Multi-Color Corp. (NASDAQ:LABL) Q1 2018 Earnings Conference Call - Final Transcript
Aug 08, 2017 • 10:00 am ET
Good day, ladies and gentlemen, and welcome to the First Quarter Fiscal Year 2018 Earnings Conference Call and Webcast. At this time, all participants are in a listen-mode. Later, we will conduct a question-and-answer session.
As a reminder, this conference is being recorded for replay purposes.
I would now like to turn the presentation over to your host for today, Ms. Sharon Birkett, Vice President and Chief Financial Officer. Please proceed.
Sharon E. Birkett
Thank you, Jasmine. Welcome to Multi-Color Corporation's fiscal 2018 first quarter conference call and webcast for the period ending June 30, 2017. We're also broadcasting this live over the Internet accessible through the Multi-Color website at www.mcclabel.com on our Investor Relations page.
I'm Sharon Birkett, Vice President and CFO of Multi-Color. I'll be leading today's call, and I'm 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'll 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 included in our earnings release and in 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 2018, net revenues increased 3% to $242.4 million from to $236.5 million in the prior year quarter. Acquisitions occurring after the beginning of fiscal 2017 accounted for a 3% increase in revenue. Increased revenues in North America and Latin America contributed to our organic growth at a level of 1%. Foreign exchange rates, primarily driven by the depreciation of the British pound and the euro led to a 1% decrease in revenues quarter-over-quarter. Organic growth was impacted by the timing of holidays and customer de-stocking. Fiscal year-to-date organic growth has returned to 3%, including July.
Please take a look at Slide number 3, gross profit and margin. Gross profit decreased 5% or $2.6 million compared to the prior year quarter. Acquisitions occurring after the beginning of fiscal 2017 contributed $1.1 million to gross profit, partially offset by an unfavorable exchange rate of $0.4 million. Operating inefficiencies, primarily in North America, led to an organic profit decrease of 6% or $3.3 million compared to the prior year quarter. Gross margins were 20.4% of sales for the current quarter compared to 22% in the prior year quarter.
Please turn to Slide number 4, operating income and margin. Operating income decreased 12% or $3.4 million compared to the prior year quarter. Acquisitions occurring after the beginning