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Item 1. Financial Statements

2023-04-27 compared with 2023-01-26 · 210 added, 159 removed, 640 unchanged (37% of the section changed)

47 unchanged sentences

Accumulated other comprehensive loss ( 35,291 ) ( 47,128 )

Total shareholders’ deficit attributable to Cimpress plc ( 662,417 ) ( 494,922 )

Noncontrolling interests (Note 10) 542 —

Total shareholders' deficit ( 661,875 ) ( 494,922 )

3 unchanged sentences

(unaudited in thousands, except share and per share data)

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

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

2023 2022 2023 2022

6 unchanged sentences

Restructuring expense (1) 30,115 3,420 43,142 3,418

Income from operations 33,578 85,981 15,611 102,920

Other (expense) income, net ( 17,392 ) 12,839 10,005 26,009

(Loss) income from operations ( 12,197 ) ( 28,437 ) 3,414 74,483

Other income, net 1,377 12,321 11,382 38,330

Interest expense, net ( 30,515 ) ( 24,247 ) ( 83,918 ) ( 75,304 )

1 unchanged sentence

Income tax expense 8,475 29,529 143,969 56,208

Net (loss) income ( 138,540 ) 56,153 ( 163,281 ) 51,193

Net (income) attributable to noncontrolling interests ( 1,460 ) ( 1,364 ) ( 2,160 ) ( 3,102 )

Net (loss) income attributable to Cimpress plc $ ( 140,000 ) $ 54,789 $ ( 165,441 ) $ 48,091

Basic net (loss) income per share attributable to Cimpress plc $ ( 5.34 ) $ 2.10 $ ( 6.31 ) $ 1.84

Diluted net (loss) income per share attributable to Cimpress plc $ ( 5.34 ) $ 2.08 $ ( 6.31 ) $ 1.82

Weighted average shares outstanding — basic 26,234,747 26,096,786 26,206,782 26,084,518

Weighted average shares outstanding — diluted 26,234,747 26,402,703 26,206,782 26,493,258

Net loss ( 49,810 ) ( 69,892 ) ( 213,091 ) ( 18,699 )

Net loss (income) attributable to noncontrolling interests 484 ( 1,925 ) ( 1,676 ) ( 5,027 )

Net loss attributable to Cimpress plc $ ( 49,326 ) $ ( 71,817 ) $ ( 214,767 ) $ ( 23,726 )

Basic and diluted net loss per share attributable to Cimpress plc $ ( 1.88 ) $ ( 2.75 ) $ ( 8.19 ) $ ( 0.91 )

Weighted average shares outstanding — basic and diluted 26,268,301 26,102,610 26,226,989 26,090,460

____________________________________________

(1) Share-based compensation is allocated as follows:

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

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

2023 2022 2023 2022

7 unchanged sentences

(unaudited in thousands)

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

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

2023 2022 2023 2022

Net (loss) income $ ( 138,540 ) $ 56,153 $ ( 163,281 ) $ 51,193

Net loss $ ( 49,810 ) $ ( 69,892 ) $ ( 213,091 ) $ ( 18,699 )

Other comprehensive income (loss), net of tax:

Foreign currency translation gains, net of hedges 11,120 3,542 2,938 3,359

Foreign currency translation (losses) gains, net of hedges ( 1,526 ) ( 4,281 ) 1,412 ( 922 )

Net unrealized (losses) gains on derivative instruments designated and qualifying as cash flow hedges ( 4,667 ) 7,222 6,444 2,799

Amounts reclassified from accumulated other comprehensive loss to net (loss) income on derivative instruments 3,136 7,768 198 13,314

Amounts reclassified from accumulated other comprehensive loss to net loss for derivative instruments ( 969 ) 4,401 ( 771 ) 17,715

Gain on pension benefit obligation, net — — — 444

1 unchanged sentence

Comprehensive loss (income) attributable to noncontrolling interests 414 ( 1,563 ) 3,076 ( 3,204 )

Total comprehensive (loss) income attributable to Cimpress plc $ ( 127,918 ) $ 64,649 $ ( 146,372 ) $ 62,246

Total comprehensive loss attributable to Cimpress plc $ ( 56,558 ) $ ( 64,113 ) $ ( 202,930 ) $ ( 1,867 )

See accompanying notes.

37 unchanged sentences

Shareholders’

Balance at December 31, 2021 44,080 $ 615 25 $ 28 ( 17,980 ) $ ( 1,364,336 ) $ 476,002 $ 562,214 $ ( 57,327 ) $ ( 382,804 )

Restricted share units vested, net of shares withheld for taxes — — — — 4 380 ( 580 ) — — ( 200 )

Purchase and cancellation of deferred ordinary shares — — ( 25 ) ( 28 ) — — — — — ( 28 )

Share-based compensation expense — — — — — — 12,727 — — 12,727

Net loss attributable to Cimpress plc — — — — — — — ( 71,817 ) — ( 71,817 )

Redeemable noncontrolling interest accretion to redemption value — — — — — — — ( 29,034 ) — ( 29,034 )

Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges — — — — — — — — 11,623 11,623

Foreign currency translation, net of hedges — — — — — — — — ( 3,919 ) ( 3,919 )

Balance at March 31, 2022 44,080 $ 615 — $ — ( 17,976 ) $ ( 1,363,956 ) $ 488,149 $ 461,363 $ ( 49,623 ) $ ( 463,452 )

See accompanying notes.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT (CONTINUED)

(unaudited in thousands)

Ordinary Shares Deferred Ordinary Shares Treasury Shares

Issued Amount Number of

Issued Amount Number

Shares Amount Additional

Capital Retained

Earnings Accumulated Other

Comprehensive

Shareholders’

Balance at June 30, 2022 44,084 $ 615 — $ — ( 17,971 ) $ ( 1,363,550 ) $ 501,003 $ 414,138 $ ( 47,128 ) $ ( 494,922 )

14 unchanged sentences

See accompanying notes.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT (CONTINUED)

(unaudited in thousands)

Ordinary Shares Deferred Ordinary Shares Treasury Shares

Issued Amount Number of

Issued Amount Number

Shares Amount Additional

Capital Retained

Earnings Accumulated Other

Comprehensive

Shareholders’

