This Report contains forward-looking statements that involve risks and uncertainties. The statements contained in this Report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not limited to our statements about the anticipated growth and development of our businesses and revenues, our expectations with respect to our business and demand for our products post-pandemic, the anticipated impacts of global supply chain disruptions on our business, our expectations for the brand evolution of Vista, the anticipated effects of our investments in our business including the hiring of talented personnel, sufficiency of our liquidity position, legal proceedings, and sufficiency of our tax reserves. Without limiting the foregoing, the words "may," "should," "could," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "designed," "potential," "continue," "target," "seek" and similar expressions are intended to identify forward-looking statements. All forward-looking statements included in this Report are based on information available to us up to, and including the date of this document, and we disclaim any obligation to update any such forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various important factors, including but not limited to flaws in the assumptions and judgments upon which our forecasts and estimates are based; the development, severity, and duration of the COVID-19 pandemic and the timing and pace of economic recovery; our failure to anticipate and react to the effects of the pandemic on our customers, supply chain, markets, team members, and business; our inability to make the investments that we plan to make or the failure of those investments to achieve the results we expect; our failure to execute on the transformation of the Vista business; loss or unavailability of key personnel or our inability to recruit talented personnel to drive performance of our businesses; the failure of businesses we acquire or invest in to perform as expected; unanticipated changes in our markets, customers, or businesses; changes in the laws and regulations, or in the interpretation of laws and regulations, that affect our businesses; our failure to manage the growth and complexity of our business and expand our operations; our failure to maintain compliance with the covenants in our debt documents or to pay our debts when due; competitive pressures; general economic conditions; and other factors described in this Report and the other documents that we periodically file with the SEC.


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Executive Overview
Cimpress is a strategically focused group of more than a dozen businesses that
specialize in mass customization, via which we deliver large volumes of
individually small-sized customized orders for a broad spectrum of print,
signage, photo merchandise, invitations and announcements, writing instruments,
packaging, apparel and other categories. We invest in and build
customer-focused, entrepreneurial mass customization businesses for the long
term, which we manage in a decentralized, autonomous manner. We drive
competitive advantage across Cimpress through a select few shared strategic
capabilities that have the greatest potential to create Cimpress-wide value. We
limit all other central activities to only those which absolutely must be
performed centrally.
As of September 30, 2021, we have numerous operating segments under our
management reporting structure that are reported in the following five
reportable segments: Vista, PrintBrothers, The Print Group, National Pen, and
All Other Businesses. Refer to Note 11 in our accompanying consolidated
financial statements for additional information relating to our reportable
segments and our segment financial measures.
Our Vistaprint business and reportable segment has introduced a new parent brand
"Vista", which reflects our ongoing transformation into the expert design and
marketing partner for small businesses around the world. This new parent brand
encompasses VistaPrint, 99designs by Vista and VistaCreate. This move should
help open customers' minds to allow us to serve a broader set of their needs
across a wide range of products and solutions that includes design, social media
and web presence as well as print. No changes were made to our internal
organizational and reporting structure as a result of this rebranding, but we
will refer to this reportable segment as "Vista" from here forward and
throughout this document.
COVID-19
The pandemic continues to drive some volatility, but its overall impact on
Cimpress has lessened as compared to the first quarter of fiscal year 2021.
Customer demand trends are nearing pre-pandemic levels and gross profit,
including the relatively small impact of acquisitions, has increased above the
pre-pandemic first quarter of fiscal year 2020. Before considering increased
growth investment, particularly in Vista, the combination of recovering gross
profit and cost savings from actions taken during the pandemic drove increased
adjusted EBITDA compared to the pre-pandemic period.
Supply chain delays are a developing facet of pandemic impacts which has created
both challenges and opportunities for Cimpress businesses. Each of our
reportable segments has seen material cost increases of product substrates like
paper, production materials like aluminum plates, freight and shipping charges
and a more competitive labor market. Our scale-based shared strategic
capabilities and supplier relationships provide competitive advantage for our
businesses to weather these challenges. Through data capabilities, our
businesses are regularly testing new pricing approaches, and in every business
there has been some form of pricing increases that are mostly offsetting the
increased costs.
