCF Interest
Free Cash Flow &
Cash Interest Related to Borrowing
(TTM)
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$117 $141
$152 $134
$102
$73
$45 $50
$106
$18
$20
$31
$32
$32
$34
$38 $41
$43
TTM Adjusted ROIC
TTM Adjusted ROIC ex SBC
Adjusted Return on Invested Capital
(TTM)
Q2 F
Y16
Q3 F
Y16
Q4 F
Y16
Q1 F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
19% 19% 18%
15%
10%
6% 5% 6%
10%
22% 21% 20%
17%
13%
9% 8% 9%
14%
Please see non-GAAP reconciliations at the end of this document. Page 10 of 34
Cash Flow from Operations
(Quarterly)
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$135
$33
$52
$10
$105
$9
$33
$16
$160
Capital Expenditures Capitalized Software
Capital Expenditures & Capitalization of Software
& Website Development Costs
(Quarterly)
Q2 F
Y16
Q3 F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$19 $19 $18 $19 $17
$21
$17 $20 $18
$7
$26
$6
$25
$8
$26
$8
$27
$11
$28
$10
$31
$9
$26
$9
$29
$9
$27
Cash Restructuring
Cash Interest Related to Borrowing
Certain Cash Payments Impacting
Cash Flow from Operations
(Quarterly)
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$8 $7
$4
$7
$13
$3
$13
$3
$13
$5
$13 $16
$23
$7
$11
$16
$23
Cash Flow from Operations
(TTM)
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$212
$242 $247 $230
$200
$176
$157 $164
$219
Capital Expenditures Capitalized Software
Capital Expenditures & Capitalization of Software
& Website Development Costs
(TTM)
Q2 F
Y16
Q3 F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$84 $88 $80 $75 $73 $75 $74 $75 $77
$22
$106
$23
$111
$26
$106
$30
$105
$33
$106
$37
$112
$37
$111
$38
$113
$36
$113
TTM Cash Restructuring
TTM Cash Interest Related to Borrowing
Certain Cash Payments Impacting
Cash Flow from Operations
(TTM)
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$3 $3 $3 $8
$15 $19
$26$18
$21
$20
$23
$31
$34 $32 $32
$34
$42
$38
$53
$41
$60
$43
$69
Please see non-GAAP reconciliations at the end of this document. Page 11 of 34
SEGMENT RESULTS
Please see non-GAAP reconciliations at the end of this document. Page 12 of 34
VISTAPRINT
Vistaprint revenue growth for the second quarter of fiscal
2018 was on track with our expectations. We saw
continued growth in both repeat and new customer
bookings, though repeat continued to grow faster with
growth in bookings per customer and a repeat rate which
was the highest since 2007.
Segment Profit for the second quarter of fiscal 2018 was up
by $32.0 million year over year and Segment Profit margin
was up 540 basis points compared to the year-ago period.
This was driven by a combination of factors in addition to
revenue growth, including operating expense savings from
our January and November 2017 restructuring initiatives,
the non-recurrence of roughly $10 million of production
inefficiencies that occurred in the year-ago period, and
gross margin gains in some of our newer product lines as
we have begun optimization efforts in line with previously
described plans and as described in the next paragraph.
Additionally, Vistaprint's Segment Profit was positively
influenced by currency movements in the quarter. As a
reminder, we do not allocate realized gains or losses from
our hedging contracts to our segment operating results.
As previously discussed at our investor day in August and
on our Q1FY18 earnings call, one of Vistaprint's objectives
is to optimize the large number of new products and
services that were launched in fiscal 2017 and that we
continue to launch in fiscal 2018. We believe that there are
pricing and operating levers to improve the profitability of
these products over time. That effort is underway and while
we are already seeing some positive indicators that these
efforts are making a difference, it will take time to scale and
transition those new products and services from
investments to cash generative business. While these
investments in new products and services put pressure on
current period profitability, we expect they will continue to
help us attract higher-value customers and improve
customer loyalty and, over time, deliver attractive return on
our investment.
As a reminder, we expect the year-over-year impact of our
shipping price reduction within the Vistaprint business to be
minimal for fiscal year 2018. The year-over-year profit
impact for the second quarter was an approximately $4
million drag due to the timing of the roll-out in the U.S. in
2017.
We believe that Vistaprint continues to strengthen as a
result of the many changes and investments we have
made over the past five years, which have resulted in
stable to improving customer loyalty scores and improved
repeat rates. We are optimistic about the progress we're
making in Vistaprint and remain focused on achieving
strong returns on the capital invested over those years.
Reported Revenue ($M) &
Organic Constant Currency Revenue Growth
Q2FY1
6
Q3FY1
6
Q4FY1
6
Q1FY1
7
Q2FY1
7
Q3FY1
7
Q4FY1
7
Q1FY1
8
Q2FY1
8
$356
$291 $306 $287
$381
$323 $321 $319
$429
8%
10%
12%
8% 9%
12%
6%
10% 9%
Segment Profit ($M) & Segment Profit Margin
Q2FY1
6
Q3FY1
6
Q4FY1
6
Q1FY1
7
Q2FY1
7
Q3FY1
7
Q4FY1
7
Q1FY1
8
Q2FY1
8
$85
$46 $48
$25
$67
$38 $38
$31
$99
24%
16% 16%
9%
18%
12% 12% 10%
23%
Vistaprint advertising expense ($M)
Vistaprint advertising as % of revenue
Vistaprint Advertising
Q2FY1
6
Q3FY1
6
Q4FY1
6
Q1FY1
7
Q2FY1
7
Q3FY1
7
Q4FY1
7
Q1FY1
8
Q2FY1
8
$73 $64 $65 $69
$80 $73 $69 $73
$89
21% 22% 21% 24% 21% 23% 22% 23% 21%
We also expect fluctuations in our financial metrics as we
continue to make investments that we believe will further
improve the value proposition to Vistaprint customers and
deliver attractive long-term returns on investment, but are
investments which often negatively impact near-term
revenue growth, gross margin, contribution profit and/or
cash flow.
VISTAPRINT RESTRUCTURING UPDATE
As part of our prior-quarter earnings announcement,
Vistaprint announced an initiative to reorganize its business
following more than six months of experience operating in
the integrated organization which was created by the
Cimpress-wide decentralization that we announced in
January 2017. As of the end of the second quarter of fiscal
2018, the restructuring is complete, and we see early
indications that this reorganization is helping us move
faster and free up capital. We are also pleased that,
despite the near-term disruption of the organizational
changes especially during our peak holiday season, our
team members delivered solid operating results for the
second quarter.
These actions resulted in the elimination of approximately
180 positions, as well as non-headcount related cost
reductions. During the quarter, we took a restructuring
charge through our income statement of $11.5 million,
which was primarily severance-related. We do not expect
material charges in future quarters related to this initiative.
On a cash basis, about 50% of the restructuring payments
were made in Q2 of FY18, and the remainder should be
spread fairly evenly throughout the second half of the fiscal
year.
Looking forward, we continue to expect a reduction in fiscal
year 2018 operating expenses by $20 million to $22 million,
which represents partial-year savings, including a small
amount of reinvestment. Net of the restructuring charges,
we expect in-year savings of roughly $8 million to $10
million as a result of these changes. On an annualized
basis, savings would be higher; however, we expect to
reinvest some of this as we enter FY 2019.
Decisions like this are not easy, but we believe these
changes will improve the steady-state free cash flow of this
business and, importantly, free up capital to reinvest in
other areas of Vistaprint that provide the greatest benefit to
our customers and our long-term shareholders.
Please see non-GAAP reconciliations at the end of this document. Page 13 of 34
UPLOAD AND PRINT BUSINESSES
Constant-currency revenue growth in Q2 FY 2018
accelerated versus the year-ago period and was in line with
Q1 FY18 levels.
Segment Profit in Q2 FY 2018 was up by $5.7 million year
over year due primarily to growth in gross profit and
operating expense efficiencies in several businesses,
partially offset by increased investments in technology.
Segment Profit margin increased 100 basis points year
over year.
We continue to see evidence that the January 2017
decentralization is driving the desired impacts within our
Upload and Print businesses. This is primarily due to
tighter cross-functional connections of marketing,
technology, manufacturing and service teams, allowing the
businesses to be more agile and work faster. We continue
to see opportunities to shift production of certain products
to lower-cost and/or higher-quality options through the
mass customization platform. The current benefits remain
small, but we expect them to begin to grow through the
back half of the fiscal year and in FY 2019.
