2023 Annual Report
Notice of Annual General Meeting of
Shareholders | Proxy Statement
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, 2023
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.)
First Floor Building 3, Finnabair Business and Technology Park A91 XR61,
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
If securities are registered pursuant to Section 12(b) of the Exchange Act, indicate by check mark whether the financial statements of the
registrant included in this filing reflect the correction of an error to previously issued financial statements. o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). 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 $599.3 million on December
31, 2022 (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 July 31, 2023, there were 26,362,374 Cimpress plc ordinary shares outstanding.
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, 2023. 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.
DOCUMENTS INCORPORATED BY REFERENCE
CIMPRESS PLC
ANNUAL REPORT ON FORM 10-K
For the Year Ended June 30, 2023
TABLE OF CONTENTS
Part I
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1.
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Changes in and Disagreements with Accountants and Financial Disclosures . . . . . . . . . . . . . . . . . .
Item 9.
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Part IV
Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Item 1. Business
Overview & Strategy
PART I
Cimpress is a strategically focused group of more than ten 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 and services 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, design and digital marketing services, 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 $3.1 billion of revenue in fiscal year 2023. As we have
grown we have achieved important benefits of scale. Our strategy is to invest in and build customer-focused,
entrepreneurial print 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.
We believe this decentralized structure is beneficial in many ways as it 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. We believe this approach has provided
great value in periods of increased market volatility, enabling our businesses to respond quickly to changes in
customer needs, while also providing our leaders an environment to share best practices and insights 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 the extent to which they 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 that must be performed centrally. Out of more than 15,000
employees, we have fewer than 100 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 have
developed guardrails and accountability mechanisms in key areas of governance including cultural aspects such as
a focus on customers and being socially responsible, as well as operational aspects such as the processes by
which we set strategy and financial budgets and review performance, and the policies by which we ensure
compliance with applicable 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 cash interest payments, partially offset by cash
interest received on our cash and marketable securities.
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.
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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 their 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. We currently produce many other product
categories (such as flyers, brochures, signage, drinkware, pens, t-shirts, hats, embroidered soft goods, rubber
stamps, labels, packaging, stickers, books, catalogs, magazines, calendars, holiday cards, invitations, photobooks,
and canvas prints) 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 businesses 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, 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,
Europe and Australia, and significantly higher if you include other geographies and custom 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. The estimates of annual market
opportunity in each of the four product categories below are based on research conducted for Cimpress by third-
party research firm Keypoint Intelligence in August 2022 to estimate the value of print shipments to small and
medium businesses in Australia, France, Germany, Italy, UK and the U.S. Cimpress extrapolated the findings of the
study to estimate the market size of the remaining countries in North America and Europe in which we sell products
based on the relative number of small and medium businesses in those other markets.
•
•
•
•
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). This
opportunity is estimated to be more than $25 billion per year.
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). This
opportunity is estimated to be more than $35 billion per year.
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. This
opportunity is estimated to be more than $25 billion per year.
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). This opportunity is
estimated to be more than $15 billion per year.
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
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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, and catalogs). Vista has continued to invest
in its design capabilities, both organically and through acquisition, to be a leader in this market shift. For example,
Vista has acquired a network of 150,000 freelance designers who work with customer-specific design projects and a
business with more than 100,000 freelance contributors of photos, videos, music, and other content. Vista 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.
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. In our Vista business we recently acquired a business to accelerate our offering
for do-it-yourself social media design that, 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. 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 million
square feet of production space in the aggregate across our owned and operated facilities. We also work
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extensively with hundreds of external fulfillers 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-
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, VistaCreate 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 11 million small businesses annually to 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.
Several signature services including "VistaPrint", "VistaCreate", "99designs by Vista", "Vista Corporate
Solutions," and "Vista x Wix" operate within the "Vista" brand architecture. This broadens our customers'
understanding of our value proposition to allow us to serve a larger set of their needs across a wide range
of products and solutions that include design, social media, and web presence as well as print.
VistaPrint represents the vast majority of the revenue in this segment where average order value is more
than $80 and customers spend, on average, a bit more than $170 per year; gross margins are about 54%
and advertising spend as a percent of revenue is about 16%. 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 such as 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 €115 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
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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%.
2. PrintBrothers: Consists of our druck.at, Printdeal, and WIRmachenDRUCK businesses. PrintBrothers
businesses serve customers throughout Europe, 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, 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, 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 52% with highly seasonal profits driven in the December quarter. Advertising spend as a percent
of revenue is about 21%. Significant inventory and customer invoicing requirements in this business drive
different working capital needs compared to our other businesses.
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5. All Other Businesses:
A collection of businesses combined into one reportable segment based on materiality, including
BuildASign, a larger and profitable business, with strong profitability and cash flow, and Printi, a small early-
stage business operating at a relatively modest operating loss. We exited our YSD business, which was
included in this reportable segment, during fiscal year 2023.
BuildASign is an e-commerce provider of canvas-print wall décor,
business signage, and other large-format printed products.
As the online printing leader in Brazil, Printi offers a superior customer
experience with transparent and attractive pricing, reliable service, and
quality.
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 also supports 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 light of recent disruptions in global supply chains, which impacted many industries, including ours, having
this central procurement team that worked together with the procurement teams in each of our businesses benefited
us, and we believe it has enabled us to operate more effectively, mitigating 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, and
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.
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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 depending on their specific needs. Over the past few
years, an increasing number of our businesses have modernized and modularized 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 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, 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 leverage across Cimpress.
Competition
The markets for the products our businesses produce and sell are intensely competitive, highly fragmented,
and geographically dispersed, with many existing and potential competitors. 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. 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. As described above, in Vista in recent years we expanded both our value
proposition and addressable market to include design and digital marketing services.
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
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office superstores, drug store chains, 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
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 ongoing for over 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 fiscal year 2040 across our entire
value chain and to achieve a 53% reduction in emissions by fiscal year 2030 as compared to our fiscal year
2019 baseline. The majority of these baseline emissions are from our value chain (Scope 3). Through
investments in energy-efficient infrastructure and equipment, as well as renewable energy, we have
achieved significant reductions in our direct emissions (Scope 1) and indirect emissions from purchased
electricity or other forms of energy (Scope 2), 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
enhancing our internal data management capabilities to improve our decision making and reporting
capabilities. Our targets have been informed by a science-based approach and are in alignment with a
1.5oC pathway.
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), a 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 83% 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.
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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. Our goal is focused on our product and packaging profile, and by fiscal
year 2025 we aim to eliminate 100% of problematic plastic usage (PVC and polystyrene), transition 100% of
non-reusable packaging to recyclable and/or compostable materials, decrease virgin plastic content in our
packaging by 20%, and increase the recycled content in our plastic products by 20%. These goals are
compared to our fiscal year 2020 baseline.
Fair labor practices: We require recruiting, retention, and other performance management related
decisions to be made 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 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.
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.
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 closely monitor its supply chain 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 inaugural environmental, social, and governance (ESG) report
published on December 20, 2022, supplier code of conduct, and compliance with the UK anti-slavery act. 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 had seasonal fluctuations. 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, 2023, we had approximately 15,000 full-time and approximately 1,000 temporary employees
worldwide.
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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.
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.
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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. 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
a potential recession or other economic downturn in some or all of our markets
our pricing and marketing strategies and those of our competitors
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
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
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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 building 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 to be the expert design and marketing partner
for small businesses. In the third quarter of fiscal year 2023, we implemented organizational changes to support
expanded profitability and improve the speed and quality of our execution, and we have been investing heavily to
rebuild Vista's technology infrastructure, improve our customer experience and product quality, and optimize Vista's
marketing mix. 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 and decentralized organizational structure 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,
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
our failure to maintain sufficient 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
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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 and war 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
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
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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
acquisitions and investments 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 and can lead to larger than expected payouts that can 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.
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. These
methods include promoting our products and services through paid channels such as online search, display, and
television, as well as leveraging our owned and operated channels such as email, direct mail, our social media
accounts, and telesales. If the costs of these channels significantly increase or the effectiveness of these channels
significantly declines, 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.
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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 typically 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:
•
•
•
•
•
•
•
•
fire, natural disaster, or extreme weather, which could be exacerbated by climate change
pandemic or other public health crisis
ransomware and other cyber security attacks
labor strike, work stoppage, or other issues with our workforce
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.
17
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 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. We may not be able to mitigate increases in our costs
by increasing the prices of our products and services. 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 we expect our costs to 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.
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,
18
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.
During the last two fiscal years, we have experienced 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 competitive labor market. We cannot predict whether costs will
further increase in the future or by how much. We have not been able to fully mitigate our 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 have impacted, and could in the future impact, the availability of materials we use in our
business, including the residual 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.
19
We need to hire, retain, develop, and motivate talented personnel in key roles in order to be successful, and
we face intense competition for talent.
If we are unable to recruit, retain, develop, 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 that makes 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 have in the past or may in the
future receive substantial payouts from their redeemable non-controlling interests in those businesses, as it may be
challenging to retain and motivate them to continue running their businesses. Although we believe our remote-first
way of working, which allows team members to work remotely with no expectation that they will commute to a
company facility, is a competitive advantage, it can be more challenging to engage, motivate, and develop team
members in a remote work environment, and our success depends on an engaged and motivated workforce and on
developing the skills and talents of our workforce.
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 and print markets, and traditional “brick and mortar” businesses establish an online presence. With
Vista's increased focus on design services, we now also face competition from companies in the design space,
some of which may be more established, experienced, or innovative than we are . 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 enter a recession or other sustained economic downturn,
which could negatively impact demand for our products and services. Although the economic downturns we
experienced in the past often precipitated increases in the number of small businesses, which in turn increased
demand for our products, an inflation-fueled downturn and/or tightening credit conditions could result in potential
customers not being able to 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.
Meeting our ESG goals will be costly, and our ESG policies and positions could expose us to reputational
harm.
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, labor practices, the
diversity of our management and directors, and the composition of our Board. Meeting the ESG goals we have set
and publicly disclosed will require significant resources and expenditures, and we may face pressure to make
commitments, establish additional goals, and take actions to meet them beyond our current plans. 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, and our reputation could be
harmed. In addition, with anti-ESG sentiment gaining momentum in some of our markets, we could experience
reduced revenue and reputational harm if we are targeted by groups or influential individuals who disagree with our
public positions on social or environmental issues.
20
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 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:
•
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
•
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.
Our material indebtedness and interest expense could adversely affect our financial condition.
As of June 30, 2023, our total debt was $1,654.0 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
•
limiting our ability to obtain additional financing to fund future working capital, capital expenditures,
acquisitions, or other general corporate requirements
21
•
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
•
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
•
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. Refinancing our debt may be particularly challenging in the current environment of capital market
disruptions and rising interest rates. 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 continue to increase, our debt service obligations on the variable rate indebtedness will
increase even if the amount borrowed remains the same, and our net income and cash flows, including cash
available for servicing our indebtedness, will correspondingly decrease. As of June 30, 2023, 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 $8.7 million over the next 12 months, not including any yield from our cash and
marketable securities.
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
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.
22
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
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, 2023 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.
23
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.
More than 70% 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.
24
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 formerly serviced our Vista and National Pen
businesses in the Japanese market.
◦
As of June 30, 2023, this facility is classified as held for sale. 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, 2023, a summary of our currently occupied leased spaces is as follows:
Business Segment (1)
Square Feet
Type
Lease Expirations
Vista
PrintBrothers
431,086
Technology development, marketing, customer
service, manufacturing, and administrative
July 2023 - May 2027
320,020 Technology development, marketing, customer
service, manufacturing, and administrative
September 2023 - September
2031
The Print Group
426,953
Technology development, marketing, customer
service, manufacturing, and administrative
November 2023 - March 2037
National Pen
All Other
Businesses
___________________
681,085
Marketing, customer service, manufacturing, and
administrative
586,917
Technology development, marketing, customer
service, manufacturing, and administrative
July 2023 - December 2037
March 2024 - February 2030
(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.
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.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
The ordinary shares of Cimpress plc are traded on the NASDAQ Global Select Market (the "NASDAQ")
under the symbol “CMPR.” As of July 31, 2023, there were five 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, 2023.
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, 2018 and the relative performance of each
investment is tracked through June 30, 2023.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
Among Cimpress plc, the NASDAQ Composite Index
and the RDG Internet Composite Index
2018
2019
2020
2021
2022
2023
Cimpress plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 100.00 $ 62.70 $ 52.66 $ 74.79 $ 26.83 $ 41.03
NASDAQ Composite . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
191.93
RDG Internet Composite . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
126.17
107.78
101.46
198.71
180.18
136.82
138.28
100.00
100.00
152.16
113.92
The share price performance included in this graph is not necessarily indicative of future share price
performance.
Item 6. [Reserved]
Not applicable.
26
Cimpress plcNASDAQ CompositeRDG Internet Composite6/186/196/206/216/226/23$0$50$100$150$200$250 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,
including profitability, cash flows, liquidity, and net leverage; the expected effects of our cost reductions and recent
restructuring, including future cost savings; our competitive position and the size of our market; sufficiency of our
liquidity position; legal proceedings; and sufficiency of our tax reserves. 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 lingering effects of
the COVID-19 pandemic; our inability to make the investments in our business 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 of key personnel or our inability to recruit talented personnel to drive performance of our businesses;
costs and disruptions caused by acquisitions and minority investments; the failure of businesses we acquire or
invest in to perform as expected; 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. The Business section of this Report also contains estimates and other statistical data from research we
conducted in August 2022 with a third-party research firm, and this data involves a number of assumptions and
limitations and contains projections and estimates of the sizes of the opportunities of our markets that are subject to
a high degree of uncertainty and should not be given undue weight.
Executive Overview
Cimpress is a strategically focused group of more than ten 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 and services 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, design and digital marketing services, 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 further in the Business section of this Report.
As of June 30, 2023, 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.
We announced plans on March 23, 2023 to reduce costs within our Vista business and our central teams
and implement organizational changes to support expanded profitability, reduced leverage and increased speed,
focus, and accountability. These plans resulted in a restructuring charge of $30.2 million during fiscal year 2023.
Excluding this restructuring charge, this restructuring action provided a cost savings benefit of approximately $24
million during the current fiscal year due to the timing of the action, and we expect this action to deliver
approximately $100 million of annualized pre-tax cost savings in total.
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
27
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, 2023
as compared to the year ended June 30, 2022 follows:
Fiscal Year 2023
•
•
Revenue increased by 7% to $3,079.6 million.
Constant-currency revenue increased 11% when excluding the revenue of acquired companies for the
first twelve months after acquisition (a non-GAAP financial measure).
• Operating income increased by $10.0 million to $57.3 million.
•
•
•
•
Adjusted EBITDA (a non-GAAP financial measure) increased by $58.8 million to $339.8 million.
Diluted net loss per share attributable to Cimpress plc increased to $7.08 from $2.08 in the prior fiscal
year.
Cash provided by operating activities decreased by $89.2 million to $130.3 million.
Adjusted free cash flow (a non-GAAP financial measure) decreased by $81.5 million to $18.7 million.
For the year ended June 30, 2023, the increase in reported revenue was primarily due to growth across all
businesses and markets through increased pricing and customer demand. Revenue growth in our Vista business
was driven by increases in new customer count as well as new and repeat customer bookings across most major
markets. Promotional products, apparel, and gifts (PPAG) was our fastest-growing product category, with business
cards, marketing materials, packaging and labels, and signage all showing strong year-over-year growth; however,
constant-currency revenue from consumer products has declined from the prior year. Pricing changes made during
the past year across all reportable segments improved our revenue on a year-over-year basis, as these actions
were one tool we used to mitigate inflationary cost pressures that have arisen from ongoing supply chain
challenges. Currency exchange fluctuations had a negative effect on revenue growth during the current fiscal year.
The increase to operating income during the year ended June 30, 2023 was driven by gross profit growth as
we benefited from higher volumes and the reduced net impact of cost inflation including through improved pricing.
We also realized cost efficiencies in advertising spend during the current year. These items were partially offset by
an increase in restructuring charges of $30.2 million, primarily related to actions taken in March 2023 to reduce
costs in the Vista business and in our central teams. These restructuring charges were offset in part by a partial
year of savings from the related actions.
Adjusted EBITDA increased for the year ended June 30, 2023, primarily driven by the gross profit growth
described above, as well the $13.7 million net benefit of currency on consolidated adjusted EBITDA year over year.
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.
Diluted net loss per share attributable to Cimpress plc increased for the year ended June 30, 2023, primarily
due to an increase in income tax expense of $95.6 million, driven by our conclusion that Swiss deferred tax assets'
recognition was no longer supported, which caused the recognition of a valuation allowance against these assets
during the second quarter of the current fiscal year; higher interest expense driven by an increased weighted-
average interest rate; and the effects of lower unrealized currency gains caused by exchange rate volatility. Partially
offsetting these items was the increase to operating income as described above, as well as a $6.8 million gain on
the repurchase of a portion of our senior unsecured notes during the fourth quarter of the current fiscal year. Refer
to Note 10 of our accompanying consolidated financial statements for additional details.
During the year ended June 30, 2023, cash from operations decreased $89.2 million year over year due
primarily to $113.3 million of lower working capital inflows, which was largely influenced by the timing impacts of
payables. In addition, the decrease was also driven by higher restructuring payments of $36.9 million, due to actions
taken to reduce costs over the past year, as well as higher net cash interest payments of $7.6 million.
28
Adjusted free cash flow decreased year over year by $81.5 million for the year ended June 30, 2023, due to
the operating cash flow decrease described above, partially offset by lower capitalized software and capitalized
expenditures.
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 years ended June 30, 2023, 2022, and
2021 are shown in the following table:
In thousands
Year Ended June 30,
Currency
Impact:
Constant-
Currency
Impact of
Acquisitions/
Divestitures:
2023
2022
%
Change
(Favorable)/
Unfavorable
Revenue
Growth (1)
(Favorable)/
Unfavorable
Vista . . . . . . . . . . . . . . . . . . . . $ 1,613,887 $ 1,514,909
7%
PrintBrothers . . . . . . . . . . . . .
The Print Group . . . . . . . . . .
National Pen . . . . . . . . . . . . .
578,431
346,949
366,294
526,952
10%
329,590
341,832
All Other Businesses . . . . . .
Inter-segment eliminations
205,862
(31,590)
Total revenue . . . . . . . . . . . . . $ 3,079,627 $ 2,887,555
213,455
(39,389)
5%
7%
4%
7%
2%
8%
8%
5%
—%
9%
18%
13%
12%
4%
—%
(1)%
—%
—%
—%
4%
11%
—%
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 . . . . . . . . . . . . .
The Print Group . . . . . . . . . .
National Pen . . . . . . . . . . . . .
526,952
329,590
341,832
421,766
275,534
313,528
All Other Businesses . . . . . .
Inter-segment eliminations
192,038
(55,160)
Total revenue . . . . . . . . . . . . . $ 2,887,555 $ 2,575,961
205,862
(31,590)
6%
25%
20%
9%
7%
1%
8%
7%
2%
—%
7%
33%
27%
11%
7%
(2)%
(1)%
—%
—%
(4)%
12%
3%
15%
(2)%
Constant-
Currency
Revenue
Growth
Excluding
Acquisitions/
Divestitures (2)
9%
17%
13%
12%
4%
11%
Constant-
Currency
Revenue
Growth
Excluding
Acquisitions/
Divestitures (2)
5%
32%
27%
11%
3%
13%
_________________
(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.
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.
29
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,
2023
2022
2021
1,640,625
$
1,492,726
$
1,299,889
53.3 %
51.7 %
50.5 %
For the year ended June 30, 2023, cost of revenue increased by $147.9 million as compared to the prior
year, primarily due to additional variable cost increases driven by the constant-currency revenue growth described
above, as well as continued effects of 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.
Although input costs were higher year over year, we started to see some easing across many product substrates
during the second half of the current fiscal year, and we began to pass the anniversary of input cost increases, so
the year-over-year impact lessened.
Compensation costs were also higher due to the combination of a more competitive labor market and the
inflationary environment in many jurisdictions where we operate. The compensation cost increases were partially
offset by savings for a portion of the year that resulted from the March 2023 cost reduction actions.
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of Goodwill (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
_____________________
Year Ended June 30,
2023
302,257
$
2022
292,845
9.8 %
10.1 %
773,970
$
789,241
25.1 %
27.3 %
209,246
$
197,345
6.8 %
6.8 %
46,854
$
54,497
1.5 %
1.9 %
43,757
$
13,603
$
$
$
$
$
1.4 %
5,609
$
0.2 %
0.5 %
—
$
— %
2021
253,060
9.8 %
648,391
25.2 %
195,652
7.6 %
53,818
2.1 %
1,641
0.1 %
—
— %
(1) Refer to Note 8 in our accompanying consolidated financial statements for additional details relating to the amortization of acquired intangible
assets.
(2) During the fourth quarter of fiscal 2023, we recognized a goodwill impairment charge of $5.6 million, which related to one of our small
businesses that is a part of our All Other Businesses reportable segment. Refer to Note 8 in the accompanying consolidated financial
statements for additional details.
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.
30
Technology and development expenses increased by $9.4 million for the year ended June 30, 2023 as
compared to the prior year. This increase is primarily driven by higher volume-related third-party technology costs
due in part to increased customer demand. In addition, amortization expense from capitalized software increased
$3.6 million, driven by the higher capitalized asset base, as well as other operating cost increases due to higher
travel and training costs. These increases were partially offset by lower compensation costs year-over-year of
$0.8 million, due to cost savings resulting from recent restructuring actions that reduced headcount, which more
than offset increases from our inflation-adjusted annual merit cycle and market adjustments. We also benefited from
lower building costs, driven by actions taken over the past year to further optimize our real estate footprint for many
of our team members operating under a remote-first model.
