Cimpress reports improved bottom line

Cimpress  PLC reported second-quarter results of total revenues of $820.3 million, compared with $825.6 million a year ago.  The National Pen segment generated revenues of about $128 million, down 3.8% while the company’s largest revenue-generating segment, Vistaprint, reported aggregate revenues of $433.3 million, down from $443.9 million.

Upload and Print segment’s revenues increased to $214.1 million from $203.8 million in the year-ago quarter. The segment consists of two subgroups — PrintBrothers and The Print Group (Pixart, Exaprint, etc.) – where PrintBrothers’ revenues increased to $126.6 million from $116.3 million and The Print Group generated $87.7 million, roughly flat year over year.

The company’s founder, chairman and CEO, Robert S. Keane, noted the company is pursuing bottom-line results, rather than trying to drive growth:

Robert Keane, CEO, Cimpress
Robert Keane, CEO, Cimpress

We are foregoing top-line growth where we do not believe it can generate sufficient returns on the capital it requires or if it otherwise distracts from areas of the business that have an opportunity to generate higher returns on capital.

Our organic constant-currency revenue was flat year over year and we do not expect it to accelerate significantly in the near term. That being said, we are optimistic that our execution focus and our investment in new capabilities will, over time, provide us with attractive growth opportunities.

On the other hand, we continue to deliver strong bottom-line results. You can see the results of our improved execution throughout this document in our highest-ever quarterly, year-to-date, and trailing-twelve-month figures for operating income, adjusted EBITDA, cash from operations, and free cash flow. Our adjusted return on invested capital has also increased to 25% compared to 14% at this time last year

As an example, the report stated Vistaprint reported revenue and constant currency revenue both declined year over year by 2%. “We continue to expect flat-to-negative growth for Vistaprint for the foreseeable future as a result of the changes we have made including substantial reductions in advertising spend which we do not believe meets our return thresholds,” wrote Keane.

In the quarter, Cimpress’ cost of revenues was $394 million, down 4.3% on a year-over-year basis, which represented 48% of total revenues. Total selling, general & administrative expenses declined 10.2% to $225.2 million. It represented 27.5% of revenues in the fiscal second quarter. Gross profit increased 2.9% year over year to $426.3 million, with margin expanding 180 basis points to 52%. Net interest expenses fell 6.5% to $15.7 million.