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Cimpress (CMPR) Down 2.2% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Cimpress (CMPR - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Cimpress due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Fourth-Quarter Fiscal 2018 Highlights

Cimpress reported better-than-expected results for the fourth quarter and fiscal 2018 (ended Jun 30, 2018). The company's GAAP loss in the reported quarter was 24 cents per share, an improvement over the loss of $1.11 recorded in the year-ago quarter. Adjusted earnings in the quarter were 21 cents, above the Zacks Consensus Estimate of 3 cents.

For fiscal 2018, GAAP net income per share was $1.36 versus net loss per share of $2.29 in the previous fiscal.

Organic and Forex Gains Drive Revenues

Cimpress generated revenues of $631.1 million in the reported quarter, reflecting growth of 11.9% from the year-ago tally. The improvement came on the back of 11% organic gains and 4% positive impact of foreign currency movements, partially offset by 3% adverse impact of acquisitions, divestitures and joint ventures.

However, the top line lagged the Zacks Consensus Estimate of $635.7 million by 0.7%. Cimpress reports its revenues under the segments discussed below:

Vistaprint — the largest revenue generating segment of the company — showed healthy year-over-year rise of 11.3% in revenues. Aggregate quarterly revenues from the segment totaled $357.1 million, up from $320.8 million in the year-ago quarter. The improvement was driven by Easter holiday and the increase in repeat customer bookings.

Upload and Print segment's revenues increased 19.5% year over year to $193.3 million in the reported quarter. On the other hand, revenues of $65.9 million from National Pen segment grew 22.3% year over year and that from All Other Businesses decreased 33.1% year over year to $19.7 million.

For fiscal 2018, the company's revenues totaled $2,592.5 million, increasing 21.4% over the previous year. On a constant-currency basis, top-line results improved 11%.

Margin Profile Mixed

In the reported quarter, Cimpress' cost of revenues increased 13.4% year over year to $316.6 million. It represented 50.2% of the quarter's revenues versus 49.5% in the year-ago quarter. Gross profit increased 10.3% year over year to $314.6 million while margin declined 70 basis points (bps) to 49.8%.

Adjusted net operating profit increased 64.9% year over year to $36.1 million while adjusted net operating margin grew 180 bps to 5.7%. The improvement came on the back of sales growth, initiatives to improve operational efficiencies and savings from restructuring measures.

Balance Sheet and Cash Flow

Exiting the fiscal fourth quarter, Cimpress had cash and cash equivalents of $44.2 million, down 11.4% from $49.9 million recorded at the end of the last reported quarter. Long-term debt decreased 2.4%, sequentially, to $767.6 million.

In the fourth quarter of fiscal 2018, the company generated net cash of $47.7 million from its operating activities, reflecting growth of 44.1% over the year-ago quarter. Capital spending on the purchase of property, plant and equipment was $13.5 million, lower than $17.2 million in the year-ago quarter. Free cash flow was $22.8 million, up considerably from $7.1 million in the year-ago quarter.

Though no shares were repurchased during the fiscal fourth quarter, the total share buyback activities amounted to $94.7 million for fiscal 2018. During the fiscal, the company bought back 895,377 shares for $105.78 per share.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.




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