2022 Annual Report
Notice of Annual General Meeting of
Shareholders | Proxy Statement
Dear Investor,
July 27, 2022
This annual investor letter reflects on our strategic progress and capital allocation over the past year and describes
our ambitions looking forward. For a detailed look at our financial results please review our separate Q4 and
FY2022 earnings document that we posted today at ir.cimpress.com. Note that our annual investor day will be held
on September 13, 2022 - later than in recent years - to incorporate past investor feedback on its timing.
I hope that by the end of reading this letter you will take away the following:
1. The financial results of many parts of Cimpress demonstrate successful value generation despite difficult
macro conditions. While Vista's profit continues to be constrained by the significant investments we have
made, following the completion of its technology migration, we are focused on leveraging these investments
to demonstrate Vista's growth and profitability potential.
2. Our opportunity to serve customers while growing revenue, profits and cash flow, and our competitive
advantages relative to the many offline and smaller online suppliers in the market, both remain significant.
3. We are focused on the tactical execution of our established strategy and believe that, over the coming year,
we can deliver attractive top-line growth while also enhancing profitability and reducing net leverage.
In the following pages we will provide thoughts on macroeconomic trends, risk management, capital allocation
options, our strategic performance by business component, our estimate of steady state free cash flow for FY2022,
and why we are confident as we turn to FY2023.
In FY2022 we reached all-time high consolidated revenue and gross profit. Our upload and print businesses,
National Pen, BuildASign, and Printi all are generating similar or more revenue and profit than they did prior to the
pandemic despite lingering pandemic headwinds throughout this past year, supply chain disruption, and cost
inflation. There is much to celebrate here about their demonstration of our competitive advantages and our
execution.
The Vista segment generates our highest profits, but those profits and cash flow are currently depressed relative to
past and potential levels. To return Vista to sustained revenue growth and to its traditional levels of profit, we have
been investing deeply in the multi-year transformation journey that we have discussed extensively in past investor
communications. In summary, we seek to build what will become best-in-world design and service capabilities that
will integrate seamlessly with a broad range of physical and digital small business marketing products. These
capabilities should allow Vista to serve as the expert design and marketing partner to small business, elevating what
is remarkable about each small business.
Multiple factors weighed heavily on Vista's FY2022 profitability: revenue growth that was not as strong as Cimpress'
other businesses, cost inflation not offset by price increases as price testing in major markets was limited prior to
Vista's platform migration, and high levels of discretionary long-term investment. That long-term investment includes
major increases to talent in domains such as data & analytics, design and service, user experience design, and
brand marketing. It also includes a three-year dedication, now nearly complete, of almost all of Vista's engineering
resources to rebuild its technology stack. The re-platforming work constrained our bandwidth to innovate and
improve our customer offering but its architecture and leveraging of best-in-class third-party SaaS tools means that
it is vastly better suited for such improvements going forward than our old tech platform, which we built in the first
decade of this century.
With our foundational investments in place, the entire Vista team now has a clear focus on demonstrating that
Vista's transformation can yield rapid improvements to customer value and the attractive financial returns we seek
through the significant investments we have made. In light of our uppermost financial objective of maximizing our
intrinsic value per share, there is nothing more critical than this so our focus is prioritized accordingly. We look
forward to sharing specific examples of this in our upcoming investor day. We expect that the shape of Vista's
profitability improvement will start to be visible in FY2023, and over the next several years, Vista's segment EBITDA
and UFCF can return to historical highs.
Our strong FY2022 growth and record revenues in many parts of Cimpress reinforced our position as the leader in
the long-term secular shift of the printing market, from offline to online and from traditional production to mass
customization. Both of these shifts have plenty of runway in front of them. We have seen clear evidence over the
past year of our advantages relative to traditional printers and smaller online competitors, namely our scale-driven
cost position, global procurement leverage, and technology. In fact, some of the growth we have seen is the direct
result of traditional competitors and customers who previously worked offline turning to Cimpress; our two largest
upload and print businesses had record new customer acquisition during the past quarter. New product introduction
and shared fulfillment have been sources of profit expansion in FY2022: intra-segment revenue has more than
tripled from its pre-pandemic levels and grown even more when including cross-business sourcing within segments.
We have access to talent from around the globe, including in multiple lower-cost locations, which allows our
businesses to recruit and retain high-quality team members when smaller competitors are scrambling to do so.
Our cost structure remains highly variable and, as evidenced two years ago when pandemic lockdowns severely
reduced revenues, we have a proven ability to flex it if demand drops. Across our business, we have invested
strongly in talent, technology, and capabilities development, and the positive impact we expect from those
investments are not yet significant in our results. In summary, we see Cimpress as being competitively advantaged
and able to continue to grow profitably for years to come.
We often receive questions from investors about the impact of macro conditions on our outlook. The biggest
pressure we face is significant inflation for raw materials, energy, shipping and team member compensation. In our
history we haven't experienced an inflation-driven recession so, if that comes to pass, there is uncertainty on the
impact to demand, but past economic recessions have accelerated both small business formation and the shift of
demand to online players in our market. The following liquidity and risk management topics also allow us to keep
our focus on operational execution despite increased volatility:
• We have ample liquidity ($327 million of cash and marketable securities as of June 30, 2022) and no
material debt maturities until May 2026, when our bonds mature.
•
A significant percentage of our EBITDA and cash flow is generated in currencies other than the U.S. Dollar.
However, we consistently apply a robust currency hedging program that reduces our exposure to this
volatility. For our two largest currency exposures (the Euro and British Pound) we average into a mix of
currency forwards and options to hedge exposures over a rolling 24-month period, which means we have
full visibility to our contracted rates for the upcoming year. We also have a portion of our debt denominated
in Euro and use other balance sheet hedging to manage currency risk.
• We have fixed-rate and floating-rate debt. We use interest rate swaps to fix the interest rate for a portion of
our floating-rate debt to arrive at a fixed/floating mix that is in line with our risk management policies. A
hypothetical 100 basis point increase in the base rate beyond rates as of June 30, 2022 would lead to an
approximate $6.4 million increase in our cash interest costs if in place for a full year, not factoring in any
offsetting interest income that could be earned based on the rate increase.
Next we'll review some selected historical financial measures that put FY2022 into a long-term perspective before
turning to our assessment of capital allocation.
2
Selected Historical Financial Measures1,2
1 Please see reconciliation of non-GAAP measures at the end of this letter.
2 Diluted weighted average shares outstanding for FY2017, FY2021 and FY2022 represent the number of shares we would have
reported if we recorded a profit instead of a loss that year. The basic weighted shares outstanding we reported those years was
31.3M, 26.0M and 26.1M, respectively.
3
Revenue ($M)$817$1,020$1,167$1,270$1,494$1,788$2,135$2,593$2,751$2,481$2,576$2,888FY11FY12FY13FY14FY15FY16FY17FY18FY19FY20FY21FY22Adjusted EBITDA ($M)165140143181243283238326387$400$349$281FY11FY12FY13FY14FY15FY16FY17FY18FY19FY20FY21FY22Adjusted FCF ($M)$121$95$54$72$157$152$45$139$212$244$166$100FY11FY12FY13FY14FY15FY16FY17FY18FY19FY20FY21FY22Unlevered Free Cash Flow (UFCF) ($M)$121$96$59$78$165$184$83$189$269$317$283$198FY11FY12FY13FY14FY15FY16FY17FY18FY19FY20FY21FY22Net Debt ($M)$237$(167)$(189)$(386)$(419)$(609)$(857)$(795)$(1,000)$(1,437)$(1,379)$(1,378)FY11FY12FY13FY14FY15FY16FY17FY18FY19FY20FY21FY22Shares Outstanding (M)45.039.034.534.233.833.032.632.231.727.826.526.343.134.132.832.333.231.531.430.930.425.926.026.1Wtd. Avg. S/OS/O at End of PeriodFY11FY12FY13FY14FY15FY16FY17FY18FY19FY20FY21FY22 Capital Allocation
We consider capital allocation to be any investment that does not pay back within twelve months on a net basis. The
table below summarizes the capital allocation, other than debt repayment, that we have made over the past eight
fiscal years that we have published this annual letter, excluding investments we believed at the time to be required
to maintain steady state.
We define "steady state" as having a sustainable and defensible business over the long term that is capable of
growing after-tax free cash flow at the rate of long-term United States inflation. As discussed in more detail below,
the volatile macro-economic environment increases the amount of judgment required to make this distinction
compared to doing so prior to the pandemic. For the purposes of the FY2022 analysis we have included the impact
of cost inflation that we experienced over the last year but we have not included future price increases to account
for these increased costs, nor have we attempted to estimate future cost increases that we may incur.
Capital Allocation (UFCF Value)
Excluding Organic Investments That We Believe Are Required to Maintain Steady State
Allocated Capital ($M)
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020*
FY2021
FY2022
8-Year
Total*
Percent of
8-yr Total*
Growth investments
$145
$190
$193
$108
$158
$142
$130
$188
$1,254
M&A and similar equity
investments
$148
$176
$228
Share repurchases
$—
$153
$50
$52
$95
$327
$4
$56
$627
$60
$—
$121
$1,117
$—
$980
38%
33%
29%
Total capital deployed
$293
$519
$471
$255
$541
$773
$190
$309
$3,351
100%
Capital raised via
divestitures or partial-
equity sales ($M)
$—
$—
$—
$129
$12
$—
$—
$—
$141
100%
* Growth investments in the "FY2020" column reflect estimated spend for the trailing twelve months ended February 29, 2020 as
that was the pre-pandemic period we used for our analysis in that fiscal year.
Share and Debt Repurchases
From a capital allocation perspective, nothing has changed in our approach but the option set is evolving. In
FY2022, we prioritized organic investment and tuck-in M&A in service of Vista’s transformation. Our share price and
bonds have recently traded at levels that imply very attractive returns in our view and this has changed the hurdle
rate required for incremental organic investment. That said, we did not repurchase our shares or debt in FY2022 as
we have favored preserving liquidity in light of increased macro uncertainty, but we will actively consider these
options balanced with liquidity needs and current leverage levels. Our debt covenants allow us to repurchase our
bonds or shares even at our current leverage levels, although there are limitations to the amount. We do not
currently have board authorization for share repurchases, so if we put a program in place, this will be disclosed prior
to any actual share repurchases.
Organic Growth Investments
The following tables include midpoint estimates of the impact of our historical organic growth investment, expressed
in terms of its impact on our segment EBITDA and unlevered free cash flow. Factors such as capital expenditures,
capitalization of software development costs, and working capital changes drive the difference between these two
perspectives. We use unlevered free cash flow as the input to our SSFCF estimates but below we show the
segment EBITDA table first because it is a significant input to the unlevered free cash flow view.
These tables illustrate that over the past four to five years we have significantly increased organic growth
investment in Vista while significantly reducing it in our All Other Business segment. This is consistent with our belief
that transforming Vista to return it to sustained revenue growth and its traditional levels of profitability would be the
single greatest driver of long-term shareholder value creation.
4
SEGMENT EBITDA - ESTIMATED NET IMPACT3 OF ORGANIC GROWTH INVESTMENTS4
$ in millions
VISTA ORGANIC GROWTH INVESTMENTS
Investment Area
FY15
FY16
FY17
FY18
FY19
TTM
Feb 20
FY21
FY22
Capabilities to enter the market for
promotional products, apparel & gifts
New products and product extensions
LTV-based advertising
Product development and marketing
Expansion of production & IT capacity
Post-acquisition investments in
99designs and VistaCreate
Other
VISTA TOTAL
26
—
10
10
8
—
—
35
4
8
12
14
—
4
26
18
12
13
(1)
—
14
—
—
—
—
—
Included
below
Included
below
Included
below
Included
below
Included
below
12
8
—
—
6
28
11
—
—
7
4
11
2
—
19
26
25
—
—
3
31
53
—
23
8
$54
$77
$82
$26
$46
$36
$54
$115
OTHER ORGANIC GROWTH INVESTMENTS
Investment Area
Upload and Print
National Pen
All Other Businesses
Mass Customization Platform (MCP)
Other Centrally Managed Investments
FY15
FY16
FY17
FY18
FY19
TTM
Feb 20
FY21
FY22
6
N/A
22
15
14
10
N/A
34
24
11
12
N/A
26
20
14
7
—
36
19
16
5
8
38
22
5
—
2
18
24
6
5
2
5
27
7
3
5
8
18
3
TOTAL OTHER THAN VISTA
$57
$80
$72
$78
$77
$50
$46
$37
CIMPRESS TOTAL AT MIDPOINT
$111
$157
$154
$104
$123
$86
$100
$152
CIMPRESS TOTAL ESTIMATED
RANGE
N/A
$117M -
$197M
$129M -
$179M
$84M -
$104M
$108M -
$138M
$71M -
$101M
$85M -
$115M
$137M -
$167M
3 Note that the estimates presented regarding our investments in MCP are gross investments, prior to benefits we realize in year,
i.e., not net investments like the other lines in these tables.
4 Note that we have recategorized certain Vista costs to aid investor understanding. Vista's "LTV-based advertising" is now stand-
alone and only includes our estimate for advertising spend that takes longer than 12 months to pay back and is not needed to
maintain a steady state. "Product development and marketing" includes the cost of the teams who develop our customer
experience and tech and data capabilities, including technology, user experience, data and analytics, and product management;
as well non-advertising marketing investments such as talent and agencies. Design and service investments in traditional
(VistaPrint) parts of Vista are included in "Other" and we have introduced a new category for post-acquisition design and service
investments in 99designs and VistaCreate. Investments in Vista Corporate Solutions, VistaPrint India and VistaPrint Japan are
included in All Other Businesses through FY2019. Starting in FY2020, these businesses moved into our Vista business, and so
our estimated investments in these businesses are included in Vista's "Other" category after FY2019. Additionally, we exclude $5
million of VIDA EBITDA losses from the growth investments within the "TTM Feb20" column above.
5
UNLEVERED FREE CASH FLOW5 - ESTIMATED NET IMPACT OF ORGANIC GROWTH INVESTMENTS6
$ in millions
VISTA ORGANIC GROWTH INVESTMENTS
Investment Area
FY15
FY16
FY17
FY18
FY19
TTM
Feb 20
FY21
FY22
Capabilities to enter the market for
promotional products, apparel & gifts
New products and product extensions
LTV-based advertising
Product development and marketing
Expansion of production & IT capacity
Post-acquisition investments in
99designs and VistaCreate
Other
VISTA TOTAL
34
14
10
11
14
—
8
36
8
8
14
34
—
4
26
18
12
12
11
—
16
—
—
—
—
—
Included
below
Included
below
Included
below
Included
below
Included
below
12
12
8
—
6
28
15
10
—
6
4
18
12
—
18
26
36
1
—
4
31
56
4
25
7
$91
$104
$95
$38
$59
$52
$67
$123
OTHER ORGANIC GROWTH INVESTMENTS
Investment Area
Upload and Print
National Pen
All Other Businesses
Mass Customization Platform (MCP)
Other Centrally Managed Investments
FY15
FY16
FY17
FY18
FY19
TTM
Feb 20
FY21
FY22
6
N/A
26
14
8
10
N/A
42
27
7
18
N/A
42
24
14
14
2
29
22
3
8
13
49
25
4
14
7
28
28
5
4
7
12
34
6
15
10
13
24
3
TOTAL OTHER THAN VISTA
$54
$86
$98
$70
$99
$82
$63
$65
CIMPRESS TOTAL AT MIDPOINT
$145
$190
$193
$108
$158
$134
$130
$188
CIMPRESS TOTAL ESTIMATED
RANGE
N/A
$150M -
$230M
$168M -
$218M
$88M -
$128M
$143M -
$173M
$119M -
$149M
$115M -
$145M
$173M -
$203M
5 Note that the estimates presented regarding our investments in MCP are gross investments, prior to benefits we realize in year,
i.e., not net investments like the other lines in these tables.
6 Note that we have recategorized certain Vista costs to aid investor understanding. Vista's "LTV-based advertising" is now stand-
alone and only includes our estimate for advertising spend that takes longer than 12 months to pay back and is not needed to
maintain a steady state. "Product development and marketing" includes the cost of the teams who develop our customer
experience and tech and data capabilities, including technology, user experience, data and analytics, and product management;
as well non-advertising marketing investments such as talent and agencies. Design and service investments in traditional
(VistaPrint) parts of Vista are included in "Other" and we have introduced a new category for post-acquisition design and service
investments in 99designs and VistaCreate. Investments in Vista Corporate Solutions, VistaPrint India and VistaPrint Japan are
included in All Other Businesses through FY2019. Starting in FY2020, these businesses moved into our Vista business, and so
our estimated investments in these businesses are included in Vista's "Other" category after FY2019. Additionally, we exclude $5
million of VIDA EBITDA losses from the growth investments within the "TTM Feb20" column above.
6
Assessment of Capital Allocation by Component7
Vista
As we have covered extensively in our investor communications over the past three and a half years, Vista has
rebuilt its organizational and technological foundations and begun to evolve the customer value proposition away
from deeply discounted business cards and other simple custom marketing products toward being the expert design
and marketing partner to small business. This includes reducing its prior reliance on deep discounting in order to
provide customers with greater consistency and transparency. We have progressively reduced list prices while
simultaneously reducing discount levels; the average discount off of list price has fallen from 28% in FY2019 to 14%
in FY2022.
An important traditional driver of Vista's previous success was that, in each fiscal year from 2001 to 2016, we
increased the cumulative gross profit per customer by acquisition cohort. This was a key factor behind Vista's long
track record of attractive financial returns because incremental gains in gross profit from existing customers typically
incur much lower advertising costs than incremental gross profit generated from first time customers. From 2017 to
2019, our gross profit per customer fell or stagnated. We have turned that trend around and are again steadily
increasing it each year, with the metric now at record levels. We believe that our strategy will allow us to continue
this trend for years to come as we capture a greater share of wallet of what customers spend on design and
marketing.
While per-customer economics have improved, the number of new Vista customers acquired per fiscal year has
declined. Some of this is welcome, for example the move away from deep-discount sensitive, loss-making
customers that were in our lowest-value deciles and improving the efficiency of our performance advertising spend
were intentional. However, we need to and expect to increase customer acquisition counts while maintaining
attractive ROI. There are multiple components to this: increasing the range of our product and design capabilities,
improving user experience to drive stronger conversion rates, evolving our brand messaging and media mix to
promote more awareness of our broader offering and the value we offer as a partner, and increasing our relevance
to today's new small businesses in the beginning stages of their formation.
Importantly, Vista has nearly completed the engineering of, and the migration to, a modern flexible technology stack.
This is a crucial enabler that will allow us to move to modern best practices and tools for product development, data
& analytics, personalization, and accelerated new product introduction in service of customer value, and which
should materially increase the velocity and the bandwidth of our work in those areas.
Vista's UFCF was approximately $191 million in FY2022, net of organic growth investments of $108 million to $138
million. We have been allocating major amounts of capital to foundations for the Vista transformation. The two
categories that represent the most significant increase in investment from FY2021 to FY2022 are:
•
Expanding Vista's talent base: We have significantly ramped investments in user experience design, data &
analytics, brand-based marketing and other domains. These are the teams we expect to deliver enhanced
value to our customers and investors now that our foundations include a modern, microservices-based
technology stack upon which to improve the customer experience and cohort value.
7 Notes for the measures in this section: segment EBITDA, our segment measure of profitability, and component EBITDA,
include share-based compensation expense. Unlevered free cash flow adds capital expenditures, capitalized software, cash
taxes and changes in net working capital, but excludes share-based compensation expense.
7
Revenue ($M)$1,499$1,508$1,337$1,428$1,515FY18FY19FY20FY21FY22Segment EBITDA ($M)$310$350$363$319$195FY18FY19FY20FY21FY22UFCF ($M)$251$313$335$335$191FY18FY19FY20FY21FY22 •
Post-acquisition investments in 99designs and VistaCreate: During FY2022 we invested $70 million to
acquire Depositphotos8 and $44 million for the deferred payment for the acquisition of 99designs (on top of
$36 million that we paid in FY2021). These acquisitions are important to Vista's ability to upgrade and
expand our design capabilities. Vista's self-service studio has always been one of the biggest areas of drop-
off in the customer journey and we believe we can significantly reduce this through better templates,
assisted design, and professional freelance design. That is why, as we had planned during our evaluations
of both acquisitions, subsequent to making these acquisitions we are investing to expand their development
capabilities and to begin integration. We expect that over the coming years we will make steady progress
integrating these design capabilities with the VistaPrint offering so as to enable a unified design and service
experience that delivers great value to customers and, in turn, increases the value of our customer cohorts.
Our estimate of Vista's SSFCF has decreased from the last public estimate we made for the year ended February
29, 2020. This is the business that by far has been the most negatively impacted by the combination of recent cost
inflation and the pandemic's impact on both product mix and active customer count. The impact of cost inflation
accelerated in the second half of FY2022 when Vista's organizational priority was our platform migration, which
limited our ability to implement price increases that account for these increased costs. We believe many of these
factors can be overcome, but we have not assumed this in our SSFCF analysis. For example, we have successfully
tested broader price increases at Vista to begin offsetting more of the input cost inflation, and we will continue to
move quickly to test further over the course of FY2023. These price increases are patterned on increases that we
have already successfully made over the past six to nine months in other parts of Cimpress similarly reflecting cost
increases, and their success will be an important driver of Vista's future SSFCF.
For FY2023, we have prioritized work that leverages recent investments to both drive near-term gross profit
expansion and advance our transformation strategy. These priorities are in areas such as design and service, new
product introduction, pricing, our Wix partnership, site experience, and personalization. Conversely, we have
decided to cease or reduce activities that require a multi-year period before returns will be evident in our financial
results. An example of this is a choice to exit Japan, a region that has long-term opportunity but has not been
profitable.
Revenue growth at Vista drives significant value creation because the margin on each incremental revenue dollar is
high. With our low share count, the impact to per-share value from this incremental revenue is significant. Even as
Vista's revenue growth rate remains below our aspirations, it is beginning to recover. Constant currency organic
growth was 8% for each of the third and fourth quarters of FY2022; the last time these quarters grew at those levels
was in FY2018, two years before the onset of the pandemic. Revenue from Vista's core strategic focus area of small
business products, which accounts for about 85% of annual revenues, grew 11% in Q4. For the full year, Vista's
growth was dampened by a year-over-year decrease of $69 million in sales of face masks. Vista's Q4 year-over-
year organic constant-currency growth was above 20% in Canada and France, its second and third largest markets
and both of which are further along in the shift of our value proposition and marketing approach. These early signs
of progress, the potential we see for near-term user experience improvements, early results from price testing, and
the strong growth we see in other Cimpress reportable segments are all factors which make us optimistic that Vista
will accelerate annual organic constant-currency revenue growth in FY2023 relative to FY2022 growth of 5%9, and
that the acceleration can be sustained for the foreseeable future.
On the profit side, we expect the pace of growth to be slower for Vista. In FY2023 we will experience a full year of
impact of our increased headcount and wage inflation in addition to the full-year impact of input cost increases,
although we expect partial offsets in the form of recent decisions to reduce costs in Vista, as well as higher year-
over-year benefits from pricing improvements. We expect that the shape of Vista's profitability improvement will start
to be visible in FY2023 and, over the next several years, Vista's segment EBITDA and UFCF can return to historical
highs in actual terms (i.e., inclusive of growth investments we are making).
8 We expect to make a deferred payment for the Depositphotos acquisition of approximately $8 million in October 2022.
9 Vista's reported revenue growth in FY2022 was 6%. Please see non-GAAP reconciliations at the end of this document.
8
Upload and Print Businesses10
This group consists of seven different European businesses that we have acquired, plus relatively minor equity
investments in suppliers (€509 million total investment consideration between FY2014 and FY2022). The total
investment includes payments and minority equity purchases completed to date.
Upload and Print businesses generated approximately €103 million in UFCF in FY2022 (net of reductions to reflect
the partial equity ownership of certain businesses in the group), an annual yield of approximately 20% on the €509
million of consideration we have paid to date. This is net of organic growth investments of €12 million to €14 million
in FY2022. Our Upload and Print businesses are organized into two reportable segments, each centered around a
business with significant scale, supply chain and other advantages.
During the pandemic, these businesses focused on expanding their product ranges, reducing costs, investing in
software and production technology, and leveraging intra-Cimpress wholesale transactions via the Cimpress MCP
marketplace. This work paid dividends in FY2022 as pandemic restrictions on events and in-person commerce
began to lift and demand rebounded. Revenue growth accelerated to record levels in FY2022, with 23% growth on
a reported basis and 30% on an organic constant currency basis. Profitability has grown to record levels as well,
despite the impact of high inflation on key cost inputs.
Actual FY2022 UFCF was higher in these businesses than our estimate of steady-state free cash flow was pre-
pandemic. There is not a significant amount of growth investment in these businesses outside of capital
expenditures that support new product introduction and capacity expansion, so the differences between steady-
state free cash flow and UFCF is both smaller and clearer. A key question to understand how to value these
businesses is what is a reasonable revenue and profit growth expectation over the next several years. As much as
we would love to see these businesses grow in excess of 30% each year as they did in FY2022, it's important to
note that a portion of the growth was driven by pricing actions intended to offset increased input costs. Volumes also
grew across most product lines in FY2022, but a portion of this volume growth was likely helped by post-pandemic
demand surges and favorable impact of a supply-constrained environment for our businesses. We expect that a
more normalized constant-currency revenue growth rate for these businesses over the next few years is about 10%,
although we expect constant-currency revenue growth in the near term to remain above this. Though inflation is
putting pressure on margin expansion for this group, we believe that margins can expand modestly from current
levels as these businesses continue to scale and optimize most notably in production and supply chain.
10 Upload and Print businesses combine the results of two segments: PrintBrothers and The Print Group, and eliminates
intercompany revenue within the group as if these businesses were in a single segment. Please see non-GAAP reconciliations at
the end of this document.
9
Revenue ($M)$730$769$692$696$856FY18FY19FY20FY21FY22Segment EBITDA ($M)$105$107$91$86$125FY18FY19FY20FY21FY22UFCF ($M)$75$78$52$73$112FY18FY19FY20FY21FY22 National Pen
We acquired National Pen for $211 million on December 31, 2016. The UFCF in FY2022 was $10 million, or 5% of
consideration paid. UFCF was net of organic growth investments of $9 million - $11 million that we believe are not
required to maintain steady state. Segment EBITDA for National Pen was near record levels, but there were some
unfavorable working capital items mostly driven by higher inventory due to extended lead times and supply
disruption, leading to the lower UFCF yield on FY2022 results.
National Pen has focused on reducing costs, launching new products, creating a service-focused mindset, and re-
platforming the business by rebuilding its e-commerce platform and other tech capabilities. Cost reductions across
contact centers, fulfillment operations and other areas have generated improvements in segment EBITDA, and as
demand for promotional products recovered throughout FY2022, revenue and profitability accelerated in this
business.
National Pen has executed well over the past couple of years and near the end of FY2022 completed its multi-year
technology re-platforming effort, migrating all websites onto a single platform to enable both the business and
customers to reap the benefits of a simplified shopping experience and improved design capabilities. Along with this
platform migration, National Pen has launched a customer-facing rebrand to pens.com to enhance its brand
recognition as a service-oriented e-commerce player, grow beyond pens into drinkware and bags offerings, and
support its ability to grow the mix of revenue coming from faster-growing online channels in the coming years.
In FY2023, we expect year-over-year constant-currency revenue growth to moderate to high-single-digit rates now
that demand levels are more normalized coming out of the pandemic. As described in the past, growth rates for
online sales of promotional products is higher than for traditional mail-order sales and the advertising expense is
lower as a percent of revenue in these online channels, so the growth rate and margin potential in this business will
continue to hinge on how successful it is in evolving into a majority e-commerce business (today, over a quarter of
National Pen's sales are online). Additionally, National Pen has recently taken opportunities to improve its cost
structure, which we expect will drive a slight improvement to profit margins in FY2023 and beyond.
10
Revenue ($M)$333$348$299$314$342FY18FY19FY20FY21FY22Segment EBITDA ($M)$29$17$8$12$27FY18FY19FY20FY21FY22UFCF ($M)$24$10$(15)$22$10FY18FY19FY20FY21FY22 BuildASign11
We acquired 99% of BuildASign in October 2018 for $271 million. In the fourth quarter of FY2021, via BuildASign
we allocated an additional $17 million of capital to acquire 81% of a fast growing business located in the U.S. whose
product capabilities we expect to benefit BuildASign and other Cimpress businesses in North America via intra-
Cimpress wholesale supply relationships. The contribution of that business included in the charts above as of
acquisition date was not material to BuildASign's FY2021 results, but has grown throughout FY2022 (yet still small
relative to BuildASign in total).
The UFCF of BuildASign for FY2022 was $22 million, or 8% of the total investment consideration, net of organic
growth investments of approximately $1 million. BuildASign's organic growth moderated in FY2022 after a
pandemic-fueled demand surge in home decor products in FY2021. Pro forma revenue and EBITDA for FY2022
was 30% and 47% higher than in FY2019, respectively (as if we had owned BuildASign for the full year in 2019).12
The team continues to execute well, and while demand for home decor products has normalized as we have
emerged from the pandemic, growth of signage products was strong in the past two quarters.
We expect constant-currency revenue growth in this business to be in the high single digits over the next several
years, with opportunity to improve profit margins as the business continues to scale and seek opportunity to drive
efficiency after a year of intense cost inflation.
Early-Stage Investments13
As demonstrated in the charts above, over the last three years we have significantly reduced EBITDA and UFCF
investment of our early-stage businesses, although investment was higher in FY2022 than in FY2021 primarily due
to increased losses in our business in China. Note that we recently made a decision to exit that business, which will
result in approximately $5 million of annualized savings in future years.
Printi, the remaining business in this category, is a market leader for upload and print in Brazil. Its constant-currency
revenue growth accelerated significantly in FY2022 and we believe there is runway for continued constant-currency
growth while also improving gross margins and EBITDA as it scales.
11 BuildASign is the largest component of our All Other Businesses segment.
12 We acquired BuildASign in October 2018, the second quarter of FY2019. Charts above reflect reported figures. FY2022
reported revenue and EBITDA was 68% and 97% higher, respectively, due in part to acquisition timing.
13 Early-stage investments are part of our All Other Businesses segment.
11
Revenue ($M)$108$153$174$182FY18FY19FY20FY21FY22Component EBITDA ($M)$16$29$38$31FY18FY19FY20FY21FY22UFCF ($M)$14$32$26$22FY18FY19FY20FY21FY22Revenue ($M)$28$28$21$18$24FY18FY19FY20FY21FY22Component EBITDA ($M)$(12)$(22)$(11)$(6)$(8)FY18FY19FY20FY21FY22UFCF ($M)$(13)$(40)$(14)$(8)$(12)FY18FY19FY20FY21FY22 Central Investments
The Cimpress mass customization platform (MCP) has demonstrated significant advantages before and during the
pandemic. As we have begun to see demand increase, secondary impacts like supply chain challenges have
lingered, and our MCP is supporting our businesses by enabling faster new product introduction and the shifting of
production to enable capacity expansion or from a continuity perspective when suppliers experienced supply
shortages. In FY2022, we decreased growth investment in MCP, while the cost (including third-party costs) to
maintain this investment increased as more of our businesses put MCP technologies into use. We have expanded
the number of team members working on MCP faster than our investment dollars are increasing, as we
disproportionately hire in high-value/lower-cost locations like India and Tunisia.
Our central procurement team, working in concert with our businesses, helps drive material cash and cost savings
under normal circumstances, and they have also driven great value during our pandemic response and the supply
chain and inflationary challenges of the last year. We do not consider any material portion of the cost of our central
procurement team to be growth investments because of the time to recognize associated benefits and also the
necessity of this team in maintaining our scale advantages and supply chain relationships no matter what our
growth trajectory.
Steady-State Free Cash Flow ("SSFCF")
Our SSFCF calculation is an annual estimate of the range of unlevered free cash flow that we would have delivered
in the prior fiscal year if we had not invested other than to maintain steady state. The difference between our actual
unlevered free cash flow and our approximate estimates of SSFCF represents an approximate range estimate of
the capital that we allocate to organic investments to grow our business beyond steady state or those that, in
hindsight, were not needed to maintain our steady state.
For the last two years, we have not publicly shared our SSFCF estimates because the pandemic-driven economic
conditions made it extremely difficult to estimate what our unlevered free cash flow (which is a crucial input to our
SSFCF calculation) would have been in normal times and what level of our organic investment is required to
maintain it. We will share our FY2022 SSFCF estimates now, while cautioning that many aspects of our current
environment remain far from normal, predictable or steady state. What will the rate of cost inflation be and how
much of future cost inflation can be absorbed by price increases and what is the impact, if any, on demand? Will we
experience ongoing COVID-driven volatility in the future? What will future supply chain reliability levels be? How will
currency exchange rates continue to evolve given significant recent volatility? You get the idea - variability in the
impact of macro inputs to our steady state free cash flow has increased.
The table below illustrates our calculation of our approximate estimate of our likely range of SSFCF for FY2022.
SSFCF Estimate ($ in Millions) - Most numbers in this table are approximate
FY2022
Adjusted free cash flow
Add back cash interest expense related to borrowing
Unlevered free cash flow (UFCF)
Adjustment for pro forma UFCF of M&A and non-controlling interests
Adjustment for pro forma UFCF of non-steady state working capital change
Adjustment for impact of technology migration activities and Ukraine response
Adjustment for pro forma impact of current year restructuring activity
Adjustment for gain on early settlement of derivative contracts not intended to hedge adjusted EBITDA
Approximate pro-forma UFCF normalized for the above items
Add back low estimate of investment not needed to maintain steady state
Low estimate of Steady State Free Cash Flow
Add the increment between low and high estimates of investment not needed to maintain steady state
High estimate of Steady State Free Cash Flow
$
$
$
$
$
100
98
198
(8)
(19)
17
14
(12)
190
173
363
30
393
12
Below is a chart showing the trend in our SSFCF estimate over time. We believe that in businesses other than Vista,
our SSFCF has increased over the past several years, but this has been more than offset by changes in Vista's
SSFCF, which is lower today than it was leading into the pandemic. We believe Vista can return to a steady-state or
actual unlevered free cash flow in line with our previous estimates, but based on a few factors, we think that will
take several years. These factors are:
•
•
•
Vista's maintenance-oriented expenses including those in cost of goods sold have increased significantly as a
result of inflation, which has weighed on underlying profitability in FY2022 as outlined above. We have not
made any assumptions that any of these cost increases are temporary. Although some are not, such as wage
inflation, others are tied to commodities pricing and may be temporary in nature. But the picture is too cloudy
right now to adjust for this in our SSFCF estimate through anything other than the range of estimates.
Vista's FY2022 organic revenue was in line with pre-pandemic revenue levels, but the product mix is still
reflecting some pandemic overhang: certain higher gross margin products are still a bit below their pre-
pandemic levels and these have been filled in by revenue from products with a lower gross margin. This isn't
bad news long-term because we believe the higher margin products will grow beyond their pre-pandemic
levels in the coming year, and the lower-margin products correlate to higher lifetime value of Vista customers
by capturing more wallet share than we have traditionally done. Additionally, given our history of being able to
improve product-level gross margins as we scale volumes, continued growth in our lower-margin products will
provide us opportunities for incremental process efficiencies over time.
The growth-oriented investments we are making today have been added back to our estimate of SSFCF, so
they do not weigh on the FY2022 estimate. But all of these investments are being made with an expectation
that they will drive great value to customers and future financial returns that will increase our underlying/actual
free cash flow. There has been no adjustment made in our SSFCF estimate for this future value; we must
deliver it and if we do, it will benefit the calculation in future years.
13
Past and Current Approximate Estimates of our Likely Range of Steady State Free Cash Flow(USD Millions)$385$351$340$340$430$485$393$210$271$290$300$400$455$363FY2015FY2016FY2017FY2018FY2019TTM February 2020FY2022 Summary & Conclusion
Despite looming macro-economic uncertainty, our experience over the past two-plus years gives us significant
confidence in our ability to not just manage whatever comes our way, but to do so while capitalizing on the most
important opportunities. Our strategic destination has not changed through the pandemic, supply chain challenges
and inflation and our experience has made us stronger. We have a credible playbook for managing volatility in
demand, and our investments in technology, procurement, and talent have enabled our businesses to perform
better than they would have on their own.
At the beginning of this letter, I expressed my hope that you will take away the following from reading it:
1. The financial results of many parts of Cimpress demonstrate successful value generation despite difficult
macro conditions. While Vista's value generation continues to be constrained by the significant investments
we have made, following the completion of its technology migration, we are focused on leveraging these
investments to demonstrate Vista's growth and profitability potential.
2. Our opportunity to serve customers while growing revenue, profits and cash flow, and our competitive
advantages relative to the many offline and smaller online suppliers in the market, both remain significant.
3. We are focused on the tactical execution of our established strategy and believe that, over the coming year,
we can deliver attractive top-line growth while also enhancing profitability and reducing net leverage.
As always, I greatly value the partnership of our long-term shareholders and our debt holders. I am optimistic that
together we will succeed in driving great value for customers, team members, society, and you who have entrusted
your capital with us.
Sincerely,
Robert Keane
Founder, Chairman & CEO
Cimpress plc
July 27, 2022
14
APPENDICES
Please note that we have pared back the information in these appendices to include only the categories with
updated information (historical estimates of steady state free cash flow and net debt per share). Our overarching
philosophy on how we think about intrinsic value per share and capital allocation options remain unchanged, and
investors may refer to past annual investor letters for this information.
Historical Estimates of Steady State Free Cash Flow
As we regularly emphasize, Cimpress' uppermost financial objective is to maximize our intrinsic value per share. We
believe we can approximate the rate of growth of our IVPS by comparing, across long periods of time, the result of
the following formula:
( [SSFCF divided by our WACC] - net debt ) / diluted shares outstanding
Note that the output of the above formula is not an estimate of our IVPS because the SSFCF component does not
include the value of growth investment, past and future, that is not yet impacting our SSFCF, whereas the net debt
component does include the cumulative investments.
We provide below a table of historical values for the components of the formula and we encourage shareholders to
make their own estimates. Note that the second-last column is the trailing twelve months ended February 29, 2020,
just prior to Cimpress' results being heavily impacted by the pandemic, other than pro forma net debt and weighted
average diluted shares outstanding, which are as of June 30, 2020.
in millions
FY2015
FY2016
FY2017
FY2018
FY2019
TTM
Feb20*
FY2022
When we made this estimate
High estimate of SSFCF
Low estimate of SSFCF
Pro forma net debt*
Weighted average diluted
shares outstanding**
July 2015 July 2016 July 2017 July 2018 July 2019 July 2020 July 2022
$340
$300
$795
$430
$400
$1,001
$485
$455
$1,437
$393
$363
$1,378
$340
$290
$750
$351
$271
$601
$385
$210
$413
33.8
33.0
32.6
32.2
31.7
27.8
26.3
* Pro forma net debt and weighted average diluted shares outstanding in the TTM Feb20 column are as of June 30, 2020. Since
it is a weighted average for the fiscal year, the weighted average diluted shares outstanding as of June 30, 2020 do not fully
reflect the FY2020 repurchases. The number of actual shares outstanding on June 30, 2020 was 25.9 million. Total dilutive
shares from options, RSUs and warrants was 1.3 million shares, although net dilution will be less.
**Please see details in net debt per share appendix.
In order to create economic value, net of our cost of capital, we need to grow the result of this equation at a
compounded annual growth rate that is higher than our cost of capital.
15
Net Debt per Share
We define IVPS as (a) the unlevered free cash flow per diluted share that, in our best judgment, will occur between
now and the long-term future, appropriately discounted to reflect our cost of capital, minus (b) net debt per diluted
share. The following table provides our calculation of part (b).
Net Debt Per Share (USD Millions Except Per Share Data)
FY2015
(June 30,
2015)
FY2016
(June 30,
2016)
FY2017
(June 30,
2017)
FY2018
(June 30,
2018)
FY2019
(June 30,
2019)
TTM Feb
2020
FY2020
(June 30,
2020)
FY2021
(June 30,
2021)
FY2022
(June 30,
2022)
Total debt,
excluding
debt
issuance
costs
Cash and
equivalents
Marketable
securities,
current and
non-current
Net debt,
excluding
debt
issuance
costs
Adjustment
for proceeds
from sale of
Albumprinter*
Pro-forma net
debt
Weighted
average
diluted shares
outstanding**
Pro-forma net
debt per
share
$523
$104
$686
$883
$839
$1,036
$1,537
$1,482
$1,765
$1,705
$77
$26
$44
$35
$49
$45
$183
$277
$7
$8
$—
$—
$—
$—
$—
$203
$50
$413
$601
$857
$795
$1,001
$1,488
$1,437
$1,379
$1,378
$—
$—
$(107)
$—
$—
$—
$—
$—
$—
$413
$601
$750
$795
$1,001
$1,488
$1,437
$1,379
$1,378
33.8
33.0
32.6
32.2
31.7
29.5
27.8
26.5
26.3
$12.21
$18.20
$23.01
$24.69
$31.58
$50.44
$51.74
$52.03
$52.41
* USD estimate made using July 25, 2017 USD/Euro spot rate of 1.1655. This adjustment was made prior to the sale date and the calculation
has not been updated to show the proceeds in FY2018, when the sale was actually completed.
** Diluted weighted average shares outstanding for FY2017, FY2021 and FY2022 represent the number of shares we would have reported on
the face of our income statement had we been in a profit position for those years instead of a loss position. The 'basic' weighted shares
outstanding reported on our income statement was 31.3 million for FY2017, 26.0 million for FY2021 and 26.1M for FY2022.
16
Non-GAAP Reconciliations
To supplement Cimpress’ consolidated financial statements presented in accordance with U.S. generally accepted accounting
principles, or GAAP, Cimpress has used the following measures defined as non-GAAP financial measures by Securities and
Exchange Commission, or SEC, rules: adjusted EBITDA, adjusted free cash flow, unlevered free cash flow and trailing-twelve-
month return on invested capital:
•
•
•
Adjusted EBITDA is defined as operating income plus depreciation and amortization (excluding depreciation and
amortization related to our Waltham, Massachusetts office lease) plus share-based compensation expense plus proceeds
from insurance plus earn-out related charges plus certain impairments plus restructuring related charges plus realized
gains or losses on currency derivatives less interest expense related to our Waltham, Massachusetts office lease less gain
on purchase or sale of subsidiaries.
Adjusted free cash flow is defined as net cash provided by operating activities less purchases of property, plant and
equipment, purchases of intangible assets not related to acquisitions, and capitalization of software and website
development costs, plus payment of contingent consideration in excess of acquisition-date fair value, plus gains on
proceeds from insurance.
Unlevered free cash flow is adjusted free cash flow before cash interest related to borrowing. Cash interest related to
borrowing excludes the portion of cash interest expense expense related to our Waltham, Massachusetts office.
These non-GAAP financial measures are provided to enhance investors' understanding of our current operating results from the
underlying and ongoing business for the same reasons they are used by management. For example, as we have become more
acquisitive over recent years we believe excluding the costs related to the purchase of a business (such as amortization of
acquired intangible assets, contingent consideration, or impairment of goodwill) provides further insight into the performance of
the underlying acquired business in addition to that provided by our GAAP operating income. As another example, as we do not
apply hedge accounting for our currency forward contracts, we believe inclusion of realized gains and losses on these contracts
that are intended to be matched against operational currency fluctuations provides further insight into our operating performance
in addition to that provided by our GAAP operating income. We do not, nor do we suggest that investors should, consider such
non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliation of Non-GAAP
Financial Measures” included at the end of this letter. The tables have more details on the GAAP financial measures that are
most directly comparable to non-GAAP financial measures and the related reconciliation between these financial measures.
17
Reconciliation of Non-GAAP Financial Measures
Consolidated Adjusted EBITDA
Annual, in $ millions
GAAP operating
income (loss)
Depreciation and
amortization
Waltham, MA
lease
depreciation
adjustment
Share-based
compensation
expense
Proceeds from
insurance
Interest expense
associated with
Waltham, MA
lease
Earn-out related
charges
Certain
impairments and
other adjustments
Gain on purchase
or sale of
subsidiaries
Restructuring
related charges
Realized gains
(losses) on
currency
derivatives not
included in
operating income
Adjusted
EBITDA1,2
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
TTM
Feb 20
FY2020 FY2021 FY2022
$93.1
$55.2 $ 46.1 $ 85.9 $ 96.3 $ 78.2 $ (45.7) $ 157.8 $163.6 $235.7 $ 56.0 $ 123.5 $ 47.3
$50.6
$59.4 $ 64.3 $ 72.3 $ 97.5 $ 132.1 $ 159.7 $ 169.0 $173.0 $171.0 $ 167.9 $ 173.2 $ 175.7
$—
$— $ — $ — $ — $
(3.4) $
(4.1) $
(4.1)
($4.1)
($1.4) $ — $ — $ —
$21.7
$25.4 $ 32.9 $ 27.8 $ 24.1 $ 23.8 $ 42.4 $ 49.1
$18.3
$25.5 $ 33.3 $ 37.0 $ 49.8
$—
$— $ — $ — $ — $
4.0 $
0.8 $
0.7
$—
$— $ — $
0.1 $ —
$—
$— $ — $ — $ — $
(6.3) $
(7.7) $
(7.5)
($7.2)
($2.4) $ — $ — $ —
$—
$— $ — $
2.2 $ 15.3 $
6.4 $ 40.4 $
2.4
$—
$— $
(0.1) $ — $ —
$—
$— $ — $ — $ — $ 41.8 $
9.6 $
2.9
$10.7
$10.9 $ 104.6 $ 20.5 $
(9.7)
$—
$— $ — $ — $ — $ — $ — $ (47.9)
$—
$— $ — $ — $ —
$—
$— $ — $ — $
2.5 $
0.4 $ 26.7 $ 15.2
$12.1
$11.0 $ 13.5 $
1.6 $ 13.6
$—
$— $ — $
(7.0) $
7.5 $
5.9 $ 16.5 $ (11.4) $20.3
$26.6 $ 24.5 $
(6.9) $
4.4
$165.4
$140.0 $ 143.4 $ 181.1 $ 243.1 $ 282.8 $ 238.4 $ 326.1 $386.5
$477.0 $ 399.8 $ 349.1 $ 281.1
1 This letter uses the definition of adjusted EBITDA as outlined above and therefore does not include the pro-forma impact of acquisitions or
divestitures; however, our debt covenants allow for the inclusion of pro-forma impacts to adjusted EBITDA.
2Adjusted EBITDA includes 100% of the results of our consolidated subsidiaries and therefore does not give effect to adjusted EBITDA
attributable to noncontrolling interests. This is to most closely align to our debt covenant and cash flow reporting.
18
Vista Constant-currency Growth Rates
Quarterly
Vista
Reported revenue growth
Currency impact
Revenue growth in constant currency
Impact of TTM acquisitions, divestitures & JVs
Revenue growth in constant currency ex. TTM acquisitions, divestitures & JVs
Constant-curency Growth Rates
Annual, in $ thousands
Vista
Reported revenue growth
Currency impact
Revenue growth in constant currency
Impact of TTM acquisitions, divestitures & JVs
Revenue growth in constant currency ex. TTM acquisitions, divestitures & JVs
Q3FY22 Q4FY22
8 %
2 %
6 %
4 %
10 %
10 %
(2) %
(2) %
8 %
8 %
FY2022
6 %
1 %
7 %
(2) %
5 %
Upload and Print ($M)
PrintBrothers reported revenue
The Print Group reported revenue
FY2018 FY2019 FY2020 FY2021 FY2022
$ 410.8 $ 444.0 $ 417.9 $ 421.8 $ 527.0
$ 320.5 $ 325.9 $ 275.2 $ 275.5 $ 329.6
Upload and Print inter-segment eliminations
$
(1.3) $
(1.0) $
(1.0) $
(1.3) $
(0.9)
Total Upload and Print revenue in USD
$ 730.0 $ 768.9 $ 692.1 $ 696.0 $ 855.6
Upload and Print
Reported revenue growth
Currency impact
Revenue growth in constant currency
Impact of TTM acquisitions, divestitures & JVs
Revenue growth in constant currency ex. TTM acquisitions, divestitures & JVs
FY2022
23 %
7 %
30 %
— %
30 %
19
Consolidated Free Cash Flow and Unlevered Free Cash Flow
Annual, in $ thousands
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
Net cash provided by operating activities
$165,149
$146,749
$141,808
$153,739
$242,022
$247,358
Purchases of property, plant and equipment
($37,405)
($46,420)
($78,999)
($72,122)
($75,813)
($80,435)
Purchases of intangible assets not related to acquisitions
($205)
($239)
($750)
($253)
($250)
($476)
Capitalization of software and website development costs
($6,290)
($5,463)
($7,667)
($9,749)
($17,323)
($26,324)
Payment of contingent consideration in excess of
acquisition-date fair value
Proceeds from insurance related to investing activities
$—
$—
$—
$—
$—
$—
$—
$—
$8,055
$8,613
$—
$3,624
Adjusted free cash flow
$121,249
$94,627
$54,392
$71,615
$156,691
$152,360
Plus: cash paid during the period for interest
$219
$1,487
$4,762
$6,446
$8,520
$37,623
Less: interest expense for Waltham lease
$—
$—
$—
$—
$—
($6,287)
Unlevered free cash flow
$121,468
$96,114
$59,154
$78,061
$165,211
$183,696
Consolidated Free Cash Flow and Unlevered Free Cash Flow (continued)
Annual, in $ thousands
FY2017
FY2018
FY2019
TTM Feb
2020
FY2020
FY2021
FY2022
Net cash provided by operating activities
$ 156,736 $ 192,332 $ 331,095 $ 395,292 $ 338,444 $ 265,221 $ 219,536
Purchases of property, plant and
equipment
Purchases of intangible assets not
related to acquisitions
Capitalization of software and website
development costs
Payment of contingent consideration in
excess of acquisition-date fair value
Adjusted free cash flow
Plus: cash paid during the period for
interest
$
$
$
$
$
$
(74,157) $
(60,930) $
(70,563) $
(51,795) $
(50,467) $
(38,524) $
(54,040)
(197) $
(308) $
(64) $
(42) $
— $
— $
—
(37,307) $
(40,847) $
(48,652) $
(50,472) $
(43,992) $
(60,937) $
(65,297)
— $
49,241 $
— $
— $
— $
— $
—
45,075 $ 139,488 $ 211,816 $ 292,983 $ 243,985 $ 165,760 $ 100,199
45,275 $
56,614 $
63,940 $
66,596 $
72,906 $ 116,977 $
98,099
Less: interest expense for Waltham lease $
(7,727) $
(7,489) $
(7,236) $
— $
— $
— $
—
Unlevered free cash flow
$
82,623 $ 188,613 $ 268,520 $ 359,579 $ 316,891 $ 282,737 $ 198,298
UFCF by Segment
Annual, in $ thousands
Vista
Segment EBITDA
Capital Expenditures
Capitalized Software
SBC expense treated as cash
Other Reconciling items1
Unlevered free cash flow
FY2018
FY2019
FY2020
FY2021
FY2022
$
$
$
$
$
$
309,783 $
349,697 $
362,590 $
318,684 $
195,321
(35,998) $
(32,820) $
(15,986) $
(12,332) $
(17,198)
(23,457) $
(23,369) $
(18,381) $
(28,297) $
(30,994)
7,384 $
6,153 $
7,101 $
10,165 $
18,949
(6,232) $
13,023 $
8 $
46,424 $
25,393
251,480 $
312,684 $
335,332 $
334,644 $
191,462
1 “Other reconciling items” includes net working capital changes and estimated tax allocation.
20
UFCF by Segment (continued)
Annual, in $ thousands
Upload & Print
FY2018
FY2019
FY2020
FY2021
FY2022
PrintBrothers Segment EBITDA
The Print Group Segment EBITDA
Combined Upload & Print Segment EBITDA
Capital Expenditures
Capitalized Software
SBC expense treated as cash
Other Reconciling items1
Combined Upload & Print unlevered free cash flow
National Pen
Segment EBITDA
Capital Expenditures
Capitalized Software
SBC expense treated as cash
Other Reconciling items1
Unlevered free cash flow
All Other Businesses
Segment EBITDA
BuildASign Component EBITDA
Early-Stage Investments Component EBITDA
Albumprinter Component EBITDA2
BuildASign
Component EBITDA
Capital Expenditures
Capitalized Software
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
41,129 $
43,474 $
39,373 $
43,144 $
66,774
63,529 $
63,997 $
51,606 $
43,126 $
58,664
104,658 $
107,471 $
90,979 $
86,270 $
125,438
(16,212) $
(11,429) $
(21,451) $
(15,456) $
(23,665)
(4,010) $
(4,114) $
(2,474) $
(3,068) $
(3,558)
944 $
952 $
946 $
703 $
493
(10,788) $
(15,166) $
(16,000) $
4,087 $
13,501
74,592 $
77,714 $
52,000 $
72,536 $
112,209
FY2018
FY2019
FY2020
FY2021
FY2022
29,438 $
17,299 $
7,605 $
11,644 $
26,845
(6,565) $
(8,346) $
(5,016) $
(3,603) $
(4,332)
(1,482) $
(3,624) $
(3,290) $
(3,115) $
(3,390)
543 $
824 $
1,155 $
931 $
401
2,432 $
4,052 $
(14,996) $
15,737 $
(9,265)
24,366 $
10,205 $
(14,541) $
21,594 $
10,259
FY2018
FY2019
FY2020
FY2021
FY2022
(10,603) $
(6,317) $
17,474 $
31,707 $
23,227
— $
15,986 $
28,670 $
37,968 $
31,454
(12,169) $
(22,303) $
(11,196) $
(6,261) $
(8,227)
1,566 $
— $
— $
— $
—
FY2018
FY2019
FY2020
FY2021
FY2022
n/a $
15,986 $
28,670 $
37,968 $
31,454
n/a $
(4,096) $
(3,656) $
(4,786) $
(5,055)
n/a $
(1,480) $
(2,023) $
(2,283) $
(2,327)
SBC expense treated as cash
n/a $
267 $
622 $
528 $
450
Other Reconciling items1
Unlevered free cash flow
n/a $
2,824 $
8,055 $
(5,335) $
(2,765)
n/a $
13,500 $
31,668 $
26,091 $
21,757
1 “Other reconciling items” includes net working capital changes and estimated tax allocation.
2 Albumprinter was divested on August 31, 2017.
21
UFCF by Segment (continued)
Annual, in $ thousands
Early-Stage Investments
FY2018
FY2019
FY2020
FY2021
FY2022
Component EBITDA
Capital Expenditures
Capitalized Software
SBC expense treated as cash
Other Reconciling items1
Unlevered free cash flow
$
$
$
$
$
$
(12,169) $
(22,303) $
(11,196) $
(6,261) $
(8,227)
(848) $
(12,956) $
(587) $
(680) $
(1,972)
(322) $
(1,446) $
(1,662) $
(1,463) $
(1,768)
109 $
234 $
— $
— $
385 $
(3,545) $
(894) $
283 $
—
76
(12,846) $
(40,016) $
(14,338) $
(8,121) $
(11,892)
1 “Other reconciling items” includes net working capital changes and estimated tax allocation.
2 Albumprinter was divested on August 31, 2017.
Net Cash (Debt)
Annual, in $ thousands
Cash and cash equivalents
Less: Short-term debt
Less: Long-term debt
Less: Debt issuance costs and debt
discounts
Net cash (debt)
$
$
$
$
$
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
236,552 $
62,203 $
50,065 $
62,508 $
103,584 $
77,426
— $
— $
(8,750) $
(37,575) $
(21,057) $
(21,717)
— $
(227,037) $
(227,037) $
(406,994) $
(493,039) $
(656,794)
— $
(1,963) $
(2,963) $
(3,490) $
(8,940) $
(7,386)
236,552 $
(166,797) $
(188,685) $
(385,551) $
(419,452) $
(608,471)
Cash and cash
equivalents
Plus: marketable
securities (current)
Plus: marketable
securities (non-current)
Less: Short-term debt
Less: Long-term debt
Less: Debt issuance
costs and debt
discounts
$
$
$
$
$
$
FY2017
FY2018
FY2019
TTM Feb 2020
FY2020
FY2021
FY2022
25,697 $
44,227 $
35,279 $
49,068 $
45,021 $
183,023 $
277,053
— $
— $
— $
— $
— $
— $
— $
— $
— $
152,248 $
49,952
— $
50,713 $
—
(28,926) $
(59,259) $
(81,277) $
(60,094) $
(17,933) $
(9,895) $
(10,386)
(847,730) $
(767,585) $
(942,290) $
(1,460,438) $
(1,415,657) $
(1,732,511) $
(1,675,562)
(5,922) $
(12,585) $
(12,018) $
(16,136) $
(48,587) $
(22,450) $
(19,417)
Net cash (debt)
($856,881)
($795,202)
($1,000,306)
($1,487,599)
($1,437,156)
($1,378,872)
($1,378,360)
22
About Cimpress
Cimpress plc (Nasdaq: CMPR) invests in and builds customer-focused, entrepreneurial, mass customization businesses for the
long term. Mass customization is a competitive strategy which seeks to produce goods and services to meet individual customer
needs with near mass production efficiency. Cimpress businesses include BuildASign, Drukwerkdeal, Exaprint, National Pen,
Pixartprinting, Printi, Vista and WIRmachenDRUCK. To learn more, visit http://www.cimpress.com.
Cimpress and the Cimpress logo are trademarks of Cimpress plc or its subsidiaries. All other brand and product names
appearing on this announcement may be trademarks or registered trademarks of their respective holders.
