Cimpress Earnings 2021-03-31

Balance Sheet	Income Statement	Cash Flow

cmpr-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________

Form 10-Q


(Mark One)
☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	March 31, 2021
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission file number 000-51539

_________________________________

Cimpress plc

(Exact Name of Registrant as Specified in Its Charter)

_________________________________


Ireland									98-0417483
(State or Other Jurisdiction of Incorporation or Organization)									(I.R.S. Employer Identification No.)

Building D, Xerox Technology Park A91 H9N9,

Dundalk, Co. Louth

Ireland

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: 353 42 938 8500

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Exchange on Which Registered

Ordinary Shares, nominal value of €0.01 per share

CMPR

NASDAQ Global Select Market

______________________________

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ☐ No þ

As of April 26, 2021, there were 26,033,704 Cimpress plc ordinary shares outstanding.

CIMPRESS PLC

QUARTERLY REPORT ON FORM 10-Q

For the Three and Nine Months ended March 31, 2021

TABLE OF CONTENTS


						Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)						1
Consolidated Balance Sheets as of March 31, 2021 and June 30, 2020						1
Consolidated Statements of Operations for the three and nine months ended March 31, 2021 and 2020						2
Consolidated Statements of Comprehensive Income for the three and nine months ended March 31, 2021 and 2020						3
Consolidated Statements of Shareholders' Equity (Deficit) for the three and nine months ended March 31, 2021 and 2020						4
Consolidated Statements of Cash Flows for the nine months ended March 31, 2021 and 2020						8
Notes to Consolidated Financial Statements						10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations						33
Item 3. Quantitative and Qualitative Disclosures About Market Risk						47
Item 4. Controls and Procedures						48

PART II OTHER INFORMATION
Item 1A. Risk Factors						49
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						49
Item 6. Exhibits						50
Signatures						51

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CIMPRESS PLC

CONSOLIDATED BALANCE SHEETS

(unaudited in thousands, except share and per share data)


	March 31, 2021		June 30, 2020
Assets
Current assets:
Cash and cash equivalents	$	36,364	$	45,021
Accounts receivable, net of allowances of $10,103 and $9,651, respectively	45,365		34,596
Inventory	76,104		80,179
Prepaid expenses and other current assets	75,717		88,608

Total current assets	233,550		248,404
Property, plant and equipment, net	312,560		338,659
Operating lease assets, net	84,581		156,258
Software and website development costs, net	81,677		71,465
Deferred tax assets	135,491		143,496
Goodwill	706,626		621,904
Intangible assets, net	194,502		209,228
Other assets	34,276		25,592
Total assets	$	1,783,263	$	1,815,006
Liabilities, noncontrolling interests and shareholders’ deficit
Current liabilities:
Accounts payable	$	174,947	$	163,891
Accrued expenses	265,593		210,764
Deferred revenue	42,298		39,130
Short-term debt	9,012		17,933
Operating lease liabilities, current	29,508		41,772
Other current liabilities	77,669		13,268

Total current liabilities	599,027		486,758
Deferred tax liabilities	27,612		33,811
Long-term debt	1,332,234		1,415,657

Operating lease liabilities, non-current	72,142		128,963
Other liabilities	92,786		88,187
Total liabilities	2,123,801		2,153,376
Commitments and contingencies (Note 13)
Redeemable noncontrolling interests	64,250		69,106
Shareholders’ deficit:
Preferred shares, nominal value €0.01 per share, 100,000,000 shares authorized; none issued and outstanding	—		—
Ordinary shares, nominal value €0.01 per share, 100,000,000 shares authorized; 44,080,627 shares issued; 26,003,676 and 25,885,675 shares outstanding, respectively	615		615
Deferred ordinary shares, nominal value €1.00 per share, 25,000 shares authorized, issued and outstanding	28		28
Treasury shares, at cost, 18,076,951 and 18,194,952 shares, respectively	(1,368,721)		(1,376,496)
Additional paid-in capital	448,432		438,616
Retained earnings	599,833		618,437
Accumulated other comprehensive loss	(84,975)		(88,676)


Total shareholders' deficit	(404,788)		(407,476)
Total liabilities, noncontrolling interests and shareholders’ deficit	$	1,783,263	$	1,815,006

See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited in thousands, except share and per share data)


