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Item 1. Financial Statements

2023-10-26 compared with 2023-04-27 · 233 added, 343 removed, 507 unchanged (53% of the section changed)

2 unchanged sentences

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

September 30,

2023 June 30,

31 unchanged sentences

Commitments and contingencies (Note 12)

Redeemable noncontrolling interests 11,974 131,483

Redeemable noncontrolling interests (Note 10) 10,848 10,893

Shareholders’ deficit:

Preferred shares, nominal value €0.01 per share, 100,000,000 shares authorized;

none issued and outstanding — —

Ordinary shares, nominal value €0.01 per share, 100,000,000 shares authorized;

13 unchanged sentences

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

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

2023 2022 2023 2022

Three Months Ended September 30,

Revenue $ 757,294 $ 703,415

5 unchanged sentences

Restructuring expense (1) ( 334 ) 1,820

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

Income (loss) from operations 34,100 ( 17,967 )

Other income, net 6,419 27,397

Interest expense, net ( 29,200 ) ( 24,806 )

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

Gain on early extinguishment of debt 1,372 —

Income (loss) before income taxes 12,691 ( 15,376 )

Income tax expense 8,122 9,365

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 March 31, Nine Months Ended March 31,

Net income (loss) 4,569 ( 24,741 )

Net (income) attributable to noncontrolling interests ( 15 ) ( 700 )

Net income (loss) attributable to Cimpress plc $ 4,554 $ ( 25,441 )

Basic net income (loss) per share attributable to Cimpress plc $ 0.17 $ ( 0.97 )

Diluted net income (loss) per share attributable to Cimpress plc $ 0.17 $ ( 0.97 )

Weighted average shares outstanding — basic 26,468,769 26,178,818

Weighted average shares outstanding — diluted 27,079,455 26,178,818

____________________________________________

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

Three Months Ended September 30,

Cost of revenue $ 167 $ 193

4 unchanged sentences

See accompanying notes.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited in thousands)

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

2023 2022 2023 2022

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

Three Months Ended September 30,

Net income (loss) $ 4,569 $ ( 24,741 )

Other comprehensive income (loss), net of tax:

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 for derivative instruments ( 969 ) 4,401 ( 771 ) 17,715

Gain on pension benefit obligation, net — — — 444

Comprehensive (loss) income ( 56,972 ) ( 62,550 ) ( 206,006 ) 1,337

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

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

Foreign currency translation losses, net of hedges ( 3,787 ) ( 8,182 )

Net unrealized gains on derivative instruments designated and qualifying as cash flow hedges 7,679 16,760

Amounts reclassified from accumulated other comprehensive loss to net income (loss) for derivative instruments ( 3,548 ) ( 2,938 )

Comprehensive income (loss) 4,913 ( 19,101 )

Comprehensive loss attributable to noncontrolling interests 79 647

Total comprehensive income (loss) attributable to Cimpress plc $ 4,992 $ ( 18,454 )

See accompanying notes.

1 unchanged sentence

(unaudited in thousands)

Ordinary Shares Deferred Ordinary Shares Treasury Shares

Issued Amount Number of

Ordinary Shares Treasury Shares

Issued Amount Number

Shares Amount Additional

Shares Issued Amount Additional

Capital Retained

10 unchanged sentences

Balance at September 30, 2022 44,196 $ 615 ( 17,971 ) $ ( 1,363,550 ) $ 509,444 $ 385,972 $ ( 40,141 ) $ ( 507,660 )

Restricted share units vested, net of shares withheld for taxes — — — — 11 743 ( 1,062 ) — — ( 319 )

Share-based compensation expense — — — — — — 12,398 — — 12,398

Net income attributable to Cimpress plc — — — — — — — 54,789 — 54,789

Redeemable noncontrolling interest accretion to redemption value — — — — — — — ( 8,444 ) — ( 8,444 )

Decrease in noncontrolling interest due to share purchase — — — — — — ( 272 ) — — ( 272 )

Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges — — — — — — — — 5,270 5,270

Foreign currency translation, net of hedges — — — — — — — — 4,146 4,146

Unrealized gain on pension benefit obligation, net of tax — — — — — — — — 444 444

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

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, 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, 2023 44,316 $ 615 ( 17,971 ) $ ( 1,363,550 ) $ 539,454 $ 235,396 $ ( 35,060 ) $ ( 623,145 )

Issuance of ordinary shares due to share option exercises, net of shares withheld for taxes 2 — — — 82 — — 82

Restricted share units vested, net of shares withheld for taxes 236 — — — ( 8,403 ) — — ( 8,403 )

Share-based compensation expense — — — — 12,621 — — 12,621

Net loss attributable to Cimpress plc — — — — — — — ( 25,441 ) — ( 25,441 )

Net income attributable to Cimpress plc — — — — — 4,554 — 4,554

Redeemable noncontrolling interest accretion to redemption value — — — — — ( 330 ) — ( 330 )

2 unchanged sentences

Balance at September 30, 2023 44,554 $ 615 ( 17,971 ) $ ( 1,363,550 ) $ 543,754 $ 239,620 $ ( 34,622 ) $ ( 614,183 )

Restricted share units vested, net of shares withheld for taxes 15 — — — — — ( 158 ) — — ( 158 )

Share-based compensation expense — — — — — — 12,245 — — 12,245

Net loss attributable to Cimpress plc — — — — — — — ( 140,000 ) — ( 140,000 )

Redeemable noncontrolling interest accretion to redemption value — — — — — — — 10,180 — 10,180

Net unrealized loss on derivative instruments designated and qualifying as cash flow hedges — — — — — — — — ( 2,513 ) ( 2,513 )

