Cimpress Earnings 2020-12-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

cmpr-20201231

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	December 31, 2020
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 January 25, 2021, there were 26,003,676 Cimpress plc ordinary shares outstanding.

CIMPRESS PLC

QUARTERLY REPORT ON FORM 10-Q

For the Three and Six Months ended December 31, 2020

TABLE OF CONTENTS


						Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)						1
Consolidated Balance Sheets as of December 31, 2020 and June 30, 2020						1
Consolidated Statements of Operations for the three and six months ended December 31, 2020 and 2019						2
Consolidated Statements of Comprehensive Income for the three and six months ended December 31, 2020 and 2019						3
Consolidated Statements of Shareholders' Equity (Deficit) for the three and six months ended December 31, 2020 and 2019						4
Consolidated Statements of Cash Flows for the six months ended December 31, 2020 and 2019						6
Notes to Consolidated Financial Statements						7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations						28
Item 3. Quantitative and Qualitative Disclosures About Market Risk						42
Item 4. Controls and Procedures						43

PART II OTHER INFORMATION
Item 1A. Risk Factors						44
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						44
Item 6. Exhibits						45
Signatures						46

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CIMPRESS PLC

CONSOLIDATED BALANCE SHEETS

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


	December 31, 2020		June 30, 2020
Assets
Current assets:
Cash and cash equivalents	$	36,883	$	45,021
Accounts receivable, net of allowances of $10,797 and $9,651, respectively	51,404		34,596
Inventory	85,932		80,179
Prepaid expenses and other current assets	84,965		88,608

Total current assets	259,184		248,404
Property, plant and equipment, net	332,824		338,659
Operating lease assets, net	149,851		156,258
Software and website development costs, net	82,581		71,465
Deferred tax assets	146,814		143,496
Goodwill	726,813		621,904
Intangible assets, net	212,078		209,228
Other assets	20,368		25,592
Total assets	$	1,930,513	$	1,815,006
Liabilities, noncontrolling interests and shareholders’ deficit
Current liabilities:
Accounts payable	$	236,540	$	163,891
Accrued expenses	291,039		210,764
Deferred revenue	41,913		39,130
Short-term debt	12,603		17,933
Operating lease liabilities, current	38,315		41,772
Other current liabilities	40,966		13,268

Total current liabilities	661,376		486,758
Deferred tax liabilities	30,941		33,811
Long-term debt	1,258,535		1,415,657

Operating lease liabilities, non-current	122,006		128,963
Other liabilities	157,076		88,187
Total liabilities	2,229,934		2,153,376
Commitments and contingencies (Note 13)
Redeemable noncontrolling interests	65,510		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; 26,003,649 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, 18,076,978 and 18,194,952 shares, respectively	(1,368,723)		(1,376,496)
Additional paid-in capital	438,863		438,616
Retained earnings	638,883		618,437
Accumulated other comprehensive loss	(74,597)		(88,676)


Total shareholders' deficit	(364,931)		(407,476)
Total liabilities, noncontrolling interests and shareholders’ deficit	$	1,930,513	$	1,815,006

See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

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


	Three Months Ended December 31,				Six Months Ended December 31,
	2020		2019		2020		2019
Revenue	$	786,145	$	820,333	$	1,372,645	$	1,454,292
Cost of revenue (1)	385,979		394,018		684,823		719,683
Technology and development expense (1)	65,036		64,427		123,525		127,594
Marketing and selling expense (1)	182,322		173,336		320,472		334,253
General and administrative expense (1)	42,979		51,910		84,791		95,533
Amortization of acquired intangible assets	13,453		13,150		26,758		26,168
Restructuring expense (1)	2,182		1,897		2,096		4,087


Income from operations	94,194		121,595		130,180		146,974
Other (expense) income, net	(17,198)		(9,040)		(25,952)		6,634
Interest expense, net	(30,141)		(15,701)		(60,657)		(30,788)

Income before income taxes	46,855		96,854		43,571		122,820
Income tax expense (benefit)	12,954		(93,795)		19,748		(87,680)
Net income	33,901		190,649		23,823		210,500
Add: Net income attributable to noncontrolling interest	(1,614)		(426)		(2,291)		(246)
Net income attributable to Cimpress plc	$	32,287	$	190,223	$	21,532	$	210,254
Basic net income per share attributable to Cimpress plc	$	1.24	$	7.04	$	0.83	$	7.41
Diluted net income per share attributable to Cimpress plc	$	1.22	$	6.81	$	0.82	$	7.19
Weighted average shares outstanding — basic	26,003,649		27,036,675		25,974,823		28,391,855
Weighted average shares outstanding — diluted	26,384,460		27,916,759		26,390,273		29,223,116

