2013-02-05 14:34:24 -
CINCINNATI, OHIO, February 5, 2013 - Multi-Color Corporation (NASDAQ: LABL)
today announced a 35% increase in third quarter adjusted EPS compared to the
prior year quarter after the first anniversary of the York acquisition.
"The December quarter saw adjusted gross margin, as a percent of revenues,
rebound with a 2% increase over the prior year quarter to 19%. The return to
higher gross margin is now across a much larger revenue base and primarily
reflects benefits of York acquisition synergies," said Nigel Vinecombe,
President and CEO of Multi-Color Corporation.
Third quarter highlights:
* Net revenues increased 7% to $157 million from $146.4 million compared to
the three months ended December 31, 2011. Net revenues increased 4% or $5.8
million due to acquisitions occurring after December 31, 2011 and 3% due to
higher sales volumes.
* Gross profit increased $6.9 million or 29% compared to the three months
ended December 31, 2011. Adjusted for special items, gross profit increased
$5.4 million or 21% compared to the prior year quarter. The increase is
primarily due to higher sales volumes in the current quarter and
acquisitions occurring after December 31, 2011. Gross margins, adjusted for
special items, increased to 19% of net revenues compared to 17% of net
revenues in the three months ended December 31, 2011. This increase in
adjusted gross margins is due primarily to improvements in operations in
North and Latin America related to the completion of most of the integration
of the York Label Group acquisition.
* Selling, general and administrative (SG&A) expenses decreased $1.2 million
compared to the prior year quarter due primarily to lower integration
expenses related to the acquisition of the York Label Group compared to the
prior year partially offset by the impact of acquisitions occurring after
the beginning of the prior year period and costs related to the
consolidation and relocation of plants. Adjusted for special items, SG&A
expenses increased by 13% compared to the prior year quarter due primarily
to the impact of new acquisitions. Special items included in SG&A expenses
in the three months ended December 31, 2012 consisted of $0.5 million of
costs related to the consolidation and relocation of plants and $0.6 million
of integration expenses related to the York Label Group acquisition.
Adjusted SG&A, as a percentage of sales, was 9% in the current quarter
compared to 8.6% in the prior year quarter.
* Operating income increased $8.1 million compared to the prior year quarter.
Adjusted for special items, operating income increased 30% to $16.3 million
from $12.5 million. The increase was due primarily to acquisitions
occurring after December 31, 2011, higher North American sales volumes and
improvements in the operations in North and Latin America related to the
completion of most of the integration of the York Label Group acquisition.
* Interest expense increased by 5% compared to the prior year quarter. The
increase is due primarily to a 1% increase in the interest rate on $125
million of variable rate debt swapped to fixed rate debt starting October
3, 2012 and a higher debt balance in the current period. The Company had
$416.8 million of debt at December 31, 2012 compared to $409.9 million at
December 31, 2011.
* The effective tax rate was 36% for the third quarter of fiscal 2013 compared
to 13% in the prior year quarter due primarily to an increase in income mix
between domestic and foreign jurisdictions and due to a higher tax benefit
in the prior year quarter related to the release of reserves for uncertain
tax positions whose statutes of limitations had expired. The Company
expects its annual effective tax rate to be approximately 36% in fiscal year
2013 reflecting a higher percentage of income in North America.
* Diluted earnings per share (EPS) increased to $0.36 per diluted share from
$0.10 in the prior year quarter. Excluding the impact of the special items
noted below, adjusted EPS increased 35% to $0.42 per diluted share from
$0.31 in the prior year quarter. Net income attributable to Multi-Color
Corporation increased to $5.9 million from $1.6 million in the prior year.
Adjusted for special items, net income attributable to Multi-Color
Corporation increased to $6.8 million from $5 million in the prior year
quarter.