The performance across the Upload and Print group varies,
with a wide range of revenue growth and cash flow
contribution by business. As described at our investor day
in August 2017, the aggregate unlevered free cash flow of
the full portfolio of Upload and Print businesses has
exceeded our aggregate deal model plans to date, and we
expect it to continue to do so in the future.
BUSINESSES IN THIS REPORTABLE SEGMENT:
Reported Revenue ($M) &
Organic Constant Currency Revenue Growth
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$93
$116
$146 $132
$152 $142
$162 $160
$193
31%
25% 21%
12% 11% 13% 14%
16% 16%
Segment Profit ($M) & Segment Profit Margin
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$15 $15
$17
$13
$17
$13
$20
$15
$22
16%
13% 12% 10% 11% 9%
12%
9%
12%
Please see non-GAAP reconciliations at the end of this document. Page 14 of 34
NATIONAL PEN
We are pleased with National Pen's performance during
the second quarter of fiscal 2018. As we have described in
the past, National Pen's business is highly seasonal. Since
we did not own this business in the year-ago period, a
reported revenue growth rate cannot be calculated. On a
pro forma basis, revenue grew 28% in constant currencies
with strong growth across channels and geographies. This
growth was boosted by several factors including actions
taken last fiscal year to improve marketing performance,
increased marketing and prospecting activities versus the
year-ago period, and a timing-related reduction to quarter-
end backlog.
National Pen's Q2 FY 2018 performance gives us
increased confidence that the operational changes we
have discussed over recent quarters were the right value-
creating economic decisions for the business.
We expect high single-digit constant-currency revenue
growth for National Pen in fiscal year 2018 on a pro forma
basis if we had owned National Pen for all of fiscal 2017
and 2018. Please note that this statement is more specific
than our commentary from the beginning of the fiscal year,
which was "single-digit". In order to understand this full-
year growth expectation, please (i) recall that constant-
currency revenue declined 7% in the first quarter on a pro
forma basis, and (ii) note that for the back half of the year
we expect more moderate growth than what we saw for
Q2.
We've made good progress on post-acquisition plans in
line with those we presented at investor day in August,
2017. Multiple other Cimpress businesses have begun to
tap into National Pen's product offering via our mass
customization platform. We've also delivered shipping and
freight savings by leveraging Cimpress' contracts and scale
advantages, as well as through moving decoration of
products for National Pen's Japanese customers to the
Cimpress Japan facility. These initiatives are driving
attractive returns for National Pen and we believe they will,
over time, also benefit other Cimpress businesses.
Reported Revenue ($M)
Q3FY17 Q4FY17 Q1FY18 Q2FY18
$59 $54 $60
$126
Segment Profit ($M) & Segment Profit Margin
Q3FY17 Q4FY17 Q1FY18 Q2FY18
($3)
$1 $1
$18
(5%) 2% 2%
14%
Please see non-GAAP reconciliations at the end of this document. Page 15 of 34
ALL OTHER BUSINESSES
The revenue chart on the right breaks out the Albumprinter
contribution to revenue in this segment for the final four
quarters of ownership. As a reminder, the divestiture of
Albumprinter was completed during the first quarter of
FY18; therefore, there was no revenue contribution from
Albumprinter during the second quarter of FY18. The
organic constant-currency growth rate excludes
Albumprinter starting in the first quarter of FY18.
Q2 FY 2018 Segment Loss increased by $6.5 million year
over year primarily due to the divestiture of Albumprinter,
whose contribution to the All Other Businesses Segment
Profit was $5.8 million in the year-ago period. Segment
Loss margin declined from (5)% to (41)% year over year for
the same reason.
Corporate Solutions continues to build foundations for new
growth opportunities, remains early in this process and is
growing strongly. Our multiple Most of World businesses
also continue to grow strongly, but each off of small bases.
Our objective for all of these young businesses remains the
same: to build foundations in large and potentially long-
term-attractive markets. In all of these businesses we
continue to operate at a significant operating loss as
previously described and as planned, and we expect to
continue to do so in the next several years.
BUSINESSES IN THIS REPORTABLE SEGMENT:
Corporate Solutions, serving medium-sized businesses
and larger corporations, as well as our legacy business
with retail partners and franchise businesses. The primary
brand by which we market is "Vistaprint Corporate".
Most of World, consisting of our businesses in Brazil,
China, India and Japan. In Japan and India, we primarily
operate under close derivatives of the Vistaprint business
model and technology, albeit with decentralized, locally
managed cross-functional operations in each country, and
with product, content and service offerings that we tailor to
the Japanese and Indian markets.
Historical Revenue (including Albumprinter)
Revenue (excluding Albumprinter)
Albumprinter Revenue
Revenue Growth
Reported Revenue ($M) &
Organic Constant Currency Revenue Growth
Q2FY1
6
Q3FY1
6
Q4FY1
6
Q1FY1
7
Q2FY1
7
Q3FY1
7
Q4FY1
7
Q1FY1
8
Q2FY1
8
$48
$31 $28 $26
$15 $11 $13 $15
$21
$30
$45
$17
$28
$16
$29
$13
$28
8%
(3)%
(8)%
(19)%
(7)% (9)%
7%
40%
24%
Segment Loss ($M)
& Margin (%) of Loss
Q2FY1
6
Q3FY1
6
Q4FY1
6
Q1FY1
7
Q2FY1
7
Q3FY1
7
Q4FY1
7
Q1FY1
8
Q2FY1
8
$7
($4)
($11) ($10)
($2)
($10) ($9)
($8) ($9)
14%
(13%)
(39%) (37%)
(5%)
(36%)
(32%)
(27%)
(41%)
Please see non-GAAP reconciliations at the end of this document. Page 16 of 34
CENTRAL AND CORPORATE COSTS
See the table below for definitions of the components that
constitute central and corporate costs.
In Q2 FY 2018, our corporate costs declined by
approximately 25% versus the same quarter last year, but
this was more than offset by increases in central operating
costs, MCP investment and 'Unallocated SBC'. The
increase in unallocated SBC is due to the first-time
inclusion of SPSUs defined in the table below.
Our Cimpress Technology team continues to build and
deploy our MCP, a growing set of software services and
standards that deliver business and customer functionality
to our businesses. We remain early in the journey toward
our vision for MCP, but are encouraged by the steady
progress we are making. Our 2017 decentralization
significantly reduced the organizational scope of the MCP
by moving certain teams to our businesses. Our
decentralized businesses are actively involved in the
selection and scoping of new MCP functionality, an
approach which has increased the internal adoption of
these technologies.
What are Central and Corporate Costs?
MCP
Investment
Software engineering and related costs to
expand the functionality of our Mass
Customization Platform (MCP).
Central
Operating
Costs
Our operationally oriented shared-service
organizations of (1) global procurement, (2) the
technical maintenance and hosting of the MCP,
and (3) privacy, and information security
management, plus the administrative costs of our
Cimpress India offices where numerous
Cimpress businesses have dedicated business-
specific team members. Even if we did not
manage our Central Operating Costs on a
shared basis they would still be required to
operate our businesses, and we believe that, if
decentralized, they would cost the same or more
as under our shared model, albeit without as
many current and potential future synergies.
Corporate
Costs
Corporate activities, including the office of the
CEO, the supervisory board, directors and
officers insurance, treasury, tax, capital
allocation, financial consolidation, audit,
corporate legal, internal company-wide
communications, investor relations and corporate
strategy.
Unallocated
SBC
The GAAP accounting value of performance
share units (PSUs) across Cimpress, minus what
we charge either to our businesses or to the
above central cost categories which is based on
the cash grant value of a long-term incentive
award. However, the total value of the
Supplemental PSUs (SPSUs) as described in the
next paragraph remain in Unallocated SBC.
Beginning in Q2 FY 2018, Unallocated SBC
includes expense related to certain SPSU
awards that include a multi-year financial
performance condition. They are subject to mark-
to-market accounting throughout the
performance vesting period if the performance
condition is probable of being achieved, so we
expect the related costs to be volatile depending
on share price fluctuations.