	Three Months Ended March 31,				Nine Months Ended March 31,
	2021		2020		2021		2020
Revenue	$	578,851	$	597,960	$	1,951,496	$	2,052,252
Cost of revenue (1)	302,022		309,598		986,845		1,029,281
Technology and development expense (1)	62,572		67,693		186,097		195,287
Marketing and selling expense (1)	154,472		148,803		474,944		483,056
General and administrative expense (1)	62,358		45,148		147,149		140,681
Amortization of acquired intangible assets	13,506		12,693		40,264		38,861
Restructuring expense (1)	(382)		919		1,714		5,006
Impairment of goodwill	—		100,842		—		100,842

(Loss) income from operations	(15,697)		(87,736)		114,483		59,238
Other income (expense), net	9,785		22,537		(16,167)		29,171
Interest expense, net	(29,002)		(17,262)		(89,659)		(48,050)

(Loss) income before income taxes	(34,914)		(82,461)		8,657		40,359
Income tax expense (benefit)	3,927		1,039		23,675		(86,641)
Net (loss) income	(38,841)		(83,500)		(15,018)		127,000
Add: Net income attributable to noncontrolling interest	(209)		(1,384)		(2,500)		(1,630)
Net (loss) income attributable to Cimpress plc	$	(39,050)	$	(84,884)	$	(17,518)	$	125,370
Basic net (loss) income per share attributable to Cimpress plc	$	(1.50)	$	(3.26)	$	(0.67)	$	4.54
Diluted net (loss) income per share attributable to Cimpress plc	$	(1.50)	$	(3.26)	$	(0.67)	$	4.43
Weighted average shares outstanding — basic	26,003,675		26,024,229		25,984,300		27,608,387
Weighted average shares outstanding — diluted	26,003,675		26,024,229		25,984,300		28,317,440

____________________________________________

(1) Share-based compensation is allocated as follows:


	Three Months Ended March 31,				Nine Months Ended March 31,
	2021		2020		2021		2020
Cost of revenue	$	99	$	66	$	233	$	251
Technology and development expense	2,284		2,014		5,690		5,791
Marketing and selling expense	1,808		1,145		4,247		367
General and administrative expense	5,354		5,683		12,901		15,574
Restructuring expense	—		(16)		—		756

See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited in thousands)


	Three Months Ended March 31,				Nine Months Ended March 31,
	2021		2020		2021		2020
Net (loss) income	$	(38,841)	$	(83,500)	$	(15,018)	$	127,000
Other comprehensive (loss) income, net of tax:
Foreign currency translation (losses) gains, net of hedges	(14,571)		1,490		192		3,110
Net unrealized gains (losses) on derivative instruments designated and qualifying as cash flow hedges	5,809		(21,201)		13,447		(22,258)
Amounts reclassified from accumulated other comprehensive (loss) income to net (loss) income on derivative instruments	(3,085)		2,531		(8,382)		5,537


Loss on pension benefit obligation, net	—		—		(336)		—
Comprehensive (loss) income	(50,688)		(100,680)		(10,097)		113,389
Add: Comprehensive loss (income) attributable to noncontrolling interests	1,260		(1,515)		(3,720)		(967)
Total comprehensive (loss) income attributable to Cimpress plc	$	(49,428)	$	(102,195)	$	(13,817)	$	112,422

See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)

(unaudited in thousands)


	Ordinary Shares			Deferred Ordinary Shares			Treasury Shares
	Number of Shares Issued	Amount		Number of Shares Issued	Amount		Number of Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity (Deficit)
Balance at June 30, 2019	44,080	$	615	—	$	—	(13,635)	$	(737,447)	$	411,079	$	537,422	$	(79,857)	$	131,812
Restricted share units vested, net of shares withheld for taxes	—	—		—	—		4	87		(259)		—		—		(172)
Grant of restricted share awards	—	—		—	—		(2)	(187)		—		—		—		(187)
Share-based compensation expense	—	—		—	—		—	—		5,164		—		—		5,164
Purchase of ordinary shares	—	—		—	—		(1,964)	(232,286)		—		—		—		(232,286)
Net income attributable to Cimpress plc	—	—		—	—		—	—		—		20,031		—		20,031
Adoption of new accounting standards	—	—		—	—		—	—		—		3,143		—		3,143
Net unrealized loss on derivative instruments designated and qualifying as cash flow hedges	—	—		—	—		—	—		—		—		(3,037)		(3,037)
Foreign currency translation, net of hedges	—	—		—	—		—	—		—		—		(70)		(70)
Balance at September 30, 2019	44,080	$	615	—	$	—	(15,597)	$	(969,833)	$	415,984	$	560,596	$	(82,964)	$	(75,602)
Restricted share units vested, net of shares withheld for taxes	—	—		—	—		1	55		(152)		—		—		(97)
Issuance of ordinary shares due to share option exercises, net of shares withheld for taxes	—	—		—	—		1	8		(2)		—		—		6
Issuance of deferred ordinary shares	—	—		25	28		—	—		—		—		—		28
Share-based compensation expense	—	—		—	—		—	—		8,228		—		—		8,228
Purchase of ordinary shares	—	—		—	—		(2,280)	(305,287)		—		—		—		(305,287)
Net income attributable to Cimpress plc	—	—		—	—		—	—		—		190,223		—		190,223
Redeemable noncontrolling interest accretion to redemption value	—	—		—	—		—	—		—		(5,493)		—		(5,493)
Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges	—	—		—	—		—	—		—		—		4,986		4,986
Foreign currency translation, net of hedges	—	—		—	—		—	—		—		—		2,484		2,484
Balance at December 31, 2019	44,080	$	615	25	$	28	(17,875)	$	(1,275,057)	$	424,058	$	745,326	$	(75,494)	$	(180,524)
See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (CONTINUED)