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, 2023, marketing and selling expenses decreased by $15.3 million as
compared to the prior year. The decreased expense was due to lower compensation costs of $13.4 million due in
part to recent cost reduction actions. Other cost decreases include lower third-party consulting spend, mainly in our
Vista business, and less building costs driven by actions taken over the past year to further optimize our real estate
footprint for many of our team members operating under a remote-first model. These cost decreases were partially
offset by higher advertising spend of $9.3 million across Cimpress, including increases in mid- and upper-funnel
spend, partially offset by lower performance advertising in Vista.
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, 2023, general and administrative expenses increased by $11.9 million as
compared to the prior year. Compensation costs increased year over year from higher headcount and the impacts of
our inflation-adjusted annual merit cycle, partially offset by savings from recent cost reduction actions. Other cost
increases included higher travel and training costs and consulting spend. We also recognized an additional
$2.2 million of expense related to the termination of one of our leased office locations as we continue to optimize
our office footprint with many of our team members operating under a remote-first model. This incremental expense
was partially offset by lower building costs due to the termination. The increases were partially offset by lower share-
based compensation expense due to forfeitures from our recent restructuring actions, as well as favorability due to
different timing of expense from our granting of restricted share units, or RSUs, and share options for most
employees during the current year, as compared to performance share units, or PSUs, in prior years.
Restructuring expense
Restructuring costs include employee termination benefits, acceleration of share-based compensation,
write-off of assets, costs to exit loss-making operations, and other related costs including third-party professional
and outplacement services. All restructuring costs are excluded from segment and adjusted EBITDA.
For the year ended June 30, 2023, restructuring expenses increased by $30.2 million as compared to the
prior year. This increase is largely driven by $30.2 million of costs related to the previously described action taken in
our Vista business and central teams during March 2023 that were intended to reduce costs and support expanded
profitability, reduced leverage, and increased speed, focus, and accountability. The remaining increase relates to
other actions announced in the fourth quarter of fiscal year 2022 to prioritize our investments and exit the Japanese
and Chinese markets. Refer to Note 18 in the accompanying consolidated financial statements for additional details.
Other Consolidated Results
Other income, net
Other income, net generally consists of gains and losses from currency exchange rate fluctuations on
31
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,
2023
2022
2021
Gains (losses) on derivatives not designated as hedging instruments . $
Currency-related gains, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (losses) gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,311 $
16,350
(1,163)
18,498 $
58,148 $
244
3,071
61,463 $
(20,728)
1,005
370
(19,353)
The decrease 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 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 net 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, accretion adjustments related to our
mandatorily redeemable noncontrolling interests, and realized gains (losses) on effective interest rate swap
contracts and certain cross-currency swap contracts.
Interest expense, net increased by $13.4 million during the year ended June 30, 2023 as compared to the
prior year, primarily due to a higher weighted-average interest rate (net of interest rate swaps) and partially offset by
an increase in interest income earned on our cash and marketable securities of $7.7 million. In addition, we
recognized expense related to accretion adjustments of $2.3 million during the year ended June 30, 2023 for our
mandatorily redeemable noncontrolling interests, which did not occur in the prior year.
Income tax expense
In thousands
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended June 30,
2023
2022
2021
155,493
$
59,901
$
18,903
(514.5) %
642.0 %
(29.7) %
Income tax expense increased for the year ended June 30, 2023 versus the prior comparable period
primarily due to recording a full valuation allowance during the year ended June 30, 2023 of $116.7 million on Swiss
deferred tax assets related to Swiss Tax Reform benefits recognized in fiscal year 2020 and tax loss carryforwards,
partially offset by a partial valuation allowance on Swiss deferred tax assets of $29.6 million recorded during the
year ended June 30, 2022. Management concluded in the second quarter of this fiscal year that based on current
period results at that time, that objective and verifiable negative evidence of recent losses in Switzerland
outweighed more subjective positive evidence of anticipated future income.
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
32
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. The effects of currency exchange rate fluctuations
impact segment EBITDA and we do not allocate to segment EBITDA any gains or losses that are realized by our
currency hedging program.
Vista
In thousands
Year Ended June 30,
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
Reported Revenue . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,613,887
Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . .
224,081
$ 1,514,909
$ 1,428,255
195,321
318,684
7%
15%
6%
(39)%
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14 %
13 %
22 %
Segment Revenue
Vista's reported revenue growth for the year ended June 30, 2023 was negatively affected by a currency
impact of 2%, and organic constant-currency revenue growth was 9%. Constant-currency revenue growth was
driven by new customer count and new customer bookings growth across all major markets, as well as increased
repeat customer bookings and higher average order values. From a product perspective, the strongest growth was
in the promotional products, apparel, and gifts (PPAG) category, as well as business cards, marketing materials,
packaging, and signage. Revenue from consumer oriented products that include holiday cards, invitations, and
announcements declined, particularly in the U.S. market, which had a more pronounced impact during our
seasonally significant second quarter. For the year ended June 30, 2023, revenue growth described above was
partially offset by a decline in face mask sales of $10.3 million as well as lower revenue year over year of
$7.2 million due to our exit from the Japanese market.
Segment Profitability
For the year ended June 30, 2023, segment EBITDA increased by $28.8 million, due in part to gross profit
growth as a result of the revenue growth described above. Cost inflation had a negative impact on gross profit year
over year, but the impacts were more pronounced during the first half of fiscal year 2023, as input costs have
started to stabilize and further price increases have been implemented throughout the current fiscal year. Product
mix weighed on Vista's gross margins during the current fiscal year, since the fastest growth was in product
categories like PPAG that have lower gross margins despite higher average order values. Vista's advertising
expense decreased by $1.1 million year over year, driven by reductions to performance advertising spend during
the second half of the fiscal year, which were offset in part by higher mid- and upper funnel advertising spend,
mainly during the first half of fiscal year 2023. Operating expenses also decreased $13.8 million, largely due to a
partial year of cost savings of approximately $20.0 million that resulted from cost reduction actions implemented in
March 2023. Changes in currency exchange rates had a negative impact year over year.
33
PrintBrothers
In thousands
Year Ended June 30,
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
Reported Revenue . . . . . . . . . . . . . . . . . . . . . . . . . $
Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . .
578,431
$
526,952
$
421,766
70,866
66,774
43,144
10%
6%
25%
55%
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12 %
13 %
10 %
Segment Revenue
PrintBrothers' reported revenue growth for the year ended June 30, 2023 was negatively affected by
currency impacts of 8%. When excluding the benefit from a small recent acquisition, organic constant-currency
revenue growth was 17%. This strong performance was driven by growth in order volumes and price increases
implemented to address inflationary cost increases.
Segment Profitability
Despite a challenging supply chain and inflationary environment, PrintBrothers' segment EBITDA for the
year ended June 30, 2023 grew year over year, driven by the constant-currency revenue growth described above,
as well as profit contribution from a business acquired in the last twelve months. Currency exchange fluctuations
negatively impacted segment EBITDA year over year by $3.8 million. We continue to focus on key areas within
these businesses to exploit scale advantages and improve their cost competitiveness. These businesses also
continue to adopt technologies that are part of our mass customization platform, which we believe will further
improve customer value and the efficiency of each business over the long term.
The Print Group
In thousands
Year Ended June 30,
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
Reported Revenue . . . . . . . . . . . . . . . . . . . . . . . . . $
Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . .
346,949
$
329,590
$
275,534
60,089
58,664
43,126
5%
2%
20%
36%
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17 %
18 %
16 %
Segment Revenue
The Print Group's reported revenue for the year ended June 30, 2023 was negatively affected by a currency
impact of 8%, resulting in an increase to revenue on a constant-currency basis of 13%. Constant-currency revenue
growth was largely driven by price increases that have been implemented over the past year to address inflationary
cost increases, as well as volume growth and increased order fulfillment for other Cimpress businesses.
Segment Profitability
The increase in The Print Group's segment EBITDA during the year ended June 30, 2023 as compared to
the prior year was largely due to the revenue growth described above, despite higher input costs that are impacted
by supply chain disruptions and higher shipping and energy costs, which had a larger impact during the first half of
fiscal year 2023. Currency exchange fluctuations negatively impacted segment EBITDA year over year by
$3.9 million.
National Pen
In thousands
Year Ended June 30,
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
Reported Revenue . . . . . . . . . . . . . . . . . . . . . . . . . $
Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . .
366,294
$
341,832
$
313,528
23,714
26,845
11,644
7%
(12)%
9%
131%
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6 %
8 %
4 %
34
Segment Revenue
For the year ended June 30, 2023, National Pen's revenue growth was negatively affected by currency
impacts of 5%, resulting in constant-currency revenue growth of 12%. Constant-currency revenue growth was
driven by price increases that have been implemented over the past year to address inflationary cost increases, as
well as volume growth in new product categories that include bags and drinkware. Year-over-year revenue growth
was negatively impacted by our exit from the Japanese market by approximately $11.7 million as well as the decline
in face mask sales of approximately $9.2 million.
Segment Profitability
The decrease in National Pen's segment EBITDA for the year ended June 30, 2023 was driven by currency
exchange fluctuations that negatively impacted segment EBITDA year over year by $8.1 million. Excluding the effect
of currency, segment EBITDA grew, as a result of contribution profit growth that was due to the revenue growth
described above. During the current fiscal year, duplicative costs from the migration of European manufacturing
from Ireland to the Czech Republic lessened contribution profit growth versus the prior year. Additionally, operating
expenses increased year over year due to higher tech spend and customer service costs driven by higher sales
volumes, which partially offset the contribution profit growth described above.
All Other Businesses
In thousands
Year Ended June 30,
Reported Revenue . . . . . . . . . . . . . . . . . . . . . . . . . $
Segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . .
213,455
$
205,862
$
192,038
25,215
23,227
31,707
4%
9%
7%
(27)%
% of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12 %
11 %
17 %
2023
2022
2021
2023 vs. 2022
2022 vs. 2021
This segment includes BuildASign, which is a larger and profitable business, and Printi, an early-stage
business that we have managed at a relatively modest operating loss as previously described and planned. This
segment also included results from our YSD business in China that was divested during the third quarter of fiscal
year 2023.
Segment Revenue
All Other Businesses' constant-currency revenue growth was 4% during the year ended June 30, 2023.
BuildASign generates the majority of revenue in this segment, and grew year over year with mixed performance by
product line. Printi delivered strong revenue growth across product lines and channels supported by price increases
implemented over the past year.
Segment Profitability
The increase in segment EBITDA for the year ended June 30, 2023, as compared to the prior year, was
primarily due to the recent divestiture of our small, loss making business in China (YSD), which we completed
during the third quarter of fiscal year 2023. Segment EBITDA for our BuildASign business declined due to lower
gross margins driven by higher input costs, including increased labor and marketing costs, which had a larger
impact on BuildASign's home decor products.
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
security; administrative costs of our Cimpress India offices where numerous Cimpress businesses have dedicated
business-specific team members; and corporate functions including our tax, treasury, internal audit, legal,
sustainability, corporate communications, remote first enablement, consolidated reporting and compliance, investor
relations, and the functions of our CEO and CFO. These costs also include certain unallocated share-based
compensation costs.
Central and corporate costs decreased by $10.4 million during the year ended June 30, 2023 as compared
to the prior year, driven by favorability from unallocated share-based compensation due to changes in the mix of
35
equity instruments granted and forfeitures from recent cost reduction actions. In addition, compensation costs
decreased due to savings from recent cost reduction actions, which more than offset the effect of our inflation-
adjusted annual merit cycle and higher volume-related technology costs.
Liquidity and Capital Resources
Consolidated Statements of Cash Flows Data
In thousands
Year Ended June 30,
2023
2022
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . . . . .
130,289 $
(103,725)
(177,106)
219,536 $
(3,997)
(106,572)
The cash flows during the year ended June 30, 2023 related primarily to the following items:
Cash inflows:
2021
265,221
(354,316)
224,128
•
•
Adjustments for non-cash items of $353.9 million primarily related to adjustments for depreciation and
amortization of $162.4 million, deferred taxes of $114.9 million, share-based compensation costs of $42.1
million, and unrealized currency-related losses of $22.4 million
Proceeds from the maturity of held-to-maturity securities of $8.1 million, net of purchases
Cash outflows:
•
•
•
•
•
•
•
•
•
•
•
Net loss of $185.7 million
Exercise of PrintBrothers and BuildASign minority equity interest holders' put options for $95.6 million; refer
to Note 14 in the accompanying consolidated financial statements for additional details
Internal and external costs of $57.8 million for software and website development that we have capitalized
Capital expenditures of $53.8 million, of which the majority related to the purchase of manufacturing and
automation equipment for our production facilities
Repurchases of a portion of our 7.0% Senior Notes due 2026 (the "2026 Notes") of $45.0 million. Refer to
Note 10 in the accompanying consolidated financial statements for additional details.
Total outflow from net working capital of $37.9 million, primarily due to timing impacts from unfavorable
changes to accounts payable and accrued expenses.
Repayments of debt, net of proceeds from borrowings, of $13.0 million
Payments for finance lease arrangements of $8.3 million
$6.9 million for the payment of purchase consideration included in the Depositphotos acquisition's fair value
Payment of withholding taxes in connection with share awards of $4.4 million
$3.7 million of distributions to noncontrolling interest holders
Additional Liquidity and Capital Resources Information. At June 30, 2023, we had $130.3 million of cash
and cash equivalents, $43.0 million of marketable securities, and $1,654.0 million of debt, excluding debt issuance
costs and debt premiums and discounts. During the year ended June 30, 2023, 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.
36
In light of our recently implemented cost savings measures and our expectation of continued profitability
expansion and cash flow generation, we expect our liquidity to increase in fiscal year 2024. We have historically
used excess cash and cash equivalents for organic investments, share repurchases, acquisitions and equity
investments, and debt reduction. During the fourth quarter of fiscal year 2023, we allocated $45.0 million of capital
toward the repurchase of a portion of our 2026 Notes. We expect to continue reducing our net leverage through
fiscal year 2024. Beyond fiscal year 2024, we expect to have the flexibility to opportunistically deploy
capital that enhances our intrinsic value per share even while maintaining leverage similar to or below our pre-
pandemic levels.
Indefinitely Reinvested Earnings. As of June 30, 2023, 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 $56.3 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, 2023 are as follows:
In thousands
Payments Due by Period
Total
Less
than 1
year
83,137 $
22,907 $
Operating leases, net of subleases (1) . . . . . . . $
Purchase commitments . . . . . . . . . . . . . . . . . . . .
2026 Notes and interest payments . . . . . . . . . . .
Senior secured credit facility and interest
payments (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
222,860
663,443
1,493,444
Other debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,076
140,527
38,381
95,483
2,853
Finance leases, net of subleases (1) . . . . . . . . .
Total (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,508,339 $
38,379
9,727
309,878 $
___________________
1-3
years
3-5
years
30,313 $
56,375
625,062
12,927 $
14,958
—
188,515
1,209,446
3,783
9,606
440
5,736
913,654 $ 1,243,507 $
More
than 5
years
16,990
11,000
—
—
—
13,310
41,300
(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 $10.1 million as of June 30, 2023 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 manufacturing facilities and 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, with $1.5 million in the aggregate outstanding as of June 30, 2023.
Purchase Commitments. At June 30, 2023, we had unrecorded commitments under contract of $222.9
million. Purchase commitments consisted of third-party fulfillment and digital services of $100.3 million; third-party
cloud services of $74.9 million; software of $13.7 million; advertising of $10.1 million; commitments for professional
and consulting fees of $6.2 million; production and computer equipment purchases of $3.9 million, and other
commitments of $13.8 million.
Senior Secured Credit Facility and Interest Payments. As of June 30, 2023, we have borrowings under our
amended and restated senior secured credit agreement ("Restated Credit Agreement") of $1,098.6 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 senior secured revolving credit facility with a maturity date of May 17, 2026 (the “Revolving Credit
Facility") under our Restated Credit Agreement has $244.2 million unused as of June 30, 2023. There are no drawn
amounts on the Revolving Credit Facility, but our outstanding letters of credit reduce our unused balance. Our
37
unused balance can be drawn at any time so long as we are in compliance with our debt covenants and 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 (as defined in the Restated Credit Agreement)
calculated as of the last day of such quarter shall not exceed 3.25 to 1.00. Any amounts drawn under the Revolving
Credit Facility will be due on May 17, 2026. Interest payable included in the above table is based on the interest rate
as of June 30, 2023 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. The LIBOR
sunset occurred on June 30, 2023, and, under the terms of our Restated Credit Agreement, our benchmark rate
transitioned to Term SOFR in July 2023.
2026 Notes and Interest Payments. Our $548.3 million 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.
Debt Covenants. The Restated Credit Agreement and the indenture that governs our 2026 Notes contain
covenants that restrict or limit certain activities and transactions by Cimpress and our subsidiaries. As of June 30,
2023, 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, 2023, we had $7.1 million
outstanding for those obligations that have repayments due on various dates through September 2027.
Finance Leases. We lease certain facilities, 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, 2023 is
$30.6 million, net of accumulated depreciation of $36.5 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, 2023 amounts
to $39.8 million.
Other Obligations. During fiscal year 2023, we made a $6.9 million deferred payment for our Depositphotos
acquisition, and there were no outstanding acquisition-related deferred liabilities as of June 30, 2023.
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 not already included in operating income
plus earn-out related charges plus certain impairments plus restructuring related charges plus realized gains or
losses on currency derivatives less the gain or loss on purchase or sale of subsidiaries as well as the disposal of
assets.
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, for acquisitions, 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 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,
38
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, 2023,
2022, and 2021:
In thousands
GAAP operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Exclude expense (benefit) impact of:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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,
2023
2022
2021
57,309 $
47,298 $
123,510
162,428
—
39,682
6,932
43,757
175,681
—
49,766
(9,709)
13,603
173,212
122
37,034
20,453
1,641
29,724
339,832 $
4,424
281,063 $
(6,854)
349,118
(1) These realized gains (losses) include only the impacts of certain currency derivative contracts that are intended to hedge our adjusted
EBITDA 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, 2023, 2022, and 2021:
In thousands
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Purchases of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . .
Capitalization of software and website development costs . . . . . . . . . . . .
Adjusted free cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Critical Accounting Policies and Estimates
Year Ended June 30,
2023
2022
2021
130,289 $
(53,772)
(57,787)
18,730 $
219,536 $
(54,040)
(65,297)
100,199 $
265,221
(38,524)
(60,937)
165,760
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.
39
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 the majority of our deferred revenue balance as revenue within three months subsequent to
June 30, 2023.
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.
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.
40
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.
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:
41
• 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. For the year ended June 30, 2023, we recognized a goodwill impairment charge of $5,609. The charge is a
partial impairment of the goodwill for one of our small reporting units within our All Other Businesses reportable
segment. There were no impairments identified for any other reporting units.
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, 2023, 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."
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, 2023, 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, 2023, we had $1,098.6 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
42
of our outstanding or forecasted long-term debt with varying maturities. As of June 30, 2023, a hypothetical 100
basis point increase in rates, inclusive of the impact of our outstanding interest rate swaps that are accruing interest
as of June 30, 2023, would result in a $8.7 million impact to interest expense over the next 12 months. This does
not include any yield from cash and marketable securities.
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
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 (loss) income before
income 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 $8.4 million on our (loss) income before
income taxes for the year ended June 30, 2023.
43
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Shareholders’ Deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45
47
48
49
50
53
55
44
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, 2023 and 2022, and the related consolidated statements of operations, of
comprehensive loss, of shareholders' deficit and of cash flows for each of the three years in the period ended June
30, 2023, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash
flows for each of the three years in the period ended June 30, 2023 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, 2023, 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
45
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 Assessment of the Exaprint Reporting Unit
As described in Note 8 to the consolidated financial statements, the Company’s goodwill balance was $782
million as of June 30, 2023, of which a portion relates to the Exaprint reporting unit ("the reporting unit").
Management performed a quantitative impairment assessment of the reporting unit as of the annual goodwill
impairment test date of May 31. 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 the reporting unit. This approach calculates fair value by
estimating the after-tax cash flows attributable to the reporting unit and then discounting the after-tax cash flows to
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 assessment of the Exaprint reporting unit is a critical audit matter are (i) the significant
judgment by management when developing the fair value estimate of the reporting unit; (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 rate; 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 assessment, including controls over the
valuation of the reporting unit. These procedures also included, among others (i) testing management’s process for
developing the fair value estimate of the reporting unit; (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 rate. 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 unit, 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 4, 2023
We have served as the Company’s auditor since 2014.
46
CIMPRESS PLC
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
June 30,
2023
June 30,
2022
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, net of allowances of $6,630 and $6,140, 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;
44,315,855 and 44,083,569 shares issued, respectively; 26,344,608 and
26,112,322 shares outstanding, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury shares, at cost, 17,971,247 shares for both periods presented . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total shareholders’ deficit attributable to Cimpress plc
Noncontrolling interests (Note 14)
Total shareholders' deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities, noncontrolling interests and shareholders’ deficit . . . . . . . . . . . . . . . . . . . . . . . . . . $
130,313 $
38,540
67,353
107,835
96,986
441,027
287,574
76,776
95,315
12,740
781,541
109,196
4,497
46,193
1,854,859 $
285,784 $
257,109
44,698
10,713
22,559
24,469
645,332
47,351
1,627,243
56,668
90,058
2,466,652
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
10,893
131,483
—
615
(1,363,550)
539,454
235,396
(35,060)
(623,145)
459
(622,686)
1,854,859 $
—
615
(1,363,550)
501,003
414,138
(47,128)
(494,922)
—
(494,922)
2,167,672
See accompanying notes.
