"Organic revenue growth continues in our largest market of North America, somewhat offset by softer organic European revenues in the quarter. Operating margins are solid but still impacted by integration activities in North and Latin America," says Nigel Vinecombe, president and CEO of Multi-Color Corporation.
First quarter highlights:
- Net revenues increased 64% to $165 million from $100.6 million compared to the three months ended June 30, 2011. Net revenues increased 66% or $66.2 million due to acquisitions occurring after June 30, 2011. Organic net revenues increased by 2% due to a favorable impact of pricing and sales mix. Net revenues decreased 4% compared to the prior year quarter due to the unfavorable impact of foreign exchange rates primarily driven by depreciation in the Australian dollar and the Euro.
- Gross profit increased $8.7 million or 39% compared to the first three months of the prior year. Adjusted for special items, gross profit increased $9.2 million or 41%. The increase is primarily due to acquisitions occurring after June 30, 2011 partially offset by a decrease related to the unfavorable impact of foreign exchange rates in the current quarter. Gross margins, adjusted for special items, decreased to 19% of net revenues compared to 22% of net revenues in the prior year quarter. This reduction in adjusted gross margins is due primarily to lower European sales, integration inefficiencies in North and Latin America and an above average quarter in the prior year. The adjusted gross margin for the three months ended June 30, 2012 is similar to the adjusted gross margin for fiscal year 2012
- Selling, general and administrative (SG&A) expenses increased $5.6 million compared to the prior year quarter due to the impact of acquisitions, costs related to the closure of the Kansas City facility of $0.6 million and severance costs related to the integration of York of $0.3 million partially offset by the impact of foreign exchange rates in the current quarter. Adjusted for special items, SG&A expenses increased by 60% compared to the prior year quarter due primarily to the impact of new acquisitions. Special items included in SG&A expenses in the three months ended June 30, 2012 consisted of $0.6 million of costs related to the closure of the Kansas City facility, $0.3 million of integration expenses related to the York Label Group acquisition and $0.1 million of acquisition related expenses. Adjusted SG&A, as a percent of sales, was 7.7% in the current quarter compared to 7.9% in the prior year quarter.