(unaudited in thousands)




	Ordinary Shares			Deferred Ordinary Shares			Treasury Shares
	Number of Shares Issued	Amount		Number of Shares Issued	Amount		Number of Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity (Deficit)
Balance at December 31, 2019	44,080	$	615	25	$	28	(17,875)	$	(1,275,057)	$	424,058	$	745,326	$	(75,494)	$	(180,524)
Restricted share units vested, net of shares withheld for taxes	—	—		—	—		1	44		(88)		—		—		(44)
Issuance of ordinary shares due to share option exercises, net of shares withheld for taxes	—	—		—	—		431	(12,526)		(28,386)		—		—		(40,912)

Share-based compensation expense	—	—		—	—		—	—		8,825		—		—		8,825
Purchase of ordinary shares	—	—		—	—		(759)	(89,483)		—		—		—		(89,483)
Net loss attributable to Cimpress plc	—	—		—	—		—	—		—		(84,884)		—		(84,884)
Net unrealized loss on derivative instruments designated and qualifying as cash flow hedges	—	—		—	—		—	—		—		—		(18,670)		(18,670)
Foreign currency translation, net of hedges	—	—		—	—		—	—		—		—		1,359		1,359
Balance at March 31, 2020	44,080	$	615	25	$	28	(18,202)	$	(1,377,022)	$	404,409	$	660,442	$	(92,805)	$	(404,333)

See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (CONTINUED)

(unaudited in thousands)


	Ordinary Shares			Deferred Ordinary Shares			Treasury Shares
	Number of Shares Issued	Amount		Number of Shares Issued	Amount		Number of Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity (Deficit)
Balance at June 30, 2020	44,080	$	615	25	$	28	(18,195)	$	(1,376,496)	$	438,616	$	618,437	$	(88,676)	$	(407,476)

Restricted share units vested, net of shares withheld for taxes	—	—		—	—		118	7,773		(13,366)		—		—		(5,593)

Share-based compensation expense	—	—		—	—		—	—		8,577		—		—		8,577
Net loss attributable to Cimpress plc	—	—		—	—		—	—		—		(10,755)		—		(10,755)
Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges	—	—		—	—		—	—		—		—		1,765		1,765
Foreign currency translation, net of hedges	—	—		—	—		—	—		—		—		(609)		(609)
Unrealized loss on pension benefit obligation, net of tax	—	—		—	—		—	—		—		—		(336)		(336)
Balance at September 30, 2020	44,080	$	615	25	$	28	(18,077)	$	(1,368,723)	$	433,827	$	607,682	$	(87,856)	$	(414,427)



Share-based compensation expense	—	—		—	—		—	—		5,036		—		—		5,036
Net income attributable to Cimpress plc	—	—		—	—		—	—		—		32,287		—		32,287
Redeemable noncontrolling interest accretion to redemption value	—	—		—	—		—	—		—		(1,086)		—		(1,086)

Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges	—	—		—	—		—	—		—		—		576		576
Foreign currency translation, net of hedges	—	—		—	—		—	—		—		—		12,683		12,683
Balance at December 31, 2020	44,080	$	615	25	$	28	(18,077)	$	(1,368,723)	$	438,863	$	638,883	$	(74,597)	$	(364,931)
See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (CONTINUED)

(unaudited in thousands)




	Ordinary Shares			Deferred Ordinary Shares			Treasury Shares
	Number of Shares Issued	Amount		Number of Shares Issued	Amount		Number of Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity (Deficit)
Balance at December 31, 2020	44,080	$	615	25	$	28	(18,077)	$	(1,368,723)	$	438,863	$	638,883	$	(74,597)	$	(364,931)
Restricted share units vested, net of shares withheld for taxes	—	—		—	—		—	2		(3)		—		—		(1)