Foreign currency translation, net of hedges — — — — — — — — 14,595 14,595

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

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)

Nine Months Ended March 31,

Three Months Ended September 30,

Operating activities

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

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

Net income (loss) $ 4,569 $ ( 24,741 )

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

Depreciation and amortization 39,942 40,942

1 unchanged sentence

Deferred taxes ( 1,118 ) ( 1,024 )

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

Gain on early extinguishment of debt

Unrealized gain on derivatives not designated as hedging instruments included in net income (loss)

( 6,261 ) ( 14,024 )

Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency 1,885 ( 749 )

6 unchanged sentences

Accrued expenses and other liabilities 13,990 16,312

Net cash provided by operating activities 68,474 131,716

Net cash provided by (used in) operating activities 42,254 ( 25,251 )

Investing activities

Purchases of property, plant and equipment ( 22,565 ) ( 11,758 )

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

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

Capitalization of software and website development costs ( 14,397 ) ( 15,330 )

2 unchanged sentences

Proceeds from maturity of held-to-maturity investments 20,500 9,953

Payments for settlement of derivatives designated as hedging instruments — ( 1,880 )

Other investing activities — ( 617 )

Net cash used in investing activities ( 10,826 ) ( 101,043 )

2 unchanged sentences

Payments of debt ( 3,784 ) ( 13,256 )

Payments for early redemption of 7% Senior Notes due 2026 ( 19,815 ) —

Payments of debt issuance costs — ( 23 )

2 unchanged sentences

Payments of finance lease obligations ( 2,768 ) ( 2,412 )

Purchase of noncontrolling interests ( 95,567 ) ( 324 )

Proceeds from issuance of ordinary shares 82 —

Distributions to noncontrolling interests ( 549 ) ( 3,652 )

Other financing activities 113 ( 26 )

Net cash used in financing activities

( 35,065 ) ( 11,780 )

Effect of exchange rate changes on cash ( 1,477 ) ( 6,879 )

5 unchanged sentences

(unaudited in thousands)

Nine Months Ended March 31,

Three Months Ended September 30,

Supplemental disclosures of cash flow information

2 unchanged sentences

Income taxes 15,794 4,257

Cash received during the period for:

Interest 3,349 2,074

Non-cash investing and financing activities

7 unchanged sentences

Description of the Business

Cimpress is a strategically focused group of more than a dozen businesses that specialize in mass customization of printing and related products, via which we deliver large volumes of individually small-sized customized orders.

Our products include a broad range of marketing materials, business cards, signage, promotional products, logo apparel, packaging, books and magazines, wall decor, photo merchandise, invitations and announcements, and other categories.

Cimpress is a strategically focused collection of businesses that specialize in mass customization of printing and related products, via which we deliver large volumes of individually small-sized customized orders.

Our products and services include a broad range of marketing materials, business cards, signage, promotional products, logo apparel, packaging, books and magazines, wall decor, photo merchandise, invitations and announcements, design and digital marketing services, and other categories.

Mass customization is a core element of the business model of each Cimpress business and is a competitive strategy which seeks to produce goods and services to meet individual customer needs with near mass production efficiency.

9 unchanged sentences

generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

We believe our most significant estimates are associated with the ongoing evaluation of the recoverability of our long-lived assets and goodwill, estimated useful lives of assets, share-based compensation, accounting for business combinations, and income taxes and related valuation allowances, among others.

We believe our most significant estimates are associated with the ongoing evaluation of the recoverability of our long-lived assets and goodwill, estimated useful lives of assets, share-based compensation, and income taxes and related valuation allowances, among others.

By their nature, estimates are subject to an inherent degree of uncertainty.

Actual results could differ from those estimates.

Mandatorily Redeemable Noncontrolling Interests

Noncontrolling interests held by third parties in consolidated subsidiaries are considered mandatorily redeemable when they are subject to an unconditional obligation to be redeemed by both parties.

The redeemable noncontrolling interest must be required to be repurchased on a specified date or on the occurrence of a specified event that is certain to occur and is to be redeemed via the transfer of assets.

Mandatorily redeemable noncontrolling interests are presented as liability-based financial instruments and are re-measured on a recurring basis to the expected redemption value.

During the second quarter of fiscal 2023, the exercise of put options by the minority shareholders of three PrintBrothers businesses to redeem a portion of their equity interests triggered a mandatory redemption feature for the remaining minority interests after exercise.

As such, we reclassified the remaining minority equity interests from redeemable noncontrolling interest to mandatorily redeemable noncontrolling interest, which is presented as part of other liabilities on the consolidated balance sheets.

Refer to Note 10 for additional details.

Marketable Securities

10 unchanged sentences

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 nine months ended March 31, 2023 and 2022.

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 March 31, 2023 and June 30, 2022.

March 31, 2023

We did not record an allowance for credit losses and we recognized no impairments for these marketable securities during the three months ended September 30, 2023 and 2022.

The following is a summary of the net carrying amount, unrealized losses, and fair value of held-to-maturity securities by type and contractual maturity as of September 30, 2023 and June 30, 2023.