Balance at December 31, 2022 44,211 $ 615 — $ — ( 17,971 ) $ ( 1,363,550 ) $ 521,531 $ 256,152 $ ( 28,059 ) $ ( 613,311 )

Restricted share units vested, net of shares withheld for taxes 74 — — — — — ( 1,439 ) — — ( 1,439 )

Share-based compensation expense — — — — — — 8,891 — 8,891

Net loss attributable to Cimpress plc — — — — — — — ( 49,326 ) — ( 49,326 )

Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges — — — — — — — — ( 5,636 ) ( 5,636 )

Foreign currency translation, net of hedges — — — — — — — — ( 1,596 ) ( 1,596 )

Balance at March 31, 2023 44,285 $ 615 — $ — ( 17,971 ) $ ( 1,363,550 ) $ 528,983 $ 206,826 $ ( 35,291 ) $ ( 662,417 )

See accompanying notes.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited in thousands)

Six Months Ended December 31,

Nine Months Ended March 31,

Operating activities

Net (loss) income $ ( 163,281 ) $ 51,193

Adjustments to reconcile net (loss) income to net cash provided by operating activities

Net loss $ ( 213,091 ) $ ( 18,699 )

Adjustments to reconcile net loss to net cash provided by operating activities

Depreciation and amortization 121,567 133,397

1 unchanged sentence

Deferred taxes 115,984 26,636

Unrealized loss (gain) on derivatives not designated as hedging instruments included in net (loss) income 25,897 ( 23,020 )

Unrealized loss (gain) on derivatives not designated as hedging instruments included in net loss 32,512 ( 25,639 )

Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency ( 6,972 ) ( 5,847 )

9 unchanged sentences

Purchases of property, plant and equipment ( 37,486 ) ( 42,142 )

Proceeds from the sale of subsidiaries, net of transaction costs and cash divested ( 4,130 ) —

Business acquisitions, net of cash acquired ( 498 ) ( 75,258 )

18 unchanged sentences

Effect of exchange rate changes on cash 3,580 ( 5,854 )

Change in cash held for sale ( 4,130 ) —

Net (decrease) increase in cash and cash equivalents ( 165,774 ) 48,136

Net decrease in cash and cash equivalents ( 162,063 ) ( 21,511 )

Cash and cash equivalents at beginning of period 277,053 183,023

3 unchanged sentences

(unaudited in thousands)

Six Months Ended December 31,

Nine Months Ended March 31,

Supplemental disclosures of cash flow information

35 unchanged sentences

Marketable Securities

We hold certain investments that are classified as held-to-maturity (HTM) as we have the intent and ability to hold them to their maturity dates.

We hold certain investments that are classified as held-to-maturity as we have the intent and ability to hold them to their maturity dates.

Our policy is to invest in the following permitted classes of assets:

2 unchanged sentences

government agency securities, U.S.

Treasury securities, specifically U.S.

Treasury bills, notes, and bonds, U.S.

Treasury securities, U.S.

government agency securities, bank time deposits, commercial paper, corporate notes and bonds, and medium term notes.

We invest in securities with a maturity of two years or less.

We invest in securities with a remaining maturity of two years or less.

As the investments are classified as held-to-maturity, they are recorded at amortized cost and interest income is recorded as it is earned within interest expense, net.

1 unchanged sentence

As our intent is to hold the securities to maturity, we must assess whether any credit losses related to our investments are recoverable and determine if it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis.

We did not record an allowance for credit losses and we recognized no impairments for these marketable securities during the three and six months ended December 31, 2022 and 2021.

The following is a summary of the net carrying amount, unrealized gains, unrealized losses, and fair value of held-to-maturity securities by type and contractual maturity as of December 31, 2022 and June 30, 2022.

December 31, 2022

We did not record an allowance for credit losses and we recognized no impairments for these marketable securities during the three and nine months ended March 31, 2023 and 2022.

March 31, 2023

Amortized cost Unrealized losses Fair value

14 unchanged sentences

Total held-to-maturity securities $ 49,952 $ ( 546 ) $ 49,406

Other (Expense) Income, Net

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

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

Other Income, Net

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

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

2023 2022 2023 2022

(Losses) gains on derivatives not designated as hedging instruments (1) $ ( 2,428 ) $ 11,210 $ 2,021 $ 31,017

Currency-related gains, net (2) 6,227 5,551 6,030 5,874

Other gains (losses) 577 807 ( 474 ) 327

Total other (expense) income, net $ ( 17,392 ) $ 12,839 $ 10,005 $ 26,009

Currency-related gains (losses), net (2) 4,187 ( 672 ) 10,217 5,202

Other (losses) gains ( 382 ) 1,783 ( 856 ) 2,111

Total other income, net $ 1,377 $ 12,321 $ 11,382 $ 38,330

_____________________

(1) Includes realized and unrealized gains and losses on derivative currency forward and option contracts not designated as hedging instruments, as well as the ineffective portion of certain interest rate swap contracts that were de-designated from hedge accounting in the prior periods.

For contracts not designated as hedging instruments, we realized gains of $ 16,368 and $ 30,988 for the three and six months ended December 31, 2022, and losses of $ 746 and $ 4,418 for the three and six months ended December 31, 2021.

For contracts not designated as hedging instruments, we realized gains of $ 4,876 and $ 35,864 for the three and nine months ended March 31, 2023, and gains of $ 2,011 and losses $ 2,407 for the three and nine months ended March 31, 2022.

Losses on ineffective interest rate swaps amounted to $ 6,580 and $ 6,364 for the three and nine months ended March 31, 2022, compared to no gains or losses in the current periods.

Refer to Note 4 for additional details relating to our derivative contracts.

(2) Currency-related gains, net primarily relates to significant non-functional currency intercompany financing relationships that we may change at times and are subject to currency exchange rate volatility.

(2) Currency-related gains (losses), net primarily relates to significant non-functional currency intercompany financing relationships that we may change at times and are subject to currency exchange rate volatility.

In addition, we have a cross-currency swap designated as a cash flow hedge which hedges the remeasurement of an intercompany loan.

Refer to Note 4 for additional details relating to this cash flow hedge.

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.

Net Loss Per Share Attributable to Cimpress plc

Basic net loss per share attributable to Cimpress plc is computed by dividing net loss attributable to Cimpress plc by the weighted-average number of ordinary shares outstanding for the respective period.

