UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


(Mark One)
☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	~~December 31, 2020~~September 30, 2021
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission file number 000-51539

Cimpress plc

(Exact Name of Registrant as Specified in Its Charter)


Ireland									98-0417483
(State or Other Jurisdiction of Incorporation or Organization)									(I.R.S. Employer Identification No.)

Building D, Xerox Technology Park A91 H9N9,

Dundalk, Co. Louth

Ireland

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: 353 42 938 8500

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Exchange on Which Registered

Ordinary Shares, nominal value of €0.01 per share

CMPR

NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ☐ No þ

As of ~~January~~October 25, 2021, there were ~~26,003,676~~26,094,869 Cimpress plc ordinary shares outstanding.

CIMPRESS PLC

QUARTERLY REPORT ON FORM 10-Q

For the Three ~~and Six~~ Months ~~ended December 31, 2020~~Ended September 30, 2021

TABLE OF CONTENTS


						Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)						1
Consolidated Balance Sheets as of ~~December 31, 2020~~September 30, 2021 and June 30, ~~2020~~2021						1
Consolidated Statements of Operations for the three ~~and six~~ months ended ~~December 31,~~September 30, 2021 and 2020 ~~and 2019~~						2
Consolidated Statements of Comprehensive ~~Income~~Loss for the three ~~and six~~ months ended ~~December 31,~~September 30, 2021 and 2020 ~~and 2019~~						3
Consolidated Statements of Shareholders' ~~Equity (Deficit)~~Deficit for the three ~~and six~~ months ended ~~December 31,~~September 30, 2021 and 2020 ~~and 2019~~						4
Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~December 31,~~September 30, 2021 and 2020 ~~and 2019~~						65
Notes to Consolidated Financial Statements						76
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations						2825
Item 3. Quantitative and Qualitative Disclosures About Market Risk						4237
Item 4. Controls and Procedures						4338

PART II OTHER INFORMATION
Item 1A. Risk Factors						44
~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~						4439
Item 6. Exhibits						4539
Signatures						4640

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CIMPRESS PLC

CONSOLIDATED BALANCE SHEETS

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


		December 31, 2020		June 30, 2020			September 30, 2021		June 30, 2021
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	36,883	$	45,021	Cash and cash equivalents	$	193,231	$	183,023
Accounts receivable, net of allowances of $10,797 and $9,651, respectively		51,404		34,596
Marketable securities						Marketable securities	152,028		152,248
Accounts receivable, net of allowances of $9,222 and $9,404, respectively						Accounts receivable, net of allowances of $9,222 and $9,404, respectively	56,624		50,679
Inventory	Inventory	85,932		80,179		Inventory	90,737		70,044
Prepaid expenses and other current assets	Prepaid expenses and other current assets	84,965		88,608		Prepaid expenses and other current assets	81,431		72,504

Total current assets	Total current assets	259,184		248,404		Total current assets	574,051		528,498
Property, plant and equipment, net	Property, plant and equipment, net	332,824		338,659		Property, plant and equipment, net	321,773		328,679
Operating lease assets, net	Operating lease assets, net	149,851		156,258		Operating lease assets, net	82,271		87,626
Software and website development costs, net	Software and website development costs, net	82,581		71,465		Software and website development costs, net	88,432		87,690
Deferred tax assets	Deferred tax assets	146,814		143,496		Deferred tax assets	146,431		149,618
Goodwill	Goodwill	726,813		621,904		Goodwill	717,970		726,979
Intangible assets, net	Intangible assets, net	212,078		209,228		Intangible assets, net	171,944		186,744
Marketable securities, non-current						Marketable securities, non-current	40,400		50,713
Other assets	Other assets	20,368		25,592		Other assets	41,416		35,951
Total assets	Total assets	$	1,930,513	$	1,815,006	Total assets	$	2,184,688	$	2,182,498
Liabilities, noncontrolling interests and shareholders’ deficit	Liabilities, noncontrolling interests and shareholders’ deficit					Liabilities, noncontrolling interests and shareholders’ deficit
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	236,540	$	163,891	Accounts payable	$	219,769	$	199,831
Accrued expenses	Accrued expenses	291,039		210,764		Accrued expenses	261,161		247,513
Deferred revenue	Deferred revenue	41,913		39,130		Deferred revenue	49,071		50,868
Short-term debt	Short-term debt	12,603		17,933		Short-term debt	11,373		9,895
Operating lease liabilities, current	Operating lease liabilities, current	38,315		41,772		Operating lease liabilities, current	26,340		26,551
Other current liabilities	Other current liabilities	40,966		13,268		Other current liabilities	95,441		103,515

Total current liabilities	Total current liabilities	661,376		486,758		Total current liabilities	663,155		638,173
Deferred tax liabilities	Deferred tax liabilities	30,941		33,811		Deferred tax liabilities	24,707		27,433
Long-term debt	Long-term debt	1,258,535		1,415,657		Long-term debt	1,718,311		1,732,511

Operating lease liabilities, non-current	Operating lease liabilities, non-current	122,006		128,963		Operating lease liabilities, non-current	61,459		66,222
Other liabilities	Other liabilities	157,076		88,187		Other liabilities	88,279		96,410
Total liabilities	Total liabilities	2,229,934		2,153,376		Total liabilities	2,555,911		2,560,749
Commitments and contingencies (Note 13)
Commitments and contingencies (Note 12)						Commitments and contingencies (Note 12)
Redeemable noncontrolling interests	Redeemable noncontrolling interests	65,510		69,106		Redeemable noncontrolling interests	79,593		71,120
Shareholders’ deficit:	Shareholders’ deficit:					Shareholders’ deficit:
Preferred shares, nominal value €0.01 per share, 100,000,000 shares authorized; none issued and outstanding	Preferred shares, nominal value €0.01 per share, 100,000,000 shares authorized; none issued and outstanding	0		0		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; 44,080,627 shares issued; 26,003,649 and 25,885,675 shares outstanding, respectively		615		615
Ordinary shares, nominal value €0.01 per share, 100,000,000 shares authorized; 44,080,627 shares issued; 26,090,016 and 26,035,910 shares outstanding, respectively						Ordinary shares, nominal value €0.01 per share, 100,000,000 shares authorized; 44,080,627 shares issued; 26,090,016 and 26,035,910 shares outstanding, respectively	615		615
Deferred ordinary shares, nominal value €1.00 per share, 25,000 shares authorized, issued and outstanding	Deferred ordinary shares, nominal value €1.00 per share, 25,000 shares authorized, issued and outstanding	28		28		Deferred ordinary shares, nominal value €1.00 per share, 25,000 shares authorized, issued and outstanding	28		28
Treasury shares, at cost, 18,076,978 and 18,194,952 shares, respectively		(1,368,723)		(1,376,496)
Treasury shares, at cost, 17,990,611 and 18,044,717 shares, respectively						Treasury shares, at cost, 17,990,611 and 18,044,717 shares, respectively	(1,365,079)		(1,368,595)
Additional paid-in capital	Additional paid-in capital	438,863		438,616		Additional paid-in capital	464,938		459,904
Retained earnings	Retained earnings	638,883		618,437		Retained earnings	532,414		537,677
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(74,597)		(88,676)		Accumulated other comprehensive loss	(83,732)		(79,000)

Total shareholders' deficit	Total shareholders' deficit	(364,931)		(407,476)		Total shareholders' deficit	(450,816)		(449,371)
Total liabilities, noncontrolling interests and shareholders’ deficit	Total liabilities, noncontrolling interests and shareholders’ deficit	$	1,930,513	$	1,815,006	Total liabilities, noncontrolling interests and shareholders’ deficit	$	2,184,688	$	2,182,498

See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

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


		Three Months Ended December 31,				Six Months Ended December 31,				Three Months Ended September 30,
		2020		2019		2020		2019				2021		2020
Revenue	Revenue	$	786,145	$	820,333	$	1,372,645	$	1,454,292		Revenue	$	657,599	$	586,500
Cost of revenue (1)	Cost of revenue (1)	385,979		394,018		684,823		719,683			Cost of revenue (1)	338,989		298,844
Technology and development expense (1)	Technology and development expense (1)	65,036		64,427		123,525		127,594			Technology and development expense (1)	67,277		58,489
Marketing and selling expense (1)	Marketing and selling expense (1)	182,322		173,336		320,472		334,253			Marketing and selling expense (1)	174,697		138,150
General and administrative expense (1)	General and administrative expense (1)	42,979		51,910		84,791		95,533			General and administrative expense (1)	46,548		41,812
Amortization of acquired intangible assets	Amortization of acquired intangible assets	13,453		13,150		26,758		26,168			Amortization of acquired intangible assets	13,458		13,305
Restructuring expense ~~(1)~~	Restructuring expense ~~(1)~~	2,182		1,897		2,096		4,087			Restructuring expense ~~(1)~~	(309)		(86)

Income from operations	Income from operations	94,194		121,595		130,180		146,974			Income from operations	16,939		35,986
Other (expense) income, net		(17,198)		(9,040)		(25,952)		6,634
Other income (expense), net											Other income (expense), net	22,197		(8,754)
Interest expense, net	Interest expense, net	(30,141)		(15,701)		(60,657)		(30,788)			Interest expense, net	(25,688)		(30,516)

Income before income taxes		46,855		96,854		43,571		122,820
Income tax expense (benefit)		12,954		(93,795)		19,748		(87,680)
Net income		33,901		190,649		23,823		210,500
Add: Net income attributable to noncontrolling interest		(1,614)		(426)		(2,291)		(246)
Net income attributable to Cimpress plc		$	32,287	$	190,223	$	21,532	$	210,254
Basic net income per share attributable to Cimpress plc		$	1.24	$	7.04	$	0.83	$	7.41
Diluted net income per share attributable to Cimpress plc		$	1.22	$	6.81	$	0.82	$	7.19
Income (loss) before income taxes											Income (loss) before income taxes	13,448		(3,284)
Income tax expense											Income tax expense	9,381		6,794
Net income (loss)											Net income (loss)	4,067		(10,078)
Add: Net (income) attributable to noncontrolling interest											Add: Net (income) attributable to noncontrolling interest	(1,738)		(677)
Net income (loss) attributable to Cimpress plc											Net income (loss) attributable to Cimpress plc	$	2,329	$	(10,755)
Basic net income (loss) per share attributable to Cimpress plc											Basic net income (loss) per share attributable to Cimpress plc	$	0.09	$	(0.41)
Diluted net income (loss) per share attributable to Cimpress plc											Diluted net income (loss) per share attributable to Cimpress plc	$	0.09	$	(0.41)
Weighted average shares outstanding — basic	Weighted average shares outstanding — basic	26,003,649		27,036,675		25,974,823		28,391,855			Weighted average shares outstanding — basic	26,072,249		25,945,998
Weighted average shares outstanding — diluted	Weighted average shares outstanding — diluted	26,384,460		27,916,759		26,390,273		29,223,116			Weighted average shares outstanding — diluted	26,583,813		25,945,998

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


		Three Months Ended December 31,				Six Months Ended December 31,				Three Months Ended September 30,
		2020		2019		2020		2019				2021		2020
Cost of revenue	Cost of revenue	$	34	$	97	$	134	$	185		Cost of revenue	$	116	$	100
Technology and development expense	Technology and development expense	1,215		2,043		3,406		3,777			Technology and development expense	2,903		2,191
Marketing and selling expense	Marketing and selling expense	754		533		2,439		(778)			Marketing and selling expense	2,677		1,685
General and administrative expense	General and administrative expense	3,240		5,652		7,547		9,891			General and administrative expense	5,310		4,307
Restructuring expense		0		108		0		772

See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME~~LOSS

(unaudited in thousands)

Three Months Ended December 31, Six Months Ended December 31,
2020 2019 2020 2019
Net income $ 33,901 $ 190,649 $ 23,823 $ 210,500
Other comprehensive income, net of tax:
Foreign currency translation gains, net of hedges 13,946 3,180 14,763 1,620
Net unrealized gains (losses) on derivative instruments designated and qualifying as cash flow hedges 3,802 6,131 7,638 (1,057)
Amounts reclassified from accumulated other comprehensive (loss) income to net income on derivative instruments (3,226) (1,145) (5,297) 3,006
Loss on pension benefit obligation, net — — (336) 0
Comprehensive income 48,423 198,815 40,591 214,069
Add: Comprehensive (income) loss attributable to noncontrolling interests (2,877) (1,122) (4,980) 548
Total comprehensive income attributable to Cimpress plc $ 45,546 $ 197,693 $ 35,611 $ 214,617


	Three Months Ended September 30,
	2021		2020
Net income (loss)	$	4,067	$	(10,078)
Other comprehensive income (loss), net of tax:
Foreign currency translation (losses) gains, net of hedges	(9,210)		817
Net unrealized (losses) gains on derivative instruments designated and qualifying as cash flow hedges	(1,925)		3,836
Amounts reclassified from accumulated other comprehensive loss to net income (loss) on derivative instruments	5,546		(2,071)


Loss on pension benefit obligation, net	—		(336)
Comprehensive loss	(1,522)		(7,832)
Add: Comprehensive (income) attributable to noncontrolling interests	(881)		(2,103)
Total comprehensive loss attributable to Cimpress plc	$	(2,403)	$	(9,935)

See accompanying notes.

