CIMPRESS plc 10-Q

Item 1. Financial Statements CIMPRESS PLC CONSOLIDATED BALANCE SHEETS (unaudited in thousands, except share and per share data) September 30, 2020 June 30, 2020 Assets Current assets: Cash and cash equivalents $ 40,229 $ 45,021 Accounts receivable, net of allowances of $10,328 and $9,651, respectively 47,549 34,596 Inventory 91,504 80,179 Prepaid expenses and other current assets 82,408 88,608 Total current assets 261,690 248,404 Property, plant and equipment, net 330,309 338,659 Operating lease assets, net 146,557 156,258 Software and website development costs, net 77,595 71,465 Deferred tax assets 146,807 143,496 Goodwill 637,568 621,904 Intangible assets, net 200,493 209,228 Other assets 21,010 25,592 Total assets $ 1,822,029 $ 1,815,006 Liabilities, noncontrolling interests and shareholders’ deficit Current liabilities: Accounts payable $ 211,087 $ 163,891 Accrued expenses 243,821 210,764 Deferred revenue 36,390 39,130 Short-term debt 22,666 17,933 Operating lease liabilities, current 39,426 41,772 Other current liabilities 21,589 13,268 Total current liabilities 574,979 486,758 Deferred tax liabilities 33,057 33,811 Long-term debt 1,331,549 1,415,657 Operating lease liabilities, non-current 119,817 128,963 Other liabilities 105,845 88,187 Total liabilities 2,165,247 2,153,376 Commitments and contingencies (Note 12) Redeemable noncontrolling interests 71,209 69,106 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; 44,080,627 shares issued; 26,003,649 and 25,885,675 shares outstanding, respectively 615 615 Deferred ordinary shares, nominal value €1.00 per share, 25,000 shares authorized, issued and outstanding 28 28 Treasury shares, at cost, 18,076,978 and 18,194,952 shares, respectively ( 1,368,723 ) ( 1,376,496 ) Additional paid-in capital 433,827 438,616 Retained earnings 607,682 618,437 Accumulated other comprehensive loss ( 87,856 ) ( 88,676 ) Total shareholders' deficit ( 414,427 ) ( 407,476 ) Total liabilities, noncontrolling interests and shareholders’ deficit $ 1,822,029 $ 1,815,006 See accompanying notes. 1 CIMPRESS PLC CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited in thousands, except share and per share data) Three Months Ended September 30, 2020 2019 Revenue $ 586,500 $ 633,959 Cost of revenue (1) 298,844 325,665 Technology and development expense (1) 58,489 63,167 Marketing and selling expense (1) 138,150 160,917 General and administrative expense (1) 41,812 43,623 Amortization of acquired intangible assets 13,305 13,018 Restructuring expense (1) ( 86 ) 2,190 Income from operations 35,986 25,379 Other (expense) income, net ( 8,754 ) 15,674 Interest expense, net ( 30,516 ) ( 15,087 ) (Loss) income before income taxes ( 3,284 ) 25,966 Income tax expense 6,794 6,115 Net (loss) income ( 10,078 ) 19,851 Add: Net (income) loss attributable to noncontrolling interest ( 677 ) 180 Net (loss) income attributable to Cimpress plc $ ( 10,755 ) $ 20,031 Basic net (loss) income per share attributable to Cimpress plc $ ( 0.41 ) $ 0.67 Diluted net (loss) income per share attributable to Cimpress plc $ ( 0.41 ) $ 0.66 Weighted average shares outstanding — basic 25,945,998 29,747,035 Weighted average shares outstanding — diluted 25,945,998 30,529,472 ____________________________________________ (1) Share-based compensation is allocated as follows: Three Months Ended September 30, 2020 2019 Cost of revenue $ 100 $ 88 Technology and development expense 2,191 1,734 Marketing and selling expense 1,685 ( 1,311 ) General and administrative expense 4,307 4,239 Restructuring expense — 664 See accompanying notes. 2 CIMPRESS PLC CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (unaudited in thousands) Three Months Ended September 30, 2020 2019 Net (loss) income $ ( 10,078 ) $ 19,851 Other comprehensive income, net of tax: Foreign currency translation gains (losses), net of hedges 817 ( 1,560 ) Net unrealized gains (losses) on derivative instruments designated and qualifying as cash flow hedges 3,836 ( 7,188 ) Amounts reclassified from accumulated other comprehensive (loss) income to net (loss) income on derivative instruments ( 2,071 ) 4,151 Loss on pension benefit obligation, net ( 336 ) — Comprehensive (loss) income ( 7,832 ) 15,254 Add: Comprehensive (income) loss attributable to noncontrolling interests ( 2,103 ) 1,670 Total comprehensive (loss) income attributable to Cimpress plc $ ( 9,935 ) $ 16,924 See accompanying notes. 3 CIMPRESS PLC CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (unaudited 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’ Equity (Deficit) Balance at June 30, 2019 44,080 $ 615 — $ — ( 13,635 ) $ ( 737,447 ) $ 411,079 $ 537,422 $ ( 79,857 ) $ 131,812 Restricted share units vested, net of shares withheld for taxes — — — — 4 87 ( 259 ) — — ( 172 ) Grant of restricted share awards — — — — ( 2 ) ( 187 ) — — — ( 187 ) Share-based compensation expense — — — — — — 5,164 — — 5,164 Purchase of ordinary shares — — — — ( 1,964 ) ( 232,286 ) — — — ( 232,286 ) Net income attributable to Cimpress plc — — — — — — — 20,031 — 20,031 Adoption of new accounting standards — — — — — — — 3,143 — 3,143 Net unrealized loss on derivative instruments designated and qualifying as cash flow hedges — — — — — — — — ( 3,037 ) ( 3,037 ) Foreign currency translation, net of hedges — — — — — — — — ( 70 ) ( 70 ) Balance at September 30, 2019 44,080 $ 615 — $ — ( 15,597 ) $ ( 969,833 ) $ 415,984 $ 560,596 $ ( 82,964 ) $ ( 75,602 ) Balance at June 30, 2020 44,080 $ 615 25 $ 28 ( 18,195 ) $ ( 1,376,496 ) $ 438,616 $ 618,437 $ ( 88,676 ) $ ( 407,476 ) Restricted share units vested, net of shares withheld for taxes — — — — 118 7,773 ( 13,366 ) — — ( 5,593 ) Share-based compensation expense — — — — — — 8,577 — — 8,577 Net loss attributable to Cimpress plc — — — — — — — ( 10,755 ) — ( 10,755 ) Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges — — — — — — — — 1,765 1,765 Foreign currency translation, net of hedges — — — — — — — — ( 609 ) ( 609 ) Unrealized loss on pension benefit obligation, net of tax — — — — — — — — ( 336 ) ( 336 ) Balance at September 30, 2020 44,080 $ 615 25 $ 28 ( 18,077 ) $ ( 1,368,723 ) $ 433,827 $ 607,682 $ ( 87,856 ) $ ( 414,427 ) See accompanying notes. 