CIMPRESS plc

Previous wording

This Report contains forward-looking statements that involve risks and uncertainties. The statements contained in this Report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not limited to our statements about the anticipated growth and development of our businesses and financial results, including liquidity, net leverage, and capital allocation opportunities; future payment terms with suppliers; legal proceedings; our expectations with respect to our valuation allowance; and sufficiency of our tax reserves. Without limiting the foregoing, the words “may,” “should,” “could,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “designed,” “potential,” “continue,” “target,” “seek” and similar expressions are intended to identify forward-looking statements. All forward-looking statements included in this Report are based on information available to us up to, and including the date of this document, and we disclaim any obligation to update any such forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various important factors, including but not limited to flaws in the assumptions and judgments upon which our forecasts and estimates are based; the development, severity, and duration of supply chain constraints and inflation; our inability to make the investments in our business that we plan to make or the failure of those investments to achieve the results we expect; our failure to execute on the transformation of the Vista business; loss of key personnel or our inability to recruit talented personnel to drive performance of our businesses; costs and disruptions caused by acquisitions and minority investments; the failure of businesses we acquire or invest in to perform as expected; our failure to develop and deploy our mass customization platform or the failure of the platform to drive the efficiencies and competitive advantages we expect; unanticipated changes in our markets, customers, or businesses; disruptions caused by political instability and war in Ukraine, Israel, or elsewhere; changes in the laws and regulations, or in the interpretation of laws and regulations, that affect our businesses; our failure to manage the growth and complexity of our business and expand our operations; our failure to maintain compliance with the covenants in our debt documents or to pay our debts when due; competitive pressures; general economic conditions; and other factors described in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 and the documents that we periodically file with the SEC.

Current wording

This Report contains forward-looking statements that involve risks and uncertainties. The statements contained in this Report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not limited to our statements about the anticipated growth and development of our businesses and financial results, including liquidity, our expectations with respect to our leverage and capital allocation opportunities, future payment terms with suppliers, legal proceedings, our expectations with respect to our valuation allowance, and sufficiency of our tax reserves. Without limiting the foregoing, the words “may,” “should,” “could,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “designed,” “potential,” “continue,” “target,” “seek” and similar expressions are intended to identify forward-looking statements. All forward-looking statements included in this Report are based on information available to us up to, and including the date of this document, and we disclaim any obligation to update any such forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various important factors, including but not limited to flaws in the assumptions and judgments upon which our forecasts and estimates are based; the development, severity, and duration of supply chain constraints and inflation; our inability to make the investments in our business that we plan to make or the failure of those investments to achieve the results we expect; our failure to execute on the transformation of the Vista business; loss of key personnel or our inability to recruit talented personnel to drive performance of our businesses; costs and disruptions caused by acquisitions and minority investments; the failure of businesses we acquire or invest in to perform as expected; our failure to develop and deploy our mass customization platform or the failure of the platform to drive the efficiencies and competitive advantages we expect; unanticipated changes in our markets, customers, or businesses; disruptions caused by political instability and war in Ukraine, Israel, or elsewhere; changes in the laws and regulations, or in the interpretation of laws and regulations, that affect our businesses; our failure to manage the growth and complexity of our business and expand our operations; our failure to maintain compliance with the covenants in our debt documents or to pay our debts when due; competitive pressures; general economic conditions; and other factors described in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 and the documents that we periodically file with the SEC.

Previous wording

The primary financial metric by which we set quarterly and annual budgets both for individual businesses and Cimpress wide is our adjusted free cash flow before net cash interest payments; however, in evaluating the financial condition and operating performance of our business, management considers a number of metrics including revenue growth, organic constant-currency revenue growth, operating income, adjusted EBITDA, cash flow from operations, and adjusted free cash flow. Reconciliations of our non-GAAP financial measures are included within the "Consolidated Results of Operations" and "Additional Non-GAAP Financial Measures" sections of Management's Discussion and Analysis. A summary of these key financial metrics for the three and six months ended December 31, 2023 as compared to the three and six months ended December 31, 2022 follows:

Current wording

The primary financial metric by which we set quarterly and annual budgets both for individual businesses and Cimpress wide is our adjusted free cash flow before net cash interest payments; however, in evaluating the financial condition and operating performance of our business, management considers a number of metrics including revenue growth, organic constant-currency revenue growth, operating income, adjusted EBITDA, cash flow from operations, and adjusted free cash flow. Reconciliations of our non-GAAP financial measures are included within the "Consolidated Results of Operations" and "Additional Non-GAAP Financial Measures" sections of Management's Discussion and Analysis. A summary of these key financial metrics for the three and nine months ended March 31, 2024 as compared to the three and nine months ended March 31, 2023 follows:

Previous wording

•Organic constant-currency revenue growth (a non-GAAP financial measure) was 6%.

