Multi Packaging Solutions International announced results for its first quarter ended 30 September 2016.
1Q FY 2017 vs. 1Q FY 2016:
GAAP sales of $407.8 million vs. $459.1 millionNegative foreign exchange impact of $17.4 millionGAAP operating income of $27.7 million vs. $40.7 millionGAAP net income attributable to MPS of $13.3 million vs. $13.0 millionGAAP net income attributable to MPS of $0.17 per share vs. $0.21 per shareThe impact of the additional shares outstanding associated with the IPO results in a comparative EPS of $0.17 in both periods.Non GAAP net income attributable to MPS of $13.1 million vs. $18.1 millionNon GAAP net income attributable to MPS per share of $0.17 per share vs. $0.29 per shareThe impact of the additional shares outstanding associated with the IPO results in a comparative Non GAAP EPS of $0.17 and $0.23 in 1Q FY 2017 and 1Q FY 2016, respectively.Adjusted EBITDA of $60.1 million vs. $77.2 millionNegative foreign exchange impact of $2.5 millionAdjusted EBITDA margin of 14.7% vs 16.8%
Recent Activity
Completed debt refinancing transaction in October 2016Redeemed $200 million 8.5% Senior NotesRaised $220 million new incremental Term Loan DRepriced outstanding Euro Tranche B Term Loans and Sterling Tranche B Term LoansUpsized Revolving Credit FacilityCompleted two acquisitions in second quarter with combined trailing 12 months revenue of $25 million, one in the European label market, and one in the North American transaction card marketPreviously announced relocation of business of the Stuttgart, Germany facility, and the closure of the Bradford, United Kingdom plant. Announces closure of Louisville, Kentucky media plantUK Field Group Pension Plan cash deficit payments completed in August 2016
Marc Shore, Chief Executive Officer, commented, “As we expected, the first quarter was challenging due to the headwinds that were previously discussed: continued negative impact of foreign exchange rates, the discontinuation of a specific toy program, the exit from the tobacco business and the continued decline in multimedia sales. Furthermore, we continued to struggle at four facilities, and some of our core customers had weaker sales than budgeted. As previously noted, we will cycle through all of these challenges by the end of our fiscal second quarter, except for foreign exchange and media declines.
Notwithstanding these headwinds, there were significant accomplishments in the quarter. We have a robust pipeline of new business which we will start benefiting from in early 2017. This is driven in part by our ability to give customers consistently high quality products on a global basis. MPS has also completed two strategic acquisitions in October and November that will enhance our offering for both labels in Europe and transaction cards in North America. These acquisitions currently have combined annual revenue of $25 million.
MPS has also taken several steps that are important to our future success:
The completion of our debt refinancing which will result in lower annual cash interest costs of approximately $10 million.The final funding payment under the UK Pension Funding Arrangement was made, which will save approximately $9 million cash annually.Progress in streamlining our operational footprint. We have internally announced the closure of three facilities and by June 30th 2017, we expect to close a total of six facilities. This will result in approximately $20 million in savings annually.Progress in our supply chain rationalization.
In summary, the first half of fiscal 2017 will be challenging. However, we are confident that the new sales pipeline, significant cost cutting measures, optimization of footprint, and strategic acquisitions will create momentum in the fiscal second half and drive our future growth and success.”