4 CIMPRESS PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited in thousands) Three Months Ended September 30, 2020 2019 Operating activities Net (loss) income $ ( 10,078 ) $ 19,851 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 42,290 42,535 Share-based compensation expense 8,283 5,414 Deferred taxes ( 32 ) ( 960 ) Unrealized loss (gain) on derivatives not designated as hedging instruments included in net (loss) income 14,628 ( 14,527 ) Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency ( 4,958 ) 5,028 Other non-cash items 3,192 1,365 Changes in operating assets and liabilities: Accounts receivable ( 12,448 ) ( 6,595 ) Inventory ( 3,111 ) ( 6,410 ) Prepaid expenses and other assets 2,523 737 Accounts payable 38,684 ( 11,038 ) Accrued expenses and other liabilities 26,708 27,505 Net cash provided by operating activities 105,681 62,905 Investing activities Purchases of property, plant and equipment ( 8,383 ) ( 14,193 ) Business acquisitions, net of cash acquired — ( 4,272 ) Capitalization of software and website development costs ( 14,804 ) ( 12,471 ) Proceeds from the sale of assets 2,103 670 Other investing activities — 903 Net cash used in investing activities ( 21,084 ) ( 29,363 ) Financing activities Proceeds from borrowings of debt 99,000 277,785 Payments of debt ( 182,726 ) ( 74,392 ) Payments of debt issuance costs ( 410 ) — Payments of purchase consideration included in acquisition-date fair value ( 648 ) — Payments of withholding taxes in connection with equity awards ( 5,592 ) ( 359 ) Payments of finance lease obligations ( 1,592 ) ( 2,719 ) Purchase of ordinary shares — ( 231,883 ) Other financing activities ( 11 ) ( 1,437 ) Net cash used in financing activities ( 91,979 ) ( 33,005 ) Effect of exchange rate changes on cash 2,590 ( 4,582 ) Net decrease in cash and cash equivalents ( 4,792 ) ( 4,045 ) Cash and cash equivalents at beginning of period 45,021 35,279 Cash and cash equivalents at end of period $ 40,229 $ 31,234 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 9,078 $ 9,384 Income taxes 352 4,472 Non-cash investing and financing activities: Property and equipment acquired under finance leases 76 — Amounts accrued related to business acquisitions 1,676 2,645 See accompanying notes. 5 CIMPRESS PLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited 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, via which we deliver large volumes of individually small-sized customized orders for a broad spectrum of print, signage, photo merchandise, invitations and announcements, writing instruments, packaging, apparel and other categories. We invest in and build customer-focused, entrepreneurial mass customization businesses for the long term, which we manage in a decentralized, autonomous manner. Mass customization is a core element of the business model of each Cimpress business. 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. 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 the related equity securities do not have a readily determinable fair value, are accounted for using the cost method and 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. Given the current and expected impact of the COVID-19 pandemic on our business we evaluated our liquidity position as of the date of the issuance of these consolidated financial statements. Based on this evaluation, management believes, despite the ongoing impact of COVID-19 on our business, that our financial position, net cash provided by operations combined with our cash and cash equivalents, borrowing availability under our revolving credit facility, and the April 2020 temporary maintenance covenant suspension and capital raise as described in Note 8, will be sufficient to fund our current obligations, capital spending, debt service requirements and working capital requirements over at least the next twelve months. Significant Accounting Policies Our significant accounting policies are described in Note 2 in our consolidated financial statements included in the Form 10-K for our year ended June 30, 2020. There have been no material changes to our significant accounting policies during the three months ended September 30, 2020. 6 Other (Expense) Income, Net The following table summarizes the components of other (expense) income, net: Three Months Ended September 30, 2020 2019 (Losses) gains on derivatives not designated as hedging instruments (1) $ ( 13,495 ) $ 19,357 Currency-related gains (losses), net (2) 4,075 ( 3,412 ) Other gains (losses) 666 ( 271 ) Total other (expense) income, net $ ( 8,754 ) $ 15,674 _____________________ (1) Primarily relates to both realized and unrealized gains and losses on derivative currency forward and option contracts not designated as hedging instruments, as well as certain interest rate swap contracts that have been de-designated from hedge accounting due to their ineffectiveness. (2) We have significant non-functional currency intercompany financing relationships that we may change at times and are subject to currency exchange rate volatility. The currency-related gains (losses), net for the three months ended September 30, 2020 and 2019 are primarily driven by this intercompany activity. In addition, we have certain cross-currency swaps designated as cash flow hedges, which hedge the remeasurement of certain intercompany loans, both presented in the same component above. The unrealized losses related to cross-currency swaps were $5,437 for the three months ended September 30, 2020, as compared to unrealized gains of $4,678 for the three months ended September 30, 2019. Net (Loss) Income Per Share Attributable to Cimpress plc Basic net (loss) income per share attributable to Cimpress plc is computed by dividing net (loss) income attributable to Cimpress plc by the weighted-average number of ordinary shares outstanding for the respective period. Diluted net (loss) income per share attributable to Cimpress plc gives effect to all potentially dilutive securities, including share options, restricted share units (“RSUs”), warrants, and performance share units ("PSUs"), if the effect of the securities is dilutive using the treasury stock method. Awards with performance or market conditions are included using the treasury stock method only if the conditions would have been met as of the end of the reporting period and their effect is dilutive. The following table sets forth the reconciliation of the weighted-average number of ordinary shares: Three Months Ended September 30, 2020 2019 Weighted average shares outstanding, basic 25,945,998 29,747,035 Weighted average shares issuable upon exercise/vesting of outstanding share options/RSUs/warrants — 782,437 Shares used in computing diluted net (loss) income per share attributable to Cimpress plc 25,945,998 30,529,472 Weighted average anti-dilutive shares excluded from diluted net (loss) income per share attributable to Cimpress plc (1)(2) 450,089 — _____________________ (1) On May 1, 2020, we entered into a financing arrangement with Apollo Global Management, Inc., which included 7-year warrants with a strike price of $ 60 that have a potentially dilutive impact on our weighted average shares outstanding. For the three months ended September 30, 2020, the weighted average anti-dilutive effect of the warrants was 316,257 shares. Refer to Note 8 for additional details about the arrangement. (2) In the periods in which a net loss is recognized, the impact of share options, RSUs and warrants is not included as they are anti-dilutive. Recently Issued or Adopted Accounting Pronouncements New Accounting Standards Adopted In December 2019, the FASB issued Accounting Standards Update No. 2019-12 "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" (ASU 2019-12), which modifies certain aspects of income tax accounting. We early adopted the standard on July 1, 2020. For the period ended September 30, 2020, adopting ASU 2019-12 resulted in a $2,468 increased tax expense in our consolidated financial statements, related to the intraperiod allocation rules. Under the intraperiod allocation rules, an entity generally allocates total income tax expense or benefit by first determining the amount attributable to continuing operations and then allocating the 7 remaining tax expense or benefit to items other than continuing operations. An exception existed that required an entity with a loss from continuing operations to consider all components when determining the benefit from continuing operations. ASU 2019-12 removes this exception. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 "Financial Instruments—Credit Losses (Topic 326)" (ASU 2016-13), which introduces a new accounting model for recognizing credit losses on certain financial instruments based on an estimate of current expected credit losses. We adopted the standard on its effective date of July 1, 2020. The standard did not have a material impact on our consolidated financial statements. 3. Fair Value Measurements We use a three-level valuation hierarchy for measuring fair value and include detailed financial statement disclosures about fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: • Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • 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: September 30, 2020 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Cross-currency swap contracts $ 948 $ — $ 948 $ — Currency forward contracts 3,790 — 3,790 — Total assets recorded at fair value $ 4,738 $ — $ 4,738 $ — Liabilities Interest rate swap contracts $ ( 36,492 ) $ — $ ( 36,492 ) $ — Cross-currency swap contracts ( 7,814 ) — ( 7,814 ) — Currency forward contracts ( 21,651 ) — ( 21,651 ) — Currency option contracts ( 2,273 ) — ( 2,273 ) — Total liabilities recorded at fair value $ ( 68,230 ) $ — $ ( 68,230 ) $ — 8 June 30, 2020 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Interest rate swap contracts $ 4,462 $ — $ 4,462 $ — Currency forward contracts 7,949 — 7,949 — Currency option contracts 1,429 — 1,429 — Total assets recorded at fair value $ 13,840 $ — $ 13,840 $ — Liabilities Interest rate swap contracts $ ( 39,520 ) $ — $ ( 39,520 ) $ — Cross-currency swap contracts ( 4,746 ) — ( 4,746 ) — Currency forward contracts ( 8,519 ) — ( 8,519 ) — Currency option contracts ( 38 ) — ( 38 ) — Total liabilities recorded at fair value $ ( 52,823 ) $ — $ ( 52,823 ) $ — During the quarter ended September 30, 2020 and year ended June 30, 2020, there were no significant transfers in or out of Level 1, Level 2 and Level 3 classifications. The valuations of the derivatives intended to mitigate our interest rate and currency risk are determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each instrument. This analysis utilizes observable market-based inputs, including interest rate curves, interest rate volatility, or spot and forward exchange rates, and reflects the contractual terms of these instruments, including the period to maturity. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparties' nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements. 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 September 30, 2020, 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 September 30, 2020 and June 30, 2020, the carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximated their estimated fair values. As of September 30, 2020 and June 30, 2020, the carrying value of our debt, excluding debt issuance costs and debt premiums and discounts, was $ 1,400,787 and $ 1,482,177 , respectively, and the fair value was $ 1,377,987 and $ 1,450,719 , respectively. Our debt at September 30, 2020 includes variable-rate debt instruments indexed to LIBOR that resets periodically, as well as fixed-rate debt instruments. The estimated fair value of our debt was determined using available market information based on recent trades or activity of debt instruments with substantially similar risks, terms and maturities, which fall within Level 2 under the fair value hierarchy. 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. 9 4. Derivative Financial Instruments We use derivative financial instruments, such as interest rate swap contracts, cross-currency swap contracts, and currency forward and option contracts, to manage interest rate and foreign currency exposures. Derivatives are recorded in the consolidated balance sheets at fair value. If the derivative is designated as a cash flow hedge or net investment hedge, then the change in the fair value of the derivative is recorded in accumulated other comprehensive loss and subsequently reclassified into earnings in the period the hedged forecasted transaction affects earnings. Additionally, any ineffectiveness associated with any 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 (expense) income, net. Hedges of Interest Rate Risk We enter into interest rate swap contracts to manage variability in the amount of our known or expected cash payments related to a portion of our debt. Our objective in using interest rate swaps is to add stability to interest expense and to manage our exposure to interest rate movements. We designate our interest rate swaps as cash flow hedges. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the contract agreements without exchange of the underlying notional amount. Realized gains or losses from interest rate swaps are recorded in earnings as a component of interest expense, net. Amounts reported in accumulated other comprehensive loss related to interest rate swap contracts will be reclassified to interest expense, net as interest payments are accrued or made on our variable-rate debt. As of September 30, 2020, we estimate that $ 10,324 will be reclassified from accumulated other comprehensive loss to interest expense during the twelve months ending September 30, 2021. As of September 30, 2020, we had ten outstanding interest rate swap contracts indexed to USD LIBOR, of which seven of these instruments were designated as cash flow hedges of interest rate risk and have varying start dates and maturity dates through December 2025. As of September 30, 2020, we have determined that three of our hedges are no longer highly effective. These de-designated hedges have varying start dates and maturity dates through December 2026. Interest rate swap contracts outstanding: Notional Amounts Contracts accruing interest as of September 30, 2020 $ 500,000 Contracts with a future start date 50,000 Total $ 550,000 Hedges of Currency Risk Cross-Currency Swap Contracts From time