The acquisition of two label converting companies in Europe gave a boost to the bottom line of Multi-Color Corporation (NASDAQ: LABL) for the third quarter ending December 31, 2010. Net revenues rose 26 percent to $83.4 million, from $66 million in the prior third quarter.
The company, based in Batavia, OH, USA, acquired CentroStampa in Italy in the second quarter and Monroe Etiquette in France during the third. Both contributed $15.5 million or 23 percent of the revenue increase. The remaining increase was due to a 3 percent favorable foreign exchange impact. Excluding the impact of acquisitions and foreign exchange, the impact of organic sales volume and pricing was comparable to the prior year quarter.
Gross profit increased $4.8 million or 42 percent compared to the prior year quarter. The acquisitions of CentroStampa and Monroe Etiquette contributed 38 percent to the gross profit increase. The remaining increase was due primarily to the impact of foreign exchange and improved operating efficiencies. Gross margins increased to 19 percent from 17 percent of sales revenues compared to the prior year quarter.
“In addition to the 50 percent increase in adjusted net income for the fiscal year, we also see positives in the more stable selling prices by quarter, and with a lower cost base, any revenue growth is meaningful for earnings,” says Multi-Color President Nigel Vinecombe.
“Our existing businesses see growth opportunities in the year ahead and are resourced to deliver on the promise,” Vinecombe adds. “Our new European operations in Italy and France have had very good debuts and encourage us to follow through on our development plans in this region. We are also excited that our new Chinese plant is operational this month as planned. We continue to actively pursue EPS growth in our existing businesses and through new ones," Vinecombe said.