The securities of Cimpress to be sold in the potential transactions described above have not been and will not be registered
under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States
absent registration with the U.S. Securities and Exchange Commission or an applicable exemption from such registration
requirements.
Risks Related to Our Business
This investor letter contains statements about our future expectations, plans, and prospects of our business that constitute
forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995,
including but not limited to our expectations for the growth and development of our businesses, revenue, profitability, and other
financial results; our estimates and expectations relating to our unlevered free cash flow, steady state free cash flow, and intrinsic
value per share; planned investments in our business and the expected effects of those investments, including the expected
performance of our acquired companies; the transformation of Vista's business, including the integration of design services, and
the expected effects of the transformation and new technology platform on Vista's business and financial results; and our
expectations with respect to future product mix, customer acquisitions, savings from restructurings, and increases in the prices of
our products and services. Forward-looking projections and expectations are inherently uncertain, are based on assumptions
and judgments by management, and may turn out to be wrong. Our actual results may differ materially from those indicated by
these forward-looking statements as a result of various important factors, including but not limited to flaws in the assumptions
and judgments upon which our forecasts are based; the development, duration, and severity of supply chain constraints,
inflation, and the ongoing COVID-19 pandemic; our failure to execute on the transformation of the Vista business; loss or
unavailability of key personnel or our inability to hire and retain talented personnel; our failure to execute our strategy; our
inability to make the investments in our business that we plan to make or the failure of those investments to have the effects that
we expect; our inability to mitigate increases in our costs by increasing our prices and taking other measures; our failure to
manage the growth and complexity of our business; our failure to develop and deploy our mass customization platform or to
realize the anticipated benefits of the platform; our failure to acquire new customers and enter new markets, retain our current
customers, and sell more products to current and new customers; costs and disruptions caused by acquisitions and strategic
investments; the failure of the businesses we acquire or invest in to perform as expected; unanticipated changes in our markets,
customers, or business; competitive pressures; our failure to maintain compliance with the covenants in our debt documents or
to pay our debts when due; changes in the laws and regulations or in the interpretations of laws or regulations to which we are
subject, including tax laws, or the institution of new laws or regulations that affect our business; general economic conditions,
including the possibility of economic downturns in some or all of our markets; and other factors described in our Form 10-K for
the fiscal year ended June 30, 2021 and the other documents we periodically file with the U.S. Securities and Exchange
Commission.
In addition, the statements and projections in this letter represent our expectations and beliefs as of the date of this letter, and
subsequent events and developments may cause these expectations, beliefs, and projections to change. We specifically
disclaim any obligation to update any forward-looking statements. These forward-looking statements should not be relied upon
as representing our expectations or beliefs as of any date subsequent to the date of this letter.
23
[This Page Intentionally Left Blank]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________
Form 10-K
(Mark One)
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the annual period ended
June 30, 2022
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-51539
_________________________________
Cimpress plc
(Exact Name of Registrant as Specified in Its Charter)
_________________________________
Ireland
(State or Other Jurisdiction of
Incorporation or Organization)
98-0417483
(I.R.S. Employer
Identification No.)
Building D, Xerox Technology Park A91 H9N9,
Dundalk, Co. Louth
Ireland
(Address of Principal Executive Offices)
Registrant’s telephone number, including area code: 353 42 938 8500
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class
Ordinary Shares, nominal value of €0.01 per
share
Trading Symbol(s)
Name of Exchange on Which Registered
CMPR
NASDAQ Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
______________________________
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No þ
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and
"emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
þ
Accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐
Non-accelerated filer ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ☐ No þ
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15U.S.C. 7262(b)) by the registered public accounting
firm that prepared or issued its audit report. þ
The aggregate market value of the ordinary shares held by non-affiliates of the registrant was approximately $1.53 billion on December 31,
2021 (the last business day of the registrant's most recently completed second fiscal quarter) based on the last reported sale price of the registrant's
ordinary shares on the NASDAQ Global Select Market.
As of August 1, 2022, there were 26,135,706 Cimpress plc ordinary shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant intends to file a definitive proxy statement pursuant to Regulation 14A within 120 days of the end of the fiscal year ended
June 30, 2022. Portions of such proxy statement are incorporated by reference into Items 10, 11, 12, 13, and 14 of Part III of this Annual Report on
Form 10-K.
CIMPRESS PLC
ANNUAL REPORT ON FORM 10-K
For the Year Ended June 30, 2022
TABLE OF CONTENTS
Part I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issued Purchases of
Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9. Changes in and Disagreements with Accountants and Financial Disclosures . . . . . . . . . . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part III
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . .
Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part IV
Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Page
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Item 1. Business
Overview & Strategy
PART I
Cimpress is a strategically focused group of more than a dozen businesses that specialize in mass
customization of printing and related products, via which we deliver large volumes of individually small-sized
customized orders. Our products include a broad range of marketing materials, business cards, signage,
promotional products, logo apparel, packaging, books and magazines, wall decor, photo merchandise, invitations
and announcements, and other categories. Mass customization is a core element of the business model of each
Cimpress business and is a competitive strategy which seeks to produce goods and services to meet individual
customer needs with near mass production efficiency. We discuss mass customization in more detail further below.
We have grown substantially over our history, from $0 in 1995 to $0.2 billion of revenue in fiscal year 2006,
the year when we became a publicly traded company, then to $2.9 billion of revenue in fiscal year 2022. As we have
grown we have achieved important benefits of scale. Our strategy is to invest in and build customer-focused,
entrepreneurial mass customization businesses for the long term, which we manage in a decentralized,
autonomous manner. We drive competitive advantage across Cimpress through a select few shared strategic
capabilities that have the greatest potential to create Cimpress-wide value. We limit all other central activities to only
those which absolutely must be performed centrally.
This decentralized structure is beneficial in many ways. We believe that, in comparison to a more
centralized structure, decentralization enables our businesses to be more customer focused, to make better
decisions faster, to manage a holistic cross-functional value chain required to serve customers well, to be more
agile, to be held more accountable for driving investment returns, and to understand where we are successful and
where we are not. This structure delegates responsibility, authority and resources to the CEOs and managing
directors of our various businesses. This strategy provided great value to us during the COVID-19 crisis because it
allowed our businesses to respond quickly to local restrictions, customer needs, and the health and safety of our
team members, and leaders shared information and best practices across the group.
The select few shared strategic capabilities into which we invest include our (1) mass customization
platform ("MCP"), (2) talent infrastructure in India, (3) central procurement of large-scale capital equipment, shipping
services, major categories of our raw materials and other categories of spend, and (4) peer-to-peer knowledge
sharing among our businesses. We encourage each of our businesses to leverage these capabilities, but each
business is free to choose whether or not to use these services. This optionality, we believe, creates healthy
pressure on the central teams who provide such services to deliver compelling value to our businesses.
We limit all other central activities to only those which must be performed centrally. Out of more than 15,000
employees we have fewer than 85 who work in central activities that fall into this category, which includes tax,
treasury, internal audit, legal, sustainability, corporate communications, remote first enablement, consolidated
reporting and compliance, investor relations, capital allocation and the functions of our CEO and CFO. We seek to
avoid bureaucratic behavior in the corporate center. We have developed, through experience, guardrails and
accountability mechanisms in key areas of governance including cultural aspects such as a focus on customers or
being socially responsible, as well as operational aspects such as the processes by which we set strategy and
financial budgets and review performance, or the policies by which we ensure compliance with information privacy
laws.
Our Uppermost Financial Objective
Our uppermost financial objective is to maximize our intrinsic value per share. We define intrinsic value per
share as (a) the unlevered free cash flow per diluted share that, in our best judgment, will occur between now and
the long-term future, appropriately discounted to reflect our cost of capital, minus (b) net debt per diluted share. We
define unlevered free cash flow as adjusted free cash flow plus interest expense related to borrowings.
This financial objective is inherently long-term in nature. Thus an explicit outcome of this is that we accept
fluctuations in our financial metrics as we make investments that we believe will deliver attractive long-term returns
on investment.
1
We ask investors and potential investors in Cimpress to understand our uppermost financial objective by
which we endeavor to make all financially evaluated decisions. We often make decisions in service of this priority
that could be considered non-optimal were they to be evaluated based on other financial criteria such as (but not
limited to) near- and mid-term revenue, operating income, net income, EPS, adjusted EBITDA, and cash flow.
Mass Customization
Mass customization is a business model that allows companies to deliver major improvements to customer
value across a wide variety of customized product categories. Companies that master mass customization can
automatically direct high volumes of orders into smaller streams of homogeneous orders that are then sent to
specialized production lines. If done with structured data flows and the digitization of the configuration and
manufacturing processes, setup costs become very small, and small volume orders become economically feasible.
The chart illustrates this concept. The horizontal
axis represents the volume of production of a given
product; the vertical axis represents the cost of
producing one unit of that product. Traditionally, the only
way to manufacture at a low unit cost was to produce a
large volume of that product: mass-produced products
fall in the lower right-hand corner of the chart. Custom-
made products (i.e., those produced in small volumes
for a very specific purpose) historically incurred very
high unit costs: they fall in the upper left-hand side of
the chart.
Mass customization breaks this trade off,
enabling low-volume, low-cost production of individually
unique products. Very importantly, relative to traditional
alternatives mass customization creates value in many
ways, not just lower cost. Other advantages can include
faster production, greater personal relevance,
elimination of obsolete stock, better design, flexible
shipping options, more product choice, and higher
quality.
Mass customization in print-related markets delivers a breakthrough in customer value particularly well in
markets in which the worth of a physical product is inherently tied to a specific, unique use or application. For
instance, there is limited value to a sign that is the same as is used by many other companies: the business owner
needs to describe what is unique about his or her business. Likewise, customized packaging is a way for a business
to add their brand identity to what is oftentimes the first physical touchpoint with a customer for online purchases.
Before mass customization, producing a high-quality custom product required high per-order setup costs, so it
simply was not economical to produce a customized product in low quantities.
There are three ingredients to mass customization applied to print applications: (1) web-to-print or e-
commerce stores that offer a wide variety of customizable products, a replacement of more expensive and harder-
to-scale physical stores with limited geographic reach; (2) software-driven order aggregation, which enables
significantly reduced costs on low-volume orders; and (3) democratized design that combines intuitive design
software with a large-scale of human designers that are typically located in low-cost locations to deliver high-
quality, or lower-cost, highly scalable alternatives to traditional graphic design services.
We believe that the business cards sold by our Vista business provide a concrete example of the potential
of our mass customization business model to deliver significant customer value and to develop strong profit
franchises in large markets that were previously low growth and commoditized. Millions of very small customers
(for example, home-based businesses) rely on Vista to design and procure aesthetically pleasing, high-quality,
quickly-delivered and low-priced business cards. The Vista production operations for a typical order of 250
standard business cards in Europe and North America require less than 14 seconds of labor for all of pre-press,
printing, cutting and packaging, versus an hour or more for traditional printers. Combined with advantages of scale
in graphic design support services, purchasing of materials, our self-service online ordering, pre-press automation,
auto-scheduling and automated manufacturing processes, we allow customers to design, configure, and procure
business cards at a fraction of the cost of typical traditional printers with very consistent quality and delivery
reliability. Customers have very extensive, easily configurable, customization options such as rounded corners,
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different shapes, specialty papers, “spot varnish”, reflective foil, folded cards, or different paper thicknesses.
Achieving this type of product variety while also being very cost efficient took us almost two decades and requires
massive volume, significant engineering investments and significant capital. For example, business cards is a
mature market that, at the overall market level, has experienced continual declines over the past two decades. Yet,
for Vista, this has remained a growing category that is highly profitable, even with temporary impacts earlier in the
pandemic. We currently produce many other product categories (such as flyers, brochures, signage, mugs,
calendars, pens, t-shirts, hats, embroidered soft goods, rubber stamps, photobooks, labels, packaging, stickers,
books, catalogs, magazines and holiday cards) via similar analogous methods. While these product categories are
not as automated as business cards, each is well along the spectrum of mass customization relative to traditional
suppliers and thus provide great customer value and a strong, profitable and growing revenue stream.
Market and Industry Background
Print's Mass Customization Opportunity
Mass customization of print and related products is not a market itself, but rather a business model that can
be applied across global geographic markets, to customers from varying businesses (micro, small, medium and
large), graphic designers, resellers, printers, teams, associations, groups, consumers and families, to which we offer
products such as the following:
Large traditional print markets undergoing disruptive innovation
The products, geographies and customer applications listed above constitute a large market opportunity
that is highly fragmented. We believe that the vast majority of the markets to which mass customization could apply
are still served by traditional business models that force customers either to produce in large quantities per order or
to pay a high price per unit.
We believe that these large and fragmented markets are moving away from small traditional suppliers that
employ job shop business models to fulfill a relatively small number of customer orders and toward businesses such
as those owned by Cimpress that aggregate a relatively large number of orders and fulfill them via a focused supply
chain and production capabilities at relatively high volumes, thereby achieving the benefits of mass customization.
We believe we are relatively early in the process of what will be a multi-decade shift from job-shop business models
to mass customization, as innovation continues to bring new product categories into this model.
Cimpress’ current revenue represents a very small fraction of this market opportunity. We believe that
Cimpress and competitors who have built their business around a mass customization model are “disruptive
innovators” to these large markets because we enable small-volume production of personalized, high-quality
products at an affordable price. Disruptive innovation, a term coined by Harvard Business School professor Clayton
Christensen, describes a process by which a product or service takes root initially in simple applications at the
bottom of a market (such as free business cards for the most price sensitive of micro-businesses or low-quality
white t-shirts) and then moves up market, eventually displacing established competitors (such as those in the
markets mentioned above).
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We believe that a large opportunity exists for major markets to shift to a mass customization paradigm and,
even though we are largely decentralized, the select few shared strategic capabilities into which we centrally invest
provide significant scale-based competitive advantages for Cimpress.
We believe this opportunity to deliver substantially better customer value and to therefore disrupt large
traditional industries can translate into tremendous future opportunity for Cimpress. Earlier in our history, we
focused primarily on a narrow set of customers (highly price-sensitive and discount-driven micro businesses and
consumers) with a limited product offering. Through acquisitions and via significant investments in our Vista
business, we have expanded the breadth and depth of our product offerings, extended our ability to serve our
traditional customers and gained a capability to serve a vast range of customer types.
As we continue to evolve and grow Cimpress, our understanding of these markets and their relative
attractiveness is also evolving. Our expansion of product breadth and depth as well as new geographic markets has
significantly increased the size of our addressable market opportunity. Our businesses conduct market research on
an ongoing basis and through those studies, we remain confident in the overall market opportunity; however, our
estimates are only approximate. Despite the imprecise nature of our estimates, we believe that our understanding is
directionally correct and that we operate in a vast aggregate market with significant opportunity for Cimpress to
grow as we continue delivering a differentiated and attractive value proposition to customers.
Print Market Opportunity
Today, we believe that the revenue opportunity for low-to-medium order quantities (i.e., still within our focus
of small-sized individual orders) in the four product categories below is over $100 billion annually in North America
and Europe combined and at least $150 billion annually if you include other geographies and consumer products.
These product categories are listed in order of market penetration by mass customization models. The market for
small format marketing materials is the most mature in this penetration, though there is still a significant portion
served by thousands of small traditional suppliers. The market for packaging products is the least mature in terms of
penetration by mass customization models, but this transition has begun.
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Small format marketing materials such as business cards, flyers, leaflets, inserts, brochures and
magazines. Businesses of all sizes are the main end users of short-and-medium run lengths (per order
quantities below 2,500 units for business cards and below 20,000 units for other materials).
Large format products such as banners, signs, tradeshow displays, and point-of-sale displays. Businesses
of all sizes are the main end users of short-and-medium run lengths (less than 1,000 units).
Promotional products, apparel and gifts including decorated apparel, bags and textiles, and hard goods
such as pens, USB sticks, and drinkware. The end users of short-and-medium runs of these products
range from businesses to teams, associations and groups, as well as individual consumers.
Packaging products, such as corrugated board packaging, folded cartons, bags and labels. Businesses of
all sizes are the primary end users for short-and-medium runs (below 10,000 units).
Design Market Opportunity
Vista was an early pioneer of the concept of web-based do-it-yourself design for printed products as a
fundamental part of its original customer value proposition for designs for relatively simple 2D product formats. We
believe that there is an ongoing revolution in graphic design for small business marketing, one in which a
combination of technology tools, artificial intelligence and machine learning, and convenient access via two-sided
marketplace platforms to professional freelance design talent (including from low-cost countries) will continue a
multi-decade democratization of design that has been central to print mass customization, and is likely to continue
to be a key enabler to bringing ever-more-complex product formats and marketing channels into the mass
customization paradigm (for example, packaging, large format signage, catalogs). Cimpress’ recent acquisitions of
99designs and Depositphotos (VistaCreate), which operate within our Vista business, provide significant capabilities
to be a leader in this market shift. For example, 99designs has a network of 150 thousand freelance designers who
work with customer-specific design projects and Depositphotos brings more than 100 thousand freelance
contributors of photos, videos, music and other content. VistaCreate is building a design system that combines
graphic templates created by thousands of freelancers with algorithmically generated variations across many
different print and digital products of customers' adaptation of those templates.
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Vista researched the design spend in two of its largest markets, the U.S. and Germany, and found that
small businesses spend approximately $6 billion annually on design services in these two markets, exclusive of the
purchases of the print or digital products that the designs enhance. Even more importantly, this research found that
small businesses in these markets that purchase design services represent the majority of the addressable market
for print and digital marketing materials. We believe that a broader complement of design services should enable
Vista to retain customers longer as their needs evolve, as well as both attract new customers and serve existing
customers with more complex products and therefore access more of our total addressable market.
Digital Market Opportunity
Over the past decade, small businesses have complemented the physical products they use to market their
businesses with digital marketing channels like websites and social media marketing. Though the digital marketing
channels themselves are not areas that we believe we should allocate significant capital to develop our own
offerings, design is a common component to both physical and digital marketing for small businesses, and our small
business customers look for ideas and advice when it comes to ensuring cohesive brand expression and successful
campaigns across these channels. Cimpress' recent acquisition of Depositphotos, which includes the VistaCreate
offering for do-it-yourself social media design and operates within our Vista business, combined with partnership
opportunities with leading digital presence businesses like Wix, has extended our total addressable market into an
adjacency where we believe we have an opportunity to deliver integrated marketing solutions to small business
customers using a best-in-class partnership approach. The total market for digital marketing applications is massive,
but our ambition here is focused on enhancing the customer experience of millions of Vista customers, where the
amount that businesses spend annually on digital marketing solutions is roughly the same amount as is spent on
design services and print products. We believe investing in digital design capabilities and offering digital solutions
via partnership will enable Vista to capture a portion of this opportunity by attracting new customers and increasing
the lifetime value and retention of existing customers.
Our Businesses
Cimpress businesses include our organically developed Vista business, plus businesses that we have
either fully acquired or in which we have a majority equity stake. Prior to their acquisitions, most of our acquired
companies pursued business models that already applied the principles of mass customization to print and related
products. In other words, each provided a standardized set of products that could be configured and customized by
customers, ordered in relatively low volumes, and produced via relatively standardized, homogeneous production
processes, at prices lower than those charged by traditional producers.
Our businesses serve markets primarily in North America, Western Europe, Australia and New Zealand. We
also have small but fast growing businesses in India and Brazil. Their websites typically offer a broad assortment of
tools and features allowing customers to create a product design or upload their own complete design and place an
order, either on a completely self-service basis or with varying levels of assistance. Some of our businesses also
use offline techniques to acquire customers (e.g., direct mail marketing, telesales). The combined product
assortment across our businesses is extensive, including offerings in the following product categories: business
cards, marketing materials such as flyers and postcards, digital and marketing services, writing instruments,
signage, canvas-print wall décor, decorated apparel, promotional products and gifts, packaging, design services,
textiles and magazines and catalogs.
The majority of our revenue is driven by standardized processes and enabled by software. We endeavor to
design these processes and technologies to readily scale as the number of orders received per day increases. In
particular, the more individual jobs we receive in a given time period, the more efficiently we can sort and route jobs
with homogeneous production processes to given nodes of our internal production systems or of our third-party
supply chain. This sortation and subsequent process automation improves production efficiency. We believe that our
strategy of systematizing our service and production systems enables us to deliver value to customers much more
effectively than traditional competitors.
Our businesses operate production facilities throughout the geographies listed above, with over 3.3 million
square feet of production space in the aggregate across our owned and operated facilities. We also work
extensively with several hundred external fulfillers located across the globe. We believe that the improvements we
have made and the future improvements we intend to make in software technologies that support the design,
sortation, scheduling, production and delivery processes provide us with significant competitive advantage. In many
cases our businesses can produce and ship an order the same day they receive it. Our supply chain systems and
processes seek to reduce inventory and working capital and improve delivery speeds to customers relative to
traditional suppliers. In certain of our company-owned manufacturing facilities, software schedules the near-
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simultaneous production of different customized products that have been ordered by the same customer, allowing
us to produce and deliver multi-part orders quickly and efficiently.
We believe that the potential for scale-based advantages is not limited to focused, automated production
lines. Other advantages include the ability to systematically and automatically sort through the voluminous “long tail”
of diverse and uncommon orders in order to group them into more homogeneous categories, and to route them to
production nodes that are specialized for that category of operations and/or which are geographically proximate to
the customer. In such cases, even though the daily production volume of a given production node is small in
comparison to our highest-volume production lines, the homogeneity and volume we are able to achieve is
nonetheless significant relative to traditional suppliers of the long-tail product in question; thus, our relative efficiency
gains remain substantial. For this type of long-tail production, we rely heavily on third-party fulfillment partnerships,
which allow us to offer a very diverse set of products. We acquired most of our capabilities in this area via our
investments in Exaprint, Printdeal, Pixartprinting and WIRmachenDRUCK. For instance, the product assortment of
each of these four businesses is measured in the tens of thousands, versus Vista where product assortment is
dramatically smaller on a relative basis. This deep and broad product offering is important to many customers.
Our businesses are currently organized into the following five reportable segments:
1. Vista:
Consists of the operations of our VistaPrint branded websites in North
America, Western Europe, Australia, New Zealand, India and Singapore.
This business also includes our 99designs by Vista business which
provides graphic design services, our rapidly growing VistaCreate brand for
do-it-yourself (DIY) design, our Vista x Wix partnership for small business
websites, and our Vista Corporate Solutions business which serves
medium-sized businesses and large corporations.
Our Vista business helps more than 15 million small businesses create attractive, professional-quality
marketing products at affordable prices and at low volumes. With Vista, small businesses are able to create
and customize their marketing with easy-to-use digital tools and design-templates, or by receiving expert
graphic design support. In October 2020, Vista acquired 99designs to expand its design offering via a
worldwide community of more than 150,000 talented designers to make it easy for designers and clients to
work together to create designs they love. In October 2021, Vista acquired Depositphotos and its business
now known as VistaCreate to expand the content available for our customers and to introduce VistaCreate,
which is a versatile, intuitive design software which leverages templates from freelance contributors.
In early fiscal year 2022 our Vista business began evolving its brand architecture to "Vista". Brands like
"VistaPrint", "VistaCreate", "99designs by Vista", "Vista Corporate Solutions" and Vista x Wix now operate
within the "Vista" brand architecture. This move should broaden our customers' understanding of our value
proposition over time to allow us to serve a broader set of their needs across a wide range of products and
solutions that include design, social media and web presence as well as print.
Vista’s average order value is more than $70, customers spend on average a bit more than $100 per year;
gross margins are about 60% and advertising spend as a percent of revenue is about 17%. Vista has had
strong free cash flow conversion as its e-commerce model typically leads to collections from customers
prior to the production and shipment of customer orders.
Upload & Print:
Our Upload & Print businesses are organized in two reportable segments PrintBrothers and The Print
Group, both of which focus on serving graphic professionals: local printers, print resellers, graphic artists,
advertising agencies and other customers with professional desktop publishing skill sets. Upload and Print
businesses have an average order value of about €90 and annual per customer revenue of over €650.
Gross margins vary by business but average about 30% due to wholesale-like pricing and the wide variety
of products produced both in owned facilities as well as via third-party fulfillers. Advertising spend as a
percent of revenue is about 5%.
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2. PrintBrothers: Consists of our druck.at, Printdeal, and WIRmachenDRUCK businesses. PrintBrothers
businesses serve customers throughout Europe, and primarily in Austria, Belgium, Germany, the
Netherlands, and Switzerland.
3. The Print Group: Consists of our Easyflyer, Exaprint, Pixartprinting, and Tradeprint businesses. The Print
Group businesses serve customers throughout Europe, and primarily in France, Italy, Spain and the UK.
4. National Pen:
Consists of our National Pen business and a few
smaller brands operated by National Pen that are
focused on customized writing instruments and
promotional products, apparel and gifts for small-
and medium-sized businesses.
National Pen serves more than a million small businesses annually across geographies including North
America, Europe, Japan and Australia. Marketing methods are typically direct mail and telesales, as well as
a growing e-commerce site. National Pen operates several brands focused on customized writing
instruments and promotional products, apparel and gifts for small- and medium-sized businesses. National
Pen’s average order value is about $200 - $250, and annual revenue per customer is about $300. Gross
margins are about 55% with highly seasonal profits driven in the December quarter. Advertising spend as a
percent of revenue is about 22%. Significant inventory and customer invoicing requirements in this business
drive different working capital needs compared to our other businesses.
5. All Other Businesses:
Includes a collection of businesses combined into one reportable segment based on materiality: BuildASign,
the largest of the these businesses with strong profitability and cash flow, and Printi and YSD, small early-
stage businesses operating at modest losses, by which Cimpress is expanding into new markets. During
the fourth quarter of fiscal 2022, we decided to exit our YSD business which we expect to complete in early
fiscal 2023.
BuildASign is an e-commerce provider of canvas-print wall décor,
business signage and other large-format printed products, based
primarily in Austin, Texas.
As the online printing leader in Brazil, Printi offers a superior customer
experience with transparent and attractive pricing, reliable service and
quality.
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Central Procurement
Given the scale of purchasing that happens across Cimpress’ businesses, there is significant value to
coordinating our negotiations and purchasing to gain the benefit of scale. Our central procurement team negotiates
and manages Cimpress-wide contracts for large-scale capital equipment, shipping services and major categories of
raw materials (e.g., paper, plates, ink). The Cimpress procurement team is also available on an as-requested basis
to help with procurement improvements, tools and approaches across other aspects of our businesses’ purchases.
While we are focused on seeking low total cost in our strategic sourcing efforts, we also work to ensure
quality, deliver reliability and responsible sourcing practices within our supply chain. Our efforts include the
procurement of high-quality materials and equipment that meet our strict specifications at a low total cost across a
growing number of manufacturing locations, with an increasing focus on supplier compliance with our sustainable
paper procurement policy as well as our Supplier Code of Conduct. Additionally, we work to develop and implement
logistics, warehousing, and outbound shipping strategies to provide a balance of low-cost material availability while
limiting our inventory exposure.
In fiscal year 2022, there were significant disruptions to global supply chains, impacting many industries
including ours. Having this strong central procurement team that worked together with the procurement teams in
each of our businesses benefited us during this challenging period and we believe it has enabled us to operate
more effectively and mitigate supply and cost risks relative to smaller competitors.
Technology
Our businesses typically rely on proprietary technology to attract and retain our customers, to enable
customers to create graphic designs and place orders on our websites, and to sort, aggregate and produce multiple
orders in standardized, scalable processes. Technology is core to our competitive advantage, as without it our
businesses would not be able to produce custom orders in small quantities while achieving the economics that are
more analogous to mass-produced items.
We are building and using our Mass Customization Platform (MCP), which is a cloud-based collection of
software services, APIs, web applications and related technology that can be leveraged independently or together
by our businesses and third parties to perform common tasks that are important to mass customization. Cimpress
businesses, and increasingly third-party fulfillers to our various businesses, leverage different combinations of MCP
services, depending on what capabilities they need to complement their business-specific technology. The
capabilities that are available in the MCP today include customer-facing technologies, such as ecommerce or those
that enable customers to visualize their designs on various products, as well as manufacturing, supply chain,
logistics technologies that automate various stages of the production and delivery of a product to a customer. The
benefits of the MCP include improved speed to market for new product introduction, reduction in fulfillment costs,
improvement of product delivery or geographic expansion, improved site experience, automating manual tasks and
avoidance of certain redundant costs. We believe the MCP can generate significant customer and shareholder
value from increased specialization of production facilities, aggregated scale from multiple businesses, increased
product offerings and shared technology development costs.
We intend to continue developing and enhancing our MCP-based customer-facing and manufacturing,
supply chain and logistics technologies and processes. We develop our MCP technology centrally and we also have
software and production engineering capabilities in each of our businesses. Our businesses are constantly seeking
to strengthen our manufacturing and supply chain capabilities through engineering improvements in areas like
automation, lean manufacturing, choice of equipment, product manufacturability, materials science, process control
and color control.
Each of our businesses uses a mix of proprietary and third-party technology that supports the specific
needs of that business. Their technology intensity ranges from significant to light, depending on their specific needs.
Over the past few years, an increasing number of our businesses have begun to modernize and modularize their
business-specific technology to enable them to launch more new products faster, provide a better customer
experience, more easily connect to our MCP technologies, and leverage third-party technologies where we do not
need to bear the cost of developing and maintaining proprietary technologies. For example, our businesses are
increasingly using third-party software for capabilities such as content management, multivariate testing tools and
data warehousing, which are areas that specialized best-in-class technologies are better than the proprietary
technologies they have replaced. This allows our own engineering and development talent to focus on artwork
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technologies, product information management and marketplace technologies from which we derive competitive
advantage.
In our central Cimpress Technology team and in an increasing number of our decentralized businesses, we
have adopted an agile, micro-services-based approach to technology development that enables multiple businesses
or use cases to leverage this API technology regardless of where it was originally developed. We believe this
development approach can help our businesses serve customers and scale operations more rapidly than could
have been done as an individual business outside Cimpress.
Information Privacy and Security
Each Cimpress business is responsible for ensuring that customer, company and team member information
is secure and handled in ways that are fully compliant with relevant laws and regulations. Because there are many
aspects of this topic that apply to all of our businesses, Cimpress also has a central security team that defines
security policies, deploys security controls, and provides services and embeds security into the development
processes of our businesses. This team works in partnership with each of our businesses and the corporate center
to measure security maturity and risk, and provides managed security services in a way that allows each business
to address their unique challenges, lower their cost, and become more efficient in using their resources.
Shared Talent Infrastructure
We make it easy, low cost, and efficient for Cimpress businesses to set up and grow teams in India via a
central infrastructure that provides all the local recruiting, onboarding, day-to-day administration, HR, and facilities
management to support these teams, whether for technology, graphic services, or other business functions. Most of
our businesses have established teams in India leveraging this central capability, with those teams working directly
for the respective Cimpress business. This is another example of scale advantage, albeit with talent, relative to both
traditional suppliers and smaller online competitors that we can leverage across Cimpress.
Competition
We estimate that Cimpress has a total addressable market of over $100 billion in North America and
Europe, where it is the market leader in the transformation from traditional highly fragmented off-line production to
online/mass customized approaches that deliver higher quality, faster speed and lower cost. We believe that this
market is at least $150 billion annually if you include other geographies and consumer products. Though Cimpress
is the largest business in our space, we still represent a small fraction of the overall market, and believe there is
significant room for growth over the long-term future. Additionally, as described above, through the acquisitions of
99designs and Depositphotos/VistaCreate, as well as organic investment and partnership opportunities in Vista, we
have expanded this total addressable market to now include the large market for design services and a portion of
the market for digital marketing services.
The markets for the products our businesses produce and sell are intensely competitive, highly fragmented
and geographically dispersed, with many existing and potential competitors. We have very low market share relative
to the total. Within this highly competitive context, our businesses compete on the basis of breadth and depth of
product offerings; price; convenience; quality; technology; design content, tools, and assistance; customer service;
ease of use; and production and delivery speed. It is our intention to offer a broad selection of high-quality products
as well as related services at competitive price points and in doing so, offer our customers an attractive value
proposition. Our current competition includes a combination of the following:
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traditional offline suppliers and graphic design providers
online printing and graphic design companies
office superstores, drug store chains, food retailers, and other major retailers targeting small business and
consumer markets
wholesale printers
self-service desktop design and publishing using personal computer software
email marketing services companies
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website design and hosting companies
suppliers of customized apparel, promotional products, gifts, and packaging
online photo product companies
internet retailers
online providers of custom printing services that outsource production to third party printers
providers of digital marketing such as social media and local search directories
Today’s market has evolved to be more competitive. This evolution, which has been going on for 20 years,
has led to major benefits for customers in terms of lower prices, faster lead times, and easier customer experience.
Cimpress and its businesses have proactively driven, and benefited from, this dynamic. The mass customization
business model first took off with small format products like business cards, post cards and flyers, and consumer
products like holiday cards. As the model has become better understood and more prevalent, and online advertising
approaches more common, the competition has become more intense. These types of small format products are
growing and we continue to derive significant profits from these small format products. Additionally, there are other
product areas that have only more recently begun to benefit from mass customization, such as books, catalogs,
magazines, textiles and packaging.
Social and Environmental Responsibility
Above and beyond compliance with applicable laws and regulations, we expect all parts of Cimpress to
conduct business in a socially responsible, ethical manner. Examples of these efforts are:
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Climate change: We strive to achieve net zero carbon emissions by 2040 across our entire value chain
and to achieve a 53% reduction in emissions by 2030 (compared to a 2019 baseline). Our targets have
been informed by a science-based approach and are in alignment with a 1.5oC pathway. This includes the
emissions from our supply chain (Scope 3). Through investments in energy-efficient infrastructure and
equipment, as well as renewable energy, we have achieved significant reductions in our Scope 1 and 2
emissions, and expect further reductions in the future. We have begun to examine our Scope 3 emissions,
including substrate and logistics choices, for further opportunities to reduce total emissions. We are focused
on engaging our suppliers to refine our Scope 3 data, while building internal systems and processes to
enhance our data management capabilities and improve our decision making.
Responsible forestry: We have converted the vast majority of the paper we print on in our Cimpress-
owned production facilities to FSC-certified paper (FSC® C143124, FSC® C125299), the leading certification
of responsible forestry practices. This certification confirms that the paper we print on comes from
responsibly managed forests that meet high environmental and social standards. Currently over 85% of the
paper that we print on in our facilities is FSC-certified, and we seek to move that to 100% over time. We
have expanded beyond our original product goal to also include packaging, where we target 95% of our
packaging to be either FSC-certified corrugate or containing recycled content from post-consumer sources.
We have also begun to engage our third-party suppliers to materially expand their use of responsibly
forested paper for the products that they customize on our behalf.
Plastics transition: We are committed to improving the profile of our plastic-based packaging and products
in line with the targets set by the New Plastics Economy Global Commitment, co-sponsored by the United
Nations Environment Programme. This includes a focus on reducing plastic usage, eliminating problematic
plastic, increasing recyclability, and supporting products and packaging that contain recycled materials.
Fair labor practices: We make recruiting, retention, and other performance management related decisions
based solely on merit and organizational needs and considerations, such as an individual’s ability to do their
job with excellence and in alignment with the company’s strategic and operational objectives. We do not
tolerate discrimination on any basis protected by human rights laws or anti-discrimination regulations, and
we strive to do more in this regard than the law requires. We are committed to a work environment where
team members are treated with respect and fairness, and have invested in education and awareness
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programs for team members to make further improvements in this area. We value individual differences,
unique perspectives and the distinct contributions that each one of us can make to the company.
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Team member health and safety: We require safe working conditions at all times to ensure our team
members and other parties are protected, and require legal compliance at a minimum at all times. We
require training on – and compliance with – safe work practices and procedures at all manufacturing
facilities to ensure the safety of team members and visitors to our plant floors. Given the ongoing impacts of
the COVID-19 pandemic, we continue to prioritize team member health and safety, and have implemented
measures such as remote working for members who are able to and increased safety measures at our
manufacturing and customer service centers including additional cleaning and sanitary protocols.
Ethical supply chain: It is important to us that our supply chain reflects our commitment to doing business
with the highest standards of ethics and integrity. We expect our suppliers to act in full compliance with
applicable laws, rules, and regulations. Our code of business conduct and supplier code of conduct lay out
our expectations regarding human rights, environmental standards, and safe working conditions. Each
Cimpress business is responsible to ensure its supply chain does not allow for unacceptable practices such
as environmental crimes, child labor, slavery or unsafe working conditions.
More information can be found at www.cimpress.com in our Corporate Social Responsibility section,
including links to reports and documents such as our supplier code of conduct, compliance with the UK anti-slavery
act and our supply chain transparency disclosure. To enhance transparency in the areas listed above, we are
working toward the release of our inaugural ESG report for fiscal year 2022, which we expect to publish during the
second quarter of fiscal year 2023. This will be guided by standard ESG reporting frameworks. We are monitoring
developments in the ESG reporting regulatory landscape and are building the necessary processes and capabilities
to remain in compliance as relevant regulations evolve.
Intellectual Property
We seek to protect our proprietary rights through a combination of patents, copyrights, trade secrets,
trademarks and contractual restrictions. We enter into confidentiality and proprietary rights agreements with our
employees, consultants and business partners, and control access to, and distribution of, our proprietary
information. We have registered, or applied for the registration of, a number of U.S. and international domain
names, trademarks, and copyrights. Additionally, we have filed U.S. and international patent applications for certain
of our proprietary technology.
Seasonality
Our profitability has historically been highly seasonal. Our second fiscal quarter, ending December 31,
includes the majority of the holiday shopping season and is our strongest quarter for sales of our consumer-oriented
products, such as holiday cards, calendars, canvas prints, photobooks, and personalized gifts.
Human Capital
As of June 30, 2022, we had approximately 15,000 full-time and approximately 1,000 temporary employees
worldwide.
Corporate Information
Cimpress plc was incorporated on July 5, 2017 as a private company limited by shares under the laws of
Ireland and on November 18, 2019 was re-registered as a public limited company under the laws of Ireland. On
December 3, 2019, Cimpress N.V., the former publicly traded parent company of the Cimpress group of entities,
merged with and into Cimpress plc, with Cimpress plc surviving the merger and becoming the publicly traded parent
company of the Cimpress group of entities. Cimpress N.V., the predecessor company to Cimpress plc, was
incorporated under the laws of the Netherlands on June 5, 2009. The registered office of Cimpress plc is at Building
D, Xerox Technology Park, Dundalk, Co. Louth, Ireland, and its telephone number at the registered office is
+353-42-938-8500.
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Available Information
We make available, free of charge through our investor relations website at ir.cimpress.com, the reports,
proxy statements, amendments and other materials we file with or furnish to the SEC as soon as reasonably
practicable after we electronically file or furnish such materials with or to the SEC. We are not including the
information contained on our website, or information that can be accessed by links contained on our website, as a
part of, or incorporating it by reference into, this Annual Report on Form 10-K.
Item 1A. Risk Factors
Our future results may vary materially from those contained in forward-looking statements that we make in
this Report and other filings with the SEC, press releases, communications with investors, and oral statements due
to the following important factors, among others. Our forward-looking statements in this Report and in any other
public statements we make may turn out to be wrong. These statements can be affected by, among other things,
inaccurate assumptions we might make or by known or unknown risks and uncertainties or risks we currently deem
immaterial. Consequently, no forward-looking statement can be guaranteed. We undertake no obligation to update
any forward-looking statements, whether as a result of new information, future events, or otherwise, except as
required by law.
Risks Related to Our Business and Operations
We manage our business for long-term results, and our quarterly and annual financial results often
fluctuate, which may lead to volatility in our share price.
Our revenue and operating results often vary significantly from period to period due to a number of factors,
and as a result comparing our financial results on a period-to-period basis may not be meaningful. We prioritize our
uppermost financial objective of maximizing our intrinsic value per share even at the expense of shorter-term results
and do not manage our business to maximize current period reported financial results, such as (but not limited to)
near- and mid-term revenue, operating income, net income, EPS, adjusted EBITDA, and cash flow. Many of the
factors that lead to period-to-period fluctuations are outside of our control; however, some factors are inherent in our
business strategies. Some of the specific factors that could cause our operating results to fluctuate from quarter to
quarter or year to year include among others:
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investments in our business in the current period intended to generate longer-term returns, where the costs
in the near term will not be offset by revenue or cost savings until future periods, if at all
costs to produce and deliver our products and provide our services, including the effects of inflation, the
rising costs of raw materials such as paper, and rising energy costs
supply chain challenges
the lingering effects of the COVID-19 pandemic on our customers, suppliers, business, and operations
variations in the demand for our products and services, in particular during our second fiscal quarter, which
may be driven by seasonality, performance issues in some of our businesses and markets, or other factors
currency and interest rate fluctuations, which affect our revenue, costs, and fair value of our assets and
liabilities
our hedging activity
our ability to attract and retain customers and generate purchases
shifts in revenue mix toward less profitable products and brands
the commencement or termination of agreements with our strategic partners, suppliers, and others
our ability to manage our production, fulfillment, and support operations
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our pricing and marketing strategies and those of our competitors
expenses and charges related to our compensation arrangements with our executives and employees
costs and charges resulting from litigation
changes in our effective income tax rate or tax-related benefits or costs
costs to acquire businesses or integrate our acquired businesses
financing costs
impairments of our tangible and intangible assets including goodwill
the results of our minority investments and joint ventures
Some of our expenses, such as office leases, depreciation related to previously acquired property and
equipment, and personnel costs, are relatively fixed, and we may be unable to, or may not choose to, adjust
operating expenses to offset any revenue shortfall. Accordingly, any shortfall in revenue may cause significant
variation in operating results in any period. Our operating results may sometimes be below the expectations of
public market analysts and investors, in which case the price of our ordinary shares may decline.
If we are not successful in transforming the Vista business, then we could lose market share and our
financial results could be adversely impacted.
The Vista business is undertaking a multi-year transformation, and we are investing heavily to rebuild
Vista's technology infrastructure, improve our customer experience, integrate Vista's brands into a cohesive
customer offering, and recruit new talent. These investments are intended to move the customer value proposition
from a discount-driven supplier of lower-end print products to the design and marketing partner for small business. If
our investments do not have the effects we expect, the new technology infrastructure does not perform well or is not
as transformational as we expect, we fail to execute well on the evolution of our customer value proposition and
brand, or the transformation is otherwise unsuccessful, then the number of new and repeat customers we attract
may not grow or could decline, Vista's reputation and brand could be damaged, and our revenue and earnings could
fail to grow or could decline.
We may not succeed in promoting, strengthening, and evolving our brands, which could prevent us from
acquiring new customers and increasing revenues.
A primary component of our business strategy is to promote and strengthen our brands to attract new and
repeat customers, and we face significant competition from other companies in our markets who also seek to
establish strong brands. To promote and strengthen our brands, we must incur substantial marketing expenses and
establish a relationship of trust with our customers by providing a high-quality customer experience, which requires
us to invest substantial amounts of our resources.
Our global operations, decentralized organizational structure, and expansion place a significant strain on
our management, employees, facilities, and other resources and subject us to additional risks.
We are a global company with production facilities, offices, employees, and localized websites in many
countries across six continents, and we manage our businesses and operations in a decentralized, autonomous
manner. We are subject to a number of risks and challenges that relate to our global operations, decentralization,
expansion, and complexity including, among others:
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difficulty managing operations in, and communications among, multiple businesses, locations, and time
zones
challenges of ensuring speed, nimbleness, and entrepreneurialism in a large and complex organization
difficulty complying with multiple tax laws, treaties, and regulations and limiting our exposure to onerous or
unanticipated taxes, duties, tariffs, and other costs
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our failure to improve and adapt our financial and operational controls and systems to manage our
decentralized businesses and comply with our obligations as a public company
the challenge of complying with disparate laws in multiple countries, such as local regulations that may
impair our ability to conduct our business as planned, protectionist laws that favor local businesses, and
restrictions imposed by local labor laws
the challenge of maintaining management's focus on our strategic and operational priorities and minimizing
lower priority distractions
disruptions caused by political and social instability that may occur in some countries
exposure to corrupt business practices that may be common in some countries or in some sales channels
and markets, such as bribery or the willful infringement of intellectual property rights
difficulty repatriating cash from some countries
difficulty importing and exporting our products across country borders and difficulty complying with customs
regulations in the many countries where we sell products
disruptions or cessation of important components of our international supply chain
failure of local laws to provide a sufficient degree of protection against infringement of our intellectual
property
In addition, we are exposed to fluctuations in currency exchange rates that may impact items such as the
translation of our revenue and expenses, remeasurement of our intercompany balances, and the value of our cash
and cash equivalents and other assets and liabilities denominated in currencies other than the U.S. dollar, our
reporting currency. The hedging activities we engage in may not mitigate the net impact of currency exchange rate
fluctuations, and our financial results may differ materially from expectations as a result of such fluctuations.
Failure to protect our information systems and the confidential information of our customers, employees,
and business partners against security breaches or thefts could damage our reputation and brands, subject
us to litigation and enforcement actions, and substantially harm our business and results of operations.
Our business involves the receipt, storage, and transmission of customers' personal and payment
information, as well as confidential information about our business, employees, suppliers, and business partners,
some of which is entrusted to third-party service providers, partners, and vendors. We and third parties with which
we share information have experienced, and will continue to experience, cyberattacks and other malicious activity
that may include physical and electronic break-ins, computer viruses, ransomware attacks, and phishing and other
social engineering scams, among other threats, and our vulnerabilities may be heightened by our decentralized
operating structure and many of our employees working remotely. As security threats evolve and become more
sophisticated and more difficult to detect and defend against, a hacker or thief may defeat our security measures, or
those of our third-party service provider, partner, or vendor, and obtain confidential or personal information. We or
the third party may not discover the security breach and theft of information for a significant period of time after the
breach occurs. We may need to significantly increase the resources we expend to protect against security breaches
and thefts of data or to address problems caused by breaches or thefts, and we may not be able to anticipate cyber
attacks or implement adequate preventative measures. Any compromise or breach of our information systems or
the information systems of third parties with which we share information could, among other things:
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damage our reputation and brands
expose us to losses, costs, litigation, enforcement actions, and possible liability
result in a failure to comply with legal and industry privacy regulations and standards
lead to the misuse of our and our customers' and employees' confidential or personal information
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cause interruptions in our operations
cause us to lose revenue if existing and potential customers believe that their personal and payment
information may not be safe with us
We are subject to the laws of many states, countries, and regions and industry guidelines and principles
governing the collection, use, retention, disclosure, sharing, and security of data that we receive from and about our
customers and employees. Any failure or perceived failure by us to comply with any of these laws, guidelines, or
principles could result in actions against us by governmental entities or others, a loss of customer confidence, and
damage to our brands. In addition, the regulatory landscape is constantly changing, as various regulatory bodies
throughout the world enact new laws concerning privacy, data retention, data transfer and data protection.
Complying with these varying and changing requirements is challenging, especially for our smaller, more thinly
staffed businesses, and could cause us to incur substantial costs or require us to change our business practices in
a manner adverse to our business and operating results.
Acquisitions and strategic investments may be disruptive to our business, may fail to achieve our goals,
and can negatively impact our financial results.
An important way in which we pursue our strategy is to selectively acquire businesses, technologies, and
services and make minority investments in businesses and joint ventures. The time and expense associated with
finding suitable businesses, technologies, or services to acquire or invest in can be disruptive to our ongoing
business and divert our management's attention. In addition, we have needed in the past, and may need in the
future, to seek financing for acquisitions and investments, which may not be available on terms that are favorable to
us, or at all, and can cause dilution to our shareholders, cause us to incur additional debt, or subject us to
covenants restricting the activities we may undertake.
An acquisition, minority investment, or joint venture may fail to achieve our goals and expectations and may
have a negative impact on our business and financial results in a number of ways including the following:
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The business we acquired or invested in may not perform or fit with our strategy as well as we expected.
Acquisitions and minority investments can be costly and can result in increased expenses including
impairments of goodwill and intangible asserts if financial goals are not achieved, assumptions of contingent
or unanticipated liabilities, amortization of certain acquired assets, and increased tax costs. In addition, we
may overpay for acquired businesses.
The management of our acquired businesses, minority investments, and joint ventures may be more
expensive or may take more resources than we expected. In addition, continuing to devote resources to a
struggling business can take resources away from other investment areas and priorities.
• We may not be able to retain customers and key employees of the acquired businesses. In particular, it can
be challenging to motivate the founders who built a business to continue to lead the business after they sell
it to us.
The accounting for our acquisitions and minority investments requires us to make significant estimates,
judgments, and assumptions that can change from period to period, based in part on factors outside of our control,
which can create volatility in our financial results. For example, we often pay a portion of the purchase price for our
acquisitions in the form of an earn out based on performance targets for the acquired companies or enter into
obligations or options to purchase noncontrolling interests in our acquired companies or minority investments, which
can be difficult to forecast. If in the future our assumptions change and we determine that higher levels of
achievement are likely under our earn outs or future purchase obligations, we will need to pay and record additional
amounts to reflect the increased purchase price. These additional amounts could be significant and could adversely
impact our results of operations.
Furthermore, provisions for future payments to sellers based on the performance or valuation of the
acquired businesses, such as earn outs and options to purchase noncontrolling interests, can lead to disputes with
the sellers about the achievement of the performance targets or valuation or create inadvertent incentives for the
acquired company's management to take short-term actions designed to maximize the payments they receive
instead of benefiting the business. In addition, strong performance of the underlying business could result in
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material payments pursuant to earn-out provisions or future purchase obligations that may or may not reflect the fair
market value of the asset at that time.
If we are unable to attract new and repeat customers in a cost-effective manner, our business and results of
operations could be harmed.
Our various businesses rely on a variety of marketing methods to attract new and repeat customers
including drawing visitors to our websites, promoting our products and services through search engines such as
Google and Bing, email, direct mail, advertising banners and other online links, broadcast media and streaming
platforms, social media platforms, and telesales. If search engines or social media platforms modify their algorithms
or terminate their relationships with us, if fewer customers click through to our websites, if our direct mail marketing
campaigns are not effective, or if the costs of attracting customers using any of our current methods significantly
increase, then our ability to efficiently attract new and repeat customers would be reduced, our revenue and net
income could decline, and our business and results of operations would be harmed.
Developing and deploying our mass customization platform is costly and resource-intensive, and we may
not realize all of the anticipated benefits of the platform.
A key component of our strategy is the development and deployment of a mass customization platform,
which is a cloud-based collection of software services, APIs, web applications and related technology offerings that
can be leveraged independently or together by our businesses and third parties to perform common tasks that are
important to mass customization. The process of developing new technology is complex, costly, and uncertain and
requires us to commit significant resources before knowing whether our businesses will adopt components of our
mass customization platform or whether the platform will make us more effective and competitive. As a result, there
can be no assurance that we will find new capabilities to add to the growing set of technologies that make up our
platform, that our diverse businesses will realize value from the platform, or that we will realize expected returns on
the capital expended to develop the platform.
Seasonal fluctuations in our business place a strain on our operations and resources.
Our profitability has historically been highly seasonal. Our second fiscal quarter, which ends on December
31, includes the majority of the holiday shopping season and accounts for a disproportionately high portion of our
earnings for the year, primarily due to higher sales of home and family products such as holiday cards, calendars,
photo books, and personalized gifts. In addition, our National Pen business has historically generated nearly all of
its profits during the second fiscal quarter. Lower than expected sales during the second quarter have a
disproportionately large impact on our operating results and financial condition for the full fiscal year. In addition, if
our manufacturing and other operations are unable to keep up with the high volume of orders during our second
fiscal quarter or we experience inefficiencies in our production or disruptions of our supply chains, then our costs
may be significantly higher, and we and our customers can experience delays in order fulfillment and delivery and
other disruptions.
Our businesses face risks related to interruption of our operations and supply chains and lack of
redundancy.
Our businesses' production facilities, websites, infrastructure, supply chain, customer service centers, and
operations may be vulnerable to interruptions, and we do not have redundancies or alternatives in all cases to carry
on these operations in the event of an interruption. In addition, because our businesses are dependent in part on
third parties for certain aspects of our communications and production systems, we may not be able to remedy
interruptions to these systems in a timely manner or at all due to factors outside of our control. Some of the events
that could cause interruptions in our businesses' operations, systems, or supply chains are the following, among
others:
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fire, natural disaster, or extreme weather, which could be exacerbated by climate change
pandemic or other public health crisis
cyber security attacks
labor strike, work stoppage, or other issues with our workforce
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political instability or acts of terrorism or war
power loss or telecommunication failure
attacks on our external websites or internal network by hackers or other malicious parties
inadequate capacity in our systems and infrastructure to cope with periods of high volume and demand
Any interruptions to our systems or operations could result in lost revenue, increased costs, negative
publicity, damage to our reputations and brands, and an adverse effect on our business and results of operations.
Building redundancies into our infrastructure, systems, and supply chain to mitigate these risks may require us to
commit substantial financial, operational, and technical resources.
Failure to meet our customers' price expectations would adversely affect our business and results of
operations.
Demand for our products and services is sensitive to price for almost all of our businesses, and changes in
our pricing strategies, including shipping pricing, have had a significant impact on the numbers of customers and
orders in some regions, which in turn affects our revenue, profitability, and results of operations. Many factors can
significantly impact our pricing and marketing strategies, including the costs of running our business, the costs of
raw materials, our competitors' pricing and marketing strategies, and the effects of inflation. If we fail to meet our
customers' price expectations, our business and results of operations may suffer.
We are subject to safety, health, and environmental laws and regulations, which could result in liabilities,
cost increases, or restrictions on our operations.
We are subject to a variety of safety, health and environmental, or SHE, laws and regulations in each of the
jurisdictions in which we operate. SHE laws and regulations frequently change and evolve, including the addition of
new SHE regulations, especially with respect to climate change. These laws and regulations govern, among other
things, air emissions, wastewater discharges, the storage, handling and disposal of hazardous and other regulated
substances and wastes, soil and groundwater contamination, and employee health and safety. We use regulated
substances such as inks and solvents, and generate air emissions and other discharges at our manufacturing
facilities, and some of our facilities are required to hold environmental permits. If we fail to comply with existing or
new SHE requirements, we may be subject to monetary fines, civil or criminal sanctions, third-party claims, or the
limitation or suspension of our operations. In addition, if we are found to be responsible for hazardous substances at
any location (including, for example, offsite waste disposal facilities or facilities at which we formerly operated), we
may be responsible for the cost of cleaning up contamination, regardless of fault, as well as for claims for harm to
health or property or for natural resource damages arising out of contamination or exposure to hazardous
substances.
Complying with existing SHE laws and regulations is costly, and our costs could significantly increase as
new SHE requirements are added and existing requirements become more stringent. In some cases we pursue
self-imposed socially responsible policies that are more stringent than is typically required by laws and regulations,
for instance in the areas of worker safety, team member social benefits, and environmental protection such as
carbon reduction initiatives. The costs of this added SHE effort are often substantial and could grow over time.
The failure of our business partners to use legal and ethical business practices could negatively impact our
business.
We contract with multiple suppliers, fulfillers, merchants, and other business partners in many jurisdictions
worldwide. We require our business partners to operate in compliance with all applicable laws, including those
regarding corruption, working conditions, employment practices, safety and health, and environmental compliance,
but we cannot control their business practices. We may not be able to adequately vet, monitor, and audit our many
business partners (or their suppliers) throughout the world, and our decentralized structure heightens this risk, as
not all of our businesses have equal resources to manage their business partners. If any of them violates labor,
environmental, or other laws or implements business practices that are regarded as unethical or inconsistent with
our values, our reputation could be severely damaged, and our supply chain and order fulfillment process could be
interrupted, which could harm our sales and results of operations.
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If we are unable to protect our intellectual property rights, our reputation and brands could be damaged,
and others may be able to use our technology, which could substantially harm our business and financial
results.
We rely on a combination of patents, trademarks, trade secrets, copyrights, and contractual restrictions to
protect our intellectual property, but these protective measures afford only limited protection. Despite our efforts to
protect our proprietary rights, unauthorized parties may be able to copy or use technology or information that we
consider proprietary. There can be no guarantee that any of our pending patent applications or continuation patent
applications will be granted, and from time to time we face infringement, invalidity, intellectual property ownership, or
similar claims brought by third parties with respect to our patents. In addition, despite our trademark registrations
throughout the world, our competitors or other entities may adopt names, marks, or domain names similar to ours,
thereby impeding our ability to build brand identity and possibly leading to customer confusion. Enforcing our
intellectual property rights can be extremely costly, and a failure to protect or enforce these rights could damage our
reputation and brands and substantially harm our business and financial results.
Intellectual property disputes and litigation are costly and could cause us to lose our exclusive rights,
subject us to liability, or require us to stop some of our business activities.
From time to time, we receive claims from third parties that we infringe their intellectual property rights, that
we are required to enter into patent licenses covering aspects of the technology we use in our business, or that we
improperly obtained or used their confidential or proprietary information. Any litigation, settlement, license, or other
proceeding relating to intellectual property rights, even if we settle it or it is resolved in our favor, could be costly,
divert our management's efforts from managing and growing our business, and create uncertainties that may make
it more difficult to run our operations. If any parties successfully claim that we infringe their intellectual property
rights, we might be forced to pay significant damages and attorney's fees, and we could be restricted from using
certain technologies important to the operation of our business.
Our business is dependent on the Internet, and unfavorable changes in government regulation of the
Internet, e-commerce, and email marketing could substantially harm our business and financial results.