to time, we execute cross-currency swap contracts designated as cash flow hedges or net investment hedges. Cross-currency swaps involve an initial receipt of the notional amount in the hedge currency in exchange for our reporting currency based on a contracted exchange rate. Subsequently, we receive fixed rate payments in our reporting currency in exchange for fixed rate payments in the hedged currency over the life of the contract. At maturity, the final exchange involves the receipt of our reporting currency in exchange for the notional amount in the hedged currency. Cross-currency swap contracts designated as cash flow hedges are executed to mitigate our currency exposure to the interest receipts as well as the principal remeasurement and repayment associated with certain intercompany loans denominated in a currency other than our reporting currency, the U.S. dollar. As of September 30, 2020, we had two outstanding cross-currency swap contracts designated as cash flow hedges with a total notional amount of $ 120,874 , both maturing during June 2024. We entered into the two cross-currency swap contracts 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 (expense) income, net as interest payments are accrued or paid and upon remeasuring the intercompany loan. As of September 30, 10 2020, we estimate that $ 2,610 of income will be reclassified from accumulated other comprehensive loss to interest expense, net during the twelve months ending September 30, 2021. Other Currency Contracts 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. As of September 30, 2020, we had five currency forward contracts designated as net investment hedges with a total notional amount of $ 149,604 , maturing during various dates through April 2023 . We entered into these contracts to hedge the risk of changes in the U.S. dollar equivalent value of a portion of our net investment in two 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. We have elected to not apply hedge accounting for all other currency forward and option contracts. During the three months ended September 30, 2020 and 2019, we have experienced volatility within other (expense) income, net in our consolidated statements of operations from unrealized gains and losses on the mark-to-market of outstanding currency forward and option contracts. We expect this volatility to continue in future periods for contracts for which we do not apply hedge accounting. Additionally, since our hedging objectives may be targeted at non-GAAP financial metrics that exclude non-cash items such as depreciation and amortization, we may experience increased, not decreased, volatility in our GAAP results as a result of our currency hedging program. As of September 30, 2020, we had the following outstanding currency derivative contracts that were not designated for hedge accounting and were used to hedge fluctuations in the U.S. dollar value of forecasted transactions or balances denominated in Australian Dollar, British Pound, Canadian Dollar, Danish Krone, Euro, Indian Rupee, Mexican Peso, New Zealand Dollar, Norwegian Krone, Philippine Peso and Swedish Krona: Notional Amount Effective Date Maturity Date Number of Instruments Index $ 466,969 December 2018 through September 2020 Various dates through October 2024 586 Various 11 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 September 30, 2020 and June 30, 2020. Our derivative asset and liability balances will fluctuate with interest rate and currency exchange rate volatility. September 30, 2020 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 Derivatives designated as hedging instruments Derivatives in cash flow hedging relationships Interest rate swaps Other current assets / other assets $ — $ — $ — Other liabilities $ ( 29,106 ) $ — $ ( 29,106 ) Cross-currency swaps Other assets 948 — 948 Other liabilities ( 7,814 ) — ( 7,814 ) Derivatives in net investment hedging relationships Currency forward contracts Other assets — — — Other current liabilities / other liabilities ( 13,157 ) — ( 13,157 ) Total derivatives designated as hedging instruments $ 948 $ — $ 948 $ ( 50,077 ) $ — $ ( 50,077 ) Derivatives not designated as hedging instruments Interest rate swaps Other assets $ — $ — $ — Other liabilities $ ( 7,386 ) $ — $ ( 7,386 ) Currency forward contracts Other current assets / other assets 4,784 ( 994 ) 3,790 Other current liabilities / other liabilities ( 10,062 ) 1,568 ( 8,494 ) Currency option contracts Other current assets / other assets — — — Other current liabilities / other liabilities ( 2,475 ) 202 ( 2,273 ) Total derivatives not designated as hedging instruments $ 4,784 $ ( 994 ) $ 3,790 $ ( 19,923 ) $ 1,770 $ ( 18,153 ) 12 June 30, 2020 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 Derivatives designated as hedging instruments Derivatives in cash flow hedging relationships Interest rate swaps Other current assets / other assets $ — $ — $ — Other liabilities $ ( 31,161 ) $ — $ ( 31,161 ) Cross-currency swaps Other assets 4,462 — 4,462 Other liabilities ( 4,746 ) — ( 4,746 ) Derivatives in net investment hedging relationships Currency forward contracts Other assets — — — Other current liabilities / other liabilities ( 6,829 ) — ( 6,829 ) Total derivatives designated as hedging instruments $ 4,462 $ — $ 4,462 $ ( 42,736 ) $ — $ ( 42,736 ) Derivatives not designated as hedging instruments Interest rate swaps Other assets $ — $ — $ — Other liabilities $ ( 8,359 ) $ — $ ( 8,359 ) Currency forward contracts Other current assets / other assets 9,702 ( 1,753 ) 7,949 Other current liabilities / other liabilities ( 2,136 ) 446 ( 1,690 ) Currency option contracts Other current assets / other assets 1,699 ( 270 ) 1,429 Other current liabilities / other liabilities ( 38 ) — ( 38 ) Total derivatives not designated as hedging instruments $ 11,401 $ ( 2,023 ) $ 9,378 $ ( 10,533 ) $ 446 $ ( 10,087 ) 13 The following table presents the effect of our derivative financial instruments designated as hedging instruments and their classification within comprehensive (loss) income for the three months ended September 30, 2020 and 2019: Amount of Net (Loss) Gain on Derivatives Recognized in Comprehensive Income (Loss) Three Months Ended September 30, 2020 2019 Derivatives in cash flow hedging relationships Interest rate swaps $ 411 $ ( 4,590 ) Cross-currency swaps 3,425 ( 2,598 ) Derivatives in net investment hedging relationships Currency forward contracts ( 17,538 ) 12,718 Total $ ( 13,702 ) $ 5,530 The following table presents reclassifications out of accumulated other comprehensive loss for the three months ended September 30, 2020 and 2019: Amount of Net Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income Affected line item in the Statement of Operations Three Months Ended September 30, 2020 2019 Derivatives in cash flow hedging relationships Interest rate swaps $ 2,622 $ ( 30 ) Interest expense, net