Multi Packaging Solutions International Limited announced results for 4Q and Fiscal Year 2016. GAAP net sales for 4Q FY 2016 and fiscal year 2016 were $373.8 million and $1,661.4 million vs net sales for 4Q FY 2015 and fiscal year 2015 of $402.5 million and $1,617.6 million.
Marc Shore, CEO, commented, “We had a very successful 2016, notwithstanding some significant challenges. EBITDA was a record $254.3 million despite a negative foreign exchange impact of $12.4 million. EBITDA margin grew by 100 basis points over the prior year to 15.3%. The business also generated approximately $109 million of free cash flow which allowed us to make early debt repayments of $60 million. In addition to the challenges of foreign exchange, we were disappointed with top-line sales. This was due to the fact that a number of our core customers’ businesses are below expectations in the current fiscal year.”
Net sales in the quarter and for the year to date period were impacted principally due to the foreign exchange effects noted above, as well as a decline in non-toy media sales compared to the prior year ($4.8 million and $36.8 million, respectively), the decline in sales of a Disney toy project where Disney has exited the business ($10.4 million and $30.8 million, respectively), and the decline in UK tobacco sales due to UK tobacco legislation ($3.3 million and $14.2 million, respectively).
The effect of the year over year Disney toy project and the UK tobacco decline is winding down and expected to impact year over year comparisons in 2017 by approximately $11 million and $5.9 million, respectively.
For the full fiscal year, gross margins continue to improve. Gross margin for the quarter and for the year to date period were 19.4% and 21.3% respectively, vs 20.6% and 20.5% in the corresponding prior year periods.
GAAP operating income for 4Q FY 2016 was $10.3 million, vs $9.5 million for 4Q 2015. GAAP operating income for fiscal 2016 was $84.1 million vs $71 million for fiscal 2015. Included in the current fiscal period is approximately $27.0 million of stock compensation recorded in connection with the vesting of shares from the Company’s initial public offering. Excluding this charge, operating income for fiscal 2016 would have been $111.1 million, an increase of $40.1 million or approximately 230 basis points when compared to the same period in the prior year.