47
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain (loss) on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . .
(Loss) income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Net income attributable to noncontrolling interests . . . . . . . . . . . . . . .
Net loss attributable to Cimpress plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Basic and diluted net loss per share attributable to Cimpress plc . . . . . . . . $
Weighted average shares outstanding — basic and diluted . . . . . . . . . . . . .
____________________________________________
(1) Share-based compensation expense is allocated as follows:
Year Ended June 30,
2023
3,079,627 $
1,640,625
302,257
773,970
209,246
46,854
43,757
5,609
57,309
18,498
(112,793)
6,764
(30,222)
155,493
(185,715)
(263)
(185,978) $
(7.08) $
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) $
26,252,860
26,094,842
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)
25,996,572
Year Ended June 30,
2023
2022
2021
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Technology and development expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketing and selling expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
474 $
538 $
13,002
5,693
20,513
2,440
13,582
11,382
24,264
—
387
9,063
6,947
20,637
—
See accompanying notes.
48
CIMPRESS PLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
Year Ended June 30,
2023
2022
2021
(185,715) $
(50,570) $
(82,457)
498
9,991
(9,990)
12,915
2,813
10,336
(2,873)
(270)
(178,369)
26,197
1,649
(29,901)
(4,089)
(336)
(63,631)
(4,404)
(68,035)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other comprehensive loss, net of tax:
Foreign currency translation gains (losses), net of hedges . . . . . . . . . . .
Net unrealized gains on derivative instruments designated and
qualifying as cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from accumulated other comprehensive loss to
net loss for derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Loss) gain on pension benefit obligation, net . . . . . . . . . . . . . . . . . . . . . .
Comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add: Comprehensive loss (income) attributable to noncontrolling
interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total comprehensive loss attributable to Cimpress plc . . . . . . . . . . . . . . . . . $
4,459
(173,910) $
(76)
(29,977) $
See accompanying notes.
49
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 . . . . . . . .
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
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
—
—
(85,229)
—
—
—
—
—
(5,757)
37,226
(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.
50
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 . . . . . . . .
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
(18,045) $ (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.
51
Balance at June
30, 2022 . . . . . . . .
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, 2023 . . . . . . . .
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
44,084 $ 615
— $ —
(17,971) $ (1,363,550) $ 501,003 $ 414,138 $
(47,128) $
(494,922)
7
—
—
—
—
—
275
—
225
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(4,777)
—
42,953
—
—
—
—
(185,978)
—
(185,978)
—
—
—
275
(4,777)
42,953
—
—
—
—
—
—
—
7,236
—
7,236
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
7,118
7,118
5,220
5,220
—
—
—
—
—
—
—
—
(270)
(270)
44,316 $ 615
— $ —
(17,971) $ (1,363,550) $ 539,454 $ 235,396 $
(35,060) $
(623,145)
See accompanying notes.
52
CIMPRESS PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended June 30,
2023
2022
2021
Operating activities
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (185,715) $
Adjustments to reconcile net loss to net cash provided by operating activities
(50,570) $
(82,457)
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Gain) loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized loss (gain) on derivatives not designated as hedging instruments
included in net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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:
162,428
42,122
5,609
—
114,912
(6,764)
175,681
49,766
—
—
22,879
—
173,212
37,034
—
19,882
(10,284)
48,343
34,393
(40,408)
17,323
(11,988)
13,235
537
(13,704)
240
7,041
—
(54,040)
109,977
33,575
219,536
(18,119)
(44,089)
(5,989)
(75,258)
(65,297)
37,771
—
151,200
(11,474)
16,382
(2,606)
29,367
23,218
265,221
(4,243)
11,352
1,768
(28,872)
(17,948)
130,289
(38,524)
—
(53,410)
(60,937)
5,696
(203,581)
—
(53,772)
(4,130)
(498)
(57,787)
4,659
(84,030)
92,110
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from maturity of held-to-maturity investments . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from (payments for) the settlement of derivatives designated as hedging
instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing activities
Proceeds from borrowings of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
665,682
Proceeds from Term Loan B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,149,751
Payments of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(14,510) (1,242,606)
Payments for early redemption of 7% Senior Notes due 2026 . . . . . . . . . . . . . . . . . . . . .
—
Payments for early redemption of 12% Senior Secured Notes due 2025 . . . . . . . . . . . .
(309,000)
Payments of debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11,963)
Payments of purchase consideration included in acquisition-date fair value . . . . . . . . .
(1,205)
Payments of withholding taxes in connection with equity awards . . . . . . . . . . . . . . . . . .
(5,757)
Payments of finance lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8,000)
Purchase of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,063)
Proceeds (payments) from issuance of ordinary shares . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,280)
Distributions to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,747)
Other financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(684)
224,128
Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,969
Net (decrease) increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . .
138,002
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45,021
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 130,313 $ 277,053 $ 183,023
—
—
(1,444)
(43,647)
(3,219)
(37,512)
(2,165)
—
(3,963)
(112)
(106,572)
(14,937)
94,030
183,023
—
(51)
(7,100)
(4,448)
(8,290)
(95,567)
327
(3,652)
(285)
(177,106)
3,802
(146,740)
277,053
—
(277)
(103,725)
(3,291)
(269)
(354,316)
(61,310)
(44,994)
(617)
(3,997)
48,264
—
—
—
2,244
See accompanying notes.
53
CIMPRESS PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(in thousands)
Year Ended June 30,
2023
2022
2021
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 113,952 $
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31,184
98,099 $ 116,977
27,870
32,987
Cash received during the period for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,451
3,230
1,940
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,303
9,403
185
—
7,033
12,810
124
8,425
6,996
4,462
2,830
45,025
See accompanying notes.
54
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 and services 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, design and digital marketing services, 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.
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.
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 $558
and $537 as of June 30, 2023 and 2022, 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 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,
U.S. government agency securities, bank time deposits, commercial paper, corporate notes and bonds, and
medium term notes. We invest in securities with a remaining 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.
55
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, 2023,
2022, and 2021.
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, 2023 and 2022.
Amortized cost
June 30, 2023
Unrealized
losses
Fair value
Due within one year or less:
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. government securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total due within one year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due between one and two years:
Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. government securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total due between one and two years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
15,982 $
16,298
6,260
38,540
1,498
2,999
4,497
43,037 $
(10) $
(190)
(69)
(269)
(35)
(66)
(101)
(370) $
15,972
16,108
6,191
38,271
1,463
2,933
4,396
42,667
Amortized cost
June 30, 2022
Unrealized
losses
Fair value
Due within one year or less:
Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Total held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
49,952 $
49,952 $
(546) $
(546) $
49,406
49,406
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
56
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.
Amortization of previously capitalized amounts in the years ended June 30 2023, 2022, and 2021 was
$57,086, $54,646, and $47,560, respectively, resulting in accumulated amortization of $279,490, $273,629, and
$231,482 at June 30 2023, 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 is 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.
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.
57
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 year ended June 30, 2023, we recognized a goodwill impairment charge of $5,609. The charge is a
partial impairment of the goodwill for one of our small reporting units within our All Other Businesses reportable
segment. There were no impairments identified for any other reporting units. We recognized no goodwill impairment
charges during the years ended June 30, 2022 and 2021. Refer to Note 8 for additional details regarding the annual
goodwill impairment test.
Mandatorily Redeemable Noncontrolling Interests
Noncontrolling interests held by third parties in consolidated subsidiaries are considered mandatorily
redeemable when they are subject to an unconditional obligation to be redeemed by both parties. The redeemable
noncontrolling interest must be required to be repurchased on a specified date or on the occurrence of a specified
event that is certain to occur and is to be redeemed via the transfer of assets. Mandatorily redeemable
noncontrolling interests are presented as liability-based financial instruments and are re-measured on a recurring
basis to the expected redemption value.
During the second quarter of fiscal 2023, the exercise of put options by the minority shareholders of three
PrintBrothers businesses to redeem a portion of their equity interests triggered a mandatory redemption feature for
the remaining minority interests after exercise. As such, we reclassified the remaining minority equity interests from
redeemable noncontrolling interest to mandatorily redeemable noncontrolling interest, which is presented as part of
other liabilities on the consolidated balance sheets. Refer to Note 14 for additional details.
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
lender 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
58
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. The portion of gain or loss on the derivative instrument previously recorded in accumulated
other comprehensive loss remains in accumulated other comprehensive loss 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
operation, the effective and ineffective portion of gains and losses on the hedging instruments is recognized in
accumulated other comprehensive loss 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 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
Comprehensive loss 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 is composed of net
loss, unrealized gains and losses on derivatives, unrealized gains and losses on pension benefit obligation, and
cumulative foreign currency translation adjustments, which are included in the accompanying consolidated
statements of comprehensive loss.
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
determined 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.
59
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.
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 the majority of our deferred revenue balance as revenue within three months subsequent to
June 30, 2023.
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
60
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 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, 2023, 2022, and 2021 was $417,886, $408,566, and $333,665,
respectively, which consisted of external costs related to customer acquisition and retention marketing campaigns.
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, 2023, 2022, and 2021 was $58,819,
$56,996, and $49,254, 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 may 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 loss are released on an item-by-item basis based on when the applicable derivative is recognized in
earnings.
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.
61
Other Income (Expense), Net
The following table summarizes the components of other income (expense), net:
Year Ended June 30,
2023
2022
2021
Gains (losses) on derivatives not designated as hedging instruments (1) . $
Currency-related gains, net (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (losses) gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,311 $
16,350
(1,163)
18,498 $
58,148 $
244
3,071
61,463 $
(20,728)
1,005
370
(19,353)
_____________________
(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 $39,133 and $9,955, respectively, for the years ended June 30,
2023 and 2022, 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 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.
Net Loss Per Share Attributable to Cimpress plc
Basic net loss per share attributable to Cimpress plc is computed by dividing net loss attributable to
Cimpress plc by the weighted-average number of ordinary shares outstanding for the respective period. Diluted net
loss 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 and diluted . . . . . . . . . . . . . . .
Weighted average anti-dilutive shares excluded from diluted net loss per
share attributable to Cimpress plc (1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
___________________
Year Ended June 30,
2023
2022
2021
26,252,860
26,094,842
25,996,572
2,834,351
762,086
494,329
(1) In the periods in which a net loss is recognized, the impact of share options, RSUs, restricted share awards, and warrants are anti-dilutive.
For the years ended June 30, 2023, 2022, and 2021, the weighted average dilutive shares for these securities, in the aggregate, would have
been 83,275, 233,244, and 465,869, respectively, had we not recognized a net loss.
(2) On May 1, 2020, we entered into a financing arrangement with Apollo Global Management, Inc., which included 7-year warrants to purchase
1,055,377 of our ordinary shares 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 average market price was higher than the strike price for at least a portion of the year, as
such the weighted average dilutive effect of the warrants that were included in the anti-dilutive share count due to the net loss in each period
was 138,088, and 368,933 shares, respectively. For the year ended June 30, 2023, the average share price was below the strike price for the
full fiscal year; therefore, the total outstanding warrants were considered anti-dilutive.
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.
62
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.
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, 2023 and 2022. We do not have any customers that accounted for greater than 10% of our revenue for
the years ended June 30, 2023, 2022, and 2021.
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.
63
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.
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, we have leases in which we are the lessees and we classify the leases as finance leases which
have been subleased under similar terms, resulting in the sublease 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 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 prospective treatment of modifications or exchanges of freestanding equity-classified
written call options that are not in the scope of another Topic. The standard is effective for us in fiscal year 2023.
There were no such transactions in the year of adoption; therefore, ASU 2021-04 had no effect on our consolidated
financial statements.
In August 2020, the FASB issued Accounting Standards Update No. 2020-06 "Debt—Debt with Conversion
and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in an Entity's Own Equity (Subtopic
815-40)" (ASU 2020-06), which provides authoritative guidance for the accounting treatment of contracts in an
entity's own equity when calculating earnings per share. We adopted this standard in fiscal year 2023 and it had no
impact on our consolidated financial statements as our free-standing warrants are equity classified.
The FASB issued Accounting Standards Updates related to reference rate reform that include No. 2020-04
"Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial
Reporting" (ASU 2020-04), No. 2021-01 "Reference Rate Reform (Topic 848): Scope", and No. 2022-06 "Reference
Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (ASU 2022-06). If certain criteria are met, ASU
848 provides optional expedients and exceptions for applying U.S. GAAP on contract modifications, hedge
accounting, and other transactions which reference LIBOR or another rate expected to be discontinued because of
reference rate reform. We have elected the optional expedients for certain existing and new interest rate swaps that
are designated as cash flow hedges, for which we have modified the critical terms and there is a variable rate
mismatch between the hedging instrument and hedged item. The adoption of these standards did not have a
material impact on our consolidated financial statements.
Issued Accounting Standards to be Adopted
In September 2022, the FASB issued Accounting Standards Update No. 2022-04, "Liabilities - Supplier
Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations". This guidance requires
annual and interim disclosures for entities that use supplier finance programs in connection with the purchase of
goods and services. All interim period disclosure requirements will be effective starting with the quarter ending
September 30, 2023, followed by annual requirements that include the rollforward of program activity, which will be
effective for our fiscal year ending June 30, 2025. As the standard updates disclosure information only, we do not
expect its adoption to have a material impact on our consolidated financial statements.
64
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.
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, 2023
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . $
19,218 $
— $
19,218 $
Currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency option contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,301
990
—
—
2,301
990
Total assets recorded at fair value . . . . . . . . . . . . . . . . . . . . . . $
22,509 $
— $
22,509 $
Liabilities
Cross-currency swap contracts . . . . . . . . . . . . . . . . . . . . . . . . $
(1,777) $
— $
(1,777) $
Currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency option contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,485)
(3,055)
—
—
(4,485)
(3,055)
Total liabilities recorded at fair value . . . . . . . . . . . . . . . . . . . . $
(9,317) $
— $
(9,317) $
—
—
—
—
—
—
—
—
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) $
—
—
—
—
—
—
—
—
During the years ended June 30, 2023 and 2022, there were no significant transfers in or out of Level 1,
Level 2, and Level 3 classifications.
65
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.
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, 2023, 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, 2023 and 2022, 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,
2023 and 2022, the carrying value of our debt, excluding debt issuance costs and debt premiums and discounts,
was $1,653,989 and $1,705,365, respectively, and the fair value was $1,604,190 and $1,600,627, respectively. Our
debt at June 30, 2023 includes variable-rate debt instruments indexed to LIBOR and Euribor 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, 2023 and 2022, our held-to-maturity marketable securities were held at an amortized cost of
$43,037 and $49,952, respectively, while the fair value was $42,667 and $49,406, 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 a 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. We have designated one intercompany loan as a net investment hedge, and any unrealized
currency gains and losses on the loan are recorded in accumulated other comprehensive loss. 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
66
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.
As of June 30, 2023, we estimate that $7,279 of income will be reclassified from accumulated other
comprehensive loss to interest expense, net during the twelve months ending June 30, 2024. As of June 30, 2023,
we had eleven effective outstanding interest rate swap contracts with aggregate notional amounts of $475,000,
$140,000, and $60,000 that were indexed to USD LIBOR, Term SOFR, and Daily SOFR, respectively. The transition
relief guidance from ASC 848 was applied to designate the SOFR swap contracts for hedge accounting despite the
benchmark rate mismatch. After USD LIBOR sunsets on June 30, 2023, all contracts indexed to USD LIBOR will
convert to either Term or Daily SOFR with effective dates in July 2023.
Our interest rate swap contracts have varying start and maturity dates through April 2028.
Interest rate swap contracts outstanding:
Notional Amounts
Contracts accruing interest as of June 30, 2023 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Contracts with a future start date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
245,000
430,000
675,000
________________________
(1) Based on contracts outstanding as of June 30, 2023, the notional value of our contracted interest rate swaps accruing interest will fluctuate
between $215,000 and $380,000 through April 2028 based on layered start dates and maturities.
Hedges of Currency Risk
Cross-Currency Swap Contracts
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 hedged 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,
2023, 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, 2023,
we estimate that $839 of income will be reclassified from accumulated other comprehensive loss to interest
expense, net during the twelve months ending June 30, 2024.
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.
As of June 30, 2023, we have one intercompany loan designated as a net investment hedge with a total
notional amount of $319,513 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, 2023, 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
67
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.
In most cases, we enter into these currency derivative contracts, which do not apply hedge accounting, in
order to address the risk for certain currencies where we have a net exposure to adjusted EBITDA, a non-GAAP
financial metric. Adjusted EBITDA exposures are our focus for the majority of our mark-to-market currency forward
and option contracts because a similar metric is referenced within the debt covenants of our amended and restated
senior secured credit agreement (refer to Note 10 for additional information about this agreement). Our most
significant net currency exposures by volume are the Euro and the British Pound (GBP). Our adjusted EBITDA
hedging approach results in addressing nearly all of our forecasted Euro and GBP net exposures for the upcoming
twelve months, with a declining hedged percentage out to twenty-four months. For certain other currencies with a
smaller net impact, we hedge nearly all of our forecasted net exposures for the upcoming six months, with a
declining hedge percentage out to fifteen months.
As of June 30, 2023, we had the following outstanding currency derivative contracts that were not
designated for hedge accounting and were primarily used to hedge fluctuations in the U.S. dollar value of forecasted
transactions or balances denominated in Australian Dollar, GBP, Canadian Dollar, Czech Koruna, Danish Krone,
Euro, Indian Rupee, Mexican Peso, New Zealand Dollar, Norwegian Krone, Philippine Peso, Swiss Franc and
Swedish Krona:
Notional Amount
$658,341
Effective Date
September 2021 through
June 2023
Maturity Date
Various dates through
June 2025
Number of Instruments
588
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, 2023 and June 30, 2022. Our derivative asset and liability balances fluctuate
with interest rate and currency exchange rate volatility.
68
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, 2023
Derivatives designated as
hedging instruments
Derivatives in cash flow
hedging relationships
Other
assets
Other
assets
Other
current
assets /
other
assets
Other
current
assets /
other
assets
Interest rate swaps
Cross-currency swaps
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
$
19,341 $
(123) $ 19,218
—
—
—
Other
liabilities
Other
current
liabilities
$
— $
— $
—
(1,777)
—
(1,777)
$
19,341 $
(123) $ 19,218
$
(1,777) $
— $
(1,777)
$
2,873 $
(572) $
2,301
990
—
990
Other
current
liabilities /
other
liabilities
Other
current
liabilities /
other
liabilities
$
(6,074) $
1,589 $
(4,485)
(3,055)
—
(3,055)
$
3,863 $
(572) $
3,291
$
(9,129) $
1,589 $
(7,540)
69
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
current
assets /
other
assets
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
$
14,336 $
— $ 14,336
Other
current
liabilities /
other
liabilities
$
— $
— $
—
—
—
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
current
liabilities /
other
liabilities
$
(505) $
— $
(505)
(9)
—
(9)
$
35,052 $
(3,803) $ 31,249
$
(514) $
— $
(514)
The following table presents the effect of our derivative financial instruments designated as hedging
instruments and their classification within comprehensive loss, net of tax, for the years ended June 30, 2023, 2022,
and 2021:
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,
2023
2022
2021
11,151 $
(1,160)
25,511 $
(22,698)
3,340
6,996
(8,384)
—
1,607 $
49,225
13,622
65,660 $
7,518
(19,052)
(1,198)
70
The following table presents reclassifications out of accumulated other comprehensive loss for the years
ended June 30, 2023, 2022 and 2021:
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,
2023
2022
2021
Derivatives in cash flow hedging
relationships
Interest rate swaps . . . . . . . . . . . . . . . . . . . $
Cross-currency swaps . . . . . . . . . . . . . . . .
Total before income tax . . . . . . . . . . . . . . .
Income tax . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(4,851) $
903
(3,948)
1,075
(2,873) $
9,998 $
18,286
28,284
(2,087)
26,197 $
6,967
(10,950)
Interest expense, net
Other income (expense), net
(3,983) (Loss) income before income taxes
(106)
(4,089)
Income tax expense
The following table presents the adjustment to fair value recorded within the consolidated statements of
operations for the years ended June 30, 2023, 2022, and 2021 for derivative instruments for which we did not elect
hedge accounting and de-designated derivative financial instruments that did not qualify as hedging instruments.
Amount of Gain (Loss) Recognized in Net Loss
Year Ended June 30,
2023
2022
2021
Affected line item in the
Statement of Operations
Currency contracts . . . . . . . . . . . . . . . . . . . $
3,311 $
51,784 $
(24,235) Other income (expense), net
Interest rate swaps . . . . . . . . . . . . . . . . . . .
—
6,364
3,507
Other income (expense), net
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,311 $
58,148 $
(20,728)
71
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 $4,013, $16,722, and $764 for the years ended June 30, 2023, 2022, and 2021:
(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, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other comprehensive income (loss) before reclassifications . . .
Amounts reclassified from accumulated other comprehensive
loss to net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net current period other comprehensive income (loss) . . . . . . . .
