Cimpress(US:CMPR)2023-01-25 16:00Revenue Performance - Total external revenue for the six months ended December 31, 2022, was $1,548,617, compared to $1,507,315 for the same period in 2021[164] - North America contributed $765,518 to total external revenue for the six months ended December 31, 2022, while Europe contributed $698,136[165] - The Print Group segment reported revenue of $166,159 for the six months ended December 31, 2022, compared to $162,950 in the same period in 2021[164] - National Pen segment revenue was $202,287 for the six months ended December 31, 2022, up from $193,981 in the same period in 2021[164] - All Other Businesses segment revenue increased to $111,825 for the six months ended December 31, 2022, from $105,590 in the same period in 2021[164] - Constant-currency revenue increased by 10% (9% excluding acquired companies) for the twelve months ended December 31, 2022[178] - Revenue increased by 3% to $1,548.6 million for the twelve months ended December 31, 2022[150] - Total revenue for the three months ended December 31, 2022, was $845.2 million, a 1% decrease year over year, with constant-currency revenue growth of 6%[183] - Reported revenue for the three months ended December 31, 2022 was flat year over year at $89.3 million, with a 1% decrease compared to the prior year period[205][228] - Constant-currency revenue growth for the Print Group was 11% and 17% for the three and six months ended December 31, 2022, respectively, driven by price increases to address inflationary costs[228] - All Other Businesses' constant-currency revenue growth was 3% and 6% for the three and six months ended December 31, 2022, respectively, with BuildASign's signage products growing at double-digit rates[231] - National Pen's revenue for the three months ended December 31, 2022, was $120.6 million, a 3% decrease compared to $124.7 million in the same period in 2021[252] - National Pen's revenue for the six months ended December 31, 2022, was $202.3 million, a 4% increase compared to $194.0 million in the same period in 2021[252] - National Pen's constant-currency revenue growth for the three and six months ended December 31, 2022, was 3% and 11%, respectively, driven by price increases and volume growth in new product categories[252] - Revenue remained flat at $845.2 million for the three months ended December 31, 2022[299] - Vista's organic constant-currency revenue growth was 2% and 5% for the three and six months ended December 31, 2022, respectively[197] - Total external revenue for the three months ended December 31, 2022, was $845.2 million, with North America contributing $406.3 million, Europe $395.3 million, and Other regions $43.6 million[25] Segment Performance - The Print Group segment reported revenue of $166,159 for the six months ended December 31, 2022, compared to $162,950 in the same period in 2021[164] - National Pen segment revenue was $202,287 for the six months ended December 31, 2022, up from $193,981 in the same period in 2021[164] - All Other Businesses segment revenue increased to $111,825 for the six months ended December 31, 2022, from $105,590 in the same period in 2021[164] - Vista's segment EBITDA declined by $35.6 million for the three months and $71.8 million for the six months ended December 31, 2022, due to cost inflation and unfavorable product mix[224] - PrintBrothers' constant-currency revenue growth was 20% for the three months and 22% for the six months ended December 31, 2022, driven by new products and price increases[226] - The Print Group's segment EBITDA decreased by 16% for both the three and six months ended December 31, 2022, negatively impacted by currency exchange fluctuations of $1.7 million and $3.9 million, respectively[228][229] - National Pen's segment EBITDA for the three months ended December 31, 2022, was $24.8 million, a 22% decrease compared to $31.6 million in the same period in 2021[252] - National Pen's segment EBITDA for the six months ended December 31, 2022, was $23.5 million, flat compared to $23.6 million in the same period in 2021[252] - National Pen's segment EBITDA was negatively impacted by $5.2 million and $5.4 million for the three and six months ended December 31, 2022, respectively, due to currency impacts[253] - Consolidated segment EBITDA decreased by 39% and 46% for the three and six months ended December 31, 2022, respectively, with segment EBITDA as a percentage of revenue declining from 20% to 13% and 11%[246] Financial Position and Debt - The company's long-lived assets totaled $490,668 as of December 31, 2022, with the United States holding the largest portion at $83,937[169] - The company's Term Loan B consists of a $795,000 tranche and a €300,000 tranche, with interest rates tied to LIBOR and EURIBOR, respectively[122] - The Revolving Credit Facility has a $250,000 limit with interest rates ranging from LIBOR plus 2.50% to 3.00% depending on the company's First Lien Leverage Ratio[122] - The company's First Lien Leverage Ratio must not exceed 3.25 to 1.00 if any loans under the Revolving Credit Facility are outstanding on the last day of any fiscal quarter[152] - Total debt outstanding, net, was $1,689,277 as of December 31, 2022, with long-term debt at $1,679,059[151] - The company had $111.3 million of cash and cash equivalents, $102.2 million of marketable securities, and $1,707.0 million of debt as of December 31, 2022[259] - The company's Credit Agreement has $243.7 million unused as of December 31, 2022[240] - As of December 31, 2022, the carrying value of the company's debt was $1,706,972, with a fair value of $1,530,471, determined using Level 2 inputs under the fair value hierarchy[3] Expenses and Costs - Technology and development expenses increased by $7.5 million (11%) for the three months ended December 31, 2022, driven by higher customer demand and compensation costs[187][188] - General and administrative expenses increased by $3.1 million (7%) for the three months ended December 31, 2022, due to higher headcount and inflation-adjusted merit cycles[190] - Restructuring expenses