Cross-currency swaps ( 4,767 ) 5,564 Other (expense) income, net Total before income tax ( 2,145 ) 5,534 (Loss) income before income taxes Income tax 74 ( 1,383 ) Income tax expense Total $ ( 2,071 ) $ 4,151 The following table presents the adjustment to fair value recorded within the consolidated statements of operations for the three months ended September 30, 2020 and 2019 for derivative instruments for which we did not elect hedge accounting and de-designated derivative financial instruments that no longer qualify as hedging instruments. Amount of Gain (Loss) Recognized in Net (Loss) Income Affected line item in the Statement of Operations Three Months Ended September 30, 2020 2019 Currency contracts $ ( 13,468 ) $ 19,357 Other (expense) income, net Interest rate swaps ( 27 ) — Other (expense) income, net Total $ ( 13,495 ) $ 19,357 14 5. Accumulated Other Comprehensive Income (Loss) The following table presents a roll forward of amounts recognized in accumulated other comprehensive income (loss) by component, net of tax of $ 105 for the three months ended September 30, 2020 : Gains (losses) on cash flow hedges (1) Gains (losses) on pension benefit obligation Translation adjustments, net of hedges (2) Total Balance as of June 30, 2020 $ ( 30,078 ) $ ( 1,399 ) $ ( 57,199 ) $ ( 88,676 ) Other comprehensive income (loss) before reclassifications 3,836 ( 336 ) ( 609 ) 2,891 Amounts reclassified from accumulated other comprehensive loss to net (loss) income ( 2,071 ) — — ( 2,071 ) Net current period other comprehensive income (loss) 1,765 ( 336 ) ( 609 ) 820 Balance as of September 30, 2020 $ ( 28,313 ) $ ( 1,735 ) $ ( 57,808 ) $ ( 87,856 ) ________________________ (1) Gains (losses) on cash flow hedges include our interest rate swap and cross-currency swap contracts designated in cash flow hedging relationships. (2) As of September 30, 2020 and June 30, 2020, the translation adjustment is inclusive of the effects of our net investment hedges, of which, unrealized gains of $ 2,971 and $ 20,509 respectively, net of tax, have been included in accumulated other comprehensive loss. 6. Goodwill The carrying amount of goodwill by reportable segment as of September 30, 2020 and June 30, 2020 was as follows: Vistaprint PrintBrothers The Print Group All Other Businesses Total Balance as of June 30, 2020 $ 150,846 $ 129,764 $ 155,197 $ 186,097 $ 621,904 Effect of currency translation adjustments (1) 3,128 5,708 6,828 — 15,664 Balance as of September 30, 2020 $ 153,974 $ 135,472 $ 162,025 $ 186,097 $ 637,568 _________________ (1) Related to goodwill held by subsidiaries whose functional currency is not the U.S. dollar. 7. Other Balance Sheet Components Accrued expenses included the following: September 30, 2020 June 30, 2020 Compensation costs $ 62,433 $ 67,307 Income and indirect taxes 55,062 53,161 Advertising costs (1) 24,422 14,746 Interest payable (2) 28,340 8,359 Production costs 8,233 7,012 Sales returns 5,724 5,166 Shipping costs 8,535 5,080 Professional fees 3,838 3,452 Purchases of property, plant and equipment 941 1,685 Other 46,293 44,796 Total accrued expenses $ 243,821 $ 210,764 _________________ (1) The increase in accrued advertising costs is primarily due to the expansion beyond first-order profitability targets used during the fourth quarter of fiscal 2020 for several of our businesses, as well as modest investment in upper-funnel advertising in our Vistaprint business. (2) The increase in interest payable is due to the additional offering of $200,000 of our 2026 Notes in the third quarter and $300,000 in Second Lien Notes issued during the fourth quarter of fiscal 2020. The interest on our 2026 Notes is payable semi-annually on June 15 and December 15 of each year and the interest on our Second Lien Notes is payable semi-annually on May 15 and November 15 of each year, with the first interest payment on November 15, 2020. Refer to Note 8 for further detail. 15 Other current liabilities included the following: September 30, 2020 June 30, 2020 Current portion of finance lease obligations $ 8,149 $ 8,055 Short-term derivative liabilities 10,120 3,521 Other 3,320 1,692 Total other current liabilities $ 21,589 $ 13,268 Other liabilities included the following: September 30, 2020 June 30, 2020 Long-term finance lease obligations $ 18,013 $ 18,617 Long-term derivative liabilities 60,874 51,800 Other 26,958 17,770 Total other liabilities $ 105,845 $ 88,187 8. Debt September 30, 2020 June 30, 2020 7.0% Senior unsecured notes due 2026 $ 600,000 $ 600,000 Senior secured credit facility 489,767 570,483 12.0% Second lien notes due 2025 300,000 300,000 Other 11,020 11,694 Debt issuance costs and debt premiums (discounts) ( 46,572 ) ( 48,587 ) Total debt outstanding, net 1,354,215 1,433,590 Less: short-term debt (1) 22,666 17,933 Long-term debt $ 1,331,549 $ 1,415,657 _____________________ (1) Balances as of September 30, 2020 and June 30, 2020 are inclusive of short-term debt issuance costs, debt premiums and discounts of $ 10,549 and $ 10,362 , respectively. Our Debt Our various debt arrangements described below contain customary representations, warranties and events of default. As of September 30, 2020, the pre-existing financial maintenance covenants under our senior secured credit facility covenants are suspended, and we were in compliance with all financial and other covenants under the credit agreement as amended, the indenture governing our 2026 Notes, and the indenture governing our Second Lien Notes. Senior Secured Credit Facility On April 28, 2020, we entered into an amendment to our senior secured credit agreement to suspend our pre-existing maintenance covenants, including the total and senior secured leverage covenants and interest coverage ratio covenant, until the publication of our results for the quarter ending December 31, 2021, for which quarter the pre-amendment maintenance covenants will be reinstated. The covenant suspension period could end earlier at our election if we have total leverage equal to or lower than 4.75x annualized EBITDA for each of two consecutive quarters and are compliant with pre-amendment maintenance covenants. During the covenant suspension period, we must comply with new maintenance covenants requiring EBITDA above zero in each of the quarters ending June 30, 2021 and September 30, 2021 and minimum liquidity (defined in the credit agreement as unrestricted cash plus unused revolver) of $ 50,000 . The amendment increased pricing to LIBOR plus 3.25% during the covenant suspension period and to LIBOR plus 2.50% to 3.25% after the covenant suspension period, depending on our total leverage ratio, including a 0.75% floor for LIBOR borrowings. Additionally, as part of the amendment, the maturity date was changed from February 2025 to November 2024. The 16 amendment to the senior secured credit agreement also reduced the credit facility from $ 1,551,419 to $ 