September 30, 2023

Amortized cost Unrealized losses Fair value

Due within one year or less:

Commercial paper $ 30,791 $ ( 96 ) $ 30,695

Corporate debt securities $ 13,337 $ ( 143 ) $ 13,194

government securities 9,276 ( 80 ) 9,196

Total due within one year or less 68,305 ( 394 ) 67,911

Due between one and two years:

Corporate debt securities 2,496 ( 54 ) 2,442

government securities 3,970 ( 61 ) 3,909

Total due within between one and two years 6,466 ( 115 ) 6,351

Total held-to-maturity securities $ 22,613 $ ( 223 ) $ 22,390

2 unchanged sentences

Due within one year or less:

Commercial paper $ 15,982 $ ( 10 ) $ 15,972

Corporate debt securities 16,298 ( 190 ) 16,108

government securities 6,260 ( 69 ) 6,191

Total due within one year or less 38,540 ( 269 ) 38,271

Due between one and two years:

Corporate debt securities 1,498 ( 35 ) 1,463

government securities 2,999 ( 66 ) 2,933

Total due between one and two years 4,497 ( 101 ) 4,396

Total held-to-maturity securities $ 43,037 $ ( 370 ) $ 42,667

1 unchanged sentence

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

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

Three Months Ended September 30,

Gains on derivatives not designated as hedging instruments (1)

$ 8,312 $ 28,645

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

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

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

Currency-related losses, net (2)

( 2,699 ) ( 197 )

Other gains (losses)

806 ( 1,051 )

Total other income, net $ 6,419 $ 27,397

_____________________

(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 $ 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.

(1) Includes realized and unrealized gains and losses on derivative currency forward and option contracts not designated as hedging instruments.

For contracts not designated as hedging instruments, we realized gains of $ 2,050 and $ 14,621 for the three months ended September 30, 2023 and 2022.

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

(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.

(2) Currency-related 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 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.

Net Income (Loss) Per Share Attributable to Cimpress plc

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

Diluted net income (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 March 31, Nine Months Ended March 31,

Three Months Ended September 30,

Weighted average shares outstanding, basic

26,468,769 26,178,818

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

Weighted average shares issuable upon exercise/vesting of outstanding share options/RSUs/warrants (1)(2)

Shares used in computing diluted net income (loss) per share attributable to Cimpress plc

27,079,455 26,178,818

Weighted average anti-dilutive shares excluded from diluted net income (loss) per share attributable to Cimpress plc (1)

187,649 2,688,813

___________________

(1) In the periods in which a net loss is recognized, the impact of share options, RSUs and warrants is not included as they are anti-dilutive.

(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 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.

(2) On May 1, 2020, we entered into a financing arrangement with Apollo Global Management, Inc., which included 7-year warrants to purchase 1,055,377 of our ordinary shares with a strike price of $60 that have a potentially dilutive impact on our weighted average shares outstanding.

For the three months ended September 30, 2023, the average market price of our ordinary shares was higher than the strike price of the warrants, as such the weighted average dilutive effect of the warrants was 98,319.

For the three months ended September 30, 2022, the average market price of our ordinary shares was lower than the strike price of the warrants;

therefore, the total 1,055,377 outstanding warrants were considered anti-dilutive.

Share-based Compensation

Total share-based compensation costs were $ 12,453 and $ 10,631 for the three months ended September 30, 2023 and 2022, respectively.

During the first quarter of fiscal 2024, we issued PSUs (the "2024 PSUs") as part of our long-term incentive program for team members in our Vista business and central teams.

The 2024 PSUs include both a service and performance condition, and the related expense is recognized using an accelerated expense attribution over the requisite service period for each separately vesting portion of the award.

The performance condition for these awards is based on one-year financial targets for fiscal year 2024 revenue, adjusted EBITDA, and unlevered free cash flow for Cimpress (for grants to central team members) and Vista (for grants to Vista team members).

Actual shares issued for each grant will range from 0% to 160% of the number of 2024 PSUs granted based on the attainment of the performance condition.

Share-based compensation expense for these awards will be recognized on an accelerated basis using the grant date fair value and our estimated attainment percentage of the related performance condition.

Until the performance condition is measured at the end of fiscal year 2024, changes in the estimated attainment percentages may cause expense volatility since a cumulative expense adjustment will be recognized in the period a change occurs.

Assets Held for Sale

During the first quarter of fiscal 2024, we began marketing our customer service facility located in Montego Bay, Jamaica for sale as part of the ongoing efforts to optimize our real estate footprint with many of our team members in Jamaica operating under a remote-first model.

The building is available for immediate sale, and we believe a sale will occur within one year.

The plan to sell the asset meets all held-for-sale criteria, which resulted in the reclassification of the building's carrying value of $16,446 from property, plant, and equipment, net to other current assets as of September 30, 2023.

The estimated selling price less costs to sell exceeds carrying value as of September 30, 2023, and therefore no loss has been recorded on the asset held for sale.

Recently Issued or Adopted Accounting Pronouncements

Adopted Accounting Standards

In December 2022, the FASB issued Accounting Standards Update No.

2022-06 "Reference Rate Reform (Topic 848) - Deferral of the Sunset Date of Topic 848" (ASU 2022-06), which extends the optional transition relief to ease the potential burden in accounting for reference rate reform on financial reporting.

The transition relief is provided through December 30, 2024 based on the expectation that the London Interbank Offered Rate (LIBOR) will cease to be published as of June 30, 2023.

We applied the transition guidance to our two Term SOFR interest rate swap contracts this quarter and will apply the guidance when updating existing interest rate swap contracts to index to a replacement rate.

There was no material impact on our consolidated financial statements in the periods presented.

In May 2021, the FASB issued Accounting Standards Update No.

2021-04 "Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)" (ASU 2021-04), which provides authoritative guidance for the accounting treatment of contracts in an entity's own equity when calculating earnings per share.

We adopted the standard on July 1, 2022.

We recognize freestanding equity-classified warrants on our consolidated balance sheet and as the standard is applied prospectively, there was no impact on our consolidated financial statements in the current period.