surged to $11,207 for the three months ended December 31, 2022, a 3,550% increase compared to the prior year period[187] - Interest expense, net, increased by $3.2 million for the three months ended December 31, 2022, primarily due to a $2.1 million accretion adjustment[193] - Cost of revenue increased by $31.5 million for the three months and $70.2 million for the six months ended December 31, 2022, primarily due to global supply chain challenges[186] - Operating expenses increased by $6.1 million for the three months and $10.6 million for the six months ended December 31, 2022, due to growth investments and inflation-adjusted merit increases[198] - Vista's advertising expense increased by $3.5 million for the three months and $23.5 million for the six months ended December 31, 2022, driven by higher mid- and upper-funnel advertising[224] - Marketing and selling expenses decreased by $3.5 million for the three months ended December 31, 2022, but increased by $22.8 million for the six months ended December 31, 2022, primarily due to higher advertising spend[215] - Central and corporate costs increased by $0.9 million and $0.5 million for the three and six months ended December 31, 2022, respectively, due to compensation increases and volume-related technology costs[235] - Cost of revenue increased to $455.4 million (53.9% of revenue) for the three months ended December 31, 2022, up from $423.9 million (49.9% of revenue) in the prior year[211] - Restructuring charges of $10.9 million were recognized, primarily related to exiting businesses in Japan and China[296] Cash Flow and Liquidity - Cash from operations decreased by $124.0 million year over year, with $77.6 million attributed to decreased working capital cash flows[181] - Net cash provided by operating activities for the six months ended December 31, 2022 was $55.9 million, a significant decrease from $179.9 million in the prior year period[257] - Adjusted free cash flow decreased year over year by $121.1 million for the six months ended December 31, 2022[208] - Total purchases of property, plant, and equipment decreased to $14.7 million for the three months ended December 31, 2022, down from $17.9 million in the prior year[298] Taxes and Valuation Allowances - Diluted net loss per share increased due to a $108.8 million income tax expense, driven by a valuation allowance against Swiss deferred tax assets[206] - Income tax expense increased due to a $116.7 million valuation allowance on Swiss deferred tax assets[220] - The company's effective tax rate was (1,016.3)% and (487.6)% for the three and six months ended December 31, 2022, respectively, compared to 23.6% and 34.3% in the prior year periods[243] Commitments and Obligations - Unrecorded commitments under contract totaled $235,619 as of December 31, 2022, including $87,452 for third-party cloud services and $69,588 for inventory and digital service purchases[170] - Total contractual obligations as of December 31, 2022, amounted to $2.59 billion, with $304.4 million due within one year[238] - The company had unrecorded purchase commitments of $235.6 million as of December 31, 2022, including $87.5 million for third-party cloud services and $69.6 million for inventory and fulfillment[239] Currency and Exchange Rates - Constant-currency revenue increased by 10% (9% excluding acquired companies) for the twelve months ended December 31, 2022[178] - Total revenue for the three months ended December 31, 2022, was $845.2 million, a 1% decrease year over year, with constant-currency revenue growth of 6%[183] - Constant-currency revenue growth for the Print Group was 11% and 17% for the three and six months ended December 31, 2022, respectively, driven by price increases to address inflationary costs[228] - All Other Businesses' constant-currency revenue growth was 3% and 6% for the three and six months ended December 31, 2022, respectively, with BuildASign's signage products growing at double-digit rates[231] - National Pen's constant-currency revenue growth for the three and six months ended December 31, 2022, was 3% and 11%, respectively, driven by price increases and volume growth in new product categories[252] - Adjusted EBITDA decreased year over year, with a currency benefit of approximately $6.5 million for the three months ended December 31, 2022[179] - A hypothetical 10% decrease in currency exchange rates would have resulted in a $10.5 million impact on income before taxes for the three months ended December 31, 2022[290] - Currency-related gains, net, were $6.2 million for the three months ended December 31, 2022, up from $5.6 million in the prior year[192] Investments and Fair Value - The company purchased an additional 10% to 11% equity interests in three PrintBrothers businesses for a total of $90,841 during the second quarter of fiscal year 2023[156] - The company holds investments classified as held-to-maturity, primarily in U.S. Treasury securities and U.S. government agency securities, with maturities of two years or less[8] - The company applied the transition guidance from ASU 2022-06 to its two Term SOFR interest rate swap contracts, with no material impact on consolidated financial statements[15] - There were no significant transfers in or out of Level 1, Level 2, and Level 3 classifications during the six months ended December 31, 2022[1] - The company uses a three-level valuation hierarchy for measuring fair value, with Level 1 being quoted prices in active markets, Level 2 including observable inputs, and Level 3 involving unobservable inputs[18] Other Financial Metrics - The company recognized a liability of $6,838 as of December 31, 2022, related to deferred payments for acquisitions, primarily for Depositphotos[171] - The company estimates that $8,207 will be reclassified from accumulated other comprehensive loss to interest expense, net during the twelve months ending December 31, 2023[23] - Weighted average shares outstanding, basic for the three months ended December 31, 2022, was 26,234,747, compared to 26,096,786 for the same period in 2021[14]