What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-04-29 compared with 2021-01-28 · 171 added, 135 removed, 277 unchanged (52% of the section changed)

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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 revenues, the potential effects of the COVID-19 pandemic and our expectations with respect to our business and financial results during and after the pandemic, our expectations with respect to our market and market share during and after the pandemic, sufficiency of our liquidity position, our future compliance with our debt covenants, legal proceedings, and sufficiency of our tax reserves.

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 revenues, the potential effects of the COVID-19 pandemic and our expectations with respect to our business, markets, and financial results during and after the pandemic, the anticipated effects of our investments in our business, expected cost savings resulting from changes in our real estate lease footprint, the anticipated completion of our Term Loan B financing, the planned redemption of our Second Lien Notes, 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.

The Term Loan B financing may be delayed or may not close at all, and we may choose not to redeem our Second Lien Notes as planned.

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;

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our failure to anticipate and react to the effects of the pandemic on our customers, supply chain, markets, team members, and business;

our inability to take the actions that we plan to take or the failure of those actions to achieve the results we expect;

our inability to make the investments that we plan to make or the failure of those investments to achieve the results we expect;

loss or unavailability of key personnel or our inability to recruit talented personnel to drive performance of our businesses;

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We limit all other central activities to only those which absolutely must be performed centrally.

As of December 31, 2020, we have numerous operating segments under our management reporting structure that are reported in the following five reportable segments:

As of March 31, 2021, we have numerous operating segments under our management reporting structure that are reported in the following five reportable segments:

Vistaprint, PrintBrothers, The Print Group, National Pen, and All Other Businesses.

Refer to Note 12 in our accompanying consolidated financial statements for additional information relating to our reportable segments and our segment financial measures.

The pandemic and related restrictions continue to have a negative impact on our businesses, customers and the markets that we serve.

Our year-over-year decline in reported revenue improved in the second quarter of fiscal 2021 as compared to the first quarter of fiscal 2021 due to favorable currency movements and acquisition timing;

and otherwise it was flat compared to last quarter, despite sequentially intensified restrictions in various jurisdictions in which we sell our products.

Even with the impacts of the pandemic, we continue to hire talent and make investments in technology, data, new product introduction, customer experience improvements, and branding that are designed to build on our competitive advantages and enable our businesses to grow as we come out of the pandemic.

We don't know how long that will take, and while the promise of COVID-19 vaccinations gives us optimism, recently we see increasingly severe restrictions in many of our major markets that are impacting small business activity and our revenue.

The pandemic and related restrictions continue to have a negative impact on most of our businesses, customers and the markets that we serve.

Consolidated revenue was down 18% year over year for the first two months of the third quarter due to severe restrictions in most of our markets.

In March we saw a pick up in demand in markets where pandemic restrictions have been lifted or are less severe and in the second half of the month we began to lap the start of depressed demand last year.

As an example of geographic differences, Vistaprint bookings in Australia grew approximately 10% for the third quarter, while bookings across European countries declined by approximately 7%.

Likewise, Vistaprint bookings from customers in less restricted U.S.

states such as Florida, Texas, and Georgia are recovering more quickly compared to bookings in U.S.

states such as California, Pennsylvania, or New York that were more restricted.

These data points give us confidence that demand will continue to pick up as activity resumes in our markets around the world.

We continue to hire talent and make investments in technology, data, new product introduction, customer experience improvements, and branding that are designed to build on our competitive advantages and enable our businesses to grow as we come out of the

pandemic, although we can't forecast how long that will take.

We continue to maintain flexibility in our cost structure, while at the same time increasing investment in areas we believe will generate high return on investment beyond the pandemic.

We believe our financial results have been stronger through the pandemic than traditional offline competitors as a result of our diverse product portfolio and economically advantaged business model, which gives us confidence in our ability to grow as we come out of the pandemic.

Financial Summary

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however, in evaluating the financial condition and operating performance of our business, management considers a number of metrics including revenue growth, organic constant-currency revenue growth, operating income, adjusted EBITDA, cash flow from operations and adjusted free cash flow.

A summary of these key financial metrics for the three and six months ended December 31, 2020 as compared to the three and six months ended December 31, 2019 follows:

Second Quarter Fiscal 2021

A summary of these key financial metrics for the three and nine months ended March 31, 2021 as compared to the three and nine months ended March 31, 2020 follows:

Third Quarter Fiscal 2021

• Revenue decreased by 3% to $578.9 million.

• Revenue decreased by 10% when excluding the impact of currency fluctuations and acquisitions ("organic constant-currency revenue growth," a non-GAAP financial measure).

• Operating income decreased by $27.4 million to $94.2 million.

• Operating loss improved by $72.0 million to $15.7 million.

• Adjusted EBITDA (a non-GAAP financial measure) decreased by $15.9 million to $55.0 million.

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• Organic constant-currency revenue decreased by 9%.

• Operating income decreased by $16.8 million to $130.2 million.

• Operating inco me increased by $55.2 million to $114.5 million.

• Adjusted EBITDA decreased by $49.0 million to $286.9 million.

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• Adjusted free cash flow (a non-GAAP financial measure) decreased by $58.7 million to $150.9 million.

For the second quarter of fiscal year 2021, our revenue declined year-over-year as the COVID-19 pandemic continues to negatively impact our results.

These results vary by segment because each business has different product mix and customers with unique challenges.

Revenue from event-driven and some small business products continued to decline, partially offset by revenue from new products introduced in reaction to the pandemic such as face masks (about 5% of total revenue for the quarter) and consumer products in Vistaprint and BuildASign that in total grew 6% year-over-year, excluding invitations and announcements which is an event-driven category.

For the second quarter of fiscal 2021, operating income decreased by $27.4 million, due to the gross profit decline driven by the decrease in revenue described above.

