Cimpress to trim Vistaprint headcount over the next few months

Cimpress cuts to Vistaprint to save $20-22 million over 2018

Cimpress N.V. filed a notice in its 8K on Nov. 3 the expected restructuring and reduced headcount of its Vistaprint division will save the company $20-$22 million for fiscal 2018: “Cimpress expects the Vistaprint headcount and cost reductions to be largely implemented over the coming two months and believes they will reduce fiscal year 2018 operating expenses by between $20 million and $22 million. Certain of the actions that are being considered are subject to mandatory consultations with employees, works councils and/or governmental authorities. Based on a preliminary assessment of the planned actions, Cimpress expects to take restructuring charges of approximately $15 million to $17 million during the quarter ending December 31, 2017, which primarily consists of one-time termination benefits. Cimpress expects that almost all of the estimated restructuring charges will be cash expenditures.”

Cimpress execs stated the Vistaprint changes were driven by the company’s overall plan to decentralize operations, to expand product offerings (which impacted gross margins).

Sean Quinn, chief financial officer of Cimpress noted: “First quarter revenue growth by segment was in line with our commentary at the beginning of the year. Our profits increased significantly year over year due in part to savings from the decentralization we announced last January and some non-operational benefits described below. Conversely, as anticipated, we continue to see pressure on Vistaprint’s incremental gross profit from the rapid expansion of new products and design services. As described at our August 8, 2017 investor day, we believe that Vistaprint has multiple pricing and operating levers to alleviate some of this pressure throughout fiscal year 2018 as we scale the new product offerings, but we expect it to take time. In the meantime, our revenue from newly launched products continues to grow strongly, so the mix effect on our profitability is meaningful: Vistaprint’s gross margin was about 400 basis points lower this quarter compared to the same period last year.”

Last week, Cimpress reported fiscal first-quarter revenue for the first quarter of fiscal year 2018 was $563.3 million, a 27 percent increase compared to revenue of $443.7 million in the same quarter a year ago. The company had a net income of $46.6 million, or 8.3 percent of revenue, compared to an operating loss of $27.8 million, or 6.3 percent of revenue. The big gain there was driven by the $93 million sale of its Albumprinter business.