Business News

Multi-Color Corporation Announces Results for First Quarter of Fiscal 2011

Friday 06. August 2010 - Multi-Color Corporation (NASDAQ:LABL) today announced first quarter increases in net revenues and gross profit.

“Our June quarter has shown encouraging signs in revenue and underlying profit growth,” stated Nigel Vinecombe, President and CEO of Multi-Color Corporation. “While we remain cautious about brand volumes, we continue to develop new business and productivity gains to drive profit improvement.”

First quarter highlights included:
— Net revenues increased 6% to $74.1 million from $69.7 million. The
increase was due to a 7% increase in sales volume and mix and a 3%
favorable foreign exchange impact, partially offset by a 4%
unfavorable pricing impact. The sales volume increase was primarily
due to higher volumes within our North American customer base. The
unfavorable pricing impact was due to reduced pricing schedules
associated with new agreements entered into in the second quarter of
fiscal 2010 with three of our largest customers.
— Gross profit increased $2 million or 16% compared to the prior year
due to higher sales volumes and improved operating efficiencies.
Gross margins increased to 20% from 19% of sales revenues compared to
the prior year.
— Selling, general and administrative (SG&A) expenses, adjusted for
special charges, increased by 11% compared to the prior year. The
special charges included in SG&A expenses for the first quarter of
fiscal 2011 were primarily comprised of $1.3 million in severance and
accelerated stock compensation charges and $535,000 for
acquisition-related expenses. The increase in adjusted SG&A is
primarily due to foreign exchange and higher professional fees.
— Operating income decreased slightly compared to the prior year to $6.6
million from $6.7 million. Excluding the impact of the special
charges from both periods, adjusted operating income increased 20% to
$8.4 million from $7 million due primarily to the increase in sales
volume and improved operating efficiencies.
— Interest expense remained steady at $1.2 million compared to the prior
year due to a $15.7 million or 16% reduction in bank debt offset by
the impact of higher interest rates and higher interest expense
related to the present value adjustment for our former corporate
headquarter lease liability.
— The Company’s effective tax rate was 31% in the first quarter of
fiscal 2011 compared to 29% in the same period of the prior year due
primarily to an increase in income in higher tax jurisdictions. The
Company expects its annual effective tax rate to be approximately 31%
in fiscal year 2011.
— Diluted EPS decreased 6% to $0.30 cents per diluted share from $0.32
cents. Excluding the impacts of the special charges noted below,
adjusted diluted EPS increased 18% to $0.40 cents per diluted share
from $0.34 cents. Adjusted net income increased 18% to $5.0 million
compared to $4.2 million in the prior year.
— As previously announced, on July 1, 2010, the Company closed the
acquisition of European wine, spirit & olive oil label specialist,
Guidotti CentroStampa S.p.A., based in Tuscany, Italy, for Euro 50.5
million with approximately 80% of the proceeds in the form of cash and
20% in the form of 934,567 shares of Multi-Color stock.



The following table shows adjustments made to Net Income and Diluted EPS between reported GAAP and Non-GAAP results for the three months ending June 30, 2010 and 2009. For a reconciliation of adjustments made to SG&A expenses and Operating Income between reported GAAP and Non-GAAP results, see the tables in Exhibit B:

Three Months Ended
6/30/10 EPS 6/30/09 EPS
(in (in
thousands) thousands)
Net Income and Diluted EPS, as
reported $3,745 $0.30 $3,985 $0.32
Severance and Accelerated Stock
Compensation Expense, Net of
Tax 874 0.07 96 0.01
Acquisition Expense, Net of Tax 368 0.03 – –
Facility Closure Expense, Net of
Tax – – 160 0.01
——————————– — — — —-
Adjusted Net Income and Diluted
EPS (Non-GAAP) $4,987 $0.40 $4,241 $0.34
——————————- —— —– —— —–




Nigel Vinecombe said, “We continue to invest in our existing operations with new press power and automation in all of our businesses this year to support future organic earnings growth. This is complemented by growth via our acquisition at Guidotti CentroStampa in Europe. Acquisitions are focused on higher margin and/or higher growth label markets.”