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' ~~EQUITY (DEFICIT)~~DEFICIT

(unaudited in thousands)


		Ordinary Shares			Deferred Ordinary Shares			Treasury Shares												Ordinary Shares			Deferred Ordinary Shares			Treasury Shares
		Number of Shares Issued	Amount		Number of Shares Issued	Amount		Number of Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity (Deficit)			Number of Shares Issued	Amount		Number of Shares Issued	Amount		Number of Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Deficit
Balance at June 30, 2019		44,080	$	615	—	$	—	(13,635)	$	(737,447)	$	411,079	$	537,422	$	(79,857)	$	131,812
Balance at June 30, 2020																			Balance at June 30, 2020	44,080	$	615	25	$	28	(18,195)	$	(1,376,496)	$	438,616	$	618,437	$	(88,676)	$	(407,476)
Restricted share units vested, net of shares withheld for taxes	Restricted share units vested, net of shares withheld for taxes	—	—		—	—		4	87		(259)		—		—		(172)		Restricted share units vested, net of shares withheld for taxes	—	—		—	—		118	7,773		(13,366)		—		—		(5,593)
Grant of restricted share awards		—	—		—	—		(2)	(187)		—		—		—		(187)
Share-based compensation expense	Share-based compensation expense	—	—		—	—		—	—		5,164		—		—		5,164		Share-based compensation expense	—	—		—	—		—	—		8,577		—		—		8,577
Purchase of ordinary shares		—	—		—	—		(1,964)	(232,286)		—		—		—		(232,286)
Net income attributable to Cimpress plc		—	—		—	—		—	—		—		20,031		—		20,031
Adoption of new accounting standards		—	—		—	—		—	—		—		3,143		—		3,143
Net unrealized loss on derivative instruments designated and qualifying as cash flow hedges		—	—		—	—		—	—		—		—		(3,037)		(3,037)
Net loss attributable to Cimpress plc																			Net loss attributable to Cimpress plc	—	—		—	—		—	—		—		(10,755)		—		(10,755)
Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges																			Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges	—	—		—	—		—	—		—		—		1,765		1,765
Foreign currency translation, net of hedges	Foreign currency translation, net of hedges	—	—		—	—		—	—		—		—		(70)		(70)		Foreign currency translation, net of hedges	—	—		—	—		—	—		—		—		(609)		(609)
Balance at September 30, 2019		44,080	$	615	—	$	—	(15,597)	$	(969,833)	$	415,984	$	560,596	$	(82,964)	$	(75,602)
Unrealized loss on pension benefit obligation, net of tax																			Unrealized loss on pension benefit obligation, net of tax	—	—		—	—		—	—		—		—		(336)		(336)
Balance at September 30, 2020																			Balance at September 30, 2020	44,080	$	615	25	$	28	(18,077)	$	(1,368,723)	$	433,827	$	607,682	$	(87,856)	$	(414,427)

Balance at June 30, 2021																			Balance at June 30, 2021	44,080	$	615	25	$	28	(18,045)	$	(1,368,595)	$	459,904	$	537,677	$	(79,000)	$	(449,371)

Restricted share units vested, net of shares withheld for taxes	Restricted share units vested, net of shares withheld for taxes	—	—		—	—		1	55		(152)		—		—		(97)		Restricted share units vested, net of shares withheld for taxes	—	—		—	—		54	3,516		(6,095)		—		—		(2,579)
Issuance of ordinary shares due to share option exercises, net of shares withheld for taxes		—	—		—	—		1	8		(2)		—		—		6
Issuance of deferred ordinary shares		—	—		25	28		—	—		—		—		—		28

Share-based compensation expense	Share-based compensation expense	—	—		—	—		—	—		8,228		—		—		8,228		Share-based compensation expense	—	—		—	—		—	—		11,129		—		—		11,129
Purchase of ordinary shares		—	—		—	—		(2,280)	(305,287)		—		—		—		(305,287)
Net income attributable to Cimpress plc	Net income attributable to Cimpress plc	—	—		—	—		—	—		—		190,223		—		190,223		Net income attributable to Cimpress plc	—	—		—	—		—	—		—		2,329		—		2,329
Redeemable noncontrolling interest accretion to redemption value	Redeemable noncontrolling interest accretion to redemption value	—	—		—	—		—	—		—		(5,493)		—		(5,493)		Redeemable noncontrolling interest accretion to redemption value	—	—		—	—		—	—		—		(7,592)		—		(7,592)
Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges	Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges	—	—		—	—		—	—		—		—		4,986		4,986		Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges	—	—		—	—		—	—		—		—		3,621		3,621
Foreign currency translation, net of hedges	Foreign currency translation, net of hedges	—	—		—	—		—	—		—		—		2,484		2,484		Foreign currency translation, net of hedges	—	—		—	—		—	—		—		—		(8,353)		(8,353)
Balance at December 31, 2019		44,080	$	615	25	$	28	(17,875)	$	(1,275,057)	$	424,058	$	745,326	$	(75,494)	$	(180,524)

Balance at September 30, 2021																			Balance at September 30, 2021	44,080	$	615	25	$	28	(17,991)	$	(1,365,079)	$	464,938	$	532,414	$	(83,732)	$	(450,816)

See accompanying notes.

~~CIMPRESS PLC~~

~~CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (CONTINUED)~~

~~(unaudited in thousands)~~

Ordinary Shares Deferred Ordinary Shares Treasury Shares
Number of
Shares
Issued Amount Number of
Shares
Issued Amount Number
of
Shares Amount Additional
Paid-in
Capital Retained
Earnings Accumulated Other
Comprehensive
Loss Total
Shareholders’
Equity (Deficit)
Balance at June 30, 2020 44,080 $ 615 25 $ 28 (18,195) $ (1,376,496) $ 438,616 $ 618,437 $ (88,676) $ (407,476)
Restricted share units vested, net of shares withheld for taxes — — — — 118 7,773 (13,366) — — (5,593)
Share-based compensation expense — — — — — — 8,577 — — 8,577
Net loss attributable to Cimpress plc — — — — — — — (10,755) — (10,755)
Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges — — — — — — — — 1,765 1,765
Foreign currency translation, net of hedges — — — — — — — — (609) (609)
Unrealized loss on pension benefit obligation, net of tax — — — — — — — — (336) (336)
Balance at September 30, 2020 44,080 $ 615 25 $ 28 (18,077) $ (1,368,723) $ 433,827 $ 607,682 $ (87,856) $ (414,427)
Share-based compensation expense — — — — — — 5,036 — — 5,036
Net income attributable to Cimpress plc — — — — — — — 32,287 — 32,287
Redeemable noncontrolling interest accretion to redemption value — — — — — — — (1,086) — (1,086)
Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges — — — — — — — — 576 576
Foreign currency translation, net of hedges — — — — — — — — 12,683 12,683
Balance at December 31, 2020 44,080 $ 615 25 $ 28 (18,077) $ (1,368,723) $ 438,863 $ 638,883 $ (74,597) $ (364,931)

~~See accompanying notes.~~

CIMPRESS PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited in thousands)


		Six Months Ended December 31,				Three Months Ended September 30,
		2020		2019				2021		2020
Operating activities	Operating activities						Operating activities
Net income		$	23,823	$	210,500
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)							Net income (loss)	$	4,067	$	(10,078)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:							Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	85,887		84,891			Depreciation and amortization	44,432		42,290

Share-based compensation expense	Share-based compensation expense	13,526		13,847			Share-based compensation expense	11,006		8,283

Deferred taxes	Deferred taxes	2,681		(105,575)			Deferred taxes	(1,138)		(32)

Unrealized loss on derivatives not designated as hedging instruments included in net income		32,545		7,548
Unrealized (gain) loss on derivatives not designated as hedging instruments included in net income (loss)							Unrealized (gain) loss on derivatives not designated as hedging instruments included in net income (loss)	(16,534)		14,628
Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency	Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency	(3,132)		1,359			Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency	(8,853)		(4,958)

Other non-cash items	Other non-cash items	4,829		3,045			Other non-cash items	(471)		3,192

Changes in operating assets and liabilities:	Changes in operating assets and liabilities:						Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(14,259)		(8,240)			Accounts receivable	(7,149)		(12,448)
Inventory	Inventory	510		(10,680)			Inventory	(11,744)		(3,111)
Prepaid expenses and other assets	Prepaid expenses and other assets	78		(2,255)			Prepaid expenses and other assets	(4,832)		2,523
Accounts payable	Accounts payable	60,800		24,432			Accounts payable	10,290		38,684
Accrued expenses and other liabilities	Accrued expenses and other liabilities	48,880		46,225			Accrued expenses and other liabilities	17,493		26,708
Net cash provided by operating activities	Net cash provided by operating activities	256,168		265,097			Net cash provided by operating activities	36,567		105,681
Investing activities	Investing activities						Investing activities
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(16,790)		(28,094)			Purchases of property, plant and equipment	(8,624)		(8,383)

Business acquisitions, net of cash acquired		(36,395)		(4,272)

Capitalization of software and website development costs	Capitalization of software and website development costs	(26,445)		(23,417)			Capitalization of software and website development costs	(15,639)		(14,804)

Proceeds from the sale of assets	Proceeds from the sale of assets	3,372		847			Proceeds from the sale of assets	1,699		2,103

Proceeds from maturity of held-to-maturity investments							Proceeds from maturity of held-to-maturity investments	10,000		—

Other investing activities	Other investing activities	(419)		1,120			Other investing activities	(617)		—
Net cash used in investing activities	Net cash used in investing activities	(76,677)		(53,816)			Net cash used in investing activities	(13,181)		(21,084)
Financing activities	Financing activities						Financing activities
Proceeds from borrowings of debt	Proceeds from borrowings of debt	301,000		634,085			Proceeds from borrowings of debt	—		99,000

Payments of debt	Payments of debt	(472,469)		(292,446)			Payments of debt	(4,111)		(182,726)

Payments of debt issuance costs	Payments of debt issuance costs	(1,051)		0			Payments of debt issuance costs	(1,137)		(410)
Payments of purchase consideration included in acquisition-date fair value	Payments of purchase consideration included in acquisition-date fair value	(648)		0			Payments of purchase consideration included in acquisition-date fair value	—		(648)
Payments of withholding taxes in connection with equity awards	Payments of withholding taxes in connection with equity awards	(5,592)		(462)			Payments of withholding taxes in connection with equity awards	(2,579)		(5,592)
Payments of finance lease obligations	Payments of finance lease obligations	(3,275)		(5,364)			Payments of finance lease obligations	(2,526)		(1,592)
Purchase of noncontrolling interests		(5,063)		0

Purchase of ordinary shares		0		(537,573)
Proceeds from issuance of ordinary shares		—		6

Distribution to noncontrolling interest		(4,599)		(3,921)

Other financing activities	Other financing activities	(57)		(1,715)			Other financing activities	2		(11)
Net cash used in financing activities	Net cash used in financing activities	(191,754)		(207,390)			Net cash used in financing activities	(10,351)		(91,979)

Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	4,125		(2,253)			Effect of exchange rate changes on cash	(2,827)		2,590

Net decrease in cash and cash equivalents		(8,138)		1,638
Net increase (decrease) in cash and cash equivalents							Net increase (decrease) in cash and cash equivalents	10,208		(4,792)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	45,021		35,279			Cash and cash equivalents at beginning of period	183,023		45,021
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	36,883	$	36,917		Cash and cash equivalents at end of period	$	193,231	$	40,229
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest		$	58,299	$	33,313
Income taxes		4,991		5,183
Non-cash investing and financing activities:
Property and equipment acquired under finance leases		150		140
Amounts accrued related to business acquisitions		45,369		2,831


Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	14,358	$	9,078
Income taxes	7,767		352
Non-cash investing and financing activities

Property and equipment acquired under finance leases	865		76
Amounts accrued related to business acquisitions	44,852		1,676

See accompanying notes.

CIMPRESS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

1. Description of the Business

Cimpress is a strategically focused group of more than a dozen businesses that specialize in mass customization, via which we deliver large volumes of individually small-sized customized orders for a broad spectrum of print, signage, photo merchandise, invitations and announcements, writing instruments, packaging, apparel and other categories. We invest in and build customer-focused, entrepreneurial mass customization businesses for the long term, which we manage in a decentralized, autonomous manner. Mass customization is a core element of the business model of each Cimpress business. We drive competitive advantage across Cimpress through a select few shared strategic capabilities that have the greatest potential to create Cimpress-wide value. We limit all other central activities to only those which absolutely must be performed centrally.

Our Vistaprint business and reportable segment has begun evolving its brand architecture to "Vista". Brands like "VistaPrint" and "99designs by Vista" will operate within the "Vista" architecture. This move should help open customers' minds to allow us to serve a broader set of their needs across a wide range of products and solutions that includes design, social media and web presence as well as print. No changes were made to our internal organizational and reporting structure as a result of this rebranding, but we will refer to this reportable segment as "Vista" from here forward and throughout this document.

2.Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Cimpress plc, its wholly owned subsidiaries, entities in which we maintain a controlling financial interest, and those entities in which we have a variable interest and are the primary beneficiary. Intercompany balances and transactions have been eliminated. Investments in entities in which we cannot exercise significant influence, and the related equity securities do not have a readily determinable fair value, are accounted for using the cost method and are included in other assets on the consolidated balance sheets. Investments in entities in which we can either exercise significant influence or, in cases when the entity's structure is that of a limited liability company that maintains a specific ownership account and our investment is more than minor, are recognized as equity method investments. Our equity method investments are included in other assets on the consolidated balance sheets.

Use of Estimates

The preparation of financial statements in conformity with U.S. 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. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results could differ from those estimates.

Given the current and expected impact of the COVID-19 pandemic on our business, we evaluated our liquidity position as of the date of the issuance of these consolidated financial statements. Based on this evaluation, management believes, despite the ongoing impact of COVID-19 on our business, that our financial position, net cash provided by operations combined with our cash and cash equivalents and borrowing availability under our revolving credit facility, will be sufficient to fund our current obligations, capital spending, debt service requirements and working capital requirements over at least the next twelve months. For the debt covenants that have been temporarily suspended under the amendment and capital raise as described in Note 9, these covenants will be reinstated no later than the quarter ending December 31, 2021. Based on our current financial results and forecasted performance, we believe we will remain in compliance with these covenants upon reinstatement.