Current wording

•Organic constant-currency revenue growth (a non-GAAP financial measure) was 4%.

Previous wording

•Operating income increased by $74.1 million to $107.7 million.

Current wording

•Operating income increased by $51.4 million to $39.2 million.

Previous wording

•Adjusted EBITDA (a non-GAAP financial measure) increased by $55.3 million to $166.4 million.

Current wording

•Adjusted EBITDA (a non-GAAP financial measure) increased by $25.0 million to $94.2 million.

Previous wording

•Operating income increased by $126.2 million to $141.8 million.

Current wording

•Operating income increased by $177.6 million to $181.0 million.

Previous wording

•Adjusted EBITDA (a non-GAAP financial measure) increased by $98.4 million to $255.2 million.

Current wording

•Adjusted EBITDA (a non-GAAP financial measure) increased by $123.4 million to $349.3 million.

Previous wording

•Diluted net income (loss) per share attributable to Cimpress plc increased to income of $2.14 from a loss of $5.34 in the prior fiscal year.

Current wording

•Diluted net income (loss) per share attributable to Cimpress plc increased to income of $2.16 from a loss of $8.19 in the prior fiscal year.

Previous wording

•Cash provided by operating activities increased by $161.3 million to $217.2 million.

Current wording

•Cash provided by operating activities increased by $157.2 million to $225.6 million.

Previous wording

•Adjusted free cash flow (a non-GAAP financial measure) increased by $159.4 million to $160.9 million.

Current wording

•Adjusted free cash flow (a non-GAAP financial measure) increased by $155.6 million to $144.2 million.

Previous wording

For the three and six months ended December 31, 2023, the increase in reported revenue was primarily due to growth across our Vista, PrintBrothers and National Pen reportable segments. Revenue growth in our Vista business was driven by growth in total customer count and the continued increase of revenue per customer. Revenue in our Vista business grew year over year across all major product categories and markets. The second fiscal quarter is seasonally significant for Vista's sales of consumer products, and this category delivered strong growth during the current period. Currency exchange fluctuations had a positive effect on revenue growth during the current quarter.

Current wording

For the three and nine months ended March 31, 2024, the increase in reported revenue was primarily due to growth across our Vista, PrintBrothers and National Pen reportable segments. The earlier timing of the Easter holiday dampened revenue growth for the current-year periods, as this holiday was in the fourth fiscal quarter last year but at the end of the current fiscal quarter this year. Currency exchange fluctuations had a positive effect on revenue growth during the current-year periods. Revenue growth in our Vista business was driven by increases to total customer count as well as revenue per customer. Vista revenue grew across all major markets, with the strongest physical product category growth rates coming from sales of signage and promotional products, apparel and gifts.

Previous wording

The increase to operating income during the three and six months ended December 31, 2023 was driven by higher gross profit that benefited from the revenue growth described above as well as gross margin expansion. Operating income also benefited from improved leverage of advertising spend as a percentage of revenue and reduced operating expenses driven by prior-year cost reduction actions, as well as lower restructuring costs of $10.7 million and $12.9 million, respectively, as a result of actions that were completed during the prior year.

Current wording

The increase to operating income during the three and nine months ended March 31, 2024 was driven by higher gross profit that benefited from the revenue growth described above as well as gross margin expansion. Operating income also benefited from year-over-year operating expense efficiencies, and lower restructuring costs of $30.0 million and $42.9 million, respectively, as a result of cost reduction actions that were completed during the prior year.