Corporate Costs
Central Operating Costs
MCP Investment
Unallocated SBC
Central and Corporate Costs ($M)
Q2FY1
6
Q3FY1
6
Q4FY1
6
Q1FY1
7
Q2FY1
7
Q3FY1
7
Q4FY1
7
Q1FY1
8
Q2FY1
8
$11 $11 $11 $12 $12 $9 $9 $10 $9
$7 $8 $8
$9 $8
$10 $10 $10 $10
$5
$23
$7
$26
$7
$26
$6
$5 $7 $7 $6 $6
$1
$28
$5
$30
$2
$28 $5
$31
$2
$28 $7
$33
Central and Corporate Costs
Excluding Unallocated SBC*
($M and as a % of Total Revenue)
Q2FY1
6
Q3FY1
6
Q4FY1
6
Q1FY1
7
Q2FY1
7
Q3FY1
7
Q4FY1
7
Q1FY1
8
Q2FY1
8
$23
$26 $26 $27 $26 $26 $26 $26 $26
5%
6%
5%
6% 4%
5% 5% 5%
3%
* We present this cost category excluding the Unallocated SBC to help
our investors see the potential for scale leverage in these central
costs without the volatility and accounting complexities of the
Unallocated SBC. For avoidance of doubt, we view SBC as a cost,
and believe investors should too. As a reminder we charge our
businesses a cost based on the cash value of long-term incentive
grants, which excludes some of these accounting complexities, and
which is included in each segment's results each period. You can find
additional information on the LTI overview document posted on
ir.cimpress.com.
Please see non-GAAP reconciliations at the end of this document. Page 17 of 34
CURRENCY IMPACTS
Our year-over-year revenue growth rate expressed in USD
was positively impacted by about 500 basis points for the
second quarter of fiscal 2018.
There are many natural expense offsets in local currencies
in our business, and therefore the net currency impact to
our bottom line is less pronounced than it is to revenue.
Our most significant net currency exposures by volume are
the Euro and the British Pound.
We also enter into currency derivative contracts to hedge
the risk for certain currencies where we have a net EBITDA
exposure. We hedge our EBITDA because it is the primary
metric used in our debt covenants. We do not apply hedge
accounting to these hedges, which increases the volatility
of the gains or losses that are included in our net income
from quarter to quarter. Realized and unrealized gains or
losses from these hedges are recorded in Other (expense)
income, net, along with other currency-related gains or
losses. The realized gains or losses on our hedging
contracts are added back to our Adjusted NOP to show the
economic impact of our hedging activities.
Our Other expense, net was $7.7 million for the second
quarter of fiscal 2018. The vast majority of this is currency
related, as follows:
• Approximately $4 million of losses are primarily related to
unrealized non-cash net losses on intercompany loans
and currency hedges. These are included in our net
income, but excluded from our Adjusted NOP.
• The realized loss on certain currency derivative contracts
was $3.5 million for the second quarter. These affect both
our net income and Adjusted NOP.
Other Income (Expense), Net
Q2 F
Y16
Q3 F
Y16
Q4 F
Y16
Q1 F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$8
($9)
$18
($2)
$31
($7)
($11)
($16)
($8)
Realized Gains (Losses) on
Certain Currency Derivatives
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$3
$1 $1
$2
$7
$5
$3
($1)
($4)
Please see non-GAAP reconciliations at the end of this document. Page 18 of 34
ADJUSTED EBITDA, DEBT & SHARE REPURCHASES
We provide commentary on EBITDA for our debt investors.
We do not manage our overall business performance to
EBITDA; however, we actively monitor it for purposes of
ensuring compliance with debt covenants, and it is a
component of unlevered free cash flow which is the
financial metric we use in managing the business on an
annual basis.
In the second quarter of fiscal 2018 we successfully fulfilled
our previously described plan to reduce our leverage to
approximately 3x trailing twelve month EBITDA or below by
the end of calendar 2017. Based on our debt covenant
definitions, our total leverage ratio was 2.58 as of
December 31, 2017, and our senior secured leverage ratio
(which is senior secured debt to trailing twelve month
EBITDA) was 1.59. Our debt covenants give pro forma
effect for acquired and divested businesses that closed
within the trailing twelve month period ended December 31,
2017.
For simplicity, the adjusted EBITDA we show in the charts
on this page is calculated differently from the one we use in
our debt covenants. Adjusted EBITDA for Q2 FY 2018 was
$133.5 million, up 42.0% from Q2 FY 2017 and our TTM
adjusted EBITDA was $288.7 million, up 17.0% from the
year-ago TTM period. This is in line with the trends in
operating income discussed on page 8 of this document.
Adjusted EBITDA excludes depreciation and amortization
(including acquisition-related amortization of intangible
assets), goodwill and other impairment charges,
restructuring charges, as well as the share-based
compensation costs that are included in our TTM GAAP
operating income.
Our credit facility provides ample liquidity for the company,
but we have various covenants that prevent us from
borrowing up to the maximum size of the credit facility as of
December 31, 2017.
During the second quarter of fiscal 2018, we repurchased
121,444 Cimpress shares for $14.5 million inclusive of
transaction costs, at an average price per share of $119.11.
Subsequent to the end of the second quarter, we
purchased an additional 321,113 shares for $39.6 million at
an average price of $123.23. Through January 31, we have
spent about $95 million on share repurchases in fiscal year
2018 for an average price of $105.78. We consider share
repurchases to be an important category of capital
deployment. We make our share repurchase decisions by
comparing the potential returns of share repurchases to the
potential returns on other uses of that capital. Our choice to
repurchase is also guided by our debt covenants and
obligations under our equity compensation plans, as well
as legal and tax considerations.
Adjusted EBITDA
(Quarterly)
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$114
$60 $59
$35
$94
$50 $59 $46
$134
Adjusted EBITDA
(TTM)
Q2F
Y16
Q3F
Y16
Q4F
Y16
Q1F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$260 $277 $283 $268 $248 $238 $238 $249
$289
Total Leverage Ratio*
Q2 F
Y16
Q3 F
Y16
Q4 F
Y16
Q1 F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
2.24 2.60 2.50 2.66
3.43 3.59 3.45 3.39
2.58
* Total leverage ratio as calculated in accordance with our debt covenants
Amount Available for Borrowing
Q2 F
Y16
Q3 F
Y16
Q4 F
Y16
Q1 F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$565
$415 $427 $419
$221 $201 $212 $262
$490
Interest Expense Related to Borrowing*
Q2 F
Y16
Q3 F
Y16
Q4 F
Y16
Q1 F
Y17
Q2F
Y17
Q3F
Y17
Q4F
Y17
Q1F
Y18
Q2F
Y18
$8 $8 $8 $8 $8
$10 $11 $11 $11
* Interest expense related to borrowing excludes interest expense
associated with our Waltham, Massachusetts lease
Please see non-GAAP reconciliations at the end of this document. Page 19 of 34
HOUSEKEEPING ITEMS
Please note the following housekeeping items:
• We generally expect the new federal tax legislation in the U.S. (Tax Cuts and Jobs Act) will have a positive
impact on Cimpress' cash flows in the near term. As a reminder, Cimpress is a Dutch company, but is a U.S.
taxpayer due to our U.S. subsidiaries' operations. Below are the primary immediate and longer-term factors that
we expect to impact our tax provision and/or cash taxes:
◦ GAAP Tax Provision: The reduction in the U.S. federal statutory rate from 35% to 21% lowered our net
deferred tax assets in Q2 FY 2018 by $5M. This creates an unfavorable impact to our GAAP tax provision,
which has been reflected in our Q2 GAAP tax provision. This will negatively impact the full-year GAAP tax
provision, but does not impact our cash taxes for FY 2018. The reduction in our net deferred tax assets
reduces the future cash tax benefit on existing timing differences as of the date of enactment; however, we
will also benefit from a reduced tax rate that will apply to future taxable earnings.
