Multi-Color Corp. (NASDAQ:LABL) Q1 2017 Earnings Conference Call - Preliminary Transcript
Aug 09, 2016 • 10:00 am ET
Good day ladies and gentlemen and welcome to the First Quarter 2017 Multi-Color Corp Earnings Conference Call. My name is Whitley and I will be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes.
I will now turn it over to your host for today Ms. Sharon Birkett, Vice President and Chief Financial Officer. Please proceed.
Thank you, Whitley. Welcome to Multi-Color Corporation's fiscal 2017 first quarter conference call and webcast for the period ending June 30, 2016. We are also broadcasting live over the Internet accessible through the Multi-Color website at www.mcclabel.com on our investor relations page.
I am Sharon Birkett, Vice President and CFO of Multi-Color. I will be leading today's call and I am joined by Nigel Vinecombe, our Executive Chairman.
I will begin with an overview of how our company performed this period and provide a detailed analysis of our financial results. Nigel will conclude with final comments and then we will take your questions.
Before we discuss our results, I want to call your attention to the Safe Harbor statement that was displayed on the registration page you viewed right after you logged on to the webcast and remind you that in accordance with the Private Securities Litigation Act of 1995, this presentation may contain some forward-looking statements that involve both known and unknown risks that may affect the outcome of our results. This Safe Harbor statement is also included in our earnings release and our filings with the SEC.
For those of you who are listening and viewing our webcast via the Internet, please take a look at slide number 2, net revenues. In the first quarter of fiscal 2017, net revenues increased 9% to $236.5 million from $217.9 million in the prior-year quarter. Acquisitions occurring after the beginning of fiscal 2016 accounted for a 9% increase in revenue and organic revenues increased 2%. Foreign exchange rates, primarily driven by depreciation of the Mexican peso and the British pound, led to a 2% decrease in revenues quarter over quarter.
Please turn to slide 3, gross profit and margin. Gross profit increased $5.3 million or 11% compared to the prior year quarter. Acquisitions occurring after the beginning of fiscal 2016 contributed $4.5 million to gross profit, partially offset by the effect of unfavorable foreign exchange rates of $0.6 million.
Organic gross margin increased $1.4 million or 3% compared to the prior year quarter. Core gross profit, excluding the impact of inventory purchase accounting charges, increased 11% or $5.2 million. Core gross margins were 22% of sales for the current quarter compared to 21.5% in the prior year quarter.
Please turn to slide 4, operating income and margins. Operating income increased $3.2 million or 12% compared to the prior year quarter. Excluding the impact of non-core items in the quarter, operating income increased $1.2 million or 4% to $29.6 million compared to $28.4 million in the prior year quarter.
The increase in operating income is primarily due to acquisitions,