Previous wording

Adjusted EBITDA increased during the three and six months ended December 31, 2023, primarily driven by the operating income growth described above, which was was partially offset by $8.0 million and $11.5 million of year-over-year net unfavorable currency impacts, respectively. Adjusted EBITDA excludes restructuring charges, share-based compensation expense, certain impairments, and gains on the sale of assets, and includes the realized gains or losses on our currency derivatives intended to hedge adjusted EBITDA.

Current wording

Adjusted EBITDA increased during the three and nine months ended March 31, 2024, primarily driven by the operating income growth described above, which was partially offset by $4.2 million and $15.7 million of year-over-year net unfavorable currency impacts, respectively. Adjusted EBITDA excludes restructuring charges, share-based compensation expense, certain impairments, and gains or losses on the sale of assets, and includes the realized gains or losses on our currency derivatives intended to hedge adjusted EBITDA.

Previous wording

Diluted net income (loss) per share attributable to Cimpress plc increased year over year for the three and six months ended December 31, 2023, primarily due to the operating income increase described above and $109.3 million and $110.6 million of decreases to income tax expense, respectively. The reduced income tax expense was due to the recognition of a full valuation allowance on Swiss deferred tax assets in the prior periods. These increases to income were partially offset by higher interest expense of $2.0 million and $6.4 million, respectively, driven by an increased weighted-average interest rate. Net currency impacts on net income for the three months ended December 31, 2023 were positive year over year due to lower unrealized losses on our derivative contracts, while the net currency impacts on net income for the six months ended December 31, 2023 were negative year over year, primarily due to lower realized gains on our derivative contracts. These fluctuations were primarily caused by currency exchange rate volatility.

Current wording

Diluted net (loss) income per share attributable to Cimpress plc improved year over year for the three and nine months ended March 31, 2024, primarily due to the operating income increase described above. There was also $108.4 million lower income tax expense for the year-to-date period primarily due to the recognition of a full valuation allowance on Swiss deferred tax assets in the prior-year period. For the nine months ended March 31, 2024, these increases to income were partially offset by higher interest expense, net of $6.0 million, driven by an increased weighted-average interest rate. Net currency impacts on net income were negative year over year, primarily due to unrealized currency losses caused by exchange rate volatility and lower realized gains on our derivative contracts.

Previous wording

During the six months ended December 31, 2023, cash from operations increased $161.3 million year over year due primarily to the increase in operating income as described above, as well as a favorable shift in working capital inflows of $88.7 million, which was driven in part by the normalization of working capital trends. This favorable impact was partially offset by higher cash taxes of $15.3 million, due in part to increased prior-year assessments in one jurisdiction driven by profitability growth, as well as higher net cash interest payments of $14.7 million.

Current wording

During the nine months ended March 31, 2024, cash from operations increased $157.2 million year over year due primarily to the increase in operating income as described above, as well as increased working capital inflows of $33.8 million, which were driven in part by the non-recurrence of the prior year's higher inventory levels that were intended to mitigate supply chain issues. This favorable impact was partially offset by higher cash taxes of $15.8 million, due in part to increased prior-year assessments in one jurisdiction driven by profitability growth, and higher net cash interest payments of $16.6 million.

Previous wording

Adjusted free cash flow increased by $159.4 million for the six months ended December 31, 2023, due to the operating cash flow increase described above, as well as $4.6 million higher proceeds from the sale of assets, primarily driven by the sale of our previously owned manufacturing facility in Japan. These increases were partially offset by $7.5 million of higher capitalized expenditures.

Current wording

Adjusted free cash flow increased by $155.6 million for the nine months ended March 31, 2024, due to the operating cash flow increase described above, as well as $4.6 million higher proceeds from the sale of assets, primarily driven by the sale of our previously owned manufacturing facility in Japan. These increases were partially offset by $6.9 million of higher capitalized expenditures.

Previous wording

Total revenue and revenue growth by reportable segment for the three and six months ended December 31, 2023 and 2022 are shown in the following table:

Current wording

Total revenue and revenue growth by reportable segment for the three and nine months ended March 31, 2024 and 2023 are shown in the following table:

Previous wording

For the three months ended December 31, 2023, cost of revenue increased by $8.0 million year over year, primarily driven by unfavorable changes in currency exchange rates of $12.8 million as well as higher production and shipping costs due to volume growth and product mix shifts in some of our businesses. These cost increases were partially offset by lower input costs, savings that resulted from the March 2023 cost reduction actions, a favorable indirect tax ruling in the current quarter that provided a benefit of $3.0 million, and a $2.6 million timing-related benefit which was offset by a negative impact during the first fiscal quarter of the current fiscal year.