Issued Accounting Standards to be Adopted

Supply Chain Finance Programs

In September 2022, the FASB issued Accounting Standards Update No.

2022-04 "Liabilities - Supplier Finance Programs (Subtopic 405-50)" (ASU 2022-04), which provides authoritative guidance for expanded disclosure requirements for supply chain finance programs.

The standard is effective on July 1, 2023.

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.

2022-04 "Liabilities - Supplier Finance Programs (Subtopic 405-50)" (ASU 2022-04), which provides authoritative guidance about expanded disclosure requirements for supply chain finance programs.

The new standard requires disclosure of the key terms of outstanding supply chain finance programs and a rollforward of the related amounts due to suppliers participating in these programs.

The adoption of the new disclosure requirements was effective for the current quarter, except for

a rollforward of activity within supply chain finance programs, which is effective as part of our annual disclosures for fiscal year 2025.

The adoption of the new standard did not have an impact on our consolidated financial statements.

We facilitate a voluntary supply chain finance program through a financial intermediary, which provides certain suppliers the option to be paid by the financial intermediary earlier than the due date of the applicable invoice.

The decision to sell receivables due from us is at the sole discretion of both the suppliers and the financial institution.

Our responsibility is limited to making payment on the terms originally negotiated with each supplier, regardless of whether a supplier participates in the program.

We are not a party to the agreements between the participating financial institution and the suppliers in connection with the program, we do not receive financial incentives from the suppliers or the financial institution, nor do we reimburse suppliers for any costs they incur for participating in the program.

There are no assets pledged as security or other forms of guarantees provided for the committed payment to the financial institution.

All unpaid obligations to our supply chain finance provider are included in accounts payable in the consolidated balance sheets, and payments we make under the program are reflected as a reduction to net cash provided by operating activities in the consolidated statements of cash flows.

The outstanding obligations with our supply chain finance provider that are included in accounts payable as of September 30, 2023 and June 30, 2023 were $49,025 and $44,522, respectively.

Fair Value Measurements

7 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:

March 31, 2023

September 30, 2023

Total Quoted Prices in

4 unchanged sentences

Interest rate swap contracts $ 23,949 $ — $ 23,949 $ —

Cross-currency swap contracts 13 — 13 —

Currency forward contracts 4,128 — 4,128 —

1 unchanged sentence

Total assets recorded at fair value $ 29,024 $ — $ 29,024 $ —

Cross-currency swap contracts $ ( 1,937 ) $ — $ ( 1,937 ) $ —

Currency forward contracts $ ( 1,545 ) $ — $ ( 1,545 ) $ —

15 unchanged sentences

Total liabilities recorded at fair value $ ( 9,317 ) $ — $ ( 9,317 ) $ —

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.

During the three months ended September 30, 2023 and year ended June 30, 2023, 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 risks are determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each instrument.

This analysis utilizes observable market-based inputs, including interest rate curves, interest rate volatility, or spot and forward exchange rates, and reflects the contractual terms of these instruments, including the period to maturity.

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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 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.

However, as of September 30, 2023, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives.

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

As of 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.

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

As of September 30, 2023 and June 30, 2023, the carrying value of our debt, excluding debt issuance costs and debt premiums and discounts, was $ 1,621,001 and $ 1,653,989 , respectively, and the fair value was $ 1,596,312 and $ 1,604,190 , respectively.

Our debt at September 30, 2023 includes variable-rate debt instruments indexed to Term SOFR 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 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.

As of September 30, 2023 and June 30, 2023, our held-to-maturity marketable securities were held at an amortized cost of $ 22,613 and $ 43,037 , respectively, while the fair value was $ 22,390 and $ 42,667 , respectively.

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

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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 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.

After USD LIBOR sunsets on June 30, 2023, we may convert our contracts to index to Term SOFR, otherwise the contracts will be subject to the fallback language within our credit agreement.

Amounts reported in accumulated other comprehensive loss related to interest rate swap contracts will be reclassified to interest expense, net as interest payments are accrued or made on our variable-rate debt.

As of September 30, 2023, we estimate that $ 6,612 of income will be reclassified from accumulated other comprehensive loss to interest expense, net during the twelve months ending September 30, 2024.

As of September 30, 2023, we had eleven effective outstanding interest rate swap contracts that were indexed to Term or Daily SOFR.

Our interest rate swap contracts have varying start and maturity dates through April 2028.

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Notional Amounts

Contracts accruing interest as of March 31, 2023

Contracts accruing interest as of September 30, 2023 (1)

Contracts with a future start date 430,000

Total $ 675,000

________________________

(1) Based on contracts outstanding as of September 30, 2023, the notional value of our contracted interest rate swaps accruing interest will fluctuate between $215,000 and $380,000 through April 2028 based on layered start dates and maturities.

Hedges of Currency Risk

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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 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.

As of September 30, 2023, we had one outstanding cross-currency swap contract designated as a cash flow hedge with a total notional amount of $ 58,478 , maturing during June 2024.

We entered into the cross-currency swap contract to

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

Amounts reported in accumulated other comprehensive loss will be reclassified to other income, 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.

As of September 30, 2023, we estimate that $ 1,353 of income will be reclassified from accumulated other comprehensive loss to interest expense, net during the twelve months ending September 30, 2024.

Other Currency Hedges

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

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.

As of September 30, 2023, we have one intercompany loan designated as a net investment hedge with a total notional amount of $ 310,270 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 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.

During the three months ended September 30, 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 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:

Additionally, since our hedging objectives may be targeted at non-GAAP financial metrics that exclude non-cash items such as depreciation and amortization, we may experience increased, not decreased, volatility in our GAAP results as a result of our currency hedging program.

