Vistaprint parent Cimpress plc reported print orders dropped by 65 percent at the end of March and beginning of April, climbing to 40 percent down by the end of the month. Sales for the quarter were down by 10 percent to US$598 million, compared with $661.8 million a year ago, with the Covid-19 pandemic taking 30 percent from March sales, the company said. Cimpress recorded an operating loss of US$88 million for the March quarter. As previously reported, Cimpress took on new capital from Apollo Global Management in anticipation of further worsening financial conditions.
The company is reducing its workforce of casual staff, and cutting hours of permanent staff, but said it would ringfence key investments in “technology, data infrastructure, and customer value improvements”. The company also listed several cost-saving actions, including:
- Limited hiring across all Cimpress businesses.
- Eliminated discretionary spend such as travel, training, and events.
- Instituted reduced work schedules or mandatory PTO usage where possible.
- Paused company 401(k) match for U.S. team members.
- Ceased or otherwise deferred all consulting projects other than those that were essential or had very obvious near term payback.
- Eliminated most contractors, unless deemed essential to operations.
- Replaced approximately $36 million annualized cash compensation with restricted shares.
“We have positioned Cimpress to stay on offense during and after this pandemic by taking actions that allow us to continue to fund key projects that we believe will benefit our customers and long-term shareholders,” says Robert Keane, founder, chairman, and CEO. “Even though deep economic recessions are painful, they also create opportunities and accelerate competitive advantages for companies with strong business models that focus on execution, invest in key projects, and improve customer value. Our recent actions ensure Cimpress remains financially robust during these uncertain times so that we can do exactly that.”
The National Pen segment generated revenues of $68.4 million, down from $79.7 million year-over-year. Vistaprint — the largest revenue-generating segment of the company — reported $316.3 million aggregate revenues, down from $358.7 million a year ago.
The Upload and Print segment’s revenues decreased to $177.8 million from $188.1 million in the year-ago quarter. The segment consists of two subgroups — PrintBrothers and The Print Group. PrintBrothers’ revenues moved up to $109.5 million from $109.3 million a year ago, whereas The Print Group – including Pixartprinting and exaprint – generated $68.5 million, down from $79 million reported in the year-ago quarter.
The company has not provided earnings and revenue projections for the fourth quarter and fiscal 2020. However, it did mention that owing to the uncertain near-term market environment due to the coronavirus outbreak, it anticipates an adverse impact on its financial results, going forward, despite its current efforts to reduce costs.