1,000,000 , made up of an $ 850,000 revolver and $ 150,000 term loan. During the covenant suspension period, we have more restrictive limitations on certain activities and actions, including but not limited to: • the incurrence of additional indebtedness and liens, • the consummation of certain investments, including acquisitions, • the making of restricted payments, including the purchases of our ordinary shares and payment of dividends. As of September 30, 2020, we have drawn commitments under the credit facility of $ 489,767 as follows: • Revolving loans of $ 343,517 with a maturity date of November 15, 2024 • Term loans of $ 146,250 amortizing over the loan period, with a final maturity date of November 15, 2024 As of September 30, 2020, the weighted-average interest rate on outstanding borrowings was 5.65 %, inclusive of interest rate swap rates. We are also required to pay a commitment fee on unused balances of 0.35 % to 0.5 % depending on our total leverage ratio, and 0.5 % during the covenant suspension period. We have pledged the assets and/or share capital of a number of our subsidiaries as collateral for our outstanding debt as of September 30, 2020. Second Lien Notes On May 1, 2020, we completed a private placement of $ 300,000 in aggregate principal of 12 % second lien notes due 2025 (the Second Lien Notes) and warrants to funds managed by affiliates of Apollo Global Management, Inc. (the "Apollo Funds"). These Second Lien Notes and warrants were issued at a discount of $ 6,000 , resulting in net proceeds of $ 294,000 . We used the proceeds to pay down a portion of the term loans under our senior secured credit facility and to pay fees and expenses incurred in connection with the financing and the above-described amendment. The Second Lien Notes bear interest at 12 % per annum, 50% of which can be paid-in-kind at our option, and mature on May 15, 2025. We may prepay the Second Lien Notes in whole or in part after the first anniversary with a 3% premium, after the second anniversary with a 1% premium, and after the third anniversary with no premium with proceeds from certain debt financings. Each of Cimpress' subsidiaries that guarantees our obligations under our senior secured credit agreement will guarantee the Second Lien Notes. The Second Lien Notes and the guarantees thereof rank equal in right of payment with existing and future senior indebtedness of Cimpress, including Cimpress' and the subsidiary guarantors' obligations under the senior secured credit agreement, and will be secured by the same assets securing Cimpress' and the subsidiary guarantors' obligations under the senior secured credit agreement on a second lien basis subject to limited exceptions and the terms of the intercreditor agreement among Cimpress, the subsidiary guarantors, JPMorgan Chase Bank, N.A. as administrative agent under the senior secured credit agreement, and U.S. Bank National Association as collateral agent under the indenture for the Second Lien Notes. The Apollo Funds also received 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. Based on the terms of the purchase agreement, the two instruments exist separately and should be treated as separate securities; therefore the warrants are considered to be detachable. The warrants have an exercise price of $ 60 per share, representing an approximately 17 % premium to the 10-day volume weighted average price of our shares as of April 28, 2020. The warrants are classified as equity as they are strictly redeemable in our own shares, and they 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. 17 Senior Unsecured Notes On February 13, 2020, we completed an additional offering of $ 200,000 in aggregate principal of 7.0% notes under the senior notes indenture between Cimpress plc and U.S. Bank National Association (as successor trustee to MUFG Union Bank, N.A.) at a premium of 105.25 %. These notes were issued in addition to the existing principal balance under the indenture of $400,000, and are collectively referred to as the 2026 Notes. The net proceeds from this add-on offering were used to repay a portion of the indebtedness outstanding under our senior secured credit facility and related transaction fees and expenses. We have the right to redeem, at any time prior to June 15, 2021, some or all of the 2026 Notes at a redemption price equal to 100 % of the principal amount redeemed, plus a make-whole amount as set forth in the indenture, plus accrued and unpaid interest to, but not including, the redemption date. In addition, we have the right to redeem, at any time prior to June 15, 2021, up to 40 % of the aggregate outstanding principal amount of the 2026 Notes at a redemption price equal to 107 % of the principal amount thereof, plus accrued and unpaid interest to, but not including, the redemption date, with the net proceeds of certain equity offerings by Cimpress. At any time on or after June 15, 2021, we may redeem some or all of the 2026 Notes at the redemption prices specified in the indenture, plus accrued and unpaid interest to, but not including, the redemption date. Other Debt Other debt consists primarily of term loans acquired through our various acquisitions or used to fund certain capital investments. As of September 30, 2020 and June 30, 2020, we had $ 11,020 and $11,694, respectively, outstanding for those obligations that are payable through March 2025. 9. Income Taxes Our income tax expense was $ 6,794 and $ 6,115 for the three months ended September 30, 2020 and 2019, respectively. Excluding the effect of discrete tax adjustments, our estimated annual effective tax rate is higher for fiscal 2021 as compared to fiscal 2020 primarily due to increased non-deductible interest expense. Our effective tax rate continues to be negatively impacted by losses in certain jurisdictions where we are unable to recognize a tax benefit in the current period. During the three months ended September 30, 2020, our unrecognized tax benefits increased by $ 7,133 , primarily due to tax positions taken in prior periods for which we have determined it is more likely than not that they will not be sustained upon audit. As of September 30, 2020, we had unrecognized tax benefits of $ 13,364 , including accrued interest and penalties of $ 495 . We recognize interest and, if applicable, penalties related to unrecognized tax benefits in the provision for income taxes. If recognized, $ 7,582 of unrecognized tax benefits would reduce our tax expense. It is reasonably possible that a reduction in unrecognized tax benefits may occur within the next twelve months in the range of $ 165 to $ 450 related to 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 2014 through 2020 remain open for examination by the IRS and the years 2014 through 2020 remain open for examination in the various states and non-US tax jurisdictions in which we file tax returns. 