Because most of our businesses depend primarily on the Internet for our sales, laws specifically governing
the Internet, e-commerce, and email marketing may have a greater impact on our operations than other more
traditional businesses. Existing and future laws, such as laws covering pricing, customs, privacy, consumer
protection, or commercial email, may impede the growth of e-commerce and our ability to compete with traditional
“bricks and mortar” retailers. Existing and future laws or unfavorable changes or interpretations of these laws could
substantially harm our business and financial results.
If we were required to screen the content that our customers incorporate into our products, our costs could
significantly increase, which would harm our results of operations.
Because of our focus on automation and high volumes, many of our sales do not involve any human-based
review of content. Although our websites' terms of use specifically require customers to make representations about
the legality and ownership of the content they upload for production, there is a risk that a customer may supply an
image or other content for an order we produce that is the property of another party used without permission, that
infringes the copyright or trademark of another party, or that would be considered to be defamatory, hateful,
obscene, or otherwise objectionable or illegal under the laws of the jurisdiction(s) where that customer lives or
where we operate. If the machine-learning tools we have developed to aid our content review fail to find instances of
intellectual property infringement or objectionable or illegal content in customer orders, we could be required to
increase the amount of manual screening we perform, which could significantly increase our costs, and we could be
required to pay substantial penalties or monetary damages for any failure in our screening process.
Risks Related to Our Industry and Macroeconomic Conditions
Rising costs could negatively affect our business and financial results.
Due to supply chain challenges and other inflationary pressures, each of our reportable segments is
experiencing material cost increases in a number of areas, including energy, product substrates like paper,
production materials like aluminum plates, freight and shipping charges, and employee compensation due to a more
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competitive labor market, where we are seeing rapidly rising costs for talent at all levels and in most countries. We
cannot predict whether costs will continue to increase or by how much. We have not been able to fully mitigate
these cost increases through price increases. If our costs remain elevated or continue to increase, there could be
further negative impacts to our financial results, and increasing our prices in response to increased costs could
negatively affect demand for our products and services.
Supply chain disruptions could impair our ability to source raw materials.
A number of factors are currently impacting, or could in the future impact, the availability of materials we use
in our business, including the lingering effects of the COVID-19 pandemic, rising energy prices and other inflationary
pressures, rationing measures, labor shortages, civil unrest and war, and climate change. Our inability to source
sufficient materials for our business in a timely manner, or at all, would significantly impair our ability to fulfill
customer orders and sell our products, which would reduce our revenue and harm our financial results.
Large-scale events like the COVID-19 pandemic, future pandemics, climate change, and war can materially
negatively impact our operations, financial results, customers, markets, suppliers, and employees.
We continue to see volatility in our markets and operations due to the COVID-19 pandemic, and we cannot
predict what new variants of the COVID-19 virus may emerge, whether there will be additional waves of increased
infection rates, how long the pandemic's impacts on economic activity and our business, operations, suppliers, and
markets will continue, or whether the pandemic will lead to a prolonged economic downturn. In addition, if another
pandemic or other event occurs that limits commerce on a large scale, such as climate change, war, or civil unrest,
our business, operations, supply chains, and financial results could be materially impacted.
We need to hire and retain talented personnel in key roles in order to be successful, and we face intense
competition for talent.
If we are unable to recruit, retain, and motivate our employees in senior management and key roles such as
technology, marketing, data science, and production, then we may not be able to execute on our strategy and grow
our business as planned. We are seeing increased competition for talent at all levels that is making it more difficult
for us to retain the employees we have and to recruit new employees, and our current management and employees
may cease their employment with us at any time with minimal advance notice. This retention risk is particularly
heightened with respect to the leaders of certain of our businesses who hold redeemable non-controlling interests
that have significantly increased in value, as described in Note 14 that accompanies the consolidated financial
statements included in this Report. If those leaders redeem their interests and receive a substantial payout, it may
be challenging to retain and motivate them to continue running their businesses.
We face intense competition, and our competition may continue to increase.
The markets for our products and services are intensely competitive, highly fragmented, and geographically
dispersed. The competitive landscape for e-commerce companies and the mass customization market continues to
change as new e-commerce businesses are introduced, established e-commerce businesses enter the mass
customization market, and traditional “brick and mortar” businesses establish an online presence. Competition may
result in price pressure, increased advertising expense, reduced profit margins, and loss of market share and brand
recognition, any of which could substantially harm our business and financial results. Some of our current and
potential competitors have advantages over us, including longer operating histories, greater brand recognition or
loyalty, more focus on a given subset of our business, significantly greater financial, marketing, and other resources,
or willingness to operate at a loss while building market share.
A major economic downturn could negatively affect our business and financial results.
It is possible that some or all of our markets could be entering a recession or other sustained market
downturn, which could negatively impact demand for our products and services. Although the economic downturns
we experienced in the past have often precipitated increases in the number of small businesses, which has in turn
increased demand for our products, an inflation-fueled downturn could be different, for example if potential
customers cannot afford our products and rely more on free social media channels to market themselves instead of
the products and services we offer. If demand for our products and services decreases, our business and financial
results could be harmed.
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Our failure or perceived failure to meet ESG expectations could negatively affect our business, reputation,
and financial results.
We face risks arising from the increased focus by our customers, investors, and regulators on
environmental, social, and governance criteria, including with respect to climate change, sustainability, pollution,
labor practices, the diversity of our management and directors, and the composition of our Board. We may face
increased pressure to make commitments, set targets, or establish additional goals and take actions to meet them
beyond our current plans, which may require significant resources and expenditures. If customers and potential
customers are dissatisfied with our ESG goals or our progress towards meeting them, then they may choose not to
buy our products and services, which could lead to reduced revenue.
Risks Related to Our Corporate and Capital Structures
Our credit facility and the indentures that govern our notes restrict our current and future operations,
particularly our ability to respond to changes or to take certain actions.
Our senior secured credit facility that governs our Term Loan B and revolving credit and the indenture that
governs our 7.0% senior unsecured notes due 2026, which we collectively refer to as our debt documents, contain a
number of restrictive covenants that impose significant operating and financial restrictions on us and may limit how
we conduct our business, execute our strategy, compete effectively, or take advantage of new business
opportunities, including restrictions on our ability to:
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incur additional indebtedness, guarantee indebtedness, and incur liens
• pay dividends or make other distributions or repurchase or redeem capital stock
• prepay, redeem, or repurchase subordinated debt
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issue certain preferred stock or similar redeemable equity securities
• make loans and investments
• sell assets
• enter into transactions with affiliates
• alter the businesses we conduct
• enter into agreements restricting our subsidiaries’ ability to pay dividends
• consolidate, merge, or sell all or substantially all of our assets
A default under any of our debt documents would have a material, adverse effect on our business.
Our failure to make scheduled payments on our debt or our breach of the covenants or restrictions under
any of our debt documents could result in an event of default under the applicable indebtedness. Such a default
would have a material, adverse effect on our business and financial condition, including the following, among
others:
• Our lenders could declare all outstanding principal and interest to be due and payable, and we and our
subsidiaries may not have sufficient assets to repay that indebtedness.
• Our secured lenders could foreclose against the assets securing their borrowings.
• Our lenders under our revolving credit facility could terminate all commitments to extend further credit under
that facility.
• We could be forced into bankruptcy or liquidation.
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Our material indebtedness and interest expense could adversely affect our financial condition.
As of June 30, 2022, our total debt was $1,705 million. Our level of debt could have important
consequences, including the following:
• making it more difficult for us to satisfy our obligations with respect to our debt
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limiting our ability to obtain additional financing to fund future working capital, capital expenditures,
acquisitions, or other general corporate requirements
requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other
purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures,
acquisitions, and other general corporate purposes
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increasing our vulnerability to general adverse economic and industry conditions
• exposing us to the risk of increased interest rates as some of our borrowings, including borrowings under
our credit facility, are at variable rates of interest
• placing us at a disadvantage compared to other, less leveraged competitors
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increasing our cost of borrowing
Subject to the limits contained in our debt documents, we may be able to incur substantial additional debt
from time to time, and if we do so, the risks related to our level of debt could intensify.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face
substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to
dispose of material assets or operations, seek additional debt or equity capital, or restructure or refinance our
indebtedness. We may not be able to effect any such alternative measures, if necessary, on commercially
reasonable terms or at all, and if we cannot make scheduled payments on our debt, we will be in default.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service
obligations to increase significantly.
Borrowings under our credit facility are at variable rates of interest and expose us to interest rate risk, and
any interest rate swaps we enter into in order to reduce interest rate volatility may not fully mitigate our interest rate
risk. If interest rates were to increase, our debt service obligations on the variable rate indebtedness would increase
even if the amount borrowed remained the same, and our net income and cash flows, including cash available for
servicing our indebtedness, will correspondingly decrease. As of June 30, 2022, a hypothetical 100 basis point
increase in rates, inclusive of our outstanding interest rate swaps, would result in an increase of interest expense of
approximately $6.4 million over the next 12 months.
Challenges by various tax authorities to our international structure could, if successful, increase our
effective tax rate and adversely affect our earnings.
We are an Irish public limited company that operates through various subsidiaries in a number of countries
throughout the world. Consequently, we are subject to tax laws, treaties and regulations in the countries in which we
operate, and these laws and treaties are subject to interpretation. From time to time, we are subject to tax audits,
and the tax authorities in these countries could claim that a greater portion of the income of the Cimpress plc group
should be subject to income or other tax in their respective jurisdictions, which could result in an increase to our
effective tax rate and adversely affect our results of operations.
Changes in tax laws, regulations and treaties could affect our tax rate and our results of operations.
A change in tax laws, treaties or regulations, or their interpretation, of any country in which we operate could
have a materially adverse impact on us, including increasing our tax burden, increasing costs of our tax compliance
or otherwise adversely affecting our financial condition, results of operations and cash flows. There are currently
multiple initiatives for comprehensive tax reform underway in key jurisdictions where we have operations, and we
21
cannot predict whether any other specific legislation will be enacted or the terms of any such legislation. In addition,
the application of sales, value added, or other consumption taxes to e-commerce businesses such as Cimpress is a
complex and evolving issue. If a government entity claims that we should have been collecting such taxes on the
sale of our products in a jurisdiction where we have not been doing so, then we could incur substantial tax liabilities
for past sales.
Our intercompany arrangements may be challenged, which could result in higher taxes or penalties and an
adverse effect on our earnings.
We operate pursuant to written transfer pricing agreements among Cimpress plc and its subsidiaries, which
establish transfer prices for various services performed by our subsidiaries for other Cimpress group companies. If
two or more affiliated companies are located in different countries, the tax laws or regulations of each country
generally will require that transfer prices be consistent with those between unrelated companies dealing at arm's
length. With the exception of certain jurisdictions where we have obtained rulings or advance pricing agreements,
our transfer pricing arrangements are not binding on applicable tax authorities. If tax authorities in any country were
successful in challenging our transfer prices as not reflecting arm's length transactions, they could require us to
adjust our transfer prices and thereby reallocate our income to reflect these revised transfer prices. A reallocation of
taxable income from a lower tax jurisdiction to a higher tax jurisdiction would result in a higher tax liability to us. In
addition, if the country from which the income is reallocated does not agree with the reallocation, both countries
could tax the same income, resulting in double taxation.
Because of our corporate structure, our shareholders may find it difficult to enforce claims based on United
States federal or state laws, including securities liabilities, against us or our management team.
We are incorporated under the laws of Ireland. There can be no assurance that the courts of Ireland would
recognize or enforce judgments of U.S. courts obtained against us or our directors or officers based on the civil
liabilities provisions of the U.S. federal or state securities laws or that the courts of Ireland would hear actions
against us or those persons based on those laws. There is currently no treaty between the U.S. and Ireland
providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters, and Irish
common law rules govern the process by which a U.S. judgment will be enforced in Ireland. Therefore, a final
judgment for the payment of money rendered by any U.S. federal or state court based on civil liability, whether or
not based solely on U.S. federal or state securities laws, would not automatically or necessarily be enforceable in
Ireland.
In addition, because most of our assets are located outside of the United States and some of our directors
and management reside outside of the United States, it could be difficult for investors to place a lien on our assets
or those of our directors and officers in connection with a claim of liability under U.S. laws. As a result, it may be
difficult for investors to enforce U.S. court judgments or rights predicated upon U.S. laws against us or our
management team outside of the United States.
Our hedging activity could negatively impact our results of operations, cash flows, or leverage.
We have entered into derivatives to manage our exposure to interest rate and currency movements. If we
do not accurately forecast our results of operations, execute contracts that do not effectively mitigate our economic
exposure to interest rates and currency rates, elect to not apply hedge accounting, or fail to comply with the
complex accounting requirements for hedging, our results of operations and cash flows could be volatile, as well as
negatively impacted. Also, our hedging objectives may be targeted at improving our non-GAAP financial metrics,
which could result in increased volatility in our GAAP results. Since some of our hedging activity addresses long-
term exposures, such as our net investment in our subsidiaries, the gains or losses on those hedges could be
recognized before the offsetting exposure materializes to offset them, potentially causing volatility in our cash or
debt balances and therefore our leverage.
We may be treated as a passive foreign investment company for United States tax purposes, which may
subject United States shareholders to adverse tax consequences.
If our passive income, or our assets that produce passive income, exceed levels provided by law for any
taxable year, we may be characterized as a passive foreign investment company, or a PFIC, for United States
federal income tax purposes. If we are treated as a PFIC, U.S. holders of our ordinary shares would be subject to a
22
disadvantageous United States federal income tax regime with respect to the distributions they receive and the
gain, if any, they derive from the sale or other disposition of their ordinary shares.
We believe that we were not a PFIC for the tax year ended June 30, 2022 and we expect that we will not
become a PFIC in the foreseeable future. However, whether we are treated as a PFIC depends on questions of fact
as to our assets and revenues that can only be determined at the end of each tax year. Accordingly, we cannot be
certain that we will not be treated as a PFIC in future years.
If a United States shareholder owns 10% or more of our ordinary shares, it may be subject to increased
United States taxation under the "controlled foreign corporation" rules. Additionally, this may negatively
impact the demand for our ordinary shares.
If a United States shareholder owns 10% or more of our ordinary shares, it may be subject to increased
United States federal income taxation (and possibly state income taxation) under the "controlled foreign corporation"
rules. In general, if a U.S. person owns (or is deemed to own) at least 10% of the voting power or value of a non-
U.S. corporation, or "10% U.S. Shareholder," and if such non-U.S. corporation is a "controlled foreign corporation,"
or "CFC," then such 10% U.S. Shareholder who owns (or is deemed to own) shares in the CFC on the last day of
the CFC's taxable year must include in its gross income for United States federal income tax (and possibly state
income tax) purposes its pro rata share of the CFC's "subpart F income," even if the subpart F income is not
distributed. In addition, a 10% U.S. Shareholder's pro rata share of other income of a CFC, even if not distributed,
might also need to be included in a 10% U.S. Shareholder’s gross income for United States federal income tax (and
possibly state income tax) purposes under the "global intangible low-taxed income," or "GILTI," provisions of the
U.S. tax law. In general, a non-U.S. corporation is considered a CFC if one or more 10% U.S. Shareholders
together own more than 50% of the voting power or value of the corporation on any day during the taxable year of
the corporation. "Subpart F income" consists of, among other things, certain types of dividends, interest, rents,
royalties, gains, and certain types of income from services and personal property sales.
The rules for determining ownership for purposes of determining 10% U.S. Shareholder and CFC status are
complicated, depend on the particular facts relating to each investor, and are not necessarily the same as the rules
for determining beneficial ownership for SEC reporting purposes. For taxable years in which we are a CFC, each of
our 10% U.S. Shareholders will be required to include in its gross income for United States federal income tax (and
possibly state income tax) purposes its pro rata share of our "subpart F income," even if the subpart F income is not
distributed by us, and might also be required to include its pro rata share of other income of ours, even if not
distributed by us, under the GILTI provisions of the U.S. tax law. We currently do not believe we are a CFC.
However, whether we are treated as a CFC can be affected by, among other things, facts as to our share ownership
that may change. Accordingly, we cannot be certain that we will not be treated as a CFC in future years.
The risk of being subject to increased taxation as a CFC may deter our current shareholders from acquiring
additional ordinary shares or new shareholders from establishing a position in our ordinary shares. Either of these
scenarios could impact the demand for, and value of, our ordinary shares.
The ownership of our ordinary shares is highly concentrated, which could cause or exacerbate volatility in
our share price.
Approximately 75% of our ordinary shares are held by our top 10 shareholders, and we may repurchase
shares in the future (subject to the restrictions in our debt documents), which could further increase the
concentration of our share ownership. Because of this reduced liquidity, the trading of relatively small quantities of
shares by our shareholders could disproportionately influence the price of those shares in either direction. The price
for our shares could, for example, decline precipitously if a large number of our ordinary shares were sold on the
market without commensurate demand, as compared to a company with greater trading liquidity that could better
absorb those sales without adverse impact on its share price.
Item 1B. Unresolved Staff Comments
None.
23
Item 2. Properties
We own real property including the following manufacturing operations that provide support across our
businesses:
•
•
•
•
•
•
A 582,000 square foot facility located near Windsor, Ontario, Canada that primarily services our Vista
business.
A 492,000 square foot facility located in Shelbyville, Tennessee, USA, that primarily services our National
Pen business.
A 362,000 square foot facility located in Venlo, the Netherlands that primarily services our Vista business.
A 130,000 square foot facility located in Kisarazu, Japan that primarily services our Vista and National Pen
businesses in the Japanese market. During the fourth quarter of fiscal year 2022, we made the decision to
exit our operations in Japan. We expect to wind down operations and prepare the facility for sale in early
fiscal year 2023. Refer to Item 8 of Part II, "Financial Statements and Supplementary Data - Note 18 -
Restructuring Charges" for additional details.
A 124,000 square foot facility located in Deer Park, Australia that primarily services our Vista business.
A 97,000 square foot facility, located near Montpellier, France that primarily services The Print Group
businesses.
As of June 30, 2022, a summary of our currently occupied leased spaces is as follows:
Business Segment (1)
Square Feet
Type
Lease Expirations
Vista (2)
PrintBrothers
The Print Group
National Pen (3)
All Other
Businesses
Other
___________________
575,446
Technology development, marketing, customer
service, manufacturing and administrative
307,253 Technology development, marketing, customer
service, manufacturing and administrative
445,497 Technology development, marketing, customer
service, manufacturing and administrative
693,828 Marketing, customer service, manufacturing and
administrative
538,244
Technology development, marketing, customer
service, manufacturing and administrative
December 2022 - September 2026
July 2022 - September 2031
August 2022 - June 2034
December 2022 - March 2032
March 2023 - November 2028
550 Corporate strategy and technology development
December 2022
(1) Many of our leased properties are utilized by multiple business segments, but each have been assigned to the segment that occupies the
majority of our leased space.
(2) The decrease in Vista's leased space during the current fiscal year was largely driven by the purchase and sale of a previously leased facility
as discussed in Item 8 of Part II, "Financial Statements and Supplementary Data - Note 16 - Leases".
(3) The increase in National Pen's leased space during the current fiscal year is primarily driven by a decision made to move our European
production operations from Ireland to the Czech Republic which has caused us to currently occupy manufacturing space in both locations
during this transition period. Refer to Item 8 of Part II, "Financial Statements and Supplementary Data - Note 18 - Restructuring" for additional
details.
We believe that the total space available to us in the facilities we own or lease, and space that is obtainable
by us on commercially reasonable terms, will meet our needs for the foreseeable future.
Item 3. Legal Proceedings
The information required by this item is incorporated by reference to the information set forth in Item 8 of
Part II, “Financial Statements and Supplementary Data — Note 17 — Commitments and Contingencies,” in the
accompanying notes to the consolidated financial statements included in this Report.
Item 4. Mine Safety Disclosures
None.
24
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
PART II
The ordinary shares of Cimpress plc are traded on the NASDAQ Global Select Market (the "NASDAQ")
under the symbol “CMPR.” As of July 31, 2022, there were six holders of record of our ordinary shares, although
there is a much larger number of beneficial owners.
Dividends and Repurchases
We have never paid or declared any cash dividends on our ordinary shares, and we do not anticipate
paying any cash dividends in the foreseeable future. We did not repurchase any of our ordinary shares during the
year ended June 30, 2022.
Performance Graph
The following graph compares the cumulative total return to shareholders of Cimpress plc ordinary shares
relative to the cumulative total returns of the NASDAQ Composite index and the Research Data Group (RDG)
Internet Composite index. An investment of $100 (with reinvestment of all dividends) is assumed to have been
made in our ordinary shares and in each of the indexes on June 30, 2017 and the relative performance of each
investment is tracked through June 30, 2022.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
Among Cimpress plc, the NASDAQ Composite Index
and the RDG Internet Composite Index
2017
2018
2019
2020
2021
2022
Cimpress plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 102.22 $ 156.75 $ 98.28 $ 82.55 $ 117.23 $ 41.15
NASDAQ Composite . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
188.07
RDG Internet Composite . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
141.56
170.91
201.56
128.30
139.43
216.96
271.11
315.10
385.88
128.30
196.44
The share price performance included in this graph is not necessarily indicative of future share price
performance.
Item 6. [Reserved]
Not applicable.
25
Cimpress plcNASDAQ CompositeRDG Internet Composite6/176/186/196/206/216/22$0$50$100$150$200$250$300 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Report contains forward-looking statements that involve risks and uncertainties. The statements
contained in this Report that are not purely historical are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not
limited to our statements about the anticipated growth and development of our businesses and financial results, the
persistence of higher costs and supply chain disruptions and the expected impacts of those costs and disruptions
on our business; our expectations with respect to Vista's brand evolution and design service offerings; our
expectations with respect to National Pen's move from Ireland to the Czech Republic; the planned divestiture of our
YSD business; our estimates and expectations with respect to our market opportunities, the size and development
of our markets, and our market share; our expectations with respect to our mass customization platform, including
our competitive advantage; our social and environmental goals; sufficiency of our liquidity position; legal
proceedings; and sufficiency of our tax reserves and the anticipated benefits of Swiss tax reform. Without limiting
the foregoing, the words “may,” “should,” “could,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,”
“predict,” “designed,” “potential,” “continue,” “target,” “seek” and similar expressions are intended to identify forward-
looking statements. All forward-looking statements included in this Report are based on information available to us
up to, and including the date of this document, and we disclaim any obligation to update any such forward-looking
statements. Our actual results could differ materially from those anticipated in these forward-looking statements as
a result of various important factors, including but not limited to flaws in the assumptions and judgments upon which
our forecasts and estimates are based; the development, severity, and duration of supply chain constraints,
inflation, and the ongoing COVID-19 pandemic; our inability to make the investments that we plan to make or the
failure of those investments to achieve the results we expect; our failure to execute on the transformation of the
Vista business; loss or unavailability of key personnel or our inability to recruit talented personnel to drive
performance of our businesses; the failure of businesses we acquire or invest in to perform as expected, including
possible impacts of the war in Ukraine on Depositphotos' operations; our failure to develop and deploy our mass
customization platform or the failure of the platform to drive the efficiencies and competitive advantages we expect;
unanticipated changes in our markets, customers, or businesses; changes in the laws and regulations, or in the
interpretation of laws and regulations, that affect our businesses; our failure to manage the growth and complexity of
our business and expand our operations; our failure to maintain compliance with the covenants in our debt
documents or to pay our debts when due; competitive pressures; general economic conditions, including the
possibility of an economic downturn in some or all of our markets; and other factors described in this Report and the
documents that we periodically file with the SEC.
Executive Overview
Cimpress is a strategically focused group of more than a dozen businesses that specialize in mass
customization of printing and related products, via which we deliver large volumes of individually small-sized
customized orders. Our products include a broad range of marketing materials, business cards, signage,
promotional products, logo apparel, packaging, books and magazines, wall decor, photo merchandise, invitations
and announcements, and other categories. Mass customization is a core element of the business model of each
Cimpress business and is a competitive strategy which seeks to produce goods and services to meet individual
customer needs with near mass production efficiency.
As of June 30, 2022, we have numerous operating segments under our management reporting structure
that are reported in the following five reportable segments: Vista, PrintBrothers, The Print Group, National Pen, and
All Other Businesses. Refer to Note 15 in our accompanying consolidated financial statements for additional
information relating to our reportable segments and our segment financial measures.
During the fourth quarter of fiscal 2022, we revised our internal reporting to reallocate certain third-party
technology costs that were previously held within our Central and corporate costs to our Vista business and
reportable segment. These include certain third-party costs that are variable in nature and the cost variability is
primarily driven by decisions or volumes in the Vista business. We have revised our presentation of all prior periods
presented to reflect our revised segment reporting, which decreased Vista segment EBITDA and Central and
corporate costs by $7.0 million, $6.0 million, and $3.7 million for the years ended June 30, 2022, 2021 and 2020,
respectively.
Throughout fiscal year 2022, the effects of the pandemic on Cimpress have generally diminished in terms of
its impact on demand, but we experienced volatility throughout the year as COVID-19 variants emerged and
government restrictions were put in place, primarily during the third quarter of our current fiscal year. Our
businesses continue to experience supply chain challenges including rising input costs and some areas of
26
disruption. These challenges are a facet of lingering pandemic impacts, and, to a lesser extent, an indirect effect of
the Russia-Ukraine conflict, which have created both difficulties and opportunities for Cimpress businesses. Each of
our reportable segments has seen material cost increases of product substrates like paper, production materials like
aluminum plates, freight and shipping charges, energy costs and higher compensation costs due to a more
competitive labor market. Our scale-based shared strategic capabilities and supplier relationships provide
competitive advantages for our businesses to weather these challenges. Through data capabilities, our businesses
are regularly testing new pricing approaches, and in all businesses there have been pricing increases that are
partially offsetting the increased costs.
Financial Summary
The primary financial metric by which we set quarterly and annual budgets both for individual businesses
and Cimpress wide is our adjusted free cash flow before cash interest expense; however, in evaluating the financial
condition and operating performance of our business, management considers a number of metrics including
revenue growth, organic constant-currency revenue growth, operating income, adjusted EBITDA, cash flow from
operations and adjusted free cash flow. Reconciliations of our non-GAAP financial measures are included within the
"Consolidated Results of Operations" and "Additional Non-GAAP Financial Measures" sections of Management's
Discussion and Analysis. A summary of these key financial metrics for the year ended June 30, 2022 as compared
to the year ended June 30, 2021 follows:
Fiscal Year 2022
•
•
Revenue increased by 12% to $2,887.6 million.
Constant-currency revenue increased by 15% and by 13% when excluding the revenue of acquired
companies for the first twelve months after acquisition (both non-GAAP financial measures).
• Operating income decreased by $76.2 million to $47.3 million.
•
•
•
•
Adjusted EBITDA (a non-GAAP financial measure) decreased by $68.1 million to $281.1 million.
Diluted net loss per share attributable to Cimpress plc decreased to $(2.08) from $(3.28) in the
comparative period.
Cash provided by operating activities decreased by $45.7 million to $219.5 million.
Adjusted free cash flow (a non-GAAP financial measure) decreased by $65.6 million to $100.2 million.
For fiscal year 2022, the increase in reported revenue was primarily due to the continued recovery of
demand. Reported revenue benefited from our recent acquisitions, with the majority of the additional revenue
attributable to Depositphotos, which was acquired on October 1, 2021 and is included in our Vista business. Recent
new product introduction, strong growth of volume, and an uptick in orders due to supply chain constraints that
turned new customers to our businesses all drove growth in our reported revenue year over year. Pricing changes
also improved our revenue, as these actions were one tool we used to mitigate inflationary cost pressures that have
arisen from ongoing supply chain challenges. These benefits were slightly offset by revenue for face masks
decreasing $85.3 million compared to the prior year because demand for pandemic-related products has
diminished. Currency exchange fluctuations also had a negative effect during the current year.
For the year ended June 30, 2022, the decrease in operating income was primarily due to increased
investments in our Vista business. These investments include hiring across several strategic initiatives, as well as
increased advertising spend driven by mid- and upper-funnel advertising and higher performance advertising driven
by expanded payback thresholds compared to the prior year. The current year was also negatively impacted by
inflationary cost pressures, which were not fully mitigated through price increases. We also recognized an increase
in restructuring charges of $12.0 million, primarily relating to actions taken in our Vista business and central teams,
as well as higher share based compensation expense primarily driven by increased headcount in areas in which we
continue to invest. These items were partially offset by an increase to gross profit driven by the revenue growth
described above, as well as the non-recurrence of a $19.9 million lease-related impairment in the prior year.
Adjusted EBITDA decreased year over year, primarily for the same reasons operating income decreased.
Adjusted EBITDA excludes restructuring charges, share-based compensation expense, certain impairments, and
non-cash gains on the sale of assets, and includes the realized gains or losses on our currency derivatives intended
to hedge adjusted EBITDA. The net year-over-year impact of currency on consolidated adjusted EBITDA was a
benefit of approximately $5.9 million.
27
Diluted net loss per share attributable to Cimpress plc decreased for the year ended June 30, 2022 due to
unrealized currency gains caused by exchange rate volatility, decreased interest expense driven by our fourth
quarter fiscal year 2021 debt refinancing which also caused a non-recurring $48.3 million loss on debt
extinguishment in the prior-year period. This was partially offset by the decrease in operating income as described
above and increased income tax expense that was impacted by the current year valuation allowance that related to
Swiss tax reform benefits.
Cash from operations decreased $45.7 million year over year due to the decrease in operating income
described above, partially offset by increased working capital inflows and $12.1 million of proceeds from the early
settlement of certain derivatives.
Adjusted free cash flow decreased by $65.6 million, due to the operating cash flow decrease described
above, as well as a $15.5 million increase in capital expenditures and a $4.4 million increase in capitalized software
expenditures.
Information pertaining to fiscal year 2020 was included in our Annual Report on Form 10-K for the year
ended June 30, 2020 under Part II, Item 7, “Management’s Discussion and Analysis of Financial Position and
Results of Operations,” which was filed with the SEC on August 11, 2020.
Consolidated Results of Operations
Consolidated Revenue
Our businesses generate revenue primarily from the sale and shipment of customized products. We also
generate revenue, to a much lesser extent (and primarily in our Vista business), from digital services, graphic
design services, website design and hosting, and email marketing services, as well as a small percentage of
revenue from order referral fees and other third-party offerings. For additional discussion relating to segment
revenue results, refer to the "Reportable Segment Results" section included below.
Total revenue and revenue growth by reportable segment for the year ended June 30, 2022 and 2021 are
shown in the following table:
In thousands
Year Ended June 30,
Currency
Impact:
Constant-
Currency
Impact of
Acquisitions/
Divestitures:
2022
2021
%
Change
(Favorable)/
Unfavorable
Revenue
Growth (1)
(Favorable)/
Unfavorable
Vista . . . . . . . . . . . . . . . . . . . $ 1,514,909 $ 1,428,255
PrintBrothers . . . . . . . . . . . .
421,766
526,952
The Print Group . . . . . . . . . .
National Pen . . . . . . . . . . . .
All Other Businesses . . . . .
329,590
341,832
205,862
275,534
313,528
192,038
Inter-segment
eliminations . . . . . . . . . . . .
(55,160)
Total revenue . . . . . . . . . . . . $ 2,887,555 $ 2,575,961
(31,590)
6%
25%
20%
9%
7%
1%
8%
7%
2%
—%
7%
33%
27%
11%
7%
(2)%
(1)%
—%
—%
(4)%
Constant-
Currency
Revenue
Growth
Excluding
Acquisitions/
Divestitures (2)
5%
32%
27%
11%
3%
12%
3%
15%
(2)%
13%
28
In thousands
Year Ended June 30,
Currency
Impact:
Constant-
Currency
Impact of
Acquisitions/
Divestitures:
2021
2020
%
Change
(Favorable)/
Unfavorable
Revenue
Growth (1)
(Favorable)/
Unfavorable
Vista . . . . . . . . . . . . . . . . . . . $ 1,428,255 $ 1,337,291
PrintBrothers . . . . . . . . . . . .
417,921
421,766
7%
1%
The Print Group . . . . . . . . . .
National Pen . . . . . . . . . . . .
All Other Businesses . . . . .
275,534
313,528
192,038
275,214 —%
299,474
5%
173,789
11%
1%
3%
3%
1%
1%
8%
4%
3%
6%
—%
(2)%
—%
—%
12%
(25)%
(13)%
Constant-
Currency
Revenue
Growth
Excluding
Acquisitions/
Divestitures (2)
8%
2%
3%
6%
Inter-segment
eliminations . . . . . . . . . . . .
(11,716)
Total revenue . . . . . . . . . . . . $ 2,575,961 $ 2,751,076
(55,160)
(6)%
1%
(5)%
(2)%
(7)%
_________________
(1) Constant-currency revenue growth, a non-GAAP financial measure, represents the change in total revenue between current and prior year
periods at constant-currency exchange rates by translating all non-U.S. dollar denominated revenue generated in the current period using the
prior year period’s average exchange rate for each currency to the U.S. dollar. Our reportable segments-related growth is inclusive of inter-
segment revenues, which are eliminated in our consolidated results.
(2) Constant-currency revenue growth excluding acquisitions/divestitures, a non-GAAP financial measure, excludes revenue results for
businesses in the period in which there is no comparable year-over-year revenue. Our reportable segments-related growth is inclusive of
inter-segment revenues, which are eliminated in our consolidated results. For example, revenue from 99designs, which we acquired on
October 1, 2020 in Q2 2021, is excluded from revenue growth in Q1 of fiscal year 2022 since there are no full quarter results in the
comparable period, but revenue is included in revenue growth for Q2 through Q4 of fiscal year 2022. Our reportable segments-related growth
is inclusive of inter-segment revenues, which are eliminated in our consolidated results.
We have provided these non-GAAP financial measures because we believe they provide meaningful information regarding our results on a
consistent and comparable basis for the periods presented. Management uses these non-GAAP financial measures, in addition to GAAP
financial measures, to evaluate our operating results. These non-GAAP financial measures should be considered supplemental to and not a
substitute for our reported financial results prepared in accordance with GAAP.
Consolidated Cost of Revenue
Cost of revenue includes materials used by our businesses to manufacture their products, payroll and
related expenses for production and design services personnel, depreciation of assets used in the production
process and in support of digital marketing service offerings, shipping, handling and processing costs, third-party
production and design costs, costs of free products and other related costs of products our businesses sell.
In thousands
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended June 30,
2022
2021
2020
1,492,726
$
1,299,889
$ 1,248,871
51.7 %
50.5 %
50.3 %
For the year ended June 30, 2022, cost of revenue increased by $192.8 million, primarily due to demand-
dependent cost of goods sold, including third-party fulfillment, material and shipping costs. During the current fiscal
year, we've experienced increasing impacts from global supply chain challenges that resulted in increased costs for
product substrates like paper, production materials like aluminum plates, freight and shipping charges, and energy
costs. Compensation costs are also higher due to a more competitive labor market. The overall impact of increased
costs, net of pricing and manufacturing efficiencies, had varying impacts on our businesses during the year ended
June 30, 2022. It remains a challenging environment, and we expect higher input costs and supply constraints to
persist, although we are unable to predict for how long. We believe we are advantaged in this environment versus
smaller competitors because our scale provides us with a stronger supplier negotiation position for both costs and
availability of supply.
29
Consolidated Operating Expenses
The following table summarizes our comparative operating expenses for the following periods:
In thousands
Technology and development expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketing and selling expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of acquired intangible assets (1) . . . . . . . . . . . . . . . . . . . . . . . . $
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring expense (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of Goodwill (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
_____________________
Year Ended June 30,
2022
292,845
2021
253,060
$
2020
253,252
$
10.1 %
9.8 %
10.2 %
789,241
$
648,391
$
574,041
27.3 %
25.2 %
23.1 %
197,345
$
195,652
$
183,054
6.8 %
54,497
1.9 %
13,603
0.5 %
$
$
7.6 %
53,818
2.1 %
1,641
0.1 %
$
$
7.4 %
51,786
2.1 %
13,543
0.5 %
—
$
—
$
100,842
— %
— %
4.1 %
(1) Refer to Note 8 in our accompanying consolidated financial statements for additional details relating to the amortization of acquired
intangibles and goodwill impairment charges.
(2) Refer to Note 18 in our accompanying consolidated financial statements for additional details relating to restructuring expense.
Technology and development expense
Technology and development expense consists primarily of payroll and related expenses for employees
engaged in software and manufacturing engineering, information technology operations and content development,
as well as amortization of capitalized software and website development costs, including hosting of our websites,
asset depreciation, patent amortization, and other technology infrastructure-related costs. Depreciation expense for
information technology equipment that directly supports the delivery of our digital marketing services products is
included in cost of revenue.
Technology and development expenses increased by $39.8 million for the year ended June 30, 2022, as
compared to the prior year. This increase is primarily driven by $28.5 million higher compensation costs due to
increased investment from hiring, impacts of our annual merit cycle and prior-year delay of our share-based
compensation grants to the middle of the third quarter of fiscal year 2021, mainly in the Vista business and our
central technology group. Other operating costs increased in part due to increases in demand, as well as higher
travel and training costs as pandemic restrictions diminished in the current year.
Marketing and selling expense
Marketing and selling expense consists primarily of advertising and promotional costs; payroll and related
expenses for our employees engaged in marketing, sales, customer support and public relations activities; direct-
mail advertising costs; and third-party payment processing fees. Our Vista, National Pen and BuildASign
businesses have higher marketing and selling costs as a percentage of revenue as compared to our PrintBrothers
and The Print Group businesses due to differences in the customers that they serve.
For the year ended June 30, 2022, marketing and selling expenses increased $140.9 million as compared
to the prior year. The largest increase in marketing and selling expenses was in our Vista business which had
increased internal marketing and customer service costs of $52.1 million and increased advertising costs of
$51.1 million. The increases to Vista spend were primarily driven by growth in headcount for areas such as user
experience design, brand and data and analytics, higher performance advertising from increased customer demand
and expanded payback thresholds as well as higher mid- and upper-funnel advertising. Advertising expense also
increased for our remaining businesses in total by $28.7 million for the year ended June 30, 2022, due to higher
demand and more normalized payback thresholds in the current year.
30
General and administrative expense
General and administrative expense consists primarily of transaction costs, including third-party
professional fees, insurance and payroll and related expenses of employees involved in executive management,
finance, legal, strategy, human resources and procurement.
For the year ended June 30, 2022, general and administrative expenses increased by $1.7 million as
compared to the prior year, driven primarily by increases of $16.7 million to compensation costs from impacts of our
annual merit cycle, increased expense for cash-based long-term incentive awards driven by additional vesting and
business performance, as well as higher headcount year over year. Share-based compensation costs also
increased $3.6 million due to the prior year's delayed timing of the annual grant cycle, mainly in our Vista business
and our central teams. The current fiscal year benefited from a non-cash gain of $3.3 million recognized during the
second fiscal quarter as a result of our purchase and sale of a previously leased facility. The year-over-year
increase was almost fully offset by the non-recurrence of lease-related impairment and abandonment charges that
were recognized in the prior year of $19.9 million. Refer to Note 2 of the accompanying consolidated financial
statements for additional details.
Other Consolidated Results
Other income (expense), net
Other income (expense), net generally consists of gains and losses from currency exchange rate
fluctuations on transactions or balances denominated in currencies other than the functional currency of our
subsidiaries, as well as the realized and unrealized gains and losses on some of our derivative instruments. In
evaluating our currency hedging programs and ability to qualify for hedge accounting in light of our legal entity cash
flows, we considered the benefits of hedge accounting relative to the additional economic cost of trade execution
and administrative burden. Based on this analysis, we execute certain currency derivative contracts that do not
qualify for hedge accounting.
The following table summarizes the components of other income (expense), net:
In thousands
Year Ended June 30,
2022
2021
2020
Gains (losses) on derivatives not designated as hedging instruments . $
Currency-related gains, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
58,148 $
244
3,071
61,463 $
(20,728) $
1,005
370
(19,353) $
20,564
2,309
1
22,874
The increase in other income (expense), net was primarily due to the currency exchange rate volatility
impacting our derivatives that are not designated as hedging instruments, of which our Euro and British Pound
contracts are the most significant exposures that we economically hedge. We also recognize the impact from de-
designated interest swap contracts that are no longer highly effective, which resulted in unrealized losses during the
current period. We expect volatility to continue in future periods, as we do not apply hedge accounting for most of
our derivative currency contracts.
We experienced currency-related gains due to currency exchange rate volatility on our non-functional
currency intercompany relationships, which we may alter from time to time. The impact of certain cross-currency
swap contracts designated as cash flow hedges is included in our currency-related gains, net, offsetting the impact
of certain non-functional currency intercompany relationships.
Interest expense, net
Interest expense, net primarily consists of interest paid on outstanding debt balances, amortization of debt
issuance costs, debt discounts, interest related to finance lease obligations and realized gains (losses) on effective
interest rate swap contracts and certain cross-currency swap contracts.
Interest expense, net decreased by $19.9 million during the year ended June 30, 2022, as compared to the
prior year period. This is primarily due to our Term Loan B refinancing during the fourth quarter of fiscal 2021 that
resulted in a reduction to our weighted-average interest rate on our outstanding borrowings in the current year.
31
Loss on early extinguishment of debt
As part of the fourth quarter fiscal year 2021 amendment and restatement of our senior secured credit
agreement, we redeemed $300.0 million of our 12% Senior Secured Notes due 2025. The loss on extinguishment of
debt of $48.3 million during the year ended June 30, 2021, consisted of a $22.3 million accretion adjustment to
increase the debt's carrying value to the principal amount, a $17.0 million write-off of unamortized financing fees,
and a $9.0 million early redemption fee payment.
Income tax expense (benefit)
In thousands
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended June 30,
2022
2021
2020
59,901
$
18,903
$
(80,992)
642.0 %
(29.7) %
(2,697.0) %
Income tax expense for the year ended June 30, 2022 increased versus the prior comparative period due to
establishing a partial valuation allowance on Swiss deferred tax assets of $29.6 million primarily related to Swiss tax
reform benefits recognized in fiscal year 2020 and Swiss tax loss carryforwards that we no longer expect to fully
realize.
We believe that our income tax reserves are adequately maintained by taking into consideration both the
technical merits of our tax return positions and ongoing developments in our income tax audits. However, the final
determination of our tax return positions, if audited, is uncertain and therefore there is a possibility that final
resolution of these matters could have a material impact on our results of operations or cash flows. Refer to Note 13
in our accompanying consolidated financial statements for additional discussion.
Reportable Segment Results
Our segment financial performance is measured based on segment EBITDA, which is defined as operating
income plus depreciation and amortization; plus proceeds from insurance; plus share-based compensation expense
related to investment consideration; plus earn-out related charges; plus certain impairments; plus restructuring
related charges; less gain on purchase or sale of subsidiaries.
During the fourth quarter of fiscal 2022, we revised our internal reporting to reallocate certain third-party
technology costs that were previously held within our Central and corporate costs to our Vista business and
reportable segment. These third-party costs are variable in nature and the cost variability is primarily driven by
decisions or volumes in the Vista business. We have revised our presentation of all prior periods presented to reflect
our revised segment reporting, which decreased Vista segment EBITDA by $7.0 million, $6.0 million and $3.7
million for the years ended June 30, 2022, 2021 and 2020, respectively.
Vista
In thousands
Year Ended June 30,
2022
2021
2020
2022 vs. 2021
2021 vs. 2020
Reported Revenue . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,514,909
Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . .
195,321
$ 1,428,255
$ 1,337,291
318,684
362,589
6%
(39)%
7%
(12)%
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13 %
22 %
27 %
32
Segment Revenue
Vista's reported revenue growth for the year ended June 30, 2022 was negatively affected by a currency
impact of 1%. When excluding the benefit from the recent acquisitions of Depositphotos and 99designs, Vista's
organic constant-currency revenue growth was 5%. Vista's revenue growth accelerated in our European markets
during the second half of the fiscal year, while the U.S. market experienced lower growth driven in part by the
decline in revenue from consumer products. In addition, revenue related to face masks was $69.0 million less than
the prior year as the demand for pandemic-related products declined. From a category perspective, growth was
primarily driven by business cards, signage, marketing materials, and promotional products. Revenue from business
cards and small format marketing materials improved year over year, but were still below pre-pandemic levels.
During the current fiscal year we executed on the migration of Vista's customer-facing website in most major
markets, including in the United States, to a new platform. Each launch in the current year created a short-term
negative impact on revenue, but every successive launch benefited from the learnings of prior launches to mitigate
the impact of migrating in our largest markets.
Segment Profitability
For the year ended June 30, 2022, segment EBITDA declined by $123.4 million, largely driven by increased
operating expenses related to growth investments including hiring of talent, especially in user experience, design,
product management, and data and analytics. These organic investments are in support of Vista's multi-year
transformation journey to become the expert design and marketing partner to the world's small businesses.
Additionally, Vista's advertising expense increased by $57.1 million, driven by $48.1 million of incremental
performance advertising from higher volumes and increased payback thresholds relative to last year and
$9.0 million from higher mid- and upper-funnel advertising. Advertising spend was more constrained during the prior
year when the effects of the pandemic on this segment were more severe. Gross profit was negatively impacted
during fiscal year 2022 by significant inflationary cost pressures from higher material, inbound freight, shipping and
energy costs. A small portion of those inflationary pressures were offset by price increases. These inflationary
pressures were more pronounced during the second half of the current fiscal year. The decline in profitability was
also affected by government subsidy benefits in the prior year of $9.0 million that did not recur during the year
ended June 30, 2022. These decreases were partially offset by the profit improvement driven by the revenue growth
described above.
PrintBrothers
In thousands
Year Ended June 30,
2022
2021
2020
2022 vs. 2021
2021 vs. 2020
Reported Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . $
Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . .
526,952
$
421,766
$
417,921
66,774
43,144
39,373
25%
55%
1%
10%
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13 %
10 %
9 %
Segment Revenue
PrintBrothers' reported revenue growth for the year ended June 30, 2022 was negatively affected by a
currency impact of 8%, resulting in a constant-currency revenue growth of 33%. This strong growth was driven by
past new production introductions and growth in order volumes due in part to supply chain constraints that turned
new customers to our businesses. The PrintBrothers network and relative size allowed these businesses to address
opportunities to meet customer demand when competition could not. In addition, the current year benefited from
less-intensive pandemic-related lockdowns than in the prior year, as well as price increases implemented to address
inflationary cost increases.
Segment Profitability
PrintBrothers' segment EBITDA during the year ended June 30, 2022, as compared to the prior period,
increased despite increased input costs, driven by the constant-currency revenue growth described above, the
higher margin impact of new products, and improved efficiencies as the businesses in this segment better leverage
their combined capabilities. Currency exchange rate fluctuations had a negative year-over-year impact.
33
The Print Group
In thousands
Year Ended June 30,
2022
2021
2020
2022 vs. 2021
2021 vs. 2020
Reported Revenue . . . . . . . . . . . . . . . . . . . . . . . . . $
Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . .
329,590
$
275,534
$
275,214
58,664
43,126
51,606
20%
36%
—%
(16)%
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18 %
16 %
19 %
Segment Revenue
The Print Group's reported revenue for the year ended June 30, 2022 was negatively affected by a currency
impact of 7%, resulting in an increase to revenue on a constant-currency basis of 27% due to signs of overall
economic recovery in many of the European countries in which we compete, leveraging new products introduced in
recent years and growth in order volumes due in part to supply chain constraints that turned new customers to our
businesses. In addition, the current year benefited from less-intensive pandemic-related lockdowns than in the prior
year, as well as price increases implemented to address inflationary cost increases.
Segment Profitability
The increase in The Print Group's segment EBITDA during the year ended June 30, 2022, as compared to
the prior year, was primarily driven by the constant-currency revenue growth described above. In addition, The Print
Group continues to benefit from the introduction of new products with higher margins, as well as improved
efficiencies as the group better leverages its combined capabilities. Currency exchange rate fluctuations had a
negative year-over-year impact.
National Pen
In thousands
Year Ended June 30,
2022
2021
2020
2022 vs. 2021
2021 vs. 2020
Reported Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . $
Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . .
341,832
$
313,528
$
299,474
26,845
11,644
7,605
9%
131%
5%
53%
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8 %
4 %
3 %
Segment Revenue
For the year ended June 30, 2022, National Pen's revenue growth was negatively affected by currency
impacts of 2%, resulting in constant-currency revenue growth of 11%. National Pen's revenue has improved across
geographic markets and channels, including web and mail order channels. This improvement is due to businesses
reopening and a return of in-person events in some markets, despite a decline in revenue from pandemic-related
products, including a $26.2 million decline of face mask revenue.
Segment Profitability
The increase in National Pen's segment EBITDA for the year ended June 30, 2022 was due in part to the
revenue increase described above, as well as improvements in gross profit driven by a normalized mix of products
and decline in lower-margin pandemic-related products, partially offset by higher freight costs. National Pen also
made permanent cost reductions in the prior year that benefited segment EBITDA for the year ended June 30,
2022. The increased profitability was also caused by the non-recurrence of the prior years' inventory reserve to
reduce the carrying value of disposable masks held in inventory to market prices of $8.2 million. Currency exchange
rate fluctuations had a negative year-over-year impact.
34
All Other Businesses
In thousands
Year Ended June 30,
Reported Revenue . . . . . . . . . . . . . . . . . . . . . . . . . $
Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . .
205,862
$
192,038
$
173,789
23,227
31,707
17,474
7%
(27)%
11%
81%
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11 %
17 %
10 %
2022
2021
2020
2022 vs. 2021
2021 vs. 2020
This segment consists of BuildASign, which is a larger and profitable business, and two early-stage
businesses that we have managed at a relatively modest operating loss as previously described and planned.
During the fourth quarter of fiscal year 2022, we decided to exit our YSD business, which generated a loss of
$5.5 million during fiscal year 2022, which we expect to complete in early fiscal year 2023.
Segment Revenue
All Other Businesses' constant-currency revenue growth, excluding the impact of acquisitions, was 3%
during the year ended June 30, 2022. This growth was driven by recovery of demand for both our Printi business
and signage products offered by BuildASign, partially offset by a decline in demand for home decor products that
had benefited revenue during the pandemic period.
Segment Profitability
The decrease in segment EBITDA for the year ended June 30, 2022 was due to a combination of factors
including increased advertising spend and inflationary pressures on input costs including shipping, materials and
labor during the current period.
Central and Corporate Costs
Central and corporate costs consist primarily of the team of software engineers that is building our mass
customization platform; shared service organizations such as global procurement; technology services such as
hosting and security; administrative costs of our Cimpress India offices where numerous Cimpress businesses have
dedicated business-specific team members; and corporate functions including our Board of Directors, CEO, and the
team members necessary for managing corporate activities, such as treasury, tax, capital allocation, financial
consolidation, internal audit and legal. These costs also include certain unallocated share-based compensation
costs.
During the fourth quarter of fiscal 2022, we revised our internal reporting to reallocate certain third-party
technology costs that were previously held within our Central and corporate costs to our Vista business. We have
revised our presentation of all prior periods presented to reflect our revised segment reporting. Refer to Note 15 in
our accompanying consolidated financial statements for additional details.
Central and corporate costs increased by $14.6 million during the year ended June 30, 2022, as compared
to the prior year, due to the end of temporary cost-control measures from the year-ago period and, to a lesser
extent, prior year timing of our annual share-based compensation grant which caused a higher expense rate for
accelerated vesting in the first quarter of the current fiscal year than in the comparable period. In addition, our
continued investments in our mass customization platform through additional hiring in cost-efficient talent markets
and increased volumes contributed to higher central operating costs year over year.
35
Liquidity and Capital Resources
Consolidated Statements of Cash Flows Data
In thousands
Year Ended June 30,
2022
2021
2020
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
219,536 $
265,221 $
338,444
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,997)
(354,316)
(66,864)
Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . . . . . . .
(106,572)
224,128
(258,255)
The cash flows during the year ended June 30, 2022 related primarily to the following items:
Cash inflows:
•
•
•
•
•
Adjustments for non-cash items of $194.8 million primarily related to adjustments for depreciation and
amortization of $175.7 million, share-based compensation costs of $49.8 million, and deferred taxes of
$22.9 million, which were partially offset by negative adjustments for unrealized currency-related gains of
$39.9 million and gains on ineffective interest rate swaps of $6.4 million
Proceeds from the maturity of held-to-maturity securities of $151.2 million
Total net working capital impacts of $75.4 million were a source of cash. Accounts payable and accrued
expense inflows were partially offset by inventory, accounts receivable and other asset outflows
The early termination and settlement of derivative contracts resulted in $19.7 million of cash proceeds. $2.2
million of these cash proceeds was from the termination or settlement of net investment hedges and is
presented in investing activities. The remainder of the cash proceeds are presented in operating activities, a
portion of which is included in net working capital
Proceeds from the sale of assets in the normal course of business of $14.5 million, primarily the sale of land
adjacent to one of our production facilities
Cash outflows:
•
•
•
•
•
•
•
•
•
•
•
Net loss of $50.6 million
Business acquisitions for $75.3 million, net of cash acquired, primarily related to the Depositphotos
acquisition
Internal and external costs of $65.3 million for software and website development that we have capitalized
Capital expenditures of $54.0 million of which the majority related to the purchase of manufacturing and
automation equipment for our production facilities
$43.6 million for the payment of purchase consideration included in the 99designs acquisition's fair value
Repayments of debt for $14.5 million
Payments for finance lease arrangements, excluding the payment associated with the purchase option
exercise included below, of $9.6 million
Purchase and sale of a previously leased facility that resulted in a net payment of $4.7 million due to our
exercise of the lease purchase option and subsequent sale
A $4.0 million distribution to noncontrolling interest holders
Payment of withholding taxes in connection with share awards of $3.2 million
$1.8 million for the final settlement for the purchase of noncontrolling interests in our PrintBrothers
businesses, for which an initial payment was made in fiscal year 2021
36
•
Financing fees of $1.4 million from our fourth quarter fiscal year 2021 credit facility amendment that have
been capitalized
Additional Liquidity and Capital Resources Information. At June 30, 2022, we had $277.1 million of cash
and cash equivalents, $50.0 million of marketable securities and $1,705.4 million of debt, excluding debt issuance
costs and debt premiums and discounts. During the year ended June 30, 2022, we financed our operations and
strategic investments through internally generated cash flows from operations and cash on hand. We expect to
finance our future operations through our cash, investments, operating cash flow and borrowings under our debt
arrangements.
Noncontrolling Interests. The put options for several of our noncontrolling interests are exercisable during
the first half of fiscal year 2023. Exercising a put option is at the discretion of each noncontrolling interest holder,
which creates uncertainty around the timing of our cash outflow should an option be exercised. The total estimated
redemption value for these noncontrolling interests as of June 30, 2022 is $103.6 million. Refer to Note 14 in our
accompanying consolidated financial statements for additional details.
Indefinitely Reinvested Earnings. As of June 30, 2022, a portion of our cash and cash equivalents were held
by our subsidiaries, and undistributed earnings of our subsidiaries that are considered to be indefinitely reinvested
were $49.0 million. We do not intend to repatriate these funds as the cash and cash equivalent balances are
generally used and available, without legal restrictions, to fund ordinary business operations and investments of the
respective subsidiaries. If there is a change in the future, the repatriation of undistributed earnings from certain
subsidiaries, in the form of dividends or otherwise, could have tax consequences that could result in material cash
outflows.
Contractual Obligations
Contractual obligations at June 30, 2022 are as follows:
In thousands
Payments Due by Period
Total
Less
than 1
year
85,176 $
28,146 $
Operating leases, net of subleases (1) . . . . . . . $
Purchase commitments . . . . . . . . . . . . . . . . . . . .
Senior unsecured notes and interest payments
Senior secured credit facility and interest
payments (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
310,797
768,000
1,407,935
Other debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,063
150,307
42,000
66,289
2,800
1-3
years
3-5
years
More
than 5
years
37,465 $
97,237
84,000
10,958 $
63,252
642,000
8,607
—
—
129,884
125,399
1,086,363
4,735
528
—
Finance leases, net of subleases (1) . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,605,205 $
16,809
8,425
5,016
8,425
302,983 $
7,480
—
360,801 $
3,891
—
422
—
846,028 $ 1,095,392
___________________
(1) Operating and finance lease payments above include only amounts which are fixed under lease agreements. Our leases may also incur
variable expenses which are not reflected in the contractual obligations above.
(2) Senior secured credit facility and interest payments include the effects of interest rate swaps, whether they are expected to be payments or
receipts of cash.
(3) We may be required to make cash outlays related to our uncertain tax positions. However, due to the uncertainty of the timing of future cash
flows associated with our uncertain tax positions, we are unable to make reasonably reliable estimates of the period of cash settlement, if
any, with the respective taxing authorities. Accordingly, uncertain tax positions of $9.2 million as of June 30, 2022 have been excluded from
the contractual obligations table above. See Note 13 in our accompanying consolidated financial statements for further information on
uncertain tax positions.
Operating Leases. We rent office space under operating leases expiring on various dates through 2037.
The terms of certain lease agreements require security deposits in the form of bank guarantees and letters of credit
in the amount of $1.8 million in the aggregate.
Purchase Commitments. At June 30, 2022, we had unrecorded commitments under contract of $310.8
million. Purchase commitments consisted of inventory, third-party fulfillment and digital service purchase
commitments of $124.4 million; third-party cloud services of $113.9 million; advertising of $18.1 million; software of
37
$23.7 million; commitments for professional and consulting fees of $6.4 million; production and computer equipment
purchases of $7.1 million; and other unrecorded purchase commitments of $17.3 million.
