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Multi-Color Corporation Releases Third Quarter Earnings

Wednesday, February 05, 2014

Press release from the issuing company

CINCINNATI, OHIO - Multi-Color Corporation (NASDAQ: LABL) today announced third quarter fiscal 2014 results.

"Softer than normal revenues in our Wine and Spirit markets and lower than average gross margins from 2013 acquisitions led to a lower gross margin ratio for the quarter than the prior year.  Lower gross margins impacted the bottom line, resulting in lower than expected Core EPS," said Nigel Vinecombe, President and CEO of Multi-Color Corporation.

Third quarter highlights:

  • Net revenues increased 8% to $169.4 million from $157.0 million compared to the prior year quarter.  Net revenues increased 9% or $13.4 million due to fiscal 2014 acquisitions.  Revenue decreases of 3% due to pricing/sales mix were partially offset by increases of 3% in volume.  Revenues also decreased 1% due to the unfavorable impact of foreign exchange rates primarily driven by depreciation in the Australian dollar.  

  • Gross profit decreased $1.3 million or 4% compared to the prior year quarter.  Gross margins decreased to 17% of net revenues compared to 19% of net revenues in the prior year quarter, primarily due to softer revenues relative to fixed costs. 

  • Selling, general and administrative (SG&A) expenses increased by $0.1 million to $15.3 million compared to the prior year quarter.  Core SG&A expenses decreased by 4% compared to the prior year quarter.  Core SG&A expenses were 8% of sales in the current year quarter, a decrease from 9% of sales in the prior year quarter.  Non-core items included in SG&A expenses in the three months ended December 31, 2013 consisted of $0.3 million of acquisition expenses related to fiscal 2014 acquisitions and $1.4 million related to plant consolidation costs for the closure of the El Dorado Hills, California facility.  Special items included in SG&A expenses in the three months ended December 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.   

  • Operating income decreased $1.4 million or 9% compared to the prior year quarter.  Core operating income decreased 5% to $15.5 million from $16.3 million.  Non-core items relate to acquisition, integration and plant consolidation expenses in the current and prior year quarters.  The decrease in operating profit was due primarily to lower profit margins in the current year quarter.   

  • Interest expense decreased by $0.2 million compared to the prior year quarter.  The Company had $408.9 million of debt at December 31, 2013 compared to $416.8 million at December 31, 2012. 

  • The effective tax rate was 28% for the third quarter of fiscal 2014 compared to 36% in the prior year quarter due primarily to the tax effect of a $3.8 million gain recognized on a legal claim agreement in the current year quarter.  The Company expects its annual effective tax rate to be approximately 33%. 

  • Diluted earnings per share (EPS) increased 47% to $0.53 cents per diluted share from $0.36 cents in the prior year quarter.  Excluding the impact of the special items noted below, core EPS decreased 12% to $0.37 cents per diluted share from $0.42 cents in the prior year quarter.  Net income increased to $8.9 million from $5.9 million in the prior year.  Core net income decreased to $6.2 million from $6.8 million in the prior year quarter. 

Full Release

 

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Label & Packaging Editor

Jennifer Matt

Patrick Henry, Section Editor
Pat has covered graphic communications for nearly 30 years as a reporter, an editor, and a commentator.

 

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