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 there is a possibility that final resolution of these matters could have a material impact on our results of operations or cash flows. 18 10. Noncontrolling Interests For some of our subsidiaries, we own a controlling equity stake, and a third party or key member of the business' management team owns a minority portion of the equity. The balance sheet and operating activity of these entities are included in our consolidated financial statements and we adjust the net (loss) income in our consolidated statement of operations to exclude the noncontrolling interests' proportionate share of results. We present the proportionate share of equity attributable to the redeemable noncontrolling interests as temporary equity within our consolidated balance sheet and the proportionate share of noncontrolling interests not subject to a redemption provision that is outside of our control as equity. We recognize redeemable noncontrolling interests at fair value on the sale or acquisition date and adjust to the redemption value on a periodic basis with the offset to retained earnings in the consolidated balance sheet. If the formulaic redemption value exceeds the fair value of the noncontrolling interest, then the accretion to redemption value is offset to the net (income) loss attributable to noncontrolling interest in our consolidated statement of operations. Redeemable Noncontrolling Interests PrintBrothers Members of the PrintBrothers management team hold a minority equity interest ranging from 12 % to 13 % in each of the three businesses within the segment. The put options associated with the redeemable noncontrolling interest are exercisable beginning in 2021, while the associated call options become exercisable in 2026. As of September 30, 2020, the redemption value was less than the carrying value, and therefore no adjustment was required. All Other Businesses On October 1, 2018, we acquired approximately 99 % of the outstanding equity interests of Build A Sign LLC. The remaining 1 % is considered a redeemable noncontrolling equity interest, as it is redeemable for cash based on future financial results through put and call rights and not solely within our control. As of September 30, 2020, the redemption value was less than the carrying value, and therefore no adjustment was required. The following table presents the reconciliation of changes in our redeemable noncontrolling interests: Redeemable noncontrolling interests Balance as of June 30, 2020 $ 69,106 Net income attributable to noncontrolling interest 677 Foreign currency translation 1,426 Balance as of September 30, 2020 $ 71,209 11. 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 September 30, 2020, we have numerous operating segments under our management reporting structure which are reported in the following five reportable segments: • Vistaprint - Includes the operations of our global Vistaprint websites and our Webs-branded business, which is managed with the Vistaprint-branded digital business. Also included is our Vistaprint Corporate Solutions business which serves medium-sized businesses and large corporations, as well as a legacy revenue stream with retail partners and franchise businesses • PrintBrothers - Includes the results of our druck.at, Printdeal, and WIRmachenDRUCK businesses • The Print Group - Includes the results of our Easyflyer, Exaprint, Pixartprinting, and Tradeprint businesses 19 • 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: ◦ BuildASign is an internet-based provider of canvas-print wall décor, business signage and other large-format printed products, based in Austin, Texas. ◦ Printi is an online printing leader in Brazil, which offers a superior customer experience with transparent and attractive pricing, reliable service and quality. ◦ YSD is a startup operation that provides end-to-end mass customization solutions to brands and intellectual property owners in China, supporting multiple channels including retail stores, websites, WeChat and e-commerce platforms to enhance brand awareness and competitiveness and develop new markets. Central and corporate costs consist primarily of the team of software engineers that is building our mass customization platform; shared service organizations such as global procurement; technology services such as hosting and security; administrative costs of our Cimpress India offices where numerous Cimpress businesses have dedicated business-specific team members; and corporate functions including our Board of Directors, CEO, and the team members necessary for managing corporate activities, such as treasury, tax, capital allocation, financial consolidation, internal audit and legal. These costs also include certain unallocated share-based compensation costs. For awards granted under our 2016 Performance Equity Plan, the PSU expense value 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. All expense or benefit associated with our supplemental PSUs 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 do not allocate non-operating income, including realized gains and losses on currency hedges, to our segment results. With the exception of BuildASign, which is a larger and profitable business, the All Other Businesses reportable segment consists of two early-stage businesses that we continue to manage at a relatively modest operating loss. Our balance sheet information is not presented to the CODM on an allocated basis, and therefore we do not present asset information by segment. We do present other segment information to the CODM, which includes purchases of property, plant and equipment and capitalization of software and website development costs, and therefore include that information in the tables below. Revenue by segment is based on the business-specific websites or sales channel through which the customer’s order was transacted. The following tables set forth revenue by reportable segment, as well as disaggregation of revenue by major geographic region and reportable segment. 