Diluted net loss per share attributable to Cimpress plc gives effect to all potentially dilutive securities, including share options, restricted share units (“RSUs”), warrants, and performance share units ("PSUs"), if the effect of the securities is dilutive using the treasury stock method.

Awards with performance or market conditions are included using the treasury stock method only if the conditions would have been met as of the end of the reporting period and their effect is dilutive.

The following table sets forth the reconciliation of the weighted-average number of ordinary shares:

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

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

2023 2022 2023 2022

Weighted average shares outstanding, basic 26,234,747 26,096,786 26,206,782 26,084,518

Weighted average shares issuable upon exercise/vesting of outstanding share options/RSUs/warrants (1) — 305,917 — 408,740

Shares used in computing diluted net (loss) income per share attributable to Cimpress plc 26,234,747 26,402,703 26,206,782 26,493,258

Weighted average anti-dilutive shares excluded from diluted net (loss) income per share attributable to Cimpress plc (1)(2) 3,286,936 567,220 2,987,875 292,834

Weighted average shares outstanding, basic and diluted 26,268,301 26,102,610 26,226,989 26,090,460

Weighted average anti-dilutive shares excluded from diluted net loss per share attributable to Cimpress plc (1)(2) 3,161,275 908,354 3,045,675 770,500

___________________

1 unchanged sentence

(2) On May 1, 2020, we entered into a financing arrangement with Apollo Global Management, Inc., which included 7-year warrants with a strike price of $ 60 that have a potentially dilutive impact on our weighted average shares outstanding.

For the three and six months ended December 31, 2022, the weighted average anti-dilutive effect of the warrants was 1,055,377 shares in both periods, and 281,884 and 345,722 shares for the three and six months ended December 31, 2021, respectively.

For the three and nine months ended March 31, 2023, the weighted average anti-dilutive effect of the warrants was 1,055,377 shares in both periods, and 103,443 and 264,963 shares for the three and nine months ended March 31, 2022, respectively.

Recently Issued or Adopted Accounting Pronouncements

13 unchanged sentences

The standard is effective on July 1, 2023.

businesses have an active supply chain finance program which will require additional disclosure after adoption of this standard.

Cimpress businesses have an active supply chain finance program which will require additional disclosure after adoption of this standard.

We will include the expanded disclosure requirements starting in the first quarter of fiscal 2024.

8 unchanged sentences

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:

December 31, 2022

March 31, 2023

Total Quoted Prices in

25 unchanged sentences

Total liabilities recorded at fair value $ ( 960 ) $ — $ ( 960 ) $ —

During the six months ended December 31, 2022 and year ended June 30, 2022, there were no significant transfers in or out of Level 1, Level 2 and Level 3 classifications.

During the nine months ended March 31, 2023 and year ended June 30, 2022, 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.

3 unchanged sentences

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 December 31, 2022, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives.

However, as of March 31, 2023, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives.

As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 in the fair value hierarchy.

As of December 31, 2022 and June 30, 2022, the carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximated their estimated fair values.

As of December 31, 2022 and June 30, 2022, the carrying value of our debt, excluding debt issuance costs and debt premiums and discounts, was $ 1,706,972 and $ 1,705,365 , respectively, and the fair value was $ 1,530,471 and $ 1,600,627 , respectively.

Our debt at December 31, 2022 includes variable-rate debt instruments indexed to LIBOR that resets periodically, as well as fixed-rate debt instruments.

As of March 31, 2023 and June 30, 2022, the carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximated their estimated fair values.

As of March 31, 2023 and June 30, 2022, the carrying value of our debt, excluding debt issuance costs and debt premiums and discounts, was $ 1,710,187 and $ 1,705,365 , respectively, and the fair value was $ 1,624,353 and $ 1,600,627 , respectively.

Our debt at March 31, 2023 includes variable-rate debt instruments indexed to LIBOR and Euribor that resets periodically, as well as fixed-rate debt instruments.

The estimated fair value of our debt was determined using available market information based on recent trades or activity of debt instruments with substantially similar risks, terms and maturities, which fall within Level 2 under the fair value hierarchy.

As of December 31, 2022 and June 30, 2022 our held-to-maturity marketable securities were held at an amortized cost of $ 102,177 and $ 49,952 , respectively, while the fair value was $ 101,247 and $ 49,406 , respectively.

As of March 31, 2023 and June 30, 2022 our held-to-maturity marketable securities were held at an amortized cost of $ 74,771 and $ 49,952 , respectively, while the fair value was $ 74,262 and $ 49,406 , respectively.

The securities were valued using quoted prices for identical assets in active markets, which fall into Level 1 under the fair value hierarchy.

6 unchanged sentences

Additionally, any ineffectiveness associated with an effective and designated hedge is recognized within accumulated other comprehensive loss.

The change in the fair value of derivatives not designated as hedges is recognized directly in earnings as a component of other (expense) income, net.

The change in the fair value of derivatives not designated as hedges is recognized directly in earnings as a component of other income, net.

Hedges of Interest Rate Risk

1 unchanged sentence

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.

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 December 31, 2022, we estimate that $ 8,207 will be reclassified from accumulated other comprehensive loss to interest expense, net during the twelve months ending December 31, 2023.

As of December 31, 2022, we had fourteen effective outstanding interest rate swap contracts.

Twelve of our swaps are indexed to USD LIBOR, while the remaining two are indexed to Term SOFR.

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 March 31, 2023, we estimate that $ 6,830 of income will be reclassified from accumulated other comprehensive loss to interest expense, net during the twelve months ending March 31, 2024.

As of March 31, 2023, we had sixteen effective outstanding interest rate swap contracts.

Fourteen of our swaps are indexed to USD LIBOR, while the remaining two are indexed to Term SOFR.

The transition relief guidance from ASC 848 was applied to designate the two Term SOFR swap contracts that we entered into during the current quarter for hedge accounting.

3 unchanged sentences

Notional Amounts

Contracts accruing interest as of December 31, 2022

Contracts accruing interest as of March 31, 2023

Contracts with a future start date 430,000

2 unchanged sentences

Cross-Currency Swap Contracts

From time to time, we execute cross-currency swap contracts designated as cash flow hedges or net investment hedges.