Balance as of June 30, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) before reclassifications . . .
Amounts reclassified from accumulated other comprehensive
loss to net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net current period other comprehensive income (loss) . . . . . . . .
Balance as of June 30, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) before reclassifications . . .
Amounts reclassified from accumulated other comprehensive
loss to net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net current period other comprehensive income (loss) . . . . . . . .
(30,078) $
(1,399) $
(57,199) $
(88,676)
10,336
(336)
11,283
21,283
(4,089)
6,247
(23,831)
2,813
26,197
29,010
5,179
9,991
(2,873)
7,118
—
—
(336)
11,283
(1,735)
1,649
(45,916)
(6,305)
—
1,649
(86)
(106)
(164)
(270)
—
(6,305)
(52,221)
5,220
—
5,220
(4,089)
17,194
(71,482)
(1,843)
26,197
24,354
(47,128)
15,105
(3,037)
12,068
Balance as of June 30, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
12,297 $
(356) $
(47,001) $
(35,060)
________________________
(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, 2023 and 2022, the translation adjustment is inclusive of both realized and unrealized effects of our net investment hedges.
Gains on currency forward and swap contracts, net of tax, of $15,079 have been included in accumulated other comprehensive loss as of
June 30, 2023 and 2022. Intercompany loan hedge gains of $44,229 and $56,743, net of tax, have been included in accumulated other
comprehensive loss as of June 30, 2023 and 2022, respectively.
6. Property, Plant, and Equipment, Net
Property, plant, and equipment, net consists of the following:
Land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10 years $
4,903 $
4,899
Estimated useful lives
2023
2022
June 30,
Building and building improvements . . . . . . . . . . . . . . . . . . . .
Machinery and production equipment . . . . . . . . . . . . . . . . . . .
Machinery and production equipment under finance lease .
Computer software and equipment . . . . . . . . . . . . . . . . . . . . .
10 - 30 years
175,393
4 - 10 years
389,523
4 - 10 years
3 - 5 years
67,131
95,586
36,046
52,092
14,988
180,295
366,647
57,669
105,778
35,681
52,671
13,117
Furniture, fixtures and office equipment . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shorter of lease term or expected
life of the asset
5 - 7 years
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation, inclusive of assets under
finance lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant, and equipment, net . . . . . . . . . . . . . . . . . . . .
835,662
816,757
(573,281)
(557,981)
262,381
25,193
258,776
28,050
$
287,574 $
286,826
Depreciation expense, inclusive of assets under finance leases, totaled $59,841, $67,513, and $71,057 for
the years ended June 30, 2023, 2022, and 2021, respectively.
72
7. Business Combinations
Fiscal Year 2023 Acquisitions
On December 12, 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 58% of the company's shares for total cash consideration of $498. The purchase
consideration also includes the effective settlement of the company's existing liabilities to a Cimpress business. 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 $4,724, which is not deductible for tax purposes. The net assets recognized upon
acquisition, as well as the revenue and earnings included in our consolidated financial statements for the year
ended June 30, 2023, are not material. We utilized our available cash to fund the acquisition.
Fiscal Year 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. The deferred
payments were made in two installment, including the payment of $609 during fiscal year 2022 and a final deferred
payment of $6,875 that was made during fiscal year 2023.
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.
73
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.
74
Fiscal Year 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.
75
83,652
(821)
(43,210)
766,600
4,724
Other Acquisition
On April 23, 2021 we completed an acquisition of a 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, 2023 and 2022 was as follows:
Vista
PrintBrothers
The Print Group
All Other
Businesses
Total
Balance as of June 30, 2021 . . . . . . . . . . . . . . . . . $
225,147 $
137,307 $
164,220 $
200,305 $
726,979
Acquisitions (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73,168
10,484
Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(821)
—
—
—
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
Acquisitions (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
4,724
—
—
—
—
—
Effect of currency translation adjustments (2) . . .
4,233
5,540
5,828
—
(5,609)
(5,609)
225
—
225
15,601
Balance as of June 30, 2023 . . . . . . . . . . . . . . . . . $
295,731 $
141,092 $
149,797 $
194,921 $
781,541
________________________
(1) In fiscal year 2023, we acquired a small business that is included in our PrintBrothers reportable segment, which included cash consideration
of $498 and the recognition of goodwill of $4,724. The consideration for this purchase included the effective settlement of the company's
existing liabilities to a Cimpress business.
In fiscal year 2022, we acquired Depositphotos Inc., which is included in our Vista reportable segment and 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.
(3) During the fourth quarter of fiscal year 2023, we recorded an impairment charge of $5,609, related to one of our small reporting units acquired
in fiscal year 2021 that is part of our All Other Businesses reportable segment. See below for additional details.
Annual Impairment Review
Our goodwill accounting policy establishes an annual goodwill impairment test date of May 31. We identified
ten reporting units with goodwill individually. We considered the timing of our most recent fiscal year 2022 fair value
assessments, associated headroom, actual operating results as compared to the forecasts used to assess fair
value, the current long-term forecasts for each reporting unit, and the general economic environment of each
reporting unit. After performing this qualitative assessment, we determined that there was no indication the carrying
values for seven of these reporting units exceeded their respective fair values.
For each of the three remaining reporting units, we performed a quantitative goodwill impairment test that
compared the estimated fair value to carrying value. We used the income approach, specifically the discounted
cash flow method, to derive the fair value. 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. As required, prior to performing the quantitative
goodwill impairment test for the three reporting units mentioned above, we first evaluated the recoverability of long-
lived assets and concluded that no impairment of long-lived assets existed.
76
The quantitative tests were performed for Exaprint, which is part of The Print Group reportable segment,
one small reporting unit that is part of our The Print Group reportable segment, as well as a small reporting unit that
was acquired by our BuildASign business and included in the All Other Businesses reportable segment. For the
Exaprint reporting unit and the small reporting unit that is part of The Print Group reportable segment, we concluded
that substantial headroom between the estimated fair value and carrying value existed and that no goodwill
impairment was identified. For the one remaining reporting unit, which is a small reporting unit included in our All
Other Businesses reportable segment, we concluded that an impairment existed, driven in part by recent declines in
revenue growth rates and lower near-term cash flow forecasts. We recognized an impairment charge of $5,609,
using a WACC of 17.0%, resulting in a post-impairment goodwill balance of $8,824 at June 30, 2023.
Acquired Intangible Assets
Gross
Carrying
Amount
June 30, 2023
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
June 30, 2022
Accumulated
Amortization
Net
Carrying
Amount
Trade name . . . . . . . . . . . . . . . . . . . . $
147,096 $
(77,501) $
69,595 $
144,916 $
(65,203) $
79,713
Developed technology . . . . . . . . . . .
97,316
(87,872)
9,444
96,120
(75,585)
Customer relationships . . . . . . . . . .
199,932
(183,879)
16,053
195,766
(160,247)
Customer network and other . . . . .
Print network . . . . . . . . . . . . . . . . . . .
24,368
23,909
(14,470)
(19,703)
9,898
4,206
23,946
22,982
(11,580)
(16,385)
20,535
35,519
12,366
6,597
Total intangible assets . . . . . . . . . . . $
492,621 $
(383,425) $
109,196 $
483,730 $
(329,000) $
154,730
Acquired intangible assets amortization expense for the years ended June 30, 2023, 2022, and 2021 was
$46,854, $54,497, and $53,818 respectively. Estimated intangible assets amortization expense for each of the five
succeeding fiscal years and thereafter is as follows:
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,424
19,049
12,333
10,842
8,721
25,827
$
109,196
77
9. Other Balance Sheet Components
Accrued expenses included the following:
June 30, 2023
June 30, 2022
Compensation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
74,879 $
Income and indirect taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advertising costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third party manufacturing and digital content costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shipping costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Variable compensation incentives (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53,266
16,548
17,380
11,146
9,413
7,567
6,441
2,847
2,743
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54,879
78,521
41,886
25,925
15,790
10,228
—
13,449
6,286
2,477
2,394
56,885
Total accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
257,109 $
253,841
______________________
(1) Includes cash-based employee long-term incentives, which are variable based on the performance of individual businesses and vest over
four years. As the first payout will occur during the first half of fiscal year 2024, a portion of the balance is now classified as a current liability
within accrued expenses.
Other current liabilities included the following:
Current portion of finance lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
9,938 $
Short-term derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,865
4,666
Total other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
24,469 $
6,684
4,299
17,052
28,035
______________________
(1) The decrease is due in part to the payment of an acquisition-related liability associated with our Depositphotos acquisition of $6,875 that
occurred during the third quarter of fiscal year 2023.
June 30, 2023
June 30, 2022
Other liabilities included the following:
Long-term finance lease obligations (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
29,822 $
Long-term compensation incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mandatorily redeemable noncontrolling interest (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22,286
12,018
1,737
24,195
Total other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
90,058 $
14,699
19,934
—
463
29,298
64,394
June 30, 2023
June 30, 2022
______________________
(1) The increase in long-term finance lease obligations compared to the prior year was largely due to the extension of various lease contracts
across our reportable segments as well as the inclusion of finance lease obligations from the acquisition of a small business within our
PrintBrothers reportable segment during fiscal year 2023.
(2) During the second quarter of fiscal year 2023, we reclassified the noncontrolling interest for three businesses in the PrintBrothers reportable
segment to other liabilities, due to the exercise of a put option for a portion of the minority equity interests, which triggered a mandatory
redemption feature for the remaining minority equity interest. Refer to Note 14 for additional details.
78
10. Debt
7.0% Senior Notes due 2026 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
548,300 $
600,000
Senior secured credit facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,098,613
1,097,302
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,076
8,063
Debt issuance costs and debt premiums (discounts) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(16,033)
(19,417)
Total debt outstanding, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,637,956
1,685,948
Less: short-term debt (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,713
10,386
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,627,243 $
1,675,562
June 30, 2023
June 30, 2022
_____________________
(1) During the fourth quarter of fiscal 2023, we repurchased an aggregate principal amount of $51,700 of our 7.0% Senior Notes due 2026. Refer
below for additional details.
(2) Balances as of June 30, 2023 and June 30, 2022 are inclusive of short-term debt issuance costs, debt premiums and discounts of $3,526 and
$3,498, respectively.
Our various debt arrangements described below contain customary representations, warranties, and events
of default. As of June 30, 2023, 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.
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
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 LIBOR sunset occurred on June 30, 2023, and under the terms of our Restated Credit Agreement, our
benchmark rate transitioned to Term SOFR in July 2023.
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, 2023, we have borrowings under the Restated Credit Agreement of $1,098,613 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, 2023.
As of June 30, 2023, the weighted-average interest rate on outstanding borrowings under the Restated
Credit Agreement was 7.69%, 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, 2023.
79
Senior Unsecured Notes
As of June 30, 2023, we have $548,300 in aggregate principal outstanding of our 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. During the
fourth quarter of fiscal year 2023, we repurchased an aggregate principal amount of $51,700, for a repurchase price
of $44,994, as well as the related settlement of unpaid interest. We recognized a gain on the extinguishment of debt
of $6,764, which included an immaterial write-off of unamortized debt issuance costs and debt premiums.
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, 2023 and 2022, we had $7,076 and $8,063, respectively, outstanding for those
obligations that are payable through September 2027.
11. Shareholders' Deficit
Warrants
In conjunction with our issuance of our 12% Senior Secured Notes due 2025 in fiscal year 2020, which we
subsequently redeemed in fiscal year 2021, 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 at the time of issuance.
The warrants, which currently remain outstanding, 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.
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 5,500,000 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
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.
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, 2023, 2,201,615 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.
80
Performance share units
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, 2023 is as follows:
Weighted-
Average
Grant Date Fair
Value
Aggregate
Intrinsic
Value
PSUs
Outstanding at the beginning of the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,359,242
$130.61
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
75,000
Vested and distributed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(32,498)
17.61
—
134.95
Outstanding at the end of the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,401,744
$124.46 $
83,376
The weighted average fair value of PSUs granted during the fiscal years ended June 30 2023, 2022, and
2021 was $17.61, $110.28, and $129.25, respectively. The total intrinsic value of PSUs outstanding as of June 30
2023, 2022, and 2021 was $83,376, $52,875, and $125,616, respectively. The total intrinsic value of PSUs assumes
that the performance condition is met; however, it is possible that a portion or all of these PSUs will not achieve the
associated performance condition. As of June 30, 2023, 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 3,504,360 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.
A summary of our RSU activity and related information for the fiscal year ended June 30, 2023 is as follows:
Weighted-
Average
Grant Date Fair
Value
Aggregate
Intrinsic
Value
RSUs
Unvested at the beginning of the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,038,234 $
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,120,951
Vested and distributed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(334,971)
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(353,921)
83.66
44.25
79.94
63.69
Unvested at the end of the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,470,293 $
59.27 $
87,453
The weighted average fair value of RSUs granted during the fiscal years ended June 30 2023, 2022, and
2021 was $44.25, $80.26, and $93.64, respectively. The total intrinsic value of RSUs vested during the fiscal years
ended June 30 2023, 2022, and 2021 was $13,544, $10,123, and $17,231, respectively.
Share options
We have 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.
81
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. We value share options with a market condition 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 years 2022 or 2021. Weighted-average values used for option
awards in fiscal year 2023 were as follows:
Year Ended June 30,
2023
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average fair value of options granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3.06 %
— %
4.01
61.99 %
22.83
A summary of our share option activity and related information for the year ended June 30, 2023 is as
follows:
Shares
Pursuant to
Options
Weighted-
Average
Exercise
Price
Outstanding at the beginning of the period . . . . . . . . . . . . . . . . . .
5,298 $
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
436,211
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7,073)
Forfeited/expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(46,989)
Outstanding at the end of the period . . . . . . . . . . . . . . . . . . . . . . .
387,447
Exercisable at the end of the period . . . . . . . . . . . . . . . . . . . . . . . .
98,591 $
80.01
45.94
46.20
46.20
46.37
48.02
Weighted-
Average
Remaining
Contractual
Term (years)
2.8
Aggregate
Intrinsic
Value
9.0 $
8.6 $
5,189
1,239
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, 2023. The total intrinsic value
of options exercised during the fiscal years ended June 30, 2023 and 2021 was $41 and $5,460, respectively, while
no options were exercised during the fiscal year ended June 30, 2022.
Share-based compensation
Total share-based compensation costs were $42,122, $49,766, and $37,034 for the years ended June 30
2023, 2022, and 2021, respectively, and we recognize the impact of forfeitures as they occur. Share-based
compensation costs capitalized as part of software and website development costs were $1,879, $1,221, and
$1,338 for the years ended June 30 2023, 2022, and 2021, respectively. As of June 30, 2023, there was $77,410 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 2.6 years.
82
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. As part of the cost reduction measures taken in response to the pandemic, the matching
program was temporarily suspended from March 2020 through December 31, 2020 and was reinstated on January
1, 2021.
We expensed $16,061, $16,157, and $12,228 for our government-mandated and defined contribution plans
in the years ended June 30 2023, 2022, and 2021, 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 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, 2023 and 2022, the plan had an unfunded net pension obligation of approximately
$1,134 and $1,173, respectively, and plan assets, which totaled approximately $5,497 and $4,754, respectively. For
the years ended June 30 2023, 2022, and 2021 we recognized expense totaling $282, $537, and $667,
respectively, related to our Swiss plan.
13. Income Taxes
The following is a summary of our (loss) income before income taxes by geography:
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(35,508) $
(7,299) $
2,689
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,286
16,630
(66,243)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(30,222) $
9,331 $
(63,554)
Year Ended June 30,
2023
2022
2021
The components of the provision (benefit) for income taxes are as follows:
Year Ended June 30,
2023
2022
2021
Current:
U.S. Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,634 $
526 $
U.S. State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred:
U.S. Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
769
39,792
42,195
3,522
465
109,311
113,298
568
36,932
38,026
(93)
546
28,205
28,658
(3,566)
(1,573)
12
25,429
21,875
(31)
(8,151)
(9,755)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
155,493 $
59,901 $
18,903
83
The following is a reconciliation of the standard U.S. federal statutory tax rate and our effective tax rate:
Year Ended June 30,
2023
2022
2021
21.0 %
3.7
21.0 %
(11.1)
U.S. federal statutory income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State taxes, net of federal effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax rate differential on non-U.S. earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nondeductible interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in entity status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensation related items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Irish foreign tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax on repatriated earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on the extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notional interest deduction (Italy) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Patent box (Italy) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credits and incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-U.S. tax rate changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Irish tax restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. global intangible low-taxed income (GILTI) . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. foreign-derived intangible income (FDII) . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. base erosion and anti-abuse tax (BEAT) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net tax benefit on intellectual property transfer . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax loss carryforward expirations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business and withholding taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(52.5)
(457.2)
(30.2)
4.0
(13.7)
(4.1)
21.4
(15.0)
2.8
2.6
(1.5)
24.1
(1.1)
—
—
2.7
(2.1)
1.0
(5.1)
(1.2)
Uncertain tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10.5)
Other non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax on unremitted earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes to derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6.0)
(1.6)
3.1
0.9
97.1
363.7
52.7
—
21.9
—
(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
7.1
0.1
73.5
(14.9)
21.0 %
3.1
(20.3)
(27.2)
(18.6)
—
0.2
—
8.8
(3.9)
—
1.4
—
4.2
1.2
—
(0.3)
—
—
—
(0.5)
(0.4)
(1.0)
0.5
(0.9)
0.1
2.9
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(514.5) %
642.0 %
(29.7) %
For the year ended June 30, 2023, our effective tax rate was below our U.S. federal statutory tax rate
primarily due to establishing a full valuation allowance on Swiss deferred tax assets of $116,694 related to Swiss tax
reform benefits recognized in fiscal year 2020 and Swiss tax loss carryforwards. Management concluded in the
second quarter of this fiscal year that based on current period results at that time, objective and verifiable negative
evidence of recent losses in Switzerland outweighed more subjective positive evidence of anticipated future income.
In addition, we had non-deductible interest expense and losses in certain jurisdictions for which we cannot
recognize a tax benefit. 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 11% 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, 2023, our effective tax rate was (514.5)% as compared to the prior year
effective tax rate of 642.0%. The decrease in our effective tax rate as compared to the prior year is primarily due a
pre-tax loss for the year ended June 30, 2023 as compared to pre-tax income in the year ended June 30, 2022.
During the year ended June 30, 2023 we recognized tax expense of $116,694 to establish a full valuation allowance
in Switzerland as compared to tax expense of $29,600 in the year ended June 30, 2022 to establish a partial
valuation allowance in Switzerland. Our fiscal year 2022 effective tax rate was higher than fiscal year 2021 primarily
due to establishing a partial valuation allowance in Switzerland.
84
As of June 30, 2023, we recorded a deferred tax asset of $131,472 related to Swiss tax-amortizable
goodwill, which we can benefit from during fiscal year 2025 through fiscal year 2030 under our Swiss tax ruling.
During the year ended June 30, 2023, the Swiss tax-amortizable goodwill deferred tax asset increased $7,579 due
to currency exchange rate changes.
Significant components of our deferred income tax assets and liabilities consisted of the following at June
30, 2023 and 2022:
Deferred tax assets:
June 30, 2023
June 30, 2022
Swiss tax-amortizable goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
131,472 $
123,893
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit and other carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
75,643
30,364
8,289
15,335
16,920
58,790
4,469
71,820
24,952
3,736
12,244
16,090
47,405
1,120
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
341,282
301,260
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(277,976)
(134,660)
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63,306
166,600
Deferred tax liabilities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(37,572)
(27,392)
Investment in flow-through entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Tax on unremitted earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7,221)
(32,595)
(21,049)
(7,031)
(6,692)
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(17,091)
(19,703)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8,641)
(7,584)
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(97,917)
(94,654)
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(34,611) $
71,946
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 full valuation allowance and losses in certain jurisdictions (mainly Brazil, Japan, the
Netherlands, Ireland, and the United Kingdom) for which management has determined we cannot recognize the
related deferred tax assets. Also, we generated $4,202 of Irish foreign tax credit carryforwards and increased tax
effected interest limitation carryforwards of $7,365 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. The increase in valuation
allowance was offset by the release of valuation allowances related to the exit of our YSD business of $3,224.
We have recorded a full valuation allowance against deferred tax assets of $22,583 and $131,472 related to
Swiss tax losses and the Swiss tax-amortizable goodwill, respectively. In addition, we have recorded valuation
allowances of $28,744, $5,123, and $14,768 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.
Based on the weight of available evidence at June 30, 2023, 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.
85
A reconciliation of the beginning and ending amount of the valuation allowance for the year ended June 30,
2023 is as follows:
Balance at June 30, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
134,660
Charges to earnings (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
138,143
Charges to other accounts (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,173
Balance at June 30, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
277,976
_________________
(1) Amount is primarily related to full Swiss valuation allowance, increased non-U.S. net operating losses, increased Irish foreign tax credits, and
increased interest limitation carryforwards.
(2) Amount is primarily related to increased Swiss tax-amortizable goodwill deferred tax asset and deferred tax assets on non-U.S. net operating
losses due to currency exchange rate changes offset by unrealized gains on derivative financial instruments included in accumulated other
comprehensive loss.