The following table shows adjustments made to Net Income Attributable to Multi-
Color Corporation and Diluted EPS between reported GAAP and non-GAAP results for
the three months ended December 31, 2012 and 2011. For a reconciliation of
adjustments made to Gross Profit, SG&A expenses, Operating Income and Interest
Expense between reported GAAP and non-GAAP results, see page 7 of this press
release:
Three Months Ended
----------------------------------------
12/31/12 Diluted 12/31/11 Diluted
(in (in
000's) EPS 000's) EPS
----------------------------------------
Net Income Attributable to Multi-Color
Corporation and Diluted EPS, as
reported $ 5,882 $ 0.36 $ 1,558 $ 0.10
Acquisition Expense, Net of Tax - - 97 -
York Label Group Integration Expense,
Net of Tax 461 0.03 2,376 0.15
Plant Consolidation Costs, Net of Tax 498 0.03 - -
Inventory Purchase Accounting Charge,
Net of Tax - - 923 0.06
----------------------------------------
Adjusted Net Income Attributable to
Multi-Color
Corporation and Diluted EPS, (Non-
GAAP) $ 6,841 $ 0.42 $ 4,954 $ 0.31
----------------------------------------
Nigel Vinecombe said, "We consolidated our Montreal plants in the December
quarter and plan to complete our current integration plans with the
consolidation of our Omaha plants in the March quarter. We also see improved
operations in Chile and China. We look forward to our positive momentum
continuing into fiscal 2014 and creating scope for further acquisitions."
Year-to-date highlights:
* Net revenues increased 41% to $491.8 million from $349.7 million compared to
the nine months ended December 31, 2011. Net revenues increased 39% or
$134.3 million due to acquisitions occurring after the beginning of the
prior year period. Net revenues increased by 3% compared to the prior year
due to higher sales volumes and 1% due to a favorable impact of pricing and
sales mix. Net revenues decreased 2% compared to the prior year due to the
unfavorable impact of foreign exchange rates primarily driven by
depreciation in the Australian dollar and the Euro at the beginning of
fiscal 2013.
* Gross profit increased $25 million or 37% compared to the nine months ended
December 31, 2011. Adjusted for special items, gross profit increased $23.9
million or 35% compared to the prior year. The increase is primarily due to
acquisitions occurring after the beginning of the prior year period
partially offset by a decrease related to the unfavorable impact of foreign
exchange rates in the current year. Gross margins, adjusted for special
items, decreased to 19% of net revenues compared to 20% of net revenues in
the nine months ended December 31, 2011. This reduction in adjusted gross
margins is due primarily to integration inefficiencies in North and Latin
America.
* Selling, general and administrative (SG&A) expenses increased $7.3 million
compared to the nine months ended December 31, 2011 due to the impact of
acquisitions and costs related to the consolidation and relocation of plants
of $1.5 million partially offset by lower integration expenses related to
the York Label group acquisition and the impact of foreign exchange rates in
the current year. Adjusted for special items, SG&A expenses increased by
35% compared to the nine months ended December 31, 2011 due primarily to the
impact of new acquisitions. Special items included in SG&A expenses in the
nine months ended December 31, 2012 consisted of $1.5 million of costs
related to the consolidation and relocation of plants, $1.3 million of
integration expenses related to the York Label Group acquisition and $0.1
million of acquisition related expenses. Special items in the prior year
period consisted of $2 million of acquisition related expenses and $3.7
million of integration related expenses. Adjusted SG&A, as a percentage of
sales, was 8% compared to 8.3% in the prior year.
* Operating income increased $17.7 million or 56% compared to the nine months
ended December 31, 2011. Adjusted for special items, operating income
increased 35% to $52.9 million from $39.1 million. The increase was due
primarily to acquisitions occurring after the beginning of the prior year
period partially offset by a decrease due to the unfavorable impact of
foreign exchange rates and integration inefficiencies in North and Latin
America.
* Interest expense increased by $7.2 million compared to the nine months ended
December 31, 2011. The increase is due primarily to an increase in debt
borrowings to finance acquisitions, including the York Label Group
acquisition and higher interest rates. Adjusted for special items, interest
expense increased $7.7 million compared to the prior year. The prior year
included a special charge of $0.5 million to write off deferred financing
fees in conjunction with the debt modification to the Company's credit
facility related to the York Label Group acquisition. The Company had
$416.8 million of debt at December 31, 2012 compared to $409.9 million at
December 31, 2011.
* The effective tax rate was 36% for the nine months ended December 31, 2012
compared to 31% in the prior year due primarily to income mix between
domestic and foreign jurisdictions. The Company expects its annual
effective tax rate to be approximately 36% in fiscal year 2013 reflecting a
higher percentage of income in North America.
* Diluted earnings per share (EPS) increased to $1.29 per diluted share from
$1.05 in the nine months ended December 31, 2011. Excluding the impact of
the special items noted below, adjusted EPS increased 2% to $1.46 per
diluted share from $1.43 in the prior year. Net income attributable to
Multi-Color Corporation increased to $21.1 million from $15.2 million in the
prior year. Adjusted for special items, net income attributable to Multi-
Color Corporation increased to $23.9 million from $20.7 million in the prior
year.