Additionally, we incurred $4.5 million of expense for pandemic-related products, most notably for disposable masks in National Pen, for which pricing and demand have dropped.

The negative impact of the pandemic on demand was partially offset by variable cost controls and fixed cost savings, but the gross margin profile of our revenue mix was unfavorable compared to last year particularly in Vistaprint, and advertising and operating expenses increased with increased investments in talent and strategic projects.

Operating income benefited from $4.0 million of COVID-19-related government incentives, primarily to offset wages for manufacturing and customer service team members in countries where demand decreased but roles were maintained.

Adjusted EBITDA decreased year-over-year, primarily due to the gross profit decrease described above.

Adjusted EBITDA excludes restructuring charges and share-based compensation expense, and includes the realized gains or losses on our currency derivatives intended to hedge adjusted EBITDA.

For the third quarter of fiscal year 2021, our revenue declined year-over-year as the COVID-19 pandemic continues to negatively impact our results, although results vary by segment depending on product and customer mix.

Our businesses also serve customers in different geographic markets where the extent and impact of government restrictions and lockdowns vary.

Revenue from event-driven and some small business products continued to decline year-over-year, partially offset by continued growth in revenue from home decor and packaging products, as well as new products introduced in reaction to the pandemic such as face masks, although the contribution from those products has lessened compared to the first six months of fiscal 2021.

We expect our financial results will continue to experience volatility connected to the extent of pandemic-related restrictions but also higher rates of year-over-year revenue growth as we lap depressed periods of demand from last year.

For the third quarter of fiscal 2021, operating loss improved by $72.0 million, primarily driven by the non-recurrence of a $100.8 million goodwill impairment charge in the prior comparable period, as well as continued variable cost controls, fixed cost savings and lower restructuring charges, in addition to the benefit of $3.2 million of COVID-19-related government incentives, primarily to offset wages for manufacturing and customer service team members in countries where demand decreased but roles were maintained.

During the current quarter operating income was negatively impacted by $19.9 million of lease-related impairment and abandonment charges due to changes in our intended use of two leased locations, which we expect will deliver substantial cost savings in future periods.

We also increased organic investment primarily through hiring in Vistaprint.

Adjusted EBITDA decreased year-over-year, primarily due to the pandemic-related revenue decline during the three months ended March 31, 2021 as described above.

Adjusted EBITDA excludes goodwill and other impairment charges, restructuring charges and share-based compensation expense, and includes the realized gains or losses on our currency derivatives intended to hedge adjusted EBITDA.

The net year-over-year impact of currency on consolidated adjusted EBITDA was negative by approximately $4.4 million.

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Our businesses generate revenue primarily from the sale and shipment of customized manufactured products.

To a much lesser extent (and primarily in our Vistaprint business) we provide digital services, website design and hosting, and email marketing services, as well as generate a small percentage of revenue from order referral fees and other third-party offerings.

To a much lesser extent (and primarily in our Vistaprint business) we provide digital services, graphic design services, website design and hosting, and email marketing services, as well as generate 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 three and six months ended December 31, 2020 and 2019 are shown in the following table:

In thousands Three Months Ended December 31, Currency

Total revenue and revenue growth by reportable segment for the three and nine months ended March 31, 2021 and 2020 are shown in the following table:

In thousands Three Months Ended March 31, Currency

Currency Impact of Acquisitions/Divestitures:

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Total revenue $ 578,851 $ 597,960 (3)% (4)% (7)% (3)% (10)%

In thousands Six Months Ended December 31, Currency

In thousands Nine Months Ended March 31, Currency

Currency Impact of Acquisitions/Divestitures:

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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.

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

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% of revenue 52.2 % 51.8 % 50.6 % 50.2 %

For the three and six months ended December 31, 2020, consolidated cost of revenue decreased by $8.0 million and $34.9 million, respectively, due to reduced demand-dependent cost of goods sold including third-party fulfillment, material, and shipping costs which decreased across several of our segments that continued to be impacted by the COVID-19 pandemic.

For the three and six months ended December 31, 2020, we realized approximately $2.5 million and $5.6 million, respectively, of wage offset benefits from government incentives in locations where demand decreased materially but roles were maintained.

These decreases were partially offset by $4.5 million and $5.5 million of expense during the three and six months ended December 31, 2020, respectively, related to losses associated with the decline in market demand and pricing for disposable masks.

For the three and nine months ended March 31, 2021, consolidated cost of revenue decreased by $7.6 million and $42.4 million, respectively, due to reduced demand-dependent cost of goods sold including third-party fulfillment, material, and shipping costs in our segments that experienced year-over-year pandemic-related revenue declines.

For the three and nine months ended March 31, 2021, we realized approximately $2.2 million and $7.9 million, respectively, of wage offset benefits from government incentives in locations where demand decreased materially but roles were maintained.

These benefits were partially offset by $2.1 million and $7.6 million of expense incurred during the three and nine months ended March 31, 2021, respectively, related to losses associated with the decline in market demand and pricing for certain masks and related products, primarily in our Vistaprint and National Pen businesses.

Changes in currency negatively impacted cost of revenue for both periods presented.

Cost of revenue from our 99designs business is included from the acquisition date of October 1, 2020.

Consolidated Operating Expenses

The following table summarizes our comparative operating expenses for the following periods:

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 vs.

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% of revenue (0.1) % 0.2 % 0.1 % 0.2 %

Impairment of Goodwill $ — $ 100,842 (100)% $ — $ 100,842 (100)%

% of revenue — % 16.9 % — % 4.9 %

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(1) General and administrative expense for the three and nine months ended March 31, 2021 includes lease impairment and abandonment charges for two leased locations totaling $19.9 million.

Refer to Note 2 for additional details.

Technology and development expense

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Depreciation expense for information technology equipment that directly supports the delivery of our digital marketing services products is included in cost of revenue.

