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Multi-Color Corporation Reports $5.9M Profit in Q3

February 12, 2013

Multi-Color Corporation announced a 35 percent 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 percent increase over the prior year quarter to 19 percent. 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, Multi-Color Corporation.

Third quarter highlights:

  • Net revenues increased 7 percent to $157 million from $146.4 million compared to the three months ended Dec. 31, 2011. Net revenues increased 4 percent or $5.8 million due to acquisitions occurring after Dec. 31, 2011 and 3 percent due to higher sales volumes.
  • Gross profit increased $6.9 million or 29 percent compared to the three months ended Dec. 31, 2011. Adjusted for special items, gross profit increased $5.4 million or 21 percent compared to the prior year quarter. The increase is primarily due to higher sales volumes in the current quarter and acquisitions occurring after Dec. 31, 2011. Gross margins, adjusted for special items, increased to 19 percent of net revenues compared to 17 percent of net revenues in the three months ended Dec. 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 percent 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 Dec. 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 percent in the current quarter compared to 8.6 percent 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 percent to $16.3 million from $12.5 million. The increase was due primarily to acquisitions occurring after Dec. 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 percent compared to the prior year quarter. The increase is due primarily to a 1 percent increase in the interest rate on $125 million of variable rate debt swapped to fixed rate debt starting Oct. 3, 2012 and a higher debt balance in the current period. The company had $416.8 million of debt at Dec. 31, 2012 compared to $409.9 million at Dec. 31, 2011.
  • The effective tax rate was 36 percent for the third quarter of fiscal 2013 compared to 13 percent 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 percent 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, adjusted EPS increased 35 percent 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.
For more information, www.mcclabel.com.
 

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