The following table shows adjustments made to Net Income Attributable to Multi-
Color Corporation and Diluted EPS between reported GAAP and non-GAAP results for
the nine months ended December 31, 2012 and 2011. For a reconciliation of
adjustments made to Gross Profit, SG&A expenses, Operating Income and Interest
Expense between reported GAAP and non-GAAP results, see page 7 of this press
release:
Nine Months Ended
--------------------------------------
12/31/12 Diluted 12/31/11 Diluted
(in 000's) EPS (in 000's) EPS
--------------------------------------
Net Income Attributable to Multi-Color
Corporation and Diluted EPS, as
reported $ 21,148 $ 1.29 $ 15,206 $ 1.05
Acquisition Expense, Net of Tax 124 0.01 1,865 0.13
York Label Group Integration Expense,
Net of Tax 1,040 0.07 2,376 0.17
Plant Consolidation Costs, Net of Tax 1,194 0.07 - -
Deferred Financing Fee Charge, Net of
Tax - - 300 0.02
Inventory Purchase Accounting Charge,
Net of Tax 344 0.02 923 0.06
--------------------------------------
Adjusted Net Income Attributable to
Multi-Color
Corporation and Diluted EPS, (Non-
GAAP) $ 23,850 $ 1.46 $ 20,670 $ 1.43
--------------------------------------
Fiscal Year 2013 Third Quarter Earnings Conference Call and Webcast
The Company will hold a conference call on February 5, 2013 at 11:00 a.m. (ET)
to discuss the news release. For domestic access to the conference call, please
dial 1-888-680-0892 (participant code 29653412) or for international access,
please dial 1-617-213-4858 (participant code 29653412) by 10:45 a.m. (ET). A
replay of the conference call will be available at 1:00 p.m. (ET) on February
5, 2013 through 11:59 p.m. (ET) on February 12, 2013 by calling 1-888-286-8010
(participant code 49163107) or for international access, please call
1-617-801-6888 (participant code 49163107). In addition, the call will be
broadcast over the Internet and can be accessed from a link on the Company's
home page at www.mcclabel.com. Listeners should go to the website prior to the
call to register and to download any necessary audio software.
Participants may pre-register for the call at
www.theconferencingservice.com/prereg/key.process?key=PGCD6JPGK (Due to
its length, this URL may need to be copied/pasted into your Internet browser's
address field. Remove the extra space if one exists). Pre-registrants will be
issued a pin number to use when dialing into the live call which will provide
quick access to the conference by bypassing the operator upon connection.
The webcast is also being distributed over the Thomson Reuters' Investor
Distribution Network to both institutional and individual investors. Individual
investors can listen to the call through Thomson Reuters' individual investor
center at
www.fulldisclosure.com or by visiting any of the investor sites
in Thomson Reuters' Individual Investor Network. Institutional investors can
access the call via Thomson Reuters' password-protected event management site,
StreetEvents (
www.streetevents.com).
Safe Harbor Statement
The Company believes certain statements contained in this report that are not
historical facts constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, and are intended to be covered
by the safe harbors created by that Act. Reliance should not be placed on
forward-looking statements because they involve known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
achievements to differ materially from those expressed or implied. Any forward-
looking statement speaks only as of the date made. The Company undertakes no
obligation to update any forward-looking statements to reflect events or
circumstances after the date on which they are made.
Statements concerning expected financial performance, on-going business
strategies, and possible future actions which the Company intends to pursue in
order to achieve strategic objectives constitute forward-looking information.