Technology and development expenses increased by $0.6 million for the three months ended December 31, 2020 and decreased by $4.1 million for the six months ended December 31, 2020, as compared to the prior comparative periods.

The increase for the second quarter of fiscal 2021 was due to fluctuations in currency exchange rates.

Both periods benefited from decreases in costs from our fiscal 2020 reorganization of our central technology and Vistaprint teams as well as continued reductions in discretionary spend including travel and training expenses.

Technology and development expenses decreased by $5.1 million and $9.2 million for the three and nine months ended March 31, 2021, as compared to the prior comparative periods.

Both periods benefited from decreases in costs from our fiscal 2020 reorganization of our central and Vistaprint technology teams as well as continued reductions in discretionary spend including travel and training expenses.

Marketing and selling expense

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Our Vistaprint, 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.

Our marketing and selling expenses during the three months ended December 31, 2020 increased by $9.0 million as compared to the prior comparative period, driven primarily by increased spend in our Vistaprint business due to further expanded return on advertising spend targets, as well as increased brand sponsorships and upper-funnel advertising investment along with associated agency fees.

Our marketing and selling expenses during the three months ended March 31, 2021 increased by $5.7 million as compared to the prior comparative period, driven primarily by fluctuations in currency exchange rates.

We also increased spend in our Vistaprint business due to brand sponsorships and upper-funnel advertising investment along with associated agency fees.

These increases were partially offset by reductions in advertising across several of our other businesses as they continue to control advertising spend levels in line with demand.

For the six months ended December 31, 2020, marketing and selling expenses decreased by $13.8 million, as compared to the prior year.

The decrease from the prior comparative period is primarily due to the year-over-year reduction in advertising spend in our Vistaprint business, which is partially offset by progressive increases in upper-funnel advertising investments.

For the nine months ended March 31, 2021, marketing and selling expenses decreased by $8.1 million, as compared to the prior year.

The decrease from the prior comparative period is primarily due to the year-over-year reduction in performance based advertising spend in our Vistaprint business of $11.8 million, which is partially offset by increases in brand sponsorships and upper-funnel advertising investments.

We also recognized a decrease in marketing costs in our National Pen business of $8.1 million, primarily due to pandemic-related initiatives to lower costs, which included reductions to direct mail prospecting activities and cost savings from initiatives intended to reduce costs in service centers.

These decreases were partially offset by negative impacts from fluctuations in currency exchange rates.

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 three and six months ended December 31, 2020, general and administrative expenses decreased by $8.9 million and $10.7 million, respectively, as compared to the prior comparative periods, primarily due to lower professional fees as a result of the non-recurrence of costs related to strategic projects in our Vistaprint business, as well as the Cimpress' cross-border merger to Ireland in fiscal year 2020.

For both periods, we also realized lower share-based compensation costs and discretionary spend.

For the three and nine months ended March 31, 2021, general and administrative expenses increased by $17.2 million and $6.5 million, respectively, as compared to the prior comparative periods, due to $19.9 million of lease-related impairment and abandonment charges driven by changes in our office footprint at two leased locations.

These changes to our leased facility footprint are expected to result in substantial cost savings in future periods.

These increased expenses were partially offset by lower professional fees as a result of the non-recurrence of costs related to strategic projects in our Vistaprint business, as well as the Cimpress cross-border merger to Ireland in fiscal year 2020.

We also realized lower discretionary spend in both periods.

Amortization of acquired intangible assets

Amortization of acquired intangible assets consists of amortization expense associated with separately identifiable intangible assets capitalized as part of our acquisitions, including customer relationships, trade names, developed technologies, print networks, and customer and referral networks.

Amortization of acquired intangible assets increased by $0.3 million and $0.6 million for the three and six months ended December 31, 2020, respectively as compared to the three and six months ended December 31, 2019.

The increase is driven by the acquisition of 99designs, as discussed in Note 7 in our accompanying consolidated financial statements, partially offset by the reduction of amortization expense in our BuildASign business as certain intangible assets became fully amortized during the current quarter.

Amortization of acquired intangible assets increased by $0.8 million and $1.4 million for the three and nine months ended March 31, 2021, respectively, as compared to the three and nine months ended March 31, 2020.

The year-over-year increase is driven by the negative impact of fluctuations in currency exchange rates.

The incremental amortization from the newly acquired 99designs intangibles was offset by the expense reduction caused by another acquired intangible asset becoming fully amortized during the second quarter of fiscal 2021.

Refer to Note 7 in our accompanying consolidated financial statements for additional information about the 99designs acquisition.

Restructuring expense

Restructuring expense consists of costs directly incurred as a result of restructuring initiatives, and includes employee-related termination costs, third party professional fees and facility exit costs.

During the three and six months ended December 31, 2020, we recognized restructuring expense of $2.2 million and $2.1 million, respectively, due to actions taken in The Print Group reportable segment which are intended to streamline certain activities within the segment.

We recognized restructuring expense of $1.9 million and $4.1 million, respectively in the three and six months ended December 31, 2019 due to prior year actions taken in our Vistaprint business.

We recognized a restructuring benefit of $0.4 million during the three months ended March 31, 2021 and an expense of $1.7 million for the nine months ended March 31, 2021, due to actions taken in The Print Group reportable segment which are intended to streamline certain activities within the segment.

We recognized restructuring expense of $0.9 million and $5.0 million, respectively in the three and nine months ended March 31, 2020 due to prior year actions taken in our Vistaprint business.

Impairment of goodwill

During the prior comparative periods, we recognized goodwill impairment charges of $100.8 million.

We did not recognize any goodwill impairment charges during the current periods presented.

Refer to Note 6 in our accompanying consolidated financial statements for additional details.