We execute cross-currency swap contracts designated as cash flow hedges or net investment hedges.

Cross-currency swaps involve an initial receipt of the notional amount in the hedged currency in exchange for our reporting currency based on a contracted exchange rate.

2 unchanged sentences

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.

As of December 31, 2022, we had one outstanding cross-currency swap contract designated as a cash flow hedge with a total notional amount of $ 58,478 , maturing during June 2024.

As of March 31, 2023, we had one outstanding cross-currency swap contract designated as a cash flow hedge with a total notional amount of $ 58,478 , maturing during June 2024.

We entered into the cross-currency swap contract to hedge the risk of changes in one Euro-denominated intercompany loan entered into with one of our consolidated subsidiaries that has the Euro as its functional currency.

Amounts reported in accumulated other comprehensive loss will be reclassified to other (expense) income, net as interest payments are accrued or paid and upon remeasuring the intercompany loan.

As of December 31, 2022, we estimate that $ 1,794 of income will be reclassified from accumulated other comprehensive loss to interest expense, net during the twelve months ending December 31, 2023.

Amounts reported in accumulated other comprehensive loss will be reclassified to other income, net as interest payments are accrued or paid and upon remeasuring the intercompany loan.

As of March 31, 2023, we estimate that $ 1,744 of income will be reclassified from accumulated other comprehensive loss to interest expense, net during the twelve months ending March 31, 2024.

Other Currency Hedges

3 unchanged sentences

Amounts reported in accumulated other comprehensive loss are recognized as a component of our cumulative translation adjustment.

As of December 31, 2022, we have one intercompany loan designated as a net investment hedge with a total notional amount of $ 364,524 that matures in May 2028.

As of March 31, 2023, we have one intercompany loan designated as a net investment hedge with a total notional amount of $ 364,524 that matures in May 2028.

We have elected to not apply hedge accounting for all other currency forward and option contracts.

During the three and six months ended December 31, 2022 and 2021, we 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.

During the three and nine months ended March 31, 2023 and 2022, we experienced volatility within other 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 December 31, 2022, we had the following outstanding currency derivative contracts that were not designated for hedge accounting and were used to hedge fluctuations in the U.S.

dollar value of forecasted transactions or balances denominated in Australian Dollar, British Pound, Canadian Dollar, Danish Krone, Euro, Indian Rupee, Japanese Yen, Mexican Peso, New Zealand Dollar, Norwegian Krone, Philippine Peso, Swiss Franc and Swedish Krona:

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 March 31, 2023, we had the following outstanding currency derivative contracts that were not designated for hedge accounting and were primarily used to hedge fluctuations in the U.S.

dollar value of forecasted transactions or balances denominated in Australian Dollar, British Pound, Canadian Dollar, Danish Krone, Euro, Indian Rupee, Mexican Peso, New Zealand Dollar, Norwegian Krone, Philippine Peso, Swiss Franc and Swedish Krona:

Notional Amount Effective Date Maturity Date Number of Instruments Index

$ 534,594 March 2021 through December 2022 Various dates through Dec 2024 536 Various

$ 532,504 June 2021 through March 2023 Various dates through March 2025 553 Various

Financial Instrument Presentation

The table below presents the fair value of our derivative financial instruments as well as their classification on the balance sheet as of December 31, 2022 and June 30, 2022.

The table below presents the fair value of our derivative financial instruments as well as their classification on the balance sheet as of March 31, 2023 and June 30, 2022.

Our derivative asset and liability balances fluctuate with interest rate and currency exchange rate volatility.

December 31, 2022

March 31, 2023

Asset Derivatives Liability Derivatives

1 unchanged sentence

Derivatives in cash flow hedging relationships

Interest rate swaps Other assets $ 23,554 $ ( 4 ) $ 23,550 Other current liabilities / other liabilities $ — $ — $ —

Interest rate swaps Other current assets / other assets $ 17,962 $ ( 863 ) $ 17,099 Other current liabilities / other liabilities $ — $ — $ —

Cross-currency swaps Other assets — — — Other liabilities ( 1,937 ) — ( 1,937 )

2 unchanged sentences

Currency forward contracts Other current assets / other assets $ 2,142 $ ( 620 ) 1,522 Other current liabilities / other liabilities $ ( 7,217 ) 2,992 $ ( 4,225 )

Currency option contracts Other current assets / other assets 4,537 ( 23 ) 4,514 Other liabilities ( 1,243 ) 644 ( 599 )

Currency option contracts Other current assets / other assets 2,139 ( 224 ) 1,915 Other current liabilities / other liabilities ( 1,959 ) 378 ( 1,581 )

Total derivatives not designated as hedging instruments $ 4,281 $ ( 844 ) $ 3,437 $ ( 9,176 ) $ 3,370 $ ( 5,806 )

11 unchanged sentences

Total derivatives not designated as hedging instruments $ 35,052 $ ( 3,803 ) $ 31,249 $ ( 514 ) $ — $ ( 514 )

The following table presents the effect of our derivative financial instruments designated as hedging instruments and their classification within comprehensive (loss) income, net of tax, for the three and six months ended December 31, 2022 and 2021:

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

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

2023 2022 2023 2022

6 unchanged sentences

Total $ ( 8,085 ) $ 10,913 $ ( 2,658 ) $ 30,290

The following table presents reclassifications out of accumulated other comprehensive loss for the three and six months ended December 31, 2022 and 2021:

The following table presents reclassifications out of accumulated other comprehensive loss for the three and nine months ended March 31, 2023 and 2022:

Amount of Net Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income Affected line item in the

Statement of Operations

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

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

2023 2022 2023 2022

1 unchanged sentence

Interest rate swaps $ ( 1,939 ) $ 2,684 $ ( 2,632 ) $ 8,154 Interest expense, net

Cross-currency swaps 4,606 3,821 864 7,808 Other (expense) income, net

Cross-currency swaps 595 2,538 1,459 10,346 Other income, net

Total before income tax ( 1,344 ) 5,222 ( 1,173 ) 18,500 (Loss) income before income taxes

1 unchanged sentence

Total $ ( 969 ) $ 4,401 $ ( 771 ) $ 17,715

The following table presents the adjustment to fair value recorded within the consolidated statements of operations for the three and six months ended December 31, 2022 and 2021 for derivative instruments for which we did not elect hedge accounting and de-designated derivative financial instruments that did not qualify as hedging instruments.

