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Cimpress Reports Sales Rise in Fiscal Q3

Top 40 distributor Cimpress (asi/162149), parent company of Vistaprint and National Pen, this week reported a year-over-year 16% increase in total revenue and an 83% rise in adjusted net operating profit for the third quarter of its fiscal 2018, which ended March 31. Adjusted EBITDA was up too, rising 35% from Q3 2017 to $67.8 million, the company said. Despite the positives, Netherlands-based Cimpress recorded a GAAP net loss per diluted share for the quarter of $0.07, a performance that nonetheless represented an improvement from 2017’s third quarter loss of $1.38 per diluted share.

Back on the bright side, both Vistaprint and National Pen contributed to Cimpress’ sales growth. Revenue and profit reportedly rose in both those business segments.

Cimpress executives said Wednesday that total revenue for the quarter increased to $636 million, up from about $550.5 million during the prior year’s Q3. Meanwhile, adjusted net operating profit soared to $25.3 million, a jump from the third quarter of 2017 when profit tallied $13.8 million. “Operating income and adjusted net operating profit both increased significantly year-over-year, primarily as a result of net restructuring savings and operating efficiencies,” said Robert Keane, Cimpress’ founder, president and CEO.

Despite the gain in adjusted net operating profit, factors that include a year-over-year increase in Cimpress’ tax provision contributed to keeping the company’s GAAP earnings per diluted share in the loss column.

Keane noted National Pen’s performance played a significant role in bolstering overall revenue. National Pen, a former Top 40 distributor that Cimpress acquired in 2016, generated $81.5 million in sales during fiscal 2018’s third quarter, a 39% increase from the same three-month period the prior year. Profit reportedly accelerated to $18 million. “Revenue grew strongly across channels and geographies due to great execution, benefits from actions taken last year to improve marketing performance, increased marketing and prospecting investment, and increased inter-company sales to other Cimpress businesses,” a company statement said.

Vistaprint, a web-based seller of business marketing materials and promotional products, is Cimpress’ primary sales driver. During Q3 2018, Vistaprint generated revenue of $357.6 million, an 11% increase from Q3 2017. Profit rose too, from $37.6 million in the third quarter of 2017 to $57.6 million during this fiscal year’s third quarter. Cimpress said a combination of factors propelled the $20 million increase in Vistaprint’s profit, including approximately $14 million in year-over-year operating expense savings, revenue growth, reduced advertising as a percent of revenue and favorable currency movements.

Looking ahead, Cimpress said its best estimate for total share-based compensation expense for the full fiscal year 2018 has increased to approximately $45 million. “We continue to expect a portion of our share-based compensation expense to be volatile as certain awards granted in fiscal 2018 are subject to mark-to-market accounting throughout a three-year performance vesting period,” the company noted.