Senior Secured Credit Facility and Interest Payments. As of June 30, 2022, we have borrowings under our
Restated Credit Agreement of $1,097.3 million consisting of the Term Loan B, which amortizes over the loan period,
with a final maturity date of May 17, 2028. Our $250.0 million revolver under our Restated Credit Agreement has
$243.6 million unused as of June 30, 2022. There are no drawn amounts on the revolver, but our outstanding letters
of credit reduce our unused balance. Our unused balance can be drawn at any time so long as we are in
compliance with our debt covenants, and any amounts drawn under the revolver will be due on May 17, 2026.
Interest payable included in the above table is based on the interest rate as of June 30, 2022 and assumes all
LIBOR-based revolving loan amounts outstanding will not be paid until maturity but that the term loan amortization
payments will be made according to our defined schedule.
Senior Unsecured Notes and Interest Payments. Our $600.0 million of 2026 Notes bear interest at a rate of
7.0% per annum and mature on June 15, 2026. Interest on the notes is payable semi-annually on June 15 and
December 15 of each year and has been included in the table above.
Debt Covenants. The Restated Credit Agreement and the indenture that governs our 7.0% Senior Notes
due 2026 contain covenants that restrict or limit certain activities and transactions by Cimpress and our subsidiaries.
As of June 30, 2022, we were in compliance with all covenants under our Restated Credit Agreement and the
indenture governing our 2026 Notes. Refer to Note 10 in our accompanying consolidated financial statements for
additional information.
Other Debt. In addition, we have other debt which consists primarily of term loans acquired through our
various acquisitions or used to fund certain capital investments. As of June 30, 2022, we had $8.1 million
outstanding for those obligations that have repayments due on various dates through March 2027.
Finance Leases. We lease certain machinery and plant equipment under finance lease agreements that
expire at various dates through 2028. The aggregate carrying value of the leased equipment under finance leases
included in property, plant and equipment, net in our consolidated balance sheet at June 30, 2022 is $19.2 million,
net of accumulated depreciation of $38.5 million. The present value of lease installments not yet due included in
other current liabilities and other liabilities in our consolidated balance sheet at June 30, 2022 amounts to $21.4
million.
Other Obligations. Other obligations consist of deferred payments relating to previous acquisitions,
including the deferred payment relating to our Depositphotos acquisition that is payable in October 2022 and small
deferred acquisition liabilities for other, smaller acquisitions. Refer to Note 7 in the accompanying consolidated
financial statements for additional details.
Additional Non-GAAP Financial Measures
Adjusted EBITDA and adjusted free cash flow presented below, and constant-currency revenue growth and
constant-currency revenue growth excluding acquisitions/divestitures presented in the consolidated results of
operations section above, are supplemental measures of our performance that are not required by, or presented in
accordance with, GAAP. Adjusted EBITDA is defined as GAAP operating income plus depreciation and amortization
plus share-based compensation expense plus proceeds from insurance plus earn-out related charges plus certain
impairments plus restructuring related charges plus realized gains or losses on currency derivatives less interest
expense related to our Waltham, Massachusetts office lease less gain on purchase or sale of subsidiaries.
Adjusted EBITDA is the primary profitability metric by which we measure our consolidated financial
performance and is provided to enhance investors' understanding of our current operating results from the
underlying and ongoing business for the same reasons it is used by management. For example, as we have
become more acquisitive over recent years we believe excluding the costs related to the purchase of a business
(such as amortization of acquired intangible assets, contingent consideration, or impairment of goodwill) provides
further insight into the performance of the underlying acquired business in addition to that provided by our GAAP
operating income. As another example, as we do not apply hedge accounting for certain derivative contracts, we
believe inclusion of realized gains and losses on these contracts that are intended to be matched against
operational currency fluctuations provides further insight into our operating performance in addition to that provided
by our GAAP operating income. We do not, nor do we suggest that investors should, consider such non-GAAP
38
financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
Adjusted free cash flow is the primary financial metric by which we set quarterly and annual budgets both
for individual businesses and Cimpress-wide. Adjusted free cash flow is defined as net cash provided by operating
activities less purchases of property, plant and equipment, purchases of intangible assets not related to acquisitions,
and capitalization of software and website development costs that are included in net cash used in investing
activities, plus the payment of contingent consideration in excess of acquisition-date fair value and gains on
proceeds from insurance that are included in net cash provided by operating activities, if any. We use this cash flow
metric because we believe that this methodology can provide useful supplemental information to help investors
better understand our ability to generate cash flow after considering certain investments required to maintain or
grow our business, as well as eliminate the impact of certain cash flow items presented as operating cash flows that
we do not believe reflect the cash flow generated by the underlying business.
Our adjusted free cash flow measure has limitations as it may omit certain components of the overall cash
flow statement and does not represent the residual cash flow available for discretionary expenditures. For example,
adjusted free cash flow does not incorporate our cash payments to reduce the principal portion of our debt or cash
payments for business acquisitions. Additionally, the mix of property, plant and equipment purchases that we choose
to finance may change over time. We believe it is important to view our adjusted free cash flow measure only as a
complement to our entire consolidated statement of cash flows.
The table below sets forth operating income and adjusted EBITDA for the years ended June 30, 2022, 2021
and 2020:
In thousands
GAAP operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Exclude expense (benefit) impact of:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earn-out related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain impairments and other adjustments . . . . . . . . . . . . . . . . . . . . . .
Restructuring-related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Realized gains (losses) on currency derivatives not included in
operating income (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
_________________
Year Ended June 30,
2022
2021
2020
47,298 $
123,510 $
55,969
175,681
—
49,766
—
(9,709)
13,603
173,212
122
37,034
—
20,453
1,641
4,424
281,063 $
(6,854)
349,118 $
167,943
—
33,252
(54)
104,593
13,543
24,533
399,779
(1) These realized gains (losses) include only the impacts of currency derivative contracts that are intended to hedge our exposure to foreign
currencies for which we do not apply hedge accounting. See Note 4 in our accompanying consolidated financial statements for further
information.
The table below sets forth net cash provided by operating activities and adjusted free cash flow for the
years ended June 30, 2022, 2021 and 2020:
In thousands
Net cash provided by operating activities (1) . . . . . . . . . . . . . . . . . . . . . . $
Purchases of property, plant and equipment . . . . . . . . . . . . . . . . . . . .
Capitalization of software and website development costs . . . . . . . .
Adjusted free cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
_________________
Year Ended June 30,
2022
2021
2020
219,536 $
265,221 $
338,444
(54,040)
(65,297)
(38,524)
(60,937)
(50,467)
(43,992)
100,199 $
165,760 $
243,985
(1) The decrease of net cash provided by operating activities was driven by the decrease in operating income as described earlier in this section.
39
Critical Accounting Policies and Estimates
Our financial statements are prepared in accordance with U.S. generally accepted accounting principles
(“GAAP”). To apply these principles, we must make estimates and judgments that affect our reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. In some
instances, we reasonably could have used different accounting estimates and, in other instances, changes in the
accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ
significantly from our estimates. We base our estimates and judgments on historical experience and other
assumptions that we believe to be reasonable at the time under the circumstances, and we evaluate these
estimates and judgments on an ongoing basis. We refer to accounting estimates and judgments of this type as
critical accounting policies and estimates, which we discuss further below. This section should be read in
conjunction with Note 2, "Summary of Significant Accounting Policies," of our audited consolidated financial
statements included elsewhere in this Report.
Revenue Recognition. We generate revenue primarily from the sale and shipment of customized
manufactured products. To a much lesser extent (and only in our Vista business) we provide digital services,
website design and hosting, and email marketing services, as well as a small percentage from order referral fees
and other third-party offerings. Revenues are recognized when control of the promised products or services is
transferred to the customer in an amount that reflects the consideration we expect to be entitled to in exchange for
those products or services.
Under the terms of most of our arrangements with our customers we provide satisfaction guarantees, which
give our customers an option for a refund or reprint over a specified period of time if the customer is not fully
satisfied. As such, we record a reserve for estimated sales returns and allowances as a reduction of revenue, based
on historical experience or the specific identification of an event necessitating a reserve. Actual sales returns have
historically not been significant.
We have elected to recognize shipping and handling activities that occur after transfer of control of the
products as fulfillment activities and not as a separate performance obligation. Accordingly, we recognize revenue
for our single performance obligation upon the transfer of control of the fulfilled orders, which generally occurs upon
delivery to the shipping carrier. If revenue is recognized prior to completion of the shipping and handling activities,
we accrue the costs of those activities. We do have some arrangements whereby the transfer of control, and thus
revenue recognition, occurs upon delivery to the customer. If multiple products are ordered together, each product is
considered a separate performance obligation, and the transaction price is allocated to each performance obligation
based on the standalone selling price. Revenue is recognized upon satisfaction of each performance obligation. We
generally determine the standalone selling prices based on the prices charged to our customers.
Our products are customized for each individual customer with no alternative use except to be delivered to
that specific customer; however, we do not have an enforceable right to payment prior to delivering the items to the
customer based on the terms and conditions of our arrangements with customers and therefore we recognize
revenue at a point in time.
We record deferred revenue when cash payments are received in advance of our satisfaction of the related
performance obligation. The satisfaction of performance obligations generally occur shortly after cash payment and
we expect to recognize our deferred revenue balance as revenue within three months subsequent to June 30, 2021.
We periodically provide marketing materials and promotional offers to new customers and existing
customers that are intended to improve customer retention. These incentive offers are generally available to all
customers and, therefore, do not represent a performance obligation as customers are not required to enter into a
contractual commitment to receive the offer. These discounts are recognized as a reduction to the transaction price
when used by the customer. Costs related to free products are included within cost of revenue and sample products
are included within marketing and selling expense.
We have elected to apply the practical expedient under ASC 340-40-25-4 to expense incremental direct
costs as incurred, which primarily includes sales commissions, since our contract periods generally are less than
one year and the related performance obligations are satisfied within a short period of time.
40
Share-Based Compensation. We measure share-based compensation costs at fair value, and recognize the
expense over the period that the recipient is required to provide service in exchange for the award, which generally
is the vesting period. We recognize the impact of forfeitures as they occur.
Our performance share units, or PSUs, are estimated at fair value on the date of grant, which is fixed
throughout the vesting period. The fair value is determined using a Monte Carlo simulation valuation model. As the
PSUs include both a service and market condition the related expense is recognized using the accelerated expense
attribution method over the requisite service period for each separately vesting portion of the award. For PSUs that
meet the service vesting condition, the expense recognized over the requisite service period will not be reversed if
the market condition is not achieved. The compensation expense for these awards is estimated at fair value using a
Monte Carlo simulation valuation model and compensation costs are recorded only if it is probable that the
performance condition will be achieved.
Income Taxes. As part of the process of preparing our consolidated financial statements, we calculate our
income taxes in each of the jurisdictions in which we operate. This process involves estimating our current tax
expense, including assessing the risks associated with tax positions, together with assessing temporary and
permanent differences resulting from differing treatment of items for tax and financial reporting purposes. We
recognize deferred tax assets and liabilities for the temporary differences using the enacted tax rates and laws that
will be in effect when we expect temporary differences to reverse. We assess the ability to realize our deferred tax
assets based upon the weight of available evidence both positive and negative. To the extent we believe that it is
more likely than not that some portion or all of the deferred tax assets will not be realized, we establish a valuation
allowance. Our estimates can vary due to the profitability mix of jurisdictions, foreign exchange movements,
changes in tax law, regulations or accounting principles, as well as certain discrete items. In the event that actual
results differ from our estimates or we adjust our estimates in the future, we may need to increase or decrease
income tax expense, which could have a material impact on our financial position and results of operations.
We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which,
additional taxes will be due. These reserves are established when we believe that certain positions might be
challenged despite our belief that our tax return positions are in accordance with applicable tax laws. We adjust
these reserves in light of changing facts and circumstances, such as the closing of a tax audit, new tax legislation,
or the change of an estimate based on new information. To the extent that the final outcome of these matters is
different than the amounts recorded, such differences will affect the provision for income taxes in the period in which
such determination is made. Interest and, if applicable, penalties related to unrecognized tax benefits are recorded
in the provision for income taxes.
Software and Website Development Costs. We capitalize eligible salaries and payroll-related costs of
employees and third-party consultants who devote time to the development of our websites and internal-use
computer software. Capitalization begins when the preliminary project stage is complete, management with the
relevant authority authorizes and commits to the funding of the software project, and it is probable that the project
will be completed and the software will be used to perform the function intended. These costs are amortized on a
straight-line basis over the estimated useful life of the software, which is three years. Our judgment is required in
evaluating whether a project provides new or additional functionality, determining the point at which various projects
enter the stages at which costs may be capitalized, assessing the ongoing value and impairment of the capitalized
costs, and determining the estimated useful lives over which the costs are amortized. Historically we have not had
any significant impairments of our capitalized software and website development costs.
Business Combinations. We recognize the tangible and intangible assets acquired and liabilities assumed
based on their estimated fair values at the date of acquisition. The fair value of identifiable intangible assets is
based on detailed cash flow valuations that use information and assumptions provided by management. The
valuations are dependent upon a myriad of factors including historical financial results, forecasted revenue growth
rates, estimated customer renewal rates, projected operating margins, royalty rates and discount rates. We estimate
the fair value of any contingent consideration at the time of the acquisition using all pertinent information known to
us at the time to assess the probability of payment of contingent amounts or through the use of a Monte Carlo
simulation model. We allocate any excess purchase price over the fair value of the net tangible and intangible
assets acquired and liabilities assumed to goodwill. The assumptions used in the valuations for our acquisitions may
differ materially from actual results depending on performance of the acquired businesses and other factors. While
we believe the assumptions used were appropriate, different assumptions in the valuation of assets acquired and
liabilities assumed could have a material impact on the timing and extent of impact on our statements of operations.
41
Goodwill is assigned to reporting units as of the date of the related acquisition. If goodwill is assigned to
more than one reporting unit, we utilize a method that is consistent with the manner in which the amount of goodwill
in a business combination is determined. Costs related to the acquisition of a business are expensed as incurred.
Goodwill, Indefinite-Lived Intangible Assets, and Other Definite Lived Long-Lived Assets. We evaluate
goodwill and indefinite-lived intangible assets for impairment annually or more frequently when an event occurs or
circumstances change that indicate that the carrying value may not be recoverable. We have the option to first
assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less
than its carrying amount. We consider the timing of our most recent fair value assessment and associated
headroom, the actual operating results as compared to the cash flow forecasts used in those fair value
assessments, the current long-term forecasts for each reporting unit, and the general market and economic
environment of each reporting unit. In addition to the specific factors mentioned above, we assess the following
individual factors on an ongoing basis such as:
• A significant adverse change in legal factors or the business climate;
• An adverse action or assessment by a regulator;
• Unanticipated competition;
• A loss of key personnel; and
• A more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold
or otherwise disposed of.
If the results of the qualitative analysis were to indicate that the fair value of a reporting unit is less than its
carrying value, the quantitative test is required. Under the quantitative approach, we estimate the fair values of our
reporting units using a discounted cash flow methodology and in certain circumstances a market-based approach.
This analysis requires significant judgment and is based on our strategic plans and estimation of future cash flows,
which is dependent on internal forecasts. Our annual analysis also requires significant judgment including the
identification and aggregation of reporting units, as well as the determination of our discount rate and perpetual
growth rate assumptions. We are required to compare the fair value of the reporting unit with its carrying value and
recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair
value.
We are required to evaluate the estimated useful lives and recoverability of definite lived long-lived assets
(for example, customer relationships, developed technology, property, and equipment) on an ongoing basis when
indicators of impairment are present. For purposes of the recoverability test, long-lived assets are grouped with
other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash
flows of other assets and liabilities. The test for recoverability compares the undiscounted future cash flows of the
long-lived asset group to its carrying value. If the carrying values of the long-lived asset group exceed the
undiscounted future cash flows, the assets are considered to be potentially impaired. The next step in the
impairment measurement process is to determine the fair value of the individual net assets within the long-lived
asset group. If the aggregate fair values of the individual net assets of the group are less than the carrying values,
an impairment charge is recorded equal to the excess of the aggregate carrying value of the group over the
aggregate fair value. The loss is allocated to each long-lived asset within the group based on their relative carrying
values, with no asset reduced below its fair value. The identification and evaluation of a potential impairment
requires judgment and is subject to change if events or circumstances pertaining to our business change. We
evaluated our long-lived assets for impairment during the year ended June 30, 2022, and we recognized no
impairments.
Recently Issued or Adopted Accounting Pronouncements
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 2 — Summary of Significant
Accounting Policies — Recently Issued or Adopted Accounting Pronouncements."
42
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk. Our exposure to interest rate risk relates primarily to our cash, cash equivalents and
debt.
As of June 30, 2022, our cash and cash equivalents consisted of standard depository accounts which are
held for working capital purposes, money market funds, and marketable securities with an original maturity of less
than 90 days. We do not believe we have a material exposure to interest rate fluctuations related to our cash and
cash equivalents.
As of June 30, 2022, we had $1,097 million of variable-rate debt. As a result, we have exposure to market
risk for changes in interest rates related to these obligations. In order to mitigate our exposure to interest rate
changes related to our variable rate debt, we execute interest rate swap contracts to fix the interest rate on a portion
of our outstanding or forecasted long-term debt with varying maturities. As of June 30, 2022, a hypothetical 100
basis point increase in rates, inclusive of our outstanding interest rate swaps, would result in a $6.4 million impact to
interest expense over the next 12 months.
Currency Exchange Rate Risk. We conduct business in multiple currencies through our worldwide
operations but report our financial results in U.S. dollars. We manage these currency risks through normal operating
activities and, when deemed appropriate, through the use of derivative financial instruments. We have policies
governing the use of derivative instruments and do not enter into financial instruments for trading or speculative
purposes. The use of derivatives is intended to reduce, but does not entirely eliminate, the impact of adverse
currency exchange rate movements. A summary of our currency risk is as follows:
•
•
•
Translation of our non-U.S. dollar revenues and expenses: Revenue and related expenses generated in
currencies other than the U.S. dollar could result in higher or lower net loss when, upon consolidation, those
transactions are translated to U.S. dollars. When the value or timing of revenue and expenses in a given
currency are materially different, we may be exposed to significant impacts on our net loss and non-GAAP
financial metrics, such as adjusted EBITDA.
Our currency hedging objectives are targeted at reducing volatility in our forecasted U.S. dollar-equivalent
adjusted EBITDA in order to maintain stability on our incurrence-based debt covenants. Since adjusted
EBITDA excludes non-cash items such as depreciation and amortization that are included in net loss, we
may experience increased, not decreased, volatility in our GAAP results due to our hedging approach. Our
most significant net currency exposures by volume are in the Euro and British Pound.
In addition, we elect to execute currency derivatives contracts that do not qualify for hedge accounting. As a
result, we may experience volatility in our consolidated statements of operations due to (i) the impact of
unrealized gains and losses reported in other income (expense), net, on the mark-to-market of outstanding
contracts and (ii) realized gains and losses recognized in other income (expense), net, whereas the
offsetting economic gains and losses are reported in the line item of the underlying activity, for example,
revenue.
Translation of our non-U.S. dollar assets and liabilities: Each of our subsidiaries translates its assets and
liabilities to U.S. dollars at current rates of exchange in effect at the balance sheet date. The resulting gains
and losses from translation are included as a component of accumulated other comprehensive loss on the
consolidated balance sheet. Fluctuations in exchange rates can materially impact the carrying value of our
assets and liabilities.
We have currency exposure arising from our net investments in foreign operations. We enter into currency
derivatives to mitigate the impact of currency rate changes on certain net investments.
Remeasurement of monetary assets and liabilities: Transaction gains and losses generated from
remeasurement of monetary assets and liabilities denominated in currencies other than the functional
currency of a subsidiary are included in other income (expense), net, on the consolidated statements of
operations. Certain of our subsidiaries hold intercompany loans denominated in a currency other than their
functional currency. Due to the significance of these balances, the revaluation of intercompany loans can
have a material impact on other income (expense), net. We expect these impacts may be volatile in the
future, although our largest intercompany loans do not have a U.S. dollar cash impact for the consolidated
43
group because they are either 1) U.S. dollar loans or 2) we elect to hedge certain non-U.S. dollar loans with
cross-currency swaps and forward contracts. A hypothetical 10% change in currency exchange rates was
applied to total net monetary assets denominated in currencies other than the functional currencies at the
balance sheet dates to compute the impact these changes would have had on our income before taxes in
the near term. The balances are inclusive of the notional value of any cross-currency swaps designated as
cash flow hedges. A hypothetical decrease in exchange rates of 10% against the functional currency of our
subsidiaries would have resulted in a change of $2.8 million on our income before income taxes for the year
ended June 30, 2022.
44
Item 8.
Financial Statements and Supplementary Data
CIMPRESS PLC
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 238) . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive (Loss) Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Shareholders’ Deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
46
48
49
50
51
54
56
45
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Cimpress plc
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Cimpress plc and its subsidiaries (the
“Company”) as of June 30, 2022 and 2021, and the related consolidated statements of operations, of
comprehensive income, of shareholders' deficit and of cash flows for each of the three years in the period ended
June 30, 2022, including the related notes (collectively referred to as the “consolidated financial statements”). We
also have audited the Company's internal control over financial reporting as of June 30, 2022, based on criteria
established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the financial position of the Company as of June 30, 2022 and 2021, and the results of its operations and its cash
flows for each of the three years in the period ended June 30, 2022 in conformity with accounting principles
generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of June 30, 2022, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining
effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over
financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under
Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the
Company's internal control over financial reporting based on our audits. We are a public accounting firm registered
with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent
with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of
material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our audit of internal control over financial reporting included
obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk. Our audits also included performing such other procedures as we considered necessary in the circumstances.
We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
46
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the
consolidated financial statements that was communicated or required to be communicated to the audit committee
and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii)
involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Goodwill - Quantitative Impairment Assessments
As described in Note 8 to the consolidated financial statements, the Company’s goodwill balance was $767
million as of June 30, 2022. Management performed a quantitative assessment for all nine reporting units with
goodwill as of the annual goodwill impairment test date of May 31. For each reporting unit, the estimated fair value
of the reporting unit exceeded the related carrying value and management concluded that no impairment existed.
Management used the income approach, specifically the discounted cash flow method, to derive the fair value of
each reporting unit. This approach calculates fair value by estimating the after-tax cash flows attributable to a
reporting unit and then discounting the after-tax cash flows to a present value using a risk-adjusted discount rate.
The cash flow projections in the fair value analysis are considered Level 3 inputs, and consist of management's
estimates of revenue growth rates and operating margins, taking into consideration historical results, as well as
industry and market conditions. The discount rate used in the fair value analysis is based on a weighted average
cost of capital.
The principal considerations for our determination that performing procedures relating to the goodwill
quantitative impairment assessments for certain reporting units is a critical audit matter are (i) the significant
judgment by management when determining the fair value of certain reporting units, (ii) a high degree of auditor
judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions
related to the revenue growth rates, operating margins, and discount rates, and (iii) the audit effort involved the use
of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with
forming our overall opinion on the consolidated financial statements. These procedures included testing the
effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the
valuation of certain reporting units. These procedures also included, among others (i) testing management’s
process for determining the fair value of certain reporting units; (ii) evaluating the appropriateness of the discounted
cash flow method; (iii) testing the completeness and accuracy of underlying data used in the discounted cash flow
method; and (iv) evaluating the reasonableness of the significant assumptions used by management related to the
revenue growth rates, operating margins, and discount rates. Evaluating management’s assumptions related to the
revenue growth rates and operating margins involved evaluating whether the assumptions used by management
were reasonable considering the current and past performance of the reporting units, the consistency with external
market and industry data, and whether these assumptions were consistent with evidence obtained in other areas of
the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of (i) the
appropriateness of the Company’s discounted cash flow method and (ii) the reasonableness of the discount rate
significant assumption.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
August 5, 2022
We have served as the Company’s auditor since 2014.
47
CIMPRESS PLC
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
June 30,
2022
June 30,
2021
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, net of allowances of $6,140 and $9,404, respectively . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software and website development costs, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities, non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Liabilities, noncontrolling interests and shareholders’ deficit
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities, current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities, non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and contingencies (Note 17)
Redeemable noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders’ deficit:
Preferred shares, nominal value €0.01 per share, 100,000,000 shares authorized; none
issued and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ordinary shares, nominal value €0.01 per share, 100,000,000 shares authorized;
44,083,569 and 44,080,627 shares issued, respectively; 26,112,322 and
26,035,910 shares outstanding, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred ordinary shares, nominal value €1.00 per share, 25,000 shares authorized, none
and 25,000 issued and outstanding, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury shares, at cost, 17,971,247 and 18,044,717 shares, respectively . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total shareholders' deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities, noncontrolling interests and shareholders’ deficit . . . . . . . . . . . . . . . . . . . . . . . . . . $
277,053 $
49,952
63,885
126,728
108,697
626,315
286,826
80,694
90,474
113,088
766,600
154,730
—
48,945
2,167,672 $
313,710 $
253,841
58,861
10,386
27,706
28,035
692,539
41,142
1,675,562
57,474
64,394
2,531,111
183,023
152,248
50,679
70,044
72,504
528,498
328,679
87,626
87,690
149,618
726,979
186,744
50,713
35,951
2,182,498
199,831
247,513
50,868
9,895
26,551
103,515
638,173
27,433
1,732,511
66,222
96,410
2,560,749
131,483
71,120
—
615
—
(1,363,550)
501,003
414,138
(47,128)
(494,922)
2,167,672 $
—
615
28
(1,368,595)
459,904
530,159
(71,482)
(449,371)
2,182,498
See accompanying notes.
48
CIMPRESS PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Cost of revenue (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Technology and development expense (1) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketing and selling expense (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expense (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of acquired intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring expense (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add: Net (income) attributable to noncontrolling interests . . . . . . . . . . . . . . .
Net (loss) income attributable to Cimpress plc . . . . . . . . . . . . . . . . . . . . . . . . $
Basic net (loss) income per share attributable to Cimpress plc . . . . . . . . . . $
Diluted net (loss) income per share attributable to Cimpress plc . . . . . . . . . $
Weighted average shares outstanding — basic . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares outstanding — diluted . . . . . . . . . . . . . . . . . . . . . .
____________________________________________
(1) Share-based compensation is allocated as follows:
Year Ended June 30,
2022
2,887,555 $
1,492,726
292,845
789,241
197,345
54,497
13,603
—
47,298
61,463
(99,430)
—
9,331
59,901
(50,570)
(3,761)
(54,331) $
(2.08) $
(2.08) $
2021
2,575,961 $
1,299,889
253,060
648,391
195,652
53,818
1,641
—
123,510
(19,353)
(119,368)
(48,343)
(63,554)
18,903
(82,457)
(2,772)
(85,229) $
(3.28) $
(3.28) $
26,094,842
26,094,842
25,996,572
25,996,572
2020
2,481,358
1,248,871
253,252
574,041
183,054
51,786
13,543
100,842
55,969
22,874
(75,840)
—
3,003
(80,992)
83,995
(630)
83,365
3.07
3.00
27,180,744
27,773,286
Year Ended June 30,
2022
2021
2020
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Technology and development expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketing and selling expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
538 $
387 $
13,582
11,382
24,264
—
9,063
6,947
20,637
—
486
9,003
2,703
21,061
1,621
See accompanying notes.
49
CIMPRESS PLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other comprehensive (loss) income, net of tax:
Foreign currency translation (losses) gains, net of hedges . . . . . . . . . . .
Net unrealized gains (losses) on derivative instruments designated
and qualifying as cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from accumulated other comprehensive loss to
net (loss) income on derivative instruments . . . . . . . . . . . . . . . . . . . . . . . .
Gain (loss) on pension benefit obligation, net . . . . . . . . . . . . . . . . . . . . . .
Comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add: Comprehensive (income) attributable to noncontrolling interests .
Year Ended June 30,
2022
2021
2020
(50,570) $
(82,457) $
83,995
(9,990)
12,915
10,933
2,813
10,336
(24,570)
26,197
1,649
(29,901)
(76)
(4,089)
(336)
(63,631)
(4,404)
5,774
(1,195)
74,937
(391)
74,546
Total comprehensive (loss) income attributable to Cimpress plc . . . . . . . . . $
(29,977) $
(68,035) $
See accompanying notes.
50
Balance at June
30, 2019 . . . . . . . .
Issuance of
ordinary shares
due to share
option exercises,
net of shares
withheld for taxes
Restricted share
units vested, net
of shares withheld
for taxes . . . . . . . .
Issuance of
deferred ordinary
shares . . . . . . . . . .
Grant of restricted
share awards . . . .
Share-based
compensation
expense . . . . . . . .
Purchase of
ordinary shares . .
Net income
attributable to
Cimpress plc . . . .
Redeemable
noncontrolling
interest accretion
to redemption
value . . . . . . . . . . .
Adoption of new
accounting
standards . . . . . . .
Issuance of
warrants . . . . . . . .
Net unrealized
loss on derivative
instruments
designated and
qualifying as cash
flow hedges . . . . .
Foreign currency
translation, net of
hedges . . . . . . . . .
Unrealized loss
on pension
benefit obligation,
net of tax . . . . . . .
Balance at June
30, 2020 . . . . . . . .
CIMPRESS PLC
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
(in thousands)
Ordinary Shares
Deferred Ordinary
Shares
Treasury Shares
Number
of
Shares
Issued
Amount
Number
of
Shares
Issued
Amount
Number
of
Shares
Amount
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Shareholders’
Deficit
44,080 $ 615
— $ —
(13,635) $
(737,447) $ 411,079 $ 537,422 $
(79,857) $
131,812
—
—
—
—
432
(12,518)
(28,388)
—
—
(40,906)
—
—
—
—
13
712
(1,317)
—
—
25
28
—
—
—
—
—
(2)
—
(187)
—
—
—
—
—
—
—
—
34,810
—
—
—
—
(5,003)
(627,056)
—
—
—
—
—
—
—
—
—
—
—
—
—
83,365
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(5,493)
—
3,143
22,432
—
—
—
—
—
(18,796)
(18,796)
11,172
11,172
—
—
—
—
—
—
—
—
(1,195)
(1,195)
44,080 $ 615
25 $
28
(18,195) $ (1,376,496) $ 438,616 $ 618,437 $
(88,676) $
(407,476)
See accompanying notes.
51
—
—
—
—
—
—
—
—
—
(605)
28
(187)
34,810
(627,056)
83,365
(5,493)
3,143
22,432
CIMPRESS PLC
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT (CONTINUED)
(in thousands)
Ordinary Shares
Deferred Ordinary
Shares
Treasury Shares
Number
of
Shares
Issued
Amount
Number
of
Shares
Issued
Amount
Number
of
Shares
Amount
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Shareholders’
Deficit
44,080 $ 615
25 $
28
(18,195) $ (1,376,496) $ 438,616 $ 618,437 $
(88,676) $
(407,476)
—
—
—
—
30
3
(2,283)
—
—
(2,280)
—
—
—
—
120
7,898
(13,655)
—
—
—
—
—
—
37,226
—
—
—
—
(5,757)
37,226
—
—
—
—
—
—
—
(85,229)
—
(85,229)
—
—
—
—
—
—
—
(3,049)
—
(3,049)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,247
6,247
11,283
11,283
—
—
—
—
—
—
—
—
(336)
(336)
44,080 $ 615
25 $
28
(18,045) $ (1,368,595) $ 459,904 $ 530,159 $
(71,482) $
(449,371)
See accompanying notes.
Balance at June
30, 2020 . . . . . . . .
Issuance of
ordinary shares
due to share
option exercises,
net of shares
withheld for taxes
Restricted share
units vested, net
of shares withheld
for taxes . . . . . . . .
Share-based
compensation
expense . . . . . . . .
Net loss
attributable to
Cimpress plc . . . .
Redeemable
noncontrolling
interest accretion
to redemption
value . . . . . . . . . . .
Net unrealized
gain on derivative
instruments
designated and
qualifying as cash
flow hedges . . . . .
Foreign currency
translation, net of
hedges . . . . . . . . .
Unrealized loss
on pension
benefit obligation,
net of tax . . . . . . .
Balance at June
30, 2021 . . . . . . . .
52
CIMPRESS PLC
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT (CONTINUED)
(in thousands)
Balance at June 30,
2021 . . . . . . . . . . . . . .
Purchase and
cancellation of
deferred ordinary
shares . . . . . . . . . . . . .
Restricted share
units vested, net of
shares withheld for
taxes . . . . . . . . . . . . . .
Share-based
compensation
expense . . . . . . . . . . .
Net loss attributable
to Cimpress plc . . . . .
Redeemable
noncontrolling
interest accretion to
redemption value . . .
Decrease in
noncontrolling
interest due to share
purchase . . . . . . . . . .
Net unrealized gain
on derivative
instruments
designated and
qualifying as cash
flow hedges . . . . . . . .
Foreign currency
translation, net of
hedges . . . . . . . . . . . .
Unrealized gain on
pension benefit
obligation, net of tax .
Balance at June 30,
2022 . . . . . . . . . . . . . .
Ordinary Shares
Deferred Ordinary
Shares
Treasury Shares
Number
of
Shares
Issued
Amount
Number
of
Shares
Issued
Amount
Number
of
Shares
Amount
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Shareholders’
Deficit
44,080 $ 615
25 $
28
(18,045) $ (1,368,595) $ 459,904 $ 530,159 $
(71,482) $
(449,371)
—
—
(25)
(28)
—
—
—
—
4
—
—
—
74
5,045
(8,315)
—
—
—
—
—
—
—
—
—
—
—
49,686
—
—
(54,331)
—
—
—
—
—
—
(28)
(3,270)
49,686
(54,331)
—
—
—
—
—
—
—
(61,690)
—
(61,690)
—
—
—
—
—
—
(272)
—
—
(272)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
29,010
29,010
(6,305)
(6,305)
1,649
1,649
44,084 $ 615
— $ —
(17,971) $ (1,363,550) $ 501,003 $ 414,138 $
(47,128) $
(494,922)
See accompanying notes.
53
CIMPRESS PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Operating activities
Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Adjustments to reconcile net (loss) income to net cash provided by operating
activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized (gain) loss on derivatives not designated as hedging instruments
included in net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on monetary assets and liabilities denominated
in non-functional currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-cash items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, net of effects of businesses
acquired:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investing activities
Purchases of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from the sale of subsidiaries, net of transaction costs and cash divested .
Business acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalization of software and website development costs . . . . . . . . . . . . . . . . . . . . . .
Proceeds from the sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from maturity of held-to-maturity investments . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for settlement of derivatives designated as hedging instruments . . . . . . . .
Other investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing activities
Proceeds from borrowings of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from Term Loan B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of senior notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of 12% Senior Secured Notes due 2025 . . . . . . . . . . . . . . . .
Proceeds from issuance of warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for early redemption of 12% Senior Secured Notes due 2025 . . . . . . . . . .
Payments of debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of purchase consideration included in acquisition-date fair value . . . . . . . .
Payments of withholding taxes in connection with equity awards . . . . . . . . . . . . . . . . .
Payments of finance lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of ordinary shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of ordinary shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution to noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
See accompanying notes.
54
Year Ended June 30,
2021
2020
2022
(50,570) $
(82,457) $
83,995
175,681
—
49,766
—
22,879
—
173,212
—
37,034
19,882
(10,284)
48,343
167,943
100,842
34,874
—
(106,864)
—
(40,408)
17,323
7,731
537
(13,704)
240
7,041
(802)
11,229
(18,119)
(44,089)
(5,989)
109,977
33,575
219,536
(11,474)
16,382
(2,606)
29,367
23,218
265,221
(54,040)
(38,524)
—
—
(75,258)
(65,297)
37,771
151,200
2,244
(617)
(3,997)
(53,410)
(60,937)
5,696
—
(3,291)
(269)
(354,316)
26,659
(18,328)
11,946
(17,547)
36,766
338,444
(50,467)
(1,124)
(4,272)
(43,992)
1,644
—
29,791
1,556
(66,864)
—
—
—
—
—
665,682
1,149,751
—
—
—
1,281,490
—
210,500
271,568
22,432
(14,510) (1,242,606) (1,337,334)
—
(309,000)
(22,570)
(11,963)
(358)
(1,205)
(41,709)
(5,757)
(9,511)
(8,000)
—
(5,063)
(627,056)
—
6
(2,280)
(3,955)
(4,747)
(1,758)
(684)
(258,255)
—
(1,444)
(43,647)
(3,219)
(37,512)
(2,165)
—
—
(3,963)
(112)
(106,572)
224,128
CIMPRESS PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(in thousands)
Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 277,053 $ 183,023 $
Supplemental disclosures of cash flow information
Cash paid during the period for:
2,969
138,002
45,021
Year Ended June 30,
2021
2022
(14,937)
94,030
183,023
2020
(3,583)
9,742
35,279
45,021
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98,099 $ 116,977 $
32,987
27,870
72,906
13,520
Non-cash investing and financing activities
Property and equipment acquired under finance leases . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts accrued related to property, plant and equipment . . . . . . . . . . . . . . . . . . . . . .
Amounts accrued related to capitalized software development costs . . . . . . . . . . . . . .
Amounts accrued related to business acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,033
12,810
124
8,425
6,996
4,462
2,830
45,025
1,605
8,371
—
2,289
See accompanying notes.
55
CIMPRESS PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
1. Description of the Business
Cimpress is a strategically focused group of more than a dozen businesses that specialize in mass
customization of printing and related products, via which we deliver large volumes of individually small-sized
customized orders. Our products include a broad range of marketing materials, business cards, signage,
promotional products, logo apparel, packaging, books and magazines, wall decor, photo merchandise, invitations
and announcements, and other categories. Mass customization is a core element of the business model of each
Cimpress business and is a competitive strategy which seeks to produce goods and services to meet individual
customer needs with near mass production efficiency.
In October 2021 our Vista business and reportable segment began evolving its brand architecture to "Vista".
Brands like "VistaPrint", "VistaCreate", "99designs by Vista", Vista x Wix, and "Vista Corporate Solutions" now
operate within the "Vista" brand architecture. This move should help open customers' minds to allow us to serve a
broader set of their needs across a wide range of products and solutions that includes design, social media and web
presence as well as print. No changes were made to our internal organizational or reporting structure as a result of
this rebranding, but we we now refer to this reportable segment as "Vista". Refer to Note 15 for additional details.
2. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include the accounts of Cimpress plc, its wholly owned subsidiaries,
entities in which we maintain a controlling financial interest, and those entities in which we have a variable interest
and are the primary beneficiary. Intercompany balances and transactions have been eliminated. Investments in
entities in which we cannot exercise significant influence, and for which the related equity securities do not have a
readily determinable fair value, are included in other assets on the consolidated balance sheets; otherwise the
investments are recognized by applying equity method accounting. Our equity method investments are included in
other assets on the consolidated balance sheets.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles
(“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. We believe our most significant estimates are
associated with the ongoing evaluation of the recoverability of our long-lived assets and goodwill, estimated useful
lives of assets, share-based compensation, accounting for business combinations, and income taxes and related
valuation allowances, among others. By their nature, estimates are subject to an inherent degree of uncertainty.
Actual results could differ from those estimates.
In light of the recent Russian invasion of Ukraine and the related sanctions that have been placed on certain
Russian entities and activities, we have evaluated the impacts that these events have on our business and on our
financial results. Currently, we have no material exposure to Ukraine and Russia in terms of revenue, supply and
tangible assets. We also considered any triggering events for our intangibles assets and due to the limited exposure
we have to both countries, we concluded that no triggering events have occurred. We do have employees in
Ukraine from our recently acquired Depositphotos business, and we are providing financial and other assistance to
those employees. The impact of these costs are not material to our financial results.
56
Revision of Prior Period Financial Statements
Foreign Currency Gains Associated with Intercompany Loan Hedge
During the second fiscal quarter of 2022, we identified an error related to the recognition of foreign currency
gains that were included in other income (expense), net within our consolidated statements of operations,
associated with a net investment hedge. In May 2021, we designated a €300,000 intercompany loan as a net
investment hedge to hedge the risk of changes in the U.S. dollar equivalent value of a portion of our net investment
in one of our consolidated subsidiaries that has the Euro as its functional currency. As this hedging instrument was
designated as a net investment hedge, all foreign currency gains and losses should be recognized in accumulated
other comprehensive loss as part of currency translation adjustment. For the year ended June 30, 2021, we
incorrectly recognized $7,518 of gains in other income (expense), net. This error overstated other income
(expense), net; income (loss) before income taxes; and net loss for the period but did not have an impact on cash
provided by operating activities, since it is a non-cash currency item. Included below are the revisions made for
each period presented.
Consolidated Balance Sheets
Reported
As of June 30, 2021
Adjustments
Revised
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(79,000) $
537,677
7,518 $
(7,518)
(71,482)
530,159
Consolidated Statements of Operations
Year ended
June 30, 2021
Adjustments
Reported
Revised
Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(11,835) $
(7,518) $
(19,353)
Loss before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss attributable to Cimpress plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss per share attributable to Cimpress plc: . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(56,036)
(74,939)
(77,711)
(7,518)
(63,554)
(7,518)
(82,457)
(7,518)
(85,229)
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(2.99) $
(2.99) $
(0.29) $
(0.29) $
(3.28)
(3.28)
Consolidated Statements of Comprehensive (Loss) Income
Year ended
June 30, 2021
Adjustments
Reported
Revised
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(74,939) $
(7,518) $
(82,457)
Foreign currency translation losses, net of hedges . . . . . . . . . . . . . . . . . . . . . . . . . .
5,397
7,518
12,915
Consolidated Statements of Shareholders' Deficit
Year ended
June 30, 2021
Adjustments
Reported
Revised
Net loss attributable to Cimpress plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(77,711) $
(7,518) $
(85,229)
Foreign currency translation, net of hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,765
7,518
11,283
Consolidated Statements of Cash Flows
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Effect of exchange rate changes on monetary assets and liabilities denominated
in non-functional currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year ended
June 30, 2021
Adjustments
Reported
Revised
(74,939) $
(7,518) $
(82,457)
(7,278)
7,518
240
57
Presentation of Revenue and Cost of Revenue
During the first quarter of fiscal 2022, we identified an immaterial error related to the presentation of
revenue for one-to-one design service arrangements that overstated revenue and cost of revenue for the period
from October 1, 2020 through June 30, 2021. On October 1, 2020 we acquired the 99designs business, which is
presented as part of our Vista reportable segment, and after acquisition we recognized revenue on a gross basis as
if we were the principal to the transactions. During the first quarter of fiscal 2022, we reconsidered the guidance of
ASC 606-10-55-39 and confirmed we are the principal for contest arrangements; however, the one-to-one design
service portion of 99designs revenue is governed by different terms and conditions. We evaluated whether we have
control over these services before the design is transferred to the customer, as we leverage a network of third-party
designers to fulfill this offering. The pricing and fulfillment responsibility aspects of the one-to-one design
arrangements led us to conclude we are an agent to these specific transactions.
The revision for the year ended June 30, 2021 is summarized in the table below.
Consolidated Statements of Operations
Year ended June 30, 2021
Adjustments
Reported
Revised
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,592,513 $
(16,552) $ 2,575,961
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,316,441
(16,552)
1,299,889
Management assessed the materiality of the misstatements described above on prior period financial
statements in accordance with SEC Staff Accounting Bulletin (“SAB” No. 99, Materiality, codified in ASC 250-10,
Accounting Changes and Error Corrections ("ASC 250") and ASC 250 (SAB No. 108, Considering the Effects of
Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements) and concluded
that these misstatements were not material to any prior annual or interim periods.
Cash and Cash Equivalents
We consider all highly liquid investments purchased with an original maturity of three months or less to be
the equivalent of cash for the purpose of balance sheet and statement of cash flows presentation. Cash equivalents
consist of depository accounts and money market funds. Cash and cash equivalents restricted for use were $543
and $537 as of June 30, 2022 and 2021, respectively, and are included in other assets in the accompanying
consolidated balance sheets.
For bank accounts that are overdrawn at the end of a reporting period, including any net negative balance
in our notional cash pool, we reclassify these overdrafts to short-term debt on our consolidated balance sheets.
Book overdrafts that result from outstanding checks in excess of our bank balance are reclassified to other current
liabilities. We did not have a bank or book overdraft for any of the periods presented.
Marketable Securities
We hold certain investments that are classified as held-to-maturity (HTM) as we have the intent and ability
to hold them to their maturity dates. Our policy is to invest in the following permitted classes of assets: overnight
money market funds invested in U.S. Treasury securities and U.S. government agency securities, U.S. Treasury
securities-specifically U.S. Treasury bills, notes, and bonds, U.S. government agency securities, bank time deposits,
commercial paper, corporate notes and bonds, and medium term notes. We generally invest in securities with a
maturity of two years or less. As the investments are classified as held-to-maturity they are recorded at amortized
cost and interest income is recorded as it is earned within interest expense, net.
58
We will continue to assess our securities for impairment when the fair value is less than amortized cost to
determine if any risk of credit loss exists. As our intent is to hold the securities to maturity, we must assess whether
any credit losses related to our investments are recoverable and determine if it is more likely than not that we will be
required to sell the security before recovery of its amortized cost basis. We did not record an allowance for credit
losses and we recognized no impairments for these marketable securities during the years ended June 30, 2022
and 2021, and we held no marketable securities during the year ended June 30, 2020.
The following is a summary of the net carrying amount, unrealized gains, unrealized losses, and fair value
of held-to-maturity securities by type and contractual maturity as of June 30, 2022 and June 30, 2021.
Due within one year or less:
Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Total held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
49,952 $
49,952 $
(546) $
(546) $
49,406
49,406
Amortized cost
June 30, 2022
Unrealized
losses
Fair value
Amortized cost
June 30, 2021
Unrealized
gains
Fair value
Due within one year or less:
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total due within one year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
74,463 $
77,785
152,248
(28) $
(57)
(85)
Due after one year through two years:
Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
50,713
(90)
202,961 $
(175) $
74,407
77,638
152,045
50,721
202,766
Accounts Receivable
Accounts receivable includes amounts due from customers. We offset gross trade accounts receivable with
an allowance for doubtful accounts, which is our best estimate of the amount of probable credit losses in existing
accounts receivable. Account balances are charged off against the allowance when the potential for recovery is no
longer reasonably assured.
Inventories
Inventories consist primarily of raw materials and are recorded at the lower of cost or net realizable value
using the first-in, first-out method. Costs to produce products are included in cost of revenues as incurred.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Additions
and improvements that substantially extend the useful life of a particular asset are capitalized while repairs and
maintenance costs are expensed as incurred. Assets that qualify for the capitalization of interest cost during their
construction period are evaluated on a per project basis and, if material, the costs are capitalized. No interest costs
associated with our construction projects were capitalized in any of the years presented as the amounts were not
material. Depreciation of plant and equipment is recorded on a straight-line basis over the estimated useful lives of
the assets.
Software and Website Development Costs
We capitalize eligible salaries and payroll-related costs of employees and third-party consultants who
devote time to the development of websites and internal-use computer software. Capitalization begins when the
preliminary project stage is complete, management with the relevant authority authorizes and commits to the
funding of the software project, and it is probable that the project will be completed and the software will be used to
perform the function intended. These costs are amortized on a straight-line basis over the estimated useful life of
the software, which is generally over a three year period. Costs associated with preliminary stage software
development, repair, maintenance or the development of website content are expensed as incurred.
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Amortization of previously capitalized amounts in the years ended June 30, 2022, 2021 and 2020 was
$54,646, $47,560, and $40,753, respectively, resulting in accumulated amortization of $273,629 and $231,482 at
June 30, 2022 and 2021, respectively.
Intangible Assets
We capitalize the costs of purchasing patents from unrelated third parties and amortize these costs over the
estimated useful life of the patent. The costs related to patent applications, pursuing others who we believe infringe
on our patents, and defending against patent-infringement claims are expensed as incurred.
We record acquired intangible assets at fair value on the date of acquisition using the income approach to
value the trade names, customer relationships and customer network and a replacement cost approach to value
developed technology and our print network. The income approach calculates fair value by discounting the
forecasted after-tax cash flows back to a present value using an appropriate discount rate. The baseline data for
this analysis was the cash flow estimates used to price the transaction. We amortize such assets using the straight-
line method over the expected useful life of the asset, unless another amortization method is deemed to be more
appropriate. In estimating the useful life of the acquired assets, we reviewed the expected use of the assets
acquired, factors that may limit the useful life of an acquired asset or may enable the extension of the useful life of
an acquired asset without substantial cost, the effects of obsolescence, demand, competition and other economic
factors, and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.
We evaluate the remaining useful life of intangible assets on a periodic basis to determine whether events
and circumstances warrant a revision to the remaining useful life. If the estimate of an intangible asset’s remaining
useful life is changed, we amortize the remaining carrying value of the intangible asset prospectively over the
revised remaining useful life.
Long-Lived Assets
Long-lived assets with a finite life are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would
necessitate an impairment assessment include a significant decline in the observable market value of an asset, a
significant change in the extent or manner in which an asset is used, or any other significant adverse change that
would indicate that the carrying amount of an asset or group of assets may not be recoverable.
During the year ended June 30, 2021, our intent to occupy two leased spaces changed, and we performed
the required impairment assessment for the right-of-use assets. The assessment resulted in a total impairment
charge of $12,769 for both right-of-use assets as well as an $8,303 impairment charge for abandoned assets
associated with the leased spaces. These charges were recognized in general and administrative expense. Refer to
Note 16 for additional information about the lease changes in fiscal year 2021.
Business Combinations
We recognize the assets acquired and liabilities assumed in business combinations on the basis of their fair
values at the date of acquisition. We assess the fair value of assets, including intangible assets, using a variety of
methods and each asset is measured at fair value from the perspective of a market participant. The method used to
estimate the fair values of intangible assets incorporates significant assumptions regarding the estimates a market
participant would make in order to evaluate an asset, including a market participant’s use of the asset and the
appropriate discount rates. Assets acquired that are determined to not have economic use for us are expensed
immediately. Any excess purchase price over the fair value of the net tangible and intangible assets acquired is
allocated to goodwill. Transaction costs and restructuring costs associated with a business combination are
expensed as incurred.
The consideration for our acquisitions often includes future payments that are contingent upon the
occurrence of a particular event. For acquisitions that qualify as business combinations, we record an obligation for
such contingent payments at fair value on the acquisition date.
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Goodwill
The evaluation of goodwill for impairment is performed at a level referred to as a reporting unit. A reporting
unit is either the “operating segment level” or one level below, which is referred to as a “component.” The level at
which the impairment test is performed requires an assessment as to whether the operations below the operating
segment should be aggregated as one reporting unit due to their similarity or reviewed individually. Goodwill is
evaluated for impairment on an annual basis or more frequently when an event occurs or circumstances change
that indicate that the carrying value may not be recoverable. Goodwill is considered to be impaired when the
carrying amount of a reporting unit exceeds its estimated fair value.
We have the option to first assess qualitative factors to determine whether it is more likely than not that the
fair value of a reporting unit is less than its carrying value. If the results of this analysis indicate that the fair value of
a reporting unit is less than its carrying value, the quantitative impairment test is required; otherwise, no further
assessment is necessary. To perform the quantitative approach, we estimate the fair value of our reporting units
using a discounted cash flow methodology. If the carrying value of a reporting unit’s goodwill exceeds its implied fair
value, then we record an impairment loss equal to the difference.
For the years ended June 30, 2022 and 2021, we recognized no goodwill impairment charges, and during
the year ended June 30, 2020, we recognized a goodwill impairment charge of $100,842. We recognized a partial
impairment of the goodwill of our Exaprint reporting unit of $40,391 (a business within The Print Group reportable
segment), a full impairment of the goodwill of our National Pen reporting unit of $34,434 and a full impairment of the
goodwill of our VIDA reporting unit of $26,017 (a business previously reported within All Other Businesses
reportable segment).
Refer to Note 8 for additional details regarding the annual goodwill impairment test performed in the current
fiscal year.
Debt Issuance Costs
Costs associated with the issuance of debt instruments are capitalized and amortized over the term of the
respective financing arrangement on a straight-line basis through the maturity date of the related debt instrument.
We evaluate all changes to our debt arrangements, to determine whether the changes represent a modification or
extinguishment to the old debt arrangement. If a debt instrument is deemed to be modified, we capitalize all new
lenders fees and expense all third-party fees. If we determine that an extinguishment of one of our debt instruments
has occurred, the unamortized financing fees associated with the extinguished instrument are expensed. For the
revolving loans associated with our senior secured credit facility, all lender and third-party fees are capitalized, and
in the event an amendment reduces the committed capacity under the revolving loans, we expense a portion of any
unamortized fees on a pro-rata basis in proportion to the decrease in the committed capacity.
Derivative Financial Instruments
We record all derivatives on the consolidated balance sheet at fair value. We apply hedge accounting to
arrangements that qualify and are designated for hedge accounting treatment, which includes cash flow and net
investment hedges. Hedge accounting is discontinued prospectively if the hedging relationship ceases to be
effective or the hedging or hedged items cease to exist as a result of maturity, sale, termination or cancellation.
Derivatives designated and qualifying as hedges of the exposure to variability in expected future cash flows,
or other types of forecasted transactions, are considered cash flow hedges which could include interest rate swap
contracts and cross-currency swap contracts. In a cash flow hedging relationship, the effective and ineffective
portion of the change in the fair value of the hedging derivative is initially recorded in accumulated other
comprehensive (loss) income. The portion of gain or loss on the derivative instrument previously recorded in
accumulated other comprehensive (loss) income remains in accumulated other comprehensive (loss) income until
the forecasted transaction is recognized in earnings. For derivatives designated as cash flow hedges, we present
the settlement amount of these contracts within cash from operating activities in our consolidated statement of cash
flows, if the hedged item continues after contract settlement.
Derivatives designated and qualifying as hedges of currency exposure of a net investment in a foreign
operation are considered net investment hedges which could include cross-currency swap and currency forward
contracts as well as intercompany loans. In hedging the currency exposure of a net investment in a foreign
61
operation, the effective and ineffective portion of gains and losses on the hedging instruments is recognized in
accumulated other comprehensive (loss) income as part of currency translation adjustment. The portion of gain or
loss on the derivative instrument previously recorded in accumulated other comprehensive (loss) income remains in
accumulated other comprehensive (loss) income until we reduce our investment in the hedged foreign operation
through a sale or substantial liquidation.
We also enter into derivative contracts that are intended to economically hedge certain of our risks, even
though we may not elect to apply hedge accounting or the instrument may not qualify for hedge accounting. When
hedge accounting is not applied, the changes in the fair value of the derivatives are recorded directly in earnings as
a component of other (expense) income, net.
In accordance with the fair value measurement guidance, our accounting policy is to measure the credit risk
of our derivative financial instruments that are subject to master netting agreements on a net basis by counterparty
portfolio. We execute our derivative instruments with financial institutions that we judge to be credit-worthy, defined
as institutions that hold an investment grade credit rating.
Shareholders' Deficit
Comprehensive (Loss) Income
Comprehensive (loss) income is defined as the change in equity of a business enterprise during a period
from transactions and other events and circumstances from non-owner sources. Comprehensive (loss) income is
composed of net (loss) income, unrealized gains and losses on derivatives, unrealized loss on pension benefit
obligation, and cumulative foreign currency translation adjustments, which are included in the accompanying
consolidated statements of comprehensive income.
Treasury Shares
Treasury shares are accounted for using the cost method and are included as a component of
shareholders' equity. Prior to June 2022, we reissued treasury shares as part of our share-based compensation
programs and as consideration for some of our acquisition transactions. Upon issuance of treasury shares we
determine the cost using the average cost method.
Warrants
We bifurcate and separately account for a detachable warrant as a separate equity instrument. The value
assigned to the warrants was determined based on a relative fair value allocation between the warrants and related
debt. The fair value of the warrants was determined using a Monte Carlo valuation and applying a discount for the
lack of marketability for the warrants. We present the allocated value for the warrants within additional paid-in
capital in our consolidated balance sheet. Refer to Note 11 for additional details.
Revenue Recognition
We generate revenue primarily from the sale and shipment of customized manufactured products. We also
generate revenue, to a much lesser extent (and primarily in our Vista business) from digital services, website design
and hosting, professional design services, and email marketing services, as well as a small percentage from order
referral fees and other third-party offerings. Revenues are recognized when control of the promised products or
services is transferred to the customer in an amount that reflects the consideration we expect to be entitled to in
exchange for those products or services. Shipping revenues are recognized when control of the related products is
transferred to the customer. For design service arrangements, we recognize revenue when the services are
complete. A portion of this revenue relates to design contests in which we have determined that we are the principal
in the arrangement as we satisfy our contractual performance obligation to provide the customer with the benefit of
our platform and network of designers.
Under the terms of most of our arrangements with our customers we provide satisfaction guarantees, which
give our customers an option for a refund or reprint over a specified period of time if the customer is not fully
satisfied. As such, we record a reserve for estimated sales returns and allowances as a reduction of revenue, based
on historical experience or the specific identification of an event necessitating a reserve. Actual sales returns have
historically not been significant.
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We have elected to recognize shipping and handling activities that occur after transfer of control of the
products as fulfillment activities and not as a separate performance obligation. Accordingly, we recognize revenue
for our single performance obligation upon the transfer of control of the fulfilled orders, which generally occurs upon
delivery to the shipping carrier. If revenue is recognized prior to completion of the shipping and handling activities,
we accrue the costs of those activities. We do have some arrangements whereby the transfer of control, and thus
revenue recognition, occurs upon delivery to the customer. If multiple products are ordered together, each product is
considered a separate performance obligation, and the transaction price is allocated to each performance obligation
based on the standalone selling price. Revenue is recognized upon satisfaction of each performance obligation. We
generally determine the standalone selling prices based on the prices charged to our customers.