Amount of Gain (Loss) Recognized in Net (Loss) Income Affected line item in the

The following table presents the adjustment to fair value recorded within the consolidated statements of operations for the three and nine months ended March 31, 2023 and 2022 for derivative instruments for which we did not elect hedge accounting and de-designated derivative financial instruments that did not qualify as hedging instruments.

Amount of Gain (Loss) Recognized in Net Loss Affected line item in the

Statement of Operations

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

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

2023 2022 2023 2022

Currency contracts $ ( 24,196 ) $ 7,161 $ 4,449 $ 20,024 Other (expense) income, net

Interest rate swaps — ( 680 ) — ( 216 ) Other (expense) income, net

Currency contracts $ ( 2,428 ) $ 4,630 $ 2,021 $ 24,653 Other income, net

Interest rate swaps — 6,580 — 6,364 Other income, net

Total $ ( 2,428 ) $ 11,210 $ 2,021 $ 31,017

Accumulated Other Comprehensive Loss

The following table presents a roll forward of amounts recognized in accumulated other comprehensive income (loss) by component, net of tax of $ 3,888 for the six months ended December 31, 2022 :

The following table presents a roll forward of amounts recognized in accumulated other comprehensive income (loss) by component, net of tax of $ 5,959 for the nine months ended March 31, 2023 :

Gains on cash flow hedges (1) Losses on pension benefit obligation Translation adjustments, net of hedges (2) Total

4 unchanged sentences

Net current period other comprehensive income 5,673 — 6,164 11,837

Balance as of December 31, 2022

Balance as of March 31, 2023

$ 10,852 $ ( 86 ) $ ( 46,057 ) $ ( 35,291 )

1 unchanged sentence

(1) Gains on cash flow hedges include our interest rate swap and cross-currency swap contracts designated in cash flow hedging relationships.

(2) As of December 31, 2022 and June 30, 2022, the translation adjustment is inclusive of both the unrealized and realized effects of our net investment hedges.

Gains on currency forward and swap contracts, net of tax, of $ 15,079 have been included in accumulated other comprehensive loss as of December 31, 2022 and June 30, 2022.

Intercompany loan hedge gains of $ 42,519 and $ 51,003 have been included in accumulated other comprehensive loss as of December 31, 2022 and June 30, 2022, respectively.

The carrying amount of goodwill by reportable segment as of December 31, 2022 and June 30, 2022 was as follows:

(2) As of March 31, 2023 and June 30, 2022, the translation adjustment is inclusive of both the unrealized and realized effects of our net investment hedges.

Gains on currency forward and swap contracts, net of tax, of $ 15,079 have been included in accumulated other comprehensive loss as of March 31, 2023 and June 30, 2022.

Intercompany loan hedge gains of $ 39,463 and $ 56,743 have been included in accumulated other comprehensive loss as of March 31, 2023 and June 30, 2022, respectively.

The carrying amount of goodwill by reportable segment as of March 31, 2023 and June 30, 2022 was as follows:

Vista PrintBrothers The Print Group All Other Businesses Total

Balance as of June 30, 2022

$ 291,498 $ 130,828 $ 143,969 $ 200,305 $ 766,600

Acquisitions (1) — 4,724 — — 4,724

Adjustments — — — 225 225

Effect of currency translation adjustments (2) 3,527 5,874 6,341 — 15,742

Balance as of December 31, 2022 $ 293,882 $ 134,447 $ 147,929 $ 200,530 $ 776,788

Balance as of March 31, 2023

$ 295,025 $ 141,426 $ 150,310 $ 200,530 $ 787,291

________________________

(1) During the third quarter of fiscal year 2023, we completed the purchase accounting for an immaterial acquisition that closed on December 12, 2022 resulting in the recognition of goodwill of $ 4,724 .

The consideration for this purchase included the effective settlement of the company's existing liabilities to a Cimpress business as well as cash consideration of $ 498 .

(2) Related to goodwill held by subsidiaries whose functional currency is not the U.S.

1 unchanged sentence

Accrued expenses included the following:

December 31, 2022 June 30, 2022

March 31, 2023 June 30, 2022

Compensation costs $ 71,649 $ 78,521

Income and indirect taxes 50,839 41,886

Restructuring costs (1) 28,728 13,449

Advertising costs 24,074 25,925

Shipping costs 13,492 10,228

Third party manufacturing and digital content costs 17,038 15,790

Interest payable (2) 13,563 2,477

Variable compensation incentives (3) 11,506 —

Shipping costs 11,060 10,228

Sales returns

Restructuring costs (2) 5,239 13,449

Professional fees 3,278 2,394

Interest payable 2,901 2,477

Other 61,676 56,885

1 unchanged sentence

______________________

(1) Includes cash-based employee long-term incentives, which are variable based on the performance of individual businesses and vest over four years.

(2) Includes accrued restructuring charges related to severance benefits primarily from our fiscal year 2022 actions.

(1) During the third quarter of fiscal 2023, we executed against a plan to reduce costs and implement organizational changes to support expanded profitability, reduced leverage, and increased speed, focus, and accountability.

The impact of these cost reductions occurred within the Vista business and Cimpress central teams.

Refer to Note 13 for additional details.

(2) The increase in interest payable as of March 31, 2023 is due to the interest on our 2026 Notes being payable semi-annually on June 15 and December 15 of each year.

Refer to Note 8 for further detail.

(3) Includes cash-based employee long-term incentives, which are variable based on the performance of individual businesses and vest over four years.

As the first potential payout will occur within one year, a portion of the balance is now classified as a current liability within accrued expenses.

Other current liabilities included the following:

December 31, 2022 June 30, 2022

March 31, 2023 June 30, 2022

Current portion of finance lease obligations $ 8,990 $ 6,684

2 unchanged sentences

Total other current liabilities $ 21,824 $ 28,035

______________________

(1) The decrease is due in part to the payment of an acquisition-related liability associated with our Depositphotos acquisition of $ 6,785 that occurred during the third quarter of fiscal 2023.