Other Consolidated Results

Other (expense) income, net

Other (expense) income, net generally consists of gains and losses from currency exchange rate fluctuations on transactions or balances denominated in currencies other than the functional currency of our subsidiaries, as well as the realized and unrealized gains and losses on some of our derivative instruments.

Other income (expense), net

Other income (expense), net generally consists of gains and losses from currency exchange rate fluctuations on transactions or balances denominated in currencies other than the functional currency of our subsidiaries, as well as the realized and unrealized gains and losses on some of our derivative instruments.

In evaluating our currency hedging programs and ability to qualify for hedge accounting in light of our legal entity cash flows, we considered the benefits of hedge accounting relative to the additional economic cost of trade execution and administrative burden.

Based on this analysis, we execute certain currency derivative contracts that do not qualify for hedge accounting.

The following table summarizes the components of other (expense) income, net:

Three Months Ended December 31, Six Months Ended December 31,

The following table summarizes the components of other income (expense), net:

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

(Losses) gains on derivatives not designated as hedging instruments $ (19,020) $ (11,666) $ (32,515) $ 7,691

Currency-related gains (losses), net 1,809 2,645 5,884 (767)

Other gains (losses) 13 (19) 679 (290)

Total other (expense) income, net $ (17,198) $ (9,040) $ (25,952) $ 6,634

The decrease in other (expense) income, 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.

Gains (losses) on derivatives not designated as hedging instruments $ 18,724 $ 18,039 $ (13,791) $ 25,730

Currency-related (losses) gains, net (8,841) 3,950 (2,957) 3,183

Other (losses) gains (98) 548 581 258

Total other income (expense), net $ 9,785 $ 22,537 $ (16,167) $ 29,171

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 also recognize the impact from de-designated interest swap contracts that are no longer highly effective, which resulted in unrealized gains during the current periods.

We expect volatility to continue in future periods, as we do not apply hedge accounting for most of our derivative currency contracts.

We also experienced currency-related gains due to currency exchange rate volatility on our non-functional currency intercompany relationships, which we may alter from time to time.

The impact of certain cross-currency swap contracts designated as cash flow hedges is included in our currency-related gains (losses), net, offsetting the impact of certain non-functional currency intercompany relationships.

We experienced currency-related losses 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 (losses) gains, net, offsetting the impact of certain non-functional currency intercompany relationships.

Interest expense, net

Interest expense, net primarily consists of interest paid on outstanding debt balances, amortization of debt issuance costs, debt discounts, interest related to finance lease obligations and realized gains (losses) on effective interest rate swap contracts and certain cross-currency swap contracts.

Interest expense, net increased by $14.4 million and $29.9 million during the three and six months ended December 31, 2020, as compared to the prior comparable periods.

Interest expense, net increased by $11.7 million and $41.6 million during the three and nine months ended March 31, 2021, as compared to the prior comparable periods.

This is primarily due to the additional $200.0 million offering of our 7% senior unsecured notes in February 2020 and issuance of our $300.0 million, 12% Second Lien Notes in May 2020.

Income tax expense

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

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Effective tax rate (11.2) % (1.3) % 273.5 % (214.7) %

Income tax expense for the three and six months ended December 31, 2020 increased as compared to the prior year primarily attributable to the discrete tax benefit of $114.1 million related to Swiss Tax Reform recorded in the three months ended December 31, 2019.

Excluding this benefit, tax expense would have decreased, primarily attributable to decreased pre-tax income for the three and six months ended December 31, 2020 as compared to the same prior year periods.

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.

Income tax expense (benefit) for the three and nine months ended March 31, 2021 increased as compared to the prior year.

For the period ended March 31, 2020, we calculated our year-to-date income tax on ordinary income based on the actual year-to-date effective tax rate rather than the estimated annual tax rate.

The increased tax expense for the three months ended March 31, 2021 was primarily due to a higher forecasted effective tax rate as compared to the actual effective tax rate for the same prior year period.

In the nine months ended March 31, 2020, we recognized a discrete tax benefit of $114.1 million related to Swiss Tax Reform.

Excluding this benefit, tax expense would have decreased, primarily attributable to decreased pre-tax income for the nine months ended March 31, 2021 as compared to the same prior year period.

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.

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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;

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less gain on purchase or sale of subsidiaries.

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 vs.

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Segment Revenue

Vistaprint's reported revenue decline for the three and six months ended December 31, 2020 was positively affected by currency impacts of 3% and 2%, respectively.

When excluding the benefit from the recent acquisition of 99designs, Vistaprint's organic constant-currency revenue decline was 6% for the three months ended December 31, 2020 and 5% for the six months ended December 31, 2020.

Vistaprint's reported revenue growth for the three and nine months ended March 31, 2021 was positively affected by currency impacts of 3% and 2%, respectively.

When excluding the benefit from the recent acquisition of 99designs, Vistaprint's organic constant-currency revenue decline was 5% for both periods presented.

The revenue decline was primarily driven by the impact of the pandemic on customer demand, partially offset by the sale of pandemic-related products, such as face masks.

During the second quarter of fiscal 2021, heightened pandemic-related restrictions in certain countries negatively impacted revenue for some business products and event-related consumer products like invitations and announcements, while Vistaprint delivered growth in photo products and other holiday products.

During the first two months of the third quarter, Vistaprint's revenue continued to be impacted in function of the severity of restrictions in the markets we serve.

Revenue grew significantly year over year during the month of March 2021 as restrictions loosened in some markets and we lapped the earliest periods impacted by the pandemic in fiscal year 2020.

Segment Profitability

For the three and six months ended December 31, 2020, the decrease to Vistaprint's segment EBITDA was primarily due to a decline in gross profit driven by the revenue decrease described above, as well as a revenue mix shift to lower margin products during the second quarter of fiscal 2021.

This was combined with increased investment in advertising which included expanded return on advertising spend targets and progressive increases in upper-funnel advertising investments (including related agency fees) and brand-based sponsorships.

