MultiColor Corp. Reports Operating Results (10-Q)
Multi-color Corporation has a market cap of $311.5 million; its shares were traded at around $20.52 with a P/E ratio of 10.2 and P/S ratio of 0.6. The dividend yield of Multi-color Corporation stocks is 1%. Multi-color Corporation had an annual average earning growth of 10.2% over the past 10 years. GuruFocus rated Multi-color Corporation the business predictability rank of 4-star.
Highlight of Business Operations:Net revenues increased 64% to $165,010 from $100,635 compared to the three months ended June 30, 2011. Net revenues increased 66% or $66,189 due to acquisitions occurring after June 30, 2011. Of this acquisition-related revenue increase, $58,543 is attributable to the acquisition of York Label Group (York). Organic net revenues decreased by 2% compared to the prior year quarter due to a 4% unfavorable impact of foreign exchange rates primarily driven by depreciation in the Australian dollar and the Euro partially offset by a 2% increase due to a favorable impact of pricing and sales mix.
Cost of revenues increased 71% or $55,647 compared to the prior year quarter due primarily to acquisitions that occurred after June 30, 2011. Included in the impact of the acquisition increase is a charge of $458 for an adjustment related to the step-up of finished goods and work-in-process inventory in the purchase price accounting for Labelgraphics. The cost of revenues was also impacted by the unfavorable impact of foreign exchange rates and integration inefficiencies in North and Latin America.
Gross profit increased 39% or $8,728 compared to the prior year quarter due primarily to acquisitions that occurred after June 30, 2011 partially offset by a decrease related to the unfavorable impact of foreign exchange rates in the current quarter. Gross margins decreased from 22% to 19% of net revenues in the current quarter due primarily to lower European sales and integration inefficiencies in North and Latin America.
Selling, general and administrative (SG&A) expenses increased $5,633 compared to the prior year quarter due primarily to the impact of new acquisitions. In addition, SG&A expenses increased due to $573 of costs related to the closure of the Kansas City facility and $272 of severance costs related to the integration of York partially offset by the impact of foreign exchange rates in the current quarter. SG&A expenses, as a percent of sales, was steady at 8% compared to the prior year quarter.
Our effective tax rate increased from 29% in the three months ending June 30, 2011 to 33% in the three months ending June 30, 2012 due primarily to a shift in the geographical mix of worldwide earnings. The Company expects its annual effective tax rate to be approximately 33% in fiscal year 2013.
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