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Mar 31, 2021
Cimpress Q3 2021 Earnings Report
Revenue declined but operating loss improved due to cost controls and non-recurrence of goodwill impairment.
Key Takeaways
Cimpress' Q3 FY2021 revenue decreased by 3% year-over-year, but GAAP operating loss improved significantly due to the non-recurrence of a goodwill impairment and cost controls. The company is seeing increased signs of recovery as pandemic restrictions ease in some markets.
Consolidated revenue was down 18% for the first two months of the quarter, but saw a pick up in demand in March and April in markets where pandemic restrictions have been lifted.
Vistaprint bookings in Australia grew approximately 10% for the third quarter, while bookings across European countries declined by approximately 7%.
The $1.15 billion Term Loan B offering is expected to facilitate refinancing of the 12% second lien debt.
Businesses are increasingly leveraging the mass customization platform (MCP) for the benefit of customers and financial performance.
Cimpress
Cimpress
Cimpress Revenue by Segment
Revenue by Segment
Vista Revenue
CapyFin.comPrintBrothers Revenue
CapyFin.comThe Print Group Revenue
CapyFin.comNational Pen Revenue
CapyFin.comAll Other Businesses Revenue
CapyFin.com Forward Guidance
Cimpress expects continued volatility in financial results due to pandemic-related restrictions, but anticipates higher year-over-year revenue growth as they lap depressed periods of demand from last year. Higher advertising spend and cash compensation costs are expected in Q4 FY2021.
Positive Outlook
- Month-to-date consolidated bookings through April 24, 2021, increased approximately 95% over the same period last year.
- April month-to-date results through April 24, 2021, have been stronger than any month in Q3 FY2021, primarily driven by continued recovery in North America.
- Permanent fixed cost reductions of over $30 million compared to pre-pandemic cost base remain in place.
- Expect to refinance 12% second lien debt in May 2021 at materially improved interest rates.
- Successful completion of Term Loan B transaction will bring liquidity onto the balance sheet.
Challenges Ahead
- Financial results will continue to experience volatility connected to the extent of pandemic-related restrictions.
- Expect higher advertising spend year over year in absolute dollars and as a percent of revenue.
- Expect materially higher cash compensation costs relative to Q4 FY2020.
- Expect one more quarter of elevated cash interest expense related to the second lien debt in May 2021.
- Expect the year-over-year adjusted EBITDA impact from currency to be negative in the fourth quarter due to less favorable average contracted rates on currency hedges relative to FY2020.
Revenue & Expenses
Visualization of income flow from segment revenue to net income