As of June 30, 2023, we had gross U.S. federal and apportioned state net operating losses of $2,348 and
$30,281, respectively, that expire on various dates from fiscal year 2024 through fiscal year 2043 or with unlimited
carryforward. We also had gross non-U.S. net operating loss carryforwards of $564,818, a significant amount of
which begin to expire in fiscal year 2024, with the remaining amounts expiring on various dates from fiscal year
2024 through fiscal year 2032 or having unlimited carryforward. In addition, we had $33,854 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 having unlimited carryforward. We also had $22,778, $6,130, and $1,048 of
U.S. federal, apportioned U.S. 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
$12,535 of Irish foreign tax credits with unlimited carryforward. The benefits of these carryforwards are dependent
upon the generation of taxable income in the jurisdictions in which 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, 2023, no tax
provision has been made for $56,294 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
$13,000 to $14,000 at that time. A cumulative deferred tax liability of $7,221 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.
86
A reconciliation of the gross beginning and ending amount of unrecognized tax benefits is as follows:
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance June 30, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(799)
(29)
12,996
2,167
770
(62)
—
(225)
(22)
Balance June 30, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
15,624
For the year ended June 30, 2023, the amount of unrecognized tax benefits (exclusive of interest) that, if
recognized, would impact the effective tax rate is $8,518. We recognize interest and, if applicable, penalties related
to unrecognized tax benefits in income tax expense. The interest and penalties recognized as of years ended June
30, 2023, 2022, and 2021 were $1,924, $1,383, and $1,014, respectively. It is reasonably possible that a further
change in unrecognized tax benefits in the range of $910 to $960 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 2023 remain open for examination by the United States
Internal Revenue Service ("IRS") and the years 2015 through 2023 remain open for examination in the various
states and non-U.S. 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.
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
business management team own a minority portion of the equity. The put options for several of our noncontrolling
interests were exercised during the second quarter of fiscal year 2023 as summarized below. In addition to the
noncontrolling interests described below, we also have several less significant minority interests that span multiple
businesses and reportable segments.
87
PrintBrothers
Members of the PrintBrothers management team hold minority equity interests in several businesses within
the reportable segment. During the second quarter of fiscal year 2023, put options were exercised by the minority
interest holders for a portion of their equity interests that required us to purchase 10% to 11% in three of the
respective businesses for a total of $90,841. The exercise of the put options triggered a mandatory redemption
feature for the remaining minority equity interests, which requires the purchase of the remaining 1% equity interests
on the third anniversary of the put option exercise, absent the earlier exercise of a call option on the first or second
anniversaries by Cimpress. The remaining noncontrolling interests are mandatorily redeemable, which required the
reclassification of the remaining equity interests to a liability, which has been presented in other liabilities within our
consolidated balance sheet.
The following table presents the reconciliation of changes in our noncontrolling interests:
Redeemable
Noncontrolling
Interest
Noncontrolling
Interest
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of June 30, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification to mandatorily redeemable noncontrolling interest (5) . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of June 30, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
71,120 $
4,453
61,962
3,761
(3,963)
(2,165)
(3,685)
131,483
—
(7,236)
180
(3,652)
(95,567)
(9,582)
(4,733)
10,893 $
—
—
—
—
—
—
—
—
365
—
83
—
—
—
11
459
_________________
(1) During fiscal years 2023 and 2022, we acquired the majority equity interests in two separate immaterial businesses within our PrintBrothers
reportable segment.
(2) Accretion of redeemable noncontrolling interests to redemption value recognized in retained earnings is the result of changes in the estimated
redemption amount to the extent increases do not exceed the estimated fair value.
(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) As discussed above, we purchased an additional 10% to 11% of the equity interests in three PrintBrothers businesses during the second
quarter of fiscal year 2023, as well as the 1% minority interest in our BuildASign business. In fiscal year 2022, we paid the final redemption
amount to one minority equity interest holder in our PrintBrothers businesses, which we agreed to purchase in fiscal year 2021.
(5) During the second quarter of fiscal year 2023, the minority equity interest holders of three PrintBrothers businesses exercised a put option
that triggered a mandatory redemption feature for the remaining minority equity interests. The remaining minority equity interests were
reclassified to mandatorily redeemable noncontrolling interests, as part of other liabilities within the consolidated balance sheets. Refer above
for additional information regarding the transaction and Note 9 for additional details about the reclassified liability balance.
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, 2023, 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, Depositphotos,
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.
88
•
•
•
•
PrintBrothers - Consists of three of our Upload & Print businesses, which includes druck.at, Printdeal, and
WIRmachenDRUCK that primarily serve customers in Austria, Belgium, Germany, the Netherlands, and
Switzerland.
The Print Group - Includes our Easyflyer, Exaprint, Pixartprinting, and Tradeprint businesses, which are
Upload & Print businesses that primarily serve customers in France, Italy, Spain, and the United Kingdom.
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 includes one smaller business 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.
◦ We exited our YSD business, which was included in this reportable segment, during fiscal year
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 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. These costs also include certain unallocated
share-based compensation costs.
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.
89
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,
2023
2022
2021
Revenue:
Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,613,887 $
1,514,909 $
1,428,255
PrintBrothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Print Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
National Pen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
578,431
346,949
366,294
213,455
526,952
329,590
341,832
205,862
421,766
275,534
313,528
192,038
Total segment revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,119,016
2,919,145
2,631,121
Inter-segment eliminations (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(39,389)
(31,590)
(55,160)
Total consolidated revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,079,627 $
2,887,555 $
2,575,961
_____________________
(1) 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 fiscal year ended June 30, 2021
associated with the fulfillment of masks in response to the pandemic. Demand for this product was far lower in the years ended June 30,
2023 and 2022.
Vista
PrintBrothers
The Print
Group
National Pen
All Other
Total
Year Ended June 30, 2023
Revenue by Geographic Region:
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,155,000 $
— $
— $ 216,690 $ 181,145 $ 1,552,835
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
366,244
576,719
337,012
122,007
—
1,401,982
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inter-segment . . . . . . . . . . . . . . . . . . . . . . . . . . .
91,066
1,577
—
1,712
—
9,937
7,772
19,825
25,972
124,810
6,338
39,389
Total segment revenue . . . . . . . . . . . . . . . . .
1,613,887
578,431
346,949
366,294
213,455
3,119,016
Less: inter-segment elimination . . . . . . . . . . . .
(1,577)
(1,712)
(9,937)
(19,825)
(6,338)
(39,389)
Total external revenue . . . . . . . . . . . . . . . . . . . . $ 1,612,310 $ 576,719 $ 337,012 $ 346,469 $ 207,117 $ 3,079,627
Vista (1)
PrintBrothers
The Print
Group
National Pen
All Other
Total
Year Ended June 30, 2022
Revenue by Geographic Region:
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,063,390 $
— $
— $ 193,056 $ 177,868 $ 1,402,222
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
353,275
525,224
322,315
113,820
—
1,304,175
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inter-segment . . . . . . . . . . . . . . . . . . . . . . . . . . .
94,874
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
90
Vista (1)
PrintBrothers
The Print
Group
National Pen
All Other
Total
Year Ended June 30, 2021
Revenue by Geographic Region:
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 984,910 $
— $
— $ 154,857 $ 171,398 $ 1,281,535
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
354,546
420,946
258,230
106,004
—
1,135,450
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inter-segment . . . . . . . . . . . . . . . . . . . . . . . . . . .
86,461
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
__________________
(1) During the fourth quarter of fiscal year 2023, we identified an immaterial error in our previously disclosed revenue by geographic area for our
Vista reportable segment for the fiscal years ended June 30, 2022 and 2021, which understated revenue in North America and Europe, with
an offsetting overstatement in the Other geographies. We have corrected the disclosed figures as included herein.
The following table includes segment EBITDA by reportable segment, total income from operations, and
total (loss) income before income taxes:
Year Ended June 30,
2023
2022
2021
Segment EBITDA:
Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
224,081 $
195,321 $
318,684
PrintBrothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Print Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
National Pen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Central and corporate costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain impairments and other adjustments . . . . . . . . . . . . . . . . . . .
70,866
60,089
23,714
25,215
403,965
(133,539)
(162,428)
—
(6,932)
66,774
58,664
26,845
23,227
370,831
(143,958)
(175,681)
—
9,709
Restructuring-related charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(43,757)
(13,603)
Total income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
57,309
18,498
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)
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(112,793)
(99,430)
(119,368)
Gain (loss) on early extinguishment of debt . . . . . . . . . . . . . . . . . . .
6,764
—
(Loss) income before income taxes . . . . . . . . . . . . . . . . . . . . . . $
(30,222) $
9,331 $
(48,343)
(63,554)
Year Ended June 30,
2023
2022
2021
Depreciation and amortization:
Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
58,464 $
65,489 $
PrintBrothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Print Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
National Pen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Central and corporate costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18,135
22,810
21,366
17,694
23,959
20,790
25,657
24,261
18,536
20,948
58,513
22,089
27,066
25,123
19,811
20,610
Total depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . $
162,428 $
175,681 $
173,212
91
Year Ended June 30,
2023
2022
2021
Purchases of property, plant, and equipment:
Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
17,604 $
17,198 $
PrintBrothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Print Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
National Pen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Central and corporate costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,422
19,683
6,003
4,793
1,267
3,788
19,877
4,332
7,027
1,818
Total purchases of property, plant and equipment . . . . . . . . . . $
53,772 $
54,040 $
12,332
3,609
11,847
3,603
5,466
1,667
38,524
Year Ended June 30,
2023
2022
2021
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
22,559 $
30,994 $
2,010
2,997
2,913
4,299
23,009
1,139
2,419
3,390
4,097
23,258
28,297
1,465
1,603
3,115
3,746
22,711
57,787 $
65,297 $
60,937
Enterprise Wide Disclosures:
The following table sets forth revenues by significant geographic area:
Year Ended June 30,
2023
2022 (1)
2021 (1)
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,407,691 $
1,320,347 $
1,226,606
Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
460,516
420,041
Other (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,211,420
1,147,167
353,253
996,102
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,079,627 $
2,887,555 $
2,575,961
__________________
(1) During the fourth quarter of fiscal year 2023, we identified an immaterial error in our previously disclosed revenue by geographic area for the
fiscal year ended June 30, 2022 and 2021, which understated revenue in the United States and Germany, with an offsetting overstatement in
the Other geographies. We have corrected the disclosed figures as included herein.
(2) Our other revenue includes Ireland, our country of domicile.
The following table sets forth revenues by groups of similar products and services:
Physical printed products and other (1) . . . . . . . . . . . . . . . . . . . . . . . $
2,990,041 $
2,789,600 $
2,477,158
Digital products and services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
89,586
97,955
98,803
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,079,627 $
2,887,555 $
2,575,961
__________________
(1) Other revenue includes miscellaneous items, which account for less than 1% of revenue.
Year Ended June 30,
2023
2022
2021
92
The following table sets forth long-lived assets by geographic area:
June 30, 2023
June 30, 2022
Long-lived assets (1):
United States (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
83,956 $
Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jamaica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65,547
57,328
73,857
42,377
29,302
17,834
19,664
—
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
114,503
95,589
67,240
58,498
72,394
48,262
25,383
18,744
17,751
11,392
90,677
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
504,368 $
505,930
___________________
(1) Excludes goodwill of $781,541 and $766,600, intangible assets, net of $109,196 and $154,730, deferred tax assets of $12,740 and $113,088,
and marketable securities, non-current of $4,497 and zero as of June 30, 2023 and June 30, 2022, respectively.
(2) The decrease of the United States long-lived assets is primarily driven by the termination of our Waltham, MA lease in August 2022 that
resulted in a reduction to the operating lease asset and related leasehold improvements.
(3) The decrease in Japan's long-lived assets is due to the planned sale of the land and building, which resulted in the classification of the
carrying value as prepaid expenses and other current assets because it meets held-for-sale criteria as of June 30, 2023. Refer to Note 18 for
additional details.
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. Over the past three years, we continually assessed our leased real estate
footprint as a facet of our evolving remote-first operating model for many of our employees, which resulted in a
decrease to our leased real estate portfolio over this period of time.
The following table presents the classification of right-of-use assets and lease liabilities as of June 30, 2023
and 2022:
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, 2023
June 30, 2022
Operating lease assets, net
Property, plant, and equipment, net
Operating lease liabilities, current
Other current liabilities
$
$
$
76,776 $
30,616
107,392 $
80,694
19,181
99,875
22,559 $
9,938
27,706
6,684
Operating lease liabilities, non-current
Other liabilities
56,668
29,822
$
118,987 $
57,474
14,699
106,563
93
The following table represents the lease expenses for the years ended June 30, 2023 and 2022:
Year Ended
June 30, 2023
June 30, 2022
Operating lease expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
30,240 $
26,975
Finance lease expense:
Amortization of finance lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest on lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Variable lease expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,565
205
6,821
Less: sublease income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(833)
5,892
305
7,550
(86)
Net operating and finance lease cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
40,998 $
40,636
Future minimum lease payments under non-cancelable leases as of June 30, 2023 were as follows:
Payments Due by Period
Operating lease
obligations
Finance lease
obligations
Total lease
obligations
Less than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
24,159 $
10,904 $
2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,464
13,466
8,998
5,991
16,990
89,068
6,080
6,072
4,364
2,482
13,310
43,212
Less: present value discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9,841)
(3,452)
35,063
25,544
19,538
13,362
8,473
30,300
132,280
(13,293)
Lease liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
79,227 $
39,760 $
118,987
Other information about leases is as follows:
Lease Term and Discount Rate
Weighted-average remaining lease term (years):
June 30, 2023
June 30, 2022
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average discount rate:
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.74
8.69
5.20 %
6.23 %
4.32
3.89
3.71 %
2.79 %
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, 2023
June 30, 2022
Operating cash flows from operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
31,161 $
26,641
Operating cash flows from finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing cash flows from finance leases (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
205
8,290
305
37,512
__________________
(1) The decrease in financing cash flows from finance leases is driven by the non-recurring purchase option exercise for a leased facility in fiscal
year 2022, with the purchased facility being subsequently sold. Refer to additional details below.
94
Purchase and Sale of a Leased Facility
During fiscal year 2022, we paid $27,885 to exercise the purchase option available for one of our leased
facilities, immediately sold the facility to a separate third party for $23,226, and recognized a $3,324 gain on the
sale within general and administrative expense on our consolidated statement of operations. The purchase option
exercise was presented as a financing activity on our consolidated statement of cash flows while the sale of the
facility was presented as an investing activity. Prior to the purchase and sale, as required under our long-lived asset
policy, we identified a triggering event in fiscal year 2021 for this leased facility and abandoned equipment, which
resulted in impairment charges of $7,420 and $1,680, respectively, that were recognized in general and
administrative expense on the consolidated statement of operations.
Waltham Lease Modification
During fiscal year 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 recognized a gain of $1,156 in general and administrative expense on the
consolidated statement of operations for the year ended June 30, 2021. As required under our long-lived asset
policy, we identified a triggering event with regards to the modified right-of-use asset and abandoned property, plant
and equipment related to the vacated space, which resulted in impairments of $7,489 and $4,483, respectively,
which were recognized in general and administrative expense on the consolidated statement of operations for the
year ended June 30, 2021.
17. Commitments and Contingencies
Debt
The required principal payments due during the next five fiscal years and thereafter under our outstanding
long-term debt obligations at June 30, 2023 are as follows:
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
14,063
14,187
560,317
11,613
1,053,809
1,653,989
Purchase Obligations
At June 30, 2023, we had unrecorded commitments under contract of $222,860. These commitments
consist of inventory, third-party fulfillment, and digital services of $100,327; third-party cloud services of $74,912;
software of $13,678; advertising of $10,070; professional and consulting fees of $6,245; production and computer
equipment purchases of $3,853; and other commitments of $13,775.
Lease Arrangements
We lease certain assets, including manufacturing facilities, machinery and plant equipment, and office
space under lease agreements. Refer to Note 16 for additional details.
Other Obligations
In February 2023, we made a $6,875 deferred payment for our Depositphotos acquisition, resulting in no
outstanding acquisition-related deferred liabilities as of June 30, 2023.
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
95
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 employee termination benefits, acceleration of share-based compensation,
write-off of assets, costs to exit loss-making operations, and other related costs, including third-party professional
and outplacement services. All restructuring costs are excluded from segment and adjusted EBITDA. During the
years ended June 30, 2023, 2022, and 2021, we recognized restructuring charges of $43,757, $13,603, and $1,641,
respectively.
Fiscal Year 2023
During the year ended June 30, 2023, we recognized restructuring charges of $43,757. The majority of
these costs related to actions taken in our Vista business and central teams during March 2023 that were intended
to reduce costs and support expanded profitability, reduced leverage, and increased speed, focus, and
accountability. For the year ended June 30, 2023, we recognized restructuring charges of $28,840 and $9,645 in
our Vista business and central and corporate costs, respectively, which collectively included $30,175 from the March
action described above. The remaining restructuring charges relate to prior actions taken to prioritize our
investments, including our exit from the Japanese market. Most of these costs related to employee termination
benefits, and, to a lesser extent, share-based compensation expense for the accelerated vesting of equity awards
as well as third-party consulting costs. A portion of the restructuring charge in our Vista business included the
impairment of assets from our exit of the Japanese market of $5,397.
We also recognized restructuring charges of $1,715 in our National Pen business for the year ended June
30, 2023, which included employee termination benefits for previously announced actions to exit the Japanese
market and to migrate our European production operations from Ireland to the Czech Republic. Additionally, we
recognized restructuring costs of $3,556 for the year ended June 30, 2023 in our All Other Businesses reportable
segment for our previously announced exit from the Chinese market, which included employee termination benefits
and the write-off of certain assets.
We do not expect any additional material charges for these restructuring actions.
Fiscal Year 2022
During the year ended June 30, 2022, we recognized restructuring charges of $13,603, primarily due to
decisions to reduce costs in certain areas including exiting 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 reportable segment,
$1,093 in our All Other Businesses reportable segment, and $854 in our central and corporate costs. 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.
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. These actions were
completed during fiscal year 2021.
96
The following table summarizes the restructuring activity during the years ended June 30, 2023 and 2022.
Severance and
Related Benefits
Other Restructuring
Costs
Balance as of June 30, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of June 30, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash charges (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of June 30, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
402 $
13,312
(265)
—
13,449
33,694
(37,147)
(2,429)
7,567 $
________________
Accrued
restructuring liability
402
13,603
(265)
(291)
13,449
43,757
(37,147)
(12,492)
7,567
— $
291
—
(291)
—
10,063
—
(10,063)
— $
(1) During the fiscal year ended June 30, 2023, non-cash restructuring charges primarily includes the loss recorded on assets for our Japan and
China exits, and share-based compensation expense upon modification to accelerate the vesting of share-based compensation awards for
the actions described above.
97
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, 2023. 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,
2023, 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, 2023 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,
2023. 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, 2023, our internal control over financial
reporting is effective based on criteria in Internal Control - Integrated Framework (2013) issued by the COSO.
98
PricewaterhouseCoopers LLP, our independent registered public accounting firm, has audited the effectiveness of
our internal control over financial reporting as of June 30, 2023, as stated in their report included on page 45.
Item 9B. Other Information
On May 12, 2023, Sean Quinn, our Executive Vice President and Chief Financial Officer, adopted a plan for
the sale of Cimpress ordinary shares that is intended to satisfy the affirmative defense conditions of Exchange Act
Rule 10b5-1(c). The plan provides for the sales, on the dates and at the prices set forth in the plan, of up to 22,185
ordinary shares held by Mr. Quinn as of the date of the plan adoption plus additional shares Mr. Quinn receives
upon the vesting of his RSU awards. The plan expires on May 4, 2024.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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,” "Insider Trading
Policy," and “Delinquent Section 16(a) Reports” contained in our definitive proxy statement for our 2023 Annual
General Meeting of Shareholders, which we refer to as our 2023 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, 2023. 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 2023 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 2023 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 2023 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 2023 Proxy Statement captioned “Independent Registered Public Accounting Firm Fees and Other Matters.”
99
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
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, as amended, is incorporated by reference to our Current Report on Form 8-K filed with
the SEC on November 17, 2022
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
Second Amended and Restated Executive Retention Agreement dated as of February 20, 2023 between Cimpress
plc and Robert Keane is incorporated by reference to our Current Report on Form 8-K filed with the SEC on February
23, 2023
Form of Amended and Restated Executive Retention Agreement between Cimpress plc and each of Sean Quinn and
Maarten Wensveen is incorporated by reference to our Current Report on Form 8-K filed with the SEC on February
23, 2023
100
10.20*
Executive Retention Agreement between Cimpress plc and Florian Baumgartner dated February 1, 2023 is
incorporated by reference to our Current Report on Form 8-K filed with the SEC on February 23, 2023
10.21* 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
Employment Agreement between Cimpress Deutschland GmbH and Florian Baumgartner dated July 10, 2019 is
incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023
Amendment to Employment Agreement between Cimpress Deutschland GmbH and Florian Baumgartner dated
January 1, 2021 is incorporated by reference to our Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 2023
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 (as
amended and restated by the Amendment and Restatement Agreement, the "Credit Agreement"), is incorporated by
reference to our Current Report on Form 8-K filed with the SEC on May 19, 2021
Amendment No. 1 (LIBOR Hardwire Transition Amendment) dated as of June 13, 2023 to the Credit Agreement
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
Insider Trading Policy
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
Compensation Recovery Policy
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)
10.22*
10.23*
10.24*
10.25*
10.26*
10.27*
10.28
10.29
10.30
10.31
19.1
21.1
23.1
31.1
31.2
32.1
97.1
101
104
__________________
*Management contract or compensatory plan or arrangement
Item 16. Form 10-K Summary
None.
