Multi-Color Corporation increases sales and earnings in Q3
Wednesday, February 10, 2010
Press release from the issuing company
Batavia, Ohio, - Multi-Color Corporation today announced financial results for the third quarter ended December 31, 2009.
Third quarter highlights as compared to the prior year included:
- Diluted EPS from continuing operations increased 38% to 18 cents per diluted share from 13 cents. Excluding the impacts of the charges noted below, adjusted diluted EPS from continuing operations increased 86% to 26 cents per diluted share from 14 cents.
- Net revenues increased 5% to $66.0 million from $62.6 million, as a 9% favorable foreign exchange impact was offset by a 4% organic sales decline. Approximately one-half of the organic sales decline was due to pricing while the remaining one-half was due to lower sales volume and mix.
- Gross profit increased by $1.1 million or 11% to $11.4 million and gross margins increased to 17% from 16% primarily due to favorable foreign exchange.
- The Company recorded facility closure expenses of $1.2 million ($959,000 after-tax) in connection with the relocation of its corporate headquarters which reduced diluted earnings per share (EPS) by 8 cents. In the prior year quarter, the Company incurred $192,000 ($112,000 after-tax) of acquisition related expenses which reduced diluted EPS by 1 cent.
- Operating income declined 12% to $3.8 million from $4.3 million primarily due to the facility closure expenses. Excluding the impact of the charges noted above, adjusted operating income increased 11% to $5.0 million from $4.5 million.
- Interest expense decreased 26% to $1.2 million due to a $4.5 million reduction in bank debt and a 57 basis point reduction in interest rates.
- The Company's effective tax rate decreased to 21% due to a more efficient tax structure and income in lower tax jurisdictions. The Company expects its annual effective tax rate to be approximately 28% for fiscal year 2010.
- Net income from continuing operations increased 37% to $2.2 million from $1.6 million. Excluding the impacts of the charges noted above, adjusted net income from continuing operations increased 84% to $3.2 million from $1.7 million.
"We continued to experience fluctuations in demand in a very competitive marketplace and challenging economy. I am pleased with our ability to increase earnings as a result of cost reduction actions and our continued emphasis on repaying debt. This demonstrates the ongoing focus and hard work of our associates who continue to excel in a difficult environment," said Frank Gerace, President and CEO of Multi-Color Corporation.
For the nine month period ended December 31, 2009, Multi-Color's net revenues of $207.6 million decreased 7% compared to the prior year. The decrease in revenues was due to a 5% decline in sales volume, a 1% unfavorable pricing impact and a 1% unfavorable foreign exchange impact. Income from continuing operations increased 12% to $9.6 million, while EPS from continuing operations increased to 78 cents per diluted share from 69 cents.
- Financial results for the nine month periods ended December 31, 2009 and 2008 included the following charges:
- During the quarter ended December 31, 2009, the Company recorded a $1.2 million charge ($959,000 after-tax) in connection with the relocation of its corporate headquarters which reduced diluted EPS by 8 cents.
- During the quarter ended June 30, 2009, the Company incurred $359,000 ($256,000 after-tax) in severance and plant closure costs which reduced diluted EPS by 2 cents.
- During the quarter ended December 31, 2008, the Company incurred $192,000 ($112,000 after-tax) of acquisition related expenses which reduced diluted EPS by 1 cent.
- During the quarter ended September 30, 2008, the Company incurred $517,000 ($346,000 after-tax) in severance and termination costs which reduced diluted EPS by 3 cents.
- During the quarter ended June 30, 2008, the Company recorded an asset impairment charge of $226,000 ($144,000 after-tax) which reduced diluted EPS by 1 cent.
- Excluding the impacts of these charges from the 2009 and 2008 nine month periods, adjusted EPS from continuing operations increased to 88 cents per diluted share from 74 cents per diluted share.
- During the nine month period, the Company repaid $14.5 million or 14% of long term debt.
Safe Harbor Statement
The Company believes certain statements contained in this report that are not historical facts constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbors created by that Act. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from those expressed or implied. Any forward-looking statement speaks only as of the date made. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which they are made.
Statements concerning expected financial performance, on-going business strategies, and possible future actions which the Company intends to pursue in order to achieve strategic objectives constitute forward-looking information. Implementation of these strategies and the achievement of such financial performance are each subject to numerous conditions, uncertainties and risk factors. Factors which could cause actual performance by the Company to differ materially from these forward-looking statements include, without limitation, factors discussed in conjunction with a forward-looking statement; changes in general economic and business conditions; the ability to consummate and successfully integrate acquisitions; ability to manage foreign operations; currency exchange rate fluctuations; the success and financial condition of the Company's significant customers; competition; acceptance of new product offerings; changes in business strategy or plans; quality of management; the Company's ability to maintain an effective system of internal control; availability, terms and development of capital and credit; cost and price changes; raw material cost pressures; availability of raw materials; ability to pass raw material cost increases to its customers; business abilities and judgment of personnel; changes in, or the failure to comply with, government regulations, legal proceedings and developments; risk associated with significant leverage; increases in general interest rate levels affecting the Company's interest costs; ability to manage global political uncertainty; and terrorism and political unrest. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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