Additionally, an increase in operating expenses was driven by continued hiring and increased spend related to customer experience, partially offset by technology savings from our fiscal 2020 restructuring and reduced spend for consulting projects compared to the prior year periods.

For the three and six months ended December 31, 2020, Vistaprint received $2.4 million and $4.9 million, respectively in government incentives to offset wages in locations where demand decreased materially but roles were maintained.

For the three and nine months ended March 31, 2021, the decrease to Vistaprint's segment EBITDA was primarily due to a decline in gross profit driven by the organic revenue decrease described above, as well as a revenue mix shift to lower margin products during the second quarter of fiscal 2021.

For the three months ended March 31, 2021, an increase in operating expenses was driven by the acquisition of 99designs combined with increased investment in hiring, which was more than offset by year-over-year cost reductions including lower building-related costs and travel expenses.

For the nine months ended March 31, 2021, the decline in segment EBITDA was combined with increased investment in advertising which included expanded return on advertising spend targets and increases in upper-funnel advertising investments (including related agency fees) and brand-based sponsorships.

Additionally, the increase in operating expenses was driven by continued hiring and increased spend related to customer experience, partially offset by technology savings from our fiscal 2020 restructuring and reduced spend for consulting projects compared to the prior year periods.

For the three and nine months ended March 31, 2021, Vistaprint received $1.9 million and $6.8 million, respectively in government incentives to offset wages in locations where demand decreased materially but roles were maintained.

Vistaprint's segment EBITDA was positively impacted by currency movements for both periods presented.

PrintBrothers

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 vs.

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Segment Revenue

PrintBrothers' reported revenue decline for the three and six months ended December 31, 2020 was positively affected by currency impacts of 7% and 6%, respectively, resulting in a constant-currency revenue decline, excluding the impact of acquisitions, of 11% and 13%, respectively.

The revenue decline was due to impacts from COVID-19, as the pandemic continued to have a negative effect on demand in the quarter, though less so than our upload and print businesses serving southern European and UK markets.

PrintBrothers' reported revenue decline for the three and nine months ended March 31, 2021 was positively affected by currency impacts of 7% and 6%, respectively, resulting in a constant-currency revenue decline,of 21% for the three months ended March 31, 2021, and, excluding the impact of acquisitions, a constant-currency organic revenue decline of 17%, for the nine months ended March 31, 2021.

The revenue decline was due to pandemic-related decreases in demand.

In the current quarter, heightened restrictions in certain European countries, including Germany and the Netherlands, resulted in more significant impacts on demand as compared to the first six months of the fiscal year.

Segment Profitability

PrintBrothers' segment EBITDA decreased slightly during the three and six months ended December 31, 2020 as compared to the prior comparative periods, due primarily to the revenue declines described above.

A portion of the decline in segment EBITDA driven by the revenue decline was partially offset by discretionary cost controls and government incentive program benefits of $0.9 million and $1.8 million for the three and six months ended December 2020, respectively.

PrintBrothers' segment EBITDA decreased during the three and nine months ended March 31, 2021 as compared to the prior comparative periods, due primarily to the revenue declines described above.

A portion of the decline in segment EBITDA driven by the revenue decline was partially offset by discretionary cost controls and government incentive program benefits of $0.9 million and $2.5 million for the three and nine months ended March 31, 2021, respectively.

PrintBrothers' segment EBITDA was positively impacted by currency movements for both periods presented.

The Print Group

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 vs.

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Segment Revenue

The Print Group's reported revenue decline for the three and six months ended December 31, 2020 was positively affected by currency impacts of 6% and 5%, respectively, resulting in a decrease in revenue on a constant-currency basis of 19% and 16%, respectively.

The revenue decline was due to impacts from the COVID-19 pandemic as these trends worsened when compared to the first quarter of fiscal year 2021, due to new lockdowns in the geographies that these businesses serve.

These businesses benefited from the introduction of new products relevant to the pandemic and leveraged by other Cimpress businesses in Europe, which increased inter-segment sales that are included in segment results but eliminated at the consolidated level.

The Print Group's reported revenue decline for the three and nine months ended March 31, 2021 was positively affected by currency impacts of 7% and 6%, respectively, resulting in a decrease in revenue on a constant-currency basis of 20% and 17%, respectively.

The revenue decline was due to pandemic-related decreases in demand.

Despite these pressures, our businesses have found pockets of strength in demand and pivoted quickly over the last year to deliver quality offerings to help fill in some of the reduced demand in other areas, including the launch of new products for other Cimpress businesses.

Segment Profitability

The Print Group's segment EBITDA decreased during the three and six months ended December 31, 2020, as compared to the prior comparative periods, primarily driven by the revenue decline described above.

The Print Group's segment EBITDA decreased during the three and nine months ended March 31, 2021, as compared to the prior comparative periods, primarily driven by the revenue decline described above.

This was partially offset by discretionary cost controls, benefits from government incentives totaling $0.3 million and $1.6 million, respectively, and efficiency gains from leveraging our mass customization platform to shift production to lower-cost sources.

The Print Group's segment EBITDA was positively impacted by currency movements for both periods presented.

In thousands Three Months Ended December 31, Six Months Ended December 31,

In thousands Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 vs.

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Segment Revenue

National Pen's reported revenue decrease for the three and six months ended December 31, 2020 was positively affected by currency impacts of 3% and 2%, respectively, resulting in constant-currency revenue decline of 13% and 10%, respectively.

This performance is slightly worse than year-over-year revenue results during the first quarter of fiscal year 2021, but still significantly better than the results during the height of pandemic impact in the fourth quarter of fiscal year 2020.

National Pen executed well on its holiday peak in light of the pandemic, but revenue was muted compared to last year.

National Pen's sales to larger businesses continue to be negatively impacted due to cancelled trade shows and other large-scale events.