Other liabilities included the following:

December 31, 2022 June 30, 2022

March 31, 2023 June 30, 2022

Long-term finance lease obligations $ 28,129 $ 14,699

5 unchanged sentences

______________________

(1) During the second quarter of fiscal year 2023, we reclassified the noncontrolling interest for three businesses in the PrintBrothers reportable segment to other liabilities, due to the exercise of a put option in the current quarter for a portion of the minority equity interests that triggered a mandatory redemption feature for the remaining minority equity interest.

Subsequent to the option exercise, we recognized an accretion adjustment to increase the liability by $ 2,142 to the estimated redemption value due to the businesses' continued strong performance, which is recognized within interest expense, net in our consolidated statements of operations .

(1) During the second quarter of fiscal year 2023, we reclassified the noncontrolling interest for three businesses in the PrintBrothers reportable segment to other liabilities, due to the exercise of a put option for a portion of the minority equity interests that triggered a mandatory redemption feature for the remaining minority equity interest .

Refer to Note 10 for additional details.

December 31, 2022 June 30, 2022

March 31, 2023 June 30, 2022

7.0% Senior Notes due 2026 $ 600,000 $ 600,000

6 unchanged sentences

_____________________

(1) Balances as of December 31, 2022 and June 30, 2022 are inclusive of short-term debt issuance costs, debt premiums and discounts of $ 3,502 and $ 3,498 , respectively.

(1) Balances as of March 31, 2023 and June 30, 2022 are inclusive of short-term debt issuance costs, debt premiums and discounts of $ 3,503 and $ 3,498 , respectively.

Our various debt arrangements described below contain customary representations, warranties and events of default.

As of December 31, 2022, we were in compliance with all covenants in our debt contracts, including those under our amended and restated senior secured credit agreement ("Restated Credit Agreement") and the indenture governing our 2026 Notes (as defined below).

As of March 31, 2023, we were in compliance with all covenants in our debt contracts, including those under our amended and restated senior secured credit agreement ("Restated Credit Agreement") and the indenture governing our 2026 Notes (as defined below).

Senior Secured Credit Facility

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In addition, if any loans made under the Revolving Credit Facility are outstanding on the last day of any fiscal quarter, then we are subject to a financial maintenance covenant that the First Lien Leverage Ratio calculated as of the last day of such quarter does not exceed 3.25 to 1.00 .

As of December 31, 2022, we have borrowings under the Restated Credit Agreement of $ 1,100,238 consisting of the Term Loan B, which amortizes over the loan period, with a final maturity date of May 17, 2028.

We have no outstanding borrowings under our Revolving Credit Facility as of December 31, 2022.

As of December 31, 2022, the weighted-average interest rate on outstanding borrowings under the Restated Credit Agreement was 6.52 %, inclusive of interest rate swap rates.

As of March 31, 2023, we have borrowings under the Restated Credit Agreement of $ 1,102,509 consisting of the Term Loan B, which amortizes over the loan period, with a final maturity date of May 17, 2028.

We have no outstanding borrowings under our Revolving Credit Facility as of March 31, 2023.

As of March 31, 2023, the weighted-average interest rate on outstanding borrowings under the Restated Credit Agreement was 6.94 %, inclusive of interest rate swap rates.

We are also required to pay a commitment fee for our Revolving Credit Facility on unused balances of 0.35 % to 0.45 % depending on our First Lien Leverage Ratio.

We have pledged the assets and/or share capital of a number of our subsidiaries as collateral for our debt as of December 31, 2022.

We have pledged the assets and/or share capital of a number of our subsidiaries as collateral for our debt as of March 31, 2023.

Senior Unsecured Notes

1 unchanged sentence

We can redeem some or all of the 2026 Notes at the redemption prices specified in the indenture that governs the 2026 Notes, plus accrued and unpaid interest to, but not including, the redemption date.

As of December 31, 2022, we have not redeemed any of the 2026 Notes.

As of March 31, 2023, we have not redeemed any of the 2026 Notes.

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

As of December 31, 2022 and June 30, 2022, we had $ 6,734 and $ 8,063 , respectively, outstanding for those obligations that are payable through March 2027.

Our income tax expense was $ 126,129 and $ 135,494 for the three and six months ended December 31, 2022, respectively, as compared to $ 17,298 and $ 26,679 for the three and six months ended December 31, 2021, respectively.

Tax expense increased year over year for both comparable periods due to the Swiss valuation allowance, discussed below, offset by lower tax expense on decreased profits.

As of March 31, 2023 and June 30, 2022, we had $ 7,678 and $ 8,063 , respectively, outstanding for those obligations that are payable through March 2027.

Our income tax expense was $ 8,475 and $ 143,969 for the three and nine months ended March 31, 2023, respectively, as compared to $ 29,529 and $ 56,208 for the three and nine months ended March 31, 2022, respectively.

Tax expense decreased for the three months ended March 31, 2023 versus the prior comparable period due to the partial valuation allowance on Swiss deferred tax assets of $29,600 recorded during the three months ended March 31, 2022.

Tax expense increased for the nine months ended March 31, 2023 versus the prior comparable period due to the full valuation allowance on Swiss deferred tax assets of $116,694 recorded during the second quarter of fiscal 2023 primarily related to Swiss tax reform benefits recognized in fiscal year 2020 and tax loss carryforwards.

Management concluded that based on the current period results, that objective and verifiable negative evidence of recent losses in Switzerland outweighed more subjective positive evidence of anticipated future income.

Excluding the effect of discrete tax adjustments, our estimated annual effective tax rate is lower for fiscal year 2023 as compared to fiscal year 2022 primarily due to a forecasted pre-tax loss.

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 second quarter of fiscal year 2023, we recorded a full valuation allowance on Swiss deferred tax assets of $116,694 primarily related to Swiss tax reform benefits recognized in fiscal year 2020 and tax loss carryforwards.

As of December 31, 2022 we had unrecognized tax benefits of $ 15,852 , including accrued interest and penalties of $ 1,658 .

As of March 31, 2023 we had unrecognized tax benefits of $ 16,759 , including accrued interest and penalties of $ 1,803 .

We recognize interest and, if applicable, penalties related to unrecognized tax benefits in the provision for income taxes.

11 unchanged sentences

For some of our subsidiaries, we own a controlling equity stake, and a third party or key members of the business management team own a minority portion of the equity.

The put options for several of our noncontrolling interests were exercised during the current quarter as summarized below.

The put options for several of our noncontrolling interests were exercised during the second quarter of fiscal year 2023 as summarized below.

In addition to the noncontrolling interests described below, we also have several less significant minority interests that span multiple businesses and reportable segments.

3 unchanged sentences

The exercise of the put options triggered a mandatory redemption feature for the remaining minority equity interests, which requires the purchase of the remaining 1% equity interests on the third anniversary of the put option exercise, absent the earlier exercise of a call option on the first and second anniversaries by Cimpress.

The remaining noncontrolling interests are mandatorily redeemable, which requires the reclassification of the remaining equity interests to a liability, which has been presented in other liabilities within our consolidated balance sheet.

The following table presents the reconciliation of changes in our redeemable noncontrolling interests:

Redeemable Noncontrolling Interest

The remaining noncontrolling interests are mandatorily redeemable, which required the reclassification of the remaining equity interests to a liability, which has been presented in other liabilities within our consolidated balance sheet.

The following table presents the reconciliation of changes in our noncontrolling interests:

Redeemable Noncontrolling Interest Noncontrolling Interest

Balance as of June 30, 2022 $ 131,483 $ —

Acquisition of noncontrolling interest (1) — 365

Net income attributable to noncontrolling interests 1,513 163

4 unchanged sentences

Foreign currency translation ( 4,766 ) 14

Balance as of December 31, 2022 $ 12,565

Balance as of March 31, 2023 $ 11,974 $ 542

_________________

(1) During the second quarter of fiscal year 2023, we acquired a majority equity interest in an immaterial business within our PrintBrothers reportable segment.

(2) Distributions to noncontrolling interests include contractually required profit sharing payments made annually to the minority interest holders in one of the PrintBrothers businesses.

(2) As discussed above, we purchased an additional 10% to 11% of the equity interests in three PrintBrothers businesses during the second quarter of fiscal year 2023.

We also purchased the 1% minority interest in our BuildASign business this quarter.

(3) As discussed above, we purchased an additional 10% to 11% of the equity interests in three PrintBrothers businesses during the second quarter of fiscal year 2023, as well as the 1% minority interest in our BuildASign business.

(4) Accretion of redeemable noncontrolling interests to redemption value recognized in retained earnings is the result of changes in the estimated redemption amount to the extent increases do not exceed the estimated fair value.

4 unchanged sentences

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 December 31, 2022, we have numerous operating segments under our management reporting structure which are reported in the following five reportable segments:

• Vista - Vista is the parent brand of multiple offerings including VistaPrint, VistaCreate, 99designs by Vista, Vista Corporate Solutions, and Depositphotos, which together represent a full-service design, digital and print solution, elevating small businesses’ presence in physical and digital spaces and empowering them to achieve success.

As of March 31, 2023, we have numerous operating segments under our management reporting structure which are reported in the following five reportable segments:

• PrintBrothers - Includes the results of our druck.at, Printdeal, and WIRmachenDRUCK businesses.

1 unchanged sentence

• 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 two businesses grouped together based on materiality.

In addition to BuildASign, which is a larger and profitable business, the All Other Businesses reportable segment consists of another, smaller business that we continue to manage at a relatively modest operating loss.

◦ 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.

• All Other Businesses - Includes two businesses grouped together based on materiality, as well as our YSD business through its divestiture that was completed during the third quarter of fiscal 2023.

◦ BuildASign, a larger and profitable business, is an internet-based provider of canvas-print wall décor, business signage and other large-format printed products.

◦ Printi, a smaller business that we continue to manage at a relatively modest operating loss, is an online printing leader in Brazil, which offers a superior customer experience with transparent and attractive pricing, reliable service and quality.

Central and corporate costs consist primarily of the team of software engineers that is building our mass customization platform;

13 unchanged sentences

These include certain third-party costs that are variable in nature and the cost variability is primarily driven by decisions or volumes in the Vista business.

We revised our presentation of the prior period results to reflect our updated segment reporting, which decreased both Vista segment EBITDA and Central and corporate costs by $ 1,923 and $ 3,042 for the three and six months ended December 31, 2021.

We revised our presentation of the prior period results to reflect our updated segment reporting, which decreased both Vista segment EBITDA and Central and corporate costs by $ 1,852 and $ 4,894 for the three and nine months ended March 31, 2022.

Our balance sheet information is not presented to the CODM on an allocated basis, and therefore we do not present asset information by segment.

2 unchanged sentences

The following tables set forth revenue by reportable segment, as well as disaggregation of revenue by major geographic region and reportable segment.

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

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

2023 2022 2023 2022

9 unchanged sentences

(1) Refer to the "Revenue by Geographic Region" tables below for detail of the inter-segment revenue within each respective segment.

Three Months Ended December 31, 2022

Three Months Ended March 31, 2023

Vista PrintBrothers The Print Group National Pen All Other Total

7 unchanged sentences

Total external revenue $ 396,372 $ 139,187 $ 83,096 $ 75,929 $ 47,580 $ 742,164

Six Months Ended December 31, 2022

Nine Months Ended March 31, 2023

Vista PrintBrothers The Print Group National Pen All Other Total

7 unchanged sentences

Total external revenue $ 1,202,465 $ 419,658 $ 244,378 $ 268,010 $ 156,270 $ 2,290,781

Three Months Ended December 31, 2021

Three Months Ended March 31, 2022

Vista PrintBrothers The Print Group National Pen All Other Total

7 unchanged sentences

Total external revenue $ 347,666 $ 119,353 $ 73,885 $ 69,100 $ 47,408 $ 657,412

Six Months Ended December 31, 2021

Nine Months Ended March 31, 2022

Vista PrintBrothers The Print Group National Pen All Other Total

7 unchanged sentences

Total external revenue $ 1,143,453 $ 381,654 $ 232,636 $ 255,524 $ 151,460 $ 2,164,727

The following table includes segment EBITDA by reportable segment, total income from operations and total (loss) income before income taxes:

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

The following table includes segment EBITDA by reportable segment, total (loss) income from operations and total (loss) income before income taxes:

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

2023 2022 2023 2022

10 unchanged sentences

Restructuring-related charges ( 30,115 ) ( 3,420 ) ( 43,142 ) ( 3,418 )

