Multi-Color Corporation Announces 30% Increase in Fourth Quarter Core EPS
Wednesday, May 22, 2013
Press release from the issuing company
CINCINNATI, OHIO - Multi-Color Corporation fourth quarter core earnings per share increased 30% to $0.56 per diluted share from $0.43 in the prior year quarter. Fiscal 2013 core earnings per share increased 9% to $2.02 from $1.85 in the prior year. Diluted net earnings per share increased to $1.86 from $1.32 in the prior year. Non-core items (consisting of integration expenses, acquisition expenses, plant consolidation expenses, and purchase accounting charges) decreased to $0.16 per share from $0.53 per share in the prior year.
"Revenues at $660 million and organic growth at 4% met our targets set for the fiscal year. Gross margin trend has been positive in the second half of the fiscal year and SG&A ratio stable, delivering a core EPS breaking through the two dollar mark." said Nigel Vinecombe, President and CEO of Multi-Color Corporation.
Fiscal 2013 highlights:
Net revenues increased 29% to $659.8 million from $510.2 million in the prior year. Acquisitions and start-ups occurring after the beginning of fiscal 2012 account for 27% of the 29% increase or $139.7 million. Of this acquisition-related revenue increase, $114.7 million is attributable to the acquisition of York Label Group. Organic net revenues excluding foreign exchange impact increased 4% in the current year comprised of a 2% increase in sales volumes and a 2% favorable impact of sales mix. The impact of foreign exchange rates compared to the prior year was an unfavorable 2% change primarily driven by the depreciation of the euro.
Gross profit increased $28.0 million or 29% compared to the prior year. Acquisitions and start-ups occurring after the beginning of fiscal 2012 contributed $19.0 million or 20% to the gross profit increase. The remaining 9% increase was due to higher organic sales volumes and favorable sales mix. Core gross profit, excluding the impact of inventory purchase accounting charges, increased 27% or $27.0 million. Core gross margins decreased to 19% of sales revenues compared to 20% the prior year primarily due to operating inefficiencies in the first half of the fiscal year related to the York Label Group acquisition.
Selling, general and administrative (SG&A) expenses increased $2.6 million or 5% compared to the prior year. SG&A increased $9.2 million due primarily to the impact of acquisitions occurring after the beginning of fiscal 2012 partially offset by a decrease of $6.6 million in integration and acquisition expenses compared to the prior year. Core SG&A, as a percent of sales, decreased to 8% of sales from 9% of sales in the prior year.
In fiscal 2013, the Company incurred $1.5 million of expenses related to the consolidation of its manufacturing facilities located in Montreal, Canada and Kansas City, Missouri. In connection with the closure of the Kansas City facility, the Company incurred a charge of $1.2 million in the fourth quarter of fiscal 2012 comprised of employee severance and other termination benefits, non-cash charges related to asset impairments and relocation and other costs.
Operating income increased $25.1 million or 55% compared to the prior year. Acquisitions and start-ups occurring after the beginning of fiscal 2012 contributed $8.2 million to the operating income increase. The remaining increase is due primarily to the impact of higher sales volumes, favorable sales mix impact, lower integration expenses and other cost decreases. Core operating income increased 32% to $74.2 million from $56.4 million in the prior year. Non-core items for fiscal 2013 include $1.5 million related to the closure of the Kansas City, Missouri facility and the consolidation of the Montreal, Canada plants.
The Company had $402.9 million of debt at March 31, 2013 compared to $402.1 million at March 31, 2012. In April 2012, the company borrowed $42.3 million to finance the Labelgraphics acquisition and fund the deferred payment on the York Label Group acquisition. During fiscal 2013, the company paid down $41.5 million of the additional borrowings.
On April 2, 2012, Multi-Color acquired Labelgraphics for a total purchase price of $25.3 million. Labelgraphics, based in Glasgow, Scotland, supplies labels to the spirit & wine markets bottled in the U.K. These markets are experiencing growth through spirit shipments to developing markets and imported wine shipments bottled in the U.K.
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