Cimpress (CMPR) Loss Narrows in Q4 on Y/Y Sales Growth

Cimpress N.V.CMPR reported results yesterday for the fourth quarter and fiscal 2018 (ended Jun 30, 2018).

The company's GAAP loss in the reported quarter was 24 cents per share, an improvement over loss of $1.11 recorded in the year-ago quarter. The Zacks Consensus Estimate for earnings for the quarter under review was 3 cents.

For fiscal 2018, GAAP net income per share was $1.36 versus net loss per share of $2.29 in the previous fiscal.

Organic and Forex Gains Drive Revenues

Cimpress generated revenues of $631.1 million in the reported quarter, reflecting growth of 11.9% from the year-ago tally. The improvement came on the back of 11% organic gains and 4% positive impact of foreign currency movements, partially offset by 3% adverse impact of acquisitions, divestitures and joint ventures.

However, the top line lagged the Zacks Consensus Estimate of $635.7 million by 0.7%.

Cimpress reports its revenues under the segments discussed below:

Vistaprint - the largest revenue generating segment of the company - showed healthy year-over-year rise of 11.3% in revenues. Aggregate quarterly revenues from the segment totaled $357.1 million, up from $320.8 million in the year-ago quarter. The improvement was driven by Easter holiday and the increase in repeat customer bookings.

Upload and Print segment's revenues increased 19.5% year over year to $193.3 million in the reported quarter. On the other hand, revenues of $65.9 million from National Pen segment grew 22.3% year over year and that from All Other Businesses decreased 33.1% year over year to $19.7 million.

For fiscal 2018, the company's revenues totaled $2,592.5 million, increasing 21.4% over the previous year. On a constant-currency basis, top-line results improved 11%.

Margin Profile Mixed

In the reported quarter, Cimpress' cost of revenues increased 13.4% year over year to $316.6 million. It represented 50.2% of the quarter's revenues versus 49.5% in the year-ago quarter. Gross profit increased 10.3% year over year to $314.6 million while margin declined 70 basis points (bps) to 49.8%.

Adjusted net operating profit increased 64.9% year over year to $36.1 million while adjusted net operating margin grew 180 bps to 5.7%. The improvement came on the back of sales growth, initiatives to improve operational efficiencies and savings from restructuring measures.

Balance Sheet and Cash Flow

Exiting the fiscal fourth quarter, Cimpress had cash and cash equivalents of $44.2 million, down 11.4% from $49.9 million recorded at the end of the last reported quarter. Long-term debt decreased 2.4% sequentially to $767.6 million.

In the fourth quarter of fiscal 2018, the company generated net cash of $47.7 million from its operating activities, reflecting growth of 44.1% over the year-ago quarter. Capital spending on the purchase of property, plant and equipment was $13.5 million, lower than $17.2 million in the year-ago quarter. Free cash flow was $22.8 million, up considerably from $7.1 million in the year-ago quarter.

Though no shares were repurchased during the fiscal fourth quarter, total share buyback activities amounted to $94.7 million for fiscal 2018. During the fiscal, the company bought back 895,377 shares for $105.78 per share.

Cimpress N.V Price and Consensus

Cimpress N.V Price and Consensus | Cimpress N.V Quote

Zacks Rank & Key Picks

With a market capitalization of approximately $4.5 billion, Cimpress currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Industrial Products sector are Altra Industrial Motion Corp. AIMC , Chart Industries, Inc. GTLS and DXP Enterprises, Inc. DXPE . While both Altra Industrial Motion and Chart Industries sport a Zacks Rank #1 (Strong Buy), DXP Enterprises carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

In the past 60 days, earnings estimates for each of these stocks improved for the current year and the next year. Also, the average positive earnings surprise for the last four quarters was 4.01% for Altra Industrial Motion, 29.36% for Chart Industries and 70.97% for DXP Enterprises.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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