Cimpress Issues Results For Its Fourth Quarter, Fiscal Year 2017
Cimpress, the Dutch parent company of Waltham, Massachusetts, distributor Vistaprint (PPAI 565755), has released financial results for the fourth quarter and the 2017 fiscal year that ended June 30. The company’s revenues grew 18 percent, year-over-year, in the fourth quarter to $564.3 million, while annual revenues of $2.135 billion were up 19 percent over the previous year.
"Fiscal year 2017 was important in terms of the evolution of Cimpress," says Robert Keane, president and chief executive officer. "We decentralized our operations, delivered many new capabilities and product offerings, began using our mass customization platform, made strong investments in organic growth opportunities, and completed our largest acquisition to date. Additionally, we continue to improve our understanding of and approach to capital allocation, pushing this understanding deeper into our organization. I describe these subjects in detail in my annual letter to investors which was published simultaneously with this earnings announcement on ir.cimpress.com. We also plan to highlight our progress and fiscal year 2018 plans at our upcoming investor day on August 8."
Sean Quinn, chief financial officer, adds, "Fourth quarter revenue growth decelerated, in line with our expectations. As mentioned last quarter, the timing shift of the Easter holiday from the third quarter in 2016 to the fourth quarter in 2017 created much of this dynamic. Looking at the full year which removes typical quarterly fluctuations, our revenue growth by segment was in line with our commentary at the beginning of the year. As described throughout the year, we continue to see pressure on Vistaprint's gross profit from shipping price reductions and the rapid expansion of product selection and design services as we have prioritized launching and learning about demand levels ahead of in-year profits. We often note that we are not targeting absolute gross margin or even contribution margin increases; we seek to maximize our cash flows over long periods of time. With that said, the Vistaprint business sees opportunities to optimize costs and pricing starting in the upcoming year as we scale these offerings and realize the operational benefits of our recent reorganization."
The company reported a GAAP (generally accepted accounting principles) loss from operations of $9.7 million in fourth quarter. It attributes this largely to expenses related to its acquisition last year of WIRmachenDRUCK and planned increases in investments, although these were partially offset by restructuring savings. Its adjusted net operating profit after tax was $9.6 million versus $16.9 million during the same period last year.
For fiscal year 2017, the company says that GAAP loss from operations of $45.7 million was primarily due to planned increases in investments, acquisition-related charges, previously announced loss of certain partner profits, net restructuring costs, and unfavorable currency impacts, partially offset by reduced impairment charges. The adjusted net operating profit after tax was $64.6 million versus $139.8 million for fiscal year 2016.
Looking ahead to fiscal year 2018, Cimpress expects year-over-year savings from its recent restructuring. Quinn says, “As we look ahead to fiscal year 2018, we are on track to recognize the financial benefits of our recent restructuring in line with our past commentary. Our businesses are focused on delivering strong returns from past investment spend and, as outlined in detail in our letter to investors dated July 26, we expect to continue to invest significantly against our organic growth opportunities, albeit at a more modest amount relative to fiscal year 2017. These are among the factors that we expect to result in higher unlevered free cash flow in fiscal year 2018."
More on Cimpress’ financial statements can be found here.