Implementation of these strategies and the achievement of such financial
performance are each subject to numerous conditions, uncertainties and risk
factors. Factors which could cause actual performance by the Company to differ
materially from these forward-looking statements include, without limitation,
factors discussed in conjunction with a forward-looking statement; changes in
general economic and business conditions; the ability to consummate and
successfully integrate acquisitions; ability to recognize the benefits of
acquisitions, including potential synergies and cost savings; failure of an
acquisition or acquired company to achieve its plans and objectives generally;
risk that proposed or consummated acquisitions may disrupt operations or pose
difficulties in employee retention or otherwise affect financial or operating
results; ability to manage foreign operations; currency exchange rate
fluctuations; the success and financial condition of the Company's significant
customers; competition; acceptance of new product offerings; changes in business
strategy or plans; quality of management; the Company's ability to maintain an
effective system of internal control; availability, terms and development of
capital and credit; cost and price changes; raw material cost pressures;
availability of raw materials; ability to pass raw material cost increases to
its customers; business abilities and judgment of personnel; changes in, or the
failure to comply with, government regulations, legal proceedings and
developments; risk associated with significant leverage; increases in general
interest rate levels affecting the Company's interest costs; ability to manage
global political uncertainty; and terrorism and political unrest. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
About Multi-Color (
www.mcclabel.com)
Cincinnati, Ohio, U.S.A. based Multi-Color Corporation (MCC), established in
1916, is a leader in global label solutions supporting a number of the world's
most prominent brands including leading producers of home and personal care,
wine and spirit, food and beverage and specialty consumer products. MCC serves
international brand owners in North, Central and South America, Europe,
Australia, New Zealand, South Africa and China with a comprehensive range of the
latest label technologies in Pressure Sensitive, Cut and Stack, In-Mold, Shrink
Sleeve and Heat Transfer. MCC employs approximately 2,800 associates across 27
operations globally and is a public company trading on the NASDAQ Global Select
Market (company symbol: LABL).
For additional information on Multi-Color, please visit
www.mcclabel.com.
#
Multi-Color Corporation
Condensed Consolidated Statements of Income
(in 000's except per share data)
Unaudited
Three Months Ended Nine Months Ended
December December December December
31, 2012 31, 2011 31, 2012 31, 2011
--------------- --------------- -------------- -------------
Net Revenues $ 156,950 $ 146,400 $ 491,830 $ 349,661
Cost of Revenues 126,529 122,872 400,050 282,871
--------------- --------------- -------------- -------------
Gross Profit 30,421 23,528 91,780 66,790
Gross Margin 19% 16% 19% 19%
Selling, General &
Administrative
Expenses 15,228 16,394 42,323 34,986
--------------- --------------- -------------- -------------
Operating Income 15,193 7,134 49,457 31,804
Interest Expense 5,686 5,392 16,849 9,678
Other (Income)
Expense, Net 250 (39) (386) 56
--------------- --------------- -------------- -------------
Income before
Income Taxes 9,257 1,781 32,994 22,070
Income Tax Expense 3,375 223 11,846 6,896
--------------- --------------- -------------- -------------
Net Income 5,882 1,558 21,148 15,174
Loss Attributable to
Non-Controlling
Interests - - - 32
--------------- --------------- -------------- -------------
Net Income
Attributable to
Multi-Color
Corporation $ 5,882 $ 1,558 $ 21,148 $ 15,206
--------------- --------------- -------------- -------------
Basic Earnings Per
Share $ 0.36 $ 0.10 $ 1.31 $ 1.07
Diluted Earnings
Per Share $ 0.36 $ 0.10 $ 1.29 $ 1.05
Basic Shares
Outstanding 16,150 15,960 16,154 14,191
Diluted Shares
Outstanding 16,340 16,225 16,333 14,439
Selected Balance Sheet Information
(in 000's) Unaudited
December 31, 2012 March 31, 2012
--------------------- -----------------
Current Assets $ 178,927 $ 167,102
Total Assets $ 836,742 $ 809,654
Current Liabilities $ 108,551 $ 132,233
Total Liabilities $ 566,396 $ 556,634
Stockholders' Equity $ 270,346 $ 253,020
Total Debt $ 416,827 $ 402,055
Certain prior year amounts have been reclassified to conform to current year
reporting.
Reconciliation of Non-GAAP Measures: The Company reports its financial results
in accordance with generally accepted accounting principles in the U.S. (GAAP).
In order to provide investors with additional information and more meaningful
period-to-period comparisons of the Company's financial and operating results,
the Company reports certain non-GAAP financial measures as defined by the
Securities and Exchange Commission. These non-GAAP measures are not in
accordance with, nor are they a substitute for, GAAP measures.
