Cimpress Revenue Growth for Q4 and Fiscal Year 2015 Fall Inline with Expectations
VENLO, Netherlands—July 31, 2015—Cimpress N.V., the world leader in mass customization, has announced financial results for the three month period ended June 30, 2015, the fourth quarter of its 2015 fiscal year.
"Our fourth quarter and full year fiscal 2015 performance reflects the great strides made in service of the strategy we communicated at our August 2014 investor meeting," said Robert Keane, president and CEO. "We gained initial traction on our multi-year project to integrate our production technology and operations via a common mass customization platform. In our Vistaprint business unit the constant currency revenue growth doubled in fiscal 2015 compared to fiscal 2014 reflecting net positive returns from the many improvements we have made to reposition the Vistaprint customer value proposition toward 'higher expectations' customers, even as many of those investments continue to create short-term revenue headwinds."
He continued, "Over the past year, we allocated capital to the acquisition of several high-quality businesses that we believe will bring important additional capabilities to our future mass customization platform, as well as brands with which we can go to market via distinct and differentiated customer value propositions. In Japan and India, we continued to build foundations for growth and we entered the market in Brazil via an equity investment of just under 50 percent. Across our company, we broadened product offerings in categories such as signage, apparel and soft goods, flyers and promotional products."
Keane added, "As we begin the next fiscal year, we reiterate our strategic objective of being the world leader in mass customization, and our financial objective of maximizing our intrinsic value per share." According to Keane, the company has experienced tremendous growth over the last two decades, and its business and strategy continue to evolve.
As described in Keane's letter to investors (opens as PDF), the company is evolving its investor communications to better align with the way it views and manages its business today. It will no longer provide detailed annual guidance for its revenue, GAAP, and non-GAAP earnings per share results. Cimpress has provided its expectations of fiscal year 2016 spending on several discretionary long-term investments in the letter to investors and in its publicly available fourth quarter and fiscal 2015 presentation and commentary.
Ernst Teunissen, chief financial officer, noted, "Our fourth quarter results were in line with expectations. Our GAAP net income results continue to be impacted by non-operational, non-cash currency items, which caused GAAP EPS to be at the lower end of our previous guidance range."
Acquisitions Completed During the Fourth Quarter
Cimpress completed the following acquisitions during the fourth quarter:
- Exagroup SAS, a leading Web-to-print business in Europe that focuses on serving French graphic arts professionals and printers
- druck.at Druck- und Handelsgesellschaft mbH (druck.at), a leading Web-to-print business in Austria
- FL Print SAS, which does business as Easyflyer in France, a small but rapidly growing French Web-to-print start-up company
Our fourth quarter consolidated results include a partial quarter of the operations of these businesses.
Consolidated Financial Metrics:
Revenue for the fourth quarter of fiscal year 2015 was $380.5 million, a 13 percent increase compared to revenue of $338.2 million reported in the same quarter a year ago. The year-over-year strengthening of the U.S. Dollar has negatively impacted the U.S. Dollar value of our revenues generated from countries other than the United States. Excluding the estimated impact from currency exchange rate fluctuations and revenue from businesses acquired during the past 12 months, total revenue grew 13 percent year over year in the fourth quarter, in line with our expectations. For the full year, total consolidated revenue grew 18 percent year over year and 23 percent in constant currencies. Excluding the estimated impact from currency exchange rate fluctuations and revenue from businesses acquired during the past twelve months, revenue for the full year grew 9 percent.
Gross margin (revenue minus the cost of revenue as a percent of total revenue) in the fourth quarter was 58.9 percent, down from 60.5 percent in the same quarter a year ago. For the full fiscal year, gross margin was 61.9 percent compared to 64.5 percent in fiscal year 2014. The year-over-year reduction in gross margin was primarily due to the mix effect of our acquisitions in the upload and print space that have lower gross margins than our Vistaprint business unit.
Operating income in the fourth quarter was $15.2 million, or 4.0 percent of revenue, a decrease in both absolute dollars and as a percent of revenue compared to $19.7 million, or 5.8 percent of revenue, in the same quarter a year ago. For the full fiscal year, operating income was $96.3 million, or 6.4 percent of revenue, a 12 percent increase compared to operating income of $85.9 million, or 6.8 percent of revenue, in the prior fiscal year. Operating income in the fourth quarter and year was negatively impacted by currency fluctuations that were offset by realized hedging gains below the line in Other income (expense), net.
GAAP net loss for the fourth quarter was $(3.7) million, or (1.0) percent of revenue, compared to GAAP net income of $1.0 million, or 0.3 percent of revenue in the same quarter a year ago. This was influenced by additional interest expense related to the senior unsecured notes offering completed in the third quarter, as well as non-operational, non-cash currency impacts. For the full fiscal year, GAAP net income attributable to Cimpress was $92.2 million, or 6.2 percent of revenue, a 111 percent increase compared to GAAP net income of $43.7 million, or 3.4 percent of revenue, in the prior fiscal year.
GAAP net loss per diluted share for the fourth quarter was $(0.11), versus GAAP net income per diluted share of $0.03 in the same quarter a year ago. For the full fiscal year, GAAP net income per diluted share was $2.73, versus $1.28 in the prior full fiscal year.
Non-GAAP adjusted net income for the fourth quarter, which is defined at the end of this press release, was $22.8 million, or 6.0 percent of revenue, down 10.4 percent compared to $25.5 million, or 7.6 percent of revenue, in the same quarter a year ago. For the full fiscal year, non-GAAP adjusted net income was $147.7 million, or 9.9 percent of revenue, a 44 percent increase compared to non-GAAP adjusted net income of $102.5 million, or 8.1 percent of revenue, in the prior fiscal year.
Non-GAAP adjusted net income per diluted share for the fourth quarter, as defined at the end of this press release, was $0.66, versus $0.75 in the same quarter a year ago. For the 2015 full fiscal year, non-GAAP adjusted net income per diluted share was $4.31, versus $2.95 in the prior fiscal year.
Capital expenditures in the fourth quarter were $25.7 million, or 6.8 percent of revenue. During the full fiscal year capital expenditures were $75.8 million or 5.1 percent of revenue.
During the fourth quarter, the company generated $36.5 million of cash from operations and $12.7 million in free cash flow, which is defined at the end of this press release. During the full fiscal year, the company generated $228.9 million of cash from operations and $143.5 million in free cash flow.
As of June 30, 2015, the company had $103.6 million in cash and cash equivalents and $522.5 millionof debt. After considering debt covenant limitations, as of June 30, 2015 the company had $589.6 million available for borrowing under its committed credit facility.
The acquisitions of Printdeal, Pixartprinting, FotoKnudsen, Exagroup, Easyflyer, and druck.at, and the investment in Printi and the Digipri contribution to its joint venture in Japan are not incorporated into these metrics.
Cimpress N.V. (Nasdaq: CMPR) is the world leader in mass customization. For 20 years, the company has focused on developing software and manufacturing capabilities that transform traditional markets in order to make customized products accessible and affordable to everyone. Cimpress’ portfolio of brands includes Vistaprint, Albelli, Drukwerkdeal, Exaprint, Pixartprinting and others. That portfolio serves multiple customer segments across many applications for mass customization. The company produces more than 80 million unique products a year via its network of computer integrated manufacturing facilities.