Significant Accounting Policies

Our significant accounting policies are described in Note 2 in our consolidated financial statements included in the Form 10-K for our year ended June 30, ~~2020. There~~2021.

Revision of Prior Period Financial Statements

During the first quarter of fiscal 2022, we identified an immaterial error related to the presentation of revenue for one-to-one design service arrangements that overstated revenue and cost of revenue for the period from October 1, 2020 through June 30, 2021. On October 1, 2020 we acquired the 99designs business, which is presented as part of our Vista reportable segment, and after acquisition we recognized revenue on a gross basis as if we were the principal to the transactions. In the current quarter, we reconsidered the guidance of ASC 606-10-55-39 and confirmed we are the principal for contest arrangements; however, the one-to-one design service

portion of 99designs revenue is governed by different terms and conditions. We evaluated whether we have ~~been no~~control over these services before the design is transferred to the customer, as we leverage a network of third-party designers to fulfill this offering. The pricing and fulfillment responsibility aspects of the one-to-one design arrangements led us to conclude we are an agent to these specific transactions.

We referred to the Codification of SEC Staff Accounting Bulletins (“SAB”) Topics 1.M Materiality and 1.N Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements to assess the materiality of the error. When considering both quantitative and qualitative factors, we determined the impact of the error was not material ~~changes~~ to our ~~significant accounting policies~~financial statements in any period previously presented. This immaterial error did not have an impact on operating income, nor did it have an impact on our previously presented consolidated balance sheets or consolidated statements of cash flows. This error did not have an impact on the first quarter of fiscal year 2021, which is the comparative period presented in this report, however, we will revise the comparative period results in the Form 10-Q for the second and third quarters of the current fiscal year as well as the Form 10-K for fiscal year 2022. We will revise our previously reported results to present these transactions on a net basis, which will result in a decrease to revenue and cost of revenue of $5,241 and $5,489 for the second and third quarters of fiscal year 2021, respectively, and $16,552 for the fiscal year ended June 30, 2021.

Marketable Securities

We hold certain investments that are classified as held-to-maturity (HTM) as we have the intent and ability to hold them to their maturity dates. Our policy is to invest in the following permitted classes of assets: overnight money market funds invested in U.S. Treasury securities and U.S. government agency securities, U.S Treasury securities-specifically U.S Treasury bills, notes, and bonds, U.S. government agency securities, bank time deposits, commercial paper, corporate notes and bonds, and medium term notes. We generally invest in securities with a maturity of two years or less. As the investments are classified as held-to-maturity they are recorded at amortized cost and interest income is recorded as it is earned within interest expense, net.

We will continue to assess our securities for impairment when the fair value is less than amortized cost to determine if any risk of credit loss exists. 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 three months ended September 30, 2021 and we had no marketable securities during the three ~~and six~~ months ended ~~December 31,~~September 30, 2020.

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, 2021 and June 30, 2021.


	September 30, 2021
	Amortized cost		Unrealized losses		Fair value
Due within one year or less
Commercial paper	$	64,478	$	(13)	$	64,465
Corporate debt securities	87,550		(45)		87,505
Total due within one year or less	152,028		(58)		151,970
Due between one and two years
Corporate debt securities	40,400		(61)		40,339
Total held-to-maturity securities	$	192,428	$	(119)	$	192,309


	June 30, 2021
	Amortized cost		Unrealized losses		Fair value
Due within one year or less
Commercial paper	$	74,463	$	(28)	$	74,435
Corporate debt securities	77,785		(57)		77,728
Total due within one year or less	152,248		(85)		152,163
Due between one and two years
Corporate debt securities	50,713		(90)		50,623
Total held-to-maturity securities	$	202,961	$	(175)	$	202,786

Other Income (Expense) ~~Income,~~, Net

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

Three Months Ended December 31, Six Months Ended December 31,
2020 2019 2020 2019
(Losses) gains on derivatives not designated as hedging instruments (1) $ (19,020) $ (11,666) $ (32,515) $ 7,691
Currency-related gains (losses), net (2) 1,809 2,645 5,884 (767)
Other gains (losses) 13 (19) 679 (290)
Total other (expense) income, net $ (17,198) $ (9,040) $ (25,952) $ 6,634


	Three Months Ended September 30,
	2021		2020
Gains (losses) on derivatives not designated as hedging instruments (1)	$	13,327	$	(13,495)
Currency-related gains, net (2)	9,350		4,075
Other (losses) gains	(480)		666
Total other income (expense), net	$	22,197	$	(8,754)

_____________________

(1) Primarily relates to both realized and unrealized gains and losses on derivative currency forward and option contracts not designated as hedging instruments, as well as certain interest rate swap contracts that have been de-designated from hedge accounting due to their ineffectiveness.

(2) We have significant non-functional currency intercompany financing relationships that we may change at times and are subject to currency exchange rate volatility. The currency-related gains, ~~(losses),~~ net ~~for the three and six months ended December 31, 2020 and 2019~~ are primarily driven by this intercompany ~~activity.~~activity for the periods presented. In addition, we have certain cross-currency swaps designated as cash flow hedges which hedge the remeasurement of certain intercompany ~~loans,~~loans; both are presented in the same component above. ~~The unrealized losses~~Unrealized gains related to cross-currency swaps were ~~$6,085 and $11,522 for~~$3,288 during the three ~~and six~~ months ended ~~December 31, 2020, respectively, as compared to~~September 30, 2021 while there were unrealized losses of ~~$2,858 and $1,820 for~~$5,437 during the three ~~and six~~ months ended ~~December 31, 2019, respectively.~~September 30, 2020.

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 December 31,		Six Months Ended December 31,			Three Months Ended September 30,
		2020	2019	2020	2019			2021	2020
Weighted average shares outstanding, basic	Weighted average shares outstanding, basic	26,003,649	27,036,675	25,974,823	28,391,855	Weighted average shares outstanding, basic		26,072,249	25,945,998
Weighted average shares issuable upon exercise/vesting of outstanding share options/RSUs/warrants(1)	Weighted average shares issuable upon exercise/vesting of outstanding share options/RSUs/warrants(1)	380,811	880,084	415,450	831,261	Weighted average shares issuable upon exercise/vesting of outstanding share options/RSUs/warrants(1)		511,564	—
Shares used in computing diluted net income per share attributable to Cimpress plc		26,384,460	27,916,759	26,390,273	29,223,116
Weighted average anti-dilutive shares excluded from diluted net income per share attributable to Cimpress plc (1)		3,129	—	1,565	0
Shares used in computing diluted net income (loss) per share attributable to Cimpress plc						Shares used in computing diluted net income (loss) per share attributable to Cimpress plc		26,583,813	25,945,998
Weighted average anti-dilutive shares excluded from diluted net income (loss) per share attributable to Cimpress plc (2)						Weighted average anti-dilutive shares excluded from diluted net income (loss) per share attributable to Cimpress plc (2)		18,447	450,089

_____________________

(1) On May 1, 2020, we entered into a financing arrangement with Apollo Global Management, Inc., which included 7-year warrants with a strike price of $60 that have a potentially dilutive impact on our weighted average shares outstanding. For the three ~~and six~~ months ended ~~December 31,~~September 30, 2021 and 2020, the weighted average ~~anti-dilutive~~dilutive effect of the warrants was ~~318,191~~409,561 and ~~317,224~~316,257 shares, respectively. ~~Refer to Note 9 for additional details about the arrangement.~~

~~Recently Issued or Adopted Accounting Pronouncements~~

~~New Accounting Standards Adopted~~

In December 2019, the FASB issued Accounting Standards Update No. 2019-12 "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" (ASU 2019-12), which modifies certain aspects of income tax accounting. We early adopted the standard on July 1, 2020.(2) For the ~~six~~three months ended ~~December 31,~~September 30, 2020, ~~adopting ASU 2019-12 resulted~~we recognized a net loss in ~~a $2,771 increased tax expense in our consolidated financial statements, related to~~ the ~~intraperiod allocation rules. Under~~period and therefore presented the ~~intraperiod allocation rules, an entity generally allocates total income tax expense or benefit by first determining the amount attributable to continuing operations~~impact of share options, RSUs and ~~then allocating the remaining tax expense or benefit to items other than continuing operations. An exception existed that required an~~warrants as being anti-dilutive.

~~entity with a loss from continuing operations~~Recently Issued or Adopted Accounting Pronouncements

Issued Accounting Standards to ~~consider all components when determining the benefit from continuing operations. ASU 2019-12 removes this exception.~~be Adopted

In ~~June 2016,~~May 2021, the FASB issued Accounting Standards Update No. ~~2016-13 "Financial Instruments—Credit Losses~~2021-04 "Earnings Per Share (Topic ~~326)~~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 ~~2016-13)~~2021-04), which ~~introduces a new~~provides authoritative guidance for the accounting ~~model~~ for ~~recognizing credit losses~~modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The standard is effective for us on ~~certain financial instruments based on an estimate of current expected credit losses. We adopted the standard on its effective date of~~ July 1, ~~2020. The standard did not have a material impact on our consolidated financial statements.~~

~~In March 2020,~~2022, and early adoption is permitted. We are assessing the FASB issued ASU 2020-04 "Reference Rate Reform ("ASC 848"): Facilitation of the Effects of Reference Rate Reform on Financial Reporting", which contains optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. We elected to amend our hedge documentation, without dedesignating and redesignating, for all outstanding cash flow hedges by applying two practical expedients. We elected the expedient in ASC 848-50-25-2 to assert probability of the hedged interest payments regardless of any expected modification in terms related to reference rate reform. In addition, we elected to continue the method of assessing effectiveness as documented in the original hedge documentation and elect to apply the expedient in ASC 848-50-35-17, so that the reference rate on the hypothetical derivative matches the reference rate on the hedging instrument. The standard did not have a material impact on our consolidated financial statements.

During the three months ended December 31, 2020, the tax on Global Intangible Low-Taxed Income (“GILTI”) provision of the Tax Cuts and Jobs Act became applicable to our operations. The FASB has provided that companies subject to GILTI have the option to account for the GILTI tax as a period cost if and when incurred, or to recognize deferred taxes for temporary differences, including outside basis differences, expected to reverse as GILTI. We elected to account for GILTI as a period cost, as incurred. We do not expect GILTI to have a material impact on our consolidated financial statements.

3. Fair Value Measurements

We use a three-level valuation hierarchy for measuring fair value and include detailed financial statement disclosures about fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

•Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•Level 2: Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

•Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. 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:


	September 30, 2021
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Interest rate swap contracts	$	232	$	—	$	232	$	—
Cross-currency swap contracts	760		—		760		—
Currency forward contracts	8,447		—		8,447		—
Currency option contracts	1,982		—		1,982		—
Total assets recorded at fair value	$	11,421	$	—	$	11,421	$	—

Liabilities
Interest rate swap contracts	$	(21,937)	$	—	$	(21,937)	$	—
Cross-currency swap contracts	(6,741)		—		(6,741)		—
Currency forward contracts	(10,303)		—		(10,303)		—
Currency option contracts	(1,150)		—		(1,150)		—
Total liabilities recorded at fair value	$	(40,131)	$	—	$	(40,131)	$	—

December 31, 2020
Total Quoted Prices in
Active
Markets for
Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Assets
Currency forward contracts $ 692 $ — $ 692 $ —
Total assets recorded at fair value $ 692 $ — $ 692 $ —
Liabilities
Interest rate swap contracts $ (32,999) $ — $ (32,999) $ —
Cross-currency swap contracts (14,622) — (14,622) —
Currency forward contracts (41,764) — (41,764) —
Currency option contracts (4,274) — (4,274) —
Total liabilities recorded at fair value $ (93,659) $ — $ (93,659) $ —


		June 30, 2020									June 30, 2021
		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets	Assets									Assets
Interest rate swap contracts		$	4,462	$	—	$	4,462	$	—
Currency forward contracts	Currency forward contracts	7,949		—		7,949		—		Currency forward contracts	$	1,679	$	—	$	1,679	$	—
Currency option contracts		1,429		—		1,429		—
Total assets recorded at fair value	Total assets recorded at fair value	$	13,840	$	—	$	13,840	$	—	Total assets recorded at fair value	$	1,679	$	—	$	1,679	$	—

Liabilities	Liabilities									Liabilities
Interest rate swap contracts	Interest rate swap contracts	$	(39,520)	$	—	$	(39,520)	$	—	Interest rate swap contracts	$	(25,193)	$	—	$	(25,193)	$	—
Cross-currency swap contracts	Cross-currency swap contracts	(4,746)		—		(4,746)		—		Cross-currency swap contracts	(9,914)		—		(9,914)		—
Currency forward contracts	Currency forward contracts	(8,519)		—		(8,519)		—		Currency forward contracts	(19,651)		—		(19,651)		—
Currency option contracts	Currency option contracts	(38)		—		(38)		—		Currency option contracts	(3,080)		—		(3,080)		—
Total liabilities recorded at fair value	Total liabilities recorded at fair value	$	(52,823)	$	—	$	(52,823)	$	—	Total liabilities recorded at fair value	$	(57,838)	$	—	$	(57,838)	$	—

During the ~~quarter~~three months ended ~~December 31, 2020~~September 30, 2021 and year ended June 30, ~~2020,~~2021, 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. 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. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparties' nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements.

Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to appropriately reflect both our own nonperformance risk and the respective counterparties' nonperformance risk in the fair value measurement. However, as of ~~December 31, 2020,~~September 30, 2021, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 in the fair value hierarchy.