◦ Cash Taxes: The reduction in the U.S. federal statutory rate from 35% to 21% will decrease cash taxes on
our U.S. income. The effective date of the tax rate change is January 1, 2018, so we are required to use a
blended U.S. statutory federal tax rate of 28% for fiscal 2018 (excluding the impact of state taxes, research
and development tax credits or other discrete items). For perspective, had the new tax law been effective as
of the beginning of fiscal 2018, rather than as of January 1, 2018, the annualized impact of the U.S. federal
tax rate reduction alone (excluding the impact of other tax reform items) would have been approximately $2
million. Additionally, we are now able to, for U.S. tax purposes, immediately expense certain qualified U.S.
capital expenditures beginning in Q2 FY 2018 and going forward for the next several years. With our
manufacturing operations in Tennessee and Nevada, as well as office-related capital equipment in multiple
other U.S. facilities, we expect the immediate expensing to result in favorable cash tax timing benefits in the
next few years. We do expect to see some unfavorable impact to cash tax as a result of certain other
aspects of tax reform, such as changes to, and limitations on, the deductibility of meals and entertainment
costs and executive officer compensation. However, overall we expect a net favorable impact to our cash
taxes in the near term.
◦ Limited Deductibility of Executive Compensation: An aspect of the new U.S. legislation that we expect to
impact Cimpress negatively in the longer term relates to the deductibility of executive compensation.
Historically, certain types of “performance based” awards issued to our top executives, including share-
based compensation awards such as stock options, were considered "performance based" under Section
162(m) of the Internal Revenue Code and, therefore, were not subject to the annual $1 million deduction
limitation as defined under prior law. The new law eliminates the "performance based" exception for these
types of awards to the extent they are not "grandfathered" in and granted under a written binding agreement
in effect on November 2, 2017. Prior to this change, Cimpress had not been limited on these deductions,
which resulted in some sizable discrete cash and GAAP tax benefits in past years. We believe, based on our
current interpretation of the new U.S. tax legislation, that most of the share-based compensation awards
granted to date meet the "grandfather" requirement and will not be subject to limitation. However, future
equity awards to our named executive officers may no longer be deductible upon vest or exercise over the
long term beyond a total compensation ceiling of $1 million per executive per year. This will negatively
impact our GAAP and cash taxes in the year of vest or exercise if the performance conditions in these
awards are achieved. As an example, performance share units (PSUs) granted to named executive officers
under our current PSU plan that are subject to this limitation will vest no earlier than fiscal 2024 and may be
subject to limited deductibility for U.S. tax purposes in that year.
Given our present operational structure, we do not expect material adverse impacts to Cimpress as a result of
the non-U.S. tax aspects of the new U.S. tax legislation.
• As part of the acquisition of WIRmachenDRUCK on February 1, 2016, we agreed to a variable contingent
payment up to €40 million. The difference between the fair value at the time of the acquisition and the maximum
amount was expensed through our income statement in past periods. On January 2, 2018, we paid the
maximum amount and this will be reflected in our cash flow statement for the third quarter of fiscal 2018 ending
March 31, 2018. Additionally, we made a similar contingent payment of €2 million in January related to our
Easyflyer acquisition. No contingent payments remain for either of these acquisitions.
Please see non-GAAP reconciliations at the end of this document. Page 20 of 34
• Our current best estimate for total share-based compensation expense for the full fiscal year 2018 is
unchanged at approximately $40 million. However, we expect a portion of our share-based compensation
expense to be volatile as certain awards granted in fiscal 2018 are subject to mark-to-market accounting
throughout a three-year performance vesting period, and therefore, the related accounting treatment is
sensitive to share price changes during such period.
Please see non-GAAP reconciliations at the end of this document. Page 21 of 34
CONFERENCE CALL AND WEBCAST INFORMATION
We will host a live Q&A conference call and earnings webcast at 7:30 a.m. (EST) tomorrow, Thursday, February 1,
2018 with management to discuss the financial results. The webcast will be available at ir.cimpress.com and via
dial-in at +1 (844) 778-4144, conference ID 4994308. A replay of the Q&A session will be available on the
company’s website following the call on February 1, 2018.
CIMPRESS N.V.
CONSOLIDATED BALANCE SHEETS
(unaudited in thousands, except share and per share data)
Page 22 of 34
December 31,
2017
June 30,
2017
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 40,064 $ 25,697
Accounts receivable, net of allowances of $7,426 and $3,590, respectively. . . . . . . . . . . . 66,876 48,630
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,263 46,563
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,282 78,835
Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 46,276
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235,485 246,001
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507,299 511,947
Software and website development costs, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,040 48,470
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,022 48,004
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 531,199 514,963
Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258,657 275,924
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,238 34,560
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,678,940 $ 1,679,869
Liabilities, noncontrolling interests and shareholders’ equity
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 165,798 $ 127,386
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219,707 175,567
Deferred revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,824 30,372
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,569 28,926
Other current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,269 78,435
Liabilities held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 8,797
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 539,167 449,483
Deferred tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,008 60,743
Lease financing obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,737 106,606
Long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 664,961 847,730
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107,884 94,683
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,473,757 1,559,245
Commitments and contingencies
Redeemable noncontrolling interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,478 45,412
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 30,973,620 and 31,415,503 shares outstanding, respectively . . . . . . . 615 615
Treasury shares, at cost, 13,107,007 and 12,665,124 shares, respectively . . . . . . . . . . . . (638,414) (588,365)
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378,121 361,376
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462,205 414,771
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (83,093) (113,398)
Total shareholders’ equity attributable to Cimpress N.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119,434 74,999
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 213
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119,705 75,212
Total liabilities, noncontrolling interests and shareholders’ equity $ 1,678,940 $ 1,679,869
CIMPRESS N.V.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited in thousands, except share and per share data)
Page 23 of 34
Three Months Ended
December 31,
Six Months Ended
December 31,
2017 2016 2017 2016
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 762,054 $ 576,851 $ 1,325,338 $ 1,020,564
Cost of revenue (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360,285 276,366 644,040 489,416
Technology and development expense (1) . . . . . . . . . . . . . . . . . . . . . . 59,228 56,282 121,331 115,292
Marketing and selling expense (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,785 151,358 366,878 284,026
General and administrative expense (1) . . . . . . . . . . . . . . . . . . . . . . . . 44,988 48,161 83,766 104,741
Amortization of acquired intangible assets . . . . . . . . . . . . . . . . . . . . . . 12,558 9,879 25,191 20,092
Restructuring expense (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,501 1,100 12,355 1,100
(Gain) on sale of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (47,545) —
Income from operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,709 33,705 119,322 5,897
Other (expense) income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,732) 30,549 (24,044) 28,417
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,529) (9,631) (25,611) (19,535)
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,448 54,623 69,667 14,779
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,825 19,601 15,638 9,787
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,623 35,022 54,029 4,992
Add: Net (income) loss attributable to noncontrolling interest . . . . . . . . (688) 6 (731) 933
Net income attributable to Cimpress N.V. . . . . . . . . . . . . . . . . . . . . . . . $ 29,935 $ 35,028 $ 53,298 $ 5,925
Basic net income per share attributable to Cimpress N.V. . . . . . . . . . . $ 0.96 $ 1.12 $ 1.71 $ 0.19
Diluted net income per share attributable to Cimpress N.V. . . . . . . . . . $ 0.93 $ 1.07 $ 1.65 $ 0.18
Weighted average shares outstanding — basic . . . . . . . . . . . . . . . . . . 31,026,043 31,291,356 31,123,177 31,431,090
Weighted average shares outstanding — diluted . . . . . . . . . . . . . . . . . 32,319,022 32,614,013 32,325,592 32,846,275
____________________________________________
(1) Share-based compensation is allocated as follows:
Three Months Ended
December 31,
Six Months Ended
December 31,
2017 2016 2017 2016
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 95 $ 75 $ 135 $ 118
Technology and development expense . . . . . . . . . . . . . . . . . . . . . . . . . 2,818 3,118 4,674 5,443
Marketing and selling expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,858 1,480 2,843 2,300
General and administrative expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,037 6,604 11,965 14,987
Restructuring expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 506 — 609 —
CIMPRESS N.V.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
Page 24 of 34
Three Months Ended
December 31,
Six Months Ended
December 31,
2017 2016 2017 2016
Operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30,623 $ 35,022 $ 54,029 $ 4,992
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,299 36,977 83,683 72,382
Share-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . 13,314 11,277 20,226 22,848
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,720 655 (6,869) (17,508)
Gain on sale of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (47,545) —
Change in contingent earn-out liability . . . . . . . . . . . . . . . . . . . . . . . . . 947 6,746 1,774 22,766
Gain on sale of available-for-sale securities . . . . . . . . . . . . . . . . . . . . . — (2,268) — (2,268)
Unrealized loss (gain) on derivatives not designated as hedging
instruments included in net income . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,525) (6,384) 4,541 (4,573)
Effect of exchange rate changes on monetary assets and liabilities
denominated in non-functional currency. . . . . . . . . . . . . . . . . . . . . . . . 4,889 (16,273) 13,275 (13,246)
Other non-cash items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 794 1,049 817 1,719
Changes in operating assets and liabilities: . . . . . . . . . . . . . . . . . . . . .
Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,617) (2,095) (16,456) 822
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,628 (2,967) (7,357) (4,187)
Prepaid expenses and other assets. . . . . . . . . . . . . . . . . . . . . . . . . 719 (14,961) (4,174) (14,290)
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,225 29,760 43,604 21,808
Accrued expenses and other liabilities. . . . . . . . . . . . . . . . . . . . . . . 20,347 28,521 37,194 23,394
Net cash provided by operating activities 160,363 105,059 176,742 114,659
Investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of property, plant and equipment. . . . . . . . . . . . . . . . . . . . . . (18,217) (16,941) (38,674) (36,260)
Business acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . — (206,236) (110) (206,816)
Proceeds from the sale of subsidiaries, net of transactions costs and
cash divested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 93,779 —
Purchases of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (254) (62) (278) (88)
Capitalization of software and website development costs. . . . . . . . . . . (9,180) (10,798) (18,114) (19,110)
Proceeds from sale of available-for-sale securities. . . . . . . . . . . . . . . . . — 6,346 — 6,346
Other investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,287 442 (669) 1,227
Net cash (used in) provided by investing activities (26,364) (227,249) 35,934 (254,701)
Financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from borrowings of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,817 360,000 311,349 447,000
Payments of debt and debt issuance costs. . . . . . . . . . . . . . . . . . . . . . . (252,788) (165,046) (490,717) (247,771)
Payments of withholding taxes in connection with equity awards. . . . . . (908) (1,315) (2,098) (8,864)
Payments of capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,804) (3,538) (9,462) (6,814)
Purchase of ordinary shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,465) (50,008) (55,139) (50,008)
Purchase of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (20,230) — (20,230)
Proceeds from issuance of ordinary shares . . . . . . . . . . . . . . . . . . . . . . 2,949 257 9,019 257
Issuance of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (12,000) —
Proceeds from sale of noncontrolling interest . . . . . . . . . . . . . . . . . . . . . — — 35,390 —
Capital contribution from noncontrolling interest . . . . . . . . . . . . . . . . . . . — 1,404 — 1,404
Other financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (83) 1,281 (83) 1,281
Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . (138,282) 122,805 (213,741) 116,255
Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . . . . . . . . 1,547 (4,652) 3,390 (4,051)
Change in cash held for sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 12,042 —
Net (decrease) increase in cash and cash equivalents (2,736) (4,037) 14,367 (27,838)
Cash and cash equivalents at beginning of period 42,800 53,625 25,697 77,426
Cash and cash equivalents at end of period $ 40,064 $ 49,588 $ 40,064 $ 49,588
CIMPRESS N.V.
SEGMENT INFORMATION
(unaudited in thousands)
Page 25 of 34
GAAP Revenue GAAP Revenue
Three Months Ended
December 31,
Six Months Ended
December 31,
2017 2016
%
Change 2017 2016
%
Change
Revenue growth reconciliation by reportable segment:
Vistaprint $ 428,908 $ 380,821 13% $ 747,951 $ 667,356 12%
Upload and Print 192,527 152,388 26% 352,917 284,345 24%
National Pen . . . . . . . . . . . . . . . . . . . . . . . 126,098 — 100% 185,815 — 100%
All Other Businesses 20,994 45,049 (53)% 49,048 71,383 (31)%
Inter-segment eliminations (6,473) (1,407) (10,393) (2,520)
Total revenue . . . . . . . . . . . . . . . . . . . . . . . $ 762,054 $ 576,851 32% $1,325,338 $1,020,564 30%
Three Months Ended
December 31,
Six Months Ended
December 31,
Profit (loss) by reportable segment ("Segment Profit"): 2017 2016 2017 2016
Vistaprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 99,049 $ 67,016 $ 129,944 $ 92,288
Upload and Print . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,470 16,798 37,238 30,249
National Pen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,645 — 18,830 —
All Other Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,566) (2,107) (16,117) (11,859)
Total Segment Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130,598 81,707 169,895 110,678
Central and corporate costs ex. unallocated SBC . . . . . . . . . . . . . . . . . . . . . . (25,924) (25,923) (52,109) (54,109)
Unallocated SBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,486) (5,305) (9,558) (5,305)
Include: Realized (losses) gains on certain currency derivatives not included
in operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,513) 6,839 (4,147) 8,727
Adjusted NOP 93,675 57,318 104,081 59,991
Exclude: Realized losses (gains) on certain currency derivatives not
included in operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,513 (6,839) 4,147 (8,727)
Acquisition-related amortization and depreciation . . . . . . . . . . . . . . . . . . . . . . (12,613) (10,019) (25,300) (20,232)
Earn-out related charges¹ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,254) (7,010) (2,391) (23,257)
Share-based compensation related to investment consideration . . . . . . . . . . (1,007) (601) (1,047) (4,704)
Restructuring-related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,501) (1,100) (12,355) (1,100)
Interest expense for Waltham, MA lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,896 1,956 3,807 3,926
Gain on the purchase or sale of subsidiaries2 . . . . . . . . . . . . . . . . . . . . . . . . . — — 48,380 —
Total income from operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 72,709 $ 33,705 $ 119,322 $ 5,897
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 the gain on the sale of Albumprinter, as well as a bargain purchase gain as defined by ASC 805-30 for an acquisition in
which the identifiable assets acquired and liabilities assumed are greater than the consideration transferred, that was recognized in general and
administrative expense in our consolidated statement of operations during the six months ended December 31, 2017.
Note: During the first quarter of fiscal 2018, we began presenting inter-segment fulfillment activity as revenue for the fulfilling business unit for
purposes of measuring and reporting our segment financial performance. We have revised historical results to reflect the consistent application
of our current accounting methodology. In addition, we adjusted our historical segment profitability for the allocation of certain IT costs that are
allocated to each of our businesses in fiscal 2018.
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, free cash flow,
Trailing-Twelve Month Return on Invested Capital, Adjusted EBITDA, constant-currency revenue growth and
constant-currency revenue growth excluding revenue from acquisitions and divestitures made in the last twelve
months:
• Adjusted Net Operating Profit is defined as GAAP operating income plus interest expense associated with
our Waltham, Massachusetts 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, impairments, or gains related to the purchase or sale of
subsidiaries, plus certain realized gains or losses on currency derivatives 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.
• Trailing Twelve Month Return on Invested Capital is Adjusted NOPAT or Adjusted NOPAT excluding share-
based compensation, divided by debt plus redeemable noncontrolling interest plus shareholders equity,
less excess cash. Adjusted NOPAT is defined as Adjusted NOP from above, less cash taxes. Adjusted
NOPAT excluding share-based compensation adds back all share-based compensation expense that has
not already been added back to Adjusted NOPAT. Excess cash is cash and equivalents greater than 5% of
last twelve month revenues and if negative, is capped at zero. Operating leases have not been converted to
debt for purposes of this calculation.
• Adjusted EBITDA is defined as operating Income plus depreciation and amortization (excluding
depreciation and amortization related to our Waltham, Massachusetts office lease) plus share-based
compensation expense plus proceeds from insurance plus earn-out related charges plus certain
impairments plus restructuring related charges plus realized gains or losses on currency derivatives less
interest expense related to our Waltham, Massachusetts office lease less gain on purchase or sale of
subsidiaries.
• 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 and divestitures
made during the past twelve months excludes the impact of currency as defined above and revenue from
Albumprinter and National Pen.
These non-GAAP financial measures are provided to enhance investors' understanding of our current operating
results from the underlying and ongoing business for the same reasons they are used by management. For
example, as we have become more acquisitive over recent years we believe excluding the costs related to the
purchase of a business (such as amortization of acquired intangible assets, contingent consideration, or impairment
of goodwill) provides further insight into the performance of the underlying acquired business in addition to that
provided by our GAAP operating income. As another example, as we do not apply hedge accounting for our
currency forward contracts, we believe inclusion of realized gains and losses on these contracts that are intended to
be matched against operational currency fluctuations provides further insight into our operating performance in
addition to that provided by our GAAP operating income. We do not, nor do we suggest that investors should,
consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared
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.
