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 $187.4 million; its shares were traded at around $15.19 with a P/E ratio of 14.2 and P/S ratio of 0.65. The dividend yield of MultiColor Corp. stocks is 1.32%. MultiColor Corp. had an annual average earning growth of 7.6% over the past 5 years.
Highlight of Business Operations: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 began immediately with final plant closure expected in the second quarter of fiscal 2010. In connection with the closure of the Framingham facility, the Company recorded a total charge of $2,553 during its fourth quarter period ending March 31, 2009, consisting of $1,407 in cash charges for employee severance and other termination benefits related to 62 associates and $1,146 in non-cash charges related to asset impairments. In the first quarter of fiscal 2010, the Company incurred employee retention charges of $238 (See Note 12).
Interest expense decreased 43% to $1,229 compared to the same period of the prior year as a result of a reduction in bank debt of $27,343 due to debt repayments and lower interest rates. We had $97,714 of debt at June 30, 2009 compared to $125,057 of debt at June 30, 2008.
Through the three months ended June 30, 2009, net cash used in investing activities was $915 as compared to net cash used of $646 in the same period of the prior year. Capital expenditures in the three months ended June 30, 2009 were $4,616 lower than the prior year quarter. Cash provided by investing activities in the prior year quarter included net proceeds from the sale of the Batavia building and other equipment of $1,687 and refunds of equipment deposits of $3,445, which were offset by capital expenditures of $5,778 related primarily to the expansion of the Companys manufacturing operations.
Through the three months ended June 30, 2009, net cash used in financing activities was $6,685 as compared to $8,169 in the prior year. During the three months ended June 30, 2009, net debt payments were $6,068 compared to $7,723 in the prior year.
On February 29, 2008 and in connection with the Collotype acquisition, 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. At June 30, 2009, the aggregate principal amount of $187.5 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 $37.5 million term loan facility (Term Loan Facility), which amortizes $10 million per year.
Available borrowings under the Credit Facility at June 30, 2009 consisted of $59,700 under the U.S. Revolving Credit Facility and $30,089 under the Australian Sub-Facility.
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