In most cases, we enter into these currency derivative contracts, for which we do not apply hedge accounting, in order to address the risk for certain currencies where we have a net exposure to adjusted EBITDA, a non-GAAP financial metric.

Adjusted EBITDA exposures are our focus for the majority of our mark-to-market currency forward and option contracts because a similar metric is referenced within the debt covenants of our amended and restated senior secured credit agreement (refer to Note 8 for additional information about this agreement).

Our most significant net currency exposures by volume are the Euro and the British Pound (GBP).

Our adjusted EBITDA hedging approach results in addressing nearly all of our forecasted Euro and GBP net exposures for the upcoming twelve months, with a declining hedged percentage out to twenty-four months.

For certain other currencies with a smaller net impact, we hedge nearly all of our forecasted net exposures for the upcoming six months, with a declining hedge percentage out to fifteen months.

As of September 30, 2023, we had the following outstanding currency derivative contracts that were not designated for hedge accounting and were primarily used to hedge fluctuations in the U.S.

dollar value of forecasted transactions or balances denominated in Australian Dollar, Canadian Dollar, Czech Koruna, Danish Krone, Euro, GBP, 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

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

$ 651,202 December 2021 through September 2023 Various dates through September 2025 595 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 March 31, 2023 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 September 30, 2023 and June 30, 2023.

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

March 31, 2023

September 30, 2023

Asset Derivatives Liability Derivatives

Balance Sheet line item Gross amounts of recognized assets Gross amount offset in Consolidated Balance Sheet Net amount Balance Sheet line item Gross amounts of recognized liabilities Gross amount offset in Consolidated Balance Sheet Net amount

Derivatives designated as hedging instruments

Derivatives in cash flow hedging relationships

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

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

Interest rate swaps Other current assets / other assets $ 23,949 $ — $ 23,949 Other liabilities $ — $ — $ —

Cross-currency swaps Other current assets 13 — 13 Other current liabilities — — —

Total derivatives designated as hedging instruments $ 23,962 $ — $ 23,962 $ — $ — $ —

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Derivatives in cash flow hedging relationships

Interest rate swaps Other current assets / other assets $ 14,336 $ — $ 14,336 Other current liabilities / other liabilities $ — $ — $ —

Cross-currency swaps Other assets — — — Other liabilities ( 446 ) — $ ( 446 )

Interest rate swaps Other assets $ 19,341 $ ( 123 ) $ 19,218 Other liabilities $ — $ — $ —

Cross-currency swaps Other assets — — — Other current liabilities ( 1,777 ) — ( 1,777 )

Total derivatives designated as hedging instruments $ 19,341 $ ( 123 ) $ 19,218 $ ( 1,777 ) $ — $ ( 1,777 )

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Total derivatives not designated as hedging instruments $ 3,863 $ ( 572 ) $ 3,291 $ ( 9,129 ) $ 1,589 $ ( 7,540 )

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 nine months ended March 31, 2023 and 2022:

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

2023 2022 2023 2022

The following table presents the effect of our derivative financial instruments designated as hedging instruments and their classification within comprehensive loss, net of tax, for the three months ended September 30, 2023 and 2022:

Three Months Ended September 30,

Derivatives in cash flow hedging relationships

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Total $ 12,374 $ 29,711

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

The following table presents reclassifications out of accumulated other comprehensive loss for the three months ended September 30, 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 March 31, Nine Months Ended March 31,

2023 2022 2023 2022

Three Months Ended September 30,

Derivatives in cash flow hedging relationships

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Cross-currency swaps ( 1,936 ) ( 3,742 ) Other income, net

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

Total before income tax ( 4,159 ) ( 3,345 ) Income (loss) before income taxes

Income tax 611 407 Income tax expense

Total $ ( 3,548 ) $ ( 2,938 )

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

The following table presents the adjustment to fair value recorded within the consolidated statements of operations for the three months ended September 30, 2023 and 2022 for derivative instruments for which we did not elect hedge accounting.

Amount of Gain (Loss) Recognized in Net Income (Loss)

Affected line item in the

Statement of Operations

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

2023 2022 2023 2022

Three Months Ended September 30,

Currency contracts $ 8,312 $ 28,645 Other income, net

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

Total $ 8,312 $ 28,645

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 $ 5,959 for the nine months ended March 31, 2023 :

The following table presents a roll forward of amounts recognized in accumulated other comprehensive loss by component, net of tax of $ 4,040 for the three months ended September 30, 2023 :

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

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Other comprehensive income before reclassifications 7,679 — ( 3,693 ) 3,986

Amounts reclassified from accumulated other comprehensive loss to net loss ( 771 ) — — ( 771 )

Amounts reclassified from accumulated other comprehensive loss to net income (loss)

( 3,548 ) — — ( 3,548 )

Net current period other comprehensive income 4,131 — ( 3,693 ) 438

Balance as of March 31, 2023

Balance as of September 30, 2023

$ 16,428 $ ( 356 ) $ ( 50,694 ) $ ( 34,622 )

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(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 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:

(2) As of September 30, 2023 and June 30, 2023, 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 September 30, 2023 and June 30, 2023.

Intercompany loan hedge gains of $ 47,109 and $ 38,489 have been included in accumulated other comprehensive loss as of September 30, 2023 and June 30, 2023, respectively.

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

Vista PrintBrothers The Print Group All Other Businesses Total

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$ 295,731 $ 141,092 $ 149,797 $ 194,921 $ 781,541

Acquisitions (1) — 4,724 — — 4,724

Adjustments — — — 225 225

Effect of currency translation adjustments (1) ( 1,750 ) ( 3,658 ) ( 3,968 ) — ( 9,376 )

Balance as of March 31, 2023

Balance as of September 30, 2023

$ 293,981 $ 137,434 $ 145,829 $ 194,921 $ 772,165

________________________

(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 .