Our products are customized for each individual customer with no alternative use except to be delivered to
that specific customer; however, we do not have an enforceable right to payment prior to delivering the items to the
customer based on the terms and conditions of our arrangements with customers and therefore we recognize
revenue at a point in time.
We record deferred revenue when cash payments are received in advance of our satisfaction of the related
performance obligation. The satisfaction of performance obligations generally occurs shortly after cash payment and
we expect to recognize our deferred revenue balance as revenue within three months subsequent to June 30, 2022.
We periodically provide marketing materials and promotional offers to new customers and existing
customers that are intended to improve customer retention. These incentive offers are generally available to all
customers and, therefore, do not represent a performance obligation as customers are not required to enter into a
contractual commitment to receive the offer. These discounts are recognized as a reduction to the transaction price
when used by the customer. Costs related to free products are included within cost of revenue and sample products
are included within marketing and selling expense.
We have elected to expense incremental direct costs as incurred, which primarily includes sales
commissions, since our contract periods generally are less than one year and the related performance obligations
are satisfied within a short period of time.
Restructuring
Restructuring costs are recorded in connection with initiatives designed to improve efficiency or enhance
competitiveness. Restructuring initiatives require us to make estimates in several areas, including expenses for
severance and other employee separation costs and our ability to generate sublease income to enable us to
terminate lease obligations at the estimated amounts.
For jurisdictions in which there are statutorily required minimum benefits for involuntary terminations,
severance benefits are documented in an employee manual or labor contract, or are consistent with prior
restructuring plan benefits, we evaluate these benefits as ongoing benefit arrangements. We recognize the liability
for these arrangements when it is probable that the employee would be entitled to the benefits and the amounts can
be reasonably estimated. The expense timing generally occurs when management has committed to and approved
the restructuring plan.
Involuntary termination benefits that are in excess of statutory minimum requirements and prior
restructuring plan benefits are recognized as one-time termination benefits and expensed at the date we notify the
employee, unless the employee must provide future service beyond the statutory minimum retention period, in
which case the benefits are expensed ratably over the future service period. Liabilities for costs associated with a
facility exit or disposal activity are recognized when the liability is incurred, as opposed to when management
commits to an exit plan, and are measured at fair value. Restructuring costs are presented as a separate financial
statement line within our consolidated statement of operations.
Advertising Expense
Our advertising costs are primarily expensed as incurred and included in marketing and selling expense.
Advertising expense for the years ended June 30, 2022, 2021 and 2020 was $408,566, $333,665, and $302,449,
respectively, which consisted of external costs related to customer acquisition and retention marketing campaigns.
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Research and Development Expense
Research and development costs are expensed as incurred and included in technology and development
expense. Research and development expense for the years ended June 30, 2022, 2021 and 2020 was $56,996,
$49,254, and $49,201, respectively, which consisted of costs related to enhancing our manufacturing engineering
and technology capabilities.
Income Taxes
As part of the process of preparing our consolidated financial statements, we calculate our income taxes in
each of the jurisdictions in which we operate. This process involves estimating our current tax expense and deferred
tax expense based on assessing temporary and permanent differences resulting from differing treatment of items for
tax and financial reporting purposes. We recognize deferred tax assets and liabilities for the temporary differences
using the enacted tax rates and laws that will be in effect when we expect temporary differences to reverse. We
assess the ability to realize our deferred tax assets based upon the weight of available evidence both positive and
negative. To the extent we believe that it is more likely than not that some portion or all of the deferred tax assets
will not be realized, we establish a valuation allowance. In the event that actual results differ from our estimates or
we adjust our estimates in the future, we may need to increase or decrease income tax expense, which could have
a material impact on our financial position and results of operations.
We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax
position will be sustained upon examination by the taxing authorities, based on the technical merits of the tax
position. The tax benefits recognized in our financial statements from such positions are measured as the largest
benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The unrecognized tax
benefits will reduce our effective tax rate if recognized. Interest and, if applicable, penalties related to unrecognized
tax benefits are recorded in the provision for income taxes. Stranded income tax effects in accumulated other
comprehensive income or loss are released on an item-by-item basis based on when the applicable derivative is
recognized in earnings. We account for investment tax credits using the “deferral” method, under which the tax
benefit from an investment tax credit is deferred and amortized over the book life of the related property.
During the three months ended December 31, 2020, the tax on Global Intangible Low-Taxed Income
(“GILTI”) provision of the Tax Cuts and Jobs Act became applicable to our operations. Companies subject to GILTI
have the option to account for the GILTI tax as a period cost if and when incurred, or to recognize deferred taxes for
temporary differences, including outside basis differences, expected to reverse as GILTI. We elected to account for
GILTI as a period cost, as incurred. We do not expect GILTI to have a material impact on our consolidated financial
statements.
Foreign Currency Translation
Our non-U.S. dollar functional currency subsidiaries translate their assets and liabilities denominated in their
functional currency to U.S. dollars at current rates of exchange in effect at the balance sheet date, and revenues
and expenses are translated at average rates prevailing throughout the period. The resulting gains and losses from
translation are included as a component of accumulated other comprehensive loss. Transaction gains and losses
and remeasurement of assets and liabilities denominated in currencies other than an entity’s functional currency are
included in other income (expense), net in our consolidated statements of operations.
Other Income (Expense), Net
The following table summarizes the components of other income (expense), net:
Year Ended June 30,
2022
2021
2020
Gains (losses) on derivatives not designated as hedging instruments (1) . $
Currency-related gains, net (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other income (expense), net (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
58,148 $
244
3,071
61,463 $
(20,728) $
1,005
370
(19,353) $
20,564
2,309
1
22,874
_____________________
(1) Includes realized and unrealized gains and losses on derivative currency forward and option contracts not designated as hedging
instruments,as well as the ineffective portion of certain interest rate swap contracts that have been de-designated from hedge accounting. For
contracts not designated as hedging instruments, we realized gains of $9,955 and $28,902, respectively, for the years ended June 30, 2022
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and 2020, and losses of $6,854 for the year ended June 30, 2021. Refer to Note 4 for additional details relating to our derivative contracts.
(2) Currency-related (losses) gains, net primarily relates to significant non-functional currency intercompany financing relationships that we may
change at times and are subject to currency exchange rate volatility. In addition, we have certain cross-currency swaps designated as cash
flow hedges which hedge the remeasurement of certain intercompany loans; refer to Note 4 for additional details relating to these cash flow
hedges.
(3) During fiscal year 2022, we identified an immaterial error and revised our previously reported results to reduce the gain presented above by
$7,518 for the year ended June 30, 2021. Refer to the "Revision of Prior Period Financial Statements" section above for additional details.
Net (Loss) Income Per Share Attributable to Cimpress plc
Basic net (loss) income per share attributable to Cimpress plc is computed by dividing net (loss) income
attributable to Cimpress plc by the weighted-average number of ordinary shares outstanding for the respective
period. Diluted net (loss) income per share attributable to Cimpress plc gives effect to all potentially dilutive
securities, including share options, restricted share units (“RSUs”), warrants, and performance share units ("PSUs"),
if the effect of the securities is dilutive using the treasury stock method. Awards with performance or market
conditions are included using the treasury stock method only if the conditions would have been met as of the end of
the reporting period and their effect is dilutive.
The following table sets forth the reconciliation of the weighted-average number of ordinary shares:
Weighted average shares outstanding, basic . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average shares issuable upon exercise/vesting of outstanding
share options/RSUs/warrants (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares used in computing diluted net (loss) income per share
attributable to Cimpress plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended June 30,
2022
2021
2020
26,094,842
25,996,572
27,180,744
—
—
592,542
26,094,842
25,996,572
27,773,286
Weighted average anti-dilutive shares excluded from diluted net (loss)
income per share attributable to Cimpress plc (1)(2) . . . . . . . . . . . . . . . . . . .
762,086
494,329
1,325
___________________
(1) In the periods in which a net loss is recognized, the impact of share options, RSUs, RSAs and warrants is not included as they are anti-
dilutive.
(2) On May 1, 2020, we entered into a financing arrangement with Apollo Global Management, Inc., which included 7-year warrants with a strike
price of $60 that have a potentially dilutive impact on our weighted average shares outstanding. For the years ended June 30, 2022 and
2021, the weighted average anti-dilutive effect of the warrants were 138,088 and 368,933 shares, respectively. For the year ended June 30,
2020, the weighted average dilutive effect of the warrants was 73,719 shares, respectively.
Share-based Compensation
Compensation expense for all share-based awards is measured at fair value on the date of grant and
recognized over the requisite service period. We recognize the impact of forfeitures as they occur. The fair value of
share options is determined using the Black-Scholes valuation model, or lattice model for share options with a
market condition or subsidiary share options. The fair value of RSUs is determined based on the quoted price of our
ordinary shares on the date of the grant. Such value is recognized ratably as expense over the requisite service
period, or on an accelerated method for awards with a performance or market condition. For awards that are
ultimately settleable in cash, we treat them as liability awards and mark the award to market each reporting period
recognizing any gain or loss in our statements of operations. For awards with a performance condition vesting
feature, compensation cost is recorded if it is probable that the performance condition will be achieved.
We have issued PSUs, and we calculate the fair value at grant which is fixed throughout the vesting period.
The fair value is determined using a Monte Carlo simulation valuation model. As the PSUs include both a service
and market condition the related expense is recognized using the accelerated expense attribution method over the
requisite service period for each separately vesting portion of the award. For PSUs that meet the service vesting
condition, the expense recognized over the requisite service period will not be reversed if the market condition is not
achieved.
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Sabbatical Leave
Compensation expense associated with a sabbatical leave, or other similar benefit arrangements, is
accrued over the requisite service period during which an employee earns the benefit, net of estimated forfeitures,
and is included in other liabilities on our consolidated balance sheets.
Concentrations of Credit Risk
We monitor the creditworthiness of our customers to which we grant credit terms in the normal course of
business. We do not have any customers that accounted for greater than 10% of our accounts receivable as of
June 30, 2022 and 2021. We do not have any customers that accounted for greater than 10% of our revenue for
the years ended June 30, 2022, 2021 and 2020.
We maintain an allowance for doubtful accounts for potential credit losses based upon specific customer
accounts and historical trends, and such losses to date in the aggregate have not materially exceeded our
expectations.
Lease Accounting
We determine if an arrangement contains a lease at contract inception. We consider an arrangement to be
a lease if it conveys the right to control an identifiable asset for a period of time. Costs for operating leases that
include incentives such as payment escalations or rent abatement are recognized on a straight-line basis over the
term of the lease. Additionally, inducements received are treated as a reduction of our costs over the term of the
agreement. Leasehold improvements are capitalized at cost and amortized over the shorter of their expected useful
life or the lease term, excluding renewal periods.
Lease right-of-use ("ROU") assets and liabilities for operating and finance leases are recognized based on
the present value of the future lease payments over the lease term at lease commencement date. As most of our
leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information
available at the lease commencement date. Our incremental borrowing rate approximates the interest rate on a
collateralized basis for the economic environments where our leased assets are located, and is established by
considering the credit spread associated with our existing debt arrangements, as well as observed market rates for
instruments with a similar term to that of the lease payments. ROU assets also include any lease payments made at
or before the lease commencement, as well as any initial direct costs incurred. Lease incentives received from the
lessor are recognized as a reduction to the ROU asset.
Our initial determination of the lease term is based on the facts and circumstances that exist at lease
commencement. The lease term may include the effect of options to extend or terminate the lease when it is
reasonably certain that those options will be exercised. We consider these options reasonably certain to be
exercised based on our assessment of economic incentives, including the fair market rent for equivalent properties
under similar terms and conditions, costs of relocating, availability of comparable replacement assets, and any
related disruption to operations that would be experienced by not renewing the lease.
Finance leases are accounted for as an acquisition of an asset and incurrence of an obligation. Assets held
under finance leases are recorded at the lower of the present value of the minimum lease payments or the fair value
of the leased asset at the inception of the lease, and amortized over the useful life of the asset. The corresponding
finance lease obligation is recorded at the present value of the minimum lease payments at inception of the lease.
Operating leases are included in operating lease assets and current and non-current operating lease
liabilities in the consolidated balance sheets. Finance lease assets are included in property, plant, and equipment,
net, and the related liabilities are included in other current liabilities and other liabilities in the consolidated balance
sheets.
Variable lease payments are excluded from the operating lease assets and liabilities and are recognized as
expense in the period in which the obligation is incurred. Variable lease payments primarily include index-based rent
escalation associated with some of our real estate leases, as well as property taxes and common area maintenance
payments for most real estate leases, which are determined based on the costs incurred by the lessor. We also
make variable lease payments for certain print equipment leases that are determined based on production volumes.
66
For lease arrangements where we are deemed to be involved in the construction of structural improvements
prior to the commencement of the lease or take some level of construction risk, we are considered the owner of the
assets during the construction period. Accordingly, as the lessor incurs the construction project costs, the assets
and corresponding financial obligation are recorded in our consolidated balance sheet. Once the construction is
completed, if the lease meets certain “sale-leaseback” criteria, we will remove the asset and related financial
obligation from the balance sheet and treat the building lease as either an operating or finance lease based on our
assessment of the guidance. If, upon completion of construction, the project does not meet the “sale-leaseback”
criteria, the lease will be treated as a financing obligation and we will depreciate the asset over its estimated useful
life for financial reporting purposes.
We have subleased a small amount of our equipment and real estate lease portfolio to third parties, making
us the lessor. Most of these subleases meet the criteria for operating lease classification and the related sublease
income is recognized on a straight-line basis over the lease term within the consolidated statement of operations. To
a lesser extent, where we have leases in which we are the lessees, we classify the leases as finance leases and
have subleased the asset under similar terms, resulting in their classification as direct financing leases. For direct
financing leases, we recognize a sublease receivable within prepaid expenses and other current assets and other
assets in the consolidated balance sheets.
Recently Issued or Adopted Accounting Pronouncements
Adopted Accounting Standards
In October 2021, the FASB issued Accounting Standards Update No. 2021-08 "Business Combinations
(Topic 805) — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" (ASU
2021-08), which provides authoritative guidance for the accounting of acquired contract assets and liabilities when
an acquired company has applied ASC 606 - Revenue from Contracts with Customers. We early adopted the
standard in the second quarter of fiscal year 2022, which allowed us to record the deferred revenue contract liability
as it relates to our acquisition of Depositphotos at carrying value. Refer to Note 7 for additional information relating
to our Depositphotos acquisition. The impact of this adoption did not have a material effect on our consolidated
financial statements.
In July 2021, the FASB issued Accounting Standards Update No. 2021-05 "Leases (Topic 842): Lessors –
Certain Leases with Variable Lease Payments". We early adopted the standard in the second quarter of fiscal year
2022, which provides the option for lessors to classify direct-financing or sales-type leases as operating leases if a
loss would have been incurred at lease commencement when considering non-indexed variable lease payments in
the classification test. We sublease a small number of equipment assets which are classified as direct-financing
leases; the variable lease payments associated with these leases would not have created a loss on day one.
Therefore, the impact of this adoption had no effect on our consolidated financial statements.
Issued Accounting Standards to be Adopted
In May 2021, the FASB issued Accounting Standards Update No. 2021-04 "Earnings Per Share (Topic 260),
Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718),
and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)" (ASU 2021-04), which provides
authoritative guidance for the accounting treatment of contracts in an entity's own equity when calculating earnings
per share. The standard is effective for us on July 1, 2022. We recognize freestanding equity-classified warrants on
our consolidated balance sheet and the effect of those warrants on earnings per share is currently calculated under
the treasury stock method. After adopting the standard, we will be required to prospectively apply the weighted
average method when calculating the effect of warrants on our earnings per share. We do not expect the adoption
of this standard to have a material impact on our consolidated financial statements.
3. Fair Value Measurements
We use a three-level valuation hierarchy for measuring fair value and include detailed financial statement
disclosures about fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the
valuation of an asset or liability as of the measurement date. The three levels are defined as follows:
•
Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities
in active markets.
67
•
•
Level 2: Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active
markets, quoted prices for identical or similar assets in markets that are not active and inputs that are
observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial
instrument.
Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value
measurement.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input
that is significant to the fair value measurement. The following tables summarize our assets and liabilities that are
measured at fair value on a recurring basis and are categorized using the fair value hierarchy:
June 30, 2022
Quoted Prices in
Active
Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Assets
Interest rate swap contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . $
14,336 $
— $
14,336 $
Currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency option contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,638
10,611
—
—
20,638
10,611
Total assets recorded at fair value . . . . . . . . . . . . . . . . . . . . . . $
45,585 $
— $
45,585 $
Liabilities
Cross-currency swap contracts . . . . . . . . . . . . . . . . . . . . . . . .
Currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency option contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(446)
(505)
(9)
—
—
—
(446)
(505)
(9)
Total liabilities recorded at fair value . . . . . . . . . . . . . . . . . . . . $
(960) $
— $
(960) $
—
—
—
—
—
—
—
—
June 30, 2021
Quoted Prices in
Active
Markets for
Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Assets
Currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Total assets recorded at fair value . . . . . . . . . . . . . . . . . . . . . . $
1,679 $
1,679 $
— $
— $
1,679 $
1,679 $
Liabilities
Interest rate swap contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(25,193) $
— $
(25,193) $
Cross-currency swap contracts . . . . . . . . . . . . . . . . . . . . . . . .
Currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency option contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9,914)
(19,651)
(3,080)
—
—
—
(9,914)
(19,651)
(3,080)
Total liabilities recorded at fair value . . . . . . . . . . . . . . . . . . . . $
(57,838) $
— $
(57,838) $
—
—
—
—
—
—
—
During the years ended June 30, 2022 and 2021, there were no significant transfers in or out of Level 1,
Level 2 and Level 3 classifications.
The valuations of the derivatives intended to mitigate our interest rate and currency risk are determined
using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of
each instrument. This analysis utilizes observable market-based inputs, including interest rate curves, interest rate
volatility, or spot and forward exchange rates, and reflects the contractual terms of these instruments, including the
period to maturity. We incorporate credit valuation adjustments to appropriately reflect both our own
nonperformance risk and the respective counterparties' nonperformance risk in the fair value measurements. In
adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the
impact of netting and any applicable credit enhancements.
68
Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2
of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs,
such as estimates of current credit spreads, to appropriately reflect both our own nonperformance risk and the
respective counterparties' nonperformance risk in the fair value measurement. However, as of June 30, 2022, we
have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our
derivative positions and have determined that the credit valuation adjustments are not significant to the overall
valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are
classified in Level 2 in the fair value hierarchy.
As of June 30, 2022 and June 30, 2021, the carrying amounts of our cash and cash equivalents, accounts
receivable, accounts payable and other current liabilities approximated their estimated fair values. As of June 30,
2022 and June 30, 2021, the carrying value of our debt, excluding debt issuance costs and debt premiums and
discounts, was $1,705,365 and $1,764,856, respectively, and the fair value was $1,600,627 and $1,767,209,
respectively. Our debt at June 30, 2022 includes variable-rate debt instruments indexed to LIBOR that resets
periodically, as well as fixed-rate debt instruments. The estimated fair value of our debt was determined using
available market information based on recent trades or activity of debt instruments with substantially similar risks,
terms and maturities, which fall within Level 2 under the fair value hierarchy.
As of June 30, 2022 and June 30, 2021 our held-to-maturity marketable securities were held at an
amortized cost of $49,952 and $202,961, respectively, while the fair value was $49,406 and $202,766, respectively.
The securities were valued using quoted prices for identical assets in active markets, which fall into Level 1 under
the fair value hierarchy.
The estimated fair value of assets and liabilities disclosed above may not be representative of actual values
that could have been or will be realized in the future.
4. Derivative Financial Instruments
We use derivative financial instruments, such as interest rate swap contracts, cross-currency swap
contracts, and currency forward and option contracts, to manage interest rate and foreign currency exposures.
Derivatives are recorded in the consolidated balance sheets at fair value. If the derivative is designated as a cash
flow hedge or net investment hedge, then the change in the fair value of the derivative is recorded in accumulated
other comprehensive loss and subsequently reclassified into earnings in the period the hedged forecasted
transaction affects earnings. Additionally, any ineffectiveness associated with an effective and designated hedge is
recognized within accumulated other comprehensive loss.
The change in the fair value of derivatives not designated as hedges is recognized directly in earnings as a
component of other income (expense), net.
Hedges of Interest Rate Risk
We enter into interest rate swap contracts to manage variability in the amount of our known or expected
cash payments related to a portion of our debt. Our objective in using interest rate swaps is to add stability to
interest expense and to manage our exposure to interest rate movements. We designate our interest rate swaps as
cash flow hedges. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from
a counterparty in exchange for us making fixed-rate payments over the life of the contract agreements without
exchange of the underlying notional amount. Realized gains or losses from interest rate swaps are recorded in
earnings as a component of interest expense, net. Amounts reported in accumulated other comprehensive loss
related to interest rate swap contracts will be reclassified to interest expense, net as interest payments are accrued
or made on our variable-rate debt.
69
As of June 30, 2022, we estimate that $1,970 will be reclassified from accumulated other comprehensive
loss to interest expense, net during the twelve months ending June 30, 2023. As of June 30, 2022, we had fourteen
effective outstanding interest rate swap contracts indexed to USD LIBOR. These hedges have varying start dates
and maturity dates through April 2028.
Interest rate swap contracts outstanding:
Notional Amounts
Contracts accruing interest as of June 30, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Contracts with a future start date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
400,000
430,000
830,000
Hedges of Currency Risk
Cross-Currency Swap Contracts
From time to time, we execute cross-currency swap contracts designated as cash flow hedges or net
investment hedges. Cross-currency swaps involve an initial receipt of the notional amount in the hedge currency in
exchange for our reporting currency based on a contracted exchange rate. Subsequently, we receive fixed rate
payments in our reporting currency in exchange for fixed rate payments in the hedged currency over the life of the
contract. At maturity, the final exchange involves the receipt of our reporting currency in exchange for the notional
amount in the hedged currency.
Cross-currency swap contracts designated as cash flow hedges are executed to mitigate our currency
exposure to the interest receipts as well as the principal remeasurement and repayment associated with certain
intercompany loans denominated in a currency other than our reporting currency, the U.S. dollar. As of June 30,
2022, we had one outstanding cross-currency swap contract designated as a cash flow hedge with a total notional
amount of $58,478, maturing during June 2024. We entered into the cross-currency swap contract to hedge the risk
of changes in one Euro-denominated intercompany loan entered into with one of our consolidated subsidiaries that
has the Euro as its functional currency.
Amounts reported in accumulated other comprehensive loss will be reclassified to other income (expense),
net as interest payments are accrued or paid and upon remeasuring the intercompany loan. As of June 30, 2022,
we estimate that $1,892 of income will be reclassified from accumulated other comprehensive loss to interest
expense, net during the twelve months ending June 30, 2023.
Other Currency Hedges
We execute currency forward and option contracts in order to mitigate our exposure to fluctuations in
various currencies against our reporting currency, the U.S. dollar. These contracts or intercompany loans may be
designated as hedges to mitigate the risk of changes in the U.S. dollar equivalent value of a portion of our net
investment in consolidated subsidiaries that have the Euro as their functional currency. Amounts reported in
accumulated other comprehensive loss are recognized as a component of our cumulative translation adjustment.
In April 2022 we early terminated all of our currency forward contracts designated as net investment
hedges, and as of June 30, 2022 we had no currency forward contracts designated as net investment hedges. We
have one intercompany loan designated as a net investment hedge with a total notional amount of $364,524 that
matures in May 2028.
We have elected to not apply hedge accounting for all other currency forward and option contracts. During
the years ended June 30, 2022 and 2021, we experienced volatility within other income (expense), net, in our
consolidated statements of operations from unrealized gains and losses on the mark-to-market of outstanding
currency forward and option contracts. We expect this volatility to continue in future periods for contracts for which
we do not apply hedge accounting. Additionally, since our hedging objectives may be targeted at non-GAAP
financial metrics that exclude non-cash items such as depreciation and amortization, we may experience increased,
not decreased, volatility in our GAAP results as a result of our currency hedging program.
70
As of June 30, 2022, we had the following outstanding currency derivative contracts that were not
designated for hedge accounting and were used to hedge fluctuations in the U.S. dollar value of forecasted
transactions or balances denominated in Australian Dollar, British Pound, Canadian Dollar, Danish Krone, Euro,
Indian Rupee, Japanese Yen, Mexican Peso, New Zealand Dollar, Norwegian Krone, Philippine Peso, Swiss Franc
and Swedish Krona:
Notional Amount
$437,323
Effective Date
June 2020 through June
2022
Maturity Date
Various dates through
October 2024
Number of Instruments
621
Index
Various
Financial Instrument Presentation
The table below presents the fair value of our derivative financial instruments as well as their classification
on the balance sheet as of June 30, 2022 and June 30, 2021. Our derivative asset and liability balances fluctuate
with interest rate and currency exchange rate volatility.
Asset Derivatives
Liability Derivatives
Balance
Sheet line
item
Gross
amounts of
recognized
assets
Gross amount
offset in
Consolidated
Balance Sheet
Net amount
Balance
Sheet line
item
Gross
amounts of
recognized
liabilities
Gross amount
offset in
Consolidated
Balance Sheet
Net amount
June 30, 2022
Derivatives designated as
hedging instruments
Derivatives in cash flow
hedging relationships
Interest rate swaps . . . . .
Other
assets
$
14,336 $
— $ 14,336
Other
current
liabilities /
other
liabilities
$
— $
— $
—
Cross-currency swaps . . Other
assets
Total derivatives
designated as hedging
instruments . . . . . . . . . . .
Derivatives not
designated as hedging
instruments
Currency forward
contracts . . . . . . . . . . . . .
Currency option
contracts . . . . . . . . . . . . .
Total derivatives not
designated as hedging
instruments . . . . . . . . . . .
Other
current
assets /
other
assets
Other
current
assets /
other
assets
—
—
Other
liabilities
—
(446)
—
(446)
$
14,336 $
— $ 14,336
$
(446) $
— $
(446)
24,440
(3,802)
20,638
10,612
(1)
10,611
Other
current
liabilities /
other
liabilities
Other
liabilities
(505)
—
(505)
(9)
—
(9)
$
35,052 $
(3,803) $ 31,249
$
(514) $
— $
(514)
71
Asset Derivatives
Liability Derivatives
Balance
Sheet line
item
Gross
amounts of
recognized
assets
Gross amount
offset in
Consolidated
Balance Sheet
Net amount
Balance
Sheet line
item
Gross
amounts of
recognized
liabilities
Gross amount
offset in
Consolidated
Balance Sheet
Net amount
June 30, 2021
Derivatives designated as
hedging instruments
Derivatives in cash flow
hedging relationships
Interest rate swaps . . . . .
Other
current
assets /
other
assets
Cross-currency swaps . . Other
assets
Derivatives in Net
Investment Hedging
Relationships
Currency forward
contracts . . . . . . . . . . . . .
Total derivatives
designated as hedging
instruments . . . . . . . . . . .
Other
assets
Derivatives not
designated as hedging
instruments
Interest rate swaps . . . . .
Currency forward
contracts . . . . . . . . . . . . .
Currency option
contracts . . . . . . . . . . . . .
Total derivatives not
designated as hedging
instruments . . . . . . . . . . .
Other
assets
Other
current
assets /
other
assets
Other
current
assets /
other
assets
$
— $
— $
—
Other
current
liabilities /
other
liabilities
$
(23,527) $
176 $ (23,351)
—
—
Other
liabilities
—
(9,914)
—
(9,914)
—
—
—
Other
current
liabilities /
other
liabilities
(11,379)
—
(11,379)
$
— $
— $
—
$
(44,820) $
176 $ (44,644)
$
— $
— $
—
1,796
(117)
1,679
—
—
—
Other
liabilities
Other
current
liabilities /
other
liabilities
Other
current
liabilities /
other
liabilities
$
(1,842) $
— $
(1,842)
(11,510)
3,238
(8,272)
(3,315)
235
(3,080)
$
1,796 $
(117) $
1,679
$
(16,667) $
3,473 $ (13,194)
72
The following table presents the effect of our derivative financial instruments designated as hedging
instruments and their classification within comprehensive income (loss) for the years ended June 30, 2022, 2021
and 2020:
Derivatives in cash flow hedging relationships
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Cross-currency swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives in net investment hedging relationships
Intercompany loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Year Ended June 30,
2022
2021
2020
25,511 $
(22,698)
3,340 $
6,996
(28,259)
3,689
49,225
13,622
65,660 $
7,518
(19,052)
(1,198) $
—
21,240
(3,330)
The following table presents reclassifications out of accumulated other comprehensive loss for the years
ended June 30, 2022, 2021 and 2020:
Amount of Net Gain (Loss) Reclassified from
Accumulated Other Comprehensive Loss into Income
Affected line item in the
Statement of Operations
Year Ended June 30,
2022
2021
2020
Derivatives in cash flow hedging relationships
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . $
Cross-currency swaps . . . . . . . . . . . . . . . . . . . . .
Total before income tax . . . . . . . . . . . . . . . . . . . .
9,998 $
6,967 $
18,286
28,284
(10,950)
(3,983)
3,041
4,583
7,624
Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(2,087)
26,197 $
(106)
(4,089) $
(1,850)
5,774
Interest expense, net
Other income (expense), net
Income (loss) before income
taxes
Income tax expense (benefit)
The following table presents the adjustment to fair value recorded within the consolidated statements of
operations for the years ended June 30, 2022, 2021 and 2020 for derivative instruments for which we did not elect
hedge accounting and de-designated derivative financial instruments that no longer qualify as hedging instruments.
Year Ended June 30,
2022
2021
2020
Affected line item in the
Statement of Operations
Currency contracts . . . . . . . . . . . . . . . . . . . . . . . . $
51,784 $
(24,235) $
20,882
Other income (expense), net
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . .
6,364
3,507
(318) Other income (expense), net
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
58,148 $
(20,728) $
20,564
73
5. Accumulated Other Comprehensive Loss
The following table presents a roll forward of amounts recognized in accumulated other comprehensive loss
by component, net of tax of $16,722, $764, and $1,709 for the years ended June 30, 2022, 2021 and 2020:
(Losses) gains
on cash flow
hedges (1)
(Losses) gains
on pension
benefit
obligation
Translation
adjustments,
net of hedges
(2)
Total
Balance as of June 30, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other comprehensive (loss) income before reclassifications . . .
Amounts reclassified from accumulated other comprehensive
loss to net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net current period other comprehensive (loss) income . . . . . . . .
Balance as of June 30, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive (loss) income before reclassifications . . .
Amounts reclassified from accumulated other comprehensive
loss to net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net current period other comprehensive (loss) income . . . . . . . .
Balance as of June 30, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income before reclassifications . . . . . . . .
Amounts reclassified from accumulated other comprehensive
loss to net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net current period other comprehensive income . . . . . . . . . . . . . .
(11,282) $
(204) $
(68,371) $
(79,857)
(24,570)
(1,195)
11,172
(14,593)
5,774
(18,796)
(30,078)
10,336
(4,089)
6,247
(23,831)
2,813
26,197
29,010
—
(1,195)
(1,399)
(336)
—
(336)
(1,735)
1,649
—
1,649
—
11,172
(57,199)
11,283
—
11,283
(45,916)
(6,305)
5,774
(8,819)
(88,676)
21,283
(4,089)
17,194
(71,482)
(1,843)
—
(6,305)
26,197
24,354
Balance as of June 30, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5,179 $
(86) $
(52,221) $
(47,128)
________________________
(1) (Losses) gains on cash flow hedges include our interest rate swap and cross-currency swap contracts designated in cash flow hedging
relationships.
(2) As of June 30, 2022 and June 30, 2021, the translation adjustment is inclusive of both the unrealized and realized effects of our net
investment hedges. Gains on currency forward and swap contracts, net of tax, of $15,079 and $1,457 have been included in accumulated
other comprehensive loss as of June 30, 2022 and 2021, respectively. Intercompany loan hedge gains of $56,743 and $7,518, net of tax,
have been included in accumulated other comprehensive loss as of June 30, 2022 and 2021, respectively. .
6. Property, Plant and Equipment, Net
Property, plant, and equipment, net consists of the following:
Land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10 years $
4,899 $
5,053
Estimated useful lives
2022
2021
June 30,
Building and building improvements . . . . . . . . . . . . . . . . . . . . . . . . .
10 - 30 years
180,295
Machinery and production equipment . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and production equipment under finance lease . . . . . .
Computer software and equipment . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture, fixtures and office equipment . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation, inclusive of assets under
finance lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4 - 10 years
366,647
4 - 10 years
57,669
3 - 5 years
105,778
5 - 7 years
Shorter of lease term or
expected life of the asset
35,681
52,671
13,117
816,757
191,653
380,013
73,321
119,742
38,357
64,060
7,242
879,441
(557,981)
(583,752)
258,776
28,050
295,689
32,990
Property, plant, and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . .
$
286,826 $
328,679
Depreciation expense, inclusive of assets under finance leases, totaled $67,513, $71,057, and $74,665 for
the years ended June 30, 2022, 2021 and 2020, respectively.
74
7. Business Combinations
Fiscal 2022 Acquisitions
Acquisition of Depositphotos Inc.
On October 1, 2021, we acquired Depositphotos Inc. and its subsidiaries ("Depositphotos"), a global
creative platform for digital design. We acquired all outstanding shares of the company for a purchase price of
$84,900, which included a post-closing adjustment based on acquired cash, debt, and working capital as of the
closing date. We paid $76,119 in cash at closing, and the remaining purchase consideration, including the post-
closing adjustment but net of any indemnifiable losses recoverable against the deferred amount, is payable in two
separate deferred payments. The first payment of $609 was made in January 2022 and the $8,172 remaining
deferred amount is due in October 2022.
Depositphotos is managed within our Vista business and includes VistaCreate (formerly Crello), a rapidly
growing leader in do-it-yourself (DIY) digital design, and the separately branded Depositphotos business, a platform
for creators that includes images, videos and music that are developed by a large group of content contributors. We
expect synergies to provide significant benefits to our Vista business as this represents another integral step toward
providing a compelling, full-spectrum design offering to our customers, and also provides another vehicle for the
acquisition of new customers, to whom we plan to cross-sell our other products and services.
The table below details the consideration transferred to acquire Depositphotos:
Cash consideration (paid at closing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Deferred payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
76,119
8,781
84,900
We recognized the assets and liabilities on the basis of their fair values at the date of the acquisition with
any excess of the purchase price paid over the fair value of the net assets recorded as goodwill, which is primarily
attributable to the synergies that we expect to achieve through the acquisition. The goodwill balance has been
attributed to the Vista reporting unit and none of the goodwill balance is deductible for tax purposes. Additionally, we
identified and valued Depositphotos intangible assets, which include its trade name, customer relationships,
owned content and developed technology.
75
The fair value of the assets acquired and liabilities assumed was:
Amount
Weighted Average Useful
Life in Years
Tangible assets acquired and liabilities assumed:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
7,173
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities, current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities, non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Identifiable intangible assets:
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Developed technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Owned content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
329
448
611
383
324
(843)
(5,009)
(10,999)
(152)
(4,402)
(231)
11,600
2,500
2,300
7,700
73,168
84,900
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
4 years
10 years
2 years
10 years
n/a
n/a
Depositphotos has been included in our consolidated financial statements starting on its acquisition date.
The revenue and earnings of Depositphotos included in our consolidated financial statements for the year ended
June 30, 2022 are not material, and therefore no proforma financial information is presented. We used our cash on
hand to fund the acquisition. In connection with the acquisition, we incurred $887 in general and administrative
expenses, as part of our central and corporate costs during the year ended June 30, 2022, primarily related to legal,
financial, and other professional services.
Other Acquisition
On January 21, 2022, we completed an investment in a European company that is intended to support
certain strategic initiatives within our PrintBrothers reportable segment. After giving effect to this investment, we
have acquired approximately 75% of the company's shares for total cash and noncash consideration of $11,218.
We recognized the assets, liabilities and noncontrolling interest on the basis of their fair values at the date of the
acquisition, resulting in goodwill of $10,484 which is not deductible for tax purposes. The net assets recognized
largely consist of the cash and deferred tax liability balances acquired. The revenue and earnings included in our
consolidated financial statements for the year ended June 30, 2022 are not material. We utilized our available cash
balance to finance the acquisition.
76
Fiscal 2021 Acquisitions
Acquisition of 99designs, Inc.
On October 1, 2020, we acquired 99designs, Inc. and its subsidiaries ("99designs"), a global creative
platform for graphic design. We acquired all outstanding shares of the company for a purchase price of $90,000,
subject to a post-closing adjustment based on acquired cash, debt, and working capital as of the closing date. We
paid $45,000 in cash at closing and paid the remaining purchase consideration, including the post-closing
adjustment, on February 15, 2022. The acquisition is managed within our Vista business and provides a global
platform that connects designers and clients, making it easier for small businesses to access both professional
design services and marketing products in one place. We expect the synergies achieved through integration with
the 99designs designer network to provide significant benefits to our Vista business.
The table below details the consideration transferred to acquire 99designs:
Cash consideration (paid at closing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Fair value of deferred payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Final post closing adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
45,000
43,381
310
88,691
We recognized the assets and liabilities on the basis of their fair values at the date of the acquisition with
any excess of the purchase price paid over the fair value of the net assets recorded as goodwill, which is primarily
attributable to the synergies that we expect to achieve through the acquisition. The goodwill balance has been
attributed to the Vista reporting unit and a portion of such goodwill balance is deductible for tax purposes.
Additionally, we identified and valued 99designs intangible assets which include their trade name, designer network,
and developed technology.
The fair value of the assets acquired and liabilities assumed was:
Amount
Weighted Average Useful
Life in Years
Tangible assets acquired and liabilities assumed:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
8,603
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Identifiable intangible assets:
Trade name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Developed technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Designer network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
494
787
73
142
(220)
(6,299)
(5,806)
(625)
1,550
13,400
5,800
70,792
88,691
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2 years
3 years
7 years
n/a
n/a
We used our senior secured credit facility to finance the acquisition. In connection with the acquisition, we
incurred $1,183 in general and administrative expenses during the year ended June 30, 2021, primarily related to
legal, financial, and other professional services.
77
Other Acquisition
On April 23, 2021 we completed an acquisition of a fast growing company with an attractive product
capability as part of our BuildASign business, acquiring approximately 81% of the company's shares for total
consideration of $18,535. We recognized the assets, liabilities and noncontrolling interest on the basis of their fair
values at the date of the acquisition, resulting in goodwill of $14,208 which is not deductible for tax purposes. This
acquisition is presented within our All Other Businesses segment. We utilized proceeds from our senior secured
credit facility to finance the acquisition.
8. Goodwill and Acquired Intangible Assets
The carrying amount of goodwill by reportable segment as of June 30, 2022 and June 30, 2021 was as
follows:
Vista
PrintBrothers
The Print Group
All Other
Businesses
Total
Balance as of June 30, 2020 . . . . . . . . . . . . . . . . . $
150,846 $
129,764 $
155,197 $
186,097 $
621,904
Acquisitions (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of currency translation adjustments (2) . . .
Balance as of June 30, 2021 . . . . . . . . . . . . . . . . .
Acquisitions (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70,792
3,509
225,147
73,168
—
7,543
137,307
10,484
Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(821)
—
—
9,023
14,208
—
164,220
200,305
—
—
—
—
—
85,000
20,075
726,979
83,652
(821)
(43,210)
Effect of currency translation adjustments (2) . . .
(5,996)
(16,963)
(20,251)
Balance as of June 30, 2022 . . . . . . . . . . . . . . . . . $
291,498 $
130,828 $
143,969 $
200,305 $
766,600
________________________
(1) On October 1, 2021, we acquired Depositphotos Inc., which is included in our Vista reportable segment. In the third quarter of fiscal 2022, we
recognized goodwill related to an immaterial acquisition within our PrintBrothers reportable segment. In fiscal year 2021, we acquired
99designs, which is included in our Vista reportable segment, and a small business included within our All Other Businesses reportable
segment. Refer to Note 7 for additional details.
(2) Related to goodwill held by subsidiaries whose functional currency is not the U.S. dollar.
Annual Impairment Review
Our goodwill accounting policy establishes an annual goodwill impairment test date of May 31. For our fiscal
year 2022 annual impairment assessment, we bypassed the qualitative test and performed a quantitative test for all
nine reporting units with goodwill.
To perform our quantitative goodwill test, we used the income approach, specifically the discounted cash
flow method, to derive the fair value of each reporting unit. This approach calculates fair value by estimating the
after-tax cash flows attributable to a reporting unit and then discounting the after-tax cash flows to a present value
using a risk-adjusted discount rate. We selected this method as being the most meaningful in preparing our goodwill
assessment as we believe the income approach most appropriately measures our income-producing assets. We
considered using the market approach but concluded it was not appropriate in valuing these particular reporting
units given the lack of relevant market comparisons available. The cash flow projections in the fair value analysis
are considered Level 3 inputs, and consist of management's estimates of revenue growth rates and operating
margins, taking into consideration historical results, as well as industry and market conditions. The discount rate
used in the fair value analysis is based on a weighted average cost of capital (“WACC”), which represents the
average rate a business must pay its providers of debt and equity, plus a risk premium. The respective WACC
percentages used for each reporting unit within our goodwill impairment test were derived from a group of
comparable companies for each respective reporting unit and adjusted for the risk premium associated with each
reporting unit. Based on the results of this test, the fair values of each of our reporting units exceeded their carrying
values and no goodwill impairment was recognized.
78
Acquired Intangible Assets
June 30, 2022
Accumulated
Amortization
Gross
Carrying
Amount
Net
Carrying
Amount
Gross
Carrying
Amount
June 30, 2021
Accumulated
Amortization
Net
Carrying
Amount
Trade name . . . . . . . . . . . . . . . . . . . . $
144,916 $
(65,203) $
79,713 $
152,347 $
(59,432) $
92,915
Developed technology . . . . . . . . . . .
96,120
(75,585)
Customer relationships . . . . . . . . . .
195,766
(160,247)
Customer network and other . . . . .
Print network . . . . . . . . . . . . . . . . . . .
23,946
22,982
(11,580)
(16,385)
20,535
35,519
12,366
6,597
99,905
(71,255)
199,294
(152,410)
22,301
26,182
(14,431)
(15,757)
10,425
28,650
46,884
7,870
Total intangible assets . . . . . . . . . . . $
483,730 $
(329,000) $
154,730 $
500,029 $
(313,285) $
186,744
Acquired intangible assets amortization expense for the years ended June 30 2022, 2021, and 2020 was
$54,497, $53,818, and $51,786 respectively. Estimated intangible assets amortization expense for each of the five
succeeding fiscal years and thereafter is as follows:
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47,332
31,785
18,405
12,235
10,744
34,229
$
154,730
9. Other Balance Sheet Components
Accrued expenses included the following:
June 30, 2022
June 30, 2021
Compensation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
78,521 $
Income and indirect taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advertising costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shipping costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third party manufacturing and digital content costs (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41,886
25,925
10,228
15,790
6,286
642
2,394
2,477
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69,692
Total accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
253,841 $
_______________________
73,861
46,074
35,093
9,401
6,881
5,636
1,110
4,210
2,399
62,848
247,513
(1) The increase in third party manufacturing and digital content costs from June 30, 2021 to June 30, 2022 is primarily due to increased revenue
causing higher third party fulfillment costs as well as the impact from our recent acquisition of Depositphotos on October 1, 2021. Refer to Note 7
for additional information about the acquisition.
79
Other current liabilities included the following:
Current portion of finance lease obligations (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
6,684 $
Short-term derivative liabilities (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,299
17,052
32,314
20,530
50,671
Total other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
28,035 $
103,515
June 30, 2022
June 30, 2021
________________________
(1) The decrease in the current portion of our finance lease obligations is primarily due to the exercise of a purchase option for a previously
leased facility that decreased our finance lease liability by $23,534. We immediately sold this facility to a third party and recognized a $3,324 gain
on the sale of the asset during the year ended June 30, 2022. Refer to Note 16 for additional details.
(2) The decrease in short-term derivative liabilities is due to volatility in interest and foreign currency rates. Refer to Note 4 for additional details.
(3) Other current liabilities decreased primarily due to the $43,647 payment made in February 2022 for our prior year acquisition of 99designs.
Refer to Note 7 for additional details.
Other liabilities included the following:
June 30, 2022
June 30, 2021
Long-term finance lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
14,699 $
Long-term derivative liabilities (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term compensation incentives (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
463
19,934
29,298
Total other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
64,394 $
18,528
41,074
10,298
26,510
96,410
________________________
(1) The decrease in long-term derivative liabilities is due to volatility in interest and currency rates. Refer to Note 4 for additional details about our
derivative financial instruments.
(2) Includes cash-based employee bonus incentives, which are variable based on the performance of each individual business and vest over four
years.
10. Debt
7.0% Senior notes due 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
600,000 $
600,000
Senior secured credit facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,097,302
1,152,021
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,063
Debt issuance costs and debt premiums (discounts) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(19,417)
12,835
(22,450)
Total debt outstanding, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,685,948
1,742,406
Less: short-term debt (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,386
9,895
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,675,562 $
1,732,511
June 30, 2022
June 30, 2021
_____________________
(1) Balances as of June 30, 2022 and June 30, 2021 are inclusive of short-term debt issuance costs, debt premiums and discounts of $3,498 and
$3,435, respectively.
Our various debt arrangements described below contain customary representations, warranties and events
of default. As of June 30, 2022, we were in compliance with all covenants in our debt contracts, including those
under our amended and restated senior secured credit agreement ("Restated Credit Agreement") and the indenture
governing our 2026 Notes (as defined below).
Senior Secured Credit Facility
On May 17, 2021, we entered into a Restated Credit Agreement consisting of the following:
•
A senior secured Term Loan B with a maturity date of May 17, 2028 (the “Term Loan B”), consisting of:
◦
◦
a $795,000 tranche that bears interest at LIBOR (with a LIBOR floor of 0.50%) plus 3.50%, and
a €300,000 tranche that bears interest at EURIBOR (with a EURIBOR floor of 0%) plus 3.50%; and
80
•
A $250,000 senior secured revolving credit facility with a maturity date of May 17, 2026 (the “Revolving
Credit Facility”). Borrowings under the Revolving Credit Facility bear interest at LIBOR (with a LIBOR floor
of 0%) plus 2.50% to 3.00% depending on the Company’s First Lien Leverage Ratio, a net leverage
calculation, as defined in the Restated Credit Agreement.
The Restated Credit Agreement contains covenants that restrict or limit certain activities and transactions by
Cimpress and our subsidiaries, including, but not limited to, the incurrence of additional indebtedness and liens;
certain fundamental organizational changes; asset sales; certain intercompany activities; and certain investments
and restricted payments, including purchases of Cimpress plc’s ordinary shares and payment of dividends. In
addition, if any loans made under the Revolving Credit Facility are outstanding on the last day of any fiscal quarter,
then we are subject to a financial maintenance covenant that the First Lien Leverage Ratio calculated as of the last
day of such quarter does not exceed 3.25 to 1.00.
As of June 30, 2022, we have borrowings under the Restated Credit Agreement of $1,097,302 consisting of
the Term Loan B, which amortizes over the loan period, with a final maturity date of May 17, 2028. We have no
outstanding borrowings under our Revolving Credit Facility as of June 30, 2022.
As of June 30, 2022, the weighted-average interest rate on outstanding borrowings under the Restated
Credit Agreement was 4.98%, inclusive of interest rate swap rates. We are also required to pay a commitment fee
for our Revolving Credit Facility on unused balances of 0.35% to 0.45% depending on our First Lien Leverage
Ratio. We have pledged the assets and/or share capital of a number of our subsidiaries as collateral for our debt as
of June 30, 2022.
Senior Unsecured Notes
We have issued $600,000 in aggregate principal of 7.0% Senior Notes due 2026 (the "2026 Notes"), which
are unsecured. We can redeem some or all of the 2026 Notes at the redemption prices specified in the indenture
that governs the 2026 Notes, plus accrued and unpaid interest to, but not including, the redemption date. As of
June 30, 2022, we have not redeemed any of the 2026 Notes.
Other Debt
Other debt consists primarily of term loans acquired through our various acquisitions or used to fund certain
capital investments. As of June 30, 2022 and June 30, 2021, we had $8,063 and $12,835, respectively, outstanding
for those obligations that are payable through March 2027.
11. Shareholders' Deficit
Warrants
In conjunction with our issuance of our 12% Senior Secured Notes due 2025 in fiscal year 2020, we also
issued 7-year warrants, to purchase 1,055,377 ordinary shares of Cimpress, representing approximately 3.875% of
our outstanding diluted ordinary shares. The warrants are accounted for as equity, as they are redeemable only in
our own shares, with an exercise price of $60 per share. The warrants may be exercised by cash payment or
through cashless exercise by the surrender of warrant shares having a value equal to the exercise price of the
portion of the warrant being exercised.
The fair value used for the warrants in this allocation was calculated using the Monte Carlo valuation model.
The valuation of the notes and warrants resulted in a carrying value allocated to the warrants of $22,432, which, in
addition to be being accounted for as an equity instrument recorded in additional paid in capital, was included as a
discount to the 12% Senior Secured Notes. As of June 30, 2022 the warrants remain outstanding.
Share-based awards
On November 25, 2020, our shareholders approved our 2020 Equity Incentive Plan, or the 2020 Plan. Upon
approval, we ceased granting any new awards under any of our prior equity plans that had shares available for
future grant, consisting of our 2016 Performance Equity Plan, 2011 Equity Incentive Plan, and 2005 Non-Employee
Directors' Share Option Plan, and we now grant all equity awards under the 2020 Plan. The maximum number of
ordinary shares to be issued under the 2020 Plan is 3,500,000 plus an additional number of ordinary shares equal
to the number of PSUs currently outstanding under the 2016 Performance Equity Plan that expire, terminate or are
81
otherwise surrendered, canceled or forfeited. The 2020 Plan allows us to grant share options, share appreciation
rights, restricted shares, restricted share units, other share-based awards, and dividend equivalent rights to our
employees, officers, non-employee directors, consultants, and advisors.
As noted above, we currently grant equity awards under our 2020 Plan. Our 2016 Performance Equity Plan
previously allowed us to grant PSUs to our employees, officers, non-employee directors, consultants, and advisors.
The 2011 Equity Incentive Plan previously allowed us to grant share options, share appreciation rights, restricted
shares, restricted share units and other awards based on our ordinary shares to our employees, officers, non-
employee directors, consultants and advisors. Our 2005 Non-Employee Directors’ Share Option Plan previously
allowed us to grant share options to our non-employee directors upon initial appointment as a director and annually
thereafter in connection with our annual general meeting of shareholders if they continued to serve as a director at
such time.
As of June 30, 2022, 1,480,926 ordinary shares were available for future awards under our 2020 Plan. For
PSUs, we assumed that we would issue ordinary shares equal to 250% of the outstanding PSUs, which is the
maximum potential share issuance. Treasury shares and newly issued shares have both historically been used in
fulfillment of our share-based awards.
Performance share units ("PSUs")
PSU awards entitle the recipient to receive Cimpress ordinary shares between 0% and 250% of the number
of units, based upon continued service to Cimpress and the achievement of a compounded annual growth rate
target based on Cimpress' three-year moving average share price. Awards with a grant date prior to fiscal year 2020
and all awards granted to our Chief Executive Officer and Board of Directors will be assessed annually in years 6 -
10 following the grant date and awards with a grant date in or after fiscal year 2020 (other than to the CEO and
Board) will be assessed annually in years 4 - 8 following the grant date. The fair value of the PSUs is based on a
Monte Carlo simulation, and the resulting expense is recognized on an accelerated basis over the requisite service
period.
A summary of our PSU activity and related information for the fiscal year ended June 30, 2022 is as follows:
Weighted-
Average
Grant Date Fair
Value
Aggregate
Intrinsic
Value
PSUs
Outstanding at the beginning of the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,158,716 $
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
215,899
Vested and distributed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
134.45
110.28
—
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(15,373)
134.98
Outstanding at the end of the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,359,242 $
130.61 $
52,875
The weighted average fair value of PSUs granted during the fiscal years ended June 30, 2022, 2021, and
2020 was $110.28, $129.25, and $142.90, respectively. The total intrinsic value of PSUs outstanding at the fiscal
years ended June 30, 2022, 2021, and 2020 was $52,875, $125,616, and $78,951, respectively. As of June 30,
2022, the number of shares subject to PSUs included in the table above assumes the issuance of one share for
each PSU, but based on actual performance that amount delivered can range from zero shares to a maximum of
3,398,105 shares.
Restricted share units
The fair value of an RSU award is equal to the fair market value of our ordinary shares on the date of grant
and the expense is recognized on a straight-line basis over the requisite service period. RSUs generally vest over 4
years.
82
A summary of our RSU activity and related information for the fiscal year ended June 30, 2022 is as follows:
Weighted-
Average
Grant Date Fair
Value
Aggregate
Intrinsic
Value
RSUs
Unvested at the beginning of the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
434,389 $
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
771,671
Vested and distributed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(113,207)
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(54,619)
93.54
80.26
93.92
92.91
Unvested at the end of the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,038,234 $
83.66 $
40,387
The weighted average fair value of RSUs granted during the fiscal years ended June 30, 2022, 2021, and
2020 was $80.26, $93.64, and $46.94, respectively. The total intrinsic value of RSUs vested during the fiscal years
ended June 30, 2022, 2021, 2020 was $10,123, $17,231, and $1,905, respectively.
Share options
We have previously granted options to purchase ordinary shares at prices that are at least equal to the fair
market value of the shares on the date the option is granted and that generally vest over 4 years with a contractual
term of ten years.
The fair value of each option award subject only to service period vesting is estimated on the date of grant
using the Black-Scholes option pricing model and recognized as expense on a straight-line basis over the requisite
service period. Use of a valuation model requires management to make certain assumptions with respect to inputs.
The expected volatility assumption is based upon historical volatility of our share price. The expected term
assumption is based on the contractual and vesting term of the option and historical experience. The risk-free
interest rate is based on the U.S. Treasury yield curve with a maturity equal to the expected life assumed at the
grant date. The fair value of share options with a market condition is determined using a lattice model with
compensation expense recorded on an accelerated basis over the requisite service period.
We did not grant any share options in fiscal year 2022. A summary of our share option activity and related
information for the year ended June 30, 2022 is as follows:
Shares
Pursuant to
Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term (years)
Aggregate
Intrinsic
Value
Outstanding at the beginning of the period . . . . . . . . . . . . . . . . . .
5,298 $
80.01
3.8
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited/expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
Outstanding at the end of the period . . . . . . . . . . . . . . . . . . . . . . .
5,298
Exercisable at the end of the period . . . . . . . . . . . . . . . . . . . . . . . .
5,298 $
—
—
—
80.01
80.01
2.8 $
2.8 $
—
—
The intrinsic value in the table above represents the total pre-tax amount, net of exercise price, which would
have been received if all option holders exercised in-the-money options on June 30, 2022. No options were
exercised during the fiscal year ended June 30, 2022. The total intrinsic value of options exercised during the fiscal
years ended June 30, 2021 and 2020 was $5,460, and $92,582, respectively.
Share-based compensation
Total share-based compensation costs were $49,766, $37,034, and $34,874 for the years ended June 30,
2022, 2021, and 2020, respectively, and we elected to recognize the impact of forfeitures as they occur. Share-
based compensation costs capitalized as part of software and website development costs were $1,221, $1,338, and
$1,157 for the years ended June 30 2022, 2021, and 2020, respectively. As of June 30, 2022, there was $89,977 of
total unrecognized compensation cost related to non-vested, share-based compensation arrangements. This cost is
expected to be recognized over a weighted average period of 2.5 years.
83
12. Employees' Savings Plans
Defined contribution plans
We maintain certain government-mandated and defined contribution plans throughout the world. Our most
significant defined contribution retirement plans are in the U.S. and comply with Section 401(k) of the Internal
Revenue Code. We offer eligible employees in the U.S. the opportunity to participate in one of these plans and
match most employees' eligible contributions at various rates subject to service vesting as specified in each of the
related plan documents. This matching program was temporarily suspended from March 2020 through December
31, 2020 and was reinstated on January 1, 2021.
We expensed $16,157, $12,228, and $10,710 for our government-mandated and defined contribution plans
in the years ended June 30, 2022, 2021 and 2020, respectively.
Defined benefit plan
We currently have a defined benefit plan that covers substantially all of our employees in Switzerland. Our
Swiss plan is a government-mandated retirement fund with benefits generally earned based on years of service and
compensation during active employment; however, the level of benefits varies within the plan. Eligibility is
determined in accordance with local statutory requirements. Under this plan, both we and certain of our employees
with annual earnings in excess of government determined amounts are required to make contributions into a fund
managed by an independent investment fiduciary. Employer contributions must be in an amount at least equal to
the employee’s contribution. Minimum employee contributions are based on the respective employee’s age, salary,
and gender. As of June 30 2022 and 2021, the plan had an unfunded net pension obligation of approximately
$1,173 and $2,883, respectively, and plan assets which totaled approximately $4,754 and $4,128, respectively. For
the years ended June 30, 2022, 2021 and 2020 we recognized expense totaling $537, $667, and $399,
respectively, related to our Swiss plan.
13. Income Taxes
The income tax disclosures for the year ended June 30, 2021 have been updated to reflect the prior period
revision, as described in Note 2.