101
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 4, 2023
Cimpress plc
By:
/s/ Robert S. Keane
Robert S. Keane
Founder and Chief Executive Officer
(Principal Executive Officer)
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.
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
Founder and Chief Executive Officer
(Principal executive officer)
Date
August 4, 2023
Chief Financial Officer
August 4, 2023
(Principal financial and accounting officer)
Director
Director
Director
Director
August 4, 2023
August 4, 2023
August 4, 2023
August 4, 2023
102
CIMPRESS PLC
First Floor Building 3, Finnabair Business and Technology Park
Dundalk, Co. Louth A91 XR61
Ireland
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
Cimpress plc will hold its 2023 Annual General Meeting of Shareholders:
on Thursday, December 14, 2023
at 6:30 p.m. Dublin 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 Sophie A. Gasperment 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 2026
(2) Approve, on a non-binding, advisory basis, the compensation of our named executive officers, as described in
this proxy statement
(3) Renew the authority of our Board of Directors, until June 14, 2025, to issue authorized but unissued ordinary
shares of Cimpress plc up to a maximum of 20% of our issued share capital
(4) Renew the authority of our Board of Directors, until June 14, 2025, to opt out of statutory preemption rights
under Irish law with respect to the issuance of ordinary shares for cash, up to a maximum of 20% of our issued
share capital
(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 2024
(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) Hold a non-binding, advisory "say on frequency" vote regarding the frequency of the future advisory votes on
executive compensation (once every year, every two years, or every three years)
(8) Transact other business, if any, that may properly come before the meeting or any adjournment of the meeting
Each Proposal other than Proposals 4 and 7 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.
Proposal 4 will be proposed as a special resolution under Irish law, requiring at least 75% of the votes cast to be in
favor of the resolution to pass. For Proposal 7, the option receiving the most votes will be considered the advisory
recommendation of the shareholders.
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, 2023 (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 October 12, 2023 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 December 13, 2023 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 26, 2023
CIMPRESS PLC
First Floor Building 3, Finnabair Business and Technology Park
Dundalk, Co. Louth A91 XR61
Ireland
PROXY STATEMENT FOR ANNUAL GENERAL MEETING OF SHAREHOLDERS
to be held on December 14, 2023
This proxy statement contains information about the 2023 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 Thursday, December 14, 2023 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. Dublin 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, 2023 on or about November 1, 2023.
Important Notice Regarding the Availability of Proxy Materials for the 2023 Annual General Meeting of
Shareholders:
This Proxy Statement, the 2023 Annual Report to Shareholders, and the statutory financial statements
under Irish law for the fiscal year ended June 30, 2023 (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/2023. 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, 2023, 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, 2023 (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 some or all of 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 November 1, 2023 we are mailing to our beneficial shareholders a Notice of Internet Availability
containing instructions on how to access our proxy statement and 2023 Annual Report to Shareholders and how to
vote online. 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. All shareholders other
than beneficial holders will continue to receive a paper copy of this proxy statement, proxy card and Annual Report
by mail.
i
TABLE OF CONTENTS
Section
Information about our directors and executive officers ..............................................................................
Proposal 1: Reappoint a member of our Board of Directors ....................................................................
Proposal 2: Advisory vote to approve executive compensation ...............................................................
Compensation Discussion and Analysis ......................................................................................................
Executive Compensation Tables ...................................................................................................................
Pay Versus Performance ...............................................................................................................................
Proposal 3: Authorize our Board of Directors to issue ordinary shares ..................................................
Proposal 4: Authorize our Board to opt out of preemptive rights .............................................................
Proposal 5: Reappoint our statutory auditor ...............................................................................................
Proposal 6: Authorize our Board to determine remuneration of our statutory auditor ..........................
Proposal 7: Advisory vote on say on frequency .........................................................................................
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
20
24
24
25
26
27
28
34
35
37
Appendix A - 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 and Chairman, who serve for rotating terms of up to three years.
Name
Robert S. Keane
Age
60
Board Position
Cimpress
Director Since
Current Term
Expires at our
Annual General
Meeting In:
Independent
Director
Chairman
January 1995
2025
Sophie A. Gasperment
59
Non-Employee Director
November 2016
2023
Zachary S. Sternberg
38
Non-Employee Director
November 2017
2024
Dessislava Temperley
50
Non-Employee Director
September 2021
2024
Scott J. Vassalluzzo
52
Non-Employee Director
January 2015
2025
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. Since
December 2019, Mr. Keane has also served on the Board of Directors of Astronics Corporation, a supplier to the
aerospace industry. Mr. Keane brings to Cimpress' Board his experience growing Cimpress from inception in
1995 to $3.1 billion of revenue in our 2023 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 she supports their Consumer and Digital Acceleration practices. Ms. Gasperment held multiple senior
management positions during her tenure at L’Oréal from September 1986 to November 2018, including
Managing Director, L’Oréal UK and Ireland as well as Chair and Global Chief Executive Officer of The Body
Shop, the retail brand spanning 60 countries and c.20,000 people strong. Ms. Gasperment has served on the
board of directors of Kingfisher plc, a FTSE 100 Home Improvement international company, since December
2018, and on the board of directors of Givaudan SA, the world leading flavour and fragrances company, since
September 2020. Previously, Ms. Gasperment served for 12 years on the board of Accor, the hospitality global
player, where she chaired the Nomination/Remuneration/CSR committee, and of D’Ieteren Group. 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 acumen, her brand-building and go-to-market expertise, her insights in digital business
transformation and her experience on the boards of other international public companies.
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 8.9% 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
advisory firm that holds 14.7% 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 and has served as a Managing Member of PGP since
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, 2023
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
Number of Directors Who Self-
Identify as Having That Gender
Female
Male
Non-binary
Did not disclose gender
Demographic Background
African descent or Black
Alaskan Native of Native American
Asian
Hispanic or Latinx
Pacific Islander or Native Hawaiian
White
Two or more races or ethnicities
LGBTQ+
Did not disclose demographic background
Non-U.S. Directors
2
3
0
0
Number of Directors who Self-
Identify as Having That
Demographic Background
0
0
0
0
0
4
0
0
1
2
2
Our Executive Officers:
Name
Title
Robert S. Keane
Founder, Chief Executive Officer of Cimpress, and
Chairman
Florian Baumgartner
Executive Vice President and Chief Executive Officer of
Vista
Sean E. Quinn
Executive Vice President and Chief Financial Officer
Maarten Wensveen
Executive Vice President and Chief Technology Officer
Age Joined Cimpress
60
January 1995
45
44
43
October 2019
October 2009
October 2011
ROBERT S. KEANE: Mr. Keane's biography is in the "Our Board of Directors" section above.
FLORIAN BAUMGARTNER has served as the Chief Executive Officer of Vista since February 2023 and as
Executive Vice President since October 2019. Mr. Baumgartner previously served as Executive Vice President,
Design & Service, from March 2022 to January 2023 and as President, International of Vista from October 2019
to February 2022. Before joining Cimpress, Mr. Baumgartner held various leadership roles at Amazon from
October 2010 to September 2019 and was a strategy consultant at McKinsey & Company from January 2002 to
September 2010.
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.
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
PROPOSAL 1 - REAPPOINT SOPHIE A. GASPERMENT 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 Sophie
A. Gasperment for a three-year term ending at the conclusion of our annual general meeting of shareholders in
2026. The Board recommends Ms. Gasperment's reappointment because of 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.
You can find more information about Ms. Gasperment 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 Ms. Gasperment to the
Board.
PROPOSAL 2 - ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
At the annual meeting, in accordance with Section 14A of the U.S. Securities Exchange Act of 1934, 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.
In 2017, a majority of our shareholders voted to hold the advisory vote to approve our execution compensation on
an annual basis. In accordance with the results of this vote, we implemented an advisory vote on our executive
compensation every year until the next vote on the preferred frequency of advisory votes on executive
compensation, which will occur at this annual meeting and is the subject of the non-binding advisory vote in
Proposal 7.
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. We have seen the competitiveness for talent intensify over recent
years and are often vying for qualified candidates against both larger, established companies with significant cash
and equity resources and earlier-stage companies that can offer significant potential equity upside.
Fiscal year 2023 was a transition year for our long-term incentive (LTI) compensation program. We continued the
process that we began in fiscal year 2022 of moving away from performance share units with performance
conditions based on the compound annual growth rate (CAGR) of the three-year moving average of the daily
closing share price of Cimpress’ ordinary shares (3YMA), which we refer to as "3YMA-based PSUs." The 3YMA-
based PSU awards pay out only if the 3YMA reaches or exceeds specified CAGR thresholds that require our 3YMA
to steadily increase over a period of several years, but in recent years our share price has experienced steep
declines, weighing heavily on our 3YMA. To date, no shares have been issued on any of the performance
measurement dates for our outstanding 3YMA-based PSUs because our 3YMA has been well below the applicable
CAGR thresholds, and the 3YMA CAGR thresholds are higher for future measurement dates, making future share
issuances unlikely unless there is a dramatic and sustained increase in our share price. Although this pay-for-
performance structure prevented dilution of shareholders during a multi-year period in which our share price has
underperformed our expectation, it also meaningfully impaired the retention and motivation value of 3YMA-based
PSU awards for Cimpress' executives and employees.
4
As we entered fiscal year 2023, given the volatility of our share price and the expected impacts on our financial
results of cost inflation and discretionary investments, the Compensation Committee decided to wait one year to put
in place an entirely new performance-based LTI design. In fiscal year 2023 our executives, other than Robert
Keane, received a combination of share options and restricted share unit (RSU) awards during this transition year.
Robert Keane, our Chief Executive Officer, received all of his LTI compensation in the form of 3YMA-based PSUs in
fiscal year 2023, as he has in each fiscal year since fiscal year 2017.
Continuing the evolution of our LTI compensation program after fiscal year 2023, the LTI awards granted to our
executive officers in fiscal year 2024 consist solely of performance share units with performance targets based on
the fiscal year 2024 revenue, adjusted EBITDA, and unlevered free cash flow of Cimpress (for Cimpress executive
officers) or Vista (for Florian Baumgartner, our CEO of Vista). An important objective of this design is to move to a
performance-based LTI mechanism that drives focus on in-year execution and achievement of our financial goals,
while also incentivizing focus on long-term value creation and share price performance. After the end of fiscal year
2024, the number of shares issuable pursuant to each of these new performance share units will be determined and
fixed based on the degree of achievement against these performance targets, and the performance share units will
vest over four years from the date of grant subject to continued employment on each vest date.
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, and individual performance. 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 2023, 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 an outside compensation
consultant. We chose the 16 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 2023 are:
Akamai Technologies, Inc.
iRobot Corporation
CarGurus, Inc.
Cerence, Inc.
Etsy, Inc.
HubSpot, Inc.
IAC Inc.
New Relic, Inc.
Pegasystems, Inc.
PTC, Inc.
Rapid7, Inc.
Stitch Fix, Inc.
Teradyne, Inc.
TripAdvisor, Inc.
Upwork, Inc.
Yelp, Inc.
The amount of total compensation granted to Mr. Keane did not change from fiscal year 2022 to fiscal year 2023.
In fiscal year 2023, Mr. Keane received all of his LTI compensation in the form of 3YMA-based PSUs, but unlike
past years when he elected to also receive his base salary and director retention fee wholly or partially in 3YMA-
based PSUs, 100% of his base salary and director retention fee were paid in cash in fiscal year 2023. For fiscal
year 2023, Mr. Keane's LTI compensation reached the 75,000 PSUs per fiscal year limit set forth in the 2016 PSU
Limitation Agreement between Cimpress and Mr. Keane, due to the decline in our 3YMA which is used to determine
the number of 3YMA-based PSUs underlying each award.
In fiscal year 2023, the Committee increased the amount of the annual LTI awards granted to Sean Quinn and
Maarten Wensveen, while maintaining their base salaries at fiscal year 2022 levels in order to keep their total
compensation in line with the market. However, the overall LTI compensation of Messrs. Quinn and Wensveen was
lower in fiscal year 2023 than it was in fiscal years 2021 or 2022 because both executives received supplemental
LTI awards in the prior two fiscal years, in addition to their annual LTI awards. The supplemental awards were
5
granted primarily to enhance the retention value of our LTI program in light of the decreased probability that value
would be derived from past 3YMA-based PSU awards that represented the foundation of retention for these
executives. In February 2023, Florian Baumgartner was promoted to Chief Executive Officer of Vista, and our Board
designated him as an executive officer at that time. Mr. Baumgartner received an RSU award in connection with his
promotion.
For fiscal year 2023, 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
LTI Awards
For Robert Keane, 3YMA-based PSUs with the
performance condition that the 3YMA CAGR
equal or exceed 11% over a performance period
of six to ten years
Share options and RSUs vesting over 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 2023, our Compensation Committee maintained the base salaries of our executive officers at their
fiscal year 2022 levels. In recent years, Mr. Keane has elected to take as much of his base salary and director fees
as possible in 3YMA-based PSUs within the 75,000 PSU per fiscal year limit set forth in his PSU Limitation
Agreement, but in fiscal year 2023, his base salary and Board retention fee were paid entirely in cash because his
LTI compensation reached the 75,000 PSU limit.
In December 2020, Mr. Baumgartner elected to reduce his base salary by 88% for a four-year period from
January 1, 2021 to December 31, 2024 in exchange for an RSU award granted on January 1, 2021 with a value
(based on Cimpress' then-current share price) equal to the cumulative salary reduction. The salary-replacement
RSU award vests in 16 equal quarterly installments over four years.
Long-Term Incentive Program
In fiscal year 2023, the components of our long-term incentive compensation program for executive officers were
as follows:
• Mr. Keane received 100% of his LTI compensation in the form of 3YMA-based PSUs.
• Our other executive officers received 50% of the value of their LTI awards in the form of share options and
50% in the form of RSUs, except for Mr. Baumgartner who received an additional RSU award in
connection with his promotion to Chief Executive Officer of Vista.
We transitioned our LTI program for executives and employees other than Mr. Keane away from 3YMA-based
PSUs to enhance our ability to retain and motivate talented employees in an intensely competitive market for talent
and to help mitigate the greatly reduced retention and motivation value of the 3YMA-based 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 in recent years.
Share Options and Restricted Share Units. In fiscal year 2023, we granted share options and RSU awards to
executives and employees, other than Mr. Keane, that vest over four years. The share options have a ten-year term
and an exercise price equal to the closing price of Cimpress' shares on the NASDAQ Global Select Market on the
grant date. Upon vesting each RSU is settled in ordinary shares of Cimpress plc on a one-to-one basis so long as
Cimpress continues to employ the recipient on the vesting date.
6
3YMA-Based Performance Share Units. PSU awards granted to Mr. Keane have a performance period of six to
ten years, and each grant anniversary from the sixth to the tenth is a performance measurement date. On the first
such 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. The 3YMA-based PSUs granted to Mr. Keane in fiscal year 2023
service vest 25% per year over four years so long as Mr. Keane remains employed by Cimpress on each vesting
date. The 3YMA was $78.82 on November 16, 2022, the date on which we granted 3YMA-based PSUs to Mr.
Keane for fiscal year 2023.
Legacy 3YMA-based PSU awards granted in past fiscal years to employees other than Mr. Keane have
performance periods ranging from four to ten years and 3YMA CAGR performance thresholds ranging from 7% for
the lowest multipliers to 20% for a 250% multiplier. These legacy 3YMA-based PSUs generally service vest 25% per
year over four years so long as the employee remains employed by Cimpress on each vesting date.
To date, no shares have been issued on any of the performance measurement dates for our outstanding 3YMA-
based PSUs because our 3YMA has been well below the applicable CAGR thresholds.
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, 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. From time to time, we 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, but none of our executive officers were subject
to any such arrangements in fiscal year 2023.
7
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 200% of any annual cash incentive award
in the case of Mr. Keane, and one year's base salary and 100% of any annual cash incentive award in the case
of the other executive officers. The annual cash incentive award portion of this severance payment is based on
the amount the executive officer would receive if the applicable performance criteria, if any, were achieved at
target levels.
• With respect to any outstanding annual cash incentive award, payment of a pro rata portion of the award
(assuming achievement of the applicable performance criteria, if any, at target levels) based on the number of
days elapsed from the beginning of the then current fiscal year until the date of termination, less any amount
previously paid to the executive under such award.
• With respect to any outstanding multi-year cash incentive award, payment of a pro rata portion of the award
(assuming achievement of the applicable performance criteria, if any, at target levels) based on the number of
days elapsed from the beginning of the then current performance period until the date of termination, less any
amount previously paid to the executive under such award.
•
•
The continuation of all other employment-related benefits for two years after termination for Mr. Keane and one
year after termination for the other executive officers.
If the termination occurs within 12 months after a change in control of Cimpress, then each of the executive
officer's share option awards remains exercisable until the earlier of 12 months after termination or the original
expiration date of the award.
Both the executive retention agreements and our 3YMA-based PSU awards have change in control provisions.
The executive retention agreements provide that if there is a change in control of Cimpress plc or if the executive
officer’s employment is terminated within 180 days before a change in control of Cimpress plc (other than a
termination by Cimpress for cause or a resignation by the executive without good reason), then effective upon the
date of the change in control:
•
•
•
all equity awards granted to the executive officers will accelerate and become fully vested (other than any
3YMA-based PSU awards and the salary-replacement RSU award granted on January 1, 2021 to Mr.
Baumgartner);
the performance criteria (if any) applicable to any outstanding annual or multi-year cash incentive awards
will be deemed satisfied at 100% of the target levels of performance for such awards, and the executive
officers will be entitled to receive 100% of the target amount of each such annual or multi-year award, less
any amount previously paid to the executive under such awards; and
solely in the case of Mr. Keane, if Mr. Keane is required to pay any excise tax pursuant to Section 4999 of
the U.S. Internal Revenue Code of 1986 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 plc, he will be entitled to receive 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, then Cimpress has the right to reduce the payments by up to $50,000 to avoid triggering the
excise tax and thus avoid providing a gross-up payment to Mr. Keane.
The equity plans and agreements that govern our 3YMA-based PSUs provide that upon a change in control, all
PSUs that have satisfied the applicable service-based vesting conditions will be settled for Cimpress ordinary
shares in accordance with the terms of the awards if the actual price paid per share to holders of Cimpress'
securities in connection with the change in control equals or exceeds the minimum 3YMA CAGR thresholds set forth
in the award agreements calculated as of the change in control date.
8
The RSU agreement that governs the RSU award Mr. Baumgartner received on January 1, 2021 to replace 88%
of his salary over a four-year period provides that if Cimpress terminates Mr. Baumgartner's employment without
cause (as defined in the agreement), then the "pro rata portion" of unvested RSUs will accelerate and become
vested, but there is no acceleration upon a change in control. The "pro rata portion" of unvested RSUs is equal to
(x) the number of RSUs that would have vested on the first vesting date that follows the end of the fiscal quarter in
which Mr. Baumgartner's separation date occurs multiplied by (y) the quotient of the number of calendar days from
the beginning of the fiscal quarter to the separation date divided by the number of calendar days in such fiscal
quarter.
The following table sets forth information about the potential payments to our named executive officers upon their
termination or a change in control of Cimpress, assuming that a termination or change in control took place on
June 30, 2023.
Name
Robert S. Keane
Cash
Payment
($)(1)
Accelerated
Vesting of
Share
Options
($)(2)
Accelerated
Vesting of
RSUs and
PSUs
($)(3)
Tax
Gross-
Up
Payment
($)(5)
Benefits
($)(4)
Total
($)
• Termination Without Cause or With
Good Reason .......................................
• Change in Control ...............................
3,500,000
—
•
Change in Control w/ Termination
Without Cause or With Good
Reason ..................................................
3,500,000
—
—
—
—
38,784
—
—
—
—
3,538,784
—
—
38,784
—
3,538,784
Florian Baumgartner (6)
• Termination Without Cause or With
Good Reason .......................................
• Change in Control ...............................
•
Change in Control w/ Termination
Without Cause or With Good
Reason ..................................................
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 ..................................................
_____________
240,292
—
108,967
9,517
—
543,391
4,986,863
—
—
—
358,776
5,530,254
240,292
543,391
5,095,830
9,517
—
5,889,030
800,000
—
—
26,259
—
739,005
5,218,656
—
—
—
826,259
5,957,661
800,000
739,005
5,218,656
26,259
—
6,783,920
750,000
—
—
25,971
—
597,733
3,697,515
—
—
—
775,971
4,295,248
750,000
597,733
3,697,515
25,971
—
5,071,219
(1)
(2)
Amounts in this column represent severance amounts payable under the executive retention agreements
upon the triggering event described in the first column.
Amounts in this column represent the value of unvested, in-the-money share options upon the triggering
event described in the first column. The value of share options is based on the difference between the
exercise price of the options and $59.48 per share, which was the closing price of our ordinary shares on
Nasdaq on June 30, 2023.
9
(3)
(4)
(5)
(6)
Amounts in this column represent the value, based on $59.48 per share, which was the closing price of
our ordinary shares on Nasdaq on June 30, 2023, of unvested RSUs that would vest upon the triggering
event described in the first column. For 3YMA-based 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.
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.
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, 2023 and determined that he would not have been entitled to a
gross-up payment.
The amounts relating to cash payments and welfare benefits for Mr. Baumgartner would be payable in
Euros. For purposes of this table, we converted these payments from Euros to U.S. dollars at a currency
exchange rate of €1.00 to $1.08382 based on the average currency exchange rate for the month of June
2023.