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

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Accrued expenses included the following:

March 31, 2023 June 30, 2022

September 30, 2023 June 30, 2023

Compensation costs $ 67,519 $ 74,879

Income and indirect taxes 43,091 53,266

Restructuring costs (1) 28,728 13,449

Advertising costs (1)

35,207 16,548

Third party manufacturing and digital content costs 21,492 17,380

Interest payable (2) 13,563 2,477

Variable compensation incentives (3) 11,506 —

Shipping costs 10,726 11,146

Variable compensation incentives 11,473 9,413

Restructuring costs 1,486 7,567

Sales returns

Interest payable (2)

Professional fees 2,730 2,743

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______________________

(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.

(1) The increase to accrued advertising costs is largely driven by the timing of invoice processing from third-party vendors and, to a lesser extent, increased spend in preparation for our peak holiday season during the second quarter of our fiscal year.

(2) The increase in interest payable as of September 30, 2023, is due to the interest on our 7.0% Senior Notes Due 2026 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:

March 31, 2023 June 30, 2022

September 30, 2023 June 30, 2023

Current portion of finance lease obligations $ 9,270 $ 9,938

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Total other current liabilities $ 20,114 $ 24,469

______________________

(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:

March 31, 2023 June 30, 2022

September 30, 2023 June 30, 2023

Long-term finance lease obligations $ 28,526 $ 29,822

Long-term derivative liabilities 4,799 463

Mandatorily redeemable noncontrolling interest (1) 13,113 —

Long-term compensation incentives 13,324 22,286

Mandatorily redeemable noncontrolling interest (1)

Long-term derivative liabilities 307 1,737

Other 22,023 24,195

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______________________

(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.

March 31, 2023 June 30, 2022

(1) The decrease to mandatorily redeemable noncontrolling interest liabilities is primarily driven by an accretion adjustment of $ 1,864 recognized as a benefit within interest expense, net in the consolidated statements of operations.

September 30, 2023 June 30, 2023

7.0% Senior Notes due 2026 $ 527,135 $ 548,300

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Other 6,483 7,076

Debt issuance costs and debt premiums (discounts) ( 16,833 ) ( 19,417 )

Debt issuance costs and discounts, net of debt premiums ( 15,182 ) ( 16,033 )

Total debt outstanding, net 1,605,819 1,637,956

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_____________________

(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.

(1) Balances as of September 30, 2023 and June 30, 2023 are inclusive of short-term debt issuance costs, debt premiums and discounts of $ 3,533 and $ 3,526 , respectively.

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

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).

As of September 30, 2023, we were in compliance with all covenants in our debt contracts, including those under our amended and restated senior secured credit agreement ("Restated Credit Agreement") and the indenture governing our 7.0% Senior Notes due 2026 ("2026 Notes").

Senior Secured Credit Facility

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• A senior secured Term Loan B with a maturity date of May 17, 2028 (the “Term Loan B”), consisting of:

◦ a $ 795,000 tranche that bears interest at LIBOR (with a LIBOR floor of 0.50 %) plus 3.50 %, and

◦ a € 300,000 tranche that bears interest at EURIBOR (with a EURIBOR floor of 0 %) plus 3.50 %;

◦ a $ 795,000 tranche that currently bears interest at Term SOFR (with a SOFR floor of 0.50 %) plus 3.50 %, and

◦ a € 300,000 tranche that currently bears interest at EURIBOR (with a EURIBOR floor of 0 %) plus 3.50 %;

• A $ 250,000 senior secured revolving credit facility with a maturity date of May 17, 2026 (the “Revolving Credit Facility”).

Borrowings under the Revolving Credit Facility bear interest at LIBOR (with a LIBOR floor of 0 %) plus 2.50 % to 3.00 % depending on the Company’s First Lien Leverage Ratio, a net leverage calculation, as defined in the Restated Credit Agreement.

LIBOR is expected to sunset on June 30, 2023, and under the terms of our Restated Credit Agreement our benchmark rate will automatically transition to Term SOFR.

Borrowings under the Revolving Credit Facility currently bear interest at Term SOFR (with a SOFR floor of 0 %) plus 2.50 % to 3.00 % depending on the Company’s First Lien Leverage Ratio, a net leverage calculation, as defined in the Restated Credit Agreement.

The LIBOR sunset occurred on June 30, 2023, and under the terms of our Restated Credit Agreement, our benchmark rate transitioned to Term SOFR in July 2023.

The Restated Credit Agreement contains covenants that restrict or limit certain activities and transactions by Cimpress and our subsidiaries, including, but not limited to, the incurrence of additional indebtedness and liens;

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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 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.

As of September 30, 2023, we have borrowings under the Restated Credit Agreement of $ 1,087,383 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 September 30, 2023.

As of September 30, 2023, the weighted-average interest rate on outstanding borrowings under the Restated Credit Agreement was 7.91 %, 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 March 31, 2023.

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

Senior Unsecured Notes

We have issued $ 600,000 in aggregate principal of 7.0% Senior Notes due 2026 (the "2026 Notes"), which are unsecured.

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

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

As of September 30, 2023, we have $ 527,135 in aggregate principal outstanding of our 2026 Notes, which are unsecured.

We can redeem some or all of the 2026 Notes at the redemption prices specified in the indenture

that governs the 2026 Notes, plus accrued and unpaid interest to, but not including, the redemption date.