The following is a summary of our income (loss) before income taxes by geography:
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(7,299) $
2,689 $
(58,844)
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,630
(66,243)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
9,331 $
(63,554) $
61,846
3,003
Year Ended June 30,
2022
2021
2020
The components of the provision (benefit) for income taxes are as follows:
Current:
U.S. Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
526 $
(93) $
(16,269)
Year Ended June 30,
2022
2021
2020
U.S. State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
568
36,932
38,026
546
28,205
28,658
Deferred:
U.S. Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,566)
(1,573)
U.S. State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
25,429
21,875
(31)
(8,151)
(103,490)
(9,755)
(87,297)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
59,901 $
18,903 $
(80,992)
84
213
22,361
6,305
12,980
3,213
The following is a reconciliation of the standard U.S. federal statutory tax rate and our effective tax rate:
Year Ended June 30,
2022
2021
2020
U.S. federal statutory income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State taxes, net of federal effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax rate differential on non-U.S. earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Swiss tax reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensation related items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. tax reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Irish foreign tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax on repatriated earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain/loss on sale of subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notional interest deduction (Italy) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Patent box (Italy) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credits and incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-US tax rate changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Irish tax restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. global intangible low-taxed income (GILTI) . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. foreign-derived intangible income (FDII) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net tax (benefit) expense on intellectual property transfer . . . . . . . . . . . . . . . . .
Tax loss carryforward expirations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business and withholding taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Uncertain tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nondeductible interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax on unremitted earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes to derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21.0 %
(11.1)
97.1
—
21.9
—
—
363.7
(46.8)
39.2
—
(8.8)
(12.0)
(23.7)
57.6
(13.4)
10.2
(6.8)
(10.4)
4.8
5.1
35.9
52.7
7.1
0.1
73.5
(14.9)
21.0 %
3.1
(20.3)
—
0.2
—
—
(27.2)
8.8
(3.9)
—
1.4
—
4.2
1.2
—
(0.3)
—
—
(0.5)
(0.4)
(1.0)
(18.6)
0.5
(0.9)
0.1
2.9
21.0 %
(130.1)
(408.4)
(3,779.0)
(420.7)
(372.6)
759.1
1,277.5
262.3
154.1
(189.2)
(47.9)
(24.2)
(88.3)
81.7
—
—
—
16.4
7.4
28.7
28.8
157.4
47.5
31.4
—
(109.9)
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
642.0 %
(29.7) %
(2,697.0) %
For the year ended June 30, 2022, our effective tax rate was above our U.S. federal statutory tax rate
primarily due to establishing a partial valuation allowance on Swiss deferred tax assets of $29,600 related to Swiss
tax reform benefits recognized in fiscal 2020 and Swiss tax loss carryforwards that we no longer expect to fully
realize. The jurisdictions that have the most significant impact to our non-U.S. tax provision include Australia,
Canada, France, Germany, India, Ireland, Italy, the Netherlands, Spain and Switzerland. The applicable tax rates in
these jurisdictions range from 10% to 30%. The total tax rate impact from operating in non-U.S. jurisdictions is
included in the line “Tax rate differential on non-U.S. earnings” in the above tax rate reconciliation table.
For the year ended June 30, 2022, our effective tax rate was 642.0% as compared to the prior year effective
tax rate of (29.7)%. The increase in our effective tax rate as compared to the prior year is primarily due to the Swiss
partial valuation allowance in addition to a less favorable mix of earnings year over year. Our fiscal year 2021
effective tax rate was higher than fiscal year 2020 primarily due to Swiss Tax Reform benefits of $113,482
recognized in the year ended June 30, 2020.
On October 25, 2019, the canton of Zurich enacted tax law changes by publishing the results of its
referendum to adopt the Federal Act on Tax Reform and AHV Financing (TRAF), which we refer to as Swiss Tax
Reform. Swiss Tax Reform was effective as of January 1, 2020 and included the abolishment of various favorable
federal and cantonal tax regimes. Swiss Tax Reform provided transitional relief measures for companies that lost
the tax benefit of a ruling, including a "step-up" for amortizable goodwill, equal to the amount of future tax benefit
they would have received under their existing ruling, subject to certain limitations. We recognized a tax benefit of
85
$113,482, gross of $29,600 valuation allowance recorded as of June 30, 2022, to establish Swiss deferred tax
assets related to transitional relief measures and to remeasure our existing Swiss deferred tax assets and liabilities.
We do not expect to realize the majority of this benefit until fiscal year 2025 through fiscal year 2030. During the
year ended June 30, 2022, the Swiss tax reform amortizable goodwill deferred tax asset decreased $4,676 due to
currency exchange rate changes and $5,310 due to Cantonal tax rate changes.
Significant components of our deferred income tax assets and liabilities consisted of the following at June
30, 2022 and 2021:
Deferred tax assets:
June 30, 2022
June 30, 2021
Swiss tax reform amortizable goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
123,893 $
133,879
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit and other carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71,820
24,952
3,736
12,244
16,090
47,405
—
1,120
73,574
31,363
9,136
9,538
11,192
41,222
5,745
3,661
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
301,260
319,310
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(134,660)
(111,476)
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
166,600
207,834
Deferred tax liabilities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in flow-through entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax on unremitted earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(32,595)
(21,049)
(7,031)
(6,692)
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(19,703)
Italy tax suspension reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7,584)
(37,694)
(24,920)
(5,003)
(6,877)
—
(4,528)
(6,627)
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(94,654)
(85,649)
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
71,946 $
122,185
In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some
or all of the deferred tax assets will not be realized. The increase in the valuation allowance from the prior year
relates primarily to the Swiss partial valuation allowance and losses in certain jurisdictions (mainly Brazil, China,
Cyprus, Japan, the Netherlands and the United Kingdom) for which management has determined we cannot
recognize the related deferred tax assets. Also, we generated $303 of Irish foreign tax credit carryforwards and
increased interest limitation carryforwards of $3,440 in various jurisdictions, neither of which expire, but for which
management has determined it is more likely than not that these will not be utilized. Other increases in our valuation
allowance include increased U.S. research and development credit carryforwards of $2,469 and U.S. share-based
compensation deferred tax assets of $4,225. The increase in valuation allowance was offset by the release of
valuation allowances related to tax losses in France and Ireland of $3,313 and $3,331, respectively, which
management has determined can be realized; the release of valuation allowances related to derivative financial
instruments of $5,745 recorded in accumulated other comprehensive loss on the balance sheet; and a partial
release in the U.S. of $4,402 related to acquired deferred tax liabilities.
We have recorded valuation allowances of $27,858, $4,783 and $14,300 against deferred tax assets
related to U.S. research and development credits, U.S. capital loss carryforwards, and U.S. share-based
compensation, respectively, for which management has determined that it is more likely than not that these will not
be realized.
86
We have not recorded a valuation allowance against deferred tax assets of $10,561 and $102,098 related
to Swiss tax losses and the Swiss amortizable goodwill, respectively, as the portions we do expect to realize in the
future. Management believes there is sufficient positive evidence in the form of historical and future projected
profitability to conclude that it is more likely than not that these benefits in Switzerland will be utilized against future
taxable profits within the available carryforward periods. Our assessments are reliant on the attainment of our future
operating profit goals. Failure to achieve these operating profit goals may change our assessment of these deferred
tax assets, and such change would result in additional valuation allowance and an increase in income tax expense
to be recorded in the period of the change in assessment. We will continue to review our forecasts and profitability
trends on a quarterly basis.
Based on the weight of available evidence at June 30, 2022, management believes that it is more likely
than not that all other net deferred tax assets will be realized in the foreseeable future. We will continue to assess
the realization of the deferred tax assets based on operating results on a quarterly basis.
A reconciliation of the beginning and ending amount of the valuation allowance for the year ended June 30,
2022 is as follows:
Balance at June 30, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
111,476
Charges to earnings (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charges to other accounts (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,859
(10,676)
Balance at June 30, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
134,659
_________________
(1) Amount is primarily related to partial Swiss valuation allowance, increased non-U.S. net operating losses, increased U.S. research and
development credits and share-based compensation, increased Irish foreign tax credits, increased interest limitation carryforwards and
release of valuation allowances in France, Ireland and the U.S.
(2) Amount is primarily related to decreases in deferred tax assets on non-U.S. net operating losses due to currency exchange rate changes and
unrealized gains on derivative financial instruments included in Accumulated Other Comprehensive Loss.
As of June 30, 2022, we had gross U.S. federal and apportioned state net operating losses of $3,136 and
$22,975, respectively, that expire on various dates from fiscal year 2024 through fiscal year 2040 or with unlimited
carryforward. We also had gross non-U.S. net operating loss carryforwards of $477,144, a significant amount of
which begin to expire in fiscal year 2024, with the remaining amounts expiring on various dates from fiscal year
2023 through fiscal year 2032 or with unlimited carryforward. In addition, we had $32,767 of tax credit carryforwards
primarily related to U.S. federal and state research and development credits, which expire on various dates
beginning in fiscal year 2030 or with unlimited carryforward. We also had $22,778, $5,225 and $1,048 of U.S.
federal, apportioned state, and non-U.S. capital loss carryforwards, respectively. The U.S. capital losses expire in
fiscal years 2025 through 2027 and the non-U.S. capital losses have unlimited carryforward. Lastly, we had $8,332
of Irish foreign tax credits with unlimited carryforward. The benefits of these carryforwards are dependent upon the
generation of taxable income in the jurisdictions where they arose.
We consider the following factors, among others, in evaluating our plans for indefinite reinvestment of our
subsidiaries’ earnings: (i) the forecasts, budgets and financial requirements of both our parent company and its
subsidiaries, both for the long term and for the short term; (ii) the ability of Cimpress plc to fund its operations and
obligations with earnings from other businesses within the global group without incurring substantial tax costs; and
(iii) the tax consequences of any decision to reinvest earnings of any subsidiary. As of June 30, 2022, no tax
provision has been made for $48,966 of undistributed earnings of certain of our subsidiaries as these earnings are
considered indefinitely reinvested. If, in the future, we decide to repatriate the undistributed earnings from these
subsidiaries in the form of dividends or otherwise, we could be subject to withholding taxes payable in the range of
$11,300 to $12,300 at that time. A cumulative deferred tax liability of $6,692 has been recorded attributable to
undistributed earnings that we have deemed are not indefinitely reinvested. The remaining undistributed earnings of
our subsidiaries are not deemed to be indefinitely reinvested and can be repatriated with no tax cost. Accordingly,
there has been no provision for income or withholding taxes on these earnings.
We currently benefit from various income tax holidays in certain jurisdictions. The tax holidays expire on
various dates through August 2022. When the tax holidays expire, we will be subject to tax at rates ranging from
15% to 25%. As a result of the tax holidays, our net income was higher by $266 for fiscal year 2022.
87
A reconciliation of the gross beginning and ending amount of unrecognized tax benefits is as follows:
Balance June 30, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
4,721
Additions based on tax positions related to the current tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions based on tax positions related to prior tax years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions based on tax positions related to prior tax years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions due to audit settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions due to lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cumulative translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance June 30, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions based on tax positions related to the current tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions based on tax positions related to prior tax years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions based on tax positions related to prior tax years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions due to audit settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions due to lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cumulative translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
586
769
(102)
(52)
(71)
(4)
5,847
448
7,448
(51)
(83)
(229)
19
Balance June 30, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,399
Additions based on tax positions related to the current tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions based on tax positions related to prior tax years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions based on tax positions related to prior tax years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
448
2,958
(23)
Reductions due to audit settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,958)
Reductions due to lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cumulative translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(799)
(29)
Balance June 30, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
12,996
For the year ended June 30, 2022, the amount of unrecognized tax benefits (exclusive of interest) that, if
recognized, would impact the effective tax rate is $7,790. We recognize interest and, if applicable, penalties related
to unrecognized tax benefits in income tax expense. The accrued interest and penalties recognized as of June 30,
2022, 2021 and 2020 were $1,383, $1,014 and $384, respectively. It is reasonably possible that a further change in
unrecognized tax benefits in the range of $320 to $370 may occur within the next twelve months related to the
settlement of one or more audits or the lapse of applicable statutes of limitations. We believe we have appropriately
provided for all tax uncertainties.
We conduct business in a number of tax jurisdictions and, as such, are required to file income tax returns in
multiple jurisdictions globally. The years 2016 through 2022 remain open for examination by the United States
Internal Revenue Service ("IRS") and the years 2015 through 2022 remain open for examination in the various
states and non-US tax jurisdictions in which we file tax returns.
We are currently under income tax audit in certain jurisdictions globally. We believe that our income tax
reserves are adequately maintained taking into consideration both the technical merits of our tax return positions
and ongoing developments in our income tax audits. However, the final determination of our tax return positions, if
audited, is uncertain and therefore there is a possibility that final resolution of these matters could have a material
impact on our results of operations or cash flows.
88
14. Noncontrolling Interests
Redeemable Noncontrolling Interests
For some of our subsidiaries, we own a controlling equity stake, and a third party or key members of the
businesses' management team owns a minority portion of the equity, which includes those described below, as well
as several immaterial noncontrolling interests. The put options for several of our noncontrolling interests are
exercisable in fiscal year 2023. Exercising a put option is at the discretion of each noncontrolling interest holder,
which creates uncertainty around the timing of our cash outflow should an option be exercised. As of June 30, 2022,
the total estimated redemption value is $103,572 for those noncontrolling interests with exercise windows in fiscal
year 2023.
PrintBrothers
Members of the PrintBrothers management team hold minority equity interests ranging from 11% to 12% in
each of the three businesses within the segment. The put options associated with the redeemable noncontrolling
interests have annual exercise windows for 90% of their minority equity interest to Cimpress in each quarter ending
in December. The first window occurred in the second quarter of fiscal 2022 and no options were exercised. The
next exercise window, which occurs in the second quarter of fiscal 2023, is based on actual results through June 30,
2022, and the estimated redemption value for the collective noncontrolling interests is $99,724. If the put options are
exercised, then Cimpress may redeem the remaining 10% minority equity interest concurrently with the put option
exercise or on the first, second, or third anniversary of the put option exercise. Cimpress has call options for the full
amount of the minority equity interests with the first exercise window occurring during the second quarter of fiscal
year 2027.
During the year ended June 30, 2022, the redemption value of two PrintBrothers businesses increased
above their carrying value due to strong financial performance during the current fiscal year as well as the lapping of
a period where performance was more severely impacted by the pandemic. The increased redemption value
resulted in an adjustment to redeemable noncontrolling interest of $61,691. The offsetting amount was recognized
within retained earnings as the redemption values for these noncontrolling interests were below each estimated fair
value.
The following table presents the reconciliation of changes in our redeemable noncontrolling interests:
Redeemable
Noncontrolling
Interest
Balance as of June 30, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
69,106
Acquisition of noncontrolling interest (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accretion to redemption value recognized in retained earnings (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution to noncontrolling interests (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of noncontrolling interest (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of June 30, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of noncontrolling interest (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accretion to redemption value (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution to noncontrolling interests (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of noncontrolling interest (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,370
3,049
2,772
(4,746)
(5,063)
1,632
71,120
4,453
61,962
3,761
(3,963)
(2,165)
(3,685)
Balance as of June 30, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
131,483
_________________
(1) During fiscal year 2021, we acquired the majority equity interest in an immaterial business within our All Other reportable segment. On
January 21, 2022, we completed a transaction that resulted in our acquisition of a 75% interest in a company that is included in the
PrintBrothers reportable segment. The remaining 25% is considered a redeemable noncontrolling interest which was recognized at fair value
as of the acquisition date.
89
(2) Accretion of redeemable noncontrolling interests to redemption value recognized in retained earnings or additional paid in capital is the result
of the estimated redemption amount being greater than carrying value but less than fair value. Refer above for additional details included
above.
(3) Distributions to noncontrolling interests include contractually required profit sharing payments made annually to the minority interest holders in
one of the PrintBrothers businesses.
(4) During fiscal year 2021, a PrintBrothers noncontrolling interest holder sold their shares to Cimpress and in fiscal year 2022 the final
redemption amount associated with this share purchase was paid.
15. Segment Information
Our operating segments are based upon the manner in which our operations are managed and the
availability of separate financial information reported internally to the Chief Executive Officer, who is our Chief
Operating Decision Maker (“CODM”) for purposes of making decisions about how to allocate resources and assess
performance.
As of June 30, 2022, we have numerous operating segments under our management reporting structure
which are reported in the following five reportable segments:
•
•
•
•
•
Vista - Vista is the parent brand of multiple offerings including VistaPrint, VistaCreate, 99designs by Vista,
and Vista Corporate Solutions, which together represent a full-service design, digital and print solution,
elevating small businesses’ presence in physical and digital spaces and empowering them to achieve
success. This segment also includes our recently acquired Depositphotos business, whose subsidiary,
Crello, was rebranded to VistaCreate soon after the acquisition.
PrintBrothers - Includes the results of our druck.at, Printdeal, and WIRmachenDRUCK businesses.
The Print Group - Includes the results of our Easyflyer, Exaprint, Pixartprinting, and Tradeprint businesses.
National Pen - Includes the global operations of our National Pen business, which manufactures and
markets custom writing instruments and promotional products, apparel and gifts.
All Other Businesses - Includes a collection of businesses grouped together based on materiality. In
addition to BuildASign, which is a larger and profitable business, the All Other Businesses reportable
segment consists of two smaller businesses that we continue to manage at a relatively modest operating
loss and a recently acquired company that provides production expertise and sells into a growing product
category.
◦
BuildASign is an internet-based provider of canvas-print wall décor, business signage and other
large-format printed products, based in Austin, Texas.
Printi is an online printing leader in Brazil, which offers a superior customer experience with
transparent and attractive pricing, reliable service and quality.
YSD is a startup operation that provides end-to-end mass customization solutions to brands and
intellectual property owners in China. During the fourth quarter of fiscal 2022, we decided to exit our
YSD business, which we expect to complete at the beginning of fiscal 2023.
◦
◦
Central and corporate costs consist primarily of the team of software engineers that is building our mass
customization platform; shared service organizations such as global procurement; technology services such as
hosting and security; administrative costs of our Cimpress India offices where numerous Cimpress businesses have
dedicated business-specific team members; and corporate functions including our Board of Directors, CEO, and the
team members necessary for managing corporate activities, such as treasury, tax, capital allocation, financial
consolidation, internal audit and legal. These costs also include certain unallocated share-based compensation
costs.
During the fourth quarter of fiscal 2022, we revised our internal reporting to reallocate certain third-party
technology costs that were previously held within our Central and corporate costs to our Vista business and
reportable segment. These include certain third-party costs that are variable in nature and the cost variability is
primarily driven by decisions or volumes in the Vista business. We have revised our presentation of all prior periods
presented to reflect our revised segment reporting, decreasing Vista EBITDA and Central and corporate costs by
$7,044, $6,031, and $3,745 for the years ended June 30, 2022, 2021 and 2020, respectively.
90
The expense value of our PSU awards is based on a Monte Carlo fair value analysis and is required to be
expensed on an accelerated basis. In order to ensure comparability in measuring our businesses' results, we
allocate the straight-line portion of the fixed grant value to our businesses. Any expense in excess of the amount as
a result of the fair value measurement of the PSUs and the accelerated expense profile of the awards is recognized
within central and corporate costs.
Our definition of segment EBITDA is GAAP operating income excluding certain items, such as depreciation
and amortization, expense recognized for contingent earn-out related charges including the changes in fair value of
contingent consideration and compensation expense related to cash-based earn-out mechanisms dependent upon
continued employment, share-based compensation related to investment consideration, certain impairment
expense, and restructuring charges. We include insurance proceeds that are not recognized within operating
income. We do not allocate non-operating income, including realized gains and losses on currency hedges, to our
segment results.
Our balance sheet information is not presented to the CODM on an allocated basis, and therefore we do not
present asset information by segment. We do present other segment information to the CODM, which includes
purchases of property, plant and equipment and capitalization of software and website development costs, and
therefore include that information in the tables below.
Revenue by segment is based on the business-specific websites or sales channel through which the
customer’s order was transacted. The following tables set forth revenue by reportable segment, as well as
disaggregation of revenue by major geographic region and reportable segment.
Year Ended June 30,
2022
2021
2020
Revenue:
Vista (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,514,909 $
1,428,255 $
1,337,291
PrintBrothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Print Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
National Pen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
526,952
329,590
341,832
205,862
421,766
275,534
313,528
192,038
417,921
275,214
299,474
173,789
Total segment revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,919,145
2,631,121
2,503,689
Inter-segment eliminations (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(31,590)
(55,160)
(22,331)
Total consolidated revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2,887,555 $
2,575,961 $
2,481,358
_____________________
(1) During the first quarter of fiscal year 2022, we identified an immaterial error and revised our previously reported results to decrease Vista
segment revenue by $16,552 for the year ended June 30, 2022. Refer to Note 2 for additional details.
(2) Refer to the "Revenue by Geographic Region" tables below for detail of the inter-segment revenue within each respective segment. The
decrease of inter-segment eliminations is the result of significant cross-business transactions during the three and nine months ended June
30, 2022 associated with the fulfillment of masks in response to the pandemic. Demand for this product was far lower in the current periods.
Vista
PrintBrothers
The Print
Group
National Pen
All Other
Total
Year Ended June 30, 2022
Revenue by Geographic Region:
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,031,298 $
— $
— $ 193,056 $ 177,868 $ 1,402,222
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
342,816
525,224
322,315
113,820
—
1,304,175
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
137,425
Inter-segment . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,370
—
1,728
—
7,275
20,058
14,898
23,675
181,158
4,319
31,590
Total segment revenue . . . . . . . . . . . . . . . . .
1,514,909
526,952
329,590
341,832
205,862
2,919,145
Less: inter-segment elimination . . . . . . . . . . . .
(3,370)
(1,728)
(7,275)
(14,898)
(4,319)
(31,590)
Total external revenue . . . . . . . . . . . . . . . . . . . . $ 1,511,539 $ 525,224 $ 322,315 $ 326,934 $ 201,543 $ 2,887,555
91
Vista
PrintBrothers
The Print
Group
National Pen
All Other
Total
Year Ended June 30, 2021
Revenue by Geographic Region:
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 955,280 $
— $
— $ 154,857 $ 171,398 $ 1,281,535
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
350,270
420,946
258,230
106,004
—
1,135,450
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
120,367
Inter-segment . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,338
—
820
—
17,304
20,762
31,905
17,847
158,976
2,793
55,160
Total segment revenue . . . . . . . . . . . . . . . . .
1,428,255
421,766
275,534
313,528
192,038
2,631,121
Less: inter-segment elimination . . . . . . . . . . . .
(2,338)
(820)
(17,304)
(31,905)
(2,793)
(55,160)
Total external revenue . . . . . . . . . . . . . . . . . . . . $ 1,425,917 $ 420,946 $ 258,230 $ 281,623 $ 189,245 $ 2,575,961
Vista
PrintBrothers
The Print
Group
National Pen
All Other
Total
Year Ended June 30, 2020
Revenue by Geographic Region:
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 928,668 $
— $
— $ 154,632 $ 153,795 $ 1,237,095
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
325,239
416,987
269,220
112,046
—
1,123,492
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inter-segment . . . . . . . . . . . . . . . . . . . . . . . . . . .
77,204
6,180
—
934
—
5,994
24,990
7,806
18,577
120,771
1,417
22,331
Total segment revenue . . . . . . . . . . . . . . . . .
1,337,291
417,921
275,214
299,474
173,789
2,503,689
Less: inter-segment elimination . . . . . . . . . . . .
(6,180)
(934)
(5,994)
(7,806)
(1,417)
(22,331)
Total external revenue . . . . . . . . . . . . . . . . . . . . $ 1,331,111 $ 416,987 $ 269,220 $ 291,668 $ 172,372 $ 2,481,358
The following table includes segment EBITDA by reportable segment, total income from operations and
total income (loss) before income taxes:
Year Ended June 30,
2022
2021
2020
Segment EBITDA:
Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
195,321 $
318,684 $
362,589
PrintBrothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Print Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
National Pen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Central and corporate costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earn-out related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain impairments and other adjustments . . . . . . . . . . . . . . . . . . .
66,774
58,664
26,845
23,227
370,831
(143,958)
(175,681)
—
—
9,709
Restructuring-related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(13,603)
Total income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47,298
61,463
43,144
43,126
11,644
31,707
448,305
(129,367)
(173,212)
(122)
—
(20,453)
(1,641)
123,510
(19,353)
39,373
51,606
7,605
17,474
478,647
(136,653)
(167,943)
—
54
(104,593)
(13,543)
55,969
22,874
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(99,430)
(119,368)
(75,840)
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . .
—
(48,343)
Income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . . $
9,331 $
(63,554) $
—
3,003
92
Year Ended June 30,
2022
2021
2020
Depreciation and amortization:
Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
65,489 $
58,513 $
PrintBrothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Print Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
National Pen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Central and corporate costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,790
25,657
24,261
18,536
20,948
22,089
27,066
25,123
19,811
20,610
59,029
21,010
24,769
23,654
23,755
15,726
Total depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . $
175,681 $
173,212 $
167,943
Year Ended June 30,
2022
2021
2020
Purchases of property, plant and equipment:
Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
17,198 $
12,332 $
PrintBrothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Print Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
National Pen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Central and corporate costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,788
19,877
4,332
7,027
1,818
3,609
11,847
3,603
5,466
1,667
Total purchases of property, plant and equipment . . . . . . . . . . $
54,040 $
38,524 $
15,986
4,315
17,136
5,016
4,242
3,772
50,467
Year Ended June 30,
2022
2021
2020
Capitalization of software and website development costs:
Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
PrintBrothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Print Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
National Pen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Central and corporate costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total capitalization of software and website development
costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
30,994 $
28,297 $
1,139
2,419
3,390
4,097
23,258
1,465
1,603
3,115
3,746
22,711
18,381
990
1,484
3,290
3,684
16,163
65,297 $
60,937 $
43,992
Enterprise Wide Disclosures:
The following tables set forth revenues by geographic area and groups of similar products and services:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,092,096 $
1,199,436 $
1,251,531
Germany (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
358,384
350,281
Other (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,437,075
1,026,244
351,348
878,479
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2,887,555 $
2,575,961 $
2,481,358
Year Ended June 30,
2022
2021
2020
93
Year Ended June 30,
2022
2021
2020
Physical printed products and other (3) . . . . . . . . . . . . . . . . . . . . . . . $
2,789,600 $
2,477,158 $
2,431,367
Digital products/services (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97,955
98,803
49,991
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2,887,555 $
2,575,961 $
2,481,358
__________________
(1) Our revenues within the German market exceeded 10% of our total consolidated revenue. Therefore we have presented Germany as a
significant geographic area.
(2) Our other revenue includes Ireland, our country of domicile.
(3) Other revenue includes miscellaneous items which account for less than 1% of revenue.
(4) Digital products/service revenue includes revenue associated with design services includes revenue from our Depositphotos and 99designs
businesses since their acquisition dates of October 1, 2021 and October 1, 2020, respectively. Refer to Note 7 for additional details.
The following table sets forth long-lived assets by geographic area:
June 30, 2022
June 30, 2021
Long-lived assets (1):
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
95,589 $
107,868
Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jamaica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
67,240
58,498
72,394
48,262
25,383
18,744
17,751
11,392
90,677
75,996
60,779
68,880
47,776
20,550
21,298
25,417
14,891
96,063
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
505,930 $
539,518
___________________
(1) Excludes goodwill of $766,600 and $726,979, intangible assets, net of $154,730 and $186,744, deferred tax assets of $113,088 and
$149,618, and marketable securities, non-current of zero and $50,713 as of June 30, 2022 and June 30, 2021, respectively.
16. Leases
We lease certain machinery and plant equipment, office space, and production and warehouse facilities
under non-cancelable operating leases that expire on various dates through 2037. Our finance leases primarily
relate to machinery and plant equipment.
The following table presents the classification of right-of-use assets and lease liabilities as of June 30, 2022
and 2021:
Leases
Assets:
Operating right-of-use assets
Finance right-of-use assets
Total lease assets
Liabilities:
Current:
Operating lease liabilities
Finance lease liabilities
Non-current:
Operating lease liabilities
Finance lease liabilities
Total lease liabilities
__________________
Consolidated Balance Sheet Classification
June 30, 2022
June 30, 2021
Operating lease assets, net
Property, plant, and equipment, net (1)
Operating lease liabilities, current
Other current liabilities (1)
$
$
$
80,694 $
19,181
99,875 $
87,626
35,384
123,010
27,706 $
6,684
26,551
32,314
Operating lease liabilities, non-current
Other liabilities
57,474
14,699
$
106,563 $
66,222
18,528
143,615
94
(1) The decrease in finance lease assets and current liabilities is due primarily to the lease modification described below within the "Purchase
and Sale of Leased Facilities" section.
The following table represents the lease expenses for the years ended June 30, 2022 and 2021:
Year Ended
June 30, 2022
June 30, 2021
Operating lease expense (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
26,975 $
36,803
Finance lease expense:
Amortization of finance lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest on lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Variable lease expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,892
305
7,550
Less: sublease income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(86)
Net operating and finance lease cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
40,636 $
5,557
211
7,846
(2,309)
48,108
__________________
(1) The decrease in operating lease expense from fiscal year 2021 to fiscal year 2022 is mainly driven by prior year decisions to exit certain
leased facilities as some of our businesses have shifted to a remote-first operating model.
Future minimum lease payments under non-cancelable leases as of June 30, 2022 were as follows:
Payments Due by Period
Operating lease
obligations
Finance lease
obligations
Total lease
obligations
Less than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
29,361 $
6,148 $
2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23,698
16,308
8,951
4,703
9,301
92,322
5,343
4,853
3,424
2,213
832
22,813
Less: present value discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7,142)
(1,430)
35,509
29,041
21,161
12,375
6,916
10,133
115,135
(8,572)
Lease liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
85,180 $
21,383 $
106,563
Other information about leases is as follows:
Lease Term and Discount Rate
Weighted-average remaining lease term (years):
June 30, 2022
June 30, 2021
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average discount rate:
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.32
3.89
3.71 %
2.79 %
4.28
10.71
3.17 %
3.93 %
(1) The decrease in finance lease weighted-average remaining lease term and discount rate is due primarily to the lease modification described
below within the "Purchase and Sale of Leased Facilities" section.
Our leases have remaining lease terms of 1 year to 15 years, inclusive of renewal or termination options
that we are reasonably certain to exercise.
Supplemental Cash Flow Information
Cash paid for amounts included in measurement of lease liabilities:
Year Ended
June 30, 2022
June 30, 2021
Operating cash flows from operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
26,641 $
47,327
Operating cash flows from finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing cash flows from finance leases (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
305
37,512
211
8,001
________________
(1) The current fiscal year financing cash outflows include the payment to purchase the leased facility discussed below.
95
Purchase and Sale of a Leased Facility
During the second quarter of fiscal year 2022, we paid $27,885 to exercise the purchase option available for
one of our leased facilities, resulting in a $23,534 decrease in the current portion of our finance lease obligations.
We immediately sold this facility to a separate third party for $23,226.
We previously identified a triggering event for this leased facility in fiscal year 2021 due to a change in our
intended use of the right-of-use asset, as we had committed to plans to exit the space and instead market it to be
subleased or sold. At that time, we assessed the lease for impairment and performed a discounted cash flow
analysis using current market-based rent assumptions, which resulted in an impairment of $7,420 that was
recognized in general and administrative expense on the consolidated statement of operations for the year ended
June 30, 2021. Additionally, we recorded an impairment for abandoned equipment in the amount of $1,680 that was
recognized in general and administrative expense for the year ended June 30, 2021.
Due to the fiscal year 2021 impairment charge taken, we recognized a $3,324 gain on the sale of the asset
within general and administrative expense on our consolidated statement of operations during the year ended June
30, 2022. For the year ended June 30, 2022, our consolidated statement of cash flows includes a $23,226 cash
inflow for the sale of the facility presented as an investing activity as part of proceeds from the sale of assets and a
$27,885 cash outflow for the exercise of the purchase option presented as a financing activity as part of payments
of finance lease obligations.
Waltham Lease Modification
On January 6, 2021, we modified the lease agreement for our Waltham, Massachusetts office location,
which resulted in us retaining a small portion of the previously leased office space in exchange for a reduction to our
monthly rent payments for the space we no longer lease and the payment of an early termination fee of $8,761. Due
to the partial termination of the lease, we recorded a decrease to the operating lease liabilities of $47,801 to reflect
the reduced lease payments, including the termination penalties. We also recorded a decrease to the operating
lease asset of $46,645 based on the proportionate decrease in the right-of-use asset, which resulted in a gain of
$1,156, recognized in general and administrative expense on the consolidated statement of operations for the year
ended June 30, 2021.
Due to our plans to no longer occupy the remaining leased office space and instead market the space to be
subleased, we identified a triggering event with regards to the modified right-of-use asset. Therefore, we performed
a discounted cash flow analysis that considered market-based rent assumptions, which resulted in an impairment of
the right-of-use asset of $7,489 which was recognized in general and administrative expense on the consolidated
statement of operations for the year ended June 30, 2021. Additionally, we recorded an impairment to general and
administrative expense for abandoned assets related to the vacated space totaling $4,483, which included $2,787 in
subtenant allowances, $1,312 in leasehold improvements, and $384 in furniture and fixtures.
17. Commitments and Contingencies
Purchase Obligations
At June 30, 2022, we had unrecorded commitments under contract of $310,797, including inventory, third-
party fulfillment and digital service purchase commitments of $124,383; third-party cloud services of $113,888;
software of $23,650; advertising of $18,112; production and computer equipment purchases of $7,092; professional
and consulting fees of $6,372, and other unrecorded purchase commitments of $17,300.
96
Debt
The required principal payments due during the next five fiscal years and thereafter under our outstanding
long-term debt obligations at June 30, 2022 are as follows:
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
13,884
13,448
13,454
11,530
611,166
1,041,883
1,705,365
Other Obligations
We deferred payments for several of our acquisitions resulting in the recognition of a liability of $8,425 as of
June 30, 2022, which primarily relates to a deferred payment for our acquisition of Depositphotos that is payable in
October 2022. Refer to Note 7 for additional details.
Legal Proceedings
We are not currently party to any material legal proceedings. Although we cannot predict with certainty the
results of litigation and claims to which we may be subject from time to time, we do not expect the resolution of any
of our current matters to have a material adverse impact on our consolidated results of operations, cash flows or
financial position. For all legal matters, at each reporting period, we evaluate whether or not a potential loss amount
or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance
that addresses accounting for contingencies. We expense the costs relating to our legal proceedings as those costs
are incurred.
18. Restructuring Charges
Restructuring costs include one-time employee termination benefits, acceleration of share-based
compensation, write-off of assets and other related costs including third-party professional and outplacement
services. During the years ended June 30, 2022, 2021 and 2020, we recognized restructuring charges of $13,603,
$1,641, and $13,543, respectively.
Fiscal Year 2022
During the fourth quarter of fiscal year 2022, we made decisions in light of a more uncertain macro
economic environment and our focus to improve profitability, which resulted in the prioritization of investments that
we expect to have a nearer-term return, and deprioritization of some investments that we expect to have a longer
path to returns. This resulted in decisions to reduce costs in certain areas including exiting our operations in Japan
and China, while also taking additional headcount actions in our Vista business and in our central technology team.
During the year ended June 30, 2022, we recognized restructuring expense related to these actions of $7,492 in our
Vista segment, $1,093 in our All Other Businesses reportable segment and $854 in our central and corporate costs.
We expect to recognize additional non-cash charges in the first quarter of fiscal year 2023 upon approval and
modification to accelerate vest share-based compensation awards.
Additionally, our National Pen business recognized restructuring expense of $4,178 during the year ended
June 30, 2022, incurred for both the decision to move its European production operations from Ireland to the Czech
Republic and the decision to exit the Japan market. When the Czech move is complete, we anticipate improved
speed and delivery cost efficiencies for the business's European customers. We expect to recognize additional
charges associated with these actions during the next fiscal year as impacted employees continue to vest in
additional termination benefits, but we do not expect those additional costs to be material.
97
There were also immaterial adjustments to restructuring expense during this fiscal year due to changes in
prior period estimates within The Print Group reportable segment.
Fiscal Year 2021
During the year ended June 30, 2021 we recognized restructuring charges of $1,641, primarily due to
organizational changes within The Print Group segment totaling $1,966 intended to streamline certain activities.
This was partially offset by changes in estimate related to prior period actions of $325. This action was completed
during fiscal year 2021.
Fiscal Year 2020
During the year ended June 30, 2020, we recognized restructuring charges of $13,543, consisting of
charges of $5,734 within our Vista reportable segment as we evolved our organizational structure, including our
reorganization of the technology team. We also recognized $3,532 in charges within our central and corporate
costs, due to the coordinated reorganization of technology teams with our Vista business. We also incurred charges
of $3,211, $535, and $475 in our National Pen, All Other Businesses and The Print Group reportable segments,
respectively, during the year ended June 30, 2020, for various cost reduction measures primarily in response to the
pandemic. These restructuring actions were completed during fiscal year 2020.
The following table summarizes the restructuring activity during the years ended June 30, 2022 and 2021.
Severance and
Related Benefits
Other Restructuring
Costs
Accrued
restructuring liability
Balance as of June 30, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5,969 $
Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash charges (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of June 30, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
998
(6,565)
—
402
Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,312
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash charges (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(265)
—
77 $
643
—
(720)
—
291
—
(291)
6,046
1,641
(6,565)
(720)
402
13,603
(265)
(291)
Balance as of June 30, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
13,449 $
— $
13,449
________________
(1) During the fiscal year ended June 30, 2022, non-cash restructuring charges primarily include the National Pen segment's write-off of direct
mail inventory for the Japan market which has no alternative use. During the fiscal year ended June 30, 2021, non-cash restructuring charges
were the write-off of property, plant and equipment, net, which was recognized as part of the actions taken in The Print Group segment.
98
Item 9. Changes in and Disagreement with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated
the effectiveness of our disclosure controls and procedures as of June 30, 2022. The term “disclosure controls and
procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the
Exchange Act, means controls and other procedures of a company that are designed to ensure that information
required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures designed to ensure that information
required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated
and communicated to the company’s management, including its principal executive and principal financial officers,
as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls
and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving
their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of
possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30,
2022, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls
and procedures were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There were no significant changes in our internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended June 30, 2022 that materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Management's Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting for the company. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f)
promulgated under the Exchange Act as a process designed by, or under the supervision of, the company’s chief
executive officer and chief financial officer and effected by our Board of Directors, management and other
personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles and includes
those policies and procedures that:
•
•
•
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of the assets of the company;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of June 30,
2021. In making this assessment, our management used the criteria set forth in the Internal Control — Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Based on our assessment, management concluded that, as of June 30, 2021, our internal control over financial
reporting is effective based on criteria in Internal Control - Integrated Framework (2013) issued by the COSO.
99
PricewaterhouseCoopers LLP, our independent registered public accounting firm, has audited the effectiveness of
our internal control over financial reporting as of June 30, 2022, as stated in their report included on pages 46-47.
Item 9B. Other Information
None.
PART III.
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item is incorporated by reference to the information in the sections
captioned “Information about our Directors and Executive Officers,” “Corporate Governance” and “Delinquent
Section 16(a) Reports” contained in our definitive proxy statement for our 2022 Annual General Meeting of
Shareholders, which we refer to as our 2022 Proxy Statement.
We have adopted a written code of business conduct and ethics that applies to all of our employees,
including our principal executive officer and principal financial and accounting officer, and is available on our website
at www.cimpress.com. We did not waive any provisions of this code during the fiscal year ended June 30, 2022. If
we amend, or grant a waiver under, our code of business conduct and ethics that applies to our principal executive,
financial or accounting officers, or persons performing similar functions, we will post information about such
amendment or waiver on our website at www.cimpress.com.
Item 11. Executive Compensation
The information required by this item is incorporated by reference to the information contained in the
sections of our 2022 Proxy Statement captioned “Compensation Discussion and Analysis," "Summary
Compensation Tables," “Compensation of our Board of Directors" and “Compensation Committee Interlocks and
Insider Participation.”
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
The information required by this item is incorporated by reference to the information contained in the
sections of our 2022 Proxy Statement captioned “Security Ownership of Certain Beneficial Owners and
Management” and “Securities Authorized for Issuance Under Equity Compensation Plans.”
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference to the information contained in the
sections of our 2022 Proxy Statement captioned “Certain Relationships and Related Transactions” and “Corporate
Governance.”
Item 14. Principal Accountant Fees and Services
The information required by this item is incorporated by reference to the information contained in the section
of our 2022 Proxy Statement captioned “Independent Registered Public Accounting Firm Fees and Other Matters.”
100
Item 15. Exhibits and Financial Statement Schedules
PART IV.
Exhibit
No.
3.1
4.1
4.2
4.3
4.4
4.5
10.1*
10.2*
10.3*
10.4*
10.5*
10.6*
10.7*
10.8*
10.9*
10.10*
10.11*
10.12*
10.13*
10.14*
10.15*
10.16*
10.17*
10.18*
10.19*
Description
Constitution of Cimpress plc is incorporated by reference to Annex B to our definitive proxy statement on Schedule
14A filed with the SEC on September 27, 2019
Senior Notes Indenture (including form of 7.0% senior notes due 2026), dated as of June 15, 2018, between
Cimpress plc (as successor to Cimpress N.V.), certain subsidiaries of Cimpress plc as guarantors thereto, and U.S.
Bank National Association, as successor trustee, is incorporated by reference to our Current Report on Form 8-K filed
with the SEC on June 18, 2018
Second Supplemental Indenture, dated as of December 3, 2019, with respect to the 7.0% senior notes due 2026,
between Cimpress plc, certain subsidiaries of Cimpress plc as guarantors thereto, and U.S. Bank National
Association, as successor trustee, is incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 2019
Third Supplemental Indenture, dated as of February 13, 2020, with respect to the 7.0% senior notes due 2026,
between Cimpress plc, the guarantors party thereto and U.S. Bank National Association, as successor trustee is
incorporated by reference to our Current Report on Form 8-K filed with the SEC on February 18, 2020
Form of Warrant is incorporated by reference to our Current Report on Form 8-K filed with the SEC on May 4, 2020
Description of registered securities of Cimpress plc is incorporated by reference to our Annual Report on Form 10-K
for the fiscal year ended June 30, 2020
2005 Non-Employee Directors' Share Option Plan is incorporated by reference to our Current Report on Form 8-K
filed with the SEC on December 3, 2019
Form of Nonqualified Share Option Agreement under our 2005 Non-Employee Directors’ Share Option Plan is
incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009
2011 Equity Incentive Plan is incorporated by reference to our Current Report on Form 8-K filed with the SEC on
December 3, 2019
Form of Restricted Share Unit Agreement under our 2011 Equity Incentive Plan is incorporated by reference to our
Annual Report on Form 10-K for the fiscal year ended June 30, 2020
2016 Performance Equity Plan is incorporated by reference to our Current Report on Form 8-K filed with the SEC on
December 3, 2019
Form of Performance Share Unit Agreement for employees and executives under our 2016 Performance Equity
Incentive Plan is incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended
December 31, 2019
Form of Performance Share Unit Agreement for our Chief Executive Officer under our 2016 Performance Equity
Incentive Plan is incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended
December 31, 2019
Form of Performance Share Unit Agreement for members of our Board of Directors under our 2016 Performance
Equity Incentive Plan is incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended
December 31, 2019
2020 Equity Incentive Plan is incorporated by reference to our Current Report on Form 8-K filed with the SEC on
November 30, 2020
Form of Restricted Share Unit Agreement under our 2020 Equity Incentive Plan is incorporated by reference to our
Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2020
Form of Performance Share Unit Agreement for employees and executives under our 2020 Equity Incentive Plan is
incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2020
Form of Performance Share Unit Agreement for our Chief Executive Officer under our 2020 Equity Incentive Plan is
incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2020
Form of Performance Share Unit Agreement for our Board of Directors under our 2020 Equity Incentive Plan is
incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2020
Form of Deed of Indemnification between Cimpress plc and each of its directors is incorporated by reference to our
Current Report on Form 8-K filed with the SEC on January 29, 2020
Form of Deed of Indemnification between Cimpress plc and each executive officer is incorporated by reference to our
Current Report on Form 8-K filed with the SEC on January 29, 2020
Form of Indemnification Agreement between Cimpress USA Incorporated and each director of Cimpress plc is
incorporated by reference to our Current Report on Form 8-K filed with the SEC on January 29, 2020
Form of Indemnification Agreement between Cimpress USA Incorporated and each executive officer is incorporated
by reference to our Current Report on Form 8-K filed with the SEC on January 29, 2020
Amended and Restated Executive Retention Agreement dated as of October 23, 2009 between Cimpress plc (as
successor to Cimpress N.V.) and Robert Keane is incorporated by reference to our Quarterly Report on Form 10-Q
for the fiscal quarter ended September 30, 2009
Form of Executive Retention Agreement between Cimpress plc (as successor to Cimpress N.V.) and each of Sean
Quinn and Maarten Wensveen is incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 2016
101
10.20
*
10.21*
10.22*
10.23*
10.24*
10.25
10.26
10.27
21.1
23.1
31.1
31.2
32.1
101
104
Memorandum clarifying relative precedence of agreements dated May 6, 2010 between Cimpress plc (as successor
to Cimpress N.V.) and Robert Keane is incorporated by reference to our Annual Report on Form 10-K for the fiscal
year ended June 30, 2010
Agreement Limiting PSU Awards dated May 13, 2016 between Cimpress plc (as successor to Cimpress N.V.) and
Robert Keane is incorporated by reference to our Current Report on Form 8-K filed with the SEC on May 17, 2016
Amendment to Agreement Limiting PSU Awards dated September 28, 2020 between Cimpress plc and Robert Keane
is incorporated by reference to our Current Report on Form 8-K filed with the SEC on September 30, 2020
Form of Invention and Non-Disclosure Agreement between Cimpress and each of Robert Keane, Sean Quinn, and
Maarten Wensveen is incorporated by reference to our Registration Statement on Form S-1, as amended
Form of Non-Competition and Non-Solicitation Agreement between Cimpress and each of Robert Keane, Sean
Quinn, and Maarten Wensveen is incorporated by reference to our Registration Statement on Form S-1, as amended
Amendment and Restatement Agreement dated as of May 17, 2021 among Cimpress plc, Vistaprint Limited,
Cimpress Schweiz GmbH, Vistaprint B.V., Vistaprint Netherlands B.V., and Cimpress USA Incorporated, as borrowers
(the “Borrowers”); the lenders named therein as lenders; and JPMorgan Chase Bank N.A., as administrative agent for
the lenders (the “Administrative Agent”), which amends and restates the Credit Agreement dated as of October 21,
2011, as amended and restated as of February 8, 2013, and as further amended and restated as of July 13, 2017, is
incorporated by reference to our Current Report on Form 8-K filed with the SEC on May 19, 2021
Second Amended and Restated Guaranty dated as of July 13, 2017 between Cimpress' subsidiary guarantors named
therein as guarantors (the "Subsidiary Guarantors") and the Administrative Agent, which amends and restates the
Amended and Restated Guaranty dated as of February 8, 2013, is incorporated by reference to our Current Report
on Form 8-K filed with the SEC on July 14, 2017
Amended and Restated Pledge and Security Agreement dated as of July 13, 2017 between certain Borrowers and
Subsidiary Guarantors, on one hand, and the Administrative Agent, on the other hand, which amends and restates
the Pledge and Security Agreement dated as of February 8, 2013, is incorporated by reference to our Current Report
on Form 8-K filed with the SEC on July 14, 2017
Subsidiaries of Cimpress plc
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm (PCAOB ID 238)
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Rule 13a-14(a)/15d-14(a), by Chief
Executive Officer
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Rule 13a-14(a)/15d-14(a), by Chief Financial
Officer
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, by Chief Executive Officer and Chief Financial Officer
The following materials from this Annual Report on Form 10-K, formatted in Inline Extensible Business Reporting
Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Statements of
Shareholder's Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated
Financial Statements.
Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101)
__________________
*Management contract or compensatory plan or arrangement
Item 16. Form 10-K Summary
None.
102
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
August 5, 2022
Cimpress plc
.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By:
/s/ Robert S. Keane
Robert S. Keane
Founder and Chief Executive Officer
Signature
/s/ Robert S. Keane
Robert S. Keane
/s/ Sean E. Quinn
Sean E. Quinn
/s/ Sophie A. Gasperment
Sophie A. Gasperment
/s/ Zachary S. Sternberg
Zachary S. Sternberg
/s/ Dessislava Temperley
Dessislava Temperley
/s/ Scott Vassalluzzo
Scott Vassalluzzo
Title
Date
Founder & Chief Executive Officer
August 5, 2022
(Principal executive officer)
Chief Financial Officer
(Principal financial and accounting officer)
Director
Director
Director
Director
August 5, 2022
August 5, 2022
August 5, 2022
August 5, 2022
August 5, 2022
103
[This Page Intentionally Left Blank]
CIMPRESS PLC
Building D, Xerox Technology Park, Dublin Road
Dundalk, Co. Louth A91 H9N9
Ireland
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
Cimpress plc will hold its 2022 Annual General Meeting of Shareholders:
on Wednesday, November 16, 2022
at 6:30 p.m. Greenwich Mean Time
at the offices of Matheson LLP
70 Sir John Rogerson's Quay
Dublin 2, D02 R296
Ireland
MATTERS TO BE ACTED UPON AT THE ANNUAL GENERAL MEETING:
(1) Reappoint Robert S. Keane to our Board of Directors to serve for a term of three years ending at the
conclusion of our annual general meeting of shareholders in 2025
(2) Reappoint Scott J. Vassalluzzo to our Board of Directors to serve for a term of three years ending at the
conclusion of our annual general meeting of shareholders in 2025
(3) Approve, on a non-binding, advisory basis, the compensation of our named executive officers, as described in
this proxy statement
(4) Amend our 2020 Equity Incentive Plan to increase the number of ordinary shares issuable under the plan by
2,000,000 shares
(5) Reappoint PricewaterhouseCoopers Ireland as our statutory auditor under Irish law to hold office until the
conclusion of our annual general meeting of shareholders in 2023
(6) Authorize our Board of Directors or Audit Committee to determine the remuneration of
PricewaterhouseCoopers Ireland in its capacity as our statutory auditor under Irish law
(7) Transact other business, if any, that may properly come before the meeting or any adjournment of the meeting
Each Proposal will be proposed as ordinary resolutions under Irish law, requiring, in each case, at least a simple
majority of the votes cast to be in favor of the resolution for the resolution to pass.
During the annual general meeting, management will present, for consideration by the shareholders, our statutory
financial statements under Irish law for the fiscal year ended June 30, 2022 (including the reports of the directors
and the Irish statutory auditor thereon) and a review of Cimpress' affairs.
Our Board of Directors has no knowledge of any other business to be transacted at the annual general meeting.
Shareholders of record at the close of business on September 26, 2022 are entitled to attend and vote at the
annual general meeting, or to appoint one or more proxies to attend, speak, and vote instead of the shareholder at
the annual general meeting. A proxy need not be a shareholder. To be valid, a proxy must be received no later than
4:00 p.m. Eastern Standard Time on November 15, 2022 at one of the address(es) and otherwise in the manner
described in the attached proxy statement. Your vote is important regardless of the number of shares you own.
Whether or not you expect to attend the meeting, please complete and promptly return the proxy card or voter
instruction form in accordance with the instructions that we or your bank or brokerage firm have provided. Your
prompt response will ensure that your shares are represented at the annual general meeting. You can change your
vote and revoke your proxy by following the procedures described in this proxy statement.
Please read the attached proxy statement for additional information on the matters to be considered at the annual
general meeting. The proxy statement is incorporated into this notice by this reference.
All shareholders are cordially invited to attend the annual general meeting.
By order of the Board of Directors,
Founder, Chairman and Chief Executive Officer
October 5, 2022
CIMPRESS PLC
Building D, Xerox Technology Park, Dublin Road
Dundalk, Co. Louth, A91 H9N9
Ireland
PROXY STATEMENT FOR ANNUAL GENERAL MEETING OF SHAREHOLDERS
to be held on November 16, 2022
This proxy statement contains information about the 2022 Annual General Meeting of Shareholders of Cimpress
plc, which we refer to in this proxy statement as the annual meeting or the meeting. We will hold the annual meeting
on Wednesday, November 16, 2022 at the offices of Matheson LLP, 70 Sir John Rogerson's Quay, Dublin 2, D02
R296, Ireland. The meeting will begin at 6:30 p.m. Greenwich Mean Time.
We are furnishing this proxy statement to you in connection with the solicitation of proxies by the Board of
Directors of Cimpress plc (which is also referred to as we, us, the company, or Cimpress in this proxy statement) for
use at the annual meeting and at any adjournment of the annual meeting.
We are first mailing or making available the Notice of Annual General Meeting, this proxy statement, and our
Annual Report to Shareholders for the fiscal year ended June 30, 2022 on or about October 6, 2022.
Important Notice Regarding the Availability of Proxy Materials for the 2022 Annual General Meeting of
Shareholders:
This Proxy Statement, the 2022 Annual Report to Shareholders, and the statutory financial statements
under Irish law for the fiscal year ended June 30, 2022 (including the reports of our directors and our Irish
statutory auditor thereon) are available for viewing, printing and downloading at http://www.viewproxy.com/
Cimpress/2022. We will furnish without charge a copy of this proxy statement and our Annual Report on
Form 10-K for the fiscal year ended June 30, 2022, as filed with the United States Securities and Exchange
Commission, or SEC, as well as the statutory financial statements under Irish law for the fiscal year ended
June 30, 2022 (including the reports of our directors and our Irish statutory auditor thereon), to any
shareholder who requests it by emailing ir@cimpress.com or writing to Cimpress plc, c/o Cimpress USA
Incorporated, Attention: Investor Relations, 275 Wyman Street, Waltham, MA 02451, USA. This proxy
statement and our Annual Report on Form 10-K are also available on the SEC’s website at www.sec.gov.
For this annual meeting, we are taking advantage of the SEC rule allowing companies to furnish proxy materials
to their shareholders over the Internet. We believe that this e-proxy process expedites shareholders' receipt of proxy
materials, while lowering the costs and reducing the environmental impact of our annual meeting. On or about
October 6, 2022 we are mailing to our beneficial shareholders a notice containing instructions on how to access our
proxy statement and 2022 Annual Report to Shareholders and how to vote online. All other shareholders will
continue to receive a paper copy of this proxy statement, proxy card and Annual Report by mail. The Notice of
Internet Availability contains instructions on how you can (i) receive a paper copy of the proxy statement, proxy card
and Annual Report if you only received a Notice by mail or (ii) elect to receive your proxy statement and Annual
Report over the Internet if you received them by mail this year.
i
TABLE OF CONTENTS
Section
Information about our directors and executive officers ..............................................................................
Proposals 1&2: Reappoint members of our Board of Directors ...............................................................
Proposal 3: Advisory vote to approve executive compensation ...............................................................
Compensation Discussion and Analysis ......................................................................................................
Summary Compensation Tables for named executive officers ................................................................
Proposal 4: Amendment of Equity Plan .......................................................................................................
Proposal 5: Reappoint our statutory auditor ...............................................................................................
Proposal 6: Authorize our Board to determine remuneration of our statutory auditor ..........................
Corporate Governance ...................................................................................................................................
Compensation of our Board of Directors .....................................................................................................
Security ownership of certain beneficial owners and management ........................................................
Questions and answers about the annual meeting and voting ................................................................
Page
Number
1
4
4
4
12
19
26
28
29
34
36
38
Appendix A - 2020 Equity Incentive Plan, as amended
Appendix B - Form of Proxy
ii
INFORMATION ABOUT OUR DIRECTORS AND EXECUTIVE OFFICERS
Our Board of Directors:
The Board of Directors of Cimpress plc consists of four independent, non-employee directors and Robert Keane,
our Chief Executive Officer, who serve for rotating terms of up to three years.
Name
Robert S. Keane
Age
59
Board Position
Cimpress
Director Since
Current Term
Expires at our
Annual General
Meeting In:
Independent
Director
Chairman
January 1995
2022
Sophie A. Gasperment
58
Non-Employee Director
November 2016
2023
Zachary S. Sternberg
37
Non-Employee Director
November 2017
2024
Dessislava Temperley
49
Non-Employee Director
September 2021
2024
Scott J. Vassalluzzo
50
Non-Employee Director
January 2015
2022
No
Yes
Yes
Yes
Yes
ROBERT S. KEANE has served as our President, Chief Executive Officer, and Chairman since he founded
Cimpress in January 1995. From 1988 to 1994, Mr. Keane was an executive at Flex-Key Corporation, an
original equipment manufacturer of keyboards, displays and retail kiosks used for desktop publishing. Mr. Keane
has also served on the Board of Directors of Astronics Corporation, a leading supplier of advanced technologies
and products to the global aerospace, defense and other mission critical industries, since December 2019. Mr.
Keane brings to Cimpress' Board his experience growing Cimpress from inception in 1995 to $2.9 billion of
revenue in our 2022 fiscal year, his understanding of the drivers of our intrinsic value per share, and his
knowledge of Cimpress' customer needs, business model and markets.
