“I am pleased with our ability to improve earnings in an extraordinarily difficult growth environment,” says Frank Gerace, Multi-Color’s president and CEO. “Our results reflect the actions we have taken over the past year to aggressively reduce costs, actions which have offset the impact of lower sales volume from reduced consumer spending.”
Among the first quarter highlights:
• Net revenues decreased 12 percent to $69.7 million from $79.5 million due to an 8 percent decline in sales volume and a 4 percent unfavorable foreign exchange impact. The continued decline in sales volume is a result of the impact of reduced consumer spending.
• Gross profit decreased 13 percent or $2 million due to the decline in volume; gross margins, however, were maintained at 19 percent of revenues due to improved operating efficiencies and reductions in fixed costs.
• Selling, general and administrative (SG&A) expenses decreased 26 percent or $2.2 million due to reductions in headcount and incentive compensation, and other cost decreases. As a percent of revenues, SG&A expenses were reduced to 9 percent compared to 11 percent in the prior year.
• Operating income increased 2 percent to $6.7 million from $6.5 million due to lower SG&A expenses. Operating margins increased by 200 basis points to 10 percent of revenues compared to 8 percent in the prior year.
• Interest expense decreased 43 percent to $1.2 million from $2.1 million due to lower bank debt levels and interest rates.
• Net income from continuing operations increased by $1.2 million or 40 percent compared to the prior year.
• Earnings Per Share (EPS) from continuing operations increased 39 percent to 32 cents per diluted share from 23 cents in the prior year.
“We continue to take a cautious view for the remainder of the year as consumer spending remains unpredictable and market pricing remains competitive,” Gerace adds. “I am especially impressed with our associates for the actions they are taking to execute our low cost business model. I want to thank them for the positive impact they are having on our Company's results.”
Multi-Color, based in Sharonville, OH, USA, is one of North America’s largest label manufacturing companies. It has 14 manufacturing locations worldwide: eight in the USA, five in Australia, and one in South Africa.