We continue to hire talent and make investments in technology, data, new product
introduction, customer experience improvements, and branding that are designed
to build on our competitive advantages and drive sustainable growth in our
businesses as we come out of the pandemic. We continue to maintain flexibility
in our cost structure, while at the same time increasing investment in areas we
believe will generate high return on investment.
Financial Summary
The primary financial metric by which we set quarterly and annual budgets both
for individual businesses and Cimpress wide is our adjusted free cash flow
before cash interest expense; however, in evaluating the financial condition and
operating performance of our business, management considers a number of metrics
including revenue growth, organic constant-currency revenue growth, operating
income, adjusted EBITDA, cash flow from operations and adjusted free cash flow.
A summary of these key financial metrics for the three months ended September
30, 2021 as compared to the three months ended September 30, 2020 follows:
First Quarter Fiscal Year 2022
•Revenue increased by 12% to $657.6 million.
•Constant-currency revenue (a non-GAAP financial measure) increased by 11% and
by 9% when excluding acquisitions completed in the last four quarters.
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•Operating income decreased by $19.0 million to $16.9 million.
•Adjusted EBITDA (a non-GAAP financial measure) decreased by $20.9 million to
$67.6 million.
•Diluted net income (loss) per share attributable to Cimpress plc increased to
income per share in the first quarter of fiscal 2022 of $0.09 from a loss per
share of $0.39 in the comparative period.
•Cash provided by operating activities decreased by $69.1 million to $36.6
million.
•Adjusted free cash flow (a non-GAAP financial measure) decreased by $70.2
million to $12.3 million.
For the first quarter of fiscal year 2022, the increase in reported revenue is
primarily due to the recovery of demand, as the impact of the pandemic on our
businesses has lessened, as well as the benefit from the addition of 99designs
revenue, which was acquired on October 1, 2020, and is included in our Vista
business. We continue to experience strong demand for newer fast-growing product
categories, while the impacts of the pandemic continue to have a negative effect
for certain marketing material products. Demand recovery in our Upload and Print
businesses lagged behind our other businesses in prior quarters but reported
strong revenue growth this quarter. Currency exchange fluctuations had a
positive effect during the current quarter.
For the three months ended September 30, 2021, operating income decreased by
$19.0 million, primarily due to increased investments and discretionary costs as
we compare against a period that had strict cost control measures in place when
the pandemic had a more severe impact on our businesses, as well as increased
advertising, primarily in our Vista business. These increased costs include
higher compensation costs as we have hired additional team members to support
key initiatives, mainly in Vista and our central technology team, while the
timing of our annual merit cycle contributed to increased compensation costs.
The increase in advertising spend includes a return of performance-based
advertising to more normalized levels, as well as a smaller increase in
upper-funnel advertising spend in Vista. These cost increases coupled with a
reduction in government wage incentives have more than offset the profit
increase driven by higher revenue.
Adjusted EBITDA decreased year over year, primarily for the same reasons
operating income decreased. Adjusted EBITDA excludes restructuring charges and
share-based compensation expense, and includes the realized gains or losses on
our currency derivatives intended to hedge adjusted EBITDA. The net
year-over-year impact of currency on consolidated adjusted EBITDA was
unfavorable by approximately $4.0 million.
Diluted net income (loss) per share attributable to Cimpress plc increased to
income per share of $0.09 during the three months ended September 30, 2021 from
a loss per share of $0.39 during the three months ended September 30, 2020. The
increase is primarily due to currency exchange rate volatility that resulted in
positive year-over-year unrealized currency impacts, as well as decreased
interest expense due to our debt refinancing during the fourth quarter of fiscal
2021.
Consolidated Results of Operations
Consolidated Revenue
Our businesses generate revenue primarily from the sale and shipment of
customized manufactured products. We also generate revenue, to a much lesser
extent (and primarily in our Vista business), from digital services, graphic
design services, website design and hosting, and email marketing services, as
well as a small percentage of revenue from order referral fees and other
third-party offerings. For additional discussion relating to segment revenue
results, refer to the "Reportable Segment Results" section included below.
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Total revenue and revenue growth by reportable segment for the three months ended September 30, 2021 and 2020 are shown in the following table:

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