Current wording

For the three and nine months ended March 31, 2024, cost of revenue increased by $9.8 million and $38.8 million, respectively, year over year, partially driven by unfavorable changes in currency exchange rates of $3.1 million and $31.4 million, respectively, as well as higher production and shipping costs due to volume growth and product mix shifts in some of our businesses. These cost increases were partially offset by lower input costs as well as savings that resulted from the March 2023 cost reduction actions. For the year-to-date period, cost of revenue benefited $3.0 million from a favorable indirect tax ruling.

Previous wording

Technology and development expenses increased by $2.2 million and $2.1 million for the three and six months ended December 31, 2023, respectively, as compared to the prior-year periods. The increase is largely attributable to increased amortization expense from capitalized software of $1.9 million and $4.0 million, respectively, driven by the higher capitalized asset base and fluctuations in currency exchange rates. There were also increased share-based compensation costs of $1.6 million and $2.9 million, respectively, due to a higher grant value and the impact from our 2024 PSU grants that have an accelerated expense profile as well as expense volatility from changes in the estimated attainment of the related performance condition. These increases were partially offset by lower cash compensation costs of $1.6 million and $3.5 million, respectively, due primarily to cost savings resulting from the March 2023 restructuring actions that reduced headcount.

Current wording

Technology and development expenses increased by $5.5 million and $7.6 million for the three and nine months ended March 31, 2024, respectively, as compared to the prior-year periods. The majority of the increases were driven by higher share-based compensation costs of $3.2 million and $5.8 million, respectively, due to a higher grant value and the impact from our 2024 PSU grants that have an accelerated expense profile as well as expense volatility from changes in the estimated attainment of the related performance condition. The expense increases were also impacted by higher amortization of capitalized software of $1.6 million and $5.5 million, respectively, as compared to the prior periods, driven by the higher capitalized asset base and fluctuations in currency exchange rates. Third-party technology costs also increased by $2.4 million and $4.2 million, respectively, year over year, driven in part by our businesses' further adoption of certain products offered through our mass customization platform, which has driven increased consumption of those services. These increases were partially offset by lower cash compensation costs of $1.2 million and $4.7 million, respectively, due primarily to cost savings resulting from the March 2023 restructuring actions that reduced headcount.

Previous wording

For the six months ended December 31, 2023, marketing and selling expenses decreased by $2.0 million as compared to the prior year period. The decrease was caused by lower cash compensation costs due in part to the March 2023 cost reduction actions, as well as lower third-party consulting spend, mainly in our Vista business, and lower building costs driven by actions taken over the past year to further optimize our real estate footprint for many of our team members operating under a remote-first model. These cost decreases were offset in part by higher advertising spend of $5.6 million, largely due to higher spend in our Vista and National Pen businesses, as well as increased share-based compensation costs of $1.1 million driven by the 2024 PSU grants.

Current wording

For the three and nine months ended March 31, 2024, marketing and selling expenses increased by $4.4 million and $2.3 million, respectively, primarily due to higher advertising spend of $4.4 million and $10.1 million, as compared to the prior-year periods. Share-based compensation costs increased $3.6 million and $4.7 million, respectively, due to a higher grant value year over year and the impact from our 2024 PSU grants as described above. Payment processing fees also increased $0.8 million and $4.0 million, as compared to the prior-year periods, due to increased order volumes. These cost increases are offset in part by lower cash compensation costs of $2.7 million and $9.0 million during the three and nine months ended March 31, 2024, primarily due to the cost reduction actions that were implemented in March 2023. There was also lower third-party consulting spend of $1.5 million and $4.1 million, as compared to the year-ago periods, mainly in our Vista business, and lower building costs driven by actions taken over the past year to further optimize our real estate footprint for many of our team members operating under a remote-first model.