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.
Share Ownership Guidelines
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, 2023, all executive
officers and directors had satisfied their ownership guideline requirement.
Share Option Granting Practices
Although we typically do not grant share options in most fiscal years, we did grant options to executives and
employees on two dates during fiscal year 2023: August 15, 2022 (annual retention awards) and February 15, 2023
(awards for employee promotions). We typically grant equity awards, including options, on the 15th of the applicable
month and our processes for annual grants or promotions typically occurs in the middle month of the quarter after
we have released earnings for the prior quarter.
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
10
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 officers as of June 30, 2023.
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, Cimpress
Florian Baumgartner(4)
Executive Vice President and
Chief Executive Officer, Vista
Sean E. Quinn
Executive Vice President
and Chief Financial Officer
Maarten Wensveen
Executive Vice President and ......
Chief Technology Officer
_____________
Salary
($)(1)
Year
2023 1,756,346
766,468
2022
35,568
2021
Bonus
($)(2)
—
—
20,669
Share
Awards
($)(3)
1,320,915
7,342,285
8,283,797
Option
Awards
($)(3)
All Other
Compensation
($)
Total
($)
—
—
—
— 3,077,261
8,133,820
8,340,034
25,067
—
2023
94,292
200,000
1,749,969
1,249,983
— 3,294,244
2023
2022
2021
2023
2022
2021
800,000
800,000
803,077
—
129,375
241,875
750,000
750,000
756,317
—
—
—
1,699,975
6,412,776
4,667,581
\
1,374,958
4,510,594
4,032,234
1,699,987
—
—
1,374,988
—
—
9,765(5)
8,923
6,239
4,209,727
7,351,074
5,718,772
10,350(5)
9,150
134,603
3,510,296
5,269,744
4,923,154
(1)
(2)
(3)
(4)
In fiscal years 2019 through 2022, Mr. Keane received as much of his compensation as possible in the form of 3YMA-
based PSUs, within the 75,000 PSUs per fiscal year limit set forth in his PSU Limitation Agreement. For Mr. Keane,
the amount in this column for fiscal year 2021 represents 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 fiscal year 2023 for Mr. Keane represents his
base salary and director retention fee for that fiscal year, which were paid entirely in cash because his LTI
compensation exceeded the 75,000 3YMA-based PSUs per fiscal year limit.
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 and Mr. Baumgartner represent the payment of cash retention bonuses that were granted in previous fiscal
years and vested in the years shown.
The amounts reported in these columns represent a dollar amount equal to the grant date fair value of the share
options and 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, 2023. See footnote 7 to the Grants of Plan-Based Awards in
the Fiscal Year Ended June 30, 2023 table for the value of the 3YMA-based PSUs granted to Mr. Keane in fiscal year
2023 assuming the maximum achievement of the performance conditions.
Mr. Baumgartner was designated an executive officer of Cimpress in February 2023 in connection with his promotion
to Chief Executive Officer of Vista. The amounts paid to or on behalf of Mr. Baumgartner (other than option and share
awards) were paid in Euros. For purposes of this table, we converted these payments from Euros to U.S. dollars at a
currency exchange rate of €1.00 to $1.08382 based on the average currency exchange rate for the month of June
2023.
(5)
This amount represents our matching contributions under our 401(k) deferred savings retirement plans.
12
Grants of Plan-Based Awards in the Fiscal Year Ended June 30, 2023
The following table contains information about plan-based awards granted to each of our named executive officers
during the fiscal year ended June 30, 2023.
Estimated Future Payouts Under
Equity Incentive Plan Awards(1)
Threshold
Target
Maximum
Name
Robert S. Keane
Grant Date
11/16/2022(8)
11/16/2022(9)
(#)
(#)(2)
91,768
1,981
(#)(3)
183,537
3,962
—
—
Florian Baumgartner 8/15/2022
8/15/2022
1/15/2023
Sean E. Quinn
Maarten Wensveen
8/15/2022
8/15/2022
8/15/2022
8/15/2022
___________________________
All Other
Share
Awards:
Number of
Shares or
Units
All Other
Option
Awards:
Number of
Shares
Underlying
Options
Exercise
Price of
Option
Awards
(#)(4)
(#)(5)
($/share)(6)
54,557
46.20
74,198
46.20
60,013
46.20
27,056
16,409
36,796
29,761
Grant Date
Fair Value of
Share and
Option
Awards
($)(7)
1,293,000
27,915
1,249,983
1,249,987
499,982
1,699,987
1,699,975
1,374,988
1,374,958
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
These columns represent 3YMA-based 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.
These amounts represent the number of Cimpress ordinary shares issuable to Mr. Keane six to ten years after the grant
date if he fully satisfies the service-based vesting condition described in footnote 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%).
These amounts represent the number of Cimpress ordinary shares issuable to Mr. Keane six to ten years after the grant
date if he fully satisfies the service-based vesting condition described in footnote 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%).
The amounts reported in this column represent RSU awards. 25% of the original number of RSUs subject to each
award vest on the first anniversary of the date in the Grant Date column, and 6.25% of the original number of RSUs vest
every three months after the first anniversary until the fourth anniversary of the grant date, so long as the executive
officer continues to be an eligible participant under Cimpress' 2020 Equity Incentive Plan on each such vesting date.
25% of the original number of shares subject to each option award vest on June 30, 2023, and 6.25% of the original
number of shares vest every three months thereafter until June 30, 2026, so long as the executive officer continues to
be an eligible participant under Cimpress' 2020 Equity Incentive Plan on each such vesting date.
The exercise price of our share options equals the closing price of our ordinary shares on the NASDAQ Global Select
Market on the date of grant.
The amounts reported in this column represent the grant date fair value for the equity 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, 2023. The
maximum value of the 3YMA-based PSUs granted to Mr. Keane in fiscal year 2023 is $5,195,597 assuming the
maximum achievement of the performance conditions, which we estimated by multiplying the maximum number of
shares issuable pursuant to each PSU award by the closing price of our ordinary shares on Nasdaq on the grant date.
The service-based vesting condition of the 3YMA-based PSU award reported in this row is that 25% of the original
number of PSUs vest on June 30 of each of 2023 through 2026 so long as Mr. Keane continues to be an eligible
participant under Cimpress' 2020 Equity Incentive Plan on such vesting date.
This is the annual equity award granted to the members of our Board of Directors, which in Mr. Keane's case is in the
form of 3YMA-based PSUs. The service-based vesting condition of this 3YMA-based PSU award is that 25% of the
PSUs vest on November 15 of each of 2023 through 2026 so long as Mr. Keane continues to be an eligible participant
under Cimpress' 2020 Equity Incentive Plan on such vesting date.
13
Outstanding Equity Awards at June 30, 2023
The following table contains information about outstanding option awards, unvested RSUs, and unearned shares
subject to 3YMA-based PSUs as of June 30, 2023 for each of our named executive officers.
Option Awards
Share Awards
Number of Securities
Underlying Unexercised
Options (1)
Option
Exercise
Price
Option
Expiration
Date
(#)
Exerciseable
(#)
Unexerciseable
($)
Name
Robert S.
Keane
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
(#)(2)
($)(3)
(#)(4)
($)(5)
93,750(6)
5,576,250
78,970(7)
73,498(8)
4,697,136
4,371,661
9,331(9)
555,008
1,428(10)
84,937
71,726(11)
4,266,262
19,811(12)
1,178,358
1,398(13)
83,153
19,011(14)
1,130,774
1,403(15)
83,450
73,335(16)
4,361,966
79,322(17)
4,718,073
10,886(18)
647,499
1,611(19)
1,288(20)
95,822
76,610
91,768(21)
5,458,361
1,981(22)
117,830
Florian
Baumgartner
13,639
40,918
46.20
8/15/2032
2,658(23)
158,098 10,743(24)
12,824(25)
762,772 10,999(26)
1,668(27)
99,213 10,451(28)
2,804(29)
166,782
8,456(30)
502,963
24,790(31)
1,474,509
27,056(32)
1,609,291
16,409(33)
976,007
638,994
654,221
621,625
Sean E.
Quinn
Maarten
Wensveen
18,550
55,648
46.20
8/15/2032
7,976(23)
474,412
24,301(6)
1,445,423
2,979(27)
177,191
20,306(7)
1,207,801
8,414(29)
500,465
18,898(8)
1,124,053
11,619(34)
691,098 22,952(35)
1,365,185
19,954(30)
1,186,864 19,641(26)
1,168,247
36,796(32)
2,188,626 19,410(28)
1,154,507
15,003
45,010
46.20
8/15/2032
6,647(23)
395,364
14,400(6)
856,512
7,011(29)
417,014
6,016(7)
357,832
14
11,619(34)
691,098
3,651(8)
217,161
7,126(30)
423,854 18,362(35)
1,092,172
29,761(32)
1,770,184 20,951(26)
1,246,165
16,175(28)
962,089
___________________
(1)
25% of the original number of shares subject to each option award vest on June 30, 2023, and 6.25% of the original
number of shares vest every three months thereafter until June 30, 2026, so long as the executive officer continues to
be an eligible participant under Cimpress' 2020 Equity Incentive Plan on each such vesting date.
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
These amounts represent the number of Cimpress ordinary shares issuable pursuant to RSU awards upon vesting.
The market value of the unvested RSUs is determined by multiplying the number of RSUs by $59.48 per share, which
was the closing price of our ordinary shares on Nasdaq on June 30, 2023.
These amounts represent the number of Cimpress ordinary shares issuable pursuant to 3YMA-based 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 3YMA-based PSUs is determined by multiplying the number of shares that would be
issuable if the conditions described in footnote 4 were achieved by $59.48 per share, which was the closing price of our
ordinary shares on Nasdaq on June 30, 2023.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August
15, 2016 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 will not
be earned, and no shares will be issuable pursuant to the PSUs, until the 3YMA on a measurement date as compared
to $69.44, which was the 3YMA of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR
performance thresholds. No shares were issuable pursuant to the PSUs on the first two measurement dates of August
15, 2022 and 2023 because the performance conditions were not satisfied on either of those dates. The next
measurement date for this PSU award will be August 15, 2024.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August
15, 2017 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 the 3YMA on a measurement date as compared to
$83.10, which was the 3YMA of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR performance
thresholds. No shares were issuable pursuant to the PSUs on the first measurement date of August 15, 2023 because
the performance conditions were not satisfied on that date. The next measurement date for this PSU award will be
August 15, 2024.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August
15, 2018 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, 2024 at the earliest (unless there is an
earlier change in control) and only if the 3YMA on a measurement date as compared to $102.68, which was the 3YMA
of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR performance thresholds.
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 3YMA on a measurement date as compared to $109.35, which was the 3YMA
of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR performance thresholds.
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 3YMA on a measurement date as compared to $109.35, which was the 3YMA
of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR performance thresholds.
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 3YMA on a measurement date as compared to $108.92, which was the 3YMA
of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR performance thresholds.
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 3YMA on a measurement date as compared to $108.92, which was the 3YMA
of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR performance thresholds.
15
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
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 3YMA on a measurement date as compared to
$111.70, which was the 3YMA of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR
performance thresholds.
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 3YMA on a measurement date as compared to $112.72, which was the 3YMA
of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR performance thresholds.
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 3YMA on a measurement date as compared to
$111.23, which was the 3YMA of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR
performance thresholds.
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 3YMA on a measurement date as compared to
$108.31, which was the 3YMA of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR
performance thresholds.
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 3YMA on a measurement date as compared to
$100.46, which was the 3YMA of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR
performance thresholds.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of August
15, 2021 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, 2027 at the earliest (unless there is an
earlier change in control) and only if the 3YMA on a measurement date as compared to $100.46, which was the 3YMA
of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR performance thresholds.
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 3YMA on a measurement date as compared to
$96.94, which was the 3YMA of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR performance
thresholds.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of
November 15, 2021 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 November 15, 2027 at the earliest (unless there is
an earlier change in control) and only if the 3YMA on a measurement date as compared to $96.94, which was the 3YMA
of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR performance thresholds.
16
(21)
(22)
(23)
(24)
(25)
(26)
(27)
(28)
(29)
(30)
(31)
(32)
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of
November 16, 2022 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 2023 through 2026 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 November 16, 2028 at
the earliest (unless there is an earlier change in control) and only if the 3YMA on a measurement date as compared to
$78.82, which was the 3YMA of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR performance
thresholds.
This amount represents the number of Cimpress ordinary shares issuable six to ten years after the grant date of
November 16, 2022 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 15 of each of 2023 through
2026 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 November 16,
2028 at the earliest (unless there is an earlier change in control) and only if the 3YMA on a measurement date as
compared to $78.82, which was the 3YMA of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR
performance thresholds.
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 amount represents the number of Cimpress ordinary shares issuable four to eight years after the grant date of
October 15, 2019 if Mr. Baumgartner 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 October 6 of each of 2020 through
2023 so long as Mr. Baumgartner 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
November 15, 2023 at the earliest (unless there is an earlier change in control) and only if the 3YMA on a measurement
date as compared to $111.70, which was the 3YMA of Cimpress' ordinary shares on the grant date, meets or exceeds
the CAGR performance thresholds.
This RSU award vests as to 6.25% of the original number of units on May 15, 2021 and as to an additional 6.25% on
the 15th day of every third month thereafter until February 15, 2025, on each of which dates we will automatically issue
one ordinary share for each vested unit so long as Mr. Baumgartner 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
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 3YMA on a measurement
date as compared to $95.46, which was the two-year moving average daily closing price of Cimpress' ordinary shares
on the grant date, meets or exceeds the CAGR performance thresholds.
These RSU awards vest 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 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, 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 3YMA on a measurement date as
compared to $100.46, which was the 3YMA of Cimpress' ordinary shares on the grant date, meets or exceeds the
CAGR performance thresholds.
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 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.
This RSU award vests as to 25% of the original number of units on April 15 of each of 2023 through 2026, on each of
which dates we will automatically issue one ordinary share for each vested unit so long as Mr. Baumgartner 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, 2023 and as to an additional 6.25% on
the 15th day of every third month thereafter until August 15, 2026, 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
(33)
(34)
(35)
This RSU award vests as to 25% of the original number of units on January 15, 2024 and as to an additional 6.25% on
the 15th day of every third month thereafter until January 15, 2027, on each of which dates we will automatically issue
one ordinary share for each vested unit so long as Mr. Baumgartner 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 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 has been fully satisfied for these PSUs, but the PSUs are not
earned, and no shares are issuable pursuant to the PSUs, until the 3YMA on a measurement date as compared to
$108.92, which was the 3YMA of Cimpress' ordinary shares on the grant date, meets or exceeds the CAGR
performance thresholds. No shares were issuable pursuant to the PSUs on the first measurement date of August 15,
2023 because the performance conditions were not satisfied on that date. The next measurement date for this PSU
award will be August 15, 2024.
Shares Vested in the Fiscal Year Ended June 30, 2023
The following table contains information about the vesting of RSUs on an aggregated basis during fiscal year 2023 for
each of our named executive officers. None of our executive officers exercised any share options, and no shares were
issued pursuant to 3YMA-based PSUs, during fiscal year 2023.
Name
Robert S. Keane ...............................
Florian Baumgartner ........................
Sean E. Quinn ...................................
Maarten Wensveen ..........................
_________________________
Share Awards
Number of Shares
Acquired on Vesting
(#)
Value Realized
on Vesting
(1)($)
—
22,919
18,259
9,224
—
949,626
724,799
370,842
(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 2023 annual total compensation was $3,077,261, as reported in the Summary Compensation
Table above, and the fiscal year 2023 annual total compensation of our median compensated employee other than
Mr. Keane was $24,600. The ratio of the median employee's total compensation to Mr. Keane's total compensation is 1-
to-125.
We identified a new median compensated employee for fiscal year 2023 using the same methodology that we have
used in the past: 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, 2023. We annualized this compensation for employees who did
not work the entire fiscal year, except for employees designated as seasonal or temporary.
18
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information as of June 30, 2023 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)
5,362,100
Equity compensation plans not approved by
shareholders .............................................................................
—
Total ............................................................................................
5,362,100
$3.35
—
$3.35
2,201,615
—
2,201,615 (3)
_____________
(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 4,974,653 shares underlying RSUs and
3YMA-based PSUs based on 2.5 shares per PSU that were outstanding as of June 30, 2023.
The RSUs and 3YMA-based PSUs included in column (a) do not have an exercise price, and the weighted-average
exercise price excluding these units is $46.37.
Consists of shares available for future awards under our 2020 Equity Incentive Plan. For 3YMA-based PSU awards, we
assumed that we would issue ordinary shares equal to 250% of the outstanding PSUs, which is the maximum potential
share issuance.
19
PAY VERSUS PERFORMANCE
The following table sets forth the compensation for Robert Keane, our Chief Executive Officer (who is our
principal executive officer as defined by SEC rules) and the average compensation for our other named executive
officers (Other NEOs) for fiscal years 2023, 2022, and 2021, both as reported in the Summary Compensation Table
and with certain adjustments to reflect the “compensation actually paid” to such individuals, as calculated in
accordance with applicable SEC rules. “Compensation actually paid” does not reflect amounts actually realized by
our CEO and Other NEOs and may be higher or lower than the amounts, if any, that are ultimately realized by our
executives. Our Compensation Committee did not consider “compensation actually paid,” as defined by SEC rules,
when making its executive compensation decisions for the covered fiscal years. Please see the Compensation
Discussion and Analysis section in this proxy statement for a discussion of our Compensation Committee’s
philosophy, objectives, and practices when making executive compensation decisions.
The total compensation of our CEO and Other NEOs is not tied to any specific company performance measures,
and therefore Cimpress does not have a "Company-Selected Measure," as defined by SEC rules, for fiscal year
2023. In fiscal year 2023, Mr. Keane received a base salary and 3YMA-based PSUs with long-term performance
conditions that are measured six to ten years after the grant date and are not tied to any fiscal year 2023 financial
performance measures. Our executive officers other than Mr. Keane received base salaries and RSU and share
option awards subject solely to time-based vesting.
Pay Versus Performance Table
Summary
Compensation
Table Total for
CEO
($)
Compensation
Actually Paid to
CEO
($)(1)
Average
Summary
Compensation
Table Total for
Other NEOs
($)
Average
Compensation
Actually Paid to
Other NEOs
($)(2)
3,077,261
9,177,588
3,671,422
6,692,075
8,133,820
(6,271,534)
6,310,409
(1,305,424)
Value of Initial Fixed $100
Investment Based On:
Cimpress
Total
Shareholder
Return
($)(3)
Peer Group
Total
Shareholder
Return
($)(3)
77.91
50.96
91.24
82.38
8,340,034
12,585,061
5,320,963
7,021,693
142.01
130.30
Year
2023
2022
2021
Cimpress' Net
(Loss) Income
(in thousands)
($)(4)
(185,978)
(54,331)
(85,229)
_____________
(1) The following table shows for each covered fiscal year the adjustments made to the total compensation shown
for Mr. Keane in the Summary Compensation Table to arrive at "compensation actually paid" as reflected in the
table above. The service-based vesting of our 3YMA-based PSUs is satisfied before the measurement period of
the 3YMA CAGR performance conditions begins, and the compensation actually paid, as calculated in
accordance with SEC rules, considers only the service-based vesting of our 3YMA-based PSUs. Therefore, the
compensation actually paid does not consider whether or not the 3YMA-based PSU awards achieve the
performance conditions and pay out.
Adjustments to Determine CEO Compensation Actually Paid
2023
2022
2021
Summary Compensation Table Total
3,077,261
8,133,820
8,340,034
Subtract: Grant date fair values of equity awards reported in "Stock Awards" column
of the Summary Compensation Table
Add: Fair value as of the end of the covered fiscal year (FY) of all equity awards
granted during the covered FY that remain outstanding and unvested as of the end
of the FY
Add: The change in fair value (whether positive or negative) as of the end of the
covered FY from the end of the prior FY of any equity awards granted in any prior FY
that remain outstanding and unvested as of the end of the covered FY
Add: The fair value as of the vesting date of any equity awards that are granted and
vest in the same FY
Add: The change in fair value (whether positive or negative) as of the vesting date
from the end of the prior FY of any equity awards granted in any prior FY for which all
applicable vesting conditions were satisfied at the end of or during the covered FY
Subtract: Fair value at the end of the prior FY of any equity awards that fail to meet
the applicable vesting conditions during the covered FY
Compensation Actually Paid to CEO
(1,320,915)
(7,342,285)
(8,283,797)
3,678,591
989,861
5,312,747
1,367,721
(4,490,270)
2,169,661
1,191,909
650,067
3,194,464
1,183,021
(4,212,727)
1,851,952
—
—
—
9,177,588
(6,271,534)
12,585,061
(2) The Other NEOs whose compensation amounts are averaged and included in this table are Sean Quinn and
Maarten Wensveen for all three fiscal years and Florian Baumgartner for fiscal year 2023 only. The following
table shows for each covered fiscal year the adjustments made to the average of the total compensation shown
20
for the Other NEOs in the Summary Compensation Table to arrive at "compensation actually paid" as reflected
in the table above:
Adjustments to Determine Average Other NEO Compensation Actually Paid
2023
2022
2021
Summary Compensation Table Total (Average)
3,671,422
6,310,409
5,320,963
Subtract: Grant date fair values of equity awards reported in "Option Awards"
column of the Summary Compensation Table
Subtract: Grant date fair values of equity awards reported in "Stock Awards" column
of the Summary Compensation Table
Add: Fair value as of the end of the covered fiscal year (FY) of all equity awards
granted during the covered FY that remain outstanding and unvested as of the end
of the FY
Add: The change in fair value (whether positive or negative) as of the end of the
covered FY from the end of the prior FY of any equity awards granted in any prior FY
that remain outstanding and unvested as of the end of the covered FY
Add: The fair value as of the vesting date of any equity awards that are granted and
vest in the same FY
Add: The change in fair value (whether positive or negative) as of the vesting date
from the end of the prior FY of any equity awards granted in any prior FY for which all
applicable vesting conditions were satisfied at the end of or during the covered FY
Subtract: Fair value at the end of the prior FY of any equity awards that fail to meet
the applicable vesting conditions during the covered FY
(1,441,653)
—
—
(1,608,301)
(5,461,685)
(4,349,908)
3,860,753
1,884,279
4,235,198
1,310,791
(2,757,955)
584,771
559,795
80,740
775,739
339,268
(1,361,212)
454,930
—
—
—
Average Compensation Actually Paid to Other NEOs
6,692,075
(1,305,424)
7,021,693
(3) Our peer group for purposes of this table is the Research Data Group (RDG) Internet Composite Index, which is
the industry index included in the performance graph in our Annual Report on Form 10-K for all three of the
covered fiscal years. The cumulative total returns to shareholders of Cimpress plc ordinary shares and the RDG
Internet Composite index are calculated by assuming an investment of $100 (with reinvestment of all dividends)
was made in our ordinary shares and in the index on June 30, 2020.