As of ~~December 31, 2020~~September 30, 2021 and June 30, ~~2020,~~2021, the carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximated their estimated fair values. As of ~~December 31, 2020~~September 30, 2021 and June 30, ~~2020,~~2021, the carrying value of our debt, excluding debt issuance costs and debt premiums and discounts, was $~~1,315,372~~1,751,534 and ~~$1,482,177,~~$1,764,856, respectively, and the fair value was ~~$1,358,180~~$1,803,480 and ~~$1,450,719,~~$1,887,952, respectively. Our debt at ~~December 31, 2020~~September 30, 2021 includes variable-rate debt instruments indexed to LIBOR 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 September 30, 2021 and June 30, 2021 our held-to-maturity marketable securities were held at an amortized cost of $192,428and $202,961,respectively,while the fair value was $192,309and$202,786, respectively. The securities were valued using quoted prices for identical assets in active markets, which fall into Level 1 under the fair value hierarchy.

The estimated fair value of assets and liabilities disclosed above may not be representative of actual values that could have been or will be realized in the future.

4. Derivative Financial Instruments

We use derivative financial instruments, such as interest rate swap contracts, cross-currency swap contracts, and currency forward and option contracts, to manage interest rate and foreign currency exposures. Derivatives are recorded in the consolidated balance sheets at fair value. If the derivative is designated as a cash flow hedge or net investment hedge, then the change in the fair value of the derivative is recorded in accumulated other comprehensive loss and subsequently reclassified into earnings in the period the hedged forecasted transaction affects earnings. Additionally, any ineffectiveness associated with ~~any~~an effective and designated hedge is recognized within accumulated other comprehensive loss.

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

Hedges of Interest Rate Risk

We enter into interest rate swap contracts to manage variability in the amount of our known or expected cash payments related to a portion of our debt. Our objective in using interest rate swaps is to add stability to interest expense and to manage our exposure to interest rate movements. We designate our interest rate swaps as cash flow hedges. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the contract agreements without exchange of the underlying notional amount. Realized gains or losses from interest rate swaps are recorded in earnings as a component of interest expense, net.

Amounts reported in accumulated other comprehensive loss related to interest rate swap contracts will be reclassified to interest expense, net as interest payments are accrued or made on our variable-rate debt. As of ~~December 31, 2020,~~September 30, 2021, we estimate that ~~$10,446~~$10,399 will be reclassified from accumulated other comprehensive loss to interest expense during the twelve months ending ~~December 31, 2021.~~September 30, 2022. As of ~~December 31, 2020,~~September 30, 2021, we had 1015 outstanding interest rate swap contracts indexed to USD LIBOR, of which six of these instruments were designated as cash flow hedges of interest rate risk and have varying start dates and maturity dates through September 2025. As of December 31, 2020, we have determined thatthree ~~four~~ of ~~our hedges are no longer~~which were not highly ~~effective.~~effective and therefore not designated for hedge accounting. These ~~de-designated~~ hedges have varying start dates and maturity dates through ~~December 2025.~~April 2028.


Interest rate swap contracts outstanding:	Notional Amounts
Contracts accruing interest as of ~~December 31, 2020~~September 30, 2021	$	500,000
Contracts with a future start date	~~50,000~~430,000
Total	$	~~550,000~~930,000

Hedges of Currency Risk

Cross-Currency Swap Contracts

From time to time, we execute cross-currency swap contracts designated as cash flow hedges or net investment hedges. Cross-currency swaps involve an initial receipt of the notional amount in the hedge currency in exchange for our reporting currency based on a contracted exchange rate. Subsequently, we receive fixed rate payments in our reporting currency in exchange for fixed rate payments in the hedged currency over the life of the

contract. At maturity, the final exchange involves the receipt of our reporting currency in exchange for the notional amount in the hedged currency.

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. dollar. As of ~~December 31, 2020,~~September 30, 2021, we had 2 outstanding cross-currency swap contracts designated as cash flow hedges with a total notional amount of $120,874,both maturing during June 2024. We entered into the two cross-currency swap contracts to hedge the risk of changes in one Euro-denominated intercompany loan entered into with one of our consolidated subsidiaries that has the Euro as its functional currency.

Amounts reported in accumulated other comprehensive loss will be reclassified to other ~~(expense)~~ income (expense), net, as interest payments are accrued or paid and upon remeasuring the intercompany loan. As of ~~December 31, 2020,~~September 30, 2021, we estimate that ~~$2,176~~$2,722 of income will be reclassified from accumulated other comprehensive loss to interest expense, net during the twelve months ending ~~December 31, 2021.~~September 30, 2022.

Other Currency Contracts

We execute currency forward and option contracts in order to mitigate our exposure to fluctuations in various currencies against our reporting currency, the U.S. dollar.

As of ~~December 31, 2020,~~September 30, 2021, we had 54 currency forward contracts designated as net investment hedges with a total notional amount of ~~$149,604,~~$118,203, maturing during various dates through April ~~2023~~.2023. We entered into these contracts to hedge the risk of changes in the U.S. dollar equivalent value of a portion of our net investment in two consolidated subsidiaries that have the Euro as their functional currency. Amounts reported in accumulated other comprehensive loss are recognized as a component of our cumulative translation adjustment.

We have elected to not apply hedge accounting for all other currency forward and option contracts. During the three ~~and six~~ months ended ~~December 31,~~September 30, 2021 and 2020, ~~and 2019,~~ we ~~have~~ experienced volatility within other income (expense) ~~income,~~, net, in our consolidated statements of operations from unrealized gains and losses on the mark-to-market of outstanding currency forward and option contracts. We expect this volatility to continue in future periods for contracts for which we do not apply hedge accounting. Additionally, since our hedging objectives may be targeted at non-GAAP financial metrics that exclude non-cash items such as depreciation and amortization, we may experience increased, not decreased, volatility in our GAAP results as a result of our currency hedging program.

As of ~~December 31, 2020,~~September 30, 2021, we had the following outstanding currency derivative contracts that were not designated for hedge accounting and were used to hedge fluctuations in the U.S. dollar value of forecasted transactions or balances denominated in Australian Dollar, British Pound, Canadian Dollar, Danish Krone, Euro, Indian Rupee, Japanese Yen, Mexican Peso, New Zealand Dollar, Norwegian Krone, Philippine Peso, Swiss Franc and Swedish Krona:

Notional Amount

Effective Date

Maturity Date

Number of Instruments

Index

Notional Amount

Effective Date

Maturity Date

Number of Instruments

Index

$484,660

March 2019 through December 2020

Various dates through October 2024

602

Various

$557,175

September 2019 through September 2021

Various dates through October 2024

701

Various

Financial Instrument Presentation

The table below presents the fair value of our derivative financial instruments as well as their classification on the balance sheet as of ~~December 31, 2020~~September 30, 2021 and June 30, ~~2020.~~2021. Our derivative asset and liability balances will fluctuate with interest rate and currency exchange rate volatility.


		December 31, 2020															September 30, 2021
		Asset Derivatives							Liability Derivatives								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			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 designated as hedging instruments															Derivatives designated as hedging instruments
Derivatives in cash flow hedging relationships	Derivatives in cash flow hedging relationships															Derivatives in cash flow hedging relationships
Interest rate swaps	Interest rate swaps	Other current assets / other assets	$	0	$	0	$	0	Other liabilities	$	(20,839)	$	0	$	(20,839)	Interest rate swaps	Other assets	$	232	$	—	$	232	Other liabilities	$	(20,827)	$	267	$	(20,560)
Cross-currency swaps	Cross-currency swaps	Other assets	0		—		0		Other liabilities	(14,622)		0		(14,622)		Cross-currency swaps	Other assets	760		—		760		Other liabilities	(6,741)		—		(6,741)
Derivatives in net investment hedging relationships	Derivatives in net investment hedging relationships															Derivatives in net investment hedging relationships

Currency forward contracts	Currency forward contracts	Other assets	0		0		0		Other current liabilities / other liabilities	(25,758)		0		(25,758)		Currency forward contracts	Other current assets / other assets	—		—		—		Other current liabilities / other liabilities	(7,886)		—		(7,886)
Total derivatives designated as hedging instruments	Total derivatives designated as hedging instruments		$	0	$	0	$	0		$	(61,219)	$	0	$	(61,219)	Total derivatives designated as hedging instruments		$	992	$	—	$	992		$	(35,454)	$	267	$	(35,187)

Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments															Derivatives not designated as hedging instruments
Interest rate swaps	Interest rate swaps	Other assets	$	—	$	—	$	—	Other liabilities	$	(12,160)	$	0	$	(12,160)	Interest rate swaps	Other assets	$	—	$	—	$	—	Other liabilities	$	(1,377)	$	—	$	(1,377)

Currency forward contracts	Currency forward contracts	Other current assets / other assets	772		(80)		692		Other current liabilities / other liabilities	(18,548)		2,542		(16,006)		Currency forward contracts	Other current assets / other assets	11,498		(3,051)		8,447		Other current liabilities / other liabilities	(3,260)		843		(2,417)
Currency option contracts	Currency option contracts	Other current assets / other assets	0		0		0		Other current liabilities / other liabilities	(4,274)		0		(4,274)		Currency option contracts	Other current assets / other assets	2,170		(188)		1,982		Other current liabilities / other liabilities	(1,265)		115		(1,150)
Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments		$	772	$	(80)	$	692		$	(34,982)	$	2,542	$	(32,440)	Total derivatives not designated as hedging instruments		$	13,668	$	(3,239)	$	10,429		$	(5,902)	$	958	$	(4,944)

June 30, 2020
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 $ 0 $ 0 $ 0 Other liabilities $ (31,161) $ 0 $ (31,161)
Cross-currency swaps Other assets 4,462 0 4,462 Other liabilities (4,746) 0 (4,746)
Derivatives in net investment hedging relationships
Currency forward contracts Other assets — — — Other current liabilities / other liabilities (6,829) 0 (6,829)
Total derivatives designated as hedging instruments $ 4,462 $ 0 $ 4,462 $ (42,736) $ 0 $ (42,736)
Derivatives not designated as hedging instruments
Interest rate swaps Other assets $ — $ — $ — Other liabilities $ (8,359) $ 0 $ (8,359)
Currency forward contracts Other current assets / other assets 9,702 (1,753) 7,949 Other current liabilities / other liabilities (2,136) 446 (1,690)
Currency option contracts Other current assets / other assets 1,699 (270) 1,429 Other current liabilities / other liabilities (38) 0 (38)
Total derivatives not designated as hedging instruments $ 11,401 $ (2,023) $ 9,378 $ (10,533) $ 446 $ (10,087)


	June 30, 2021
	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	$	—	$	—	$	—	Other current liabilities / other liabilities	$	(23,527)	$	176	$	(23,351)
Cross-currency swaps	Other assets	—		—		—		Other liabilities	(9,914)		—		(9,914)
Derivatives in Net Investment Hedging Relationships

Currency forward contracts	Other assets	—		—		—		Other current liabilities / other liabilities	(11,379)		—		(11,379)
Total derivatives designated as hedging instruments		$	—	$	—	$	—		$	(44,820)	$	176	$	(44,644)

Derivatives not designated as hedging instruments
Interest rate swaps	Other assets	$	—	$	—	$	—	Other liabilities	$	(1,842)	$	—	$	(1,842)

Currency forward contracts	Other current assets / other assets	1,796		(117)		1,679		Other current liabilities / other liabilities	(11,510)		3,238		(8,272)
Currency option contracts	Other current assets / other assets	—		—		—		Other current liabilities / other liabilities	(3,315)		235		(3,080)
Total derivatives not designated as hedging instruments		$	1,796	$	(117)	$	1,679		$	(16,667)	$	3,473	$	(13,194)

The following table presents the effect of our derivative financial instruments designated as hedging instruments and their classification within comprehensive (loss) income for the three ~~and six~~ months ended ~~December 31,~~September 30, 2021 and 2020 ~~and 2019:~~:


		Amount of Net (Loss) Gain on Derivatives Recognized in Comprehensive Income										Amount of Net Gain (Loss) on Derivatives Recognized in Comprehensive Income
		Three Months Ended December 31,				Six Months Ended December 31,					Three Months Ended September 30,
		2020		2019		2020		2019					2021		2020
Derivatives in cash flow hedging relationships	Derivatives in cash flow hedging relationships									Derivatives in cash flow hedging relationships

Interest rate swaps	Interest rate swaps	$	731	$	4,394	$	1,142	$	(196)	Interest rate swaps			$	519	$	411
Cross-currency swaps	Cross-currency swaps	3,071		1,737		6,496		(861)		Cross-currency swaps			(2,444)		3,425
Derivatives in net investment hedging relationships	Derivatives in net investment hedging relationships									Derivatives in net investment hedging relationships

Currency forward contracts	Currency forward contracts	(7,294)		(4,153)		(24,832)		8,565		Currency forward contracts			3,492		(17,538)
Total	Total	$	(3,492)	$	1,978	$	(17,194)	$	7,508	Total			$	1,567	$	(13,702)

The following table presents reclassifications out of accumulated other comprehensive loss for the three ~~and six~~ months ended ~~December 31, 2020~~September 30, 2021 and ~~2019:~~2020:


		Amount of Net Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income								Affected line item in the Statement of Operations		Amount of Net Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income				Affected line item in the Statement of Operations
		Three Months Ended December 31,				Six Months Ended December 31,						Three Months Ended September 30,
		2020		2019		2020		2019						2021			2020
Derivatives in cash flow hedging relationships	Derivatives in cash flow hedging relationships												Derivatives in cash flow hedging relationships
Interest rate swaps	Interest rate swaps	$	2,001	$	485	$	4,623	$	455		Interest expense, net		Interest rate swaps	$	2,497		$	2,622	Interest expense, net
Cross-currency swaps	Cross-currency swaps	(5,525)		(2,026)		(10,292)		3,538			Other (expense) income, net		Cross-currency swaps	3,987			(4,767)		Other income (expense), net
Total before income tax	Total before income tax	(3,524)		(1,541)		(5,669)		3,993			Income before income taxes		Total before income tax	6,484			(2,145)		Income (loss) before income taxes
Income tax	Income tax	298		396		372		(987)			Income tax expense (benefit)		Income tax	(938)			74		Income tax expense
Total	Total	$	(3,226)	$	(1,145)	$	(5,297)	$	3,006				Total	$	5,546		$	(2,071)

The following table presents the adjustment to fair value recorded within the consolidated statements of operations for the three ~~and six~~ months ended ~~December 31,~~September 30, 2021 and 2020 ~~and 2019~~ for derivative instruments for which we did not elect hedge accounting and de-designated derivative financial instruments that no longer qualify as hedging instruments.