Page 26 of 34
FREE CASH FLOW
(Quarterly, in millions)
Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18
Net cash provided by operating activities $134.9 $32.9 $52.1 $9.6 $105.1 $9.0 $33.1 $16.4 $160.4
Purchases of property, plant and equipment ($19.2) ($19.1) ($17.8) ($19.3) ($16.9) ($20.7) ($17.2) ($20.5) ($18.2)
Purchases of intangible assets not related to
acquisitions $— ($0.1) $— $— ($0.1) $— ($0.1) $— ($0.3)
Capitalization of software and website
development costs ($7.2) ($6.1) ($8.1) ($8.3) ($10.8) ($9.6) ($8.6) ($8.9) ($9.2)
Payment of contingent consideration in excess of
acquisition-date fair value $— $— $8.6 $— $— $— $— $— $—
Proceeds from insurance related to investing
activities $1.5 $— $— $— $— $— $— $— $—
Free cash flow $110.0 $7.7 $34.8 ($18.1) $77.3 ($21.3) $7.1 ($13.0) $132.7
Reference:
Value of capital leases $0.6 $4.2 $0.3 $2.1 $2.8 $7.2 $2.3 $— $0.1
Cash restructuring payments $— $0.4 $— $— $— $7.5 $7.5 $4.1 $6.8
Cash paid during the period for interest $15.0 $4.9 $14.7 $5.4 $14.8 $7.3 $17.8 $8.4 $17.4
Interest expense for Waltham, MA Lease ($2.0) ($2.0) ($2.0) ($2.0) ($2.0) ($1.9) ($1.9) ($1.9) ($1.9)
Cash interest related to borrowing $13.0 $2.9 $12.8 $3.4 $12.8 $5.4 $15.9 $6.5 $15.5
FREE CASH FLOW
(TTM, in millions)
TTM
Q2FY16
TTM
Q3FY16
TTM
Q4FY16
TTM
Q1FY17
TTM
Q2FY17
TTM
Q3FY17
TTM
Q4FY17
TTM
Q1FY18
TTM
Q2FY18
Net cash provided by operating activities $212.2 $242.1 $247.4 $229.5 $199.7 $175.8 $156.7 $163.5 $218.8
Purchases of property, plant and equipment ($84.4) ($88.3) ($80.4) ($75.4) ($73.1) ($74.7) ($74.2) ($75.3) ($76.6)
Purchases of intangible assets not related to
acquisitions ($0.5) ($0.5) ($0.5) ($0.1) ($0.2) ($0.1) ($0.2) ($0.2) ($0.4)
Capitalization of software and website
development costs ($22.0) ($23.0) ($26.3) ($29.7) ($33.3) ($36.8) ($37.3) ($37.9) ($36.3)
Payment of contingent consideration in excess of
acquisition-date fair value $8.1 $6.8 $8.6 $8.6 $8.6 $8.6 $— $— $—
Proceeds from insurance related to investing
activities $3.6 $3.6 $3.6 $1.5 $— $— $— $— $—
Free cash flow $116.9 $140.7 $152.4 $134.5 $101.7 $72.7 $45.1 $50.1 $105.6
Reference:
Value of capital leases $6.4 $11.3 $7.5 $7.2 $9.4 $12.4 $14.4 $12.3 $9.6
Cash restructuring payments $2.7 $3.1 $2.6 $0.4 $0.4 $7.5 $15.0 $19.1 $25.9
Cash paid during the period for interest $20.7 $24.0 $37.6 $40.0 $39.8 $42.2 $45.3 $48.3 $51.0
Interest expense for Waltham, MA Lease ($2.4) ($4.3) ($6.3) ($7.9) ($7.9) ($7.8) ($7.7) ($7.7) ($7.6)
Cash interest related to borrowing $18.3 $19.7 $31.3 $32.1 $31.9 $34.4 $37.5 $40.7 $43.4
Values may not sum to total due to rounding. Page 27 of 34
ADJUSTED NET OPERATING PROFIT
(Quarterly, in millions except percentages)
Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18
GAAP operating income (loss) $67.6 ($17.5) $16.0 ($27.8) $33.7 ($41.9) ($9.7) $46.6 $72.7
Exclude expense (benefit) impact of:
Acquisition-related amortization and depreciation $9.7 $10.9 $10.5 $10.2 $10.0 $13.5 $12.7 $12.7 $12.6
Earn-out related charges¹ $3.4 $0.9 $1.8 $16.2 $7.0 $4.9 $12.2 $1.1 $1.3
Share-based compensation related to
investment consideration $1.7 $1.2 $1.1 $4.1 $0.6 $0.4 $4.6 $— $1.0
Certain impairments² $3.0 $37.6 $1.2 $— $— $9.6 $— $— $—
Restructuring related charges $0.1 $— $— $— $1.1 $24.8 $0.8 $0.9 $11.5
Less: Interest expense associated with Waltham,
MA lease ($2.0) ($2.0) ($2.0) ($2.0) ($2.0) ($1.9) ($1.9) ($1.9) ($1.9)
Less: Gain on the purchase or sale of
subsidiaries3 $— $— $— $— $— $— $— ($48.4) $—
Include: Realized (losses) gains on certain
currency derivatives not included in operating
income
$3.3 $1.4 $0.8 $1.9 $6.8 $4.6 $3.2 ($0.6) ($3.5)
Adjusted NOP $86.9 $32.4 $29.6 $2.7 $57.3 $13.9 $21.9 $10.4 $93.7
Adjusted NOP as a percent of total revenue 17.5% 7.4% 6.2% 0.6% 9.9% 2.5% 3.9% 1.8% 12.3%
ADJUSTED NET OPERATING PROFIT
(TTM, in millions)
TTM
Q2FY16
TTM
Q3FY16
TTM
Q4FY16
TTM
Q1FY17
TTM
Q2FY17
TTM
Q3FY17
TTM
Q4FY17
TTM
Q1FY18
TTM
Q2FY18
GAAP operating income (loss) $99.3 $77.4 $78.2 $38.3 $4.4 ($20.0) ($45.7) $28.7 $67.7
Exclude expense (benefit) impact of:
Acquisition-related amortization and depreciation $31.3 $37.7 $40.8 $41.3 $41.6 $44.3 $46.4 $48.9 $51.5
Earn-out related charges¹ $11.6 $5.0 $6.4 $22.3 $25.9 $29.9 $40.4 $25.3 $19.5
Share-based compensation related to
investment consideration $4.5 $4.2 $4.8 $8.1 $7.0 $6.2 $9.6 $5.6 $6.0
Certain impairments² $3.0 $40.6 $41.8 $41.8 $38.8 $10.8 $9.6 $9.6 $9.6
Restructuring related charges $3.4 $2.9 $0.4 $0.1 $1.1 $25.9 $26.7 $27.6 $38.0
Less: Interest expense associated with Waltham,
MA lease ($2.4) ($4.3) ($6.3) ($7.9) ($7.9) ($7.8) ($7.7) ($7.7) ($7.6)
Less: Gain on the purchase or sale of
subsidiaries3 $— $— $— $— $— $— $— ($48.4) ($48.4)
Include: Realized (losses) gains on certain
currency derivatives not included in operating
income
$6.9 $6.5 $5.9 $7.4 $11.0 $14.2 $16.5 $14.0 $3.6
Adjusted NOP $157.7 $169.9 $172.0 $151.5 $122.0 $103.4 $95.7 $103.5 $139.8
1Includes expense recognized for the change in fair value of contingent consideration & compensation expense related to cash-based 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."
3Includes the impact of the gain on the sale of Albumprinter, as well as a bargain purchase gain as defined by ASC 805-30 for an acquisition in
which the identifiable assets acquired and liabilities assumed are greater than the consideration transferred, that was recognized in general and
administrative expense in our consolidated statement of operations during the six months ended December 31, 2017.