The Company defines adjusted gross profit, adjusted SG&A, adjusted operating
income, adjusted interest expense, adjusted net income and adjusted diluted
earnings per share for the periods presented as the measure reported under GAAP
principles adjusted to exclude the effects of certain severance related
expenses, plant consolidation expenses, purchase accounting charges and
acquisition-related expenses, including the charge for the debt modification
prior to the York Label Group acquisition. These non-GAAP financial measures
provide investors with an understanding of the Company's gross profit, SG&A,
operating income, interest expense and diluted EPS adjusted to exclude the
effect of the items identified above. We believe that these non-GAAP financial
measures assist investors in making a consistent comparison of the Company's
gross profit, SG&A, operating income, interest expense, net income and diluted
EPS for its three and nine months ended December 31, 2012 compared to the
results of the prior period. In addition, management uses these non-GAAP
financial measures internally to perform trend analysis and analyze operating
performance to ensure resources are allocated effectively. The non-GAAP
measures allow management to analyze trends and performance without masking or
distorting the results with the special items identified by management.
The following tables show adjustments made to Gross Profit, Operating Income,
SG&A Expenses and Interest Expense between reported GAAP and non-GAAP results
for the three and nine months ended December 31, 2012 and 2011:
Adjusted Gross Profit:
Three Months Ended Nine Months Ended
-------------------------------- --------------------------
12/31/12 12/31/11 12/31/12 12/31/11
(in
(in 000's) (in 000's) 000's) (in
000's)
---------------- ------------- ---------- -------------
Gross Profit, as
reported $ 30,421 $ 23,528 $ 91,780 $ 66,790
Inventory
Purchase
Accounting Charge - 1,530 458
1,530
---------------- ------------- ---------- -------------
Adjusted Gross
Profit, (Non-
GAAP) $ 30,421 $ 25,058 $ 92,238 $ 68,320
---------------- ------------- ---------- -------------
Adjusted Gross
Profit, (Non-
GAAP)
as a % of
Revenues 19.4% 17.1% 18.8% 19.5%
Adjusted Operating Income:
Three Months Ended Nine Months Ended
------------------------------- --------------------------
12/31/12 12/31/11 12/31/12 12/31/11
(in
(in 000's) (in 000's) 000's) (in
000's)
-------------- -------------- ---------- -------------
Operating Income,
as reported $ 15,193 $ 7,134 $ 49,457 $ 31,804
Acquisition
Expense - 159 128 2,135
York Label Group
Integration
Expense 577 3,679 1,337 3,679
Inventory Purchase
Accounting Charge - 1,530 458 1,530
Plant
Consolidation
Costs 498 - 1,531 -
-------------- -------------- ---------- -------------
Adjusted Operating
Income, (Non-GAAP) $ 16,268 $ 12,502 $ 52,911 $ 39,148
-------------- -------------- ---------- -------------
Adjusted Operating
Income, as a %
of Revenues
(Non-GAAP) 10.4% 8.5% 10.8% 11.2%
Adjusted SG&A Expenses:
Three Months Ended Nine Months Ended
-------------------------------- --------------------------
12/31/12 12/31/11 12/31/12 12/31/11
(in
(in 000's) (in 000's) 000's) (in
000's)
-------------- ------------- ---------- ------------
SG&A Expenses, as
reported $ 15,228 $ 16,394 $ 42,323 $ 34,986
Acquisition
Expense - 159 128 2,135
York Label Group
Integration
Expense 577 3,679 1,337 3,679
Plant
Consolidation
Costs 498 - 1,531 -
-------------- ------------- ---------- ------------
Adjusted SG&A
Expenses, (Non-
GAAP) $ 14,153 $ 12,556 $ 39,327 $ 29,172
-------------- ------------- ---------- ------------
Adjusted SG&A
Expenses, as a %
of Revenues,
(Non-GAAP) 9.0% 8.6% 8.0% 8.3%
Adjusted Interest Expense:
Three Months Ended Nine Months Ended
-------------------------------- -----------------------------
12/31/12 12/31/11 12/31/12 12/31/11
(in
(in 000's) (in 000's) (in 000's)
000's)
--------------- -------------- ----------------- ---------
Interest
Expense, as
reported $ 5,686 $ 5,392 $ 16,849 $ 9,678
Deferred
Financing Fee
Charge - - -
490
--------------- -------------- ----------------- ---------
Adjusted
Interest
Expense, (Non-
GAAP) $ 5,686 $ 5,392 $ 16,849 $ 9,188
--------------- -------------- ----------------- ---------
For more information, please contact: Sharon E. Birkett
Vice president and Chief Financial Officer
Multi-Color Corporation, (513) 345-5311
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Multi-Color Corporation via Thomson Reuters ONE
[HUG#1675400]