National Pen's reported revenue decrease for the three and nine months ended March 31, 2021 was positively affected by currency impacts of 3% in both periods, resulting in constant-currency revenue declines of 12% and 11%, respectively.

National Pen's sales continue to be negatively impacted due to cancelled trade shows and other large-scale events.

Product sales to other Cimpress businesses continued to supplement some of the lost volume from lower demand.

Segment Profitability

The decrease in National Pen's segment EBITDA for the three and six months ended December 31, 2020 was due to the revenue decline described above.

The impacts of lower revenue on National Pen's fixed cost base negatively impacted profitability this quarter in comparison to the year ago periods, partially offset by reduced variable cost, advertising and discretionary spend.

National Pen was negatively impacted by the sale of disposable masks at a loss, as well as the recognition of an inventory reserves to reduce the carrying value of all remaining disposable masks held in inventory to current market prices of $4.4 million and $5.4 million, respectively, for the three and six months ended December 31, 2020.

The decrease in National Pen's segment EBITDA for the three and nine months ended March 31, 2021 was due to the revenue decline described above.

The impacts of lower revenue on National Pen's fixed cost base negatively impacted profitability in comparison to the year-ago periods, partially offset by reduced variable cost, advertising and discretionary spend.

National Pen was negatively impacted by the sale of disposable masks at a loss, as well as the recognition of an inventory reserve to reduce the carrying value of all remaining disposable masks held in inventory to current market prices of $0.8 million and $6.2 million, respectively, for the three and nine months ended March 31, 2021.

National Pen's segment EBITDA was positively impacted by currency movements for both periods presented.

All Other Businesses

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 vs.

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Segment Revenue

All Other Businesses' constant-currency revenue excluding the impact of acquisitions increased by 14% and 10% for the three and six months ended December 31, 2020, respectively.

All Other Businesses' constant-currency revenue excluding the impact of acquisitions increased by 15% and 12% for the three and nine months ended March 31, 2021, respectively.

This was primarily driven by continued growth at BuildASign, whose home décor and pandemic-focused signage products continued to generate strong results.

In addition, the business benefited from higher volumes of political signage in comparison to the prior year due to the 2020 election season in the United States.

BuildASign's strong stand-alone execution is compounded by the business increasingly leveraging our mass customization platform to drive new product introduction and improve customer experience.

BuildASign's strong execution was aided by the business increasingly leveraging our mass customization platform to drive new product introduction and improve customer experience.

Revenue also grew year over year in our smaller Printi and YSD businesses.

Segment Profitability

Within the All Other Businesses segment, each business improved its profitability for the three and six months ended December 31, 2020 as compared to the comparable periods, with the overall improvement primarily driven by revenue growth and advertising efficiency in BuildASign.

Within the All Other Businesses segment, each business improved its profitability for the three and nine months ended March 31, 2021 as compared to the comparable periods, with the overall improvement primarily driven by revenue growth and advertising efficiency in BuildASign.

Printi and YSD reduced losses through revenue growth and improved efficiency.

Our divestiture of loss-making VIDA in the fourth quarter of fiscal year 2020 also contributed to year-over-year profit improvements in the second quarter.

Our divestiture of loss-making VIDA in the fourth quarter of fiscal year 2020 also contributed to year-over-year profit improvements in the third quarter of fiscal year 2021.

Central and Corporate Costs

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These costs also include certain unallocated share-based compensation costs.

Central and corporate costs decreased by $7.4 million and $10.1 million during the three and six months ended December 31, 2020, respectively, as compared to the prior year periods, due to lower professional fees, share-based compensation expense and discretionary spend, including travel and training costs.

Central and corporate costs decreased by $4.2 million and $14.3 million during the three and nine months ended March 31, 2021, respectively, as compared to the prior year periods, due to lower professional fees, share-based compensation expense and discretionary spend, including travel and training costs.

In addition, the lower central costs were also impacted by the prior year reorganization of our central technology team.

Liquidity and Capital Resources

Consolidated Statements of Cash Flows Data

Six Months Ended December 31,

Nine Months Ended March 31,

Net cash provided by operating activities $ 218,948 $ 284,061

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Net cash used in financing activities (130,185) (36,756)

At December 31, 2020, we had $36.9 million of cash and cash equivalents and $1,315.4 million of debt, excluding debt issuance costs, and debt premiums and discounts.

Under the terms of our April 28, 2020 credit facility amendment, we are required to use cash balances in excess of $100.0 million, if any, to repay the revolving loans under our senior secured credit facility.

The cash flows during the six months ended December 31, 2020 related primarily to the following items:

At March 31, 2021, we had $36.4 million of cash and cash equivalents and $1,384.1 million of debt, excluding debt issuance costs, and debt premiums and discounts.

The cash flows during the nine months ended March 31, 2021 related primarily to the following items:

Cash inflows:

• Net income of $23.8 million

• Adjustments for non-cash items of $136.3 million primarily related to positive adjustments for depreciation and amortization of $85.9 million, share-based compensation costs of $13.5 million and unrealized currency-related losses of $29.4 million

• The changes in operating assets and liabilities were a source of cash during the period, driven by increases in accounts payable and accrued expenses, largely driven by our seasonally strong second quarter

• Adjustments for non-cash items of $197.1 million primarily related to positive adjustments for depreciation and amortization of $128.7 million, share-based compensation costs of $23.1 million , unrealized currency-related losses of $20.8 million and $19.9 million of lease-related long-lived asset impairments

• Total net working capital impacts of $36.8 million were a source of cash.