Previous wording

For the three and six months ended December 31, 2023, general and administrative expenses were flat and decreased by $6.7 million, respectively, as compared to the prior-year periods. The year-to-date decrease was driven by a $3.0 million reduction of third-party consulting spend, the nonrecurrence of $2.4 million of expense related to the prior-year termination of one of our leased office locations, and the exit of our business in China during fiscal year 2023 that reduced our general and administrative expenses by $1.8 million versus the prior year. Cash compensation decreased by $1.9 million and $2.5 million for the three and six months ended December 31, 2023, respectively, largely driven by a reduction to long-term incentive compensation expense, due to lower than previously estimated attainment levels in certain Cimpress businesses, as well as cost savings from the March 2023 cost reductions. These decreases were partially offset by costs from our annual merit increase cycle and increases to share-based compensation costs of $3.3 million and $4.4 million, respectively, as compared to the prior-year periods, largely due to the 2024 PSU grants.

Current wording

General and administrative expenses decreased by $5.1 million during the nine months ended March 31, 2024 as compared to the prior-year period. The year-to-date decrease was driven by a $4.2 million reduction to third-party consulting spend, $3.5 million of lower cash compensation largely driven by a reduction to long-term incentive compensation expense due to lower than previously estimated attainment levels in certain Cimpress businesses, and cost savings from the March 2023 cost reductions, which were partially offset by increased compensation costs from our annual merit cycle. Additionally, the cost decrease was impacted by nonrecurring expense of $2.4 million for the prior-year termination of one of our leased office locations, as well as the exit of our business in China during fiscal year 2023 that reduced our general and administrative expenses by $1.8 million versus the prior year. These decreases were partially offset by increases to share-based compensation costs of $8.5 million largely driven by the 2024 PSU grants as described above.

Previous wording

We experience currency-related net losses due to currency exchange rate volatility on our non-functional currency intercompany relationships, which we may alter from time to time. Gains on the revaluation of non-functional currency debt and on a cross-currency swap contract designated as a cash flow hedge are included in our currency-related losses, net, offsetting the impact of certain non-functional currency intercompany relationships.

Current wording

We experience currency-related net gains and losses due to currency exchange rate volatility on our non-functional currency intercompany relationships, which we may alter from time to time. Gains on the revaluation of non-functional currency debt and on a cross-currency swap contract designated as a cash flow hedge are included in our currency-related losses, net, offsetting the impact of certain non-functional currency intercompany relationships.

Previous wording

Interest expense, net increased by $2.0 million and $6.4 million during the three and six months ended December 31, 2023, respectively, as compared to the prior year periods, primarily due to a higher weighted-average interest rate (net of interest rate swaps) and partially offset by an increase in interest income earned on our cash and marketable securities of $0.6 million and $1.9 million, respectively.

Current wording

For the nine months ended March 31, 2024, interest expense, net increased $6.0 million as compared to the prior-year period, primarily due to a higher weighted-average interest rate (net of interest rate swaps), which was partially offset by lower interest expense associated with our 2026 Notes for the same reason described above and a $3.2 million increase to interest income earned on our cash and marketable securities.

Previous wording

For the three and six months ended December 31, 2023, we have recognized gains on the extinguishment of debt of $0.3 million and $1.7 million, respectively, resulting from the purchase of 2026 Notes' principal of $5.0 million and $26.2 million, respectively. Refer to Note 8 in our accompanying consolidated financial statements for additional details.

Current wording

During the nine months ended March 31, 2024, we recognized gains on the extinguishment of debt of $1.7 million, resulting from the purchase of 2026 Notes' principal of $26.2 million. Refer to Note 8 in our accompanying consolidated financial statements for additional details.

Previous wording

Income tax expense for the three and six months ended December 31, 2023 decreased versus the prior comparative period. During the second quarter of fiscal year 2023, we recorded a full valuation allowance on Swiss deferred tax assets of $116.7 million primarily related to Swiss tax reform benefits recognized in fiscal year 2020 and tax loss carryforwards. This was partially offset by increased tax on increased profits as we reported pre-tax income for the three and six months ended December 31, 2023 and pre-tax losses in the prior comparative periods.

