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Multi-Color Corporation Announces Higher Organic Growth and Margin Results for Fiscal 2015

Monday, June 08, 2015

Press release from the issuing company

CINCINNATI, OHIO, June 5, 2015 - Multi-Color Corporation (NASDAQ:  LABL) fourth quarter core earnings per share increased 9% to $0.74 per diluted share from $0.68 in the prior year quarter.   

Fiscal 2015 highlights:

"Fiscal 2015 achieved 4% organic growth and a 2% of revenues improvement in margins to 21% core gross margin and 13% core operating margin.  Core EPS increased to $3.20, up 50% over the prior year.  We have seen benefits from prior year improvement and integration activities.  This has resulted in a new minimum level of performance on which to build in fiscal 2016.  Plus stronger cash flow and lower leverage positions us well to further develop our label markets," said Nigel Vinecombe, President and CEO of Multi-Color Corporation. 

  • Net revenues increased 15% to $810.8 million from $706.4 million in the prior year.  Acquisitions occurring after the beginning of fiscal 2014 accounted for a 13% increase in revenue.  Organic revenues increased 4%, 3% in volume and 1% due to the favorable impact of sales mix and pricing.  Foreign exchange rates, primarily driven by the depreciation of the Australian dollar, the Euro and Latin American currencies, led to a 2% decrease in revenues year over year.
     
  • Gross profit increased $41.2 million or 31% compared to the prior year.  Acquisitions occurring after the beginning of fiscal 2014 contributed $19.9 million to the increase.  Core gross profit, excluding the impact of inventory purchase accounting charges, increased 31% or $41.1 million.  Core gross margins increased to 21% of sales revenues for fiscal 2015 compared to 19% in the prior year primarily due to improved operating efficiencies in North America, South America and Asia Pacific.
     
  • Selling, general and administrative (SG&A) expenses increased $10.7 million or 19% compared to the prior year.  SG&A increased $7.5 million due primarily to the impact of acquisitions occurring after the beginning of fiscal 2014, partially offset by a decrease of $1.5 million due to the favorable impact of foreign exchange rates, primarily driven by depreciation in the Australian dollar and the Euro.  The remaining increase in core SG&A primarily relates to professional fees and compensation expenses.  Core SG&A as a percentage of sales was 8% in fiscal 2015 and fiscal 2014.  Non-core items relate to acquisition and integration expenses in both periods and were $1.8 million in fiscal 2015 compared to $2.3 million in fiscal 2014.
     
  • In November 2014, the Company announced plans to consolidate its manufacturing facilities located in Norway, Michigan and Watertown, Wisconsin into its other existing facilities.   During fiscal 2015, the Company recorded facility closure expenses, primarily in connection with these closures, of $7.4 million, including $0.1 million in the fourth quarter.  These expenses include a non-cash impairment charge of $5.2 million booked in the second quarter of fiscal 2015 related primarily to consolidation of the Company's manufacturing facilities located in Norway, Michigan and Watertown, Wisconsin into its other existing facilities.  During fiscal 2014, facility closure expenses were $1.2 million related to the closure of the Company's manufacturing facility located in El Dorado Hills, California facility.
     
  • Operating income increased $36.8 million or 61% compared to the prior year.  Core operating income increased 39% to $107.1 million from $77.3 million in the prior year.  Core operating income increased due to improved operating efficiencies in North America, South America and Asia Pacific and a strong contribution from fiscal 2014 acquisitions.  Acquisitions occurring after the beginning of fiscal 2014 contributed $12.5 million to the increase.  Non-core items in fiscal 2015 relate to acquisition expenses of $1.8 million, facility closure expenses of $7.4 million and a goodwill impairment loss of $1 million related to finalization of the 2014 estimate for the Latin America Wine & Spirit reporting unit.  
     
  • Interest expense increased $4.6 million or 21% compared to the prior year, including the write-off of $2.0 million of deferred financing fees as a result of debt refinancing in fiscal 2015.  Core interest expense increased $1.8 million or 8% compared to the prior year primarily due to an increase in debt borrowings to finance fiscal 2014 acquisitions.  The Company had $458.5 million of debt at March 31, 2015 compared to $478.2 million at March 31, 2014.  
     
  • Other income, net was $0.3 million in fiscal 2015 compared to $5.9 million in the prior year. Core other income, net was $0.3 million in fiscal 2015.  Non-core items in fiscal 2014 related to supplemental purchase price adjustments for businesses acquired in fiscal 2013 and 2014 for $2.5 million, income of $3.8 million related to settlement of a legal claim, and a loss on currency repatriation of $0.3 million.
     
  • The effective tax rate decreased to 35% in fiscal 2015 from 36% in the prior year.  The effective tax rate on core net income was 35% in both fiscal 2015 and fiscal 2014.  The Company expects its annual effective tax rate to be approximately 35% in fiscal 2016.  
     
  • Diluted earnings per share (EPS) increased 59% to $2.71 per diluted share from $1.70 in the prior year.  Excluding the impact of the non-core items noted below, core EPS increased 50% to $3.20 per diluted share from $2.14 per diluted share in the prior year.
     
  •  Net income increased 62% to $45.7 million from $28.2 million in the prior year.  Core net income increased 52% to $54.0 million from $35.6 million in the prior year.
 

 

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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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