NEW YORK - Multi Packaging Solutions International Limited (NYSE:MPSX), (“MPS”; “the Company”), a global leader in value-added print and packaging solutions for the branded consumer, healthcare, and multi-media markets, today announced results for 1Q 2016.
First Fiscal Quarter 2016 Highlights:
- Net sales increased $65.0 million, or 16.5%, to $459.1 million vs. 1Q 2015
- Net income attributable to MPS increased $6.0 million, or 85.6%, to $13.0 million vs. 1Q 2015
- Earnings per share on a fully diluted basis increased to $0.21 per share vs. $0.11 per share for 1Q 2015
- Adjusted EBITDA increased $16.0 million, or 26.2%, to $77.2 million vs. $61.2 million for 1Q 2015
- Achieved Adjusted EBITDA margin of 16.8% vs. 15.5% for 1Q 2015
- Completed acquisition of BP Media Ltd. on July 1, 2015
- Made voluntary early repayments of $25.0 million on outstanding term loan on October 7, 2015
- Completed initial public offering (“IPO”) on October 27, 2015, using net proceeds to prepay $182.4 million of outstanding term loans on October 29, 2015
Marc Shore, Chief Executive Officer, commented, “We are pleased with our first quarter results. Adjusted EBITDA shows the strength of our strategy to operate consistently at the highest level within our global footprint. We strive for excellence in all areas, whether it’s serving our customers, operating our factories, streamlining supply chain, providing unique packaging solutions or investing in new technology. These attributes, and the commitment of our employees, have contributed to our record first quarter. While the IPO was a significant event, our focus remains on operating the business and delivering long term shareholder value.”
First Quarter Fiscal 2016 Results
During 1Q 2016, MPS reported net sales of $459.1 million, up $65.0 million, or 16.5%, vs. $394.1 million for 1Q 2015. This increase was due primarily to acquisitions made in fiscal 2015. On a constant currency basis, sales for 1Q 2016 would have been $493.5 million.
Adjusted for acquisitions in fiscal 2015, net sales for 1Q 2016 were down $62.2 million vs. 1Q 2015. This decrease was due to several factors: the impact of unfavorable foreign exchange rates of $34.4 million, an anticipated decline in multi-media sales and a delay in certain consumer product launches.
Gross margin for 1Q 2016 was 21.6%, up 70 basis points, vs. 20.9% for 1Q 2015. This increase reflects the Company’s facility improvement programs and $4.6 million of realized synergies from acquisitions, partially offset by restructuring charges for the announced Melrose Park closure. The Company expects to realize an additional $7.4 million in synergies related to acquisitions in the next three quarters.
Net income attributable to MPS for 1Q 2016 was $13.0 million, or $0.21 per diluted share, vs. $7.0 million, or $0.11 per diluted share, for 1Q 2015. During the quarter, the Company recorded restructuring charges of $2.8 million due primarily to the announced closure of the Company’s Melrose Park facility, as well as unrealized foreign exchange losses of $2.9 million.
Adjusted EBITDA for 1Q 2016 was $77.2 million, up $16.0 million, or 26.2%, vs. $61.2 million in 1Q 2015. Adjusted EBITDA margin of 16.8% was driven by the Company’s capital programs, plant improvement initiatives, purchasing and cost savings programs. On a pro forma basis, adjusted EBITDA increased $6.8 million, or 9.6%, vs. $70.4 million in 1Q 2015. This increase includes a $6.4 million negative impact from foreign exchange rates.
Cash balances as of September 30, 2015 were $75.3 million. There were no amounts outstanding under our revolving credit facility. Total debt net of cash was $1,104.7 million including deferred debt discount of $19.1 million. In October 2015 the Company used $182.4 million of the net proceeds from the IPO and $25.0 from existing cash balances to prepay a portion of its term loans. This reduced total debt, net of cash, to $922.3 million including deferred debt discount of $19.1 million.
The Company announced the closure of Melrose Park on September 1, 2015, with an anticipated completion date of February 2016. The Company recorded restructuring expenses of approximately $2.8 million in the quarter ending September 30, 2015, due primarily to the announced closure. The underlying facility is leased on a month-to-month basis.
Initial Public Offering
On October 27, 2015, the Company completed an IPO of 16,500,000 shares of common stock at a price of $13.00 per share. In connection with the offering, certain of the selling shareholders sold 1,000,000 common shares. In addition, the underwriters exercised their right to purchase an additional 2,475,000 common shares from certain of the selling shareholders at the public offering price. The Company did not receive any of the proceeds from the underwriters’ exercise of this option.