Current wording

Tax expense increased for the three months ended March 31, 2024 versus the prior comparable period due to increased profits as we reported pre-tax income for the three months ended March 31, 2024 and pre-tax losses in the comparable period. Tax expense decreased for the nine months ended March 31, 2024 versus the prior comparable period due to the full valuation allowance on Swiss deferred tax assets of $116.7 million recorded during the nine months ended March 31, 2023.

Previous wording

Given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of our valuation allowance will no longer be needed. A release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense in the period the release is recorded. However, the timing and amount of the valuation allowance release, if any, are unknown as this is subject to change on the basis of the level of profitability that we are able to actually achieve in future periods.

Current wording

Given our current earnings and anticipated future earnings, we believe there is a reasonable possibility that within the next twelve months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of our valuation allowance will no longer be needed. A release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense in the period the release is recorded. However, the timing and amount of the valuation allowance release, if any, are unknown as this is subject to change on the basis of the level of profitability that we are able to actually achieve in future periods. Any future valuation allowance release will not have a cash tax impact.

Previous wording

For the three and six months ended December 31, 2023, segment EBITDA increased by $48.0 million and $91.7 million, respectively. Gross profit growth was driven by the revenue growth described above, lower input costs, efficiency gains, and customer experience improvements. During the current quarter Vista's gross profit benefited $3.0 million from a favorable indirect tax ruling. Vista's advertising spend as a percentage of revenue decreased due to efficiency gains and focus. Operating expenses, excluding the effect of restructuring costs which do not impact segment EBITDA, decreased $5.9 million and $20.2 million, respectively, primarily due to savings resulting from cost reduction actions implemented in March 2023, partially offset by inflationary cost increases such as the effect of merit increases on compensation costs. Changes in currency exchange rates had a positive impact on segment EBITDA of $3.6 million and $4.3 million, respectively, as compared to the prior-year periods.

Current wording

For the three and nine months ended March 31, 2024, segment EBITDA increased by $11.4 million and $103.1 million, respectively. Incremental gross profit was driven by the revenue growth described above, lower input costs, and efficiency gains as compared to the prior-year periods. Segment EBITDA growth was also driven by lower operating expenses, excluding the effect of restructuring costs which do not impact segment EBITDA, of $6.4 million and $26.6 million, respectively, for these same periods, primarily due to savings resulting from cost reduction actions implemented in March 2023. These operating expense savings were partially offset by inflationary cost increases, such as the annual merit cycle increases' effect on compensation costs. Advertising expenses were higher year over year for both periods presented and for the current quarter was higher as a percentage of revenue due to a slightly higher mix of spend in mid- and upper-funnel channels where there are additional opportunities to drive awareness. For the year-to-date period, advertising expenses as a percentage of revenue were lower year over year as efficiency gains more than offset the mix effect of higher mid- and upper-funnel spend.

Previous wording

PrintBrothers' reported revenue growth for the three and six months ended December 31, 2023 was positively affected by currency impacts of 6% and 7%, respectively, with revenue increasing on a constant-currency basis by 5% and 6%, respectively. Constant-currency growth was driven primarily by continued order volume growth, partially offset by customers purchasing lower quantities in certain product categories.

Current wording

PrintBrothers' reported revenue growth for the three and nine months ended March 31, 2024 was positively affected by currency impacts of 2% and 5%, respectively, with revenue increasing on a constant-currency basis by 6% in both periods. Constant-currency growth was driven primarily by continued order volume growth, partially offset by customers purchasing lower quantities in certain product categories.

Previous wording

PrintBrothers' segment EBITDA for the three and six months ended December 31, 2023 grew year over year, driven by the constant-currency revenue growth described above, as well as gross margin expansion which benefited from lower input costs and operating expense efficiencies. Additionally, PrintBrothers benefited from a favorable timing item of $2.6 million in the three months ended December 31, 2023, which offset unfavorability in the first quarter and therefore does not impact the six month period. Segment EBITDA also benefited from $1.5 million of government incentives during the three and six months ended December 31, 2023. Currency exchange fluctuations positively impacted segment EBITDA year over year by $1.5 million and $3.0 million, respectively.