		Amount of Gain (Loss) Recognized in Net Income									Affected line item in the Statement of Operations	Amount of Gain (Loss) Recognized in Net Income (Loss)						Affected line item in the Statement of Operations
			Three Months Ended December 31,				Six Months Ended December 31,							Three Months Ended September 30,
			2020		2019		2020		2019							2021			2020
Currency contracts	Currency contracts		$	(19,496)	$	(11,666)	$	(32,964)	$	7,691			Other (expense) income, net		Currency contracts	$	12,863		$	(13,468)	Other income (expense), net
Interest rate swaps	Interest rate swaps		476		0		449		0				Other (expense) income, net		Interest rate swaps	464			(27)		Other income (expense), net
Total	Total		$	(19,020)	$	(11,666)	$	(32,515)	$	7,691					Total	$	13,327		$	(13,495)

5. Accumulated Other Comprehensive ~~Income (Loss)~~Loss

The following table presents a roll forward of amounts recognized in accumulated other comprehensive ~~income (loss)~~loss by component, net of tax of $~~500~~938 for the ~~six~~three months ended ~~December 31, 2020~~September 30, 2021:

Gains (losses) on cash flow hedges (1) Losses on pension benefit obligation Translation adjustments, net of hedges (2) Total
Balance as of June 30, 2020 $ (30,078) $ (1,399) $ (57,199) $ (88,676)
Other comprehensive income (loss) before reclassifications 7,638 (336) 12,074 19,376
Amounts reclassified from accumulated other comprehensive loss to net income (5,297) — — (5,297)
Net current period other comprehensive income (loss) 2,341 (336) 12,074 14,079
Balance as of December 31, 2020 $ (27,737) $ (1,735) $ (45,125) $ (74,597)


	Gains (losses) on cash flow hedges (1)		Losses on pension benefit obligation		Translation adjustments, net of hedges (2)		Total
Balance as of June 30, 2021	$	(23,831)	$	(1,735)	$	(53,434)	$	(79,000)
Other comprehensive income (loss) before reclassifications	(1,925)		—		(8,353)		(10,278)
Amounts reclassified from accumulated other comprehensive loss to net income (loss)	5,546		—		—		5,546
Net current period other comprehensive income (loss)	3,621		—		(8,353)		(4,732)
Balance as of September 30, 2021	$	(20,210)	$	(1,735)	$	(61,787)	$	(83,732)

________________________

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

(2) As of ~~December 31, 2020~~September 30, 2021 and June 30, ~~2020,~~2021, the translation adjustment is inclusive of the effects of our net investment hedges, of which unrealized ~~losses of $4,323 and unrealized~~ gains of ~~$20,509,~~$3,492 and $1,457, respectively, net of tax, have been included in accumulated other comprehensive loss.

6. Goodwill

The carrying amount of goodwill by reportable segment as of ~~December 31, 2020~~September 30, 2021 and June 30, ~~2020~~2021 was as follows:

Vistaprint PrintBrothers The Print Group All Other Businesses Total
Balance as of June 30, 2020 $ 150,846 $ 129,764 $ 155,197 $ 186,097 $ 621,904
Acquisitions (1) 71,401 0 0 0 71,401
Effect of currency translation adjustments (2) 6,939 12,098 14,471 0 33,508
Balance as of December 31, 2020 $ 229,186 $ 141,862 $ 169,668 $ 186,097 $ 726,813


	Vista		PrintBrothers		The Print Group		All Other Businesses		Total
Balance as of June 30, 2021	$	225,147	$	137,307	$	164,220	$	200,305	$	726,979



Adjustments	172		—		—		—		172
Effect of currency translation adjustments (1)	(1,599)		(3,452)		(4,130)		—		(9,181)
Balance as of September 30, 2021	$	223,720	$	133,855	$	160,090	$	200,305	$	717,970

~~_________________~~________________________

(1) ~~On October 1, 2020, we acquired 99designs which is included in our Vistaprint reportable segment. Refer to Note 7 for additional details.~~

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

~~7. Business Combinations~~

On October 1, 2020, we acquired 99designs, Inc. and its subsidiaries ("99designs"), a global creative platform for graphic design. We acquired all outstanding shares of the company for a purchase price of $90,000, subject to a post-closing adjustment based on acquired cash, debt, and working capital as of the closing date. We paid $45,000 in cash at closing and will pay the remaining purchase consideration, including the post-closing adjustment, on February 15, 2022. The acquisition will be integrated into our Vistaprint business and provides a global platform that connects designers and clients, making it easier for small businesses to access both professional design services and marketing products in one place.

~~The table below details the consideration transferred to acquire 99designs:~~


~~Cash consideration (paid at closing)~~	$	~~45,000~~
~~Fair value of deferred payment~~	~~43,381~~
~~Final post closing adjustment~~	~~310~~
~~Total purchase price~~	$	~~88,691~~

We recognized the assets and liabilities on the basis of their fair values at the date of the acquisition with any excess of the purchase price paid over the fair value of the net assets recorded as goodwill, which is primarily attributable to the synergies that we expect to achieve through the acquisition. The goodwill balance has been attributed to the Vistaprint reportable segment and the portion of such goodwill balance that is deductible for tax

~~purposes is $20,257. Additionally, we identified~~7. Other Balance Sheet Components

Accrued expenses included the following:


	September 30, 2021		June 30, 2021
Compensation costs	$	69,184	$	73,861
Income and indirect taxes	47,089		46,074
Advertising costs (1)	25,538		35,093
Interest payable (2)	13,002		2,399
Shipping costs (3)	12,949		9,401
Production costs	6,237		6,881
Sales returns	6,332		5,636
Professional fees	3,753		4,210
Purchases of property, plant and equipment	3,748		1,110
Other	73,329		62,848
Total accrued expenses	$	261,161	$	247,513

________________________

(1) Advertising cost accruals decreased from June 30, 2021 to September 30, 2021 due to a reduction in upper-funnel advertising costs within our Vista reportable segment as well as payments made during the current fiscal quarter.

(2) Accrued interest increased from June 30, 2021 to September 30, 2021 as payments of our senior unsecured notes are due semi-annually on June 15th and ~~valued 99designs intangible assets which include their trade name, designer network,~~December 15th each year. Refer to Note 8 for additional details.

(3) Shipping cost accruals increased from June 30, 2021 to September 30, 2021 primarily due to delayed invoicing from one of our larger shipping vendors that resulted in an increase in accruals and ~~developed technology.~~decrease to accounts payable.

~~Our preliminary estimate of~~Other current liabilities included the ~~fair value of specifically identifiable assets acquired and~~following:


	September 30, 2021		June 30, 2021
Current portion of finance lease obligations	$	31,454	$	32,314
Short-term derivative liabilities	12,193		20,530


Other	51,794		50,671
Total other current liabilities	$	95,441	$	103,515

Other liabilities ~~assumed as of~~included the date of acquisition is subject to change upon finalizing our valuation analysis, including certain valuation assumptions and tax matters. The final determination may result in changes in the fair value of certain assets and liabilities as compared to our preliminary estimates, which are expected to be finalized prior to the end of fiscal 2021.following:

~~The fair value of the assets acquired and liabilities assumed was:~~

~~Amount~~

~~Weighted Average Useful Life in Years~~

~~Tangible assets acquired and liabilities assumed:~~

~~Cash and cash equivalents~~

~~8,603~~

~~n/a~~

~~Accounts receivable, net~~

~~494~~

~~n/a~~

~~Prepaid expenses and other current assets~~

~~1,167~~

~~n/a~~

~~Property, plant and equipment, net~~

~~n/a~~

~~Other assets~~

~~142~~

~~n/a~~

~~Accounts payable~~

~~(220)~~

~~n/a~~

~~Accrued expenses~~

~~(6,679)~~

~~n/a~~

~~Deferred revenue~~

~~(5,806)~~

~~n/a~~

~~Other liabilities~~

~~(1,234)~~

~~n/a~~

~~Identifiable intangible assets~~

~~Trade name~~

~~1,550~~

~~2 years~~

~~Developed technology~~

~~13,400~~

~~3 years~~

~~Designer network~~

~~5,800~~

~~7 years~~

~~Goodwill~~

~~71,401~~

~~n/a~~

~~Total purchase price~~

~~88,691~~

~~n/a~~

99designs has been included in our consolidated financial statements starting on its acquisition date. The revenue and earnings of 99designs included in our consolidated financial statements for the three and six months ended December 31, 2020 are not material, and therefore no proforma financial information is presented. We utilized our credit facility to finance the acquisition. In connection with the acquisition, we incurred $682 and $1,183 in general and administrative expenses during the three and six months ended December 31, 2020, primarily related to legal, financial, and other professional services.


	September 30, 2021		June 30, 2021
Long-term finance lease obligations	$	17,214	$	18,528
Long-term derivative liabilities	32,403		41,074


Other	38,662		36,808
Total other liabilities	$	88,279	$	96,410

8. ~~Other Balance Sheet Components~~

~~Accrued expenses included the following:~~

December 31, 2020 June 30, 2020
Compensation costs $ 68,179 $ 67,307
Income and indirect taxes (1) 75,875 53,161
Advertising costs (1) 46,507 14,746
Interest payable 7,397 8,359
Production costs (1) 12,049 7,012
Sales returns 5,993 5,166
Shipping costs (1) 12,657 5,080
Professional fees 3,016 3,452
Purchases of property, plant and equipment 523 1,685
Other 58,843 44,796
Total accrued expenses $ 291,039 $ 210,764

~~_________________~~

(1) The increase in income and indirect taxes, advertising, production, and shipping costs is due to increased sales volumes during our peak holiday season in the second quarter of our fiscal year. Advertising cost accruals are also driven by increased investment in upper-funnel advertising in Vistaprint.

~~Other current liabilities included the following:~~

December 31, 2020 June 30, 2020
Current portion of finance lease obligations $ 8,815 $ 8,055
Short-term derivative liabilities 27,210 3,521
Other 4,941 1,692
Total other current liabilities $ 40,966 $ 13,268

~~Other liabilities included the following:~~

December 31, 2020 June 30, 2020
Long-term finance lease obligations $ 16,132 $ 18,617
Long-term derivative liabilities 69,071 51,800
Other (1) 71,873 17,770
Total other liabilities $ 157,076 $ 88,187

~~_____________________~~

~~(1) The increase in other long term liabilities is driven by the deferred payment related to the 99designs acquisition totaling $43,691. Refer to Note 7 for additional details.~~

9. Debt


		December 31, 2020		June 30, 2020			September 30, 2021		June 30, 2021
7.0% Senior unsecured notes due 2026		$	600,000	$	600,000
7.0% Senior notes due 2026						7.0% Senior notes due 2026	$	600,000	$	600,000
Senior secured credit facility	Senior secured credit facility	404,375		570,483		Senior secured credit facility	1,140,187		1,152,021
12.0% Second lien notes due 2025		300,000		300,000

Other	Other	10,997		11,694		Other	11,347		12,835
Debt issuance costs and debt premiums (discounts)	Debt issuance costs and debt premiums (discounts)	(44,234)		(48,587)		Debt issuance costs and debt premiums (discounts)	(21,850)		(22,450)
Total debt outstanding, net	Total debt outstanding, net	1,271,138		1,433,590		Total debt outstanding, net	1,729,684		1,742,406
Less: short-term debt (1)	Less: short-term debt (1)	12,603		17,933		Less: short-term debt (1)	11,373		9,895
Long-term debt	Long-term debt	$	1,258,535	$	1,415,657	Long-term debt	$	1,718,311	$	1,732,511

_____________________

(1) Balances as of ~~December 31, 2020~~September 30, 2021 and June 30, ~~2020~~2021 are inclusive of short-term debt issuance costs, debt premiums and discounts of ~~$10,567~~$3,475 and ~~$10,362,~~$3,435, respectively.

Our Debt

Our various debt arrangements described below contain customary representations, warranties and events of default. As of ~~December 31, 2020, the pre-existing financial maintenance covenants under our senior secured credit facility covenants are suspended, and~~September 30, 2021, we were in compliance with all ~~financial and other~~ covenants under ~~the~~our amended and restated senior secured credit agreement ~~as amended,~~("Restated Credit Agreement") and the indenture governing our 2026 Notes ~~and the indenture governing our Second Lien Notes.~~(as defined below).

Senior Secured Credit Facility

On ~~April 28, 2020,~~May 17, 2021, we entered into ~~an amendment to our~~a Restated Credit Agreement consisting of the following:

•A senior secured ~~credit agreement to suspend our pre-existing maintenance covenants, including the total~~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%; and

•A $250,000 senior secured ~~leverage covenants and~~revolving credit facility with a maturity date of May 17, 2026 (the “Revolving Credit Facility”). Borrowings under the Revolving Credit Facility bear interest ~~coverage ratio covenant, until the publication~~at LIBOR (with a LIBOR floor of our results for the quarter ending December 31, 2021, for which quarter the pre-amendment maintenance covenants will be reinstated. The covenant suspension period could end earlier at our election if we have total leverage equal to or lower than 4.75x annualized EBITDA for each of two consecutive quarters and are compliant with pre-amendment maintenance covenants.

During the covenant suspension period, we must comply with new maintenance covenants requiring EBITDA above zero in each of the quarters ending June 30, 2021 and September 30, 2021 and minimum liquidity (defined in the credit agreement as unrestricted cash plus unused revolver) of $50,000. The amendment increased pricing to LIBOR plus 3.25% during the covenant suspension period and to LIBOR0%) plus 2.50% to ~~3.25% after the covenant suspension period,~~3.00% depending on ~~our total~~the Company’s First Lien Leverage Ratio, a net leverage ~~ratio, including a 0.75% floor for LIBOR borrowings. Additionally,~~calculation, as ~~part of~~defined in the ~~amendment, the maturity date was changed from February 2025 to November 2024.~~ Restated Credit Agreement.

The ~~amendment to the senior secured credit agreement also reduced the credit facility from $1,551,419 to $1,000,000, made up of an $850,000 revolver and $150,000 term loan.~~

~~During the covenant suspension period, we have more restrictive limitations on~~Restated Credit Agreement contains covenants that restrict or limit certain activities and ~~actions,~~transactions by Cimpress and our subsidiaries, including, but not limited ~~to:~~

•to, the incurrence of additional indebtedness and ~~liens,~~

•~~the consummation of~~liens; certain fundamental organizational changes; asset sales; certain intercompany activities; and certain investments ~~including acquisitions,~~

•~~the making of~~and restricted payments, including ~~the~~ purchases of ~~our~~the Company’s ordinary shares and payment of dividends. 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 September 30, 2021, we were in compliance with all covenants under our Restated Credit Agreement.

As of ~~December 31, 2020,~~September 30, 2021, we have ~~drawn commitments~~borrowings under the ~~credit facility~~Restated Credit Agreement of ~~$404,375 as follows:~~

•~~Revolving loans~~$1,140,187 consisting of ~~$260,000 with a maturity date of November 15, 2024~~

•the Term ~~loans of $144,375 amortizing~~Loan B, which amortizes over the loan period, with a final maturity date of ~~November 15, 2024~~May 17, 2028. We have no outstanding borrowings under our Revolving Credit Facility as of September 30, 2021.

As of ~~December 31, 2020,~~September 30, 2021, the weighted-average interest rate on outstanding borrowings under the Restated Credit Agreement was ~~5.94%~~4.67%, 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

~~0.50%~~ 0.45% depending on our ~~total leverage ratio, and 0.50% during the covenant suspension period.~~First Lien Leverage Ratio. We have pledged the assets and/or share capital of a number of our subsidiaries as collateral for our ~~outstanding~~ debt as of ~~December 31, 2020.~~September 30, 2021.

~~Second Lien Notes~~

On May 1, 2020, we completed a private placement of $300,000 in aggregate principal of 12% second lien notes due 2025 (the "Second Lien Notes") and warrants to funds managed by affiliates of Apollo Global Management, Inc. (the "Apollo Funds"). These Second Lien Notes and warrants were issued at a discount of $6,000, resulting in net proceeds of $294,000. We used the proceeds to pay down a portion of the term loans under our senior secured credit facility and to pay fees and expenses incurred in connection with the financing and the above-described amendment.

The Second Lien Notes bear interest at 12% per annum, 50% of which can be paid-in-kind at our option, and mature on May 15, 2025. We may prepay the Second Lien Notes in whole or in part after the first anniversary with a 3% premium, after the second anniversary with a 1% premium, and after the third anniversary with no premium with proceeds from certain debt financings.

Each of Cimpress' subsidiaries that guarantees our obligations under our senior secured credit agreement guarantees the Second Lien Notes. The Second Lien Notes and the guarantees thereof rank equal in right of payment with existing and future senior indebtedness of Cimpress, including Cimpress' and the subsidiary guarantors' obligations under the senior secured credit agreement, and are secured by the same assets securing Cimpress' and the subsidiary guarantors' obligations under the senior secured credit agreement on a second lien basis subject to limited exceptions and the terms of the intercreditor agreement among Cimpress, the subsidiary guarantors, JPMorgan Chase Bank, N.A. as administrative agent under the senior secured credit agreement, and U.S. Bank National Association as collateral agent under the indenture for the Second Lien Notes.

The Apollo Funds also received 7-year warrants to purchase 1,055,377 ordinary shares of Cimpress, representing approximately 3.875% of our outstanding diluted ordinary shares at the time of issuance. Based on the terms of the purchase agreement, the two instruments exist separately and should be treated as separate securities; therefore the warrants are considered to be detachable.

The warrants have an exercise price of $60 per share, representing an approximately 17% premium to the 10-day volume weighted average price of our shares as of April 28, 2020. The warrants are classified as equity as they are strictly redeemable in our own shares, and they may be exercised by cash payment or through cashless exercise by the surrender of warrant shares having a value equal to the exercise price of the portion of the warrant being exercised.

Senior Unsecured Notes

~~On February 13, 2020, we completed an additional offering of $200,000~~We have issued $600,000 in aggregate principal of 7.0% ~~notes under the senior notes indenture between Cimpress plc and U.S. Bank National Association (as successor trustee to MUFG Union Bank, N.A.~~Senior Notes due 2026 (the "2026 Notes") ~~at a premium of 105.25%. These notes were issued in addition to the existing principal balance under the indenture of $400,000, and~~, which are collectively referred to as the 2026 Notes. The net proceeds from this add-on offering were used to repay a portion of the indebtedness outstanding under our senior secured credit facility and related transaction fees and expenses.

We have the right to redeem, at any time prior to June 15, 2021, some or all of the 2026 Notes at a redemption price equal to 100% of the principal amount redeemed, plus a make-whole amount as set forth in the indenture, plus accrued and unpaid interest to, but not including, the redemption date. In addition, we have the right to redeem, at any time prior to June 15, 2021, up to 40% of the aggregate outstanding principal amount of the 2026 Notes at a redemption price equal to 107% of the principal amount thereof, plus accrued and unpaid interest to, but not including, the redemption date, with the net proceeds of certain equity offerings by Cimpress.unsecured. At any time on or after June 15, 2021, we may 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 September 30, 2021, we have not redeemed any of the 2026 Notes.

Other Debt

Other debt consists primarily of term loans acquired through our various acquisitions or used to fund certain capital investments. As of ~~December 31, 2020~~September 30, 2021 and June 30, ~~2020,~~2021, we had ~~$10,997~~$11,347 and~~$11,694,~~ $12,835, respectively, outstanding for those obligations that are payable through ~~March 2025.~~January 2026.

~~10.~~9. Income Taxes

Our income tax expense was ~~$12,954~~$9,381 and ~~$19,748~~$6,794 for ~~the three and six months ended December 31, 2020, respectively, compared to a benefit of $93,795 and $87,680 for the three and six months ended December 31, 2019, respectively. In~~ the three months ended December 31, 2019, we recognized a discrete tax benefit of $114,114 related to Swiss Tax Reform. Excluding this benefit, tax expense would have decreased, primarily attributable to decreased pre-tax income for the threeSeptember 30, 2021 and ~~six months ended December 31,~~ 2020, ~~as compared to the same prior year periods.~~respectively. Excluding the effect of discrete tax adjustments, our estimated annual effective tax rate is higher for fiscal ~~2021~~2022 as compared to fiscal ~~2020,~~2021 primarily due to ~~increased non-deductible interest expense.~~a less favorable mix of earnings. Our effective tax rate continues to be negatively impacted by losses in certain jurisdictions where we are unable to recognize a tax benefit in the current period.

During the six months ended December 31, 2020, our unrecognized tax benefits increased by $8,145, primarily due to tax positions taken in prior periods for which we have determined it is more likely than not that they will not be sustained upon audit. As of ~~December 31, 2020,~~September 30, 2021 we had unrecognized tax benefits of ~~$14,376,~~$15,400, including accrued interest and penalties of ~~$811.~~$1,049. We recognize interest and, if applicable, penalties related to unrecognized tax benefits in the provision for income taxes. If recognized, ~~$8,136~~$1,169 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 ~~$165~~$300 to ~~$670~~$350 related to the lapse of applicable statutes of limitations. We believe we have appropriately provided for all tax uncertainties.

We conduct business in a number of tax jurisdictions and, as such, are required to file income tax returns in multiple jurisdictions globally. The years 2014 through ~~2020~~2021 remain open for examination by the IRS and the years ~~2014~~2015 through ~~2020~~2021 remain open for examination in the various states and non-US tax jurisdictions in which we file tax returns. We believe that our income tax reserves are adequately maintained taking into consideration both the technical merits of our tax return positions and ongoing developments in our income tax audits. However, the final determination of our tax return positions, if audited, is uncertain, and there is a possibility that final resolution of these matters could have a material impact on our results of operations or cash flows.

~~11.~~

10. Noncontrolling ~~Interests~~Interest

For some of our subsidiaries, we own a controlling equity stake, and a third party or key member of the business' management team owns a minority portion of the equity. The balance sheet and operating activity of these entities are included in our consolidated financial statements, and we adjust the net income in our consolidated statement of operations to exclude the noncontrolling interests' proportionate share of results. We present the proportionate share of equity attributable to the redeemable noncontrolling interests as temporary equity within our consolidated balance sheet and the proportionate share of noncontrolling interests not subject to a redemption provision that is outside of our control as equity. We recognize redeemable noncontrolling interests at fair value on the sale or acquisition date and adjust to the redemption value on a periodic basis with the offset to retained earnings in the consolidated balance sheet. If the formulaic redemption value exceeds the fair value of the noncontrolling interest, then the accretion to redemption value is offset to the net ~~(income) loss~~income attributable to noncontrolling interest in our consolidated statement of operations.

Redeemable Noncontrolling Interests

PrintBrothers

Members of the PrintBrothers management team hold a minority equity interest ranging from 11% to 12% in each of the three businesses within the segment. The put options associated with the redeemable noncontrolling interest have exercise windows for 90% of their minority equity interest to Cimpress in each quarter ending in December, with the first window occurring in fiscal year 2022. If the put options are ~~exercisable beginning in 2021, while~~exercised, then Cimpress may redeem the ~~associated~~remaining 10% minority equity interest concurrently with the put option exercise or on the first, second, or third anniversary of the put option exercise. Cimpress has call options ~~become exercisable in 2026. As~~for the full amount of ~~December 31, 2020,~~ the ~~redemption value was less than~~minority equity interest with the ~~carrying value, and therefore no adjustment was required. During~~first exercise window occurring during the second quarter of fiscal year 2027.

During the three months ended September 30, 2021, ~~we repurchased equity interests ranging from 0.56%~~the redemption value of a PrintBrothers business increased above the carrying value due to ~~1.15% in each~~strong financial performance during the first quarter of the ~~three businesses for~~current fiscal year as well as the lapping of a ~~total~~period more severely impacted by the pandemic, resulting in an adjustment to the redeemable noncontrolling interest of ~~$5,063.~~

$7,592, which was recognized as an adjustment to retained earnings since the redemption value remains below the estimated fair value.

All Other Businesses

On October 1, 2018, we acquired approximately 99% of the outstanding equity interests of BuildASign LLC. The remaining 1% is considered a redeemable noncontrolling equity interest, as it is redeemable for cash based on future financial results through put and call rights and not solely within our control. As of ~~December 31, 2020,~~September 30, 2021, the redemption value ~~increased above~~of the noncontrolling equity interest was less than the carrying value, ~~due to continued strong~~and therefore no adjustment was required.

On April 23, 2021, we acquired 81% of the outstanding equity interests of a US-based company that provides production expertise and sells into a growing product category. The remaining 19% is considered a redeemable noncontrolling equity interest as it is redeemable for cash based on future financial ~~performance, resulting in an adjustment to~~results through put and call rights and not solely within our control. On the acquisition date, we recognized the redeemable noncontrolling interest at fair value of ~~$966, which~~$4,370. As of September 30, 2021, the redemption value was ~~recognized as an~~less than the carrying value, and therefore no adjustment ~~to retained earnings.~~was required.

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

Redeemable noncontrolling interests

Balance as of June 30, ~~2020~~2021

~~69,106~~71,120

Accretion to redemption value recognized in retained earnings (1)

~~1,086~~7,592

Net income attributable to noncontrolling interest

~~2,291~~1,738

~~Distribution to noncontrolling interest~~

~~(4,599)~~

~~Purchase of noncontrolling interest~~

~~(5,063)~~

Foreign currency translation

~~2,689~~ (857)

Balance as of ~~December 31, 2020~~September 30, 2021

~~65,510~~79,593

_________________

~~12.~~(1) Accretion of redeemable noncontrolling interests to redemption value recognized in retained earnings is the result of the estimated redemption amount being greater than carrying value but less than fair value. Refer above for additional details.

11. 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 ~~December 31, 2020,~~September 30, 2021, we have numerous operating segments under our management reporting structure which are reported in the following 5 reportable segments:

•~~Vistaprint~~Vista - ~~Includes~~Vista is the ~~operations~~parent brand of ~~our global Vistaprint websites~~multiple offerings including VistaPrint, VistaCreate, 99designs by Vista, and ~~our Webs-branded business, which is managed with the Vistaprint-branded digital business. Also included is our Vistaprint~~Vista Corporate Solutions, ~~business~~ which ~~serves medium-sized businesses~~together represent a full-service design, digital and ~~large corporations, our 99designs business which was acquired on October 1, 2020, as well as a legacy revenue stream with retail partners~~print solution,

elevating small businesses’ presence in physical and ~~franchise businesses~~digital spaces and empowering them to achieve success.

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

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

•All Other Businesses - Includes a collection of businesses grouped together based on materiality. With the exception of BuildASign, which is a larger and profitable business, the All Other Businesses reportable segment consists of two ~~early-stage~~smaller businesses that we continue to manage at a relatively modest operating ~~loss.~~loss and the addition of a newly acquired company that provides supply chain expertise and sells into a growing product category.

◦BuildASign is an internet-based provider of canvas-print wall décor, business signage and other large-format printed products, based in Austin, Texas. In the fourth quarter of fiscal year 2021, we closed a small acquisition under BuildASign in a new product category.

◦Printi is an online printing leader in Brazil, which offers a superior customer experience with transparent and attractive pricing, reliable service and quality.

◦YSD is a startup operation that provides end-to-end mass customization solutions to brands and intellectual property owners in China, supporting multiple channels including retail stores, websites,

WeChat and e-commerce platforms to enhance brand awareness and competitiveness and develop new markets.

Central and corporate costs consist primarily of the team of software engineers that is building our mass customization platform; shared service organizations such as global procurement; technology services such as hosting and security; 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. 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. In order to ensure comparability in measuring our businesses' results, we allocate the straight-line portion of the fixed grant value to our businesses. Any expense in excess of the amount as a result of the fair value measurement of the PSUs and the accelerated expense profile of the awards is recognized within central and corporate costs. ~~All expense or benefit associated with our supplemental PSUs is recognized within central and corporate costs.~~

Our definition of segment EBITDA is GAAP operating income excluding certain items, such as depreciation and amortization, expense recognized for contingent earn-out related charges including the changes in fair value of contingent consideration and compensation expense related to cash-based earn-out mechanisms dependent upon continued employment, share-based compensation related to investment consideration, certain impairment expense, and restructuring charges. We include insurance proceeds that are not recognized within operating income. We do not allocate non-operating income, including realized gains and losses on currency hedges, to our segment results.

Our balance sheet information is not presented to the CODM on an allocated basis, and therefore we do not present asset information by segment. We do present other segment information to the CODM, which includes purchases of property, plant and equipment and capitalization of software and website development costs, and therefore include that information in the tables below.

Revenue by segment is based on the business-specific websites or sales channel through which the customer’s order was transacted. The following tables set forth revenue by reportable segment, as well as disaggregation of revenue by major geographic region and reportable segment.

Three Months Ended December 31, Six Months Ended December 31,
2020 2019 2020 2019
Revenue (1):
Vistaprint $ 436,317 $ 433,305 $ 765,608 $ 776,476
PrintBrothers 121,806 126,617 221,918 235,907
The Print Group 76,204 87,699 142,641 159,957
National Pen 114,692 127,985 182,341 198,148
All Other Businesses 55,365 49,774 98,843 92,050
Total segment revenue 804,384 825,380 1,411,351 1,462,538
Inter-segment eliminations (18,239) (5,047) (38,706) (8,246)
Total consolidated revenue $ 786,145 $ 820,333 $ 1,372,645 $ 1,454,292


	Three Months Ended September 30,
		2021		2020
Revenue:
Vista		$	349,480	$	329,291
PrintBrothers		125,357		100,112
The Print Group		72,820		66,437
National Pen		69,264		67,649
All Other Businesses		47,871		43,478
Total segment revenue		664,792		606,967
Inter-segment eliminations (1)		(7,193)		(20,467)
Total consolidated revenue		$	657,599	$	586,500

_____________________

(1) Refer to the "Revenue by Geographic Region" tables below for detail of the inter-segment revenue within each respective segment. The decrease of inter-segment eliminations is the result of significant cross-business transactions in the first quarter of fiscal 2021 associated with the fulfillment of masks in response to the pandemic. Demand for this product was far lower in the current quarter.


	Three Months Ended September 30, 2021
	Vista		PrintBrothers		The Print Group		National Pen		All Other		Total
Revenue by Geographic Region:
North America	$	244,449	$	—	$	—	$	41,038	$	41,308	$	326,795
Europe	71,533		125,128		71,155		20,851		—		288,667
Other	32,796		—		—		3,533		5,808		42,137
Inter-segment	702		229		1,665		3,842		755		7,193
Total segment revenue	349,480		125,357		72,820		69,264		47,871		664,792
Less: inter-segment elimination	(702)		(229)		(1,665)		(3,842)		(755)		(7,193)
Total external revenue	$	348,778	$	125,128	$	71,155	$	65,422	$	47,116	$	657,599


	Three Months Ended September 30, 2020
	Vista		PrintBrothers		The Print Group		National Pen		All Other		Total
Revenue by Geographic Region:
North America	$	232,095	$	—	$	—	$	30,321	$	38,944	$	301,360
Europe	77,248		99,941		60,378		20,604		—		258,171
Other	19,526		—		—		3,648		3,795		26,969
Inter-segment	422		171		6,059		13,076		739		20,467
Total segment revenue	329,291		100,112		66,437		67,649		43,478		606,967
Less: inter-segment elimination	(422)		(171)		(6,059)		(13,076)		(739)		(20,467)
Total external revenue	$	328,869	$	99,941	$	60,378	$	54,573	$	42,739	$	586,500

Three Months Ended December 31, 2020
Vistaprint PrintBrothers The Print Group National Pen All Other Total
Revenue by Geographic Region:
North America $ 268,736 $ 0 $ 0 $ 48,678 $ 49,662 $ 367,076
Europe 126,877 121,564 69,343 47,578 0 365,362
Other 40,033 — — 8,699 4,975 53,707
Inter-segment 671 242 6,861 9,737 728 18,239
Total segment revenue 436,317 121,806 76,204 114,692 55,365 804,384
Less: inter-segment elimination (671) (242) (6,861) (9,737) (728) (18,239)
Total external revenue $ 435,646 $ 121,564 $ 69,343 $ 104,955 $ 54,637 $ 786,145

Six Months Ended December 31, 2020
Vistaprint PrintBrothers The Print Group National Pen All Other Total
Revenue by Geographic Region:
North America $ 500,831 $ 0 $ 0 $ 78,999 $ 88,606 $ 668,436
Europe 204,125 221,505 129,721 68,182 0 623,533
Other 59,559 — — 12,347 8,770 80,676
Inter-segment 1,093 413 12,920 22,813 1,467 38,706
Total segment revenue 765,608 221,918 142,641 182,341 98,843 1,411,351
Less: inter-segment elimination (1,093) (413) (12,920) (22,813) (1,467) (38,706)
Total external revenue $ 764,515 $ 221,505 $ 129,721 $ 159,528 $ 97,376 $ 1,372,645

Three Months Ended December 31, 2019
Vistaprint PrintBrothers The Print Group National Pen All Other Total
Revenue by Geographic Region:
North America $ 284,345 $ 0 $ 0 $ 54,400 $ 44,221 $ 382,966
Europe 121,143 126,288 86,713 60,887 0 395,031
Other 25,292 — — 11,732 5,312 42,336
Inter-segment 2,525 329 986 966 241 5,047
Total segment revenue 433,305 126,617 87,699 127,985 49,774 825,380
Less: inter-segment elimination (2,525) (329) (986) (966) (241) (5,047)
Total external revenue $ 430,780 $ 126,288 $ 86,713 $ 127,019 $ 49,533 $ 820,333

Six Months Ended December 31, 2019
Vistaprint PrintBrothers The Print Group National Pen All Other Total
Revenue by Geographic Region:
North America $ 531,430 $ 0 $ 0 $ 95,942 $ 79,627 $ 706,999
Europe 195,601 235,335 158,539 83,200 0 672,675
Other 45,592 — — 17,059 11,967 74,618
Inter-segment 3,853 572 1,418 1,947 456 8,246
Total segment revenue 776,476 235,907 159,957 198,148 92,050 1,462,538
Less: inter-segment elimination (3,853) (572) (1,418) (1,947) (456) (8,246)
Total external revenue $ 772,623 $ 235,335 $ 158,539 $ 196,201 $ 91,594 $ 1,454,292

2422

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


		Three Months Ended December 31,					Six Months Ended December 31,				Three Months Ended September 30,
		2020		2019			2020		2019				2021		2020
Segment EBITDA:	Segment EBITDA:											Segment EBITDA:
Vistaprint		$	112,331	$	138,858		$	202,488	$	226,161
Vista												Vista	$	68,039	$	90,157
PrintBrothers	PrintBrothers	16,457		16,459			26,172		27,236			PrintBrothers	16,283		9,715
The Print Group	The Print Group	12,569		18,105			24,752		31,739			The Print Group	14,389		12,183
National Pen	National Pen	18,728		28,099			8,057		18,249			National Pen	(8,048)		(10,671)
All Other Businesses	All Other Businesses	10,657		3,668			19,266		5,385			All Other Businesses	4,891		8,609
Total segment EBITDA	Total segment EBITDA	170,742		205,189			280,735		308,770			Total segment EBITDA	95,554		109,993
Central and corporate costs	Central and corporate costs	(30,984)		(38,405)			(62,004)		(72,058)			Central and corporate costs	(35,272)		(31,020)
Depreciation and amortization	Depreciation and amortization	(43,597)		(42,356)			(85,887)		(84,891)			Depreciation and amortization	(44,432)		(42,290)

Certain impairments and other adjustments	Certain impairments and other adjustments	215		(936)			(568)		(760)			Certain impairments and other adjustments	780		(783)
Restructuring-related charges	Restructuring-related charges	(2,182)		(1,897)			(2,096)		(4,087)			Restructuring-related charges	309		86

Total income from operations	Total income from operations	94,194		121,595			130,180		146,974			Total income from operations	16,939		35,986
Other (expense) income, net		(17,198)		(9,040)		—	(25,952)		6,634
Other income (expense), net												Other income (expense), net	22,197		(8,754)
Interest expense, net	Interest expense, net	(30,141)		(15,701)		—	(60,657)		(30,788)			Interest expense, net	(25,688)		(30,516)

Income before income taxes		$	46,855	$	96,854		$	43,571	$	122,820
Income (loss) before income taxes												Income (loss) before income taxes	$	13,448	$	(3,284)

Three Months Ended December 31, Six Months Ended December 31,
2020 2019 2020 2019
Depreciation and amortization:
Vistaprint $ 14,952 $ 15,042 $ 28,539 $ 30,682
PrintBrothers 5,509 5,553 10,971 10,808
The Print Group 6,641 6,609 13,222 12,842
National Pen 6,255 5,523 12,322 11,104
All Other Businesses 4,391 5,888 10,259 11,861
Central and corporate costs 5,849 3,741 10,574 7,594
Total depreciation and amortization $ 43,597 $ 42,356 $ 85,887 $ 84,891


		Three Months Ended December 31,				Six Months Ended December 31,					Three Months Ended September 30,
		2020		2019		2020		2019				2021		2020
Purchases of property, plant and equipment:
Vistaprint		$	2,515	$	6,192	$	4,449	$	10,697
Depreciation and amortization:										Depreciation and amortization:
Vista										Vista		$	16,403	$	13,587
PrintBrothers	PrintBrothers	213		668		1,138		999		PrintBrothers		5,234		5,462
The Print Group	The Print Group	3,043		4,889		5,930		8,994		The Print Group		6,584		6,581
National Pen	National Pen	1,372		761		2,824		2,777		National Pen		5,908		6,067
All Other Businesses	All Other Businesses	1,014		595		1,968		2,370		All Other Businesses		5,042		5,868
Central and corporate costs	Central and corporate costs	250		796		481		2,257		Central and corporate costs		5,261		4,725
Total purchases of property, plant and equipment		$	8,407	$	13,901	$	16,790	$	28,094
Total depreciation and amortization										Total depreciation and amortization		$	44,432	$	42,290


	Three Months Ended September 30,
		2021		2020
Purchases of property, plant and equipment:
Vista		$	2,478	$	1,934
PrintBrothers		1,512		925
The Print Group		1,428		2,887
National Pen		1,188		1,452
All Other Businesses		1,515		954
Central and corporate costs		503		231
Total purchases of property, plant and equipment		$	8,624	$	8,383

2523


		Three Months Ended December 31,				Six Months Ended December 31,					Three Months Ended September 30,
		2020		2019		2020		2019				2021		2020
Capitalization of software and website development costs:	Capitalization of software and website development costs:									Capitalization of software and website development costs:
Vistaprint		$	4,429	$	4,357	$	11,416	$	9,779
Vista										Vista		$	7,572	$	6,987
PrintBrothers	PrintBrothers	185		291		591		622		PrintBrothers		232		406
The Print Group	The Print Group	433		424		663		875		The Print Group		426		230
National Pen	National Pen	355		979		1,069		1,815		National Pen		678		714
All Other Businesses	All Other Businesses	681		1,116		1,742		2,079		All Other Businesses		1,184		1,061
Central and corporate costs	Central and corporate costs	5,558		3,779		10,964		8,247		Central and corporate costs		5,547		5,406
Total capitalization of software and website development costs	Total capitalization of software and website development costs	$	11,641	$	10,946	$	26,445	$	23,417	Total capitalization of software and website development costs		$	15,639	$	14,804

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


		December 31, 2020		June 30, 2020			September 30, 2021		June 30, 2021
Long-lived assets (1):	Long-lived assets (1):					Long-lived assets (1):
United States	United States	$	147,268	$	161,853	United States	$	104,990	$	107,868
Netherlands	Netherlands	81,187		82,897		Netherlands	75,345		75,996
Canada	Canada	61,080		67,367		Canada	63,029		60,779
Switzerland	Switzerland	65,197		58,013		Switzerland	69,738		68,880
Italy	Italy	48,326		46,317		Italy	45,029		47,776
France						France	24,333		25,417
Jamaica	Jamaica	21,309		21,563		Jamaica	20,139		20,550
Australia	Australia	21,809		19,695		Australia	20,101		21,298
France		24,933		23,917
Japan	Japan	16,399		15,430		Japan	14,512		14,891
Other	Other	97,686		94,922		Other	95,652		96,063
Total	Total	$	585,194	$	591,974	Total	$	532,868	$	539,518

___________________

(1) Excludes goodwill of ~~$726,813~~$717,970 and ~~$621,904,~~$726,979, intangible assets, net of ~~$212,078~~$171,944 and ~~$209,228, and~~$186,744, deferred tax assets of $~~146,814~~146,431 and ~~$143,496~~$149,618, and marketable securities, non-current of $40,400 and $50,713 as of ~~December 31, 2020~~September 30, 2021 and June 30, ~~2020,~~2021, respectively.