SOPHIE A. GASPERMENT has served as Senior Advisor to Boston Consulting Group since November 2019,
where her primary focus is to support their Consumer and Digital Acceleration practices. Ms. Gasperment
previously held multiple senior management positions at L’Oréal, the world’s leading beauty company, from
September 1986 to November 2018. This included global Chief Executive Officer and Executive Chairman of
The Body Shop, the iconic British retailer spanning 60 countries and ca. 20,000 people, from July 2008 to
October 2013, as well as Managing Director, L’Oréal UK and Ireland, from January 2004 to January 2008. More
recently, from January 2014 to November 2018, Ms. Gasperment was L’Oréal's Group General Manager
leading Strategic Prospective and Financial Communication. From June 2010 to May 2022, Ms. Gasperment
served on the board of Accor, a Euronext-listed company and a world leader in hospitality, and was most
recently Chair of that board's Appointments, Compensation and CSR Committee and a member of the Audit and
Compliance Committee. Since May 2018, Ms. Gasperment has served on the supervisory board of D’Ieteren, a
Euronext-listed global company, and is a member of that board's Appointments and Compensation Committee.
Since December 2018, Ms. Gasperment has served on the board of Kingfisher plc, a FTSE 100 Home
Improvement international company, and is currently Chair of that board's Responsible Business Committee
and a member of the Nomination Committee. Since September 2020, Ms. Gasperment has served on the board
of directors of Givaudan SA, the world leading flavour and fragrances company that is publicly traded on the SIX
Swiss Exchange, and is a member of that board's Nomination Committee and Audit Committee. In addition to
serving on the Board of Directors of Cimpress plc, Ms. Gasperment serves on the supervisory board of
Vistaprint B.V., a wholly owned Dutch subsidiary of Cimpress. Ms. Gasperment brings to Cimpress' Board her
leadership and strategy skills and perspective, her international brand-building expertise, her experience of
digital transformation and acceleration, her acumen in both consumer goods and retail, as well as her
experience on the boards of other public companies and her broader business experience in multi-cultural
environments.
1
ZACHARY S. STERNBERG is the co-founder and Managing Member of the General Partner of The Spruce House
Partnership, a New York-based investment partnership. Spruce House invests in public and private companies
globally and seeks to partner with management teams that are focused on growing the per share value of their
companies over the long-term. Spruce House holds 9.0% of Cimpress' outstanding shares and has been a
shareholder of Cimpress since 2011. Mr. Sternberg also serves on the board of directors of Victoria PLC, an
international manufacturer and distributor of innovative flooring products. Mr. Sternberg brings to Cimpress'
Board his perspective as a material and long-term shareholder of Cimpress with a deep understanding of the
importance of long-term stewardship of capital informed by more than a decade of successful investment
experience.
DESSISLAVA TEMPERLEY serves on the boards of Coca-Cola Europacific Partners PLC, a British multinational
bottling company; Corbion N.V., a Dutch food and biochemicals company; and Philip Morris International Inc., a
leading international tobacco company. Ms. Temperley previously served as Group Chief Financial Officer of
Beiersdorf AG, a German multinational company that manufactures personal-care products and pressure-
sensitive adhesives, from July 2018 through June 2021. Ms. Temperley spent 14 years at Nestlé, from April
2004 through June 2018, serving in various roles including Head of Investor Relations, CFO of Nestle Purina
Petcare (EMENA), Head of Global Planning and Performance Monitoring, Controller, and Finance Director. In
addition to serving on the Board of Directors of Cimpress plc, Ms. Temperley serves on the supervisory board of
Vistaprint B.V., a wholly owned Dutch subsidiary of Cimpress. Ms. Temperley brings to Cimpress' Board a
wealth of financial and operating expertise from her over 20 years of experience in various finance leadership
roles at multinational companies.
SCOTT J. VASSALLUZZO is a Managing Member of Prescott General Partners LLC ("PGP"), an investment
adviser registered with the SEC that holds 14.9% of Cimpress' outstanding shares. PGP serves as the general
partner of three private investment limited partnerships, including Prescott Associates L.P. (together, the
"Prescott Partnerships"). Mr. Vassalluzzo joined the Prescott organization in 1998 as an equity analyst, became
a general partner of the Prescott Partnerships in 2000, and transitioned to Managing Member of PGP following
Prescott's reorganization in January 2012. Prior to 1998, Mr. Vassalluzzo worked in public accounting at
Coopers & Lybrand (now PricewaterhouseCoopers LLP) and was a certified public accountant. Mr. Vassalluzzo
serves on the boards of directors of Credit Acceptance Corporation, an auto finance company providing
automobile loans and other related financial products, and World Acceptance Corporation, a personal
installment loan company. Mr. Vassalluzzo brings to Cimpress' Board his advocacy for the priorities of long-
termism and intrinsic value per share, his appreciation and understanding of the perspectives of our other long-
term shareholders, and his experience on the boards and board committees of other publicly traded companies.
Board Diversity Matrix as of June 30, 2022
We believe directors with diverse backgrounds, including gender diversity, provide competing perspectives that
enhance the Board's effectiveness. The table below sets forth information on the voluntarily self-identified diversity
characteristics of the members of our Board of Directors.
Total number of directors
5
Gender or Demographic Background
Female
Male
White
Did not disclose demographic background
Number of Directors Who Self-
Identify as Having That Gender or
Demographic Background
2
3
4
1
2
Our Executive Officers:
Name
Title
Robert S. Keane
Founder, Chief Executive Officer, and Chairman
Sean E. Quinn
Executive Vice President and Chief Financial Officer
Maarten Wensveen
Executive Vice President and Chief Technology Officer
Age Joined Cimpress
59
43
42
January 1995
October 2009
October 2011
ROBERT S. KEANE: Mr. Keane's biography is in the "Our Board of Directors" section above.
SEAN E. QUINN has served as our Chief Financial Officer since October 2015 and as Executive Vice President
since July 2016. Mr. Quinn previously served as Senior Vice President from October 2015 to July 2016, as
Chief Accounting Officer from November 2014 to October 2015, as Vice President, Corporate Finance from
January 2014 to October 2015, as Global Controller from April 2012 to November 2014, and in various other
financial roles from October 2009 to April 2012. Before joining Cimpress, Mr. Quinn was a certified public
accountant with KPMG LLP from September 2001 to October 2009 in the firm’s Philadelphia, London, and
Boston offices.
MAARTEN WENSVEEN has served as our Executive Vice President and Chief Technology Officer since February
2019. Mr. Wensveen previously served as Senior Vice President from January 2017 to February 2019 and Vice
President of Technology from February 2015 to January 2017. Mr. Wensveen joined Cimpress in November
2011 when we acquired Albumprinter, and he served in various roles at Albumprinter from December 2006 to
June 2012.
There are no family relationships among any of Cimpress' directors and executive officers. No arrangements or
understandings exist between any director and any other person pursuant to which such person is to be selected for
appointment to the Board of Directors.
3
PROPOSALS 1 and 2 - REAPPOINT TWO DIRECTORS TO OUR BOARD OF DIRECTORS
The members of our Board of Directors serve for rotating terms of up to three years. In accordance with the
recommendation of the Nominating Committee of the Board, our Board recommends the reappointment of the
following directors, each for a three-year term ending at the conclusion of our annual general meeting of
shareholders in 2025:
1. Robert S. Keane - The Board recommends the reappointment of Mr. Keane because of his experience growing
Cimpress from inception in 1995 to $2.9 billion of revenue in our 2022 fiscal year, his understanding of the drivers of
our intrinsic value per share, and his knowledge of Cimpress' customer needs, business model and markets.
2. Scott J. Vassalluzzo - The Board recommends the reappointment of Mr. Vassalluzzo because of his advocacy
for the priorities of long-termism and intrinsic value per share, his appreciation and understanding of the
perspectives of our other long-term shareholders, and his experience on the boards and board committees of other
publicly traded companies.
You can find more information about Messrs. Keane and Vassalluzzo in the section of this proxy statement
entitled “INFORMATION ABOUT OUR DIRECTORS AND EXECUTIVE OFFICERS.”
Our Board of Directors recommends that you vote FOR the reappointment of both nominees to the
Board.
PROPOSAL 3 - ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
At the annual meeting, we are asking our shareholders to approve the compensation of our named executive
officers, as described in the Compensation Discussion and Analysis section, executive compensation tables, and
accompanying narrative disclosures below. This is an advisory vote, meaning that this proposal is not binding on us,
but our Compensation Committee takes shareholder feedback into account when designing our executive
compensation program, which has received more than 90% approval from our shareholders at each of our last nine
annual general meetings of shareholders.
At our annual general meeting in 2017, a majority of our shareholders voted to hold the advisory vote to approve
our executive compensation on an annual basis. Therefore, we intend to put forth at each annual general meeting of
shareholders an advisory vote on the compensation of our named executive officers for the immediately preceding
fiscal year.
Our Board of Directors recommends that you vote FOR the approval of the compensation of our named
executive officers, as described below.
COMPENSATION DISCUSSION AND ANALYSIS
Executive Overview
Our success depends on our ability to attract and retain top talent in a competitive marketplace, and to motivate
that talent to achieve outstanding performance. Attracting, retaining, and motivating talented team members in key
roles is especially critical at a time when we are seeking to transform our business, in particular the Vista business
where we have been investing heavily, including in hiring. Although we were already operating in a competitive
market for talent, we saw that competitiveness intensify during the fiscal year, often vying for qualified candidates
against both larger, established companies with significant cash and equity resources and earlier-stage companies
that offer significant potential equity upside.
Since 2016, we have used performance share unit (PSU) awards as a key component of our long-term incentive
compensation program for executives, employees, and directors. These PSU awards only pay out if the three-year
moving average of the daily closing share price of Cimpress’ ordinary shares (3YMA) reaches or exceeds specified
compound annual growth rate (CAGR) thresholds. In order to reach those thresholds, the 3YMA must steadily
increase over a period of several years. However, during both the initial phase of the pandemic and then again on a
4
relatively sustained basis since the beginning of fiscal year 2022, our share price has experienced steep declines,
weighing heavily on our 3YMA.
No shares were issued on the first PSU measurement date of August 15, 2022 because our 3YMA was well
below the applicable CAGR threshold on that date. To put the impact of our 3YMA on outstanding PSU awards into
perspective, the lowest 3YMA that would trigger a payout under any of our outstanding PSUs eligible for
performance measurement on August 15, 2023 is $144.17. Based on the closing price of Cimpress' ordinary shares
during the first two years of the three-year measurement period ending on August 15, 2023, we would need an
average closing price of approximately $271 per share every trading day during the final year of the three-year
measurement period in order for those PSUs to reach the applicable CAGR threshold on that date. The 3YMA
CAGR thresholds for the other two outstanding PSU awards that will be measured on August 15, 2023 are even
higher, and the applicable 3YMA CAGR thresholds only increase each year thereafter until the step-down in their
respective final measurement years. This reality has meaningfully impaired the retention and motivation value of
PSU awards.
In fiscal year 2022, our executives, other than Robert Keane, received a combination of (1) PSU awards that will
pay out in four to eight years if the 3YMA CAGR thresholds are met and (2) restricted share unit (RSU) awards that
pay out, subject to continued employment through the applicable vesting date, in Cimpress ordinary shares over two
to four years after grant. In light of the downward pressure on our 3YMA noted above and its impact on the retention
and motivation value of PSU awards, and recognizing the elements of our PSU program design that were not
effective in achieving their objective, we decided to stop granting PSU awards in their current form from and after
fiscal year 2023, other than to Robert Keane. Instead, in fiscal year 2023, our executives, other than Mr. Keane,
received a combination of (1) RSU awards that pay out, subject to continued employment through the applicable
vesting date, in Cimpress ordinary shares over four years after grant and (2) share options that vest, subject to
continued employment through the applicable vesting date, and become exercisable for Cimpress ordinary shares
over four years after grant. We expect to continue to evaluate appropriate performance-based awards for future
grants that are consistent with our objective of maximizing intrinsic value per share and are effective in retaining
great talent.
In fiscal years 2022 and 2023, Robert Keane, our Chief Executive Officer, continues to receive all of his long-
term incentive compensation in PSUs that will pay out in six to ten years if the 3YMA CAGR thresholds are met. Mr.
Keane signed a PSU Limitation Agreement with Cimpress providing that, until June 30, 2023, he will receive all of
his long-term incentive (LTI) compensation in the form of PSUs, the maximum number of PSUs we may grant him in
any fiscal year is 75,000, and the performance thresholds in his PSU awards are that the 3YMA CAGR must equal
or exceed 11% over a performance period of between six and ten years. In fiscal year 2022, Mr. Keane received
91% of his total compensation in the form of PSUs, including all of his Board retainer fees and LTI and most of his
base salary.
Competitive Compensation Program
In determining the compensation of our executive officers, our Compensation Committee begins with an analysis
of the competitiveness of our executive compensation program and, as a starting point, seeks to pay our executives
base salary at the 50th percentile of the competitive market and total compensation (including base salary and
target long-term incentive award values) at the 75th percentile of the competitive market. The Compensation
Committee then applies its own discretion to take into account any other factors it may deem relevant in any given
fiscal year, such as general economic conditions, the internal equity of compensation among our executives, each
executive’s experience and role, individual performance, and, particularly in fiscal years 2021 and 2022, the impact
of the COVID-19 pandemic. The Committee does not assign specific weights to particular factors but considers
them together in determining compensation.
When considering the competitiveness of our executive compensation program for fiscal year 2022, our
Compensation Committee took into account a compensation analysis that we developed internally using data from
the comparison peer group described below, published compensation survey data, and detailed historical
compensation analyses for each executive officer. The Committee did not engage a compensation consultant. We
chose the 18 publicly traded companies that comprise our peer group based on revenue, market capitalization,
location, and industry, while taking into account the high-growth, technology-enabled businesses with which we
might reasonably expect to compete for executive-level talent. The companies in our peer group for fiscal year 2022
are:
5
Akamai Technologies, Inc.
IAC/InterActiveCorp
CarGurus, Inc.
Cerence, Inc.
Etsy, Inc.
Grubhub, Inc.
HubSpot, Inc.
iRobot Corporation
New Relic, Inc.
Rapid7, Inc.
Stitch Fix, Inc.
Teradyne, Inc.
Nuance Communications, Inc.
TripAdvisor, Inc.
Pegasystems, Inc.
PTC, Inc.
Upwork, Inc.
Yelp, Inc.
Mr. Keane's compensation remained the same from fiscal year 2021 to fiscal year 2022 because the
Compensation Committee wanted to see the Vista business progress further along in its transformation before
increasing Mr. Keane's compensation. Upon the recommendation of Mr. Keane, the Committee increased the fiscal
year 2022 LTI compensation of Sean Quinn and Maarten Wensveen, while maintaining their salaries at fiscal year
2021 levels, to maintain their total compensation at the 75th percentile of market data and because Mr. Keane and
the Committee believe that retaining these executives is critical to the success of Cimpress and Vista.
For fiscal year 2022, the principal elements of our compensation program for our named executive officers
included:
Base Salary
Starting point target at 50th percentile of market
data, then adjusted at Compensation
Committee's discretion
Robert Keane has historically chosen to take as
much as possible of his base salary in PSUs,
within the 75,000 PSUs per fiscal year limit in his
PSU Limitation Agreement
LTI Awards
PSUs with performance conditions tied to the
appreciation of our 3-year moving average share
price over a multiple-year period, intended to
reward executives based on the creation of
value for our shareholders over the long term
RSUs vesting over two to four years for
executives other than Mr. Keane
Health and Welfare Benefits
Severance/Change in Control
Standard benefits that are applicable to all of our
employees in each executive's geographic
location
Severance and change in control arrangements
that are described below in the section entitled
Executive Retention and Other Agreements
Base Salary
For fiscal year 2022, our Compensation Committee maintained the base salaries of all three of our executive
officers at their fiscal year 2021 levels. Beginning in the second half of fiscal year 2019, at his option, Mr. Keane has
chosen to take as much of his base salary and director fees as much as possible in PSUs within the 75,000 PSU
per fiscal year limit set forth in his PSU Limitation Agreement. In fiscal year 2022, the 75,000 PSU limit was reached
because of our reduced 3YMA, so we paid Mr. Keane $766,468 in cash, representing the amount of compensation
payable to Mr. Keane that exceeded the 75,000 PSU limit.
Long-Term Incentive Program
In fiscal year 2022, our long-term incentive compensation program for executive officers consisted of PSUs for
Mr. Keane and a mix of PSUs and RSUs for our other executives. We increased the use of RSUs for our executive
officers other than Mr. Keane in fiscal year 2022 to enhance our ability to retain and motivate talented executives in
an intensely competitive market for talent and to help mitigate the greatly reduced retention and motivation value of
the PSU awards we granted in past years that are increasingly unlikely to pay out given the sustained downward
pressure on our share price and 3YMA. Mr. Keane received 100% of his LTI compensation in the form of PSUs, and
he chose to take as much of the rest of his compensation as possible in the form of PSUs within the 75,000 PSU
per fiscal year limit set forth in his PSU Limitation Agreement.
Messrs. Quinn and Wensveen received a mix of PSUs and RSUs as follows:
•The annual LTI awards we granted in August 2021 to each of Messrs. Quinn and Wensveen were allocated
65% to PSUs and 35% to RSUs.
6
•In September 2021, in recognition of the critical roles that Messrs. Quinn and Wensveen play in the
transformation of our business and the importance of retaining them in an increasingly competitive market
for talent, we granted each of them an additional $1,000,000 of RSUs that will fully vest on September 15,
2023 if they remain employed by Cimpress on that date.
•In February 2022, as our 3YMA continued to decline and it became increasingly unlikely that the PSU
awards we granted in the past would ever pay out, we granted an RSU award to each executive and
employee who held PSUs other than Mr. Keane in order to augment the retention value of our past equity
awards. These RSU awards vest over three years so long as the executive or employee remains employed
by Cimpress on each vesting date.
Performance Share Units. Our PSU awards are designed to focus our executives and employees on long-term
performance and maximizing our intrinsic value per share, which we define as (a) the unlevered free cash flow per
diluted share that, in our best judgment, will occur between now and the long-term future, appropriately discounted
to reflect our cost of capital, minus (b) net debt per diluted share. We believe that the CAGR of the 3YMA over a
multiple-year period is a reasonable proxy for the change in our intrinsic value per share over the same time frame.
Each PSU represents a right to receive between 0 and 2.5 ordinary shares of Cimpress plc upon the satisfaction of
both service-based vesting over time and performance conditions relating to the 3YMA CAGR over a period
determined by the Board. We refer to the issuance of Cimpress ordinary shares pursuant to a PSU upon
satisfaction of both conditions as a Performance Dependent Issuance.
PSUs granted to employees generally vest 25% per year over four years so long as the employee remains
employed by Cimpress. However, this service-based vesting itself is not sufficient for payout; PSU service-based
vesting events are the dates after which the participant gains the future right to a Performance Dependent Issuance
with respect to their then-vested PSUs. A Performance Dependent Issuance occurs only if the relevant 3YMA CAGR
thresholds are achieved.
For each PSU award, we calculate a baseline moving average share price as of a specified date at the time of
grant for two purposes: to establish the number of units to be granted and to establish the baseline for future
performance measurement. On each measurement date during the performance period determined by our Board of
Directors we calculate the 3YMA as of such date, and on the first measurement date that the 3YMA, as compared to
the baseline moving average share price, equals or exceeds a minimum CAGR set by the Board, the performance
condition would be satisfied.
•
•
PSU awards granted to Mr. Keane have a performance period of six to ten years. Each grant anniversary
from six to ten is a measurement date. On the first measurement date that the 3YMA equals or exceeds a
CAGR of 11% as compared to the 3YMA at the date of grant, the performance condition would be
satisfied, and we would issue to Mr. Keane the number of Cimpress ordinary shares determined by
multiplying the number of PSUs subject to the award by the applicable performance-based multiplier. The
performance-based multiplier begins at 125% for an 11% 3YMA CAGR and increases on a sliding scale
to 250% for a 3YMA CAGR of 20% or above. If the 3YMA CAGR does not reach at least 11% on any of
the sixth through tenth anniversaries of the grant date, then the PSU award terminates and no Cimpress
ordinary shares would be issued with respect to the award.
PSU awards granted in fiscal year 2022 to employees and executive officers other than Mr. Keane have a
performance period of four to eight years. Each grant anniversary from the fourth to eighth year is a
measurement date. On the first measurement date during this period that the 3YMA equals or exceeds a
CAGR of 9% as compared to the baseline 3YMA, the performance condition would be satisfied, and we
would issue to the employee the number of Cimpress ordinary shares determined by multiplying the
number of PSUs subject to the award by the applicable performance-based multiplier. The performance-
based multiplier begins at 100% for a 9% CAGR and increases on a sliding scale to 250% for a CAGR of
20% or above. If the CAGR has not reached at least 9% on any of the fourth through seventh
anniversaries of the grant date and thus a Performance Dependent Issuance has not yet occurred, then
the threshold CAGR level for 3YMA performance at the eighth anniversary of the grant date, as compared
to the baseline 3YMA, is lowered to 7%, and if the 3YMA performance meets or exceeds a 7% CAGR on
the eighth anniversary the recipient would still receive Cimpress ordinary shares, but at a lower multiple
beginning at 75% for a 7% CAGR and increasing on a sliding scale to 250% for a CAGR of 20% or
above. If none of the CAGR performance goals are achieved by the eighth anniversary of the grant date,
7
then the PSU award terminates and no Cimpress ordinary shares would be issued with respect to the
award.
The actual closing price of the Cimpress shares issued upon a Performance Dependent Issuance may be higher
or lower than the 3YMA used to calculate the number of shares issued at such time.
Restricted Share Units. In fiscal year 2022, we granted RSU awards to executives and employees, other than
Mr. Keane, that vest over two to four years. Upon vesting each RSU is automatically converted into ordinary shares
of Cimpress plc on a one-to-one basis so long as Cimpress continues to employ the recipient on the vesting date.
Cash Retention Bonuses. In past years, we allowed our executive officers other than Mr. Keane to elect to
receive a portion of their LTI awards in the form of cash retention bonuses, subject to a minimum threshold that was
required to be allocated to PSUs. The cash retention bonuses pay the employee a fixed amount in equal payments
over several years (typically four years) so long as Cimpress continues to employ the recipient. Although we no
longer grant cash retention bonuses to executives, Mr. Quinn still held cash retention bonus awards that were
granted in previous fiscal years and that continued to vest, with the final vested amounts being earned in fiscal year
2022.
Benefit Programs
The Compensation Committee believes that all employees based in the same geographic location should have
access to similar levels of health and welfare benefits, and therefore our executive officers are eligible for the same
health and welfare benefits, including medical, dental, vision, and disability plans, group life and accidental death
and disability insurance and other benefit plans, as those offered to other employees in their location.
U.S.-based employees may participate in a 401(k) plan that provides a company match of up to 50% on the first
6% of the participant’s eligible compensation that is contributed, subject to certain limits under the United States
Internal Revenue Code of 1986, or US Tax Code, with company matching contributions vesting over a four-year
period.
We also provide customary pension plans to our European employees.
Perquisites
In general, executives are not entitled to benefits that are not otherwise available to all other employees who
work in the same geographic location. We also from time to time enter into arrangements with some of our named
executive officers to reimburse them for living and relocation expenses relating to their work outside of their home
countries and for tax preparation fees and associated tax gross-ups. You can find more information about these
arrangements in the Summary Compensation Table of this proxy statement.
8
Executive Retention and Other Agreements
We have entered into executive retention agreements with all of our named executive officers. Under the
executive retention agreements, if we terminate an executive officer’s employment other than for cause, death, or
disability or the executive terminates his or her employment for good reason before a change in control of Cimpress
or within one year after a change in control (as cause, disability, good reason, and change in control are defined in
the agreements), then the executive is entitled to receive:
• A lump sum severance payment equal to two years’ base salary and annual bonus in the case of Mr. Keane,
and one year’s base salary and annual bonus in the case of the other named executive officers. Because we
no longer grant annual bonuses to our executives and other team members, this amount would include only
base salary.
• With respect to any outstanding annual or multi-year cash incentive award under our previous cash
performance incentive plan a pro rata portion, based on the number of days from the beginning of the then
current performance period until the date of termination, of his or her target incentive. Because we no longer
grant awards under the cash performance incentive plan to our executives and employees, this amount would
be zero.
• The continuation of all other employment-related health and welfare benefits for up to two years after the
termination in the case of Mr. Keane, or up to one year after the termination in the case of our other named
executive officers.
Both the executive retention agreements and our PSU awards have change in control provisions. The executive
retention agreements provide that, upon a change in control of Cimpress, all equity awards granted to each
executive officer will accelerate and become fully vested (other than PSUs, which are governed by our equity plans
and PSU agreements as described below), and each executive’s annual or multi-year cash incentive awards under
our previous cash performance incentive plan would accelerate such that the executive would receive a portion of
his or her target bonus for the remaining performance period after the change in control. As of the end of fiscal year
2022, none of our executives held any share options, but if they did, then the exercise period of the share options
would be extended in certain circumstances if the executive's employment terminated after a change in control of
Cimpress.
The equity plans and agreements that govern our PSUs provide that upon a change in control, all PSUs that
have satisfied the applicable service-based vesting conditions will be settled for Cimpress ordinary shares in
accordance with the terms of the awards if the actual price paid per share to holders of Cimpress' securities in
connection with the change in control equals or exceeds the minimum 3YMA CAGR thresholds set forth in the
award agreements.
Our Compensation Committee decided that we would no longer include any excise tax gross-up provisions in
any executive retention agreements we enter into with new executives after August 1, 2012, and accordingly, the
only current executive officer who has an excise tax gross-up provision in his agreement is Mr. Keane. If Mr. Keane
is required to pay any excise tax pursuant to Section 4999 of the US Tax Code as a result of compensation
payments made to him, or benefits he obtained (including the acceleration of equity awards), in connection with a
change in ownership or control of Cimpress, we are required to pay him an amount, referred to as a gross-up
payment, equal to the amount of such excise tax plus any additional taxes attributable to such gross-up payment.
However, if reducing Mr. Keane's compensation payments by up to $50,000 would eliminate the requirement to pay
an excise tax under Section 4999 of the US Tax Code, then Cimpress has the right to reduce the payment by up to
$50,000 to avoid triggering the excise tax and thus avoid providing gross-up payments to Mr. Keane.
9
The following table sets forth information on the potential payments to our named executive officers upon their
termination or a change in control of Cimpress, assuming that a termination or change in control took place on
June 30, 2022.
Name
Robert S. Keane
Cash Payment
($)(1)
Accelerated
Vesting of
RSUs and PSUs
($)(2)
Benefits
($)(3)
Tax
Gross-Up
Payment
($)(4)
Total
($)
• Termination Without Cause or With Good
Reason ............................................................
• Change in Control ..........................................
3,500,000
—
—
61,027
—
—
• Change in Control w/ Termination Without
Cause or With Good Reason .......................
3,500,000
—
61,027
Sean E. Quinn
• Termination Without Cause or With Good
Reason ............................................................
• Change in Control ..........................................
• Change in Control w/ Termination Without
Cause or With Good Reason .......................
Maarten Wensveen
•
Termination Without Cause or With Good
Reason ............................................................
• Change in Control .........................................
• Change in Control w/ Termination Without
Cause or With Good Reason ......................
_____________
800,000
—
23,667
—
2,691,919
—
800,000
2,691,919
23,667
750,000
—
23,379
—
1,619,290
—
750,000
1,619,290
23,379
—
—
—
—
—
—
—
—
—
3,561,027
—
3,561,027
823,667
2,691,919
3,515,586
773,379
1,619,290
2,392,669
(1) Amounts in this column for Termination Without Cause or With Good Reason represent severance amounts payable under
the executive retention agreements.
(2) Amounts in this column represent the value, based on $38.90 per share, which was the closing price of our ordinary shares
on Nasdaq on June 30, 2022, the last trading day of our 2022 fiscal year, of unvested RSUs that would vest upon the
triggering event described in the first column. For PSUs, we assumed the price paid per share to holders of Cimpress'
shares in connection with the change in control would represent a CAGR below the target performance goal for the PSU
awards and accordingly that no shares would be issued pursuant to outstanding PSU awards in a change in control.
(3) Amounts reported in this column represent the estimated cost of providing employment related benefits (such as insurance
for medical, dental, and vision) during the period the named executive officer is eligible to receive those benefits under the
executive retention agreements, which is two years for Mr. Keane and one year for the other named executive officers.
(4) None of our executive officers other than Mr. Keane have excise tax gross-up provisions in their agreements. We calculate
the amount of tax gross up to which Mr. Keane would have been entitled if a triggering event had occurred on June 30,
2022 and determined that he would not have been entitled to a gross-up payment.
The Role of Company Executives in the Compensation Process
Although the Compensation Committee makes the final decisions about executive compensation, the Committee
also takes into account the views of our Chief Executive Officer, who makes initial recommendations with respect to
the compensation of executive officers other than himself. Other employees of Cimpress also participate in the
preparation of materials presented to or requested by the Compensation Committee for use and consideration at
Compensation Committee meetings.
10
Share Ownership Guidelines and Policy on Hedging
We have share ownership guidelines for all of our executive officers and members of our Board of Directors. The
guidelines require our executive officers and directors to hold Cimpress equity, including ordinary shares they hold
directly or indirectly, unvested RSUs, vested and unvested PSUs, and vested, unexercised, in-the-money share
options, with a value, based on the two-year trailing average of the closing prices of Cimpress' ordinary shares on
Nasdaq, equal to or greater than a multiple of the executive officer’s annual base salary or the director's annual
retainer, as follows:
•
Chief Executive Officer: 5 times annual base salary
• Other executive officers: 3 times annual base salary
•
Board of Directors: 3 times Board annual cash retainer
We give each executive officer and Board member four years from his or her initial appointment as a Cimpress
executive officer or director to comply with the share ownership guidelines. As of June 30, 2022, all executive
officers and directors had satisfied their ownership guideline requirement with the exception of Dessislava
Temperley, who has until September 15, 2025 to meet the share ownership requirement.
Our Insider Trading Policy prohibits Cimpress' executive officers, directors, and employees from engaging in any
derivative or hedging transactions in Cimpress securities, including but not limited to short sales, put options, call
options, collars, futures contracts, forward contracts, and swaps.
Compensation Committee Report
The Compensation Committee has reviewed and discussed with management the Compensation Discussion
and Analysis contained in this proxy statement. Based on the Compensation Committee’s review and discussions
with management, the Compensation Committee recommended to the Board of Directors that the Compensation
Discussion and Analysis be included in this proxy statement.
Compensation Committee of the
Board of Directors
Scott J. Vassalluzzo, Chair
Sophie A. Gasperment
Zachary S. Sternberg
11
Summary Compensation Table
EXECUTIVE COMPENSATION TABLES
The following table summarizes the compensation earned in each of the last three fiscal years by:
(i) our principal executive officer,
(ii) our principal financial officer, and
(iii) our other executive officer as of June 30, 2022.
Throughout this proxy statement, we refer to the individuals listed in (i) through (iii) above as our named executive
officers.
Name and Principal Position
Robert S. Keane
Chairman and
Chief Executive Officer
Sean E. Quinn
Executive Vice President
and Chief Financial Officer
Maarten Wensveen ........................
Executive Vice President and ......
Chief Technology Officer
_____________
Salary
($)(1)
766,468
35,568
29,888
Bonus
($)(2)
—
20,669
—
Share
Awards
($)(3)
7,342,285
8,283,797
9,338,794
All Other
Compensation
($)
25,067(4)
—
31,100
800,000
803,077
710,769
129,375
241,875
354,375
6,412,776
4,667,581
3,199,628
750,000
756,317
530,769
—
—
—
4,510,594
4,032,234
2,554,745
8,923(5)
6,239
6,666
9,150(5)
134,603
33,535
Year
2022
2021
2020
2022
2021
2020
2022
2021
2020
Total
($)
8,133,820
8,340,034
9,399,782
7,351,074
5,718,772
4,271,438
5,269,744
4,923,154
3,119,049
(1)
(2)
(3)
Beginning in the second half of fiscal year 2019, Mr. Keane began receiving as much of his compensation as possible
in the form of PSUs, within the 75,000 PSUs per fiscal year limit set forth in his PSU Limitation Agreement. For Mr.
Keane, the amounts in this column for fiscal years 2020 and 2021 represent the aggregate minimum salary for
exempt employees under the U.S. Fair Labor Standards Act, and the amount in this column for fiscal year 2022
represents the amount of his compensation that exceeded the 75,000 PSUs per fiscal year limit set forth in his PSU
Limitation Agreement and was instead paid to him in cash as salary.
The amount in this column for Mr. Keane in fiscal year 2021 represents the amount of his base salary that when
aggregated with his LTI compensation would have exceeded the 75,000 PSUs per fiscal year limit set forth in his PSU
Limitation Agreement and was instead paid to him as a cash bonus. The amounts reported in this column for Mr.
Quinn represent the payment of cash retention bonuses that were granted in previous fiscal years and vested in the
years shown.
The amounts reported in this column represent a dollar amount equal to the grant date fair value of the share awards
as computed in accordance with FASB ASC Topic 718. You can find the assumptions we used in the calculations for
these amounts in Note 11 to our audited financial statements included in our Annual Report on Form 10-K for the
fiscal year ended June 30, 2022. See footnote 5 to the Grants of Plan-Based Awards in the Fiscal Year Ended June
30, 2022 table for the value of the PSUs granted in fiscal year 2022 assuming the maximum achievement of the
performance conditions.
(4)
$13,950 of this amount represents reimbursement of tax preparation expenses, and $11,117 of this amount
represents a tax gross up associated with the reimbursement.
(5)
This amount represents our matching contributions under our 401(k) deferred savings retirement plans.
12
Grants of Plan-Based Awards in the Fiscal Year Ended June 30, 2022
The following table contains information about plan-based awards granted to each of our named executive officers
during the fiscal year ended June 30, 2022.
Estimated Future Payouts
Under Equity Incentive Plan Awards(1)
Maximum
Target
Threshold
(#)
(#)(2)
—
—
—
—
—
79,322
10,886
1,611
1,288
(#)(3)
158,645
21,772
3,222
2,577
19,410
48,525
—
16,175
40,437
All Other
Share
Awards:
Number of
Shares or
Units
(#)(4)
11,219
11,619
29,931
9,349
11,619
10,689
Grant Date Fair
Value of Share
Awards
($)(5)
6,263,539
859,611
121,752
97,383
2,262,899
1,049,986
999,931
2,099,959
1,885,749
874,973
999,931
749,940
Name
Robert S. Keane
Sean E. Quinn
Maarten Wensveen
Grant Date
8/15/2021(6)
8/15/2021(7)
11/15/2021(8)
11/15/2021(9)
8/15/2021(6)
8/15/2021(10)
9/15/2021(11)
2/15/2022(12)
8/15/2021(6)
8/15/2021(10)
9/15/2021(11)
2/15/2022(12)
___________________________
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
These columns represent PSU awards. Each PSU represents a right to receive between 0 and 2.5 Cimpress ordinary
shares upon the satisfaction of (A) service-based vesting, and (B) performance conditions relating to the CAGR of the
3YMA of Cimpress' ordinary shares.
For Mr. Keane, these amounts represent the number of Cimpress ordinary shares issuable six to ten years after the
grant date if he fully satisfies the service-based vesting condition described in footnote 6, 7, 8, or 9, as applicable, and
the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%).
For the named executive officers other than Mr. Keane, these amounts represent the number of Cimpress ordinary
shares issuable four to eight years after the grant date if the executive officer fully satisfies the service-based vesting
condition described in footnote 6 and the 3YMA CAGR is 9% to 9.99% on any of the fourth through eighth anniversaries
of the grant date (multiplier of 100%).
For Mr. Keane, these amounts represent the number of Cimpress ordinary shares issuable six to ten years after the
grant date if he fully satisfies the service-based vesting condition described in footnote 6, 7, 8, or 9, as applicable, and
the 3YMA CAGR is 20% or above on any of the sixth through tenth anniversaries of the grant date (multiplier is 250%).
For the named executive officers other than Mr. Keane, these amounts represent the number of Cimpress ordinary
shares issuable four to eight years after the grant date if the executive officer fully satisfies the service-based vesting
condition described in footnote 6 and the 3YMA CAGR is 20% or above on any of the fourth through eighth
anniversaries of the grant date (multiplier of 250%).
The amounts reported in this column represent RSU awards.
The amounts reported in this column represent the grant date fair value for the RSU and PSU awards computed in
accordance with FASB ASC Topic 718. You can find the assumptions we used in the calculations for these amounts in
Note 11 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended
June 30, 2022. The maximum value of the PSUs granted in fiscal year 2022 assuming the maximum achievement of the
performance conditions, which we estimated by multiplying the maximum number of shares issuable pursuant to each
PSU award by the closing price of our ordinary shares on Nasdaq on the applicable grant date, or on the last trading
date immediately before the grant date if the grant date is not a trading date, is $17,401,164 in the aggregate for all of
Mr. Keane's PSU awards, $4,541,455 for Mr. Quinn, and $3,784,499 for Mr. Wensveen.
The service-based vesting condition of the PSUs reported in this row is that 25% of the original number of PSUs vest on
June 30 of each of 2022 through 2025 so long as the executive officer continues to be an eligible participant under
Cimpress' 2020 Equity Incentive Plan on such vesting date.
This PSU award was granted to Mr. Keane in lieu of a portion of his base salary for his role as Chief Executive Officer in
fiscal year 2022. The service-based vesting condition of this PSU award is that 25% of the original number of PSUs
vested on each of September 30, 2021, December 31, 2021, March 31, 2022, and June 30, 2022 so long as Mr. Keane
continued to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on such vesting date.
This is the annual equity award granted to the members of our Board of Directors, which in Mr. Keane's case is in the
form of PSUs. The service-based vesting condition of this PSU award is that 25% of the PSUs vest on November 29 of
each of 2022 through 2025 so long as Mr. Keane continues to be an eligible participant under Cimpress' 2020 Equity
Incentive Plan on such vesting date.
13
(9)
This PSU award was granted to Mr. Keane in lieu of his $100,000 cash retainer fee for his role as a member of our
Board of Directors in fiscal year 2022. The service-based vesting condition of this PSU award is that 50% of the original
number of PSUs vested on December 31, 2021 and an additional 25% of the original number of PSUs vested on each
of March 31, 2022 and June 30, 2022 so long as Mr. Keane continued to be an eligible participant under Cimpress' 2020
Equity Incentive Plan on such vesting date.
(10)
25% of the original number of RSUs subject to this award vest on August 15 of each of 2022 through 2025 so long as
the executive officer continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on such vesting
date.
(11)
100% of the RSUs subject to this award vest on September 15, 2023 so long as the executive officer continues to be an
eligible participant under Cimpress' 2020 Equity Incentive Plan on such vesting date.
(12) One third of the original number of RSUs subject to this award vest on February 15 of each of 2023 through 2025 so
long as the executive officer continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on such
vesting date.
14
Outstanding Equity Awards at June 30, 2022
The following table contains information about unvested RSUs and unearned shares subject to PSUs as of June 30,
2022 for each of our named executive officers.
Number of Share
Units That Have
Not Vested
Market Value of
Share Units That
Have Not Vested
Equity Incentive
Plan Awards:
Number of
Unearned Shares
Equity Incentive Plan
Awards: Market Value of
Unearned Shares
Name
(#)(1)
($)(2)
(#)(3)
($)(4)
Share Awards
Robert S. Keane ..................
Sean E. Quinn ......................
Maarten Wensveen .............
11,964(20)
4,468(21)
11,219(22)
11,619(23)
29,931(25)
9,970(20)
9,349(22)
11,619(23)
10,689(25)
465,400
173,805
436,419
451,979
1,164,316
387,833
363,676
451,979
415,802
93,750(5)
78,970(6)
73,498(7)
9,331(8)
1,428(9)
71,726(10)
19,811(11)
1,398(12)
19,011(13)
1,403(14)
73,335(15)
79,322(16)
10,886(17)
1,611(18)
1,288(19)
24,301(5)
20,306(6)
18,898(7)
22,952(24)
19,641(26)
19,410(27)
14,400(5)
6,016(6)
3,651(7)
18,362(24)
20,951(26)
16,175(27)
3,646,875
3,071,933
2,859,072
362,976
55,549
2,790,141
770,648
54,382
739,528
54,577
2,852,732
3,085,626
423,465
62,668
50,103
945,309
789,903
735,132
892,833
764,035
755,049
560,160
234,022
142,024
714,282
814,994
629,208
___________________
(1)
These amounts represent the number of Cimpress ordinary shares issuable pursuant to RSU awards upon vesting.
(2)
(3)
(4)
The market value of the unvested RSUs is determined by multiplying the number of RSUs by $38.90 per share, which
was the closing price of our ordinary shares on Nasdaq on June 30, 2022, the last trading day of our 2022 fiscal year.
These amounts represent the number of Cimpress ordinary shares issuable pursuant to PSU awards if the applicable
service-based vesting condition and 3YMA CAGR performance conditions described in the footnotes below are satisfied
for such PSU award.
The market value of the unearned PSUs is determined by multiplying the number of shares that would be issuable if the
conditions described in footnote 3 were achieved by $38.90 per share, which was the closing price of our ordinary
shares on Nasdaq on June 30, 2022, the last trading day of our 2022 fiscal year.
15
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August
15, 2016 if the named executive officer fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to
11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting
condition has been fully satisfied for these PSUs, but the PSUs are not earned, and no shares are issuable pursuant to
the PSUs, until August 15, 2022 at the earliest (unless there is an earlier change in control) and only if the performance
conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August
15, 2017 if the named executive officer fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to
11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting
condition has been fully satisfied for these PSUs, but the PSUs are not earned, and no shares are issuable pursuant to
the PSUs, until August 15, 2023 at the earliest (unless there is an earlier change in control) and only if the performance
conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August
15, 2018 if the named executive officer fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to
11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting
condition has been fully satisfied for these PSUs, but the PSUs are not earned, and no shares are issuable pursuant to
the PSUs, until August 15, 2024 at the earliest (unless there is an earlier change in control) and only if the performance
conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of
February 15, 2019 if the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date
(multiplier of 125%). The service-based vesting condition has been fully satisfied for these PSUs, but the PSUs are not
earned, and no shares are issuable pursuant to the PSUs, until February 15, 2025 at the earliest (unless there is an
earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary
shares are satisfied.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of
February 15, 2019 if Mr. Keane fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to
11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting
condition for these PSUs is that 25% of the original number of PSUs vest on November 12 of each of 2019 through
2022 so long as Mr. Keane continues to be an eligible participant under Cimpress' 2016 Performance Equity Plan on
each vesting date. However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until February
15, 2025 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to
the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August
15, 2019 if Mr. Keane fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to 11.99% on any
of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting condition for
these PSUs is that 25% of the original number of PSUs vest on June 30 of each of 2020 through 2023 so long as Mr.
Keane continues to be an eligible participant under Cimpress' 2016 Performance Equity Plan on each vesting date.
However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until August 15, 2025 at the
earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the
3YMA of Cimpress' ordinary shares are satisfied.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August
15, 2019 if the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date
(multiplier of 125%). The service-based vesting condition has been fully satisfied for these PSUs, but the PSUs are not
earned, and no shares are issuable pursuant to the PSUs, until August 15, 2025 at the earliest (unless there is an
earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary
shares are satisfied.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of
November 15, 2019 if Mr. Keane fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to
11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting
condition of these PSUs is that 25% of the PSUs vest on November 21 of each of 2020 through 2023 so long as Mr.
Keane continues to be an eligible participant under Cimpress' 2016 Performance Equity Plan on such vesting date.
However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until November 15, 2025 at the
earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the
3YMA of Cimpress' ordinary shares are satisfied.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August
15, 2020 if the 3YMA CAGR is 11% to 11.99% on any of the sixth through tenth anniversaries of the grant date
(multiplier of 125%). The service-based vesting condition has been fully satisfied for these PSUs, but the PSUs are not
earned, and no shares are issuable pursuant to the PSUs, until August 15, 2026 at the earliest (unless there is an
earlier change in control) and only if the performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary
shares are satisfied.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of
November 15, 2020 if Mr. Keane fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to
11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting
condition of these PSUs is that 25% of the PSUs vest on November 24 of each of 2021 through 2024 so long as Mr.
Keane continues to be an eligible participant under Cimpress' 2016 Performance Equity Plan on such vesting date.
However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until November 15, 2026 at the
earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the
3YMA of Cimpress' ordinary shares are satisfied.
16
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of
February 15, 2021 if Mr. Keane fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to
11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting
condition for these PSUs is that 25% of the original number of PSUs vest on June 30 of each of 2021 through 2024 so
long as Mr. Keane continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on each vesting
date. However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until February 15, 2027 at
the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of
the 3YMA of Cimpress' ordinary shares are satisfied.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August
15, 2021 if Mr. Keane fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to 11.99% on any
of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting condition for
these PSUs is that 25% of the original number of PSUs vest on June 30 of each of 2022 through 2025 so long as Mr.
Keane continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on each vesting date.
However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until August 15, 2027 at the
earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the
3YMA of Cimpress' ordinary shares are satisfied.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August
15, 2021 if Mr. Keane fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to 11.99% on any
of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting condition has
been fully satisfied for these PSUs, but the PSUs are not earned, and no shares are issuable pursuant to the PSUs,
until August 15, 2027 at the earliest (unless there is an earlier change in control) and only if the performance conditions
relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of
November 15, 2021 if Mr. Keane fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to
11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting
condition of these PSUs is that 25% of the PSUs vest on November 29 of each of 2022 through 2025 so long as Mr.
Keane continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on such vesting date.
However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until November 15, 2027 at the
earliest (unless there is an earlier change in control) and only if the performance conditions relating to the CAGR of the
3YMA of Cimpress' ordinary shares are satisfied.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of
November 15, 2021 if Mr. Keane fully satisfies the service-based vesting condition and the 3YMA CAGR is 11% to
11.99% on any of the sixth through tenth anniversaries of the grant date (multiplier of 125%). The service-based vesting
condition has been fully satisfied for these PSUs, but the PSUs are not earned, and no shares are issuable pursuant to
the PSUs, until November 15, 2027 at the earliest (unless there is an earlier change in control) and only if the
performance conditions relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied.
These RSU awards vest as to 25% of the original number of units on July 1 of each of 2021 through 2024, on each of
which dates we will automatically issue one ordinary share for each vested unit so long as the named executive officer
continues to be an eligible participant under Cimpress' 2011 Equity Incentive Plan on that date.
This RSU award vests as to 25% of the original number of units on August 15 of each of 2021 through 2024, on each of
which dates we will automatically issue one ordinary share for each vested unit so long as Mr. Quinn continues to be an
eligible participant under Cimpress' 2020 Equity Incentive Plan on that date.
These RSU awards vest as to 25% of the original number of units on August 15 of each of 2022 through 2025, on each
of which dates we will automatically issue one ordinary share for each vested unit so long as the named executive
officer continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on that date.
These RSU awards vest as to 100% of the units on September 15, 2023, on which date we will automatically issue one
ordinary share for each unit so long as the named executive officer continues to be an eligible participant under
Cimpress' 2020 Equity Incentive Plan on that date.
This amount represents the number of Cimpress ordinary shares issuable four to eight years after the grant date of
August 15, 2019 if the named executive officer fully satisfies the service-based vesting condition and the 3YMA CAGR is
9% to 9.99% on any of the fourth through eighth anniversaries of the grant date (multiplier of 100%). The service-based
vesting condition for these PSUs is that 25% of the original number of PSUs vest on June 30 of each of 2020 through
2023 so long as the officer continues to be an eligible participant under Cimpress' 2016 Performance Equity Plan on
each vesting date. However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until August
15, 2023 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to
the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied.
(25)
These RSU awards vest as to one third of the original number of units on February 15 of each of 2023 through 2025, on
each of which dates we will automatically issue one ordinary share for each vested unit so long as the named executive
officer continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on that date.
17
(26)
(27)
This amount represents the number of Cimpress ordinary shares issuable four to eight years after the grant date of
February 15, 2021 if the named executive officer fully satisfies the service-based vesting condition and the 3YMA CAGR
is 9% to 9.99% on any of the fourth through eighth anniversaries of the grant date (multiplier of 100%). The service-
based vesting condition for these PSUs is that 25% of the original number of PSUs vest on June 30 of each of 2021
through 2024 so long as the officer continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan
on each vesting date. However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until
February 15, 2025 at the earliest (unless there is an earlier change in control) and only if the performance conditions
relating to the CAGR of the 3YMA of Cimpress' ordinary shares are satisfied.
This amount represents the number of Cimpress ordinary shares issuable four to eight years after the grant date of
August 15, 2021 if the named executive officer fully satisfies the service-based vesting condition and the 3YMA CAGR is
9% to 9.99% on any of the fourth through eighth anniversaries of the grant date (multiplier of 100%). The service-based
vesting condition for these PSUs is that 25% of the original number of PSUs vest on June 30 of each of 2022 through
2025 so long as the officer continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on each
vesting date. However, the PSUs are not earned, and no shares are issuable pursuant to the PSUs, until August 15,
2025 at the earliest (unless there is an earlier change in control) and only if the performance conditions relating to the
CAGR of the 3YMA of Cimpress' ordinary shares are satisfied.
Shares Vested in the Fiscal Year Ended June 30, 2022
The following table contains information about the vesting of RSUs on an aggregated basis during fiscal year 2022 for
each of our named executive officers. None of our executive officers held any share options during fiscal year 2022.
Name
Robert S. Keane ...............................
Sean E. Quinn ...................................
Maarten Wensveen ..........................
_________________________
Share Awards
Number of Shares
Acquired on Vesting
(#)
Value Realized
on Vesting
(2)($)
—
5,479
3,324
—
574,051
362,150
(1)
The value realized on vesting of RSUs is determined by multiplying the number of shares that vested by the closing sale
price of our ordinary shares on Nasdaq on the vest date, or on the last trading date immediately before the vest date if
the vest date is not a trading date.
CEO Pay Ratio
Mr. Keane's fiscal year 2022 annual total compensation was $8,133,820, as reported in the Summary Compensation
Table above, and the fiscal year 2022 annual total compensation of our median compensated employee other than
Mr. Keane was $31,615. The ratio of the median employee's total compensation to Mr. Keane's total compensation is 1-
to-257. $7,342,285 (90%) of Mr. Keane's total compensation for fiscal year 2022 was in the form of PSU awards that will
pay out six to ten years after grant only if the 3YMA CAGR thresholds are met.
Because there were no changes to our employee population or employee compensation from fiscal year 2020 to
fiscal year 2022 that significantly impacted our pay ratio disclosure, we used the same median employee this year as
we did for 2020. For purposes of identifying the median compensated employee for fiscal year 2020, we took into
account base salary (for salaried employees) and wages paid (for hourly employees) during the fiscal year for all our
employees as of May 1, 2020. We annualized this compensation for employees who did not work the entire fiscal year,
except for employees designated as seasonal or temporary. For employees whose cash compensation was temporarily
reduced for the fourth quarter of 2020 and replaced with RSUs as part of the salary restructuring program we instituted
in fiscal year 2020 in response to the COVID-19 pandemic, we included the RSUs as part of each employee's base
salary and assumed that the RSUs granted to each employee had the same value as the amount by which such
employee’s cash compensation was reduced.
18
PROPOSAL 4 - AMEND OUR 2020 EQUITY INCENTIVE PLAN TO INCREASE
THE NUMBER OF ORDINARY SHARES
Our success depends on our ability to attract and retain top talent in a competitive marketplace, and to motivate
that talent to achieve outstanding performance. Attracting, retaining, and motivating talented team members in key
roles is especially critical at a time when we are seeking to transform our business, in particular the Vista business
where we have been investing heavily, including in hiring. In recent years we have seen the competitiveness for
qualified candidates intensify, and we are often vying for qualified candidates against both larger, established
companies with significant cash and equity resources and earlier-stage companies that offer significant equity
upside. Our compensation program is heavily focused on the use of equity incentive compensation, and our ability
to offer equity awards is a critical tool for remaining competitive and motivating high levels of performance.
Moreover, equity incentives align the interests of the employees with the long-term interests of our shareholders.
On September 21, 2022, our Board of Directors approved an amendment to our 2020 Equity Incentive Plan to
increase the number of ordinary shares issuable under the plan by an additional 2,000,000 shares, subject to
shareholder approval of the amendment at the annual meeting (as so amended, the "2020 Plan"). The 2020 Plan is
the only plan under which we issue equity awards. We welcome investors’ questions about the proposed
amendment to the 2020 Plan. Please submit your questions to Meredith Burns in Investor Relations at
ir@cimpress.com by Friday, October 21, and we will provide written answers in a supplemental proxy filing by the
end of October.
We are seeking an increase in the number of ordinary shares issuable under the 2020 Plan for multiple reasons.
First, as of August 31, 2022, there were only 91,948 ordinary shares available for issuance under the 2020 Plan,
which is insufficient for our hiring and retention needs. The criticality of attracting, retaining and motivating talented
team members in a competitive marketplace, coupled with the sustained downward pressure on our share price
since the beginning of fiscal year 2022, has resulted in a higher burn rate to our share pool than in recent years.
Second, as of August 31, 2022, the plan has 994,185 shares reserved for outstanding PSUs that are unlikely to pay
out in shares at the highest multiple, or perhaps at all, and therefore the risk of dilution by the issuance of those
shares is very low. Conversely, the shareholder value creation, net of dilution, if those PSUs do pay out would be
very high.
We reserve 2.5 shares from the 2020 Plan for each PSU, which is the number of shares issuable if the highest
performance threshold (20% or higher 3YMA CAGR) is achieved, but that is increasingly unlikely to occur given the
sustained downward pressure on our share price since the beginning of fiscal year 2022. Our PSU awards pay out
in shares only if the three-year moving average of the daily closing share price of Cimpress’ ordinary shares (3YMA)
reaches or exceeds certain compound annual growth rate (CAGR) thresholds, which requires that the 3YMA
steadily increase over a long period of time. However, our 3YMA has decreased from $112.72 on August 15, 2020
to $87.42 on August 15, 2022, and the table below shows the minimum 3YMA required to satisfy the CAGR
thresholds as of various dates for any shares to be issued under any of the PSU awards outstanding under the
2020 Plan that are held by our executives and employees (other than Robert Keane, whose PSU awards have a
performance period of six to ten years and a higher minimum 3YMA CAGR threshold of 11%).
Anniversary of Grant Date
Grant Date of
PSU Award
Earliest
Potential
Payout Date
Final Potential
Payout Date
CAGR Threshold and Minimum 3YMA Target for Payout
9% CAGR
9% CAGR
9% CAGR
9% CAGR
7% CAGR
4th anniversary
5th anniversary
6th anniversary
7th anniversary
8th anniversary
2/15/2021
2/15/2025
2/15/2029
5/15/2021
5/15/2025
5/15/2029
8/15/2021
8/15/2025
8/15/2029
11/15/2021
11/15/2025
11/15/2029
$134.75
$146.66
$141.81
$136.84
$146.88
$159.86
$154.57
$149.15
$160.10
$174.25
$168.48
$162.58
$174.50
$189.93
$183.64
$177.21
$164.02
$178.52
$172.61
$166.56
If we do not achieve the 3YMA targets above, then each PSU award will expire on the applicable Final Potential
Payout Date above, and no shares would be issued pursuant to the PSU awards. There were also 956,090
outstanding PSUs under the 2016 Performance Equity Plan as of August 31, 2022. If none of the PSUs that were
outstanding as of August 31, 2022 under either the 2016 Performance Equity Plan or the 2020 Plan achieves the
minimum 3YMA CAGR thresholds applicable to such PSU awards prior to their respective expiration dates, then an
19
aggregate of 1,950,275 shares currently reserved for issuance under either the 2016 Performance Equity Plan or
the 2020 Plan in respect of such PSU awards would become available for grant under the 2020 Plan as such PSU
awards expire, no sooner than August 15, 2026.
To illustrate the dynamic of the low probability of dilution from PSUs and high value creation if any of the 3YMA
thresholds are achieved, the lowest 3YMA that would trigger a payout under any of our outstanding PSUs eligible
for performance measurement on August 15, 2023 is $144.17. Based on the closing price of Cimpress' ordinary
shares during the first two years of the three-year measurement period ending on August 15, 2023, we would need
an average closing price of approximately $271 per share every trading day during the final year of the three-year
measurement period in order for those PSUs to pay out on that date. The 3YMA CAGR thresholds for the other two
outstanding PSU awards that will be measured on August 15, 2023 are even higher, and those 3YMA CAGR
thresholds only increase each year thereafter until the step-down in their respective final measurement years.
Summary of Material Features of the Plan
The material features of the 2020 Plan, as amended, are as follows:
•
•
•
•
•
•
•
If our shareholders approve the amendment to the 2020 Plan to increase the number of ordinary shares
issuable under the plan by an additional 2,000,000 shares, then the maximum number of ordinary shares
issuable under the 2020 Plan will be 5,500,000 plus an additional number of ordinary shares equal to the
number of PSUs (on a 1:1 basis) outstanding under the 2016 Performance Equity Plan that expire,
terminate, or are otherwise surrendered, canceled or forfeited. If this amendment had been effective at
August 31, 2022, then the 2020 Plan would have 5,294,855 ordinary shares issuable (excluding the shares
that have been issued from the plan and including shares that have been transferred from the 2016
Performance Equity Plan, in each case before August 31, 2022), plus up to an additional 956,090 ordinary
shares, which is the number of PSUs (on a 1:1 basis) outstanding under the 2016 Performance Equity Plan
as of August 31, 2022, but only to the extent such PSUs expire, terminate or are otherwise surrendered,
canceled or forfeited. August 15, 2026 is the earliest date on which any shares could be transferred from
the 2016 Performance Equity Plan to the 2020 Plan due to the expiration of PSU awards, which would
happen if the PSUs granted on August 15, 2016 do not achieve a minimum 3YMA CAGR threshold on any
of the seventh through tenth anniversaries of the grant date (having already failed to achieve the minimum
3YMA CAGR threshold on the sixth anniversary of the grant date).