Current wording

PrintBrothers' segment EBITDA for the three and nine months ended March 31, 2024 grew year over year, driven by the constant-currency revenue growth described above, as well as gross margin expansion that benefited from lower input costs. Segment EBITDA also benefited from $1.5 million of government incentives during the nine months ended March 31, 2024. Currency exchange fluctuations positively impacted segment EBITDA year over year by $0.4 million and $3.4 million, respectively. The increase to PrintBrothers' segment EBITDA in the three and nine months ended March 31, 2024 was partially offset by $1.7 million of expense in our Printdeal business related to an unfavorable court ruling that is being appealed; we do not expect this matter to have a material impact on future periods.

Previous wording

The Print Group's reported revenue for the three and six months ended December 31, 2023 was positively affected by a currency impact of 5% and 7%, respectively, with revenue decreasing on a constant-currency basis by 1% and 2%, respectively. This segment is continuing to see order growth, which was partially offset by customers purchasing lower quantities in certain product categories and headwinds in the reseller channel, which is more prominent in The Print Group.

Current wording

The Print Group's reported revenue for the three and nine months ended March 31, 2024 was positively affected by currency impacts of 1% and 5%, respectively, with revenue increasing on a constant-currency basis by 2% during the current quarter and decreasing 1% on a year-to-date basis. This segment is continuing to see order growth, while revenue growth continues to be dampened by customers purchasing lower quantities in certain product categories and headwinds in the reseller channel.

Previous wording

The increase in The Print Group's segment EBITDA during the three and six months ended December 31, 2023 as compared to the prior-year periods was largely driven by $4.6 million and $9.8 million of gross profit growth, respectively, as gross margins expanded materially, benefiting from a reduction in key input costs such as materials and shipping. Segment EBITDA also benefited from a reduction in long-term incentive compensation expense of $2.1 million and $1.1 million for the three and six months ended December 31, 2023, respectively, due to lower forecasted payouts for business-specific long-term incentive awards. Currency exchange fluctuations positively impacted segment EBITDA year over year by $1.0 million and $2.0 million, respectively.

Current wording

The increase in The Print Group's segment EBITDA during the three and nine months ended March 31, 2024 as compared to the prior-year periods was largely driven by $3.2 million and $13.0 million of gross profit growth, respectively, as gross margins expanded materially, benefiting from a reduction in key input costs such as raw materials, energy and shipping. Segment EBITDA also benefited from a reduction in long-term incentive compensation expense of $1.7 million and $2.8 million for the three and nine months ended March 31, 2024, respectively, due to volatility in the estimated payouts. Currency exchange fluctuations positively impacted segment EBITDA year over year by $0.2 million and $2.2 million, respectively.

Previous wording

For the three and six months ended December 31, 2023, National Pen's revenue growth was positively affected by currency impacts of 3%, with constant-currency revenue growth of 5% in both periods. National Pen continued to deliver strong growth in its e-commerce channel and from fulfillment for other Cimpress businesses.

Current wording

For the three months ended March 31, 2024, National Pen's revenue growth was minimally affected by currency versus last year, while currency positively impacted revenue by 2% for the nine months ended March 31, 2024, resulting in constant-currency revenue growth of 10% and 6%, respectively. National Pen continued to deliver strong growth within its e-commerce and telesales channels, as well as from fulfillment for other Cimpress businesses.

Previous wording

The increase in National Pen's segment EBITDA for the three months ended December 31, 2023 was driven by revenue growth described above, partially offset by increased advertising spend in their e-commerce channels and higher compensation costs. Currency exchange fluctuations had an immaterial effect on segment EBITDA during the current fiscal quarter.

Current wording

The increase in National Pen's segment EBITDA for the three months ended March 31, 2024 was driven by the revenue growth described above; $2.7 million less advertising spend year over year, primarily in its direct mail channel; and $0.9 million of less long-term incentive compensation expense, primarily due to changes in the estimated payouts. Currency exchange fluctuations had an immaterial effect on segment EBITDA during the current fiscal quarter.

Previous wording

The decrease in National Pen's segment EBITDA for the six months ended December 31, 2023 was driven by higher external marketing spend, primarily to support their e-commerce channel, as well as higher operating expenses. Currency exchange fluctuations had a negative year-over-year impact of $1.6 million for the six months ended December 31, 2023.