During the three months ended September 30, 2023, we purchased an aggregate principal amount of $ 21,165 for a purchase price of $ 19,815 , as well as the related settlement of unpaid interest, which resulted in the recognition of a gain on the extinguishment of debt of $ 1,372 .

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

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.

As of September 30, 2023 and June 30, 2023, we had $ 6,483 and $ 7,076 , respectively, outstanding for those obligations that are payable through November 2027.

Our income tax expense was $ 8,122 and $ 9,365 for the three months ended September 30, 2023 and 2022, respectively.

Tax expense decreased year over year due to various immaterial discrete items in both periods, offset by increased tax on increased profits.

Excluding the effect of discrete tax adjustments, our estimated annual effective tax rate is higher for fiscal 2024 as compared to fiscal 2023 primarily due to forecasted pre-tax profits in fiscal 2024 as compared to a pre-tax loss in fiscal 2023.

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.

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

We continuously analyze our valuation allowance positions and the weight of objective and verifiable evidence of actual results against the more subjective evidence of anticipated future income.

As of September 30, 2023 we had unrecognized tax benefits of $ 16,276 , including accrued interest and penalties of $ 1,835 .

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

If recognized, $ 7,585 of unrecognized tax benefits would reduce our tax expense.

It is reasonably possible that a reduction in unrecognized tax benefits may occur within the next twelve months in the range of $ 370 to $ 420 related to the lapse of applicable statutes of limitations.

It is reasonably possible that a reduction in unrecognized tax benefits may occur within the next twelve months in the range of $ 500 to $ 1,700 related to the lapse of applicable statutes of limitations or settlement.

We believe we have appropriately provided for all tax uncertainties.

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

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

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

PrintBrothers

Members of the PrintBrothers management team hold minority equity interests in several businesses within the reportable segment.

During the second quarter of fiscal year 2023, put options were exercised by the minority interest holders for a portion of their equity interests that required us to purchase 10 % to 11 % in three of the respective businesses for a total of $ 90,841 .

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

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

These noncontrolling interests span multiple businesses and reportable segments.

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

1 unchanged sentence

Balance as of June 30, 2023 $ 10,893 $ 459

Acquisition of noncontrolling interest (1) — 365

Net income attributable to noncontrolling interests 1,513 163

Distribution to noncontrolling interests (2) ( 3,652 ) —

Purchase of noncontrolling interest (3) ( 95,567 ) —

Accretion to redemption value (1) 330 —

Reclassification to mandatorily redeemable noncontrolling interest (5) ( 9,582 ) —

Net (loss) income attributable to noncontrolling interests ( 96 ) 111

Distribution to noncontrolling interests ( 200 ) —

Foreign currency translation ( 79 ) ( 15 )

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

Balance as of September 30, 2023 $ 10,848 $ 555

_________________

(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.

(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.

(1) 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.

(5) During the second quarter of fiscal year 2023, the minority equity interest holders of three PrintBrothers businesses exercised a put option that triggered a mandatory redemption feature for the remaining minority equity interests.

The remaining minority equity interests were reclassified to mandatorily redeemable noncontrolling interests, as part of other liabilities within the consolidated balance sheets.

Refer above for additional information regarding the transaction and Note 7 for additional details about the reclassified liability balance.

Segment Information

Our operating segments are based upon the manner in which our operations are managed and the availability of separate financial information reported internally to the Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”), for purposes of making decisions about how to allocate resources and assess performance.

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

As of September 30, 2023, we have numerous operating segments under our management reporting structure which are reported in the following five reportable segments:

• Vista - Vista is the parent brand of multiple offerings including VistaPrint, VistaCreate, 99designs by Vista, Vista Corporate Solutions, and Depositphotos, which together represent a full-service design, digital, and print solution.

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

• The Print Group - Includes the results of our Easyflyer, Exaprint, Pixartprinting, and Tradeprint businesses.

• The Print Group - Includes the results of our Easyflyer, Exaprint, Packstyle, Pixartprinting, and Tradeprint businesses.

• National Pen - Includes the global operations of our National Pen business, which manufactures and markets custom writing instruments and promotional products, apparel and gifts.

• All Other Businesses - Includes 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.

• All Other Businesses - Includes two businesses grouped together based on materiality.

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

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administrative costs of our Cimpress India offices where numerous Cimpress businesses have dedicated business-specific team members;

and corporate functions including our Board of Directors, CEO, and the team members necessary for managing corporate activities, such as treasury, tax, capital allocation, financial

consolidation, internal audit and legal.

and corporate functions including our Board of Directors, CEO, and the team members necessary for managing corporate activities, such as treasury, tax, capital allocation, financial consolidation, internal audit and legal.

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

The expense value of our PSU awards is based on a Monte Carlo fair value analysis and is required to be expensed on an accelerated basis.

The expense value of our PSU awards is based on fair value and is required to be expensed on an accelerated basis.

In order to ensure comparability in measuring our businesses' results, we allocate the straight-line portion of the fixed grant value to our businesses.

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We do not allocate non-operating income, including realized gains and losses on currency hedges, to our segment results.

During the fourth quarter of fiscal 2022, we revised our internal reporting to reallocate certain third-party technology costs that were previously held within our Central and corporate costs to our Vista business and reportable segment.

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

We 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.