20 Three Months Ended September 30, 2020 2019 Revenue: Vistaprint (1) $ 329,291 $ 343,171 PrintBrothers (2) 100,112 109,290 The Print Group (3) 66,437 72,258 National Pen (4) 67,649 70,163 All Other Businesses (5) 43,478 42,276 Total segment revenue 606,967 637,158 Inter-segment eliminations ( 20,467 ) ( 3,199 ) Total consolidated revenue $ 586,500 $ 633,959 _____________________ (1) Vistaprint segment revenues include inter-segment revenue of $ 422 and $1,328 for the three months ended September 30, 2020 and 2019, respectively. (2) PrintBrothers segment revenues include inter-segment revenue of $ 171 and $243 for the three months ended September 30, 2020 and 2019, respectively. (3) The Print Group segment revenues include inter-segment revenue of $ 6,059 and $432 for the three months ended September 30, 2020 and 2019, respectively. (4) National Pen segment revenues include inter-segment revenue of $ 13,076 and $981 for the three months ended September 30, 2020 and 2019, respectively. (5) All Other Businesses segment revenues include inter-segment revenue of $ 739 and $215 for the three months ended September 30, 2020 and 2019, respectively. Our All Other Businesses segment includes the revenue from our VIDA acquisition from July 2, 2018 through the divestiture date of April 10, 2020. Three Months Ended September 30, 2020 Vistaprint PrintBrothers The Print Group National Pen All Other Total Revenue by Geographic Region: North America $ 232,095 $ — $ — $ 30,321 $ 38,944 $ 301,360 Europe 77,248 99,941 60,378 20,604 — 258,171 Other 19,526 — — 3,648 3,795 26,969 Inter-segment 422 171 6,059 13,076 739 20,467 Total segment revenue 329,291 100,112 66,437 67,649 43,478 606,967 Less: inter-segment elimination ( 422 ) ( 171 ) ( 6,059 ) ( 13,076 ) ( 739 ) ( 20,467 ) Total external revenue $ 328,869 $ 99,941 $ 60,378 $ 54,573 $ 42,739 $ 586,500 Three Months Ended September 30, 2019 Vistaprint PrintBrothers The Print Group National Pen All Other Total Revenue by Geographic Region: North America $ 247,085 $ — $ — $ 41,542 $ 35,406 $ 324,033 Europe 74,458 109,047 71,826 22,313 — 277,644 Other 20,300 — — 5,327 6,655 32,282 Inter-segment 1,328 243 432 981 215 3,199 Total segment revenue 343,171 109,290 72,258 70,163 42,276 637,158 Less: inter-segment elimination ( 1,328 ) ( 243 ) ( 432 ) ( 981 ) ( 215 ) ( 3,199 ) Total external revenue $ 341,843 $ 109,047 $ 71,826 $ 69,182 $ 42,061 $ 633,959 21 The following table includes segment EBITDA by reportable segment, total income from operations and total income before income taxes. Three Months Ended September 30, 2020 2019 Segment EBITDA: Vistaprint $ 90,157 $ 87,303 PrintBrothers 9,715 10,777 The Print Group 12,183 13,634 National Pen ( 10,671 ) ( 9,850 ) All Other Businesses 8,609 1,717 Total segment EBITDA 109,993 103,581 Central and corporate costs ( 31,020 ) ( 33,653 ) Depreciation and amortization ( 42,290 ) ( 42,535 ) Certain impairments and other adjustments ( 783 ) 176 Restructuring-related charges 86 ( 2,190 ) Total income from operations 35,986 25,379 Other (expense) income, net ( 8,754 ) 15,674 Interest expense, net ( 30,516 ) ( 15,087 ) (Loss) income before income taxes $ ( 3,284 ) $ 25,966 Three Months Ended September 30, 2020 2019 Depreciation and amortization: Vistaprint $ 13,587 $ 15,640 PrintBrothers 5,462 5,255 The Print Group 6,581 6,233 National Pen 6,067 5,581 All Other Businesses 5,868 5,973 Central and corporate costs 4,725 3,853 Total depreciation and amortization $ 42,290 $ 42,535 Three Months Ended September 30, 2020 2019 Purchases of property, plant and equipment: Vistaprint $ 1,934 $ 4,505 PrintBrothers 925 331 The Print Group 2,887 4,105 National Pen 1,452 2,016 All Other Businesses 954 1,775 Central and corporate costs 231 1,461 Total purchases of property, plant and equipment $ 8,383 $ 14,193 22 Three Months Ended September 30, 2020 2019 Capitalization of software and website development costs: Vistaprint $ 6,987 $ 5,422 PrintBrothers 406 331 The Print Group 230 451 National Pen 714 836 All Other Businesses 1,061 963 Central and corporate costs 5,406 4,468 Total capitalization of software and website development costs $ 14,804 $ 12,471 The following table sets forth long-lived assets by geographic area: September 30, 2020 June 30, 2020 Long-lived assets (1): United States $ 153,484 $ 161,853 Netherlands 79,211 82,897 Canada 64,133 67,367 Switzerland 62,304 58,013 Italy 44,267 46,317 Jamaica 21,777 21,563 Australia 20,094 19,695 France 23,770 23,917 Japan 15,840 15,430 Other 90,592 94,922 Total $ 575,472 $ 591,974 ___________________ (1) Excludes goodwill of $ 637,568 and $ 621,904 , intangible assets, net of $ 200,493 and $ 209,228 , and deferred tax assets of $ 146,807 and $ 143,496 as of September 30, 2020 and June 30, 2020, respectively. 12. Commitments and Contingencies Purchase Obligations At September 30, 2020, we had unrecorded commitments under contract of $ 193,650 , including third-party web services of $ 114,533 and inventory and third-party fulfillment purchase commitments of $ 29,288 . In addition, we had purchase commitments for professional and consulting fees of $ 19,153 , production and computer equipment purchases of $ 3,800 , and other unrecorded purchase commitments of $ 26,876 . Other Obligations We deferred payments for several of our acquisitions resulting in the recognition of a liability of $ 1,676 in aggregate as of September 30, 2020. Legal Proceedings We are not currently party to any material legal proceedings. Although we cannot predict with certainty the results of litigation and claims to which we may be subject from time to time, we do not expect the resolution of any of our current matters to have a material adverse impact on our consolidated results of operations, cash flows or financial position. For all legal matters, at each reporting period, we evaluate whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. We expense the costs relating to our legal proceedings as those costs are incurred. 23 13. Restructuring Charges Restructuring costs include one-time employee termination benefits, acceleration of share-based compensation, write-off of assets and other related costs including third-party professional and outplacement services. During the three months ended September 30, 2020, we recognized a restructuring benefit of $ 86 due to a change in estimate from actions taken in the fourth quarter of fiscal 2020 in our Vistaprint segment. The following table summarizes the restructuring activity during the three months ended September 30, 2020 Severance and Related Benefits Other Restructuring Costs Total Accrued restructuring liability as of June 30, 2020 $ 5,969 $ 77 $ 6,046 Restructuring charges ( 86 ) — ( 86 ) Cash payments ( 2,515 ) — ( 2,515 ) Accrued restructuring liability as of September 30, 2020 $ 3,368 $ 77 $ 3,445 14. Subsequent Events On October 1, 2020, under the terms of the Agreement and Plan of Merger dated as of September 28, 2020 among Cimpress USA Incorporated, a Delaware corporation ("Parent"), Cactus Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent, 99designs, Inc., a Delaware corporation ("99designs"), and Shareholders Representative Services, as the security holders' representative, Cimpress acquired 99designs for $ 90,000 , subject to post-closing adjustment based on acquired cash, debt, and working capital as of the closing date. $ 45,000 of the purchase price was paid at closing and remainder will be paid on February 15, 2022. Cimpress used its existing credit facility to fund the transaction. 99designs provides a global platform that connects designers and clients, and the acquisition will make it easier for small businesses to access both professional design services and great marketing products in one place. 24