Current wording

The increase in National Pen's segment EBITDA for the nine months ended March 31, 2024 was driven by revenue growth described above as well as $1.7 million less long-term incentive compensation expense, primarily due to changes in the estimated payouts. These increases were partially offset by higher advertising spend of $4.6 million, primarily during the first half of the current fiscal year to support its e-commerce channel, as well as higher operating expenses year over year. Currency exchange fluctuations had a negative year-over-year impact of $1.4 million for the nine months ended March 31, 2024.

Previous wording

All Other Businesses' constant-currency revenue was flat and decreased by 1% during the three and six months ended December 31, 2023, respectively. BuildASign generates the majority of revenue in this segment, and revenue declined slightly year over year as this business continued to experience lower revenue for real estate-related products as well as home decor products in the seasonally significant second quarter. Other signage products grew in this business. Printi revenue continued to grow.

Current wording

All Other Businesses' constant-currency revenue was relatively flat during the three and nine months ended March 31, 2024. BuildASign generates the majority of revenue in this segment, and revenue was flat year over year as this business delivered stronger growth in their signage products and from fulfillment for other Cimpress businesses, while real estate-related and home-decor products continued to experience revenue headwinds.

Previous wording

The increase in segment EBITDA for the three and six months ended December 31, 2023, as compared to the prior year, was partly due to $2.0 million and $3.3 million of lower long-term incentive compensation expense, respectively, as compared to the prior year periods, due to lower forecasted payouts for business-specific long-term incentive awards. Segment EBITDA also benefited from the fiscal year 2023 exit of our business in China, which drove $1.1 million and $1.8 million of losses in the respective year-ago periods.

Current wording

During the nine months ended March 31, 2024 segment EBITDA increased year over year, partially driven by $2.4 million of reduced long-term incentive compensation expense caused by lower forecasted payouts for business-specific long-term incentive awards when compared to the year-ago period. Segment EBITDA also benefited from the fiscal year 2023 exit of our business in China, which drove $1.8 million of losses in the year-ago period, and reduced operating losses in our Printi business.

Previous wording

During the three months ended December 31, 2023, central and corporate costs increased by $2.2 million as compared to the prior-year period, largely driven by $5.4 million of increased share-based compensation expense due to due to a higher grant value and the impact from our 2024 PSU grants that have an accelerated expense profile as well as expense volatility from changes in the estimated attainment of the related performance condition. This increase was partially offset by lower cash compensation expense of $2.2 million due to savings from the March 2023 cost reductions, as well as lower third-party consulting spend of $1.6 million as compared to the prior-year period.

Current wording

During the three and nine months ended March 31, 2024, central and corporate costs increased by $5.0 million and $4.4 million, as compared to the prior-year periods. The increases were largely driven by $8.7 million and $15.5 million of increased share-based compensation expense, respectively, due to a higher grant pool and the impact from our 2024 PSU grants that have an accelerated expense profile as well as expense volatility from changes in the estimated attainment of the related performance condition. This increase was partially offset by lower cash compensation expense of $0.9 million and $5.0 million due to savings from the March 2023 cost reductions, as well as lower third-party consulting spend of $0.9 million and $4.3 million, respectively, as compared to the prior-year periods.

Previous wording

The cash flows during the six months ended December 31, 2023 related primarily to the following items:

Current wording

The cash flows during the nine months ended March 31, 2024 related primarily to the following items:

Previous wording

•Adjustments for non-cash items of $98.7 million primarily related to adjustments for depreciation and amortization of $79.0 million and share-based compensation costs of $30.1 million, partially offset by unrealized currency-related gains of $5.8 million, deferred taxes of $2.1 million, and the gain on extinguishment of debt of $1.7 million

Current wording

•Adjustments for non-cash items of $160.3 million primarily related to adjustments for depreciation and amortization of $116.1 million, share-based compensation costs of $48.5 million, and deferred taxes of $1.1 million partially offset by unrealized currency-related gains of $4.2 million, and the gain on extinguishment of debt of $1.7 million

Previous wording

•Proceeds from the maturity of held-to-maturity securities of $25.9 million

Current wording

•Proceeds from the maturity of held-to-maturity securities of $36.7 million