Inventory, accounts payable, and accrued expenses inflows were partially offset by accounts receivable and other asset outflows

Cash outflows:

• Net loss of $15.0 million

• Payments of debt of $107.9 million, net of borrowings and inclusive of debt issuance costs

• Acquisition of 99designs for $36.4 million, net of cash acquired and excluding the deferred payment and post-closing adjustment that are payable February 15, 2022

• Internal and external costs of $45.3 million for software and website development that we have capitalized

• Capital expenditures of $16.8 million of which the majority related to the purchase of manufacturing and automation equipment for our production facilities and computer and office equipment

• Acquisition of 99designs for $36.4 million, net of cash acquired and excluding the deferred payment and post-closing adjustment that are payable February 15, 2022

• Capital expenditures of $22.7 million of which the majority related to the purchase of manufacturing and automation equipment for our production facilities

• Payment of withholding taxes in connection with share awards of $5.6 million

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Additional Liquidity and Capital Resources Information.

During the six months ended December 31, 2020, we financed our operations and strategic investments through internally generated cash flows from operations and debt financing.

As of December 31, 2020, 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 $40.4 million.

During the nine months ended March 31, 2021, we financed our operations and strategic investments through internally generated cash flows from operations and debt financing.

As of March 31, 2021, 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 $41.4 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.

We have historically allocated a material amount of capital to purchases of our ordinary shares and corporate acquisitions.

The April 2020 amendment to our credit facility prohibits us from repurchasing our shares and limits acquisitions for the period in which the financial maintenance covenants associated with our senior secured credit facility are suspended.

As of December 31, 2020, we had aggregate loan commitments from our senior secured credit facility totaling $994.4 million.

As described in Note 15 of our accompanying consolidated financial statements, we expect to refinance our 12% Second Lien Notes in May 2021 at materially improved interest rates.

We plan to raise a senior secured Term Loan B that would repay our existing secured debt and bring liquidity onto the balance sheet.

If executed, the transaction would reduce our weighted average cost of capital, provide additional financial flexibility, and extend the maturity profile of our secured debt.

As of March 31, 2021, we had aggregate loan commitments from our senior secured credit facility totaling $992.5 million.

The loan commitments consisted of revolving loan borrowings of $329.0 million and term loans of $142.5 million.

We have other financial obligations that constitute additional indebtedness based on the definitions within the credit facility.

As of December 31, 2020, the amount available for borrowing under our senior secured credit facility was as follows:

December 31, 2020

As of March 31, 2021, the amount available for borrowing under our senior secured credit facility was as follows:

March 31, 2021

Maximum aggregate available for borrowing $ 992,500

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Limitations to borrowing due to debt covenants and other obligations (1) (253,186)

Amount available for borrowing as of December 31, 2020 (2)

Amount available for borrowing as of March 31, 2021 (2) (3)

_________________

(1) As of December 31, 2020, our pre-existing financial maintenance covenants are suspended and we are in compliance with the new restrictions in place, with the primary maintenance covenant during the suspension period that we must maintain liquidity above $50.0 million.

Refer to Note 9 in our accompanying consolidated financial statements for further description of the restrictions in place during the covenant suspension period.

(1) The debt covenants of our senior secured credit facility limit our borrowing capacity each quarter, depending on our leverage and other indebtedness, such as notes, finance leases, letters of credit, and any other debt, as well as other factors that are outlined in the credit agreement.

As of March 31, 2021, we elected to exit the Covenant Suspension Period early, and entered into an amendment to our senior secured credit agreement which reinstated modified financial maintenance covenants under the credit agreement.

Refer to Note 9 in our accompanying consolidated financial statements for additional information.

(2) The amount available for borrowing reflects borrowings available for incremental debt that would increase our leverage, which is impacted by our leverage covenants.

However, as of March 31, 2021, $516.0 million o f unused capacity was available to us assuming any amounts above the amount available for borrowing are used to refinance our existing second lien notes, under a leverage neutral transaction.

(3) Share purchases, dividend payments, and corporate acquisitions are subject to more restrictive covenants, and therefore we may not be able to use the full amount available for borrowing for these purposes.

Debt Covenants .

The April 2020 amendment to our senior secured facility suspended our pre-existing financial maintenance covenants until December 31, 2021, including the total and senior secured leverage covenants and interest coverage ratio covenant.

In conjunction with the February 2021 amendment to our senior secured facility, we elected to exit the Covenant Suspension Period early, and entered into an amendment to our senior secured credit agreement which reinstated modified financial maintenance covenants under the credit agreement.

Refer to Note 9 in our accompanying consolidated financial statements for additional information.

Other debt primarily consists of term loans acquired through our various acquisitions or used to fund certain capital investments.

As of December 31, 2020, we had $11.0 million outstanding for other debt payable through March 2025.

As of March 31, 2021, we had $12.6 million outstanding for other debt payable through January 2026.

Contractual Obligations

Contractual obligations at December 31, 2020 are as follows:

Contractual obligations at March 31, 2021 are as follows:

In thousands Payments Due by Period

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___________________

(1) Operating and finance lease payments included above include only amounts which are fixed under lease agreements.

Our leases may also incur variable expenses, which are not included in these payments.

(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) On January 6, 2021, we amended our Waltham lease agreement to reduce the amount of space leased.

As part of the agreement, we will pay $8.8 million in two equal installments, which includes both an early termination penalty and the rent we would have otherwise paid for the terminated space through June 30, 2021.

As part of the agreement, as of March 31, 2021, we had a remaining obligation of $4.4 million for the lease termination penalty that was paid on April 1, 2021.

We have separately entered into a lease agreement for a new office space in Waltham, Massachusetts, which will commence on June 1, 2021.

The amended lease terms, combined with the new lease agreement, will result in a reduction to total lease commitments of $47.5 million, exclusive of the termination penalty.

The amended lease terms, combined with the new lease agreement, resulted in a reduction to total lease commitments of $44.6 million, exclusive of the termination penalty.

Refer to Note 13 in our accompanying consolidated financial statements for additional details.

