Multi-Color is one of the largest producers of printed labels forbranded consumer products in the United States. Labels printed by the Company appear principally on mass-marketed products for which label appearance is a significant element of product marketing and merchandising. Multi-Color produces labels for a variety of consumer products including liquid detergents fabric softeners food products liquid cleaners anti-freeze and chewing gum. MultiColor Corp. has a market cap of $135.79 million; its shares were traded at around $12.41 with a P/E ratio of 11.34 and P/S ratio of 0.65. The dividend yield of MultiColor Corp. stocks is 1.82%. MultiColor Corp. had an annual average earning growth of 7.6% over the past 5 years. Highlight of Business Operations: Consolidated net revenues of $62,644 for the third quarter of fiscal 2009 increased by $14,377 or 30% compared to $48,267 for the third quarter of the prior year. The significant increase in revenues was due to the Collotype acquisition, which generated $21,891 in revenues for the quarter, partially offset by a $7,514 or 16% reduction in North American organic revenues.
In January 2009, the Company announced plans to consolidate its heat transfer label (HTL) manufacturing business located in Framingham, Massachusetts into its other existing facilities. The transition will begin immediately with final plant closure within the next several months. In connection with the closure of the Framingham facility, the Company expects to record a total charge of approximately $2,600 during its fourth quarter period ending March 31, 2009, consisting of approximately $1,400 in cash charges for employee severance and other termination benefits related to 62 associates and approximately $1,200 in non-cash charges related to asset impairments (see Note 13).
Through the nine months ended December 31, 2008, net cash provided by operating activities was $20,615 as compared to $2,301 in the same period of the prior year. The increase in cash flow is primarily due to cash generated from earnings and a substantial decrease in accounts receivable due to increased collection efforts and lower sales volumes. The increase was partially offset by $7,484 of income tax payments made during the period.
Through the nine months ended December 31, 2008, net cash used in investing activities was $1,363 as compared to net cash provided of $4,046 in the same period of the prior year. Cash provided by investing activities included net proceeds from the sale of the Batavia building and other equipment of $1,726 and refunds of equipment deposits of $6,003, which were offset by capital expenditures of $9,092 related primarily to the expansion of the Companys manufacturing operations. The net cash provided by investing activities in the nine months ended December 31, 2007 was due to $18,912 in proceeds from the sale of Quick Pak, partially offset by capital expenditures of $14,866 related to the expansion of the Companys manufacturing operations.
Through the nine months ended December 31, 2008, net cash used in financing activities was $19,457 as compared to $4,598 in the prior year. During the nine months ended December 31, 2008, net debt payments were $19,170 compared to $5,150 in the prior year.
On February 29, 2008 and in connection with the Collotype acquisition (see Note 9), the Company executed a new five-year $200 million credit agreement with a consortium of bank lenders (Credit Facility). The new Credit Facility contains an election to increase the facility by up to an additional $50 million and the Company terminated its previous $50 million credit facility. The aggregate principal amount of $200 million is available under the Credit Facility through: (i) a $110 million five-year revolving credit facility (U.S. Revolving Credit Facility); (ii) the Australian dollar equivalent of a $40 million five-year revolving credit facility (Australian Sub-Facility); and (iii) a $50 million term loan facility (Term Loan Facility). The $50 million Term Loan Facility was fully drawn down on February 29, 2008.
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