The 2020 Plan permits the award of share options (both incentive stock options and non-statutory share
options), share appreciation rights, restricted shares, restricted share units, other share-based awards, and
dividend equivalent rights.
Shares tendered or held back for taxes will not be added back to the reserved pool under the 2020 Plan.
Upon the exercise of a share appreciation right that is settled in ordinary shares, the full number of shares
underlying the award will be charged to the reserved pool. Additionally, shares we reacquire on the open
market will not be added to the reserved pool under the 2020 Plan.
Share options and share appreciation rights will not be repriced in any manner without shareholder
approval.
Any dividends and dividend equivalent rights payable with respect to any equity award are subject to the
same vesting provisions as the underlying award.
Any material amendment to the 2020 Plan is subject to approval by our shareholders.
The 2020 Plan will expire on November 25, 2030.
Based solely on the closing price of our ordinary shares as reported by Nasdaq on August 31, 2022, which was
$33.58 per share, and the 5,294,855 shares that either were reserved for future issuance pursuant to outstanding
awards as of that date or would have been available for awards under the 2020 Plan if the plan had been amended
as of such date, the maximum aggregate market value of the ordinary shares that could potentially be issued under
the 2020 Plan is $177,801,231.
20
Our Grant Practices
As of August 31, 2022, there were 91,948 ordinary shares available for issuance under 2020 Plan, which is the
only plan under which we issue equity awards. As of August 31, 2022, the outstanding awards under all of our
equity compensation plans, including legacy plans under which we no longer grant awards, consisted of the
following:
•
share options to acquire 429,079 ordinary shares, with a weighted average exercise price of $46.62 and a
weighted average remaining term of 9.9 years
full value awards in the form of PSUs with performance-based conditions and time-based vesting covering
1,353,764 ordinary shares on a 1:1 basis and 3,384,410 ordinary shares assuming maximum achievement
of the performance conditions (which is extremely unlikely)
unvested full value awards in the form of RSUs covering 1,853,425 ordinary shares
•
•
Other than as described above, no awards were outstanding under our equity compensation plans as of August
31, 2022.
Below is information regarding historical awards granted and earned for the fiscal year 2020 through fiscal year
2022 period:
•
Fiscal year 2023 to date (July 1, 2022 - August 31, 2022, which includes our annual LTI grants to
employees other than Mr. Keane):
◦
◦
◦
◦
Share options to purchase 423,781 shares granted
Full-value time-based awards: 1,031,840 RSUs granted; no restricted shares granted
Full-value performance awards: no PSUs granted and no shares earned pursuant to PSUs
26,221,928 ordinary shares outstanding at August 31, 2022
•
Fiscal year 2022:
◦
◦
◦
◦
No share options granted
Full-value time-based awards: 771,671 RSUs granted; no restricted shares granted
Full-value performance awards: 215,899 PSUs granted and no shares earned pursuant to PSUs
26,094,842 weighted average ordinary shares outstanding
•
Fiscal year 2021:
◦
◦
◦
◦
No share options granted
Full-value time-based awards: 453,916 RSUs granted; no restricted shares granted
Full-value performance awards: 228,132 PSUs granted and no shares earned pursuant to PSUs
25,996,572 weighted average ordinary shares outstanding
•
Fiscal year 2020:
◦
◦
◦
◦
No share options granted
Full-value time-based awards: 193,365 RSUs granted; no restricted shares granted
Full-value performance awards: 295,239 PSUs granted and no shares earned pursuant to PSUs
27,180,744 weighted average ordinary shares outstanding
Each RSU represents Cimpress' commitment to issue one ordinary share upon vesting. Each PSU represents a
right to receive between 0 and 2.5 ordinary shares upon the satisfaction of both service-based vesting over time and
performance conditions relating to the compound annual growth rate of Cimpress' three-year moving average share
price over a multiple-year period determined by our Board.
Description of our 2020 Plan
Types of Awards; Authorized Number of Ordinary Shares and Share Counting The 2020 Plan provides for
the grant of incentive stock options, non-statutory share options, share appreciation rights, restricted shares,
restricted share units, other share-based awards, and dividend equivalent rights, to which we refer in this proxy
statement collectively as awards. Subject to adjustment in the event of stock splits, stock dividends and other similar
events and assuming shareholders approve the proposed amendment to increase the number of shares issuable
under the 2020 Plan, we may make awards under the 2020 Plan for up to 5,500,000 of our ordinary shares plus an
additional number of ordinary shares equal to the number of PSUs currently outstanding under the 2016
Performance Equity Plan that expire, terminate or are otherwise surrendered, canceled or forfeited. Ordinary shares
21
underlying awards under the 2020 Plan and ordinary shares underlying PSUs under the 2016 Performance Equity
Plan on the basis of one ordinary share for each PSU that expires, terminates or is otherwise surrendered, canceled
or forfeited, or is not issued will become available for the grant of new awards under the 2020 Plan. We will not add
back to the number of ordinary shares available for the grant of awards under the 2020 Plan any ordinary shares
that a participant delivers to Cimpress (whether by actual delivery, attestation or net exercise) to (1) purchase
ordinary shares upon the exercise of an award or (2) satisfy tax withholding obligations (including shares retained
from the award creating the tax obligation). Similarly, ordinary shares that we may repurchase on the open market,
whether using the proceeds from the exercise of awards or using other funds, do not increase the number of shares
available for future grant of awards.
Description of Awards
Incentive Stock Options and Non-statutory Share Options. Optionees receive the right to purchase a specified
number of ordinary shares at a specified exercise price and subject to such other terms and conditions as we
specify in connection with the option grant. The exercise price of the options may not be less than 100% of the fair
market value per share of our ordinary shares on the date the option is granted, unless our Board approves the
grant of an option with an exercise price to be determined on a future date, in which case the exercise price may not
be less than 100% of the fair market value on such future date. Fair market value for this purpose is determined by
reference to the price of the shares of ordinary shares on Nasdaq. Options may not have a term in excess of ten
years. The 2020 Plan allows optionees to pay the exercise price of options through the following forms of payment:
(a) cash or check, (b) a “cashless exercise” through a broker, (c) subject to certain conditions, surrender of ordinary
shares to Cimpress, (d) subject to certain conditions, in the case of non-statutory share options, by “net
exercise,” (e) any other lawful consideration as our Board may determine, or (f) any combination of these forms of
payment. To qualify as incentive stock options, options must meet additional federal tax requirements, including a
$100,000 limit on the value of ordinary shares subject to incentive stock options that first become exercisable by a
participant in any one calendar year.
Share Appreciation Rights. A share appreciation right, or SAR, is an award entitling the holder, upon exercise,
to receive an amount of our ordinary shares or cash or a combination thereof determined by reference to
appreciation, from and after the date of grant, in the fair market value of an ordinary share over the measurement
price established pursuant to the applicable SAR agreement. The measurement price may not be less than 100% of
the fair market value of our ordinary shares on the date the SAR is granted, unless the Board approves the grant of
an SAR effective as of a future date, in which case the measurement price may not be less than 100% of the fair
market value on such future date. SARs may be granted independently or in tandem with an option. SARs may not
have a term in excess of ten years.
Restricted Share Awards. A restricted share award entitles the recipient to acquire our ordinary shares subject
to our right to repurchase all or some of the shares from the recipient if the conditions specified in the award are not
satisfied before the end of the restriction period established for the award. Our Board determines the terms and
conditions of restricted share awards, including the purchase price, if any. Any dividends that we may pay during the
vesting period of restricted share awards will accrue but not be paid to the participant until and only to the extent the
restricted share award vests.
Restricted Share Unit Awards. A restricted share unit award entitles the recipient to receive ordinary shares or
cash at the time the award vests pursuant to the terms and conditions that our Board determines.
Other Share-Based Awards. We may grant under the 2020 Plan other awards that are based on our ordinary
shares pursuant to the terms and conditions that our Board determines, including awards of our ordinary shares and
other awards that are valued in whole or in part by reference to, or are otherwise based on, ordinary shares or other
property.
Dividend Equivalent Rights. We may grant dividend equivalent rights to participants as a component of a
restricted share unit award, which entitle the recipient to receive credits for dividends that would be paid if the
recipient held the ordinary shares underlying the restricted share unit award. Dividend equivalent rights granted as a
component of a restricted share unit award may be paid only if the related restricted share units become vested.
Dividend equivalent rights may be settled in cash, ordinary shares of common stock or a combination thereof, as
determined by the Board.
22
Eligibility to Receive Awards Employees, officers, directors, consultants and advisors of Cimpress and its
subsidiaries and of other business ventures in which Cimpress has a controlling interest are eligible to be granted
awards under the 2020 Plan. Under present law, however, incentive stock options may be granted only to
employees of Cimpress and its subsidiaries. As of August 31, 2022, approximately 15,000 employees, including our
three executive officers, and the four non-employee directors who serve on our Board were eligible to receive
awards under the 2020 Plan. Although the 2020 Plan permits awards to consultants and advisors, we generally do
not grant awards to consultants or advisors and do not track how many individuals may be providing consulting or
advising services to us at any given time. The granting of awards under the 2020 Plan is discretionary, and we
cannot now determine the number or type of awards to be granted in the future to any particular person or group.
Transferability of Awards A person who is granted an award under the 2020 Plan may not sell, assign,
transfer, pledge or otherwise encumber such award, either voluntarily or by operation of law, except by will or the
laws of descent and distribution or, other than in the case of an incentive stock option and awards subject to Section
409A of the US Tax Code, pursuant to a qualified domestic relations order. During the life of the participant, only the
participant may exercise such award. However, the Board may permit or provide in an award for the gratuitous
transfer of the award by a participant without consideration, subject to any limitations that the Board deems
appropriate.
Administration of the 2020 Plan The Board administers the 2020 Plan and has the authority to grant awards
and adopt, amend and repeal such administrative rules, guidelines and practices relating to the plan as it deems
advisable. The Board may delegate any or all of its powers under the 2020 Plan to one or more committees or
subcommittees of the Board, and, subject to certain limits, the Board may also delegate to one or more of our
officers the power to grant awards to Cimpress employees or officers who are not executive officers, Section 16
officers, or members of the Board and to exercise such other powers under the 2020 Plan as the Board may
determine. Our Board, or any committee to whom our Board delegates authority, as the case may be, selects the
recipients of awards and determines (a) the number of ordinary shares covered by awards and the dates upon
which such awards become exercisable, issuable or otherwise vest; (b) the exercise, measurement or purchase
price of awards (which may not be less than 100% of the fair market value of our ordinary shares on the date of
grant for options and SARs); (c) the duration of awards (which may not exceed ten years for options and SARs),
and (d) the terms and conditions of such awards.
Adjustments for Changes in our Ordinary Shares and Certain Other Events We are required to make
equitable adjustments, in the manner determined by our Board, in connection with the 2020 Plan and any
outstanding awards to reflect stock splits, stock dividends, recapitalizations, spin-offs and other similar changes in
our capitalization. The 2020 Plan also contains provisions addressing the consequences of any Reorganization
Event, which is defined as (a) any merger or consolidation of Cimpress with or into another entity as a result of
which all of our ordinary shares are converted into or exchanged for the right to receive cash, securities or other
property, or are canceled; (b) the transfer or disposition of all of our ordinary shares for cash, securities or other
property pursuant to a share exchange or other transaction; (c) the sale of all or substantially all of the assets of
Cimpress on a consolidated basis to an unrelated person or entity; (d) any other transaction in which the owners of
Cimpress’ outstanding voting power immediately prior to such transaction do not own at least a majority of the
outstanding voting power of Cimpress or any successor entity immediately upon completion of the transaction other
than as a result of the acquisition of securities directly from Cimpress; or (e) any liquidation or dissolution of
Cimpress. In connection with a Reorganization Event, our Board may take any one or more of the following actions
as to all or any outstanding awards (other than restricted share awards) on such terms as our Board determines: (i)
provide that the acquiring or succeeding corporation (or an affiliate thereof) assume such awards or substitute
substantially equivalent awards; (ii) upon written notice to a participant, provide that all of the participant’s
unexercised awards will terminate immediately before the consummation of the Reorganization Event unless
exercised by the participant; (iii) provide that outstanding awards become exercisable, realizable, or deliverable, or
restrictions applicable to an award lapse, in whole or in part before or upon the Reorganization Event; (iv) in the
event of a Reorganization Event under which holders of our ordinary shares will receive a cash payment for each
ordinary share surrendered in the Reorganization Event, make or provide for a cash payment to participants with
respect to each award held by a participant in exchange for the termination of such award equal to the number of
ordinary shares subject to the vested portion of the award multiplied by the excess, if any, of the price per ordinary
share in the Reorganization Event over the exercise, measurement or purchase price of the award; (v) provide that,
in connection with a liquidation or dissolution of Cimpress, awards convert into the right to receive liquidation
proceeds (net of any exercise, measurement or purchase price); and (vi) any combination of the above actions.
Acceleration The Board may at any time provide that any award becomes immediately exercisable in whole or
in part, free of some or all restrictions or conditions, or otherwise realizable in whole or in part.
23
Substitute Awards In connection with Cimpress’ acquisition of another entity, the Board may grant awards in
substitution for any options or other stock or stock-based awards granted by such entity, on such terms as the
Board deems appropriate in the circumstances notwithstanding the 2020 Plan’s limitations on awards. Substitute
awards do not count against the plan’s overall share limit, except as the US Tax Code may require.
Repricings Unless approved by our shareholders, we may not (1) amend any outstanding option or SAR
granted under the 2020 Plan to provide an exercise or measurement price that is lower than the then-current
exercise or measurement price of such option or SAR, (2) cancel any outstanding option or SAR (whether or not
granted under the 2020 Plan) and grant in substitution for that option or SAR any new awards under the 2020 Plan
(other than substitute awards granted in connection with a merger with another entity or acquisition of the property
or stock of an entity) covering the same or a different number of shares and having an exercise or measurement
price lower than the then-current exercise or measurement price of the canceled option or SAR, (3) cancel in
exchange for a cash payment an option or SAR with an exercise price above the then-current fair market value of
the shares, or (4) take any other action under the 2020 Plan that constitutes a repricing under the rules of the
NASDAQ Stock Market.
Tax Withholding Participants in the 2020 Plan are responsible for the payment of any federal, state or local
taxes, charges, levies or social insurance contributions that we are required by law to withhold upon the exercise of
options or SARs or vesting of other awards. We may require that tax withholding obligations satisfied by withholding
ordinary shares to be issued pursuant to exercise or vesting. We may also require our tax withholding obligation to
be satisfied, in whole or in part, by an arrangement whereby a certain number of ordinary shares issued pursuant to
any award are immediately sold and proceeds from such sale are remitted to Cimpress in an amount that would
satisfy the withholding amount due.
Amendment and Termination We may not grant any awards under the 2020 Plan after November 25, 2030,
which is the tenth anniversary of the date on which our shareholders originally approved the plan, but previously
granted awards may extend beyond that date. We may not grant any incentive stock options under the 2020 Plan
after August 26, 2030, which is the tenth anniversary of the date on which our Board originally approved the plan.
The Board may amend, suspend or terminate the 2020 Plan or any portion thereof at any time, subject to
shareholder approval of certain amendments. We must obtain the approval of our shareholders for any amendment
to the 2020 Plan to the extent required under the rules of the NASDAQ Stock Market.
United States Federal Income Tax Consequences
As required by SEC rules, we are providing a summary of the United States federal income tax consequences
that will generally arise with respect to awards granted under the 2020 Plan. The following summary is based on the
federal tax laws in effect as of the date of this proxy statement and assumes that all awards are exempt from, or
comply with, the rules under Section 409A of the US Tax Code regarding nonqualified deferred compensation.
Changes to these laws could alter the tax consequences described below. This summary does not describe all
United States federal tax consequences under the 2020 Plan, nor does it describe state, local or non-U.S. tax
consequences.
Incentive Stock Options No taxable income is generally realized by a participant upon the grant or exercise of
an incentive stock option. If ordinary shares issued to a participant pursuant to the exercise of an incentive stock
option are sold or transferred after two years from the date of grant and after one year from the date of exercise,
then (i) upon sale of such ordinary shares, any amount realized in excess of the option exercise price (the amount
paid for the shares) will be taxed to the optionee as a long-term capital gain, and any loss sustained will be a long-
term capital loss, and (ii) Cimpress will not be entitled to any deduction for federal income tax purposes. The
exercise of an incentive stock option will give rise to an item of tax preference that may result in alternative minimum
tax liability for the participant.
If ordinary shares acquired upon the exercise of an incentive stock option are disposed of prior to the expiration
of the two-year and one-year holding periods described above (a "disqualifying disposition"), generally (i) the
participant will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair
market value of the ordinary shares at exercise (or, if less, the amount realized on a sale of such ordinary shares)
over the exercise price thereof, and (ii) we will be entitled to deduct such amount. Special rules will apply where all
or a portion of the exercise price of the incentive stock option is paid by tendering ordinary shares.
24
If an incentive stock option is exercised at a time when it no longer qualifies for the tax treatment described
above, the option is treated as a nonstatutory option. Generally, an incentive stock option will not be eligible for the
tax treatment described above if it is exercised more than three months following termination of employment (or one
year in the case of termination of employment by reason of disability). In the case of termination of employment by
reason of death, the three-month rule does not apply.
Nonstatutory Options No income is realized by the optionee at the time a nonstatutory option is granted.
Generally (i) at exercise, ordinary income is realized by the optionee in an amount equal to the difference between
the option exercise price and the fair market value of the ordinary shares on the date of exercise, and we receive a
tax deduction for the same amount, and (ii) at disposition, appreciation or depreciation after the date of exercise is
treated as either short-term or long-term capital gain or loss depending on how long the ordinary shares have been
held. Special rules will apply where all or a portion of the exercise price of the nonstatutory option is paid by
tendering ordinary shares. Upon exercise, the optionee will also be subject to Social Security taxes on the excess of
the fair market value over the exercise price of the option.
Other Awards We are generally will be entitled to a tax deduction in connection with other awards under the
2020 Plan in an amount equal to the ordinary income realized by the participant at the time the participant
recognizes such income. Participants typically are subject to income tax and recognize such tax at the time that an
award is exercised, vests or becomes non-forfeitable, unless the award provides for a further deferral.
Parachute Payments The vesting of any portion of an award that is accelerated due to the occurrence of a
change in control may cause a portion of the payments with respect to such accelerated awards to be treated as
"parachute payments" as defined in the US Tax Code. Any such parachute payments may be non-deductible by
Cimpress, in whole or in part, and may subject the recipient to a non-deductible 20% federal excise tax on all or a
portion of such payment (in addition to other taxes ordinarily payable).
Limitation on Deductions Under Section 162(m) of the US Tax Code, Cimpress' deduction for awards under
the 2020 Plan may be limited to the extent that any "covered employee" (as defined in Section 162(m) of the US Tax
Code) receives compensation in excess of $1 million a year.
Our Board of Directors recommends that you vote FOR the amendment to our 2020 Equity Incentive Plan.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information as of June 30, 2022 about the securities issued or authorized for future
issuance under our current equity compensation plans.
Equity Compensation Plan Information
(a)
Number of Securities to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights(1)
(b)
Weighted-Average
Exercise Price of
Outstanding
Options, Warrants
and Rights(2)
(c)
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column(a))
Plan Category
Equity compensation plans approved by shareholders(1)
4,441,637
Equity compensation plans not approved by
shareholders .............................................................................
—
Total ............................................................................................
4,441,637
$0.10
—
$0.10
1,480,926
—
1,480,926 (3)
_____________
25
(1)
(2)
(3)
Consists of our 2005 Non-Employee Directors’ Share Option Plan, 2011 Equity Incentive Plan, 2016 Performance Equity
Plan and 2020 Equity Incentive Plan. This column includes an aggregate of 4,436,339 shares underlying RSUs and
PSUs based on 2.5 shares per PSU that were outstanding as of June 30, 2022.
The RSUs and PSUs included in column (a) do not have an exercise price, and the weighted-average exercise price
excluding these units is $80.01.
Consists of shares available for future awards under our 2020 Equity Incentive Plan. For PSU awards, we assumed that
we would issue ordinary shares equal to 250% of the outstanding PSUs, which is the maximum potential share
issuance.
PROPOSAL 5 - REAPPOINT OUR
STATUTORY AUDITOR UNDER IRISH LAW
The Irish Companies Act 2014 requires that our statutory auditors be appointed at each annual general meeting
of shareholders, to hold office from the conclusion of the annual general meeting until the conclusion of the next
annual general meeting. PricewaterhouseCoopers Ireland has served as Cimpress plc's Irish statutory auditor since
fiscal year 2020 and is affiliated with PricewaterhouseCoopers LLP, who our Audit Committee has selected as our
U.S. independent registered public accounting firm for the fiscal year ending June 30, 2023 with respect to our
consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles. We
refer to PricewaterhouseCoopers LLP and PricewaterhouseCoopers Ireland together as "PwC."
Our Audit Committee has recommended that PricewaterhouseCoopers Ireland be appointed as our Irish statutory
auditor. If our shareholders do not approve the reappointment of PricewaterhouseCoopers Ireland at this annual
meeting, our Board of Directors may appoint a person or firm to fill the vacancy.
We do not expect that PwC will attend the annual meeting or be available to answer questions.
Our Board of Directors recommends that you vote FOR the reappointment of PricewaterhouseCoopers
Ireland as our statutory auditor under Irish law to hold office until the conclusion of our annual general
meeting in 2023.
Independent Registered Public Accounting Firm Fees and Other Matters
The following table presents the aggregate fees and expenses billed for services rendered by PwC for the fiscal
years ended June 30, 2022 and June 30, 2021. The amounts reported for each fiscal year represent the fees and
expenses for services rendered during the applicable fiscal year, regardless of when the fees and expenses were
billed.
Fiscal Year
2022
Fiscal Year
2021
Audit Fees(1) .............................................. $ 4,182,586 $ 4,015,047
Tax Fees(2) ................................................
192,537
All Other Fees(3) .......................................
37,013
413,257
158,489
Total Fees ................................................... $ 4,412,136 $ 4,586,793
_____________
(1) Audit fees and expenses consisted of fees and expenses billed for the audit of our consolidated financial statements,
statutory audits of Cimpress plc and certain of our subsidiaries, quarterly reviews of our financial statements, and the audit
of the effectiveness of internal control over financial reporting as promulgated by Section 404 of the U.S. Sarbanes-Oxley
Act.
(2) Tax fees and expenses consisted of fees and expenses for tax compliance (including tax return preparation), tax advice,
tax planning and consultation services. Tax compliance services (assistance with tax returns, tax audits and appeals)
accounted for $148,689 of the total tax fees billed in fiscal year 2022 and $115,767 of the total tax fees billed in fiscal year
2021.
(3) For fiscal year 2022 and 2021,$37,013 and $97,600, respectively, represents fees associated with a COVID-19 relief
package in the Netherlands. For fiscal year 2021, the remaining fees include $55,588 for represent fees for global mobility
immigration services and $5,301 for subscription fees.
26
Audit Committee’s Pre-approval Policy and Procedures
Our Audit Committee has adopted policies and procedures for the pre-approval of audit and non-audit services
for the purpose of maintaining the independence of our registered public accounting firm. We may not engage the
independent registered public accounting firm to render any audit or non-audit service unless either the service is
approved in advance by the Audit Committee or the engagement to render the service is entered into pursuant to
the Audit Committee’s pre-approval policies and procedures. From time to time, the Audit Committee pre-approves
services that are expected to be provided to Cimpress by the independent registered public accounting firm during
the following 12 months. Any such pre-approval is detailed as to the particular service or type of services to be
provided and is also subject to a maximum dollar amount. At regularly scheduled meetings of the Audit Committee,
management or the independent registered public accounting firm report to the Audit Committee regarding services
actually provided to Cimpress.
During our fiscal year ended June 30, 2022, PwC did not provide any services to Cimpress other than in
accordance with the pre-approval policies and procedures described above.
27
PROPOSAL 6 - AUTHORIZE OUR BOARD OR AUDIT COMMITTEE
TO DETERMINE THE REMUNERATION OF OUR STATUTORY AUDITOR UNDER IRISH LAW
Under the Irish Companies Act 2014, the remuneration of our statutory auditor under Irish law must be fixed by
our shareholders in a general meeting of the Company or in such manner as may be determined in a general
meeting. We are asking our shareholders to authorize our Board or the Audit Committee of the Board to determine
PricewaterhouseCoopers Ireland's remuneration as our statutory auditor under Irish law for the duration of PwC’s
term of office. Our Board has delegated the authority to determine the remuneration of our statutory auditor under
Irish law to the Audit Committee of the Board in accordance with the Board’s procedures and applicable law.
Our Board of Directors recommends that you vote FOR the authorization of our Board or Audit
Committee to determine the remuneration of PricewaterhouseCoopers Ireland.
28
Board of Directors and Committees
CORPORATE GOVERNANCE
During our fiscal year ended June 30, 2022, our Board met four times, and each of our directors attended at least
88% of the total number of meetings of the Board and the committees of which such director was a member during
the period of time he or she served on such committee. We do not have a policy with respect to director attendance
at our annual general meetings of shareholders, and none of our directors attended our 2021 annual general
meeting of shareholders due to the COVID-19 pandemic's impacts on international travel.
The Board has standing Audit, Compensation, and Nominating Committees. Each committee has a charter that
has been approved by the Board, and each committee must review the adequacy of its charter at least annually.
Director
Audit Committee
Compensation Committee
Nominating Committee
Sophie A. Gasperment
Zachary S. Sternberg
member
Dessislava Temperley
Chair and Audit Committee
Financial Expert
member
member
member
Chair
Scott J. Vassalluzzo
member
Chair
member
All committee members
independent?
How many meetings
during fiscal year 2022?
Yes, meet independence
criteria for audit committee
members
Yes, meet independence
criteria for compensation
committee members
four
none
Yes
one
Audit Committee. The Audit Committee’s responsibilities include the following:
• evaluating and retaining our independent registered public accounting firm
• approving the compensation of, and assessing (or recommending that the Board assess) the independence of,
our registered public accounting firm
• overseeing the work of our independent registered public accounting firm, including the receipt and
consideration of certain reports from the firm
• reviewing and discussing our financial statements and other financial disclosures and considering whether to
recommend to the Board that our audited financial statements be included in our Annual Report on Form 10-K
• coordinating the Board’s oversight of our internal control over financial reporting and disclosure controls and
procedures
• overseeing our internal audit function
• establishing procedures for the receipt, retention, and treatment of accounting-related complaints and concerns
• reviewing and approving any related person transactions
• discussing our policies with respect to financial and accounting risk assessment and risk management
• preparing the Audit Committee report included in this proxy statement
29
Compensation Committee. The Compensation Committee’s responsibilities include the following:
• reviewing and approving the compensation of our Chief Executive Officer and our other executive officers
• reviewing and making recommendations to the Board with respect to incentive compensation and equity-based
plans and overseeing and administering our equity-based plans
• reviewing and approving director compensation
• overseeing the risks associated with our compensation policies and practices
• reviewing and discussing with management the Compensation Discussion and Analysis section of the proxy
statement and considering whether to recommend to the Board that the Compensation Discussion and Analysis
be included in the proxy statement
• preparing the Compensation Committee report included in this proxy statement
Nominating Committee. The Nominating Committee's responsibilities include the following:
• identifying individuals qualified to become Board members
• recommending to the Board the persons to be nominated for appointment as directors and to each of the
Board’s committees
• monitoring communications to the Board from shareholders and other interested parties
• coordinating the Board's oversight of our Code of Business Conduct and reviewing allegations made on our
confidential reporting helpline
Corporate Governance Guidelines
We believe that good corporate governance is important to ensure that Cimpress is managed for the long-term
benefit of our stakeholders, including but not limited to our shareholders. The Board has adopted Corporate
Governance Guidelines to assist in the exercise of its duties and responsibilities and to serve the best interests of
Cimpress and our stakeholders. The Corporate Governance Guidelines provide a framework for the conduct of the
Board’s business.
Among other things, the Corporate Governance Guidelines provide as follows:
• A majority of the members of the Board must be independent directors, except as permitted by Nasdaq rules.
• The Board should focus on, and develop a strategy for, long-term valuation creation by Cimpress.
• The non-employee directors must meet at least twice a year in executive session without any members of
Cimpress' management to discuss, among other matters, the performance of our Chief Executive Officer.
• The Board has full and free access to management and employees and the authority to hire and consult with
independent advisors.
• The Board must have at all times an Audit Committee, Compensation Committee, and Nominating Committee
composed of non-employee directors who meet the independence and other criteria set forth in Nasdaq rules.
• On an annual basis or such other frequency as the Board determines, the Board must conduct a self-evaluation
to determine whether it and its committees are functioning effectively.
You can find our Corporate Governance Guidelines, our Code of Business Conduct, and the charters for our
Audit Committee, Compensation Committee and Nominating Committee on our Investor Relations website at
ir.cimpress.com, or you can request copies of these documents by emailing us at ir@cimpress.com or writing to
Investor Relations, c/o Cimpress USA Incorporated, 275 Wyman Street, Waltham, MA 02451 USA.
30
Code of Business Conduct
We have adopted a written code of business conduct that applies to our Board, officers, and employees, a
current copy of which is posted on the Corporate Governance page of ir.cimpress.com. In addition, we intend to
post on our website all disclosures that are required by law or Nasdaq stock market listing standards concerning
any amendments to, or waivers from, any provision of the code.
Determination of Independence
Under Nasdaq rules, members of our Board qualify as “independent directors” only if, in the opinion of the Board,
they do not have a relationship that would interfere with the exercise of independent judgment in carrying out the
responsibilities of a director. The Board has determined that none of its members other than Robert Keane, our
Chief Executive Officer, has a relationship that would interfere with the exercise of independent judgment in carrying
out the responsibilities of a director and that all of the non-employee directors are “independent directors” as defined
under Nasdaq's Marketplace Rules.
Oversight of Risk
Our Board has responsibility for risk oversight, and the full Board or its relevant committees regularly conduct
reviews of certain risk areas. In addition, based on an internal risk assessment, we believe that any risks arising
from our compensation programs for our employees are not reasonably likely to have a material adverse effect on
Cimpress.
Board Nomination Process
The process that our Nominating Committee follows to identify and evaluate candidates for members of our
Board includes requests to its members and others for recommendations, meetings from time to time to evaluate
biographical information and background material relating to potential candidates, and interviews of selected
candidates by members of the Committee and the Board.
In considering whether to recommend any particular candidate for inclusion in the Board’s slate of nominees, the
Nominating Committee applies, among other things, the criteria for Board members set forth as an attachment to
the Nominating Committee Charter. These criteria include among others the candidate’s integrity, business acumen,
knowledge of our business and industry, experience, diligence, absence of any conflicts of interest, and ability to act
in the interests of all of Cimpress' stakeholders. In addition, the Charter specifies that nominees shall not be
discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability, or any other
basis proscribed by law and that the Nominating Committee and Board should consider the value of diversity on the
Board. The Committee does not assign specific weights to particular criteria, and no particular criterion other than
integrity and good character is a prerequisite for each prospective nominee.
We believe that the backgrounds and qualifications of the members of our Board, considered as a group, should
provide a composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities.
Accordingly, the Nominating Committee seeks nominees with a broad diversity of experience, professions, skills and
backgrounds. During fiscal year 2022, the Nominating Committee engaged MWM Consulting, a recruiting firm, to
assist the Committee in identifying, evaluating, and reaching out to potential candidates for the Board of Directors,
and MWM Consulting assisted us in recruiting Ms. Temperley as a director.
Shareholders may recommend individuals to the Nominating Committee for consideration as potential candidates
for the Board by submitting their names, together with appropriate biographical information and background
materials and a statement as to whether the shareholder or group of shareholders making the recommendation has
beneficially owned more than 5% of our ordinary shares for at least a year as of the date such recommendation is
made, to Nominating Committee, c/o General Counsel, Cimpress USA Incorporated, 275 Wyman Street, Waltham,
MA 02451 USA. If appropriate biographical and background material has been provided on a timely basis, the
Nominating Committee will evaluate shareholder-recommended candidates by following substantially the same
process, and applying substantially the same criteria, as it follows for candidates submitted by others.
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Report of the Audit Committee
The Audit Committee has reviewed Cimpress' audited consolidated financial statements for the fiscal year ended
June 30, 2022 and has discussed these financial statements with Cimpress' management and
PricewaterhouseCoopers LLP, our independent registered public accounting firm for fiscal year 2022.
The Audit Committee has also received from, and discussed with, PwC various communications that PwC is
required to provide to the Audit Committee pursuant to the applicable requirements of the Public Company
Accounting Oversight Board, or PCAOB, and in effect for Cimpress' fiscal year 2022. The Audit Committee has
discussed with the independent registered public accounting firm its independence from Cimpress. The Audit
Committee also considered whether the provision of other, non-audit related services referred to under the heading
“Independent Registered Public Accounting Firm Fees and Other Matters” under Proposal 5 is compatible with
maintaining the independence of our registered public accounting firm.
Based on its discussions with, and its review of the representations and information provided by, management
and PwC, the Audit Committee recommended to the Board that the audited financial statements be included in
Cimpress' Annual Report on Form 10-K for the fiscal year ended June 30, 2022.
This Audit Committee Report is not incorporated by reference into any of our previous or future filings with the
SEC, unless any such filing explicitly incorporates this Report.
Audit Committee of the Board of Directors
Dessislava Temperley, Chairman
Zachary S. Sternberg
Scott J. Vassalluzzo
Certain Relationships and Related Transactions
Policies and Procedures for Related Person Transactions
We have a written related person transaction policy that sets forth the policies and procedures for the review and
approval or ratification of related person transactions. This policy covers any transaction, arrangement or
relationship, or any series of similar transactions, arrangements or relationships in which we are a participant, the
amount involved exceeds $25,000, and a related person has a direct or indirect material interest, including, without
limitation, purchases of goods or services by or from the related person or entities in which the related person has a
material interest, indebtedness, guarantees of indebtedness, and employment by us of a related person. A related
person is any person who is or was a Cimpress executive officer or member of our Board of Directors at any time
since the beginning of our most recently completed fiscal year, the beneficial holder of more than 5% of any class of
our voting securities, or an immediate family member of anyone described in this sentence.
All potential related person transactions that we propose to enter into must be reported to our Chief Legal Officer
(CLO, who is currently our General Counsel) or Chief Accounting Officer (CAO), who will determine whether each
reported transaction qualifies as a related person transaction. If so, then the CLO and CAO will submit the
transaction for review and approval by our Audit Committee. If our CLO and CAO determine that advance approval
of a related person transaction by the full Audit Committee is not practicable under the circumstances, then they will
submit the transaction to the Audit Committee chair for review and approval, and the full Audit Committee will review
and ratify the related person transaction at the next Committee meeting.
In addition, the Audit Committee will review annually any previously approved or otherwise already existing
related person transaction that is ongoing in nature to ensure that such related person transaction has been
conducted in accordance with the Audit Committee’s previous approval, if any, and that all required disclosures
regarding the related person transaction are made.
When considering a proposed related person transaction, the Audit Committee will review and consider, to the
extent appropriate for the circumstances:
• the related person’s interest in the related person transaction;
• the approximate dollar value of the amount involved in the related person transaction;
32
• the approximate dollar value of the amount of the related person’s interest in the transaction without regard to
the amount of any profit or loss;
• whether the transaction was undertaken in the ordinary course of business;
• whether the transaction with the related person is entered into on terms no less favorable to us than terms that
could have been reached with an unrelated third party;
• the purpose of, and the potential benefits to us of, the transaction; and
• any other information regarding the related person transaction or the related person that would be material to
investors in light of the circumstances of the particular transaction.
The Audit Committee will review all relevant information available to it about the related person transaction. The
Audit Committee may approve or ratify the related person transaction only if the Committee determines that, under
all of the circumstances, the transaction is in or is not inconsistent with our best interests. The Committee may, in its
sole discretion, impose conditions as it deems appropriate on us or the related person in connection with approval
of the related person transaction.
In addition, under our Corporate Governance Guidelines, any director who has a conflict of interest is required to
disclose that conflict to the Chairman, full Board, or General Counsel and to abstain from voting on any resolution
involving, or participating in any Board discussion of, the conflict.
We did not have any related person transactions, as defined by SEC rules, during fiscal year 2022.
Compensation Committee Interlocks and Insider Participation
During fiscal year 2022, Ms. Gasperment and Messrs. Sternberg and Vassalluzzo served as members of our
Compensation Committee. None of these directors has ever been an officer or employee of Cimpress or any of our
subsidiaries, and during fiscal year 2022, no Compensation Committee member had any relationship with us
requiring disclosure under SEC rules.
During fiscal year 2022, none of our executive officers served as a member of the board of directors or
compensation committee (or other committee serving an equivalent function) of any entity that had one or more
executive officers serving as a member of our Board or Compensation Committee.
Communicating with the Board
Our Board will give appropriate attention to written communications that are submitted by shareholders, and will
respond if and as appropriate. The chair of the Nominating Committee, with the assistance of Cimpress' General
Counsel, is primarily responsible for monitoring communications from shareholders and for providing copies or
summaries to the other directors as its members consider appropriate.
The chair of the Nominating Committee will forward communications to the full Board if the communications relate
to substantive matters and include suggestions or comments that he considers to be important for the directors to
know. In general, the chair is more likely to forward communications relating to corporate governance and corporate
strategy than communications relating to ordinary business affairs, personal grievances, and matters as to which
Cimpress may receive repetitive or duplicative communications.
Shareholders who wish to send communications on any topic to our Board should address such communications
to:
Board of Directors
c/o Corporate Secretary, Cimpress plc
275 Wyman Street
Waltham, MA 02451
USA
33
COMPENSATION OF OUR BOARD OF DIRECTORS
We use a combination of cash and share-based incentive compensation to attract and retain qualified candidates
to serve as members of our Board of Directors. When considering the compensation of our directors, our
Compensation Committee considers the significant amount of time that directors expend in fulfilling their duties to
Cimpress and the skill level that we require of our Board members.
The strategic evolution of Vista, the macroeconomic environment, the COVID-19 pandemic, and other
challenges Cimpress faced in fiscal years 2021 and 2022 underscored the importance of attracting and retaining
talented directors. In order to bring our director compensation more in line with market norms for companies that are
publicly traded in the United States, our Compensation Committee decided to move away from PSUs in our director
compensation program in fiscal year 2022 and revised our director LTI program to provide for the grant of RSUs
instead of PSUs for non-employee directors.
Director Compensation Program
Cash Compensation
All directors (including Mr. Keane)
$100,000 retainer per fiscal year
Chair of the Audit Committee
Additional $25,000 retainer per fiscal year
Equity Compensation
Incumbent non-employee directors $125,000 of RSUs annually in connection with Cimpress'
annual general meeting of shareholders, so long as they
remain a director following that annual general meeting
Newly appointed non-employee
directors
$150,000 of RSUs in connection with their initial
appointment to the Board
Non-Employee Director Compensation Table
The following table contains information about the compensation earned by our non-employee directors in the
fiscal year ended June 30, 2022:
Name
Sophie A. Gasperment ..............................
Zachary S. Sternberg .................................
Dessislava Temperley(2) ...........................
Scott J. Vassalluzzo ...................................
John J. Gavin, Jr.(3) ...................................
_____________
Fees
Earned or
Paid in
Cash
($)
100,000
Share
Awards
($)(1)
124,914
Total
($)
224,914
100,000
124,914
224,914
118,750
100,000
274,830
124,914
393,580
224,914
62,500
—
62,500
(1) The amounts reported in this column represent a dollar amount equal to the grant date fair value of the
RSUs as computed in accordance with FASB ASC Topic 718. You can find the assumptions we used in
the calculations for these amounts in Note 11 to our audited financial statements included in our Annual
Report on Form 10-K for the fiscal year ended June 30, 2022.
(2) Ms. Temperley was appointed as a director in September 2021.
(3) Mr. Gavin's term as a director expired in November 2021.
34
In addition, at June 30, 2022, our non-employee directors held the following outstanding equity compensation
awards:
•
•
•
•
Ms. Gasperment held 6,753 PSUs and 1,404 RSUs.
Mr. Sternberg held 5,128 PSUs and 1,404 RSUs.
Ms. Temperley held 3,146 RSUs.
Mr. Vassalluzzo held 6,239 PSUs, 1,404 RSUs, and unexercised share options to purchase an
aggregate of 5,298 shares.
35
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table contains information regarding the beneficial ownership of our ordinary shares as of September
14, 2022 by:
• each shareholder we know to own beneficially more than 5% of our outstanding ordinary shares;
• each member of our Board of Directors;
• our named executive officers who are listed in the Summary Compensation Table in this proxy statement; and
• all of our current directors and executive officers as a group.
Name and Address of Beneficial Owner(1)
Arlington Value Capital LLC (4) .................................................................................
Number of Ordinary
Shares Beneficially
Owned(2)
Percent of Ordinary
Shares Beneficially
Owned(3)
1,995,437
7.6%
222 S. Main Street, Suite 1750
Salt Lake City, UT 84101 USA
Janus Henderson Group plc (5) ................................................................................
3,320,611
12.7
201 Bishopsgate
EC2M 3AE London UK
Prescott General Partners LLC (6) ...........................................................................
3,906,492
14.9
2200 Butts Road, Suite 320
Boca Raton, FL 33431 USA
Thomas W. Smith (6) ..................................................................................................
1,693,329
6.5
2200 Butts Road, Suite 320
Boca Raton, FL 33431 USA
The Spruce House Partnership LP ...........................................................................
2,358,904
9.0
435 Hudson Street, 8th Floor
New York, NY 10014 USA
The Vanguard Group (7) ............................................................................................
1,513,665
5.8
100 Vanguard Blvd.
Malvern, PA 19355 USA
Named Executive Officers and Directors
Robert S. Keane (8) ....................................................................................................
2,235,644
8.5
Sophie A. Gasperment ...............................................................................................
Sean E. Quinn (9) ........................................................................................................
696
15,226
*
*
Zachary S. Sternberg (10) .........................................................................................
2,374,803
9.1
Dessislava Temperley (11) .........................................................................................
Scott J. Vassalluzzo (11)(12) .....................................................................................
Maarten Wensveen .....................................................................................................
436
76,877
7,481
*
*
*
All current executive officers and directors as a group (7 persons) (11) ............
4,711,163
18.0%
_____________
*
Less than 1%
36
(1) Unless otherwise indicated, the address of each executive officer and director is c/o Cimpress plc, Building D, Xerox
Technology Park, Dublin Road, Dundalk, Co. Louth, A91 H9N9, Ireland.
(2)
(3)
(4)
(5)
(6)
(7)
(8)
For each person or entity in the table above, the “Number of Shares Beneficially Owned” column may include ordinary
shares attributable to the person or entity because of that holder’s voting or investment power or other relationship, as
determined under SEC rules. Under these rules, a person or entity is deemed to have “beneficial ownership” of any
shares over which that person or entity has or shares voting or investment power, plus any shares that the person or
entity may acquire within 60 days of September 14, 2022 (i.e., November 13, 2022), including through the exercise of
share options or the vesting of RSUs. Unless otherwise indicated, each person or entity referenced in the table has sole
voting and investment power over the shares listed or shares such power with his or her spouse. The inclusion in the
table of any shares, however, does not constitute an admission of beneficial ownership of those shares by the named
shareholder.
The percentage ownership for each shareholder on September 14, 2022 is calculated by dividing (1) the total number of
shares beneficially owned by the shareholder by (2) 26,222,022, the number of ordinary shares outstanding on
September 14, 2022, plus any shares issuable to the shareholder within 60 days after September 14, 2022 (i.e.,
November 13, 2022), including RSUs that vest and share options that are exercisable on or before November 13, 2022.
This information is based solely upon a Schedule 13G/A that the shareholder filed with the SEC on February 14, 2020.
This information is based solely upon a Schedule 13G/A that the shareholder filed with the SEC on February 10, 2022.
This information is based solely upon a Schedule 13D/A that the shareholder filed with the SEC on November 15, 2019.
This information is based solely upon a Schedule 13G/A that the shareholder filed with the SEC on February 9, 2022.
Includes an aggregate of 2,234,844 shares held by trusts established for the benefit for Mr. Keane or members of his
immediate family, entities wholly owned by such trusts, and a charitable entity established by Mr. Keane and his spouse.
Mr. Keane and his spouse disclaim beneficial ownership of the shares owned by the trusts and other entities except to
the extent of their pecuniary interest therein.
(9) Consists of shares held by a trust of which Mr. Quinn and his spouse are trustees.
(10)
Includes 2,358,904 shares held by The Spruce House Partnership LP. The general partner of The Spruce House
Partnership LP is Spruce House Capital LLC, of which Mr. Sternberg is a managing member. Mr. Sternberg disclaims
beneficial ownership of the shares held by The Spruce House Partnership LP except to the extent of his pecuniary
interest therein.
(11)
Includes the number of shares that each director listed below has the right to acquire under share options and RSUs that
vest on or before November 13, 2022:
Ms. Temperley: 436
Mr. Vassalluzzo: 5,298
(12)
Includes 2,174 shares held in investment accounts established for the benefit of certain family members, with respect to
which Mr. Vassalluzzo disclaims beneficial ownership except to the extent of his pecuniary interest therein.
Delinquent Section 16(a) Reports
Section 16(a) of the United States Securities Exchange Act of 1934 requires our executive officers, directors, and
the holders of more than 10% of our ordinary shares, referred to as reporting persons, to file reports with the SEC
disclosing their ownership of and transactions in our ordinary shares and other equity securities. During our fiscal
year ended June 30, 2022, Dessislava Temperley reported one transaction in Cimpress securities after the filing
deadline due to an administrative error by Cimpress, and Robert Keane failed to report four transactions in
Cimpress securities and instead reported them on Form 5 early in fiscal year 2023.
37
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
What is the purpose of the annual meeting?
At the annual meeting, our shareholders will consider and act upon the six proposals listed in the Notice of
Annual General Meeting of Shareholders that appears on the first page of this proxy statement.
Who can vote?
To be able to vote on the matters listed in the Notice of Annual General Meeting of Shareholders on the first page
of this proxy statement, you must have held ordinary shares of Cimpress at the close of business on September 26,
2022, which is the record date for the annual meeting. Shareholders of record at the close of business on
September 26, 2022 are entitled to vote on each proposal at the meeting. The number of outstanding ordinary
shares entitled to vote on each proposal at the meeting is 26,224,552. Currently, there are no outstanding preferred
shares of Cimpress.
How many votes do I have?
Each ordinary share of Cimpress that you owned on the record date entitles you to one vote on each matter that
is voted on at the annual meeting.
Is my vote important?
Your vote is important regardless of how many ordinary shares you own. Please take a moment to read the
instructions below, vote your shares, and submit your proxy as soon as possible to ensure that your shares are
represented and voted at the annual meeting.
How do I vote?
If you are a holder of record and your shares are not held in “street name” by a bank or brokerage firm, you may
vote by using any of the following methods:
•
•
•
by telephone using the toll-free telephone number shown on the proxy card or Notice of Internet Availability
through the Internet as instructed on the proxy card or Notice of Internet Availability
if you received proxy materials by mail or if you request a paper proxy card by telephone or through the
Internet, by completing and signing the proxy card and promptly returning it in the envelope provided to
Proxy Services c/o Computershare Investor Services, PO Box 505000, Louisville, KY 40233-9814 USA
(which will be forwarded electronically to Cimpress' registered office in Ireland), or by mailing or otherwise
depositing it at our registered office in Ireland
•
by attending the meeting and voting in person
For your vote to be counted at the meeting, your proxy must be received no later than 4:00 p.m. Eastern
Standard Time on November 15, 2022, the last business day before the meeting (or if the meeting is adjourned or
postponed, the last business day before the adjourned or postponed meeting).
If the shares you own are held in street name by a bank or brokerage firm, then your bank or brokerage firm, as
the record holder of your shares, is required to vote your shares according to your instructions. In order to vote your
shares, you will need to follow the directions your bank or brokerage firm provides to you. Many banks and
brokerage firms offer the option of voting by mail, over the Internet, or by telephone, which will be explained in the
voting instruction form you receive from your bank or brokerage firm.
The shares you own will be voted according to the instructions you return to Computershare Trust Company or
your bank or brokerage firm. If you are a holder of record and sign and return the proxy card, but do not give any
instructions on a particular matter to be voted on as described in this proxy statement, then the shares you own will
be voted in accordance with the recommendations of our Board of Directors. If your shares are held in street name
38
at a broker, your broker may under certain circumstances vote your shares on “routine” matters if you do not timely
provide voting instructions in accordance with the instructions provided by them. However, if you do not provide
timely instructions, your broker does not have the authority to vote on any “non-routine” proposals at the annual
meeting and a “broker non-vote” will occur. “Broker non-votes” are shares that are held in street name by a bank or
brokerage firm that indicates on its proxy that it does not have discretionary authority to vote such shares on a
particular matter.
Can I change my vote or revoke my proxy after I have mailed my proxy card?
Yes. If your shares are held in street name by a bank or brokerage firm and you wish to revoke or change your
voting instructions, then you must follow the directions you receive from your bank or brokerage firm. If you are a
holder of record and your shares are not held in street name, then you can revoke your proxy and change your vote
by doing any one of the following things:
• signing another proxy card with a later date and delivering the new proxy card to Proxy Services c/o
Computershare Investor Services, PO Box 505000, Louisville, KY 40233-9814 USA no later than 4:00 p.m.
Eastern Standard Time on the last business day before the meeting (or if the meeting is adjourned or
postponed, the last business day before the adjourned or postponed meeting);
• delivering written notice to Proxy Services c/o Computershare Investor Services, PO Box 505000, Louisville,
KY 40233-9814 USA no later than 4:00 p.m. Eastern Standard Time on the last business day before the
meeting that you want to revoke your proxy (or if the meeting is adjourned or postponed, the last business day
before the adjourned or postponed meeting); or
• voting in person at the meeting.
Your attendance at the meeting alone will not revoke your proxy.
How do I attend the meeting and vote in person?
If you wish to attend our annual meeting in Dublin, Ireland in person, we request that you notify us in advance,
if possible, by sending our Associate General Counsel written notice at the offices of our subsidiary Cimpress USA
Incorporated, 275 Wyman Street, Waltham, MA 02451 USA. If you need directions to the meeting, please call
Investor Relations at +1 781-652-6480. You will need to present the proxy card that you received, together with a
form of personal photo identification, in order to be admitted.
If you wish to attend the meeting and your shares are held in street name by a bank or brokerage firm, then
you must bring with you to the meeting an account statement or letter from your bank or brokerage firm showing
that you are the beneficial owner of the shares as of the record date in order to be admitted to the meeting. To be
able to vote your shares held in street name at the meeting, you will need to obtain a legal proxy from the holder of
record, i.e., your bank or brokerage firm.
What vote is required?
Under Cimpress' Constitution, holders of at least a majority of our outstanding ordinary shares must be
represented at the annual meeting to constitute a quorum, and the following vote is required to approve each of the
proposals described in this proxy statement, in each case assuming a quorum is present:
• Proposal 3 (advisory “say on pay”): This proposal requires the approval of at least a majority of votes cast at
the annual meeting. This vote is non-binding and advisory in nature, but our Compensation Committee will take
into account the outcome of the vote when considering future executive compensation arrangements.
• All other proposals: These proposals require the approval of at least a majority of votes cast at the annual
meeting.
For all proposals, Irish law provides that ordinary shares represented at the meeting and abstaining from voting
will count as shares present at the meeting for the purpose of determining whether there is a quorum but will not
count for the purpose of determining the number of votes cast. Broker non-votes will not count as shares present at
the meeting or for the purpose of determining the number of votes cast. “Broker non-votes” are shares that are held
39
in street name by a bank or brokerage firm that indicates on its proxy that it does not have discretionary authority to
vote on a particular matter.
How will votes be counted?
Each ordinary share will be counted as one vote according to the instructions contained on a properly completed
proxy or on a ballot voted in person at the meeting. Abstentions and broker non-votes are not counted as either
votes in favor of a proposal or votes against a proposal and therefore have no impact on the voting, although
abstentions do count for the purpose of determining the size of the quorum.
Who will count the votes?
Computershare Trust Company, Inc., our transfer agent, will count, tabulate, and certify the votes.
How does the Board of Directors recommend that I vote on the proposals?
Our Board recommends that you vote FOR all of the proposals listed in the Notice of Annual General Meeting of
Shareholders on the first page of this proxy statement.
Do the executive officers or directors have any substantial interests in these proposals?
No, our executive officers and directors do not have any substantial direct or indirect interests in the proposals,
except to the extent of their ownership of our ordinary shares or their own appointment to the Board of Directors.
Will any other business be conducted at the meeting or will other matters be voted on?
Our Board does not know of any other matters that may come before the meeting. If any other matter properly
comes before the meeting, then, to the extent permitted by applicable law, the persons named in the proxy card that
accompanies this proxy statement may exercise their judgment in deciding how to vote, or otherwise act, at the
meeting with respect to that matter or proposal.
Where can I find the voting results?
Within four business days after the annual meeting, we will report the voting results on a Current Report on
Form 8-K that we will file with the SEC.
How and when may I submit a shareholder proposal, including a shareholder nomination for a Board
position, for the 2023 annual general meeting?
Because we are an Irish public limited company whose shares are traded on a U.S. securities exchange, both
U.S. and Irish rules and timeframes will apply if you wish to submit a candidate to be considered for election to our
Board of Directors at our 2023 annual general meeting or if you wish to submit another kind of proposal for
consideration by shareholders at our 2023 annual general meeting.
Under our Constitution, in order to nominate a candidate for election as a director or bring other business before
our 2023 annual general meeting, you must deliver notice of the matter, in compliance with the Constitution, to the
address listed below no earlier than 120 calendar days and no later than 90 calendar days before the first
anniversary of the 2022 annual meeting. However, if the date of our 2023 annual general meeting is more than 30
calendar days before or more than 60 calendar days after the first anniversary of the 2022 annual meeting, you
must deliver the required notice no earlier than 120 calendar days before the 2023 annual general meeting and no
later than the later of 90 calendar days before the 2023 annual general meeting or five calendar days after the day
on we first publicly announce the date of our 2023 annual general meeting.
Under U.S. securities laws, if you wish to have a proposal included in our proxy statement for the 2023 annual
general meeting, then in addition to the above requirements, you also need to follow the procedures outlined in
Rule 14a-8 of the Exchange Act, and we must receive your proposal at our office in Dundalk, Ireland as set forth
below no later than June 7, 2023.
40
Any proposals, nominations or notices under our Constitution or pursuant to Rule 14a-8 should be sent to:
Secretary, Cimpress plc
Building D, Xerox Technology Park
Dundalk, Co. Louth
Ireland
With a copy to:
Associate General Counsel
Cimpress USA Incorporated
275 Wyman Street
Waltham, MA 02451
USA
What are the costs of soliciting these proxies?
We will bear the costs of solicitation of proxies. We have retained Alliance Advisors for a fee of $12,000 plus
expenses to assist us in soliciting proxies from our shareholders and to verify certain records relating to the
solicitation. We and our directors, officers, and selected other employees may also solicit proxies by mail,
telephone, e-mail, or other means of communication. Directors, officers, and employees who help us in soliciting
proxies will not be specially compensated for those services, but they may be reimbursed for their reasonable out-
of-pocket expenses incurred in connection with their solicitation. We will request brokers, custodians, and fiduciaries
to forward proxy soliciting material to the owners of our ordinary shares that they hold in their names and will
reimburse these entities for their out-of-pocket expenses incurred in connection with the distribution of our proxy
materials.
Householding of Annual Meeting Materials
Some banks, brokers, and other nominee record holders may participate in the practice of “householding” proxy
statements and annual reports. This means that only one copy of our proxy statement and annual report to
shareholders may be sent to multiple shareholders in your household. We will promptly deliver a separate copy of
either document to you if you contact us by emailing ir@cimpress.com, writing us at Investor Relations, Cimpress,
275 Wyman Street, Waltham, MA 02451 USA, or calling us at telephone no. +1 781-652-6480. If you want to
receive separate copies of the proxy statement or annual report to shareholders in the future, or if you are receiving
multiple copies and would like to receive only one copy per household, you should contact your bank, broker, or
other nominee record holder if you hold your shares in street name, or you may contact us per the above if you are
a holder of record.
41
APPENDIX A
Proposed Amendment No. 1 to
2020 Equity Incentive Plan
The 2020 Equity Incentive Plan of Cimpress plc is amended as follows, and capitalized terms used and not
defined herein have the respective meanings ascribed to such terms in the 2020 Equity Incentive Plan:
Section 4(a)(1) is deleted in its entirety and replaced with the following:
"Authorized Number of Ordinary Shares. Subject to adjustment under Section 9, the Company
may make Awards under the Plan for up to a total of 5,500,000 ordinary shares, €0.01 nominal value per share,
of the Company (the “Ordinary Shares”) plus the number of Ordinary Shares subject to awards granted under
the 2016 Performance Equity Plan that expire or are terminated, surrendered, canceled, or forfeited as more
specifically set forth in Section 4(a)(2)(B) below. The Company may grant Incentive Stock Options (as defined in
Section 5(b)) under the Plan covering a maximum of 5,500,000 Ordinary Shares in the aggregate. Shares
issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares."
Adopted by the Board on September 21, 2022
BUILDING D, XEROX TECHNOLOGY PARK | DUNDALK, CO. LOUTH | IRELAND