(4) The amounts in this column are Cimpress' net loss reflected in the audited financial statements published in our
Annual Report on Form 10-K for the applicable year.
21
Relationship between Compensation Actually Paid and Performance Metrics
The following graph shows the relationship between the amount of compensation actually paid to Mr. Keane and
the average amount of compensation actually paid to the Other NEOs and the total shareholder return of Cimpress
and its peer group, as set forth in the Pay Versus Performance Table above.
Compensation Actually Paid vs. Cimpress TSR and Peer Group TSR
22
Fiscal YearValue of $100 InvestmentCompensation Actually Paid(in thousands)Cimpress CEOCimpress Other NEOsCimpress TSRRDG Internet Composite Index TSR202120222023$(100.00)$(50.00)$0.00$50.00$100.00$150.00$(10,000)$(5,000)$0$5,000$10,000$15,000 The following graph shows the relationship between the amount of compensation actually paid to Mr. Keane and
the average amount of compensation actually paid to the Other NEOs and Cimpress' net loss for each fiscal year,
as set forth in the Pay Versus Performance Table above.
Compensation Actually Paid vs. Cimpress Net Loss
As noted above, during fiscal year 2023 the compensation actually paid to our CEO and Other NEOs was not
tied to any specific financial performance measures.
23
Fiscal YearCimpress Net Loss(in thousands)Compensation Actually Paid(in thousands)Cimpress CEOCimpress Other NEOsCimpress Net Loss202120222023$(200,000)$(100,000)$0$100,000$200,000$300,000$(10,000)$(5,000)$0$5,000$10,000$15,000 PROPOSAL 3 - AUTHORIZE OUR BOARD TO ISSUE ORDINARY SHARES
Under Irish law, the directors of an Irish public limited company must have authority from the company’s
shareholders to issue shares and to grant rights to acquire shares (such as options, warrants, and other convertible
securities), including shares that are part of the company’s authorized but unissued share capital. This requirement
does not apply to the issue of shares and the grant of rights to acquire shares to employees or former employees
under an "employees’ share scheme" as defined under Irish law, which includes our equity compensation plans.
Our Board currently has authority to issue shares and to grant rights to acquire shares up to the full amount of
Cimpress' authorized but unissued share capital. This authority will expire on November 21, 2024.
We are seeking authority from our shareholders at the annual meeting for our Board to issue and grant rights to
acquire ordinary shares up to a maximum of 5,318,007, which is 20% of our issued ordinary share capital as of
October 23, 2023 (the latest practicable date before mailing this proxy statement). The proposed authority is for a
period expiring on June 14, 2025, which is 18 months after the date of this annual meeting, and we expect to
propose renewals of this authority on a regular basis at future annual general meetings. If this proposal is not
passed, Cimpress will have a limited ability to issue ordinary shares after the Board's current authority expires on
November 21, 2024.
We are seeking this authorization to maintain our flexibility to issue, or grant rights to acquire, up to 20% of our
issued share capital at times when we believe doing so would be in Cimpress' best interests, including in connection
with acquisitions, financings, and other transactions, for other general corporate purposes, and for equity
compensation of our non-employee directors (as the exception for issuances pursuant to an employees' share
scheme only applies to employees and former employees). We believe it is important to our continued growth to
retain the flexibility to issue securities in a timely manner without the delay and uncertainty of obtaining specific
shareholder approval for each issuance. We are seeking authorization to issue a limited number of shares for a
limited time (18 months) to balance our need for flexibility to issue new shares against the potential dilution of our
shareholders. Furthermore, because our ordinary shares are listed on Nasdaq, our issuance of additional shares
will remain subject to Nasdaq rules, which require, among other things, shareholder approval for the issuance of
shares in excess of 20% of our shares outstanding if the shares are issued below the "minimum price" determined
by Nasdaq rules and in certain other circumstances (with several exceptions).
Accordingly, the following resolution will be submitted to our shareholders for approval, as an ordinary resolution,
at the Annual Meeting:
“Resolved, that the directors are, with effect from the passing of this resolution, hereby generally and
unconditionally authorized to exercise all powers of Cimpress plc to allot and issue relevant securities
(within the meaning of section 1021 of the Companies Act 2014, as amended) up to an aggregate
nominal value of €53,180, which represents 5,318,007 ordinary shares, equivalent to 20% of the
aggregate nominal value and number of the issued ordinary shares in the capital of Cimpress plc as of
October 23, 2023 (the latest practicable date before mailing this proxy statement), and the authority
conferred by this resolution shall expire on June 14, 2025, unless previously renewed, varied or revoked
by Cimpress, provided that Cimpress may, before such expiry, make an offer or agreement which
would, or might, require relevant securities to be allotted and issued after such expiry and, in that case,
the directors may allot and issue relevant securities in pursuance of any such offer or agreement as if
the authority conferred by this resolution had not expired.”
Our Board of Directors recommends that you vote FOR our authorization to issue ordinary shares and
grant rights to acquire ordinary shares as described above.
PROPOSAL 4 - AUTHORIZE OUR BOARD TO OPT OUT OF
STATUTORY PREEMPTION RIGHTS
Under Irish law, unless its directors are otherwise authorized and empowered to opt out, when an Irish public
limited company proposes to issue, or grant rights to acquire, shares for cash, the company is required to first offer
those shares or rights on the same or more favorable terms to existing shareholders of the company on a pro rata
basis (commonly referred to as statutory preemption rights). Statutory preemption rights do not apply to the issue of
shares or the grant of rights to acquire shares (i) for cash to employees or former employees under an employees’
share scheme, including our equity compensation plans, or (ii) for non-cash consideration, such as on a share-for-
share transaction.
Our Board is currently authorized and empowered to opt out of statutory preemption rights and to issue shares
and to grant rights to acquire shares up to the full amount of Cimpress' authorized but unissued share capital
without regard to statutory preemption rights. This authority will expire on November 21, 2024.
We are seeking authority from our shareholders at the annual meeting for our Board to issue and grant rights to
acquire ordinary shares for cash without regard to statutory preemption rights up to a maximum of 5,318,007, which
is 20% of our issued ordinary share capital as of October 23, 2023 (the latest practicable date before mailing this
proxy statement). The proposed authority is for a period expiring on June 14, 2025, which is 18 months after the
24
date of this annual meeting, and we expect to propose renewals of this authority on a regular basis at future annual
general meetings.
We believe that if we are not granted the authority to opt out of statutory preemption rights, our ability to raise
capital through sales of our securities would be significantly affected because shareholders’ exercise of their
preemption rights would cause delays in a transaction and may dissuade potential buyers of our securities from
entering into a transaction with us. Preemption rights are uncommon for publicly traded companies domiciled in the
United States.
Accordingly, the following resolution will be submitted to our shareholders for approval, as a special resolution, at
the Annual Meeting:
“Resolved, that, subject to and conditional on the passing of the resolution in respect of Proposal 3, as
set out above, and with effect from the passing of this resolution, the directors are hereby empowered
pursuant to section 1023 of the Companies Act 2014, as amended (the “Act”), to allot and issue equity
securities (within the meaning of section 1023 of the Act) for cash pursuant to the authority conferred
by the said Proposal 3 as if section 1022(1) of the Act did not apply to any such allotment, provided that
this power shall be limited to:
1.
2.
the allotment and issue of equity securities in connection with a rights’ issue in favor of the holders
of ordinary shares (including rights to subscribe for, or convert other securities into, ordinary
shares) where the equity securities respectively attributable to the interests of such holders are
proportional (as nearly as may be practicable) to the respective numbers of ordinary shares held by
them (but subject to such exclusions or other arrangements as the directors may deem necessary
or expedient to deal with any treasury shares, fractional entitlements that would otherwise arise,
record dates or with legal or practical problems under the laws of, or the requirements of any
recognized regulatory body or any stock exchange in, any territory, or otherwise); and
the allotment and issue (otherwise than pursuant to sub-paragraph (1) above) of equity securities up
to an aggregate nominal value of €53,180, which represents 5,318,007 ordinary shares, equivalent to
20% of the aggregate nominal value and number of the issued ordinary shares in the capital of
Cimpress plc as of October 23, 2023 (the latest practicable date before mailing this proxy
statement).
and, in each case, the authority conferred by this resolution shall expire on June 14, 2025, unless
previously renewed, varied or revoked, provided that Cimpress plc may, before such expiry, make an
offer or agreement, which would, or might, require any such securities to be allotted and issued after
such expiry, and in that case, the directors may allot and issue equity securities in pursuance of any
such offer or agreement as if the authority conferred by this resolution had not expired.”
This proposal is conditional upon the approval of Proposal 3, as required by Irish law.
Our Board of Directors recommends that you vote FOR our authorization to opt out of statutory
preemption rights as described above.
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, 2024 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, have an opportunity to make a statement, or be
available to answer questions.
25
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 2024.
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, 2023 and June 30, 2022. 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
2023
Fiscal Year
2022
Audit Fees(1) .............................................. $ 4,329,726 $ 4,182,586
Tax Fees(2) ................................................
455,755
192,537
All Other Fees(3) .......................................
32,900
37,013
Total Fees ................................................... $ 4,818,381 $ 4,412,136
_____________
(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 $225,960 of the total tax fees billed in fiscal year 2023 and $148,689 of the total tax fees billed in fiscal year
2022.
(3) For fiscal year 2023, this amount included subscription fees for an accounting research tool and the filing of a registration
statement on Form S-8. For fiscal year 2022, this amount represented fees associated with a COVID-19 relief package in
the Netherlands.
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, 2023, PwC did not provide any services to Cimpress other than in
accordance with the pre-approval policies and procedures described above.
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.
26
Our Board of Directors recommends that you vote FOR the authorization of our Board or Audit
Committee to determine the remuneration of PricewaterhouseCoopers Ireland.
PROPOSAL 7 - FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
At the annual meeting, in accordance with Section 14A of the U.S. Securities Exchange Act of 1934, we are
asking our shareholders to advise us on how frequently they wish to cast future advisory votes on the compensation
of our named executive officers: Once every year, once every two years, or once every three years. At our annual
general meetings in 2011 and 2017, a majority of our shareholders voted to hold the advisory vote to approve our
executive compensation on an annual basis, and we believe that an annual vote continues to be the best practice in
the market. Accordingly, we recommend that future advisory votes on executive compensation continue to be held
on an annual basis.
This is an advisory vote, meaning that it is not binding on us, but our Board of Directors will take into consideration
the outcome of this vote in making a determination about the frequency of future executive compensation advisory
votes.
Our Board of Directors recommend that you vote in favor of a frequency of every ONE YEAR for future
advisory votes on our executive compensation.
27
Board of Directors and Committees
CORPORATE GOVERNANCE
During our fiscal year ended June 30, 2023, our Board met four times, and each of our directors attended more
than 90% 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 three of our directors attended our 2022 annual
general meeting of shareholders.
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.
The Board and each committee have the power to hire and consult with independent legal, financial or other
advisors for the benefit of the Board or such committee, as they may deem necessary. The Board and each
committee may also form and delegate authority to one or more subcommittees, as they deem appropriate
(including a subcommittee consisting of a single member).
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 2023?
Yes, meet independence
criteria for audit committee
members
Yes, meet independence
criteria for compensation
committee members
five
five
Yes
none
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
28
• preparing the Audit Committee report included in this proxy statement
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 value creation by Cimpress.
• The non-employee directors must meet at least twice per 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.
29
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.
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.
Insider Trading Policy
Our Board of Directors has adopted an Insider Trading Policy, which is filed as an exhibit to our Annual Report on
Form 10-K, that governs the purchase, sale, and other dispositions of Cimpress' securities by our executive officers,
directors, and employees and that is reasonably designed to promote compliance with insider trading laws, rules,
and regulations and Nasdaq listing standards. 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.
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 Leadership Structure
The chair of our Board of Directors is Robert Keane, who is also our Chief Executive Officer. We believe that
combining the roles of chairperson and chief executive officer is appropriate for Cimpress given the small size of our
Board. We believe that appointing a separate lead director as chair, or in addition to a chair, would add unnecessary
process for a Board of five directors and could impede the Board's decision-making process.
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
30
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.
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.
Report of the Audit Committee
The Audit Committee has reviewed Cimpress' audited consolidated financial statements for the fiscal year ended
June 30, 2023 and has discussed these financial statements with Cimpress' management and
PricewaterhouseCoopers LLP, our independent registered public accounting firm for fiscal year 2023.
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 2023. 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, 2023.
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
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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;
• 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 discussion of, the conflict.
We did not have any related person transactions, as defined by SEC rules, during fiscal year 2023.
Compensation Committee Interlocks and Insider Participation
During fiscal year 2023, 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 2023, no Compensation Committee member had any relationship with us
requiring disclosure under SEC rules.
During fiscal year 2023, 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
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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
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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. For fiscal year 2023, our director compensation
program was as follows:
Cash Compensation for Directors
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 for Directors
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 $150,000 of RSUs in connection with their initial
appointment to the Board
The RSU awards granted to our non-employee directors in fiscal year 2023 vest as to 25% on November 15,
2023 and as to an additional 25% on the following three anniversaries of that date.
Non-Employee Director Compensation Table
The following table contains information about the compensation earned by our non-employee directors in the
fiscal year ended June 30, 2023:
Name
Sophie A. Gasperment ..............................
Zachary S. Sternberg .................................
Dessislava Temperley ................................
Scott J. Vassalluzzo ...................................
_____________
Fees
Earned or
Paid in
Cash
($)
100,000
Share
Awards
($)(1)
125,000
Total
($)
225,000
100,000
125,000
225,000
125,000
125,000
250,000
100,000
125,000
225,000
(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, 2023.
In addition, at June 30, 2023, our non-employee directors held the following outstanding equity compensation
awards:
•
•
•
•
Ms. Gasperment held 6,753 3YMA-based PSUs and 5,564 RSUs.
Mr. Sternberg held 5,128 3YMA-based PSUs and 5,564 RSUs.
Ms. Temperley held 6,870 RSUs.
Mr. Vassalluzzo held 6,239 3YMA-based PSUs, 5,564 RSUs, and unexercised share options to
purchase an aggregate of 5,298 shares.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table contains information regarding the beneficial ownership of our ordinary shares as of September
20, 2023 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)
ArrowMark Colorado Holdings, LLC (4) ...................................................................
Number of Ordinary
Shares Beneficially
Owned(2)
Percent of Ordinary
Shares Beneficially
Owned(3)
1,682,569
6.3%
100 Fillmore Street, Suite 325
Denver, CO 80206 USA
Janus Henderson Group plc (5) ................................................................................
2,648,346
10.0
201 Bishopsgate
EC2M 3AE London UK
Prescott General Partners LLC ................................................................................
3,906,492
14.7
2200 Butts Road, Suite 320
Boca Raton, FL 33431 USA
Thomas W. Smith .......................................................................................................
1,606,329
6.0
2200 Butts Road, Suite 320
Boca Raton, FL 33431 USA
The Spruce House Partnership LLC ........................................................................
2,358,904
8.9
435 Hudson Street, 8th Floor
New York, NY 10014 USA
The Vanguard Group (6) ............................................................................................
1,549,738
5.8
100 Vanguard Blvd.
Malvern, PA 19355 USA
Named Executive Officers and Directors
Robert S. Keane (7) ....................................................................................................
2,173,244
8.2
Florian Baumgartner (8) .............................................................................................
Sophie A. Gasperment (8) .........................................................................................
Sean E. Quinn (8) ........................................................................................................
46,022
2,357
38,447
*
*
*
Zachary S. Sternberg (8)(9) .......................................................................................
2,376,464
8.9
Dessislava Temperley (8) ...........................................................................................
Scott J. Vassalluzzo (8)(10\) ......................................................................................
Maarten Wensveen (8) ...............................................................................................
2,165
78,322
45,456
*
*
*
All current executive officers and directors as a group (8 persons) (8) ..............
4,762,477
17.9%
_____________
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*
Less than 1%
(1) Unless otherwise indicated, the address of each executive officer and director is c/o Cimpress plc, First Floor Building 3,
Finnabair Business and Technology Park, Dundalk, Co. Louth A91 XR61, Ireland.
(2)
(3)
(4)
(5)
(6)
(7)
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 20, 2023 (i.e., November 19, 2023), 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 20, 2023 is calculated by dividing (1) the total number of
shares beneficially owned by the shareholder by (2) 26,582,811, the number of ordinary shares outstanding on
September 20, 2023, plus any shares issuable to the shareholder within 60 days after September 20, 2023 (i.e.,
November 19, 2023), including RSUs that vest and share options that are exercisable on or before November 19, 2023.
This information is based solely upon a Schedule 13G that the shareholder filed with the SEC on February 15, 2023.
This information is based solely upon a Schedule 13G/A that the shareholder filed with the SEC on February 10, 2023.
This information is based solely upon a Schedule 13G/A that the shareholder filed with the SEC on February 9, 2023.
Includes an aggregate of 2,172,444 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.
(8)
Includes the number of shares that each named executive officer and director listed below has the right to acquire under
share options and RSUs that vest on or before November 19, 2023:
• Mr. Baumgartner: 20,572 shares
• Ms. Gasperment: 1,479 shares
• Mr. Quinn: 25,487 shares
• Mr. Sternberg: 1,479 shares
• Ms. Temperley: 1,479 shares
• Mr. Vassalluzzo: 6,777 shares
• Mr. Wensveen: 20,614 shares
(9)
Includes 2,358,904 shares held by The Spruce House Partnership LLC. The general partner of The Spruce House
Partnership LLC 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 LLC except to the extent of his pecuniary
interest therein.
(10)
Includes 1,958 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.
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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 seven 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 October 12,
2023, which is the record date for the annual meeting. Shareholders of record at the close of business on
October 12, 2023 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 26,582,811. 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 December 13, 2023, 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
37
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 contact
Investor Relations by email at ir@cimpress.com or by phone 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.
• Proposal 4 (authorize our Board to opt out of statutory preemption rights): This proposal requires the approval
of at least 75% of the votes cast at the annual meeting.
• Proposal 7 (advisory "say on frequency"): . This vote is non-binding and advisory in nature, but our Board will
take into account the outcome of the vote and expects to adopt the frequency that receives the greatest level of
support from our shareholders.
38
• 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
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 Proposals 1 through 6 and for a frequency of every 1 YEAR on
Proposal 7.
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 2024 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 2024 annual general meeting or if you wish to submit another kind of proposal for
consideration by shareholders at our 2024 annual general meeting.
Under our Constitution, in order to nominate a candidate for election as a director or bring other business before
our 2024 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 2023 annual meeting. However, if the date of our 2024 annual general meeting is more than 30
calendar days before or more than 60 calendar days after the first anniversary of the 2023 annual meeting, you
must deliver the required notice no earlier than 120 calendar days before the 2024 annual general meeting and no
later than the later of 90 calendar days before the 2024 annual general meeting or five calendar days after the day
on we first publicly announce the date of our 2024 annual general meeting.
39
Under U.S. securities laws, if you wish to have a proposal included in our proxy statement for the 2024 annual
general meeting, then in addition to the above requirements, you also need to follow the procedures outlined in
Rule 14a-8 of the Securities Exchange Act of 1934, and we must receive your proposal at our office in Dundalk,
Ireland as set forth below no later than July 4, 2024.To comply with the universal proxy rules, shareholders who
intend to solicit proxies in support of director nominees other than our nominees must provide notice at our office in
Dundalk, Ireland as set forth below no later than October 15, 2024, and the notice must set forth the information
required by Rule 14a-19 under the Securities Exchange Act.
Any proposals, nominations or notices under our Constitution or pursuant to Rule 14a-8 or 14a-19 should be sent
to:
Secretary, Cimpress plc
First Floor Building 3, Finnabair Business and Technology Park
Dundalk, Co. Louth, A91 XR61
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 $12,500 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.
40
FIRST FLOOR BUILDING 3, FINNABAIR BUSINESS AND TECHNOLOGY PARK
DUNDALK, CO. LOUTH, IRELAND