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Vistaprint parent Cimpress NV (NASDAQ: CMPR) released fiscal first-quarter 2019 results on Wednesday after the market closed, detailing encouraging operational improvements but admittedly sluggish revenue growth. The company also offered new insight on its recently closed acquisition of canvas-print specialist BuildASign.
Shares were down more than 10% on Thursday as the market absorbed the news. Let's take a closer look at how Cimpress started the new fiscal year and what we should be looking for in the coming quarters.
IMAGE SOURCE: CIMPRESS N.V.
Cimpress results: The raw numbers
| Metric | Fiscal Q1 2019* | Fiscal Q1 2018 | Year-Over-Year Change |
|---|---|---|---|
| Revenue | $589.0 million | $563.3 million | 4.6% |
| GAAP net income (loss) attributable to Cimpress NV | ($14.6 million) | $23.4 million | N/A |
| GAAP earnings (loss) per diluted share | ($0.47) | $0.72 | N/A |
DATA SOURCE: CIMPRESS. *FOR THE QUARTER ENDED SEPTEMBER 30, 2018. GAAP = generally accepted accounting principles.
What happened with Cimpress this quarter?
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Cimpress doesn't provide specific quarterly guidance. But for perspective, these results were well below consensus estimates for a narrower loss of $0.13 per share on revenue of $611.2 million.
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Excluding contributions from acquisitions, organic revenue grew 8% on a constant-currency basis.
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By business segment:
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Cimpress generated $22.2 million in operating cash flow, while free cash flow was negative $10.1 million.
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Subsequent to the end of the quarter, Cimpress completed its acquisition of internet-based canvas print and business signage company BuildASign, resulting in a cash outflow of $274.2 million.
What management had to say
Cimpress CEO Robert Keane stated:
In Q1 FY2019 we delivered disappointing revenue growth, solid cash flows and good progress on our operational initiatives relative to our own expectations. As our public documents and investor events make clear, we focus on the long term and we do not believe that one quarter's financial results -- whether good or bad -- make or break a great company. In the past quarter we advanced as planned on many important technology, product, customer service, and cost-reduction initiatives, and we executed the largest acquisition in our company's history. Those things being said, our first quarter revenue performance was nonetheless disappointing, with growth lower than what we should have achieved given the investments we have been making and the size of our market opportunity.
Regarding the BuildASign purchase, Keane added:
We are excited about the addition of this profitable, growing internet-based provider of canvas-print wall decor, business signage and other large-format printed products. We believe we have an opportunity to deliver strong returns on this investment and have already begun executing on expected near-term synergies.