CINCINNATI, Jan. 26 -- Multi-Color Corporation today announced financial results for the third quarter ended December 31, 2006, compared with the same period a year ago. The Company attributed the third quarter operating performance to solid sales gains in the Decorating Solutions segment and improved productivity in the Packaging Services segment. Frank Gerace, President and CEO of Multi-Color Corporation stated, "Excluding the impact of the acquisition expenses that reduced our reported earnings, we delivered solid operational results in the third quarter in both of our operating segments. I'm especially pleased with the productivity improvements in our Packaging Services segment and encouraged by the continued sales growth we are experiencing in our core label business." For the nine month period ended December 31, 2006, Multi-Color's net sales increased 8% to $163.9 million due to organic sales growth in the Decorating Solutions segment. Net Income and diluted EPS increased 14% and 13%, respectively, to $7.6 million and $1.12 per share. Excluding the impact of the acquisition expenses recorded in the third quarter of Fiscal 2007, Adjusted Net Income and Adjusted diluted EPS increased 35% and 34%, respectively, to $9.0 million and $1.33 per share. The Company incurred non-cash stock compensation expenses of $217,000 ($133,000 after-tax) for the quarter and $600,000 ($368,000 after-tax) for the nine month period ended December 31, 2006 resulting from the adoption of SFAS 123R, "Accounting for Stock Based Compensation." This expense reduced EPS by 2 cents for the quarter and 5 cents for the nine month period ended December 31, 2006 compared to the prior year. In addition, during the nine months ended December 31, 2006, the Company reduced its debt by 63% or $17.4 million and paid shareholder dividends of $1.0 million, as a result of strong operating cash flows.