Share-based compensation expense	—	—		—	—		—	—		9,572		—		—		9,572
Net loss attributable to Cimpress plc	—	—		—	—		—	—		—		(39,050)		—		(39,050)
Net unrealized loss on derivative instruments designated and qualifying as cash flow hedges	—	—		—	—		—	—		—		—		(13,102)		(13,102)
Foreign currency translation, net of hedges	—	—

10-Q	2021-03-31	Filed 2021-04-29
10-Q	2020-12-31	Filed 2021-01-28
10-Q	2020-09-30	Filed 2020-10-29
10-K	2020-06-30	Filed 2020-08-11
10-Q	2020-03-31	Filed 2020-05-06
10-Q	2019-12-31	Filed 2020-01-30
10-Q	2019-09-30	Filed 2019-10-31
10-K	2019-06-30	Filed 2019-08-09
10-Q	2019-03-31	Filed 2019-05-02
10-Q	2018-12-31	Filed 2019-01-31
10-Q	2018-09-30	Filed 2018-11-01
10-K	2018-06-30	Filed 2018-08-10
10-Q	2018-03-31	Filed 2018-05-03
10-Q	2017-12-31	Filed 2018-02-01
10-Q	2017-09-30	Filed 2017-11-03
10-K	2017-06-30	Filed 2017-08-11
10-Q	2017-03-31	Filed 2017-04-27
10-Q	2016-12-31	Filed 2017-01-30
10-Q	2016-09-30	Filed 2016-10-28
10-K	2016-08-12	Filed 2016-08-12
10-Q	2016-03-31	Filed 2016-04-28
10-Q	2015-12-31	Filed 2016-01-29
10-Q	2015-09-30	Filed 2015-10-30
10-K	2015-06-30	Filed 2015-08-14
10-Q	2015-03-31	Filed 2015-04-30
10-Q	2014-12-31	Filed 2015-01-30
10-Q	2014-09-30	Filed 2014-10-30
10-K	2014-06-30	Filed 2014-08-15
10-Q	2014-03-31	Filed 2014-04-30
10-Q	2013-12-31	Filed 2014-01-31
10-Q	2013-09-30	Filed 2013-10-30
10-K	2013-06-30	Filed 2013-08-15
10-Q	2012-12-31	Filed 2013-02-01
10-Q	2012-09-30	Filed 2012-10-26
10-K	2012-06-30	Filed 2012-08-15
10-Q	2012-03-31	Filed 2012-04-27
10-Q	2011-12-31	Filed 2012-02-01
10-Q	2011-09-30	Filed 2011-10-28
10-K	2011-06-30	Filed 2011-08-17
10-Q	2011-03-31	Filed 2011-04-29
10-Q	2010-12-31	Filed 2011-01-28
10-Q	2010-09-30	Filed 2010-10-29
10-K	2010-06-30	Filed 2010-08-27
10-Q	2010-03-31	Filed 2010-04-30
10-Q	2009-12-31	Filed 2010-01-29

8-K	2021-02-16
8-K	2021-01-27
8-K	2020-11-25
8-K	2020-10-28
8-K	2020-10-01
8-K	2020-09-28
8-K	2020-07-29
8-K	2020-06-12
8-K	2020-05-05
8-K	2020-05-01
8-K	2020-04-28
8-K	2020-03-31
8-K	2020-02-13
8-K	2020-02-11
8-K	2020-02-10
8-K	2020-02-10
8-K	2020-01-29
8-K	2019-11-22
8-K	2019-11-12
8-K	2019-11-05
8-K	2019-10-30
8-K	2019-10-25
8-K	2019-10-11
8-K	2019-09-17
8-K	2019-08-12
8-K	2019-07-26
8-K	2019-05-01
8-K	2019-02-12
8-K	2019-02-12
8-K	2019-01-29
8-K	2019-01-09
8-K	2019-01-07
8-K	2018-12-20
8-K	2018-11-13
8-K	2018-10-31
8-K	2018-10-01
8-K	2018-09-23
8-K	2018-08-01
8-K	2018-06-26
8-K	2018-06-14
8-K	2018-06-01
8-K	2018-05-29
8-K	2018-05-02
8-K	2018-04-25
8-K	2018-01-31

EX-10.1	ex101creditagreement.htm
EX-31.1	ex31133121.htm
EX-31.2	ex31233121.htm
EX-32.1	ex32133121.htm

CMPR 10Q Quarterly Report

Cimpress Earnings 2021-03-31