Total income from operations 33,578 85,981 15,611 102,920

Total (loss) income from operations ( 12,197 ) ( 28,437 ) 3,414 74,483

Other (expense) income, net 1,377 12,321 11,382 38,330

1 unchanged sentence

(Loss) income before income taxes $ ( 41,335 ) $ ( 40,363 ) $ ( 69,122 ) $ 37,509

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

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

2023 2022 2023 2022

7 unchanged sentences

Total depreciation and amortization $ 39,751 $ 43,651 $ 121,567 $ 133,397

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

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

2023 2022 2023 2022

7 unchanged sentences

Total purchases of property, plant and equipment $ 10,996 $ 15,603 $ 37,486 $ 42,142

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

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

2023 2022 2023 2022

8 unchanged sentences

The following table sets forth long-lived assets by geographic area:

December 31, 2022 June 30, 2022

March 31, 2023 June 30, 2022

Long-lived assets (1):

5 unchanged sentences

France 26,639 25,383

Jamaica 18,642 18,744

Australia 19,066 17,751

Jamaica 18,258 18,744

Japan (3) — 11,392

2 unchanged sentences

___________________

(1) Excludes goodwill of $ 776,788 and $ 766,600 , intangible assets, net of $ 131,274 and $ 154,730 , deferred tax assets of $ 9,519 and $ 113,088 , and marketable securities, non-current of $ 17,107 and zero as of December 31, 2022 and June 30, 2022, respectively.

(1) Excludes goodwill of $ 787,291 and $ 766,600 , intangible assets, net of $ 119,931 and $ 154,730 , deferred tax assets of $ 10,093 and $ 113,088 , and marketable securities, non-current of $ 6,466 and zero as of March 31, 2023 and June 30, 2022, respectively.

(2) The decrease of the United States long-lived assets is primarily driven by the termination of our Waltham, MA lease in August 2022 that resulted in a reduction to the operating lease asset and related leasehold improvements.

3 unchanged sentences

Purchase Obligations

At December 31, 2022, we had unrecorded commitments under contract of $ 235,619 , including third-party cloud services of $ 87,452 ;

At March 31, 2023, we had unrecorded commitments under contract of $ 205,973 , including third-party cloud services of $ 79,437 ;

inventory, third-party fulfillment and digital service purchase commitments of $ 79,159 ;

4 unchanged sentences

Other Obligations

We deferred payments for several of our acquisitions, resulting in the recognition of a liability of $ 6,838 as of December 31, 2022, which primarily relates to a deferred payment for our acquisition of Depositphotos that is expected to be paid during the third quarter of fiscal 2023.

In February 2023, we made a $ 6,785 deferred payment for our Depositphotos acquisition, resulting in no outstanding acquisition-related deferred liabilities as of March 31, 2023.

Legal Proceedings

We are not currently party to any material legal proceedings.

Although we cannot predict with certainty the results of litigation and claims to which we may be subject from time to time, we do not expect the resolution of any 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.

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.

2 unchanged sentences

All restructuring costs are excluded from segment and adjusted EBITDA.

During the three and six months ended December 31, 2022, we recognized restructuring charges of $ 11,207 and $ 13,027 , respectively, and immaterial charges in the prior comparable periods.

For the three and six months ended December 31, 2022, $ 7,265 and $ 8,722 , respectively, were recognized in our Vista reportable segment primarily related to the impairment and write-off of assets associated with our previously announced plan to exit the Japanese market.

In addition, we recognized $ 3,561 for the three and six months ended December 31, 2022 within our All Other Businesses reportable segment, which includes losses related to our planned sale of our Chinese business, which closed in January 2023.

The remaining costs in the current periods include severance and related benefits associated with previously announced actions in our National Pen reportable segment and in our central and corporate costs.

The following table summarizes the restructuring activity during the six months ended December 31, 2022.

During the three and nine months ended March 31, 2023, we recognized restructuring charges of $ 30,115 and $ 43,142 , respectively.

The majority of these costs related to actions taken in our Vista business and central teams during March 2023 that were intended to reduce costs and support expanded profitability, reduced leverage, and increased speed, focus and accountability.

For the three and nine months ended March 31, 2023, the previously described action combined with prior actions taken to prioritize our investments and exit the Japanese market resulted in restructuring charges in our Vista business of $ 20,406 and $ 29,128 , and in our central and corporate costs of $ 9,075 and $ 9,330 , respectively.

Most of these costs related to employee termination benefits, and, to a lesser extent, share-based compensation expense for the accelerated vesting of equity awards as well as third-party consulting costs.

A portion of the restructuring charge included the impairment of assets from our exit of the Japanese market of $ 6,257 .

We expect additional restructuring charges in the fourth quarter of fiscal 2023 for termination benefits that included ongoing service requirements, but we do not expect those charges to be material.

We also recognized restructuring charges in our National Pen business for the three and nine months ended March 31, 2023 in the amounts of $ 639 and $ 1,127 , respectively, which included employee termination benefits for previously announced actions to exit the Japanese market and to migrate our European production operations from Ireland to the Czech Republic.

Additionally, we recognized restructuring costs of $ 3,556 for the nine months ended March 31, 2023 in our All Other Businesses reportable segment for our previously announced exit from the Chinese market, which included employee termination benefits and the write-off of certain assets.

We do not expect any additional charges for these restructuring actions.

The following table summarizes the restructuring activity during the nine months ended March 31, 2023.

Severance and Related Benefits Other Restructuring Costs Accrued restructuring liability

4 unchanged sentences

Foreign currency translation 92 — 92

Balance as of December 31, 2022 $ 5,239 $ — $ 5,239

Balance as of March 31, 2023 $ 28,728 $ — $ 28,728

________________

(1) During the three and six months ended December 31, 2022, non-cash restructuring charges primarily includes the loss recorded on assets that are held-for-sale for our planned Japan and China exits as described above, and share-based compensation expense upon modification to accelerate the vesting of share-based compensation awards for the actions described above.

(1) During the nine months ended March 31, 2023, non-cash restructuring charges primarily includes the loss recorded on assets for our Japan and China exits as described above, and share-based compensation expense upon modification to accelerate the vesting of share-based compensation awards for the actions described above.

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 1. Financial Statements