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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 March 31, Nine Months Ended March 31,

2023 2022 2023 2022

Three Months Ended September 30,

Vista $ 396,647 $ 369,369

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

Three Months Ended March 31, 2023

Vista PrintBrothers The Print Group National Pen All Other Total

Revenue by Geographic Region:

North America $ 276,983 $ — $ — $ 50,938 $ 41,524 $ 369,445

Europe 88,152 139,187 83,096 23,811 — 334,246

Other 31,237 — — 1,180 6,056 38,473

Inter-segment 270 382 2,408 5,184 1,457 9,701

Total segment revenue 396,642 139,569 85,504 81,113 49,037 751,865

inter-segment elimination ( 270 ) ( 382 ) ( 2,408 ) ( 5,184 ) ( 1,457 ) ( 9,701 )

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

Nine Months Ended March 31, 2023

Vista PrintBrothers The Print Group National Pen All Other Total

Revenue by Geographic Region:

North America $ 835,354 $ — $ — $ 162,593 $ 137,016 $ 1,134,963

Europe 268,791 419,658 244,378 99,555 — 1,032,382

Other 98,320 — — 5,862 19,254 123,436

Inter-segment 1,282 1,208 7,285 15,390 4,592 29,757

Total segment revenue 1,203,747 420,866 251,663 283,400 160,862 2,320,538

inter-segment elimination ( 1,282 ) ( 1,208 ) ( 7,285 ) ( 15,390 ) ( 4,592 ) ( 29,757 )

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

Three Months Ended March 31, 2022

Three Months Ended September 30, 2023

Vista PrintBrothers The Print Group National Pen All Other Total

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Total external revenue $ 396,352 $ 151,542 $ 77,802 $ 81,849 $ 49,749 $ 757,294

Nine Months Ended March 31, 2022

Three Months Ended September 30, 2022

Vista (1) PrintBrothers The Print Group National Pen All Other Total (1)

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Total external revenue $ 368,859 $ 132,382 $ 74,991 $ 76,944 $ 50,239 $ 703,415

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,

___________________

(1) During fiscal year 2023, we identified an immaterial error in our previously disclosed revenue by geographic area for our Vista reportable segment for the quarter ended September 30, 2022, which understated revenue in North America and Europe, with an offsetting overstatement in the Other geographies.

We have corrected the disclosed figures as included herein.

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

Three Months Ended September 30,

Segment EBITDA:

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Depreciation and amortization ( 39,942 ) ( 40,942 )

Certain impairments and other adjustments 549 ( 277 ) ( 1,982 ) 3,216

Restructuring-related charges 334 ( 1,820 )

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

Certain impairments and other adjustments ( 525 ) ( 3,456 )

Total income (loss) from operations

34,100 ( 17,967 )

Other income, net

Interest expense, net ( 29,200 ) ( 24,806 )

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

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

Gain on early extinguishment of debt

Income (loss) before income taxes

$ 12,691 $ ( 15,376 )

Three Months Ended September 30,

Depreciation and amortization:

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Total depreciation and amortization $ 39,942 $ 40,942

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

2023 2022 2023 2022

Three Months Ended September 30,

Purchases of property, plant and equipment:

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Total purchases of property, plant and equipment $ 22,565 $ 11,758

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

2023 2022 2023 2022

Three Months Ended September 30,

Capitalization of software and website development costs:

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

March 31, 2023 June 30, 2022

September 30, 2023 June 30, 2023

Long-lived assets (1):

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France 30,361 29,302

Germany 29,553 27,813

Australia 18,642 19,664

Jamaica 18,258 18,744

Japan (3) — 11,392

Other 92,232 86,690

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___________________

(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) The decrease in Japan's long-lived assets is due to the planned sale of the land and building, which resulted in the reclassification of the carrying value to prepaid expenses and other current assets because it meets held-for-sale criteria during the current quarter.

(1) Excludes goodwill of $ 772,165 and $ 781,541 , intangible assets, net of $ 98,836 and $ 109,196 , deferred tax assets of $ 12,060 and $ 12,740 as of September 30, 2023 and June 30, 2023, respectively, as well as marketable securities, non-current of $ 4,497 as of June 30, 2023.

(2) The decrease in Jamaica's long-lived assets is due to the planned sale of an owned customer service facility as we continue to optimize our real estate footprint with many of these team members operating under a remote-first model, which resulted in the classification of the related assets as held-for-sale as of September 30, 2023, which is presented as part of prepaid expenses and other current assets in the consolidated balance sheets.

Refer to Note 2 for additional details.

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Purchase Obligations

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 ;

At September 30, 2023, we had unrecorded commitments under contract of $ 285,698 , including inventory, third-party fulfillment and digital service purchase commitments of $ 142,588 ;

third-party cloud services of $ 65,298 ;

software of $ 22,240 ;

advertising of $ 11,264 ;

professional and consulting fees of $ 7,237 ;

production and computer equipment purchases of $ 3,556 ;

professional and consulting fees of $ 3,462 , and other unrecorded purchase commitments of $ 14,435 .

Other Obligations

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.

and other unrecorded purchase commitments of $ 33,515 .

Legal Proceedings

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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.

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All restructuring costs are excluded from segment and adjusted EBITDA.

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.

During the three months ended September 30, 2023, we recognized benefits to restructuring expense of $ 334 , due to adjustments to our previously estimated restructuring expense for actions taken in our Vista business and central teams during March 2023.

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

During the three months ended September 30, 2022, we recognized restructuring expense of $ 1,820 , which included $ 1,456 in our Vista business, $ 209 in our National Pen business and $ 155 in our Central and corporate costs.

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

The following table summarizes the restructuring activity during the three months ended September 30, 2023.

Severance and Related Benefits Other Restructuring Costs Accrued Restructuring Liability

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Foreign currency translation ( 7 ) — ( 7 )

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

________________

(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.

Balance as of September 30, 2023 $ 1,486 $ — $ 1,486

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