Values may not sum to total due to rounding. Page 28 of 34
GROSS PROFIT AND CONTRIBUTION PROFIT
(in millions except percentages)
Q2 FY16 Q3 FY16 Q4 FY16 Q1 FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18
Total revenue $496.3 $436.8 $479.2 $443.7 $576.9 $550.6 $564.3 $563.3 $762.1
Cost of revenue $197.5 $196.9 $222.1 $213.1 $276.4 $268.5 $279.1 $283.8 $360.3
Gross profit (revenue minus cost of
revenue) $298.8 $239.9 $257.1 $230.7 $300.5 $282.1 $285.2 $279.5 $401.8
as a percent of total revenue 60.2% 54.9% 53.7% 52.0% 52.1% 51.2% 50.5% 49.6% 52.7%
Advertising expense and payment
processing fees $94.0 $81.3 $84.0 $86.4 $103.6 $109.4 $99.4 $105.0 $140.8
Contribution profit (gross profit minus
advertising/processing fees) $204.8 $158.6 $173.1 $144.3 $196.9 $172.7 $185.7 $174.5 $261.0
as a percent of total revenue 41.3% 36.3% 36.1% 32.5% 34.1% 31.4% 32.9% 31.0% 34.3%
RETURN ON INVESTED CAPITAL
(TTM, in millions except percentages)
Q2 FY16 Q3 FY16 Q4 FY16 Q1 FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18
Total Debt $547.7 $696.6 $678.5 $682.5 $876.1 $891.5 $876.7 $820.8 $700.5
Redeemable Non-Controlling Interest $64.8 $64.9 $65.3 $64.9 $41.8 $42.6 $45.4 $83.8 $85.5
Total Shareholders Equity $158.1 $151.8 $166.1 $147.5 $99.8 $84.7 $75.2 $84.5 $119.7
Excess Cash¹ — — — — — — — — —
Invested Capital² $770.6 $913.3 $909.9 $895.0 $1,017.8 $1,018.8 $997.3 $989.1 $905.7
Average Invested Capital³ $742.2 $818.4 $847.8 $872.2 $934.0 $960.3 $982.2 $1,005.7 $977.7
TTM
Q2FY16
TTM
Q3FY16
TTM
Q4FY16
TTM
Q1FY17
TTM
Q2FY17
TTM
Q3FY17
TTM
Q4FY17
TTM
Q1FY18
TTM
Q2FY18
Adjusted NOP $157.7 $169.9 $172.0 $151.5 $122.0 $103.4 $95.7 $103.5 $139.8
Less: Cash Taxes $17.5 $14.7 $19.8 $23.6 $29.3 $44.6 $49.3 $46.2 $39.5
Adjusted NOPAT $140.3 $155.2 $152.3 $127.9 $92.6 $58.8 $46.4 $57.3 $100.3
Average Invested Capital3 (from above) $742.2 $818.4 $847.8 $872.2 $934.0 $960.3 $982.2 $1,005.7 $977.7
TTM Adjusted ROIC (cash tax) 19% 19% 18% 15% 10% 6% 5% 6% 10%
Adjusted NOPAT (from above) $140.3 $155.2 $152.3 $127.9 $92.6 $58.8 $46.4 $57.3 $100.3
Less: SBC included in Adjusted NOP4 $19.7 $19.3 $18.9 $21.0 $27.4 $28.8 $32.7 $32.0 $33.2
TTM Adjusted NOPAT excluding SBC $160.0 $174.5 $171.2 $148.9 $120.0 $87.6 $79.1 $89.4 $133.6
Average Invested Capital3 (from above) $742.2 $818.4 $847.8 $872.2 $934.0 $960.3 $982.2 $1,005.7 $977.7
TTM Adjusted ROIC excluding SBC
(cash tax) 22% 21% 20% 17% 13% 9% 8% 9% 14%
1Excess cash is cash and equivalents > 5% of last twelve month revenues; if negative, capped at zero.
2 and 3 Average invested capital represents a four quarter average of total debt, redeemable non-controlling interests and total shareholder equity,
less excess cash.
4Adjusted NOP already excludes SBC related to investment consideration and restructuring. Here we remove the remaining SBC, so that the
"Adjusted NOPAT excluding SBC" excludes all SBC.
Values may not sum to total due to rounding. Page 29 of 34
ADJUSTED EBITDA
(Quarterly, in millions)
Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18
GAAP Operating income (loss) $67.6 ($17.5) $16.0 ($27.8) $33.7 ($41.9) ($9.7) $46.6 $72.7
Depreciation and amortization $31.8 $34.6 $35.5 $35.5 $37.0 $44.5 $42.6 $42.4 $41.3
Waltham, MA lease depreciation adjustment ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0) ($1.0)
Share-based compensation expense $6.1 $5.9 $5.6 $11.6 $11.3 $6.5 $13.0 $6.8 $12.8
Proceeds from Insurance $1.6 $— $0.8 $0.7 $— $0.2 $— $— $0.4
Interest expense associated with Waltham, MA
lease ($2.0) ($2.0) ($2.0) ($2.0) ($2.0) ($1.9) ($1.9) ($1.9) ($1.9)
Earn-out related charges $3.4 $0.9 $1.8 $16.2 $7.0 $4.9 $12.2 $1.1 $1.3
Certain Impairments $3.0 $37.6 $1.2 $— $— $9.6 $— $— $—
Gain on purchase or sale of subsidiaries $— $— $— $— $— $— $— ($48.4) $—
Restructuring related charges $0.1 $— $— $— $1.1 $24.8 $0.8 $0.9 $11.5
Realized gains (losses) on currency derivatives
not included in operating income $3.3 $1.4 $0.8 $1.9 $6.8 $4.6 $3.2 ($0.6) ($3.5)
Adjusted EBITDA1,2 $113.9 $59.8 $58.9 $35.1 $93.9 $50.2 $59.2 $45.8 $133.5
ADJUSTED EBITDA
(TTM, in millions)
TTM
Q2FY16
TTM
Q3FY16
TTM
Q4FY16
TTM
Q1FY17
TTM
Q2FY17
TTM
Q3FY17
TTM
Q4FY17
TTM
Q1FY18
TTM
Q2FY18
GAAP Operating income (loss) $99.3 $77.4 $78.2 $38.3 $4.4 ($20.0) ($45.7) $28.7 $67.7
Depreciation and amortization $112.2 $124.4 $132.1 $137.4 $142.6 $152.6 $159.7 $166.5 $170.8
Waltham, MA lease depreciation adjustment ($1.4) ($2.4) ($3.4) ($4.1) ($4.1) ($4.1) ($4.1) ($4.1) ($4.1)
Share-based compensation expense $24.2 $23.5 $23.8 $29.2 $34.4 $35.0 $42.4 $37.6 $39.1
Proceeds from Insurance $3.1 $3.1 $4.0 $3.0 $1.5 $1.6 $0.8 $0.2 $0.5
Interest expense associated with Waltham, MA
lease ($2.4) ($4.3) ($6.3) ($7.9) ($7.9) ($7.8) ($7.7) ($7.7) ($7.6)
Earn-out related charges $11.6 $5.0 $6.4 $22.3 $25.9 $29.9 $40.4 $25.3 $19.5
Certain Impairments $3.0 $40.6 $41.8 $41.8 $38.8 $10.8 $9.6 $9.6 $9.6
Gain on purchase or sale of subsidiaries $— $— $— $— $— $— $— ($48.4) ($48.4)
Restructuring related charges $2.9 $2.9 $0.4 $0.1 $1.1 $25.9 $26.7 $27.6 $38.0
Realized gains (losses) on currency derivatives
not included in operating income $6.9 $6.5 $5.9 $7.4 $11.0 $14.2 $16.5 $14.0 $3.6
Adjusted EBITDA1,2 $259.5 $276.7 $282.8 $267.6 $247.6 $238.0 $238.4 $249.2 $288.7
In Q3 FY17 and Q4 FY17, the SBC expense listed here excludes the portion included in restructuring-related charges to avoid double counting.
1This letter uses the definition of adjusted EBITDA as outlined above and therefore does not include the pro-forma impact of acquisitions; however,
our debt covenants allow for the inclusion of pro-forma impacts to adjusted EBITDA.
2Adjusted EBITDA includes 100% of the results of our consolidated subsidiaries and therefore does not give effect to adjusted EBITDA attributable
to non-controlling interests. This is to most closely align to our debt covenant and cash flow reporting.
