Multi-Color Corporation announced net revenues increased 1% to $166.8 million from $165.0 million in the prior year. First quarter core earnings per share decreased 13% to $0.48 per diluted share from $0.55 in the prior year quarter. Diluted net earnings per share decreased to $0.40 from $0.49 in the prior year. Non-core items (consisting of integration expenses, acquisition expenses, plant consolidation expenses, purchase accounting charges, and currency losses related to repatriation of foreign currency) increased to $0.08 per share from $0.06 per share in the prior year.
Nigel Vinecombe, president and CEO of Multi-Color Corporation, says, "Core EPS at $0.48 for the quarter was impacted by lower gross margins primarily due to unusually high expenses associated with multiple equipment transfers and installations designed for better future utilization. In addition, organic sales growth was weaker for the quarter than prior quarters. We do not expect these factors to continue at these levels.
We expect recent acquisitions in Mexico, Australia and France to contribute to core EPS from the third quarter of this fiscal year."
Fiscal 2014 highlights:
Net revenues increased 1% to $166.8 million from $165.0 million in the prior year. Acquisitions occurring after the beginning of fiscal 2013 account for 1% of the increase or $1.0 million.
Gross profit decreased $0.5 million or 2% compared to the prior year. Core gross profit, excluding the impact of inventory purchase accounting charges in fiscal 2013, decreased 3% or $0.9 million. Core gross margins decreased to 18% of sales revenues compared to 19% in the prior year, primarily due to unusually high costs related to press transfers and installations and charges for inventory write-offs.
Selling, general and administrative (SG&A) expenses increased $0.7 million or 5% compared to the prior year due primarily to integration expenses related to acquisitions made after June 30, 2012. Core SG&A, as a percent of sales, was 8% for both the current and prior periods.
In fiscal 2014, the Company incurred $1.0 million of expenses related to the integration of the Labelmakers Wine Division in Australia, as well as related acquisition expenses of $0.4 million.
Operating income decreased $1.2 million or 7% compared to the prior year, primarily due to changes in sales mix and costs related to acquisitions and integration. Core operating income decreased 6.5% to $17.5 million from $18.7 million in the prior year. Non-core items relate to acquisition and integration expenses.
Interest expense decreased $0.4 million compared to the prior year. The decrease is due to lower overall debt levels outstanding during the current year quarter.
The company had $400.9 million of debt at June 30, 2013 compared to $402.9 million at March 31, 2013.
The effective tax rate increased to 37% in the first quarter of fiscal 2014 from 33% in the same quarter of the prior year. The increase was primarily due to a shift in the geographical mix of forecasted worldwide earnings and a reduction to the tax benefit associated with certain permanent tax deductions in foreign jurisdictions during the current quarter. The Company expects its annual effective tax rate to be approximately 38% in fiscal 2014.
Diluted earnings per share (EPS) decreased 18% to $0.40 per diluted share from $0.49 in the prior year. Excluding the impact of the non-core items noted below, core EPS decreased 13% to $0.48 per diluted share from $0.55 per diluted share in the prior year.
Net income decreased to $6.7 million from $7.9 million in the prior year. Core net income decreased to $7.9 million from $8.9 million in the prior year.