Cimpress (Vistaprint) Reports Q2 2015 Results Showing Revenue Growth of 19% Year-Over-Year

Cimpress N.V. has announced financial results for the three month period ended Dec. 31, 2014, the second quarter of its 2015 fiscal year.
 
“We delivered good results across the business in our second quarter,” stated Robert Keane, president and CEO. “Quarterly revenue reflected continued improvement in the growth of our Vistaprint brand as a result of our investments in our customer value proposition, as well as continued strong growth of our recent acquisitions.
 
“Profitability, operating cash flow and free cash flow were also strong. In November, our shareholders overwhelmingly supported the name change of our corporate parent company to Cimpress, as a clear reflection of our strategy to extend our mass customization capabilities well beyond our traditional Vistaprint-branded business,” Keane added. “In pursuit of this vision we have embarked on a major multi-year investment to engineer a shared platform of software-driven mass customization capabilities that we can leverage across multiple customer-facing brands.”
 
Revenue for the second quarter of fiscal year 2015 was $439.9 million, a 19% increase compared to revenue of $370.8 million reported in the same quarter a year ago. Excluding the estimated impact from currency exchange rate fluctuations and revenue from businesses acquired during the past 12 months, total revenue grew 7% year over year in the second quarter.
 
Gross margin (revenue minus the cost of revenue as a% of total revenue) in the second quarter was 64.4%, down from 67.4% in the same quarter a year ago. The year-over-year reduction in gross margin was primarily due to our recent acquisitions of Printdeal (formerly named People & Print Group) and Pixartprinting, which have lower gross margins than our Vistaprint-branded business. Excluding the businesses we acquired during the past twelve months, our gross margin increased slightly year over year.
 
Operating income in the second quarter was $59.9 million, or 13.6% of revenue, an increase in absolute dollars but a decrease as a% of revenue compared to $52.5 million, or 14.2% of revenue, in the same quarter a year ago. This operating margin compression is driven by increased amortization expense for acquisition-related intangible assets, as well as the change in fair-value of our acquisition-related earn-outs.
 
GAAP net income for the second quarter was $63.6 million, or 14.5% of revenue, compared to $40.9 million, or 11.0% of revenue in the same quarter a year ago. Part of the significant year-over-year growth in GAAP net income is due to below-the-line currency movements that created losses in the year-ago period but gains in the current period.
 
GAAP net income per diluted share for the second quarter was $1.89, versus $1.18 in the same quarter a year ago, due in part to the currency movements described above.
 
During the second quarter, the company generated $138.2 million of cash from operations and $116.0 million in free cash flow, defined as cash from operations less purchases of property, plant and equipment, purchases of intangible assets not related to acquisitions, and capitalization of software and Website development costs.
 
As of Dec. 31, 2014, the company had $77.9 million in cash and cash equivalents and $346.9 million of debt. After considering debt covenant limitations, as of Dec. 31, 2014 the company had $399.1 million available for borrowing under its committed credit facility. The recent acquisitions of Printdeal, Pixartprinting, FotoKnudsen and the recent investment in Printi are not yet incorporated into the customer metrics.
 
“Now that we are halfway through our fiscal year, we are adjusting our guidance to reflect, on the one hand currency headwinds but, on the other hand, solid year-to-date operational results,” Ernst Teunissen, executive VP and CFO, said.