Values may not sum to total due to rounding. Page 30 of 34
REVENUE GROWTH RATES BY SEGMENT
(Quarterly)
Vistaprint Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18
Reported revenue growth 3% 8% 12% 7% 7% 11% 5% 11 % 13 %
Currency impact 5% 2% —% 1% 2% 1% 1% (1)% (4)%
Revenue growth in constant currency 8% 10% 12% 8% 9% 12% 6% 10 % 9 %
Upload and Print Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18
Reported revenue growth 112 % 201 % 94 % 72 % 63 % 22 % 10% 22 % 26 %
Currency impact 16 % 2 % (2)% 1 % 3 % 5 % 4% (6)% (10)%
Revenue growth in constant currency 128 % 203 % 92 % 73 % 66 % 27 % 14% 16 % 16 %
Impact of TTM acquisitions (97)% (178)% (71)% (61)% (55)% (14)% —% — % — %
Revenue growth in constant currency excl. TTM
acquisitions 31 % 25 % 21 % 12 % 11 % 13 % 14% 16 % 16 %
National Pen Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18
Reported revenue growth1 N/A N/A N/A N/A N/A 100 % 100 % 100 % 100 %
Impact of acquisition N/A N/A N/A N/A N/A (100)% (100)% (100)% (100)%
Year-over-year growth without the acquisition N/A N/A N/A N/A N/A — % — % — % — %
Impact of pro forma actual revenue growth N/A N/A N/A N/A N/A (8)% (5)% (5)% 33 %
Pro forma revenue growth in U.S. dollars N/A N/A N/A N/A N/A (8)% (5)% (5)% 33 %
Currency impact N/A N/A N/A N/A N/A 3 % 3 % (2)% (5)%
Pro forma revenue growth in constant currency N/A N/A N/A N/A N/A (5)% (2)% (7)% 28 %
Impact of discontinued operations N/A N/A N/A N/A N/A 3 % 3 % 4 % — %
Pro forma revenue growth in constant currency,
excluding discontinued operations N/A N/A N/A N/A N/A (2)% 1 % (3)% 28 %
All Other Businesses Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18
Reported revenue growth (4)% (7)% (8)% (17)% (7)% (8)% 6% 7 % (53)%
Currency impact 12 % 4 % — % (2)% — % (1)% 1% (2)% — %
Revenue growth in constant currency 8 % (3)% (8)% (19)% (7)% (9)% 7% 5 % (53)%
Impact of TTM acquisitions and divestitures — % — % — % — % — % — % —% 35 % 77 %
Revenue growth in constant currency excl. TTM
acquisitions & divestitures 8 % (3)% (8)% (19)% (7)% (9)% 7% 40 % 24 %
1National Pen's reported revenue growth was 100% since we did not own this business in the year-ago period.
Values may not sum to total due to rounding. Page 31 of 34
CONSTANT-CURRENCY REVENUE GROWTH RATES
(Quarterly)
Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18
Reported revenue growth 13 % 29 % 26 % 18 % 16 % 26 % 18 % 27 % 32 %
Currency impact 7 % 2 % — % 1 % 2 % 2 % 2 % (3)% (5)%
Revenue growth in constant currency 20 % 31 % 26 % 19 % 18 % 28 % 20 % 24 % 27 %
Impact of TTM acquisitions, divestitures & JVs (10)% (21)% (15)% (13)% (10)% (17)% (11)% (12)% (16)%
Revenue growth in constant currency ex. TTM
acquisitions, divestitures & JVs 10 % 10 % 11 % 6 % 8 % 11 % 9 % 12 % 11 %
Reported revenue growth rate ex. TTM
acquisitions, divestitures & JVs 3 % 8 % 11 % 6 % 6 % 9 % 7 % 15 % 16 %
Note: Q3FY17, Q4FY17 and Q1FY2018 total company revenue growth in constant currency excluding TTM acquisitions, divestitures and joint
ventures excludes the impact of currency and revenue from National Pen.
CONSTANT-CURRENCY REVENUE GROWTH RATES
(Annual)
Total Company FY14 FY15 FY16 FY17
Reported Revenue Growth 9 % 18 % 20 % 19 %
Currency Impact (1)% 5 % 4 % 2 %
Revenue Growth in Constant Currency 8 % 23 % 24 % 21 %
Impact of TTM Acquisitions & JVs (4)% (14)% (13)% (13)%
Revenue growth in constant currency ex. TTM
acquisitions & JVs 4 % 9 % 11 % 8 %
FY2017, by Reportable Segments Vistaprint Upload & Print National Pen All OtherBusinesses
Reported Revenue Growth 7% 36 % 100 % (7)%
Currency Impact 2% 3 % — % — %
Revenue Growth in Constant Currency 9% 39 % 100 % (7)%
Impact of TTM Acquisitions & JVs —% (26)% (100)% — %
Revenue growth in constant currency ex. TTM
acquisitions & JVs 9% 13 % — % (7)%
Values may not sum to total due to rounding. Page 32 of 34
TWO-YEAR STACKED CONSTANT-CURRENCY ORGANIC REVENUE GROWTH RATES
(Quarterly)
Q2FY15 Q3FY15 Q4FY15 Q1FY16
Reported revenue growth 19 % 19 % 13 % 13 %
Currency impact 4 % 7 % 9 % 8 %
Revenue growth in constant currency 23 % 26 % 22 % 21 %
Impact of TTM acquisitions, divestitures & JVs (16)% (15)% (9)% (10)%
Revenue growth in constant currency ex. TTM acquisitions, divestitures & JVs 7 % 11 % 13 % 11 %
Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18
Reported revenue growth 13 % 29 % 26 % 18 % 16 % 26 % 18 % 27 % 32 %
Currency impact 7 % 2 % — % 1 % 2 % 2 % 2 % (3)% (5)%
Revenue growth in constant currency 20 % 31 % 26 % 19 % 18 % 28 % 20 % 24 % 27 %
Impact of TTM acquisitions, divestitures & JVs (10)% (21)% (15)% (13)% (10)% (17)% (11)% (12)% (16)%
Revenue growth in constant currency ex. TTM
acquisitions, divestitures & JVs 10 % 10 % 11 % 6 % 8 % 11 % 9 % 12 % 11 %
2 Year Stacked Q2'15+Q2'16
Q3'15+
Q3'16
Q4'15+
Q4'16
Q1'16+
Q1'17
Q2'16+
Q2'17
Q3'16+
Q3'17
Q4'16+
Q4'17
Q1'17+
Q1'18
Q2'17+
Q2'18
Year 1 (Earlier of the 2 Stacked Periods) 7 % 11 % 13 % 11 % 10 % 10 % 11 % 6 % 8 %
Year 2 (More Recent of the 2 Stacked Periods) 10 % 10 % 11 % 6 % 8 % 11 % 9 % 12 % 11 %
Year 1 + Year 2 17 % 21 % 24 % 17 % 18 % 21 % 20 % 18 % 19 %
Note: Q3FY17, Q4FY17 and Q1FY18 total company revenue growth in constant currency excluding TTM acquisitions, divestitures and joint
ventures excludes the impact of currency and revenue from National Pen.
Values may not sum to total due to rounding. Page 33 of 34
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, Drukwerkdeal, Pixartprinting, Exaprint, WIRmachenDRUCK,
National Pen and many others. That portfolio serves multiple customer segments across many applications for
mass customization. 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.
CONTACT INFORMATION:
Investor Relations: Media Relations:
Jenna Berg Paul McKinlay
ir@cimpress.com mediarelations@cimpress.com
+1.781.652.6480
SAFE HARBOR STATEMENT:
This earnings commentary 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 businesses,
revenues, and cash flows; our investments in our business, including new products and services and shipping
pricing reductions, and the effects of the investments; the development and success of our mass customization
platform; the effects of and savings from our decentralization and Vistaprint restructuring; and the impact of U.S.
Tax Cuts and Jobs Act.
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 the
forward-looking statements in this document 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 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 mass
customization platform to drive the efficiencies and competitive advantage we expect; the failure of our
decentralization and restructuring to have the effects that we expect; loss of key personnel; our ability to accurately
forecast the savings and charges relating to restructuring activities and share-based compensation; unanticipated
changes in our markets, customers, or business; 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; uncertainty about the implementation and interpretation of the U.S. Tax Cuts and Jobs Act; changes in
the laws and regulations that affect our businesses; our failure to maintain compliance with the covenants in our
senior secured revolving credit facility and senior unsecured notes or to pay our debts when due; competitive
pressures; general economic conditions; and other factors described in our Form 10-Q for the fiscal quarter ended
September 30, 2017 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.
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