____________________________________________

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


	Three Months Ended December 31,				Six Months Ended December 31,
	2020		2019		2020		2019
Cost of revenue	$	34	$	97	$	134	$	185
Technology and development expense	1,215		2,043		3,406		3,777
Marketing and selling expense	754		533		2,439		(778)
General and administrative expense	3,240		5,652		7,547		9,891
Restructuring expense	—		108		—		772

See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited in thousands)


	Three Months Ended December 31,				Six Months Ended December 31,
	2020		2019		2020		2019
Net income	$	33,901	$	190,649	$	23,823	$	210,500
Other comprehensive income, net of tax:
Foreign currency translation gains, net of hedges	13,946		3,180		14,763		1,620
Net unrealized gains (losses) on derivative instruments designated and qualifying as cash flow hedges	3,802		6,131		7,638		(1,057)
Amounts reclassified from accumulated other comprehensive (loss) income to net income on derivative instruments	(3,226)		(1,145)		(5,297)		3,006


Loss on pension benefit obligation, net	—		—		(336)		—
Comprehensive income	48,423		198,815		40,591		214,069
Add: Comprehensive (income) loss attributable to noncontrolling interests	(2,877)		(1,122)		(4,980)		548
Total comprehensive income attributable to Cimpress plc	$	45,546	$	197,693	$	35,611	$	214,617

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 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 CASH FLOWS

(unaudited in thousands)


	Six Months Ended December 31,
	2020		2019
Operating activities
Net income	$	23,823	$	210,500
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	85,887		84,891

Share-based compensation expense	13,526		13,847
Deferred taxes	2,681		(105,575)




Unrealized loss on derivatives not designated as hedging instruments included in net income	32,545		7,548
Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency	(3,132)		1,359

Other non-cash items	4,829		3,045

Changes in operating assets and liabilities:
Accounts receivable	(14,259)		(8,240)
Inventory	510		(10,680)
Prepaid expenses and other assets	78		(2,255)
Accounts payable	60,800		24,432
Accrued expenses and other liabilities	48,880		46,225
Net cash provided by operating activities	256,168		265,097
Investing activities
Purchases of property, plant and equipment	(16,790)		(28,094)

Business acquisitions, net of cash acquired	(36,395)		(4,272)

Capitalization of software and website development costs	(26,445)		(23,417)
Proceeds from the sale of assets	3,372		847




Other investing activities	(419)		1,120
Net cash used in investing activities	(76,677)		(53,816)
Financing activities
Proceeds from borrowings of debt	301,000		634,085



Payments of debt	(472,469)		(292,446)


Payments of debt issuance costs	(1,051)		—
Payments of purchase consideration included in acquisition-date fair value	(648)		—
Payments of withholding taxes in connection with equity awards	(5,592)		(462)
Payments of finance lease obligations	(3,275)		(5,364)
Purchase of noncontrolling interests	(5,063)		—

Purchase of ordinary shares	—		(537,573)
Proceeds from issuance of ordinary shares	—		6


Distribution to noncontrolling interest	(4,599)		(3,921)
Other financing activities	(57)		(1,715)
Net cash used in financing activities	(191,754)		(207,390)


Effect of exchange rate changes on cash	4,125		(2,253)

Net decrease in cash and cash equivalents	(8,138)		1,638
Cash and cash equivalents at beginning of period	45,021		35,279
Cash and cash equivalents at end of period	$	36,883	$	36,917
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	58,299	$	33,313	</

Price	130.51	EPS	4
Shares	31	P/E	31
MCap	3,984	P/FCF	21
Net Debt	1,133	EBIT	200
TEV	5,118	TEV/EBIT	26
TTM 2019-09-30, in MM, except price, ratios

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
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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	Enter Agreement, Exhibits
8-K	2021-01-27	Earnings, Exhibits
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-10.3	ex103employeepsuagreement.htm
EX-10.4	ex104ceopsuagreement.htm
EX-10.5	ex105bodpsuagreement.htm
EX-31.1	ex31112312020.htm
EX-31.2	ex31212312020.htm
EX-32.1	ex32112312020.htm
EX-102	ex102rsuagreement.htm

CMPR 10Q Quarterly Report

Cimpress Earnings 2020-12-31