SHARONVILLE, Ohio, -- Multi-Color Corporation today announced financial results for the third quarter ended December 31, 2008.
   
Third quarter highlights as compared to the prior year included:

- Net revenues increased 30% to $62.6 million from $48.3 million.  The increase in revenues was due to the Collotype acquisition completed in February 2008, which generated $21.9 million in revenues for the quarter, partially offset by a $7.5 million or 16% reduction in North American organic revenues.

- Gross profit increased 20% to $10.3 million due to the Collotype acquisition, partially offset by a reduction in gross profit due to the shortfall in North American organic revenues.

- Selling, general and administrative (S,G&A) expenses increased $1.2 million due to comparable expenses from the Collotype acquisition. As a percent of sales, S,G&A expenses were reduced by 40 basis points due to cost reduction actions.

- Operating income increased 15% to $4.3 million from $3.8 million.

- Interest expense increased $1.5 million due to increased debt incurred to finance the Collotype acquisition.  During the quarter, the Company repaid $5.9 million or 5% of long term debt.

- Net income from continuing operations decreased to $1.6 million from $2.0 million.

- Diluted Earnings Per Share (EPS) from continuing operations decreased to 13 cents per diluted share from 19 cents.

Frank Gerace, President and CEO of Multi-Color Corporation stated, "We experienced a very challenging third quarter as a result of reduced sales activity, wine industry seasonality and foreign currency fluctuations. Our North American customers are feeling the impact of dramatic inventory adjustments at the retail and household levels. Although we expect seasonal improvement with wine customers toward the end of our fiscal year, we are not able to predict when sales activity with our North American consumer product customers will improve. Aggressive sales and operational plans have been implemented to mitigate the impact of the lower sales activity."

- Financial results for the 2008 and 2007 quarterly and year-to-date periods included special items as described below:

- 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 December 31, 2007, the Company recorded a non-cash charge of $957,000 ($642,000 after-tax) in Other Expenses to reflect the change in fair value of foreign currency forward contracts associated with the Collotype acquisition.  In addition, the Company incurred approximately $292,000 ($196,000 after-tax) of expenses related to its manufacturing expansion plan. Combined, these items reduced diluted EPS by 8 cents.

- Excluding the impacts of the special items from 2008 and 2007, Adjusted EPS from Continuing Operations decreased to 14 cents per diluted share from 27.

For the nine month period ended December 31, 2008, Multi-Color's net revenues of $222.7 million increased 46% compared to the prior year. The increase in revenues was due to Collotype which added $84.4 million in revenue, partially offset by a $14.3 million or 9% reduction in North American organic revenues. Income from Continuing Operations increased 10% to $8.6 million, while EPS from Continuing Operations decreased to 69 cents per diluted share from 75 cents.

- Financial results for the nine month period ended December 31, 2008 also included special items from the quarterly periods ended June 30, 2008 and September 30, 2008 as follows:

- 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.

- 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.

- Excluding the impacts of the special items from the 2008 and 2007 nine month periods, Adjusted EPS from Continuing Operations decreased to 74 cents per diluted share from 83 cents.

- During the nine month period, the Company repaid $19.2 million or 15% of long term debt.

"As a result of unprecedented worldwide economic conditions, it has become increasingly difficult to predict our customers' demand. Accordingly, we will continue to focus on the elements that are within our control. We expect to emerge from the current cycle with a lower cost structure, broader customer base, improved asset utilization and stronger company," Gerace concluded.