Cimpress plc (NASDAQ:CMPR), a global leader in commercial printing with a market capitalization of $2 billion, announced on Monday a significant amendment to its senior secured credit agreement, which is expected to reduce annual cash interest expenses by approximately $5 million. According to InvestingPro analysis, the company appears undervalued at current levels, with strong profitability metrics and an EBITDA of $338 million in the last twelve months.
The company, which operates through various subsidiaries including Vistaprint, entered into Amendment No. 4 with financial institutions and JPMorgan Chase (NYSE:JPM) Bank N.A., acting as the administrative agent. This amendment refinances the company's existing Term Loan B, comprising both U.S. dollar and Euro tranches.
Under the terms of Amendment 4, the interest rate margin on the U.S. dollar tranche was reduced by 50 basis points, from a rate of SOFR plus 3.00% to SOFR plus 2.50%. The existing U.S. dollar tranche, previously amounting to $1,032,310,634, was exchanged for a new tranche with the revised interest terms.
Additionally, the amendment expanded the size of the new U.S. dollar tranche by $48,614,176. These additional funds were used to prepay the entire balance of the Euro tranche, streamlining the company's debt structure into a single U.S. dollar-denominated tranche totaling $1,080,924,811. The maturity date for Term Loan B remains unchanged at May 17, 2028. InvestingPro data shows the company's total debt stands at $1.7 billion, with a current ratio of 0.64, indicating tight liquidity management remains important.
The company's management believes that the amended terms will provide a more favorable interest rate environment for Cimpress, aligning with their financial strategies. The changes are not expected to alter any other material terms of the Credit Agreement.
This strategic financial maneuver is part of Cimpress's ongoing efforts to optimize its capital structure and reduce financing costs. The company's forward-looking statements indicate confidence in the expected savings from this repricing, although they acknowledge the inherent uncertainty of financial forecasts and the potential impact of broader economic conditions.
Trading at a P/E ratio of 13.12, the company has demonstrated solid profitability with positive earnings over the last twelve months. For deeper insights into Cimpress's financial health and detailed analysis, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.
In other recent news, Cimpress plc has witnessed a series of significant developments. The company's shareholders approved an expansion of the 2020 Equity Incentive Plan, allowing for an additional 2 million ordinary shares to be issued, which raises the potential total to 7.5 million shares. Furthermore, the company's Board of Directors was granted authority to issue shares and opt out of statutory preemption rights until May 20, 2026.
In financial updates, Cimpress reported a promising start to fiscal year 2025, with a 6% increase in consolidated revenue and an adjusted EBITDA of $88 million. A noteworthy growth was observed in high-value segments, specifically in flexible and corrugated packaging, which experienced over 25% annual growth. Truist Securities adjusted the stock price target for Cimpress to $110.00, maintaining a Buy rating for the stock.
The company also reported a cash flow performance of approximately $10 per diluted share from the last fiscal year. Cimpress has managed to maintain strong growth investments despite a decline in North American business card sales.
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