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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 $8.1 million as of December 31, 2020 have been excluded from the contractual obligations table above.

For further information on uncertain tax positions, see Note 9 in our accompanying consolidated financial statements for additional details.

Accordingly, uncertain tax positions of $9.0 million as of March 31, 2021 have been excluded from the contractual obligations table above.

See Note 10 in our accompanying consolidated financial statements for further information on uncertain tax positions.

Operating Leases .

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Purchase Commitments .

At December 31, 2020, we had unrecorded commitments under contract of $226.3 million.

Purchase commitments consisted of third-party web services of $97.6 million, production and computer equipment purchases of $24.9 million, inventory and third-party fulfillment purchase commitments of $18.4 million, advertising of $17.8 million, commitments for professional and consulting fees of $8.4 million and other unrecorded purchase commitments of $59.2 million.

At March 31, 2021, we had unrecorded commitments under contract of $211.3 million.

Purchase commitments consisted of third-party web services of $96.7 million, software of $54.5 million, inventory and third-party fulfillment purchase commitments of $19.0 million, advertising of $15.1 million, , commitments for professional and consulting fees of $7.4 million, production and computer equipment purchases of $2.4 million and other unrecorded purchase commitments of $16.2 million.

Senior Unsecured Notes and Interest Payments.

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Interest on the notes is payable semi-annually on May 15 and November 15 of each year and has been included in the table above.

At our option, we may elect to pay interest on up to 50.0% of the then outstanding principal amount of the notes as paid-in-kind and applied to the outstanding principal balance of the notes.

At our option, we may elect to pay interest on

up to 50.0% of the then outstanding principal amount of the notes as paid-in-kind and applied to the outstanding principal balance of the notes.

Other Debt and Interest Payments.

At December 31, 2020, the term loans of $144.4 million outstanding under our credit agreement had repayments due on various dates through November 15, 2024, with the revolving loans outstanding under our $260.0 million revolving credit facility due on November 15, 2024.

Interest payable included in this table is based on the interest rate as of December 31, 2020, 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 and all Prime rate based revolving loan amounts will be paid within a year.

At March 31, 2021, the term loans of $142.5 million outstanding under our credit agreement had repayments due on various dates through November 15, 2024, with the revolving loans outstanding under our $329.0 million revolving credit facility due on November 15, 2024.

Interest payable included in this table is based on the interest rate as of March 31, 2021, 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 and all Prime rate based revolving loan amounts will be paid within a year.

Interest payable includes the estimated impact of our interest rate swap agreements.

In addition, we have other debt which consists primarily of term loans acquired through our various acquisitions or used to fund certain capital investments, and as of December 31, 2020 we had $11.0 million outstanding for those obligations that have repayments due on various dates through March 2025.

In addition, we have other debt which consists primarily of term loans acquired through our various acquisitions or used to fund certain capital investments, and as of March 31, 2021 we had $12.6 million outstanding for those obligations that have repayments due on various dates through January 2026.

Finance Leases.

We lease certain machinery and plant equipment under finance lease agreements that expire at various dates through 2027.

The aggregate carrying value of the leased equipment under finance leases included in property, plant and equipment, net in our consolidated balance sheet at December 31, 2020, is $60.5 million, net of accumulated depreciation of $41.6 million.

The present value of lease installments not yet due included in other current liabilities and other liabilities in our consolidated balance sheet at December 31, 2020 amounts to $24.9 million.

The aggregate carrying value of the leased equipment under finance leases included in property, plant and equipment, net in our consolidated balance sheet at March 31, 2021 is $59.9 million, net of accumulated depreciation of $39.9 million.

The present value of lease installments not yet due included in other current liabilities and other liabilities in our consolidated balance sheet at March 31, 2021 amounts to $27.0 million.

Other Obligations .

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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 three and six months ended December 31, 2020 and 2019:

In thousands Three Months Ended December 31, Six Months Ended December 31,

The table below sets forth operating income and adjusted EBITDA for the three and nine months ended March 31, 2021 and 2020:

In thousands Three Months Ended March 31, Nine Months Ended March 31,

2021 2020 2021 2020

GAAP operating income $ 94,194 $ 121,595 $ 130,180 $ 146,974

GAAP operating (loss) income $ (15,697) $ (87,736) $ 114,483 $ 59,238

Exclude expense (benefit) impact of:

Depreciation and amortization 42,809 41,840 128,696 126,731

Proceeds from insurance 122 — 122 —

Share-based compensation expense (1) 9,545 8,908 23,071 21,983

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Restructuring-related charges (382) 919 1,714 5,006

Realized (losses) gains on currency derivatives not included in operating income (1,578) 10,408 (361) 15,246

Realized (losses) gains on currency derivatives not included in operating (loss) income (1,936) 5,001 (2,297) 20,247

Adjusted EBITDA $ 55,024 $ 70,908 $ 286,920 $ 335,941

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(1) The adjustment for share-based compensation expense excludes the portion of share-based compensation expense included in restructuring related charges, if any, to avoid double counting.

The table below sets forth net cash provided by operating activities and adjusted free cash flow for the three and six months ended December 31, 2020 and 2019:

In thousands Six Months Ended December 31,

(2) During the three months ended March 31, 2021, we recognized impairment and abandonment charges of $19.9 million for the change in nature of use for two of our leased locations.

These impairment and abandonment charges are classified within general and administrative expense in the consolidated statement of operations.

Refer to Note 2 in our accompanying financial statements for more information.

We also recognized $0.6 million of loss for the routine disposal of fixed assets and impairment of capitalized software during the three months ended March 31, 2021.

The table below sets forth net cash provided by operating activities and adjusted free cash flow for the nine months ended March 31, 2021 and 2020:

In thousands Nine Months Ended March 31,

Net cash provided by operating activities $ 218,948 $ 284,061

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis