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): August 1, 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 August 1, 2018, Cimpress N.V. posted on its web site its Q4 & Fiscal Year 2018 Quarterly Earnings Document announcing and discussing its financial results for the fourth quarter and fiscal year ended June 30, 2018. The full text of the earnings document 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 | |
Q4 & Fiscal Year 2018 Quarterly Earnings Document dated August 1, 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.
August 1, 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 AND OUR STRATEGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 LETTER FROM CEO ROBERT KEANE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 SUMMARY CONSOLIDATED RESULTS: 3-YEAR TREND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 SUMMARY CONSOLIDATED RESULTS: QUARTERLY TREND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 INCOME STATEMENT HIGHLIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 CASH FLOW AND RETURN ON INVESTED CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 ADJUSTED EBITDA, DEBT AND SHARE REPURCHASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 SEGMENT RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 VISTAPRINT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 UPLOAD AND PRINT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 NATIONAL PEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 ALL OTHER BUSINESSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 CENTRAL AND CORPORATE COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 CURRENCY IMPACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 HOUSEKEEPING ITEMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 BALANCE SHEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 INCOME STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 CASH FLOW STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 ABOUT NON-GAAP MEASURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 NON-GAAP RECONCILIATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 ABOUT CIMPRESS, SAFE HARBOR STATEMENT AND CONTACT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . 40 Page 2 of 40
CIMPRESS' UPPERMOST FINANCIAL OBJECTIVE Our uppermost financial objective is to maximize our 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. We endeavor to make all financial decisions in service of this priority. As such, we often make decisions 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 operating income, net income, EPS, Adjusted Net Operating Profit (Adjusted NOP), Adjusted EBITDA, and cash flow. IVPS is inherently long term in nature. Thus an explicit outcome of this is that we accept fluctuations in our financial metrics as we make investments that we believe will deliver attractive long-term returns on investment. 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. Previously, in addition to our uppermost financial objective, we also described an uppermost strategic objective of being the world leader in mass customization. Mass customization remains a fundamental element of the business model by which Cimpress delivers better value to customers than traditional competitors. However, we have dropped "world leader in mass customization" from our strategic articulation in recognition of the fact that mass customization is not a market per se, but rather a competitive strategy which can be applied across many markets. Stan Davis, in his 1987 strategy manifesto "Future Perfect" coined the term mass customization to describe "generating an infinite variety of goods and services, uniquely tailored to customers". In 2001, Tseng & Jiao defined mass customization as "producing goods and services to meet individual customers’ needs with near mass production efficiency". Page 3 of 40
LETTER FROM ROBERT Dear Investor, The following are a few key highlights of our financial results for the fourth quarter and full FY2018: Fourth Quarter Fiscal Year 2018: • Consolidated revenue grew 12% year over year, and organic constant-currency revenue grew 11%, compared to 18% and 9%, respectively, in Q4 FY2017. • Operating income and Adjusted NOP both increased significantly year over year primarily as a result of revenue growth, net restructuring savings and operating efficiencies. • Cash flow from operations was $48 million and free cash flow was $23 million, both up significantly year over year. • Our leverage ratio decreased slightly from 2.79 times trailing-twelve-month EBITDA at the end of March, 2018 to 2.75 at the end of June, 2018, as our EBITDA expanded sequentially but our debt increased in conjunction with the new senior notes offering. Full Fiscal Year 2018: • Revenue grew 21% year over year, and organic constant-currency revenue grew 11%, compared to 19% and 8%, respectively, in FY2017. • Operating income and Adjusted NOP both increased significantly year over year primarily as a result of revenue growth, net restructuring savings, operating efficiencies and full-year ownership of National Pen. • Cash flow from operations was $192 million and free cash flow was $139 million, both up significantly year over year. Our cash flow from operations was reduced this year by earn-out payments of $49.2 million made in the third quarter. The earn-out payments are excluded from our free cash flow. • We repurchased 895,377 Cimpress shares for $94.7 million inclusive of transaction costs, at an average price per share of $105.78. During FY2018, we operationalized the strategic and organizational changes we announced 18 months ago to help us "stay small as we get big". These changes placed most of our teams and resources under the direct managerial control of the leaders of each of our businesses. This greatly increased their ability to make progress on (and to thus be held accountable for) key success drivers such as customer satisfaction, the attraction and motivation of talented team members, the delivery of attractive returns on investment, and the operation of our businesses in a socially responsible manner. The collective changes also led to the removal of about $75 million of annualized cash costs from our business, which frees up significant capital for future value creation. Today we have also published my annual letter to investors which I strongly encourage you to read since it includes important information that is not part of this earnings document. The letter covers our strategy, capital allocation methodology, key factors which we find useful in estimating the intrinsic value per share of Cimpress, revenue growth expectations by reportable segment, an assessment of our successes and failures in past M&A, our FY2018 investments, and our investment plans for FY2019. A significant portion of our upcoming investor day on August 8, 2018 will be spent reviewing these investments as well. Sincerely, Robert S. Keane Founder & CEO Please see non-GAAP reconciliations at the end of this document. Page 4 of 40
SUMMARY CONSOLIDATED RESULTS: THREE-YEAR TREND - Q4 FY2018 $ in thousands, except percentages REVENUE BY REPORTABLE SEGMENT, TOTAL REVENUE AND INCOME (LOSS) FROM OPERATIONS: Q4 Q4 Q4 FY 2016 FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 Vistaprint $ 306,125 $ 320,815 $ 357,129 $ 1,220,751 $1,310,975 $ 1,462,686 Upload and Print 146,467 161,792 193,325 432,638 588,613 730,010 National Pen N/A 53,884 65,906 N/A 112,712 333,266 All Other Businesses 27,729 29,385 19,670 138,244 128,795 87,583 Inter-segment eliminations (1,116) (1,620) (4,896) (3,589) (5,690) (21,004) Total revenue $ 479,205 $ 564,256 $ 631,134 $ 1,788,044 $2,135,405 $ 2,592,541 Reported revenue growth 26% 18 % 12% 20% 19 % 21% Organic constant currency revenue growth 11% 9 % 11% 11% 8 % 11% Income (loss) from operations $ 16,030 $ (9,656) $ 21,851 $ 78,193 $ (45,702) $ 157,800 Income (loss) from operations margin 3.3% (1.7)% 3.5% 4.4% (2.1)% 6.1% PROFIT (LOSS) BY REPORTABLE SEGMENT ("SEGMENT PROFIT") AND ADJUSTED NET OPERATING PROFIT (NOP): Q4 Q4 Q4 FY 2016 FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 Vistaprint $ 48,157 $ 37,772 $ 53,874 $ 214,947 $ 167,687 $ 241,479 Upload and Print 17,339 19,957 24,705 58,207 63,189 79,310 National Pen N/A 1,001 2,980 N/A (2,225) 22,165 All Other Businesses (10,869) (9,361) (9,161) (9,328) (31,307) (34,620) Total segment profit $ 54,627 $ 49,369 $ 72,398 $ 263,826 $ 197,344 $ 308,334 Central and corporate costs, excluding unallocated ) ) ) ) ) ) share-based compensation (25,901 (26,080 (26,802 (97,672 (104,747 (106,202 Unallocated share-based compensation — (4,573) (7,040) — (13,346) (25,198) Include: Realized (losses) gains on certain currency 837 3,156 (2,487) 5,863 16,474 (11,445) derivatives not included in operating income Adjusted net operating profit (Adjusted NOP) $ 29,563 $ 21,872 $ 36,069 $ 172,017 $ 95,725 $ 165,489 Adjusted NOP margin 6.2% 3.9 % 5.7% 9.6% 4.5 % 6.4% Adjusted NOP year-over-year growth 8% (26)% 65% 15% (44)% 73% CASH FLOW AND OTHER METRICS: Q4 Q4 Q4 FY 2016 FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 Net cash provided by (used in) operating activities $ 52,138 $ 33,092 $ 47,699 $ 247,358 $ 156,736 $ 192,332 Net cash provided by (used in) investing activities (26,219) (24,283) (24,573) (265,538) (301,789) (10,594) Net cash provided by (used in) financing activities (23,650) (18,538) (25,593) (5,338) 104,578 (177,757) Free cash flow 34,794 7,135 22,839 152,360 45,075 139,488 Cash interest related to borrowing 12,780 15,941 20,916 31,336 37,548 49,125 Note: During the first quarter of FY2018, we began presenting inter-segment wholesale fulfillment activity as revenue for the fulfilling business 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 FY2018. Please see non-GAAP reconciliations at the end of this document. Page 5 of 40
COMPONENTS OF FREE CASH FLOW: Q4 Q4 Q4 FY 2016 FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 Adjusted EBITDA $ 58,855 $ 59,219 $ 77,636 $ 282,767 $ 238,398 $ 326,141 Cash restructuring payments — (7,499) (2,236) (2,608) (15,022) (17,342) Cash taxes (8,661) (13,375) (14,390) (19,750) (49,342) (32,278) Other changes in net working capital (ex. earn-out payments) and other reconciling items 23,337 10,688 7,605 26,898 20,250 14,177 Purchases of property, plant and equipment (17,794) (17,241) (13,489) (80,435) (74,157) (60,930) Purchases of intangible assets not related to acquisitions (23) (87) — (476) (197) (308) Capitalization of software and website development ) ) ) ) ) ) costs (8,140 (8,629 (11,371 (26,324 (37,307 (40,847 Proceeds from insurance related to investing activities — — — 3,624 — — Free cash flow before cash interest related to borrowing 47,574 23,076 43,755 183,696 82,623 188,613 Cash interest related to borrowing (12,780) (15,941) (20,916) (31,336) (37,548) (49,125) Free cash flow 34,794 7,135 22,839 152,360 45,075 139,488 Q4 FY 2018 COMPONENTS OF FREE CASH FLOW (USD MILLIONS) $78 $8 ($2) $— ($14) ($13) $44 ($11) $23 ($21) Cash taxes Cash interest Free cash flow Adjusted EBITDA Capital expenditures Restructuring payments Capitalization of software Other NWC changes & other items Purchases of intangible assets Free cash flow before interest related to borrowing FY 2018 COMPONENTS OF FREE CASH FLOW (USD MILLIONS) $326 $14 ($17) $— ($32) $189 ($61) ($41) $139 ($49) Cash taxes Cash interest Free cash flow Adjusted EBITDA Capital expenditures Restructuring payments Capitalization of software Other NWC changes & other items Purchases of intangible assets Free cash flow before interest related to borrowing Please see non-GAAP reconciliations at the end of this document. Page 6 of 40
SUMMARY CONSOLIDATED RESULTS: QUARTERLY TREND $ in millions, except percentages and share data Revenue & Reported Revenue Growth (1) Organic Constant-Currency Revenue Growth $762 $636 $631 $577 $551 $564 $563 $479 $444 32% 26% 26% 27% 18% 18% 16% 16% 11% 11% 12% 11% 11% 11% 9% 12% 8% 6% Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 (1) Reported revenue growth rates are impacted by the timing of acquisitions. Cash Flow from Operations (2) Free Cash Flow & Cash Interest Related to Borrowing FCF Interest $160 $105 $52 $48 $33 $16 $10 $9 $(32) Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 (2) Q3FY18 cash flow from operations includes the payment Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 of contingent earn-out liabilities of $49.2 million related to the WIRmachenDRUCK and Easyflyer acquisitions. FCF $35 ($18) $77 ($21) $7 ($13) $133 ($3) $23 Interest $13 $3 $13 $5 $16 $7 $16 $6 $21 Please see non-GAAP reconciliations at the end of this document. Page 7 of 40
SUMMARY CONSOLIDATED RESULTS: QUARTERLY TREND (CONT.) $ in millions, except percentages and share data GAAP Operating Income (Loss) Net Income (Loss) Attributable to Cimpress & Adjusted Net Operating Profit GAAP OI (Loss) Adjusted NOP $94 $35 $30 $73 $23 $17 $57 $47 $34 $36 $30 $22 $25 $22 ($2) $16 $14 $17 $10 ($7) $3 ($10) ($29) ($35) ($28) ($43) ($42) Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 Debt (1) Weighted Average Shares Outstanding (Millions) (2) Long-Term Short-Term Basic Diluted $876 $891 $877 $821 $813 $827 33.0 32.6 32.3 32.3 31.6 31.1 31.2 30.8 $701 30.7 $679 $682 31.6 31.4 31.3 31.1 31.2 31.2 31.0 30.7 30.8 Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 (1) Debt net of issuance costs and discounts. (2) Basic and diluted shares are the same in certain periods where we reported a GAAP net loss. Please see non-GAAP reconciliations at the end of this document. Page 8 of 40
INCOME STATEMENT HIGHLIGHTS Our reported revenue growth was 12% in the fourth 2-Year Stacked Reported Revenue Growth quarter, and 21% for FY2018. Consolidated organic constant-currency growth was 11% in both Q4 and Earlier period Later period FY2018. Reported revenue growth slowed in Q4 compared to prior-year growth due to the timing of acquisitions, but 55% 48% accelerated for FY2018 compared to FY2017 primarily due 44% 45% 42% 39% 26% 31% 29% 30% to currency movements. On an organic constant-currency 18% 27% 32% 16% 26% 18% 16% 12% basis, we saw an acceleration in Q4 and FY2018 revenue 29% 26% 26% growth; in Q4 this was partly due to the timing of the Easter 13% 13% 13% 18% 16% 18% holiday and the Q4 and FY2018 growth was helped by the addition of National Pen, which grew rapidly this year. Q4'15+Q4'16Q1'16+Q1'17Q2'16+Q2'17Q3'16+Q3'17Q4'16+Q4'17Q1'17+Q1'18Q2'17+Q2'18Q3'17+Q3'18Q4'17+Q4'18 Q4 FY2018 GAAP operating income increased $31.5 million year over year. In addition to the profits driven by revenue growth, the following year-over-year items positively influenced this result: 2-Year Stacked Organic Constant-Currency • About $11 million of combined year-over-year operating Revenue Growth expense savings related to the decentralization announced on January 25, 2017 and the Vistaprint Earlier period Later period restructuring implemented in FY2018. These savings were realized across technology and development, 24% 21% 20% 22% 20% marketing and selling, and general and administrative 17% 18% 18% 19% 11% 11% 9% 11% costs. Nearly all of the savings benefited Vistaprint's 6% 8% 12% 11% 11% 13% segment profit, with the remaining benefit in our central 11% 10% 10% 11% 6% 8% 11% 9% and corporate costs. • An $11.9 million year-over-year decrease in acquisition- related charges primarily due to the lack of earn-out Q4'15+Q4'16Q1'16+Q1'17Q2'16+Q2'17Q3'16+Q3'17Q4'16+Q4'17Q1'17+Q1'18Q2'17+Q2'18Q3'17+Q3'18Q4'17+Q4'18 expense in Q4 FY2018 compared to Q4 FY2017. • Organic investments were lower than last year, as anticipated and described in last year's annual letter to investors on July 26, 2017. GAAP Operating Income (Loss) & Margin (%) • Favorable year-over-year currency fluctuations that were offset below the line by year-over-year changes in $73 realized gains and losses from certain hedging contracts $47 in other (expense) income, net. $34 $16 10% $17 $22 8% 6% (2)% 3% 3% 3% FY2018 GAAP operating income increased $203.5 (6)% (8)% million year over year. In addition to profits driven by ($10) ($28) revenue growth, the following year-over-year items ($42) positively influenced this result: • A $24.4 million increase in National Pen segment profit Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 due to the timing of this acquisition during FY2017. • An $11.5 million decrease in restructuring charges compared to the year-ago period. • About $55 million of combined year-over-year operating Adjusted Net Operating Profit & Margin (%) expense savings related to the decentralization announced on January 25, 2017 and the Vistaprint $94 restructuring implemented last quarter. These savings were realized across technology and development, $57 marketing and selling, and general and administrative $36 costs. About 75% of the savings benefited Vistaprint's $30 12% 10% $22 $25 segment profit, with the bulk of the remaining benefit in 6% $14 $10 6% $3 our central and corporate costs. 3% 4% 4% 1% 2% • A $47.9 million gain on the sale of subsidiaries, primarily related to the August, 2017 sale of Albumprinter. Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Please see non-GAAP reconciliations at the end of this document. Page 9 of 40
• A $46.6 million year-over-year decrease in acquisition- related charges. Though amortization of acquired intangible assets increased slightly year over year, there GAAP Operating Income (Loss) & were no impairment charges in the current period, and Adjusted Net Operating Profit earn-out and share-based compensation charges related (TTM) to investment consideration were significantly lower in FY2018 compared to the prior year. TTM OI (Loss) TTM Adjusted NOP • $49 million lower net spend in organic investments in $172 $165 FY2018 compared to FY2017. Approximately $10 million $151 $151 $140 of this decrease was driven by restructuring savings $122 $158 $103 $103 where the changes either reduced the scope of the $96 $126 investments or made it more efficient to deliver such $78 investments. $68 • Favorable year-over-year currency fluctuations that were $38 $29 offset below the line by year-over-year changes in $4 ($20) realized gains and losses from certain hedging contracts ($46) in other (expense) income, net. These positive FY2018 year-over-year impacts were Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 partially offset by a $2.9 million year-over-year impact of the Albumprinter divestiture. Adjusted NOP increased significantly year over year in Gross Profit & Gross Margin both Q4 and FY2018, primarily due to the same reasons as GAAP operating income. However, the increase in Gross Profit Gross Margin % Adjusted NOP excludes the impact of restructuring charges, acquisition-related charges, and gains on the sale $402 of a subsidiary, and includes realized gains or losses on $317 $315 $300 $282 $285 our currency hedges. The net year-over-year impact of $257 $280 $231 currency on Adjusted NOP was negative in both Q4 and FY2018. 53.7% 52.0% 52.1% 51.2% 50.5% 49.6% 52.7% 49.8% 49.8% GAAP net income (loss) per diluted share for the fourth quarter was $(0.24), versus ($1.11) in the same quarter a Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 year ago. For FY2018, GAAP net income (loss) per diluted share was $1.36 versus a net loss of $(2.29) in the year- ago period. In addition to the factors described above, GAAP net income for Q4 and FY2018 was influenced by Contribution Profit & Contribution Margin non-operational, non-cash year-over-year currency impacts in other (expense) income, net, year-over-year changes in our tax provision, as well as a $17.4 million loss for the Contribution Profit Contribution Margin % early extinguishment of our original senior notes which we redeemed in June 2018. $261 $206 $197 $186 $198 $173 $173 $175 Gross profit (revenue minus the cost of revenue) grew $144 year over year by $29.4 million and $214.3 million in the fourth quarter and FY2018, respectively. 36.1% 34.1% 34.3% 32.5% 32.9% 32.6% 31.4% 31.0% 31.2% Gross margin (revenue minus the cost of revenue expressed as a percent of revenue) in the fourth quarter was 49.8%, down slightly from 50.5% in the same quarter a Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 year ago. For FY2018, gross margin was 50.6% versus 51.4% in the year-ago period. For both the quarter and the year, the decline in gross margin was primarily due to the divestiture of Albumprinter in our All Other Businesses segment. Please see non-GAAP reconciliations at the end of this document. Page 10 of 40
Contribution profit (revenue minus the cost of revenue, the cost of advertising and payment processing) grew year over year by $20.0 million and $140.0 million in Q4 and FY2018, respectively. This was driven primarily by revenue growth but also materially benefited from currency fluctuations. Contribution margin (revenue minus the cost of revenue, the cost of advertising and payment processing, expressed as a percent of revenue) in the fourth quarter was 32.6%, down slightly from 32.9% in the same quarter a year ago. For FY2018 contribution margin was 32.4%, down slightly from 32.8% in the year-ago period. Advertising as a percent of revenue decreased year over year for the fourth quarter from 16.1% to 15.7%, which nearly offset the decrease in gross margin as described above. For FY2018, advertising as a percent of revenue decreased year over year from 17.0% to 16.7%. Lower Vistaprint advertising spend as a percent of revenue, our divestiture of Albumprinter, and currency movements accounted for most of this change in advertising as a percent of revenue. Please see non-GAAP reconciliations at the end of this document. Page 11 of 40
CASH FLOW & RETURN ON INVESTED CAPITAL For the fourth quarter of FY2018, we generated $47.7 Free Cash Flow & million of cash from operations, compared with $33.1 Cash Interest Related to Borrowing million in the fourth quarter of FY2017, with increased (Quarterly) profitability due to net restructuring savings and revenue growth, partially offset by increased cash interest FCF Interest payments. For FY2018, we generated $192.3 million in cash from operations, compared with $156.7 million in the year-ago period. For the full year, our cash flow increased due to net savings from restructuring and increased profits from revenue growth, and lower cash taxes, partially offset by the payment of contingent earn-out liabilities of $49.2 million related to the WIRmachenDRUCK and Easyflyer acquisitions included within operating cash flow earlier this year, as well as higher cash interest payments. The chart "Certain Cash Payments Impacting Cash Flow from Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 Operations" on the next page illustrates the impact of interest expense, restructuring payments and earn-outs on our operating cash flow. Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Free cash flow was $22.8 million in the fourth quarter of FCF $35 ($18) $77 ($21) $7 ($13) $133 ($3) $23 FY2018 compared to $7.1 million in the same period a year Interest $13 $3 $13 $5 $16 $7 $16 $6 $21 ago. For FY2018, free cash flow was $139.5 million, compared to $45.1 million in the prior fiscal year. For both the quarter and the year, these trends were impacted by Free Cash Flow & similar factors as our operating cash flow trends; the Cash Interest Related to Borrowing exception is that we exclude the full-year earn-out (TTM) payments from free cash flow because we consider them to be part of the purchase price for M&A, not part of FCF Interest operating activities. The combination of capital expenditures and capitalized software and development costs decreased slightly in the fourth quarter, and more significantly for the full year compared to the related year- $31 $49 $32 $44 ago periods. $32 $43 $34 $152 $134 $38 $41 $139 $102 $106 $124 Internally, our most important quarterly and annual $73 performance metric is unlevered free cash flow, which we $45 $50 define as free cash flow plus cash interest expense related to borrowing. The top two charts at the right illustrate these Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 components on a quarterly and trailing-twelve-month basis. Trailing-twelve-month cash from operations, free cash flow and unlevered free cash flow improved year over year driven by realized net restructuring savings, revenue Adjusted Return on Invested Capital growth including a full year of National Pen's results, (TTM) decreased net investment spend, and lower cash taxes. TTM Adjusted ROIC The GAAP operating measures that we use as a basis to calculate Return on Invested Capital (ROIC) are total TTM Adjusted ROIC ex SBC debt, total shareholders' equity, and operating income. The year-over-year trend in these GAAP measures was 20% 18% favorable to ROIC, as operating income increased 17% 16% 14% significantly and debt decreased. On a trailing-twelve- 18% 13% 15% 9% 8% 9% 14% month basis, Adjusted ROIC as of June 30, 2018 improved 12% significantly compared to the prior-year Q4 TTM period. As 10% 10% 6% 6% of Q2 FY2018, Adjusted ROIC reflected a full year of 5% National Pen operating results. Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 Please see non-GAAP reconciliations at the end of this document. Page 12 of 40
Cash Flow from Operations Cash Flow from Operations (Quarterly) (TTM) $247 $230 $160 $219 $200 $192 $105 $176 $178 $157 $164 $52 $48 $33 $10 $9 $16 $(32) Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 Certain Cash Payments Impacting Certain Cash Payments Impacting Cash Flow from Operations* Cash Flow from Operations* (Quarterly) (TTM) Cash Restructuring TTM Cash Restructuring Cash Interest Related to Borrowing TTM Cash Interest Related to Borrowing Cash Earn-Out Payments TTM Cash Earn-Out Payments $59 $116 $115 $49 $49 $69 $49 $60 $23 $23 $23 $51 $53 $22 $43 $41 $41 $9 $43 $44 $9 $9 $41 $49 $13 $13 $16 $11 $16 $9 $9 $38 $5 $21 $34 $13 $3 $7 $6 $31 $32 $32 $8 $7 $7 $15 $19 $26 $23 $17 $4 $4 $2 $3 $8 Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 Capital Expenditures & Capitalization of Software Capital Expenditures & Capitalization of Software & Website Development Costs & Website Development Costs (Quarterly) (TTM) Capital Expenditures Capitalized Software Capital Expenditures Capitalized Software $31 $113 $113 $29 $112 $111 $28 $106 $105 $106 $103 $102 $26 $27 $26 $27 $10 $24 $9 $26 $37 $37 $38 $36 $8 $30 $33 $8 $11 $9 $9 $20 $38 $41 $11 $11 $21 $20 $80 $75 $73 $75 $74 $75 $77 $18 $19 $17 $17 $18 $65 $61 $13 $9 Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4 FY18 Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4 FY18 * Cash restructuring and cash interest related to borrowing impact both cash flow from operations and free cash flow. Cash earn-out payments impact cash flow from operations but are excluded from free cash flow. Please see non-GAAP reconciliations at the end of this document. Page 13 of 40
ADJUSTED EBITDA, DEBT & SHARE REPURCHASES We do not manage our business performance to Adjusted Adjusted EBITDA EBITDA; however it is a significant component of unlevered (Quarterly) free cash flow which is the financial metric to which we $134 manage the business on an annual basis. $94 $69 $78 $59 $50 $59 $46 Adjusted EBITDA is operating income plus depreciation $35 and amortization (including acquisition-related amortization of intangible assets), goodwill and other impairment Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 charges, restructuring charges, gains on the purchase or sale of subsidiaries, share-based compensation, and several other small items described in the non-GAAP reconciliation section of this letter. Adjusted EBITDA for Q4 Adjusted EBITDA FY2018 was $77.6 million, up 31% from Q4 FY2017 and (TTM) our TTM Adjusted EBITDA was $326.1 million, up 37% $326 from the year-ago TTM period. Though Adjusted EBITDA $283 $289 $308 $268 $248 $238 $238 $249 excludes several costs and benefits in our operating income, Q4 and full year Adjusted EBITDA moved in line with the trends in operating income discussed on pages 9 and 10 of this document. Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 The calculation for our debt leverage ratio (either total or senior secured debt to trailing-twelve-month EBITDA) uses definitions of both debt and EBITDA that differ from the corresponding figures reported in this document. For Total Leverage Ratio* example, the EBITDA defined in our debt covenants gives pro forma effect for acquired and divested businesses that 3.43 3.59 3.45 3.39 closed within the trailing-twelve-month period ended June 2.50 2.66 2.58 2.79 2.75 30, 2018, as well as other small differences. Our total leverage ratio was 2.75 as of June 30, 2018, and our senior secured leverage ratio was 1.47. While our TTM Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 Adjusted EBITDA did increase sequentially in Q4 FY2018, our debt also increased due to the debt issuance detailed below. * Total leverage ratio as calculated in accordance with our debt covenants In June 2018 we issued $400 million of senior unsecured notes with a 7.0% interest rate due 2026. In addition, we Amount Available for Borrowing amended our credit agreement to increase our revolver $568 $490 from $745 million to $839 million while extending the $427 $419 $439 maturity date of all loans under this agreement to June of $221 $262 2023. Our credit facility provides ample liquidity for the $201 $212 company, but we have various covenants that prevent us from borrowing up to the maximum size of the credit facility as of June 30, 2018. Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 We did not repurchase any Cimpress shares during the fourth quarter. For FY2018, we repurchased 895,377 Cimpress shares for $94.7 million inclusive of transaction Interest Expense Related to Borrowing* costs, at an average price per share of $105.78. We (Income Statement View) consider share repurchases to be an important category of capital deployment. We make our share repurchase $13 $10 $11 $11 $11 $11 decisions by comparing the potential returns of share $8 $8 $8 repurchases to the potential returns on other uses of that capital. Our choice to repurchase is also guided by our debt covenants and obligations under our equity compensation plans, as well as legal and tax Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 considerations. * Interest expense related to borrowing excludes interest expense associated with our Waltham, Massachusetts lease Please see non-GAAP reconciliations at the end of this document. Page 14 of 40
SEGMENT RESULTS VISTAPRINT Revenue ($M) & Reported Revenue Growth Vistaprint's Q4 revenue growth accelerated compared to Quarterly Q3 FY2018 and Q4 FY2017, due partly to the timing of the Easter holiday. We saw continued growth in repeat $429 $381 $358 $357 $323 $321 $319 customer bookings for the fourth quarter of FY2018; $306 $287 however, new customer bookings decreased in constant currencies. For FY2018, Vistaprint revenue growth was 12% 11% 11% 13% 11% 11% 7% 7% 5% 12% on a reported basis and 9% in constant currencies. Segment profit in Q4 FY2018 increased by $16.1 million Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 year over year, and segment profit margin was up 330 basis points compared to the year-ago period. For the full FY2018, segment profit was $241.5 million, compared to $167.7 million in the year-ago period. A combination of the Organic Constant Currency Revenue Growth following factors drove this improvement: Quarterly • Revenue growth • Approximately $11 million and $42 million of year- over-year operating expense savings in Q4 FY2018 12% 12% and full year FY2018, respectively, from our January 9% 10% 9% 9% 8% 7% 2017 and November 2017 restructuring initiatives 6% • Lower investment in FY2018 compared to FY2017. For the full year, Vistaprint's organic net investment spend decreased by about $37 million. Approximately Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 $8 million of this was driven by restructuring savings where the changes either reduced the scope of the investments or made it more efficient to deliver such investments. Revenue ($M) & Revenue Growth • Favorable currency movements Annual Our full-year profit also benefited from the non-recurrence Reported Revenue ($M) of approximately $10 million of production inefficiencies that occurred in 2017. Reported Revenue Growth As a reminder, we do not allocate realized gains or losses Organic Constant Currency Revenue Growth from our hedging contracts to our segment operating $1,463 $1,311 $1,221 results. $1,150 Vistaprint's revenue and profit in FY2018 was influenced by positive and negative impacts of our strategic initiatives. As we have described many times in the past, our businesses are encouraged to regularly make trade-offs in service of improving our customers' experience and maximizing our long-term returns on the capital invested in that business, FY 2015 FY 2016 FY 2017 FY 2018 which may have near-term negative revenue and/or profit or cash flow impacts. Some examples of these efforts from FY2018 help provide context for our revenue and segment FY 2015 FY 2016 FY 2017 FY 2018 profit performance throughout the year: Reported Revenue Growth 4% 6% 7% 12% • Vistaprint has continued the introduction of new Organic Constant-Currency products, which has benefited our revenue growth but Revenue Growth 9% 10% 9% 9% has a limited benefit to incremental profits as we are still in the middle of our efforts to scale and optimize these products through pricing and operating levers. Please see non-GAAP reconciliations at the end of this document. Page 15 of 40
• The work done this year to integrate previously separate manufacturing, product and technology teams and to streamline Vistaprint's organizational 2-Year Stacked Organic Constant-Currency structure required operational focus and hard work Revenue Growth from many teams across the business in ways that likely created a drag on our revenue growth, but Earlier period Later period delivered material financial savings as discussed above. 23% 22% • Vistaprint completed the migration to a new, more 19% 17% 18% 18% 18% 12% 16% 15% flexible, modularized e-commerce technology stack in 12% 6% 7% 9% 8% 9% 10% FY2018, which should drive future benefits to the 9% business, but initially hurt conversion rates. 11% 12% 12% 8% 8% 10% 8% 9% • Vistaprint has also continued to experiment with new 6% marketing approaches. This experimentation includes concepts like establishing a control for future comparison testing, which we create by "going dark" Q4'15+Q4'16Q1'16+Q1'17Q2'16+Q2'17Q3'16+Q3'17Q4'16+Q4'17Q1'17+Q1'18Q2'17+Q2'18Q3'17+Q3'18Q4'17+Q4'18 in certain markets and media channels for a period of time, and thus has a clear short-term negative impact on our revenue. Segment Profit ($M) & Segment Profit Margin Overall, we are encouraged by the work we have done to Quarterly continue to improve the customer experience, our product and service offering, and the infrastructure that supports $99 this business. We have made great progress and we have $67 23% $58 $48 $54 much more work to do across multiple areas to satisfy 18% $38 $38 16% $25 $31 16% 15% ourselves that we have harvested the returns on prior 12% 12% investments in this business. 9% 10% While these investments in new products and services, Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 streamlined operations, new technologies and new ways of marketing put pressure on near-term revenue growth and/ or profitability, we expect they will continue to help us attract higher-value customers and improve customer Segment Profit ($M) & Segment Profit Margin loyalty and, over time, deliver attractive returns on our Annual investment. $241 $215 $193 $168 17% 18% 17% 13% FY 2015 FY 2016 FY 2017 FY 2018 Vistaprint Advertising ($M) & as % of Revenue $89 $80 $73 $73 $77 $77 $65 $69 $69 24% 21% 21% 23% 21% 23% 21% 22% 22% Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Please see non-GAAP reconciliations at the end of this document. Page 16 of 40
UPLOAD AND PRINT BUSINESSES Organic constant-currency revenue growth in Q4 FY2018 Revenue ($M) & Reported Revenue Growth decelerated versus the year-ago period despite a positive Quarterly year-over-year impact from the timing of the Easter holiday. $193 $184 $193 Organic constant-currency revenue growth for FY2018 was $152 $162 $160 $146 $132 $142 consistent with the year-ago period. 94% 72% 63% 26% 29% The Q4 revenue deceleration was in part related to the fact 22% 10% 22% 19% that some of our businesses have recently experienced increased price-focused competition in certain markets and Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 for certain products. We believe that we are well positioned for long-term success in the European market and that our geographic diversity, profitability and scale would enable us to reduce prices in the near term, if and when appropriate, Organic Constant Currency Revenue Growth to address any price-focused competition. Any such price Quarterly reductions could create fluctuations in growth and, sometimes, profit; however we believe we remain poised to outperform and outlast these competitors in the long term. 21% 16% 16% 13% 14% Segment profit in Q4 FY2018 was up year over year by 12% 11% 12% 10% $4.7 million, and up by $16.1 million for FY2018. This was primarily due to growth in gross profit dollars and operating expense efficiencies in several businesses as well as Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 currency benefits, partially offset by increased investments in technology. Segment profit margin increased 50 basis points year over year during the quarter, and 20 basis points for the full fiscal year. Revenue ($M) & Revenue Growth We continue to see evidence that the January 2017 Annual decentralization is driving the desired impacts within our Upload and Print businesses. These include tighter cross- Reported Revenue ($M) functional connections of marketing, technology, Reported Revenue Growth manufacturing and service teams which in-turn allows the businesses to be more agile and faster. We also continue Organic Constant Currency Revenue Growth to see opportunities to shift production of certain products $730 to lower-cost and/or higher-quality options through the mass customization platform. The current benefits remain $589 relatively small, but we expect them to grow through $433 FY2019 and beyond. Through increased scale, technology and other advantages that our businesses can leverage over time, we can further improve the value proposition of $197 each business in increasingly competitive markets. BUSINESSES IN THIS REPORTABLE SEGMENT FY 2015 FY 2016 FY 2017 FY 2018 FY 2015 FY 2016 FY 2017 FY 2018 Reported Revenue Growth N/A 120% 36% 24% Organic Constant-Currency Revenue Growth N/A 27% 13% 13% Note: We exclude FY2015 growth rates in this table because there was not a full-year comparison in FY2014. Please see non-GAAP reconciliations at the end of this document. Page 17 of 40
2-Year Stacked Organic Constant-Currency Revenue Growth Earlier period Later period 55% 43% 21% 42% 38% 35% 12% 11% 13% 28% 27% 14% 25% 24% 16% 16% 12% 10% 34% 31% 31% 25% 21% 12% 11% 13% 14% Q4'15+Q4'16Q1'16+Q1'17Q2'16+Q2'17Q3'16+Q3'17Q4'16+Q4'17Q1'17+Q1'18Q2'17+Q2'18Q3'17+Q3'18Q4'17+Q4'18 Segment Profit ($M) & Segment Profit Margin Quarterly $25 $22 $20 $17 $17 $17 $15 $13 $13 12% 12% 12% 13% 10% 11% 9% 9% 9% Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Segment Profit ($M) & Segment Profit Margin Annual $79 $63 $58 $24 13% 12% 11% 11% FY 2015 FY 2016 FY 2017 FY 2018 Please see non-GAAP reconciliations at the end of this document. Page 18 of 40
NATIONAL PEN Revenue growth was strong across channels and Revenue ($M) & Reported Revenue Growth geographies in Q4 FY2018 and FY2018 due to great Quarterly execution, benefits from actions taken last year to improve $126 marketing performance, increased marketing and prospecting investment, and increased inter-company sales to other Cimpress businesses. $82 $66 $60 $59 $54 Segment profit improved year over year by $2.0 million 39% during the fourth quarter due to strong revenue growth and 22% cost synergies, partially offset by increased investments in technology and life-time value based advertising. For FY2018, segment profit was $22.2 million. Since we did not Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 own National Pen for all of FY2017 and profits are highly seasonal, the full year comparison is not meaningful. We've made good progress on post-acquisition plans in Organic Constant Currency Revenue Growth line with those we presented at investor day in August Quarterly 2017. Multiple other Cimpress businesses have begun to tap into National Pen's product offering via our mass customization platform. We've also gained operational cost 30% reductions by leveraging Cimpress' global shipping contracts, as well as several other operational savings. 19% Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 Segment Profit ($M) & Segment Profit Margin Quarterly $18 14% $3 2% 2% $— 5% $1 $1 ($3) (5%) Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Please see non-GAAP reconciliations at the end of this document. Page 19 of 40
ALL OTHER BUSINESSES The first revenue chart on the right breaks out the Revenue ($M) & Reported Revenue Growth Albumprinter contribution to revenue in this segment for the Quarterly final four quarters of ownership. While reported revenue growth in this segment reflects our August 31, 2017 Historical Revenue (including Albumprinter) divestiture of Albumprinter, the organic constant-currency growth rate in the second chart excludes Albumprinter Revenue (excluding Albumprinter) starting at the beginning of FY2018. Albumprinter Revenue Q4 FY2018 segment loss improved by $0.2 million year Reported Revenue Growth over year, but deepened by $(3.3) million for FY2018. For both the quarter and year, the divestiture of Albumprinter $45 $28 $28 $29 $28 was the main driver. The Albumprinter divestiture drove a $26 $30 $21 $19 $20 year-over-year improvement to Segment Loss of $0.5 $17 $16 $13 $15 $15 million in Q4 FY2017, and a year-over-year unfavorable $11 $13 impact to Segment Loss of $2.9 million in FY 2017. 6% 7% Segment Loss margin was depressed year over year from (8)% (7)% (8)% (32)% to (47)% in the fourth quarter, and from (24)% to (17)% (40)% for FY2018 due to the removal of Albumprinter (33)% (33)% revenue. (53)% Our businesses in India, Japan, Brazil and China continue to grow strongly, but each off small bases. Vistaprint Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Corporate Solutions remains early in building foundations for new growth opportunities. Our objective for these young businesses remains the same: to build foundations in large and potentially long-term attractive markets. In all of these Organic Constant Currency Revenue Growth* businesses we continue to operate at a significant Quarterly operating loss as previously described and as planned, and 53% we expect to continue to do so in the next several years. 46% 40% On July 2, 2018, we made a majority equity investment in 24% VIDA & Co., whose future results will be reported as part of 7% (8)% (7)% (9)% the All Other Businesses reportable segment. VIDA & Co. (19)% is a rapidly growing startup that brings manufacturing access and an e-commerce marketplace to artists, thereby enabling artists to convert ideas into beautiful, original Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 products for customers, ranging from custom fashion, jewelry and accessories to home accent pieces. With this recent investment, we are testing the applicability of mass * The trend of organic constant currency revenue growth in the customization to customer demand beyond Cimpress' chart above is not indicative of the growth trends in the existing businesses within this segment. Prior to Q1 FY2018, organic traditional end-markets and for higher-quality products than growth included Albumprinter which was material to this segment most competitors offer today. and grew more slowly than the other businesses that remain. Additionally, our organic growth in Q4 FY2016 and throughout FY2017 was impacted by the loss of two retail partners in those periods as we have explained in the past. Please see non-GAAP reconciliations at the end of this document. Page 20 of 40
BUSINESSES IN THIS REPORTABLE SEGMENT This segment consists of multiple small, rapidly evolving Revenue ($M) & Revenue Growth early-stage businesses by which Cimpress is expanding to Annual new markets. These businesses are subject to high degrees of risk and we expect that each of their business Reported Revenue ($M) models will rapidly evolve in function of future trials and entrepreneurial pivoting. Although not a comprehensive list, Reported Revenue Growth our All Other Businesses reportable segment includes the Organic Constant Currency Revenue Growth following: $147 $138 $129 Vistaprint Corporate Solutions serves medium-sized businesses and large corporations, as well as a legacy $88 revenue stream with retail partners and franchise businesses. Printi, the online printing leader in Brazil, offers a superior FY 2015 FY 2016 FY 2017 FY 2018 customer experience with transparent and attractive pricing, reliable service and quality. Printi is also expanding into the US market. FY 2015 FY 2016 FY 2017 FY 2018 Reported Revenue Growth 138% (6%) (7%) (32%) Organic Constant-Currency Vistaprint India, which operates a derivative of the Revenue Growth 16% 2% (7%) 40% Vistaprint business model, albeit with higher service levels and quality, fully domestic, Indian content, pricing that is a Segment Loss ($M) & Margin (%) of Loss slight premium to many traditional offline alternatives, and Quarterly almost no discounting. ($2) India (5%) ($10) ($9) ($8) ($9) ($9) ($9) ($11) ($10) Vistaprint Japan, which operates a derivative of the Vistaprint business model with a differentiated position (27%) (32%) relative to competitors who tend to focus on upload and (37%) (36%) (39%) (41%) print, not the self-service, micro-business customer which (47%) (50%) Vistaprint Japan serves. Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Japan Segment Profit ($M) & Segment Profit Margin Annual $11 7% (7)% $(9) (24)% (40)% $(31) $(35) FY 2015 FY 2016 FY 2017 FY 2018 Please see non-GAAP reconciliations at the end of this document. Page 21 of 40
CENTRAL AND CORPORATE COSTS Excluding unallocated share based compensation (SBC), Central and Corporate Costs ($M) these costs grew slightly year over year and quarter over Quarterly quarter, and declined as a percentage of revenue by roughly 30 basis points for the quarter and by 80 basis Corporate Costs points for FY2018. Consulting fees associated with our upcoming conversion of our Dutch annual accounts to Central Operating Costs IFRS increased corporate costs by approximately $1.8 MCP Investment million for FY2018. Unallocated SBC increased in both the quarter and fiscal year due to the inclusion of the SPSUs Unallocated SBC defined in the table below. $36 $34 $3 $31 3 Our Cimpress Technology team continues to build and $30 $9 $28 $28 $28 $7 deploy our mass customization platform ("MCP"), a $5 $7 $26 $1 $5 growing set of software services and standards that $2 $2 $6 $6 $6 $6 deliver business and customer functionality to our $7 $5 $7 $7 $6 businesses. We remain early in the journey toward our $9 $8 vision for MCP, but are encouraged by the steady $8 $10 $11 $11 $10 $10 $10 progress we are making. Our decentralized businesses are actively involved in the selection and scoping of new $11 $12 $12 MCP functionality, an approach which has increased $9 $9 $10 $9 $10 $10 internal adoption. What are Central and Corporate Costs? Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 The GAAP accounting value of performance share units (PSUs) across Cimpress, minus what we cross-charge either to our businesses or to the above central cost categories. We cross- charge the cash grant value of a long-term Central and Corporate Costs ($M) incentive award. However, the total value of the Annual Supplemental PSUs (SPSUs) as described in the Unallocated next paragraph remain in Unallocated SBC. Share Corporate Costs Based Comp Beginning in Q2 FY2018, Unallocated SBC includes expense related to certain SPSU awards Central Operating Costs that include a multi-year financial performance condition. They are subject to mark-to-market MCP Investment accounting throughout the performance vesting period if the performance condition is probable of being achieved, so we expect the related costs to Unallocated SBC be volatile depending on share price fluctuations. Software engineering and related costs to expand $131 MCP the functionality of our Mass Customization Investment $117 Platform (MCP). $25 $13 Our operationally oriented shared-service $98 organizations of (1) global procurement, (2) the $25 $25 technical maintenance and hosting of the MCP, $23 and (3) privacy, and information security management, plus the administrative costs of our Cimpress India offices where numerous Cimpress $30 $37 $42 Central businesses have dedicated business-specific Operating team members. Even if we did not manage our Costs Central Operating Costs on a shared basis they would still be required to operate our businesses, $45 $42 $39 and we believe that, if decentralized, they would cost the same or more as under our shared model, albeit without as many current and FY 2016 FY 2017 FY 2018 potential future synergies. Corporate activities, including the office of the CEO, the supervisory board, directors and Corporate officers insurance, treasury, tax, capital allocation, Costs financial consolidation, audit, corporate legal, internal company-wide communications, investor relations and corporate strategy. Please see non-GAAP reconciliations at the end of this document. Page 22 of 40
Central and Corporate Costs Excluding Unallocated Share-Based Comp* ($M and as a % of Total Revenue) $27 $27 $27 $26 $26 $26 $26 $26 $26 6% 5% 5% 5% 5% 4% 4% 4% 3% Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Central and Corporate Costs Excluding Unallocated Share-Based Comp* ($M and as a % of Total Revenue) $105 $106 $98 5% 5% 4% FY 2016 FY 2017 FY 2018 * 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. All numbers rounded to nearest million and may not sum to total Central and Corporate Costs when combined with the rounded Unallocated SBC figures in the chart above. Please see non-GAAP reconciliations at the end of this document. Page 23 of 40
CURRENCY IMPACTS Y/Y Impact from Currency* Changes in currency rates positively impacted our year- Financial Measure Q4 FY2018 FY2018 over-year reported revenue growth rate by about 400 basis Revenue favorable favorable points for both Q4 and FY2018. We look at constant- Operating income favorable favorable currency organic growth rates to understand revenue Net income favorable unfavorable trends in the absence of currency movements. Segment profit favorable favorable There are many natural expense offsets in local currencies Adjusted NOP unfavorable unfavorable in our business and, therefore, the net currency impact to Adjusted EBITDA unfavorable unfavorable our bottom line is less pronounced than it is to revenue. Free cash flow unfavorable unfavorable Our most significant net currency exposures by volume are * Net income includes both realized and unrealized gains or the Euro and the British Pound. losses from currency hedges and intercompany loan balances. Adjusted NOP and adjusted EBITDA include only realized gains We also enter into currency derivative contracts to hedge or losses from certain currency hedges. Free cash flow includes the risk for certain currencies where we have a net realized gains or losses on currency hedges as well as the Adjusted EBITDA exposure. We hedge our Adjusted currency impact of the timing of receivables, payments and EBITDA exposures because this is the primary metric used other working capital settlements. Revenue, operating income in our debt covenants. We do not apply hedge accounting and segment profit do not reflect any impacts from currency to these hedges, which increases the volatility of the gains hedges or balance sheet translation. or losses that are included in our net income from quarter to quarter. Realized and unrealized gains or losses from Other Income (Expense), Net these hedges are recorded in Other (expense) income, net, along with other currency-related gains or losses. The $31 realized gains or losses on our Adjusted EBITDA hedging contracts are added back to our Adjusted NOP to show the $18 economic impact of our hedging activities. Our Other income (expense), net was $4.6 million for the $5 fourth quarter of FY2018, and $(21.0) million for the full year. The vast majority of this is currency related, as ($2) ($2) follows: ($7) ($8) ($11) • Approximately $7 million of Q4 gains and $10 million of ($16) full year losses were primarily related to non-cash net gains or losses on intercompany activity and currency hedges. These are included in our net income, but Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 excluded from our Adjusted NOP. • The unrealized gains above were more than offset by the realized losses on certain currency derivative contracts of $2.5 million for the fourth quarter and $11.4 million for the Realized Gains (Losses) on full year. These realized losses affect both our net Certain Currency Derivatives income and Adjusted NOP. $7 $5 Overall, for the reasons described above, year-over-year $3 fluctuations in currencies create different impacts on the $2 various financial results you see throughout this document. $1 At the top right of this page is a table describing these directional net currency impacts when compared to the ($1) prior-year period. ($2) ($4) ($5) Q4FY16Q1FY17Q2FY17Q3FY17Q4FY17Q1FY18Q2FY18Q3FY18Q4FY18 Please see non-GAAP reconciliations at the end of this document. Page 24 of 40
HOUSEKEEPING ITEMS Please note the following housekeeping items: • Our current best estimate for total share-based compensation expense for FY2019 is approximately $45 million to $50 million. We continue to expect a portion of our share-based compensation expense could be volatile as certain awards granted in FY2018 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. • Throughout FY2018, the currency rates that have the greatest impact on our financial results have generally moved favorably versus FY2017. However, the net impact of currency changes on our Adjusted EBITDA, Adjusted NOP and free cash flow has been negative as it also includes changes in our realized losses from currency hedges. In FY2019 we expect favorable year-over-year impact of currency on these metrics as we realize the contracted rates from hedges entered into previously. • Q1 FY2019 will include two months of year-over-year Albumprinter operating results in the comparable prior year period. • We expect to realize approximately $13 million of year-over-year savings during the first half of FY2019 as a result of the Vistaprint restructuring initiative last November. • Starting in the first quarter of FY2019, we will adopt a new accounting standard, "Revenue from Contracts with Customers" (ASU 2014-09), that will have a small impact to our financial results. We have historically capitalized direct-response advertising costs in the National Pen business. Under the new revenue standard these costs will be expensed as incurred, which will create more volatile advertising expense timing for National Pen relative to the related revenue. Upon adoption in Q1 FY2019, we expect to adjust $3.8 million of capitalized direct-response advertising costs as of June 30, 2018 to retained earnings. • As described earlier, we completed a bond offering in June which effectively swapped $275 million of senior notes at a 7% interest rate that were maturing in 4 years with $400 million of senior notes at a 7% interest rate that mature in 8 years, with some partially offsetting reduction to the rates we pay on our floating-rate debt from amending our credit facility. We do not project our debt levels into the future, but investors should keep these recent changes in mind when modeling our cash interest costs in FY2019. Please see non-GAAP reconciliations at the end of this document. Page 25 of 40
CONSOLIDATED BALANCE SHEETS (unaudited in thousands, except share and per share data) June 30, June 30, 2018 2017 Assets Current assets: Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 44,227 $ 25,697 Accounts receivable, net of allowances of $6,898 and $3,590, respectively . . . . . . . . . . . . 55,621 48,630 Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,602 46,563 Prepaid expenses and other current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,846 78,835 Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 46,276 Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239,296 246,001 Property, plant and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 483,664 511,947 Software and website development costs, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,199 48,470 Deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67,087 48,004 Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520,843 514,963 Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230,201 275,924 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,927 34,560 Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,652,217 $ 1,679,869 Liabilities, noncontrolling interests and shareholders’ equity Current liabilities: Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 152,436 $ 127,386 Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186,661 175,567 Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,697 30,372 Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,259 28,926 Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,971 78,435 Liabilities held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 8,797 Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481,024 449,483 Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,243 60,743 Lease financing obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,743 106,606 Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 767,585 847,730 Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,524 94,683 Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,472,119 1,559,245 Commitments and contingencies Redeemable noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86,151 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 30,876,193 and 31,415,503 shares outstanding, respectively . . . . . . . 615 615 Treasury shares, at cost, 13,204,434 and 12,665,124 shares, respectively . . . . . . . . . . . . (685,577) (588,365) Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395,682 361,376 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452,756 414,771 Accumulated other comprehensive loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (69,814) (113,398) Total shareholders’ equity attributable to Cimpress N.V.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,662 74,999 Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285 213 Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,947 75,212 Total liabilities, noncontrolling interests and shareholders’ equity $ 1,652,217 $ 1,679,869 Page 26 of 40
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited in thousands, except share and per share data) Three Months Ended Year Ended June 30, June 30, 2018 2017 2018 2017 Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 631,134 $ 564,256 $ 2,592,541 $ 2,135,405 Cost of revenue (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316,550 279,077 1,279,799 1,036,975 Technology and development expense (1) . . . . . . . . . . . . . . . . . . . . . . 63,160 64,702 245,758 243,230 Marketing and selling expense (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168,185 159,622 714,654 610,932 General and administrative expense (1) . . . . . . . . . . . . . . . . . . . . . . . . 49,089 57,098 176,958 207,569 Amortization of acquired intangible assets . . . . . . . . . . . . . . . . . . . . . . 11,749 12,603 49,881 46,145 Restructuring expense (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 550 810 15,236 26,700 (Gain) on sale of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (47,545) — Impairment of goodwill and acquired intangible assets . . . . . . . . . . . . . — — — 9,556 Income (loss) from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,851 (9,656) 157,800 (45,702) Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,570 (11,473) (21,032) 10,362 Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,780) (12,858) (53,043) (43,977) Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . (17,359) — (17,359) — (Loss) Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,718) (33,987) 66,366 (79,317) Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (79) 526 19,578 (7,118) Net (loss) income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,639) (34,513) 46,788 (72,199) Add: Net (income) loss attributable to noncontrolling interest . . . . . . . . (1,661) (189) (3,055) 488 Net (loss) income attributable to Cimpress N.V. . . . . . . . . . . . . . . . . . . $ (7,300) $ (34,702) $ 43,733 $ (71,711) Basic net (loss) income per share attributable to Cimpress N.V.. . . . . . $ (0.24) $ (1.11) $ 1.41 $ (2.29) Diluted net (loss) income per share attributable to Cimpress N.V. . . . . $ (0.24) $ (1.11) $ 1.36 $ (2.29) Weighted average shares outstanding — basic . . . . . . . . . . . . . . . . . . 30,812,113 31,195,625 30,948,081 31,291,581 Weighted average shares outstanding — diluted . . . . . . . . . . . . . . . . . 30,812,113 31,195,625 32,220,401 31,291,581 ____________________________________________ (1) Share-based compensation is allocated as follows: Three Months Ended Year Ended June 30, June 30, 2018 2017 2018 2017 Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 121 $ 80 $ 361 $ 289 Technology and development expense . . . . . . . . . . . . . . . . . . . . . . . . . 2,664 2,158 10,580 8,724 Marketing and selling expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,702 1,315 6,683 4,857 General and administrative expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,261 9,429 31,515 28,500 Restructuring expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,327 6,257 Page 27 of 40
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands) Three Months Ended Year Ended June 30, June 30, 2018 2017 2018 2017 Operating activities Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (5,639) $ (34,513) $ 46,788 $ (72,199) Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,885 42,616 169,005 158,400 Impairment of goodwill and acquired intangible assets . . . . . . . . . . . . — — — 9,556 Share-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . 16,748 12,982 50,466 48,627 Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,487) (3,509) (14,039) (41,358) Abandonment of long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 678 — 2,408 Gain on sale of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (47,545) — Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . 17,359 — 17,359 — Change in contingent earn-out liability . . . . . . . . . . . . . . . . . . . . . . . . . — 12,013 1,774 39,377 Gain on sale of available-for-sale securities . . . . . . . . . . . . . . . . . . . . . — — — (2,268) Unrealized (gain) loss on derivatives not designated as hedging instruments included in net (loss) income. . . . . . . . . . . . . . . . . . . . . . . (24,786) 14,974 (15,540) 15,813 Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency. . . . . . . . . . . . . . . . . . . . . . . . 14,249 1,525 19,460 (5,690) Payments of contingent consideration in excess of acquisition date fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (4,639) — Other non-cash items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,539 493 4,668 2,886 Changes in operating assets and liabilities: . . . . . . . . . . . . . . . . . . . . . Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,573 1,267 (5,123) 4,701 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,036 (1,563) (7,068) (8,699) Prepaid expenses and other assets. . . . . . . . . . . . . . . . . . . . . . . . . (2,608) (1,868) (2,472) 521 Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,334 15,424 21,782 25,332 Accrued expenses and other liabilities. . . . . . . . . . . . . . . . . . . . . . . (25,504) (27,427) (42,544) (20,671) Net cash provided by operating activities 47,699 33,092 192,332 156,736 Investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchases of property, plant and equipment. . . . . . . . . . . . . . . . . . . . . . (13,489) (17,241) (60,930) (74,157) Business acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . — — (110) (204,875) Proceeds from the sale of subsidiaries, net of transactions costs and cash divested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 93,779 — Purchases of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (87) (308) (197) Capitalization of software and website development costs. . . . . . . . . . . (11,371) (8,629) (40,847) (37,307) Proceeds from sale of available-for-sale securities. . . . . . . . . . . . . . . . . — — — 6,346 Proceeds from the sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401 282 886 4,513 Other investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (114) 1,392 (3,064) 3,888 Net cash used in investing activities (24,573) (24,283) (10,594) (301,789) (continued on next page) Page 28 of 40
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (unaudited, in thousands) Three Months Ended Year Ended June 30, June 30, 2018 2017 2018 2017 Financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from borrowings of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,487 125,071 805,995 737,075 Proceeds from issuance of senior notes . . . . . . . . . . . . . . . . . . . . . . . . 400,000 — 400,000 — Payments of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (318,628) (141,631) (974,781) (539,913) Payments for early redemption of senior notes . . . . . . . . . . . . . . . . . . . (275,000) — (275,000) — Payments of early redemption fees for senior notes . . . . . . . . . . . . . . . (14,438) — (14,438) — Payments of debt issuance costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,378) (229) (10,629) (229) Payments of purchase consideration included in acquisition-date fair value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (2,105) (539) Payments of withholding taxes in connection with equity awards . . . . . (16,618) (3,752) (19,698) (14,568) Payments of capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . (3,839) (3,858) (17,618) (15,887) Purchase of ordinary shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (94,710) (50,008) Purchase of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,144) — (1,144) (20,230) Proceeds from issuance of ordinary shares . . . . . . . . . . . . . . . . . . . . . . 465 5,861 11,981 6,192 Issuance of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,500) — (21,000) — Proceeds from sale of noncontrolling interest . . . . . . . . . . . . . . . . . . . . — — 35,390 — Capital contribution from noncontrolling interest . . . . . . . . . . . . . . . . . . — — — 1,404 Other financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 1,281 Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . (25,593) (18,538) (177,757) 104,578 Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . . . . . . . (3,184) 4,001 2,507 788 Change in cash held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (12,042) 12,042 (12,042) Net (decrease) increase in cash and cash equivalents (5,651) (17,770) 18,530 (51,729) Cash and cash equivalents at beginning of period 49,878 43,467 25,697 77,426 Cash and cash equivalents at end of period $ 44,227 $ 25,697 $ 44,227 $ 25,697 Please see non-GAAP reconciliations at the end of this document. Page 29 of 40
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: Constant-currency revenue growth, constant- currency revenue growth excluding revenue from acquisitions and divestitures made in the last twelve months, Adjusted Net Operating Profit, Adjusted EBITDA, free cash flow and Trailing-Twelve-Month Return on Invested Capital: • 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. • Q4 and FY2018 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 for all periods, and revenue from National Pen through Q2 FY2018. • 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. • 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. • 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. 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 30 of 40
REVENUE GROWTH RATES BY SEGMENT (Quarterly) Vistaprint Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Reported revenue growth 12% 7% 7% 11% 5% 11 % 13 % 11 % 11 % Currency impact —% 1% 2% 1% 1% (1)% (4)% (4)% (2)% Revenue growth in constant currency 12% 8% 9% 12% 6% 10 % 9 % 7 % 9 % Upload and Print Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Reported revenue growth 94 % 72 % 63 % 22 % 10% 22 % 26 % 29 % 19 % Currency impact (2)% 1 % 3 % 5 % 4% (6)% (10)% (17)% (9)% Revenue growth in constant currency 92 % 73 % 66 % 27 % 14% 16 % 16 % 12 % 10 % Impact of TTM acquisitions (71)% (61)% (55)% (14)% —% — % — % — % — % Revenue growth in constant currency excl. TTM 21 % 12 % 11 % 13 % 14% 16 % 16 % 12 % 10 % acquisitions National Pen Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Reported revenue growth1 N/A N/A N/A 100 % 100 % 100 % 100 % 39 % 22 % Currency impact N/A N/A N/A — % — % — % — % (9)% (3)% Revenue growth in constant currency N/A N/A N/A 100 % 100 % 100 % 100 % 30 % 19 % Impact of TTM acquisitions N/A N/A N/A (100)% (100)% (100)% (100)% — % — % Revenue growth in constant currency excl. TTM N/A N/A N/A — % — % — % — % 30 % 19 % acquisitions Pro Forma National Pen Growth Rates: Pro forma revenue growth in U.S. dollars N/A N/A N/A (8)% (5)% (5)% 33 % N/A N/A Currency impact N/A N/A N/A 3 % 3 % (2)% (5)% N/A N/A Pro forma revenue growth in constant currency N/A N/A N/A (5)% (2)% (7)% 28 % N/A N/A Impact of discontinued operations N/A N/A N/A 3 % 3 % 4 % — % N/A N/A Pro forma revenue growth in constant currency, N/A N/A N/A (2)% 1 % (3)% 28 % N/A N/A excluding discontinued operations All Other Businesses Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Reported revenue growth (8)% (17)% (7)% (8)% 6% 7 % (53)% (33)% (33)% Currency impact — % (2)% — % (1)% 1% (2)% — % — % 2 % Revenue growth in constant currency (8)% (19)% (7)% (9)% 7% 5 % (53)% (33)% (31)% Impact of TTM acquisitions and divestitures — % — % — % — % —% 35 % 77 % 86 % 77 % Revenue growth in constant currency excl. TTM (8)% (19)% (7)% (9)% 7% 40 % 24 % 53 % 46 % acquisitions & divestitures 1National Pen's reported revenue growth was 100% from Q3 FY17 to Q2 FY18 since we did not own this business in the corresponding year-ago periods. Values may not sum to total due to rounding. Page 31 of 40
CONSTANT-CURRENCY REVENUE GROWTH RATES (Quarterly) Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Reported revenue growth 26 % 18 % 16 % 26 % 18 % 27 % 32 % 16 % 12 % Currency impact — % 1 % 2 % 2 % 2 % (3)% (5)% (8)% (4)% Revenue growth in constant currency 26 % 19 % 18 % 28 % 20 % 24 % 27 % 8 % 8 % Impact of TTM acquisitions, divestitures & JVs (15)% (13)% (10)% (17)% (11)% (12)% (16)% 3 % 3 % Revenue growth in constant currency ex. TTM 11 % 6 % 8 % 11 % 9 % 12 % 11 % 11 % 11 % acquisitions, divestitures & JVs Reported revenue growth rate ex. TTM 11 % 6 % 6 % 9 % 7 % 15 % 16 % 19 % 15 % acquisitions, divestitures & JVs Note: Q3FY17, Q4FY17, Q1FY18 and Q2FY18 total company revenue growth in constant currency excluding TTM acquisitions, divestitures and joint ventures excludes the impact of currency and revenue from National Pen. Q1FY18, Q2FY18 and Q3FY18 excludes the impact of currency and revenue from Albumprinter. CONSTANT-CURRENCY REVENUE GROWTH RATES (Annual) Total Company FY14 FY15 FY16 FY17 FY18 Reported Revenue Growth 9 % 18 % 20 % 19 % 21 % Currency Impact (1)% 5 % 4 % 2 % (4)% Revenue Growth in Constant Currency 8 % 23 % 24 % 21 % 17 % Impact of TTM Acquisitions, Divestitures & JVs (4)% (14)% (13)% (13)% (6)% Revenue growth in constant currency ex. TTM 4 % 9 % 11 % 8 % 11 % acquisitions, divestitures & JVs Vistaprint FY15 FY16 FY17 FY18 Reported Revenue Growth 4% 6% 7% 12 % Currency Impact 5% 4% 2% (3)% Revenue Growth in Constant Currency 9% 10% 9% 9 % Impact of TTM Acquisitions & JVs —% —% —% — % Revenue growth in constant currency ex. TTM acquisitions & JVs 9% 10% 9% 9 % Upload and Print FY15 FY16 FY17 FY18 Reported Revenue Growth N/A 120 % 36 % 24 % Currency Impact N/A 7 % 3 % (11)% Revenue Growth in Constant Currency N/A 127 % 39 % 13 % Impact of TTM Acquisitions & JVs N/A (100)% (26)% — % Revenue growth in constant currency ex. TTM acquisitions & JVs N/A 27 % 13 % 13 % Values may not sum to total due to rounding. Page 32 of 40
All Other Businesses FY15 FY16 FY17 FY18 Reported Revenue Growth 138 % (6)% (7)% (32)% Currency Impact 17 % 8 % — % — % Revenue Growth in Constant Currency 155 % 2 % (7)% (32)% Impact of TTM Acquisitions & JVs (139)% — % — % 72 % Revenue growth in constant currency ex. TTM acquisitions, divestitures & 16 % 2 % (7)% 40 % JVs TWO-YEAR STACKED CONSTANT-CURRENCY ORGANIC REVENUE GROWTH RATES (Quarterly) Total Company Q4FY15 Q1FY16 Q2FY16 Q3FY16 Reported revenue growth 13 % 13 % 13 % 29 % Currency impact 9 % 8 % 7 % 2 % Revenue growth in constant currency 22 % 21 % 20 % 31 % Impact of TTM acquisitions, divestitures & JVs (9)% (10)% (10)% (21)% Revenue growth in constant currency ex. TTM acquisitions, divestitures & JVs 13 % 11 % 10 % 10 % Total Company Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Reported revenue growth 26 % 18 % 16 % 26 % 18 % 27 % 32 % 16 % 12 % Currency impact — % 1 % 2 % 2 % 2 % (3)% (5)% (8)% (4)% Revenue growth in constant currency 26 % 19 % 18 % 28 % 20 % 24 % 27 % 8 % 8 % Impact of TTM acquisitions, divestitures & JVs (15)% (13)% (10)% (17)% (11)% (12)% (16)% 3 % 3 % Revenue growth in constant currency ex. TTM 11 % 6 % 8 % 11 % 9 % 12 % 11 % 11 % 11 % acquisitions, divestitures & JVs 2-Year Stacked Organic Constant-Currency Q4'15+ Q1'16+ Q2'16+ Q3'16+ Q4'16+ Q1'17+ Q2'17+ Q3'17+ Q4'17+ Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Year 1 (Earlier of the 2 Stacked Periods) 13 % 11 % 10 % 10 % 11 % 6 % 8 % 11 % 9 % Year 2 (More Recent of the 2 Stacked Periods) 11 % 6 % 8 % 11 % 9 % 12 % 11 % 11 % 11 % Year 1 + Year 2 24 % 17 % 18 % 21 % 20 % 18 % 19 % 22 % 20 % Note: Q3FY17, Q4FY17, Q1FY18 and Q2FY18 total company revenue growth in constant currency excluding TTM acquisitions, divestitures and joint ventures excludes the impact of currency and revenue from National Pen. Q1FY18, Q2FY18, Q3FY18 and Q4FY18 excludes the impact of currency and revenue from Albumprinter. Values may not sum to total due to rounding. Page 33 of 40
TWO-YEAR STACKED CONSTANT-CURRENCY ORGANIC REVENUE GROWTH RATES, CONT'D (Quarterly) Vistaprint Q4FY15 Q1FY16 Q2FY16 Q3FY16 Reported revenue growth 5% 3% 3% 8% Currency impact 6% 5% 5% 2% Revenue growth in constant currency 11% 8% 8% 10% Impact of TTM acquisitions, divestitures & JVs —% —% —% —% Revenue growth in constant currency ex. TTM acquisitions, divestitures & JVs 11% 8% 8% 10% Vistaprint Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Reported revenue growth 12% 7% 7% 11% 5% 11 % 13 % 11 % 11 % Currency impact —% 1% 2% 1% 1% (1)% (4)% (4)% (2)% Revenue growth in constant currency 12% 8% 9% 12% 6% 10 % 9 % 7 % 9 % Impact of TTM acquisitions, divestitures & JVs —% —% —% —% —% — % — % — % — % Revenue growth in constant currency ex. TTM 12% 8% 9% 12% 6% 10 % 9 % 7 % 9 % acquisitions, divestitures & JVs 2-Year Stacked Organic Constant-Currency Q4'15+ Q1'16+ Q2'16+ Q3'16+ Q4'16+ Q1'17+ Q2'17+ Q3'17+ Q4'17+ Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Year 1 (Earlier of the 2 Stacked Periods) 11% 8% 8% 10% 12% 8 % 9 % 12 % 6 % Year 2 (More Recent of the 2 Stacked Periods) 12% 8% 9% 12% 6% 10 % 9 % 7 % 9 % Year 1 + Year 2 23% 16% 17% 22% 18% 18 % 18 % 19 % 15 % Upload and Print Q4FY15 Q1FY16 Q2FY16 Q3FY16 Reported revenue growth 74 % 98 % 112 % 201 % Currency impact 26 % 20 % 16 % 2 % Revenue growth in constant currency 100 % 118 % 128 % 203 % Impact of TTM acquisitions, divestitures & JVs (66)% (87)% (97)% (178)% Revenue growth in constant currency ex. TTM acquisitions, divestitures & JVs 34 % 31 % 31 % 25 % Upload and Print Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Reported revenue growth 94 % 72 % 63 % 22 % 10% 22 % 26 % 29 % 19 % Currency impact (2)% 1 % 3 % 5 % 4% (6)% (10)% (17)% (9)% Revenue growth in constant currency 92 % 73 % 66 % 27 % 14% 16 % 16 % 12 % 10 % Impact of TTM acquisitions, divestitures & JVs (71)% (61)% (55)% (14)% —% — % — % — % — % Revenue growth in constant currency ex. TTM 21 % 12 % 11 % 13 % 14% 16 % 16 % 12 % 10 % acquisitions, divestitures & JVs 2-Year Stacked Organic Constant-Currency Q4'15+ Q1'16+ Q2'16+ Q3'16+ Q4'16+ Q1'17+ Q2'17+ Q3'17+ Q4'17+ Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Year 1 (Earlier of the 2 Stacked Periods) 34 % 31 % 31 % 25 % 21% 12 % 11 % 13 % 14 % Year 2 (More Recent of the 2 Stacked Periods) 21 % 12 % 11 % 13 % 14% 16 % 16 % 12 % 10 % Year 1 + Year 2 55 % 43 % 42 % 38 % 35% 28 % 27 % 25 % 24 % Values may not sum to total due to rounding. Page 34 of 40
GROSS PROFIT AND CONTRIBUTION PROFIT (in millions except percentages) Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Total revenue $479.2 $443.7 $576.9 $550.6 $564.3 $563.3 $762.1 $636.1 $631.1 Cost of revenue $222.1 $213.1 $276.4 $268.5 $279.1 $283.8 $360.3 $319.2 $316.6 Gross profit (revenue minus cost of revenue) $257.1 $230.7 $300.5 $282.1 $285.2 $279.5 $401.8 $316.9 $314.6 as a percent of total revenue 53.7% 52.0% 52.1% 51.2% 50.5% 49.6% 52.7% 49.8% 49.8% Advertising expense and payment processing fees $84.0 $86.4 $103.6 $109.4 $99.4 $105.0 $140.8 $118.5 $108.8 Contribution profit (gross profit minus $173.1 $144.3 $196.9 $172.7 $185.7 $174.5 $261.0 $198.4 $205.7 advertising/processing fees) as a percent of total revenue 36.1% 32.5% 34.1% 31.4% 32.9% 31.0% 34.3% 31.2% 32.6% PROFIT (LOSS) BY REPORTABLE SEGMENT ("SEGMENT PROFIT") (Quarterly and YTD, in thousands) Q4 Q4 Q4 FY 2016 FY 2017 FY 2018 FY 2016 FY 2017 FY 2018 Vistaprint $ 48,157 $ 37,772 $ 53,874 $ 214,947 $ 167,687 $ 241,479 Upload and Print 17,339 19,957 24,705 58,207 63,189 79,310 National Pen N/A 1,001 2,980 N/A (2,225) 22,165 All Other Businesses (10,869) (9,361) (9,161) (9,328) (31,307) (34,620) Total segment profit $ 54,627 $ 49,369 $ 72,398 $ 263,826 $ 197,344 $ 308,334 Central and corporate costs ex. unallocated SBC (25,901) (26,080) (26,802) (97,672) (104,747) (106,202) Unallocated SBC — (4,573) (7,040) — (13,346) (25,198) Include: Realized (losses) gains on certain currency derivatives 837 3,156 (2,487) 5,863 16,474 (11,445) not included in operating income Adjusted NOP $ 29,563 $ 21,872 $ 36,069 $ 172,017 $ 95,725 $ 165,489 Exclude: Realized losses (gains) on certain currency derivatives not (837) (3,156) 2,487 (5,863) (16,474) 11,445 included in operating income Acquisition-related amortization and depreciation (10,518) (12,662) (11,819) (40,834) (46,402) (50,149) Earn-out related charges¹ (1,793) (12,245) — (6,378) (40,384) (2,391) Share-based compensation related to investment consideration (1,130) (4,559) (5,745) (4,835) (9,638) (6,792) Certain impairments (1,216) — — (41,820) (9,556) — Restructuring-related charges — (810) (550) (381) (26,700) (15,236) Interest expense for Waltham, MA lease 1,961 1,904 1,844 6,287 7,727 7,489 Gain on the purchase or sale of subsidiaries2 — — (435) — — 47,945 Total income from operations $ 16,030 $ (9,656) $ 21,851 $ 78,193 $ (45,702) $ 157,800 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. Values may not sum to total due to rounding. Page 35 of 40
ADJUSTED NET OPERATING PROFIT (Quarterly, in millions except percentages) Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 GAAP operating income (loss) $16.0 ($27.8) $33.7 ($41.9) ($9.7) $46.6 $72.7 $16.6 $21.9 Exclude expense (benefit) impact of: Acquisition-related amortization and depreciation $10.5 $10.2 $10.0 $13.5 $12.7 $12.7 $12.6 $13.0 $11.8 Earn-out related charges¹ $1.8 $16.2 $7.0 $4.9 $12.2 $1.1 $1.3 $— $— Share-based compensation related to $1.1 $4.1 $0.6 $0.4 $4.6 $— $1.0 $— $5.7 investment consideration Certain impairments² $1.2 $— $— $9.6 $— $— $— $— $— Restructuring related charges $— $— $1.1 $24.8 $0.8 $0.9 $11.5 $2.3 $0.6 Less: Interest expense associated with Waltham, ($2.0) ($2.0) ($2.0) ($1.9) ($1.9) ($1.9) ($1.9) ($1.8) ($1.8) MA lease Less: Gain on the purchase or sale of 3 $— $— $— $— $— ($48.4) $— $— $0.4 subsidiaries Include: Realized (losses) gains on certain currency derivatives not included in operating $0.8 $1.9 $6.8 $4.6 $3.2 ($0.6) ($3.5) ($4.8) ($2.5) income Adjusted NOP $29.6 $2.7 $57.3 $13.9 $21.9 $10.4 $93.7 $25.3 $36.1 Adjusted NOP as a percent of total revenue 6.2% 0.6% 9.9% 2.5% 3.9% 1.8% 12.3% 4.0% 5.7% ADJUSTED NET OPERATING PROFIT (TTM, in millions) TTM TTM TTM TTM TTM TTM TTM TTM TTM Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 GAAP operating income (loss) $78.2 $38.3 $4.4 ($20.0) ($45.7) $28.7 $67.7 $126.3 $157.8 Exclude expense (benefit) impact of: Acquisition-related amortization and depreciation $40.8 $41.3 $41.6 $44.3 $46.4 $48.9 $51.5 $51.0 $50.1 Earn-out related charges¹ $6.4 $22.3 $25.9 $29.9 $40.4 $25.3 $19.5 $14.6 $2.4 Share-based compensation related to $4.8 $8.1 $7.0 $6.2 $9.6 $5.6 $6.0 $5.6 $6.8 investment consideration Certain impairments² $41.8 $41.8 $38.8 $10.8 $9.6 $9.6 $9.6 $— $— Restructuring related charges $0.4 $0.1 $1.1 $25.9 $26.7 $27.6 $38.0 $15.5 $15.2 Less: Interest expense associated with Waltham, ($6.3) ($7.9) ($7.9) ($7.8) ($7.7) ($7.7) ($7.6) ($7.5) ($7.5) MA lease Less: Gain on the purchase or sale of 3 $— $— $— $— $— ($48.4) ($48.4) ($48.4) ($47.9) subsidiaries Include: Realized (losses) gains on certain currency derivatives not included in operating $5.9 $7.4 $11.0 $14.2 $16.5 $14.0 $3.6 ($5.8) ($11.4) income Adjusted NOP $172.0 $151.5 $122.0 $103.4 $95.7 $103.5 $139.8 $151.3 $165.5 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 36 of 40
ADJUSTED EBITDA (Quarterly, in millions) Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 GAAP operating income (loss) $16.0 ($27.8) $33.7 ($41.9) ($9.7) $46.6 $72.7 $16.6 $21.9 Depreciation and amortization $35.5 $35.5 $37.0 $44.5 $42.6 $42.4 $41.3 $43.4 $41.9 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 expense1 $5.6 $11.6 $11.3 $6.5 $13.0 $6.8 $12.8 $12.8 $16.7 Proceeds from insurance $0.8 $0.7 $— $0.2 $— $— $0.4 $0.3 $— Interest expense associated with Waltham, MA ($2.0) ($2.0) ($2.0) ($1.9) ($1.9) ($1.9) ($1.9) ($1.8) ($1.8) lease Earn-out related charges $1.8 $16.2 $7.0 $4.9 $12.2 $1.1 $1.3 $— $— Certain impairments and other adjustments $1.2 $— $— $9.6 $— $— $0.5 $0.9 $1.5 Gain on purchase or sale of subsidiaries $— $— $— $— $— ($48.4) $— $— $0.4 Restructuring related charges $— $— $1.1 $24.8 $0.8 $0.9 $11.5 $2.3 $0.6 Realized gains (losses) on currency derivatives $0.8 $1.9 $6.8 $4.6 $3.2 ($0.6) ($3.5) ($4.8) ($2.5) not included in operating income Adjusted EBITDA2,3 $58.9 $35.1 $93.9 $50.2 $59.2 $45.8 $134.0 $68.7 $77.6 ADJUSTED EBITDA (TTM, in millions) TTM TTM TTM TTM TTM TTM TTM TTM TTM Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 GAAP operating income (loss) $78.2 $38.3 $4.4 ($20.0) ($45.7) $28.7 $67.7 $126.3 $157.8 Depreciation and amortization $132.1 $137.4 $142.6 $152.6 $159.7 $166.5 $170.8 $169.7 $169.0 Waltham, MA lease depreciation adjustment ($3.4) ($4.1) ($4.1) ($4.1) ($4.1) ($4.1) ($4.1) ($4.1) ($4.1) Share-based compensation expense1 $23.8 $29.2 $34.4 $35.0 $42.4 $37.6 $39.1 $45.4 $49.1 Proceeds from insurance $4.0 $3.0 $1.5 $1.6 $0.8 $0.2 $0.5 $0.7 $0.7 Interest expense associated with Waltham, MA ($6.3) ($7.9) ($7.9) ($7.8) ($7.7) ($7.7) ($7.6) ($7.5) ($7.5) lease Earn-out related charges $6.4 $22.3 $25.9 $29.9 $40.4 $25.3 $19.5 $14.6 $2.4 Certain impairments and other adjustments $41.8 $41.8 $38.8 $10.8 $9.6 $9.6 $10.1 $1.4 $2.9 Gain on purchase or sale of subsidiaries $— $— $— $— $— ($48.4) ($48.4) ($48.4) ($47.9) Restructuring related charges $0.4 $0.1 $1.1 $25.9 $26.7 $27.6 $38.0 $15.5 $15.2 Realized gains (losses) on currency derivatives $5.9 $7.4 $11.0 $14.2 $16.5 $14.0 $3.6 ($5.8) ($11.4) not included in operating income Adjusted EBITDA2,3 $282.8 $267.6 $247.6 $238.0 $238.4 $249.2 $289.2 $307.7 $326.1 1From Q4FY17 through Q3FY18 the SBC expense listed here excludes the portion included in restructuring-related charges to avoid double counting. 2This 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. 3Adjusted 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 37 of 40
FREE CASH FLOW (Quarterly, in millions) Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Net cash provided by operating activities $52.1 $9.6 $105.1 $9.0 $33.1 $16.4 $160.4 ($32.1) $47.7 Purchases of property, plant and equipment ($17.8) ($19.3) ($16.9) ($20.7) ($17.2) ($20.5) ($18.2) ($8.8) ($13.5) Purchases of intangible assets not related to $— $— ($0.1) $— ($0.1) $— ($0.3) $— $— acquisitions Capitalization of software and website ($8.1) ($8.3) ($10.8) ($9.6) ($8.6) ($8.9) ($9.2) ($11.4) ($11.4) development costs Payment of contingent earn-out liabilities $8.6 $— $— $— $— $— $— $49.2 $— Free cash flow $34.8 ($18.1) $77.3 ($21.3) $7.1 ($13.0) $132.7 ($3.0) $22.8 Reference: Value of capital leases $0.3 $2.1 $2.8 $7.2 $2.3 $— $0.1 $0.4 $— Cash restructuring payments $— $— $— $7.5 $7.5 $4.1 $6.8 $4.2 $2.2 Cash paid during the period for interest $14.7 $5.4 $14.8 $7.3 $17.8 $8.4 $17.4 $8.0 $22.8 Interest expense for Waltham, MA Lease ($2.0) ($2.0) ($2.0) ($1.9) ($1.9) ($1.9) ($1.9) ($1.8) ($1.8) Cash interest related to borrowing $12.8 $3.4 $12.8 $5.4 $15.9 $6.5 $15.5 $6.2 $20.9 FREE CASH FLOW (TTM, in millions) TTM TTM TTM TTM TTM TTM TTM TTM TTM Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Net cash provided by operating activities $247.4 $229.5 $199.7 $175.8 $156.7 $163.5 $218.8 $177.7 $192.3 Purchases of property, plant and equipment ($80.4) ($75.4) ($73.1) ($74.7) ($74.2) ($75.3) ($76.6) ($64.7) ($60.9) Purchases of intangible assets not related to ($0.5) ($0.1) ($0.2) ($0.1) ($0.2) ($0.2) ($0.4) ($0.4) ($0.3) acquisitions Capitalization of software and website ($26.3) ($29.7) ($33.3) ($36.8) ($37.3) ($37.9) ($36.3) ($38.1) ($40.8) development costs Payment of contingent earn-out liabilities $8.6 $8.6 $8.6 $8.6 $— $— $— $49.2 $49.2 Proceeds from insurance related to investing $3.6 $1.5 $— $— $— $— $— $— $— activities Free cash flow $152.4 $134.5 $101.7 $72.7 $45.1 $50.1 $105.6 $123.8 $139.5 Reference: Value of capital leases $7.5 $7.2 $9.4 $12.4 $14.4 $12.3 $9.6 $2.9 $0.5 Cash restructuring payments $2.6 $0.4 $0.4 $7.5 $15.0 $19.1 $25.9 $22.6 $17.3 Cash paid during the period for interest $37.6 $40.0 $39.8 $42.2 $45.3 $48.3 $51.0 $51.7 $56.6 Interest expense for Waltham, MA Lease ($6.3) ($7.9) ($7.9) ($7.8) ($7.7) ($7.7) ($7.6) ($7.5) ($7.5) Cash interest related to borrowing $31.3 $32.1 $31.9 $34.4 $37.5 $40.7 $43.4 $44.2 $49.1 Values may not sum to total due to rounding. Page 38 of 40
RETURN ON INVESTED CAPITAL (TTM, in millions except percentages) Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Total Debt $678.5 $682.5 $876.1 $891.5 $876.7 $820.8 $700.5 $812.6 $826.8 Redeemable Non-Controlling Interest $65.3 $64.9 $41.8 $42.6 $45.4 $83.8 $85.5 $87.8 $86.2 Total Shareholders Equity $166.1 $147.5 $99.8 $84.7 $75.2 $84.5 $119.7 $93.6 $93.9 Excess Cash¹ — — — — — — — — — Invested Capital² $909.9 $895.0 $1,017.8 $1,018.8 $997.3 $989.1 $905.7 $994.0 $1,006.9 Average Invested Capital³ $847.8 $872.2 $934.0 $960.3 $982.2 $1,005.7 $977.7 $971.5 $974.0 TTM TTM TTM TTM TTM TTM TTM TTM TTM Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Adjusted NOP $172.0 $151.5 $122.0 $103.4 $95.7 $103.5 $139.8 $151.3 $165.5 Less: Cash Taxes $19.8 $23.6 $29.3 $44.6 $49.3 $46.2 $39.5 $31.3 $32.3 Adjusted NOPAT $152.3 $127.9 $92.6 $58.8 $46.4 $57.3 $100.3 $120.0 $133.2 Average Invested Capital3 (from above) $847.8 $872.2 $934.0 $960.3 $982.2 $1,005.7 $977.7 $971.5 $974.0 TTM Adjusted ROIC (cash tax) 18% 15% 10% 6% 5% 6% 10% 12% 14% Adjusted NOPAT (from above) $152.3 $127.9 $92.6 $58.8 $46.4 $57.3 $100.3 $120.0 $133.2 Add back: SBC included in Adjusted NOP4 $18.9 $21.0 $27.4 $28.8 $32.7 $32.0 $33.2 $39.8 $42.3 TTM Adjusted NOPAT excluding SBC $171.2 $148.9 $120.0 $87.6 $79.1 $89.4 $133.6 $159.9 $175.7 Average Invested Capital3 (from above) $847.8 $872.2 $934.0 $960.3 $982.2 $1,005.7 $977.7 $971.5 $974.0 TTM Adjusted ROIC excluding SBC 20% 17% 13% 9% 8% 9% 14% 16% 18% (cash tax) 1Excess cash is cash and equivalents > 5% of last twelve month revenues; if negative, capped at zero. 2,3Average 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 39 of 40
ABOUT CIMPRESS: Cimpress N.V. (Nasdaq: CMPR) invests in and builds customer-focused, entrepreneurial, mass-customization businesses for the long term. Mass customization is a competitive strategy which seeks to produce goods and services to meet individual customer needs with near mass production efficiency. Cimpress businesses include Drukwerkdeal, Exaprint, National Pen, Pixartprinting, Printi, Vistaprint and WIRmachenDRUCK. 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 Marvel 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, profits, cash flows, and liquidity; our investments in our business and the effects of the investments; the development and success of MCP; our future competitive position; the effects of and savings from our restructurings; our expectations and projections for future share-based compensation expense and currency exchange rates; the effects of our adoption of a new revenue recognition accounting standard; and the matters discussed in the section entitled "Housekeeping Items." 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 restructurings 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; unexpected currency fluctuations; 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 March 31, 2018 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. Page 40 of 40