~~13.~~12. Commitments and Contingencies

Purchase Obligations

At ~~December 31, 2020,~~September 30, 2021, we had unrecorded commitments under contract of ~~$226,290,~~$250,458, including third-party web services of ~~$97,609, production and computer equipment purchases of $24,942,~~$100,652, inventory and third-party fulfillment purchase commitments of ~~$18,422,~~$55,731, software of $52,957, advertising of ~~$17,750,~~$10,078, production and computer equipment purchases of $10,047, professional and consulting fees of ~~$8,374~~$7,958, and other unrecorded purchase commitments of ~~$59,193.~~$13,035.

Other Obligations

We deferred payments for several of our acquisitions resulting in the recognition of a liability of ~~$45,369 in aggregate~~$44,852 as of ~~December 31, 2020. This balance includes the deferred payment related~~September 30, 2021, of which $44,423 relates to the 99designs acquisition ~~totaling $43,691. Refer to Note 7 for additional details.~~

~~Modification of Lease Obligations~~

~~On January 6, 2021, we entered into an arrangement that modifies the lease agreement for our Waltham, Massachusetts office location, which results~~and is payable in us retaining a small portion of the previously leased office space in exchange for a reduction to our monthly rent payments. As part of the agreement, we will pay $8,761 in two equal installments, which includes both an early termination penalty and the rent we would have otherwise paid for the terminated space through June 30, 2021. The first payment was made on January 6, 2021, and the remaining amount is due on April 1, 2021. We separately entered into a lease agreement for a new office location in Waltham, Massachusetts which will commence on June 1, 2021. As of December 31, 2020, the total remaining lease commitments through September 2026 were $67,953. Under the modified lease term, combined with the new lease arrangement, the total lease commitments through September 2026 will be $20,501, excluding the termination penalties included above.February 2022.

Legal Proceedings

We are not currently party to any material legal proceedings. Although we cannot predict with certainty the results of litigation and claims to which we may be subject from time to time, we do not expect the resolution of any of our current matters to have a material adverse impact on our consolidated results of operations, cash flows or financial position. For all legal matters, at each reporting period, we evaluate whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. We expense the costs relating to our legal proceedings as those costs are incurred.

~~14.~~13. Restructuring Charges

Restructuring costs include one-time employee termination benefits, acceleration of share-based compensation, write-off of assets and other related costs including third-party professional and outplacement services. During the three ~~and six~~ months ended ~~December 31, 2020,~~September 30, 2021 we recognized a benefit to restructuring ~~costs~~expense of ~~$2,182 and $2,096, respectively,~~$309 due to ~~organizational~~ changes in prior period estimates within ~~our~~ The Print Group segment intended to streamline certain activities. During the three and six months ended December 31, 2019, we recognized restructuring charges of $1,897 and $4,087, respectively, related primarily to charges within our Vistaprint reportable segment.

The following table summarizes the restructuring activity during the ~~six~~three months ended ~~December 31, 2020:~~September 30, 2021. All activity was related to employee termination benefits.

Severance and Related Benefits Other Restructuring Costs Total
Accrued restructuring liability as of June 30, 2020 $ 5,969 $ 77 $ 6,046
Restructuring charges 1,453 643 2,096
Cash payments (3,961) — (3,961)
Non-cash charges (1) — (643) (643)
Accrued restructuring liability as of December 31, 2020 $ 3,461 $ 77 $ 3,538


	Accrued restructuring liability
Balance as of June 30, 2021	$	402
Restructuring charges	(309)

Non-cash charges	11
Balance as of September 30, 2021	$	104

~~(1) Non-cash charges primarily include the write-off of property, plant and equipment, net in The Print Group segment to streamline certain activities.~~

14. Subsequent Events

On October 1, 2021, Cimpress acquired Depositphotos Inc. for $84,782, subject to a post-closing adjustment based on acquired cash, debt, and working capital as of the closing date. $75,669 of the purchase price was paid at closing and the remainder is payable on October 1, 2022, subject to any necessary adjustments. Cimpress used its available cash balance to fund the transaction. Depositphotos is a marketplace for high-quality, royalty-free images, videos, vectors, illustrations, and music. Its subsidiary, Crello, is an online graphic design platform where anyone can create visuals for social media and websites. These businesses will be managed within our Vista reportable segment.

Item 2.7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Report contains forward-looking statements that involve risks and uncertainties. The statements contained in this Report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not limited to our statements about the anticipated growth and development of our businesses and revenues, ~~the potential effects of the COVID-19 pandemic and~~ our expectations with respect to our business and ~~financial results during and after~~demand for our products post-pandemic, the ~~pandemic,~~anticipated impacts of global supply chain disruptions on our business, our expectations ~~with respect to~~for the brand evolution of Vista, the anticipated effects of our ~~market and market share during and after~~investments in our business including the ~~pandemic,~~hiring of talented personnel, sufficiency of our liquidity position, ~~our future compliance with our debt covenants,~~ legal proceedings, and sufficiency of our tax reserves. Without limiting the foregoing, the words “may,” “should,” “could,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “designed,” “potential,” “continue,” “target,” “seek” and similar expressions are intended to identify forward-looking statements. All forward-looking statements included in this Report are based on information available to us up to, and including the date of this document, and we disclaim any obligation to update any such forward-looking statements. 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 the COVID-19 ~~pandemic;~~pandemic and the timing and pace of economic recovery; our failure to anticipate and react to the effects of the pandemic on our customers, supply chain, markets, team members, and business; our inability to ~~take~~make the ~~actions~~investments that we plan to ~~take~~make or the failure of those ~~actions~~investments to achieve the results we expect; our failure to execute on the transformation of the Vista business; loss or unavailability of key personnel or our inability to recruit talented personnel to drive performance of our businesses; the failure of businesses we acquire or invest in to perform as expected; unanticipated changes in our markets, customers, or businesses; 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 Form 10-K for the fiscal year ended June 30, 2020~~this Report and the other documents that we periodically file with the SEC.

Executive Overview

Cimpress is a strategically focused group of more than a dozen businesses that specialize in mass customization, via which we deliver large volumes of individually small-sized customized orders for a broad spectrum of print, signage, photo merchandise, invitations and announcements, writing instruments, packaging, apparel and other categories. We invest in and build customer-focused, entrepreneurial mass customization businesses for the long term, which we manage in a decentralized, autonomous manner. We drive competitive advantage across Cimpress through a select few shared strategic capabilities that have the greatest potential to create Cimpress-wide value. We limit all other central activities to only those which absolutely must be performed centrally.

As of ~~December 31, 2020,~~September 30, 2021, we have numerous operating segments under our management reporting structure that are reported in the following five reportable segments: ~~Vistaprint,~~Vista, PrintBrothers, The Print Group, National Pen, and All Other Businesses. Refer to Note 1211 in our accompanying consolidated financial statements for additional information relating to our reportable segments and our segment financial measures.

Our Vistaprint business and reportable segment has introduced a new parent brand "Vista", which reflects our ongoing transformation into the expert design and marketing partner for small businesses around the world. This new parent brand encompasses VistaPrint, 99designs by Vista and VistaCreate. This move should help open customers' minds to allow us to serve a broader set of their needs across a wide range of products and solutions that includes design, social media and web presence as well as print. No changes were made to our internal organizational and reporting structure as a result of this rebranding, but we will refer to this reportable segment as "Vista" from here forward and throughout this document.

COVID-19

The pandemic ~~and related restrictions continue~~continues to ~~have a negative~~drive some volatility, but its overall impact on ~~our businesses, customers and the markets that we serve. Our year-over-year decline in reported revenue improved in the second quarter of fiscal 2021~~Cimpress has lessened as compared to the first quarter of fiscal ~~2021 due to favorable currency movements~~year 2021. Customer demand trends are nearing pre-pandemic levels and ~~acquisition timing;~~gross profit, including the relatively small impact of acquisitions, has increased above the pre-pandemic first quarter of fiscal year 2020. Before considering increased growth investment, particularly in Vista, the combination of recovering gross profit and ~~otherwise it was flat~~cost savings from actions taken during the pandemic drove increased adjusted EBITDA compared to ~~last quarter, despite sequentially intensified restrictions~~the pre-pandemic period.

Supply chain delays are a developing facet of pandemic impacts which has created both challenges and opportunities for Cimpress businesses. Each of our reportable segments has seen material cost increases of product substrates like paper, production materials like aluminum plates, freight and shipping charges and a more competitive labor market. Our scale-based shared strategic capabilities and supplier relationships provide competitive advantage for our businesses to weather these challenges. Through data capabilities, our businesses are regularly testing new pricing approaches, and in ~~various jurisdictions in which we sell our products. Even with~~every business there has been some form of pricing increases that are mostly offsetting the ~~impacts of the pandemic, we~~increased costs.

We continue to hire talent and make investments in technology, data, new product introduction, customer experience improvements, and branding that are designed to build on our competitive advantages and ~~enable~~drive sustainable growth in our businesses ~~to grow~~ as we come out of the pandemic. We don't know how long that will take, and while the promise of COVID-19 vaccinations gives us optimism, recently we see increasingly severe restrictions in many of our major markets that are impacting small business activity and our revenue. We continue to maintain flexibility in our cost structure, while at the same time increasing investment in areas we believe will generate high return on investment beyond the pandemic. We believe our financial results have been stronger through the pandemic than traditional offline competitors as a result of our diverse product portfolio and economically advantaged business model, which gives us confidence in our ability to grow as we come out of the pandemic.

investment.

Financial Summary

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 cash interest ~~expense related to borrowing;~~expense; however, in evaluating the financial condition and operating performance of our business, management considers a number of metrics including revenue growth, organic constant-currency revenue growth, operating income, adjusted EBITDA, cash flow from operations and adjusted free cash flow. A summary of these key financial metrics for the three ~~and six~~ months ended ~~December 31, 2020~~September 30, 2021 as compared to the three ~~and six~~ months ended ~~December 31, 2019~~September 30, 2020 follows:

~~Second~~First Quarter Fiscal ~~2021~~Year 2022

•Revenue ~~decreased~~increased by 4%12% to ~~$786.1~~$657.6 million.

•~~Revenue decreased~~Constant-currency revenue (a non-GAAP financial measure) increased by 11% and by 9% when excluding acquisitions completed in the ~~impact of currency fluctuations and acquisitions ("organic constant-currency revenue growth," a non-GAAP financial measure).~~last four quarters.

•Operating ~~income~~income decreased by ~~$27.4~~ $19.0 million to ~~$94.2~~$16.9 million.

•Adjusted EBITDA (a non-GAAP financial measure) decreased by ~~$42.1~~$20.9 million to ~~$143.4 million.~~

~~Year to Date Fiscal 2021~~

•~~Revenue decreased by 6% to $1,372.6~~$67.6 million.

•~~Organic constant-currency revenue decreased by 10%.~~

•~~Operating~~Diluted net income ~~decreased by $16.8 million~~(loss) per share attributable to ~~$130.2 million.~~

•~~Adjusted EBITDA decreased by $33.1 million~~Cimpress plc increased to ~~$231.9 million.~~income per share in the first quarter of fiscal 2022 of $0.09 from a loss per share of $0.39 in the comparative period.

•Cash provided by operating activities decreased by ~~$8.9~~$69.1 million to ~~$256.2~~$36.6 million.

•Adjusted free cash flow (a non-GAAP financial measure) decreased by ~~$0.7~~$70.2 million to ~~$212.9~~$12.3 million.

For the ~~second~~first quarter of fiscal year ~~2021, our~~2022, the increase in reported revenue ~~declined year-over-year~~is primarily due to the recovery of demand, as the ~~COVID-19 pandemic continues to negatively~~ impact our results. These results vary by segment because each business has different product mix and customers with unique challenges. Revenue from event-driven and some small business products continued to decline, partially offset by revenue from new products introduced in reaction toof the pandemic ~~such~~on our businesses has lessened, as ~~face masks (about 5%~~well as the benefit from the addition of ~~total~~99designs revenue, which was acquired on October 1, 2020, and is included in our Vista business. We continue to experience strong demand for newer fast-growing product categories, while the ~~quarter)~~impacts of the pandemic continue to have a negative effect for certain marketing material products. Demand recovery in our Upload and ~~consumer products~~Print businesses lagged behind our other businesses in ~~Vistaprint and BuildASign that in total grew 6% year-over-year, excluding invitations and announcements which is an event-driven category.~~prior quarters but reported strong revenue growth this quarter. Currency exchange fluctuations had a positive effect during the current quarter.

For the ~~second quarter of fiscal~~three months ended September 30, 2021, operating income decreased by ~~$27.4~~$19.0 million, primarily due to increased investments and discretionary costs as we compare against a period that had strict cost control measures in place when the ~~gross~~pandemic had a more severe impact on our businesses, as well as increased advertising, primarily in our Vista business. These increased costs include higher compensation costs as we have hired additional team members to support key initiatives, mainly in Vista and our central technology team, while the timing of our annual merit cycle contributed to increased compensation costs. The increase in advertising spend includes a return of performance-based advertising to more normalized levels, as well as a smaller increase in upper-funnel advertising spend in Vista. These cost increases coupled with a reduction in government wage incentives have more than offset the profit ~~decline~~increase driven by the decrease in revenue described above. Additionally, we incurred $4.5 million of expense for pandemic-related products, most notably for disposable masks in National Pen, for which pricing and demand have dropped. The negative impact of the pandemic on demand was partially offset by variable cost controls and fixed cost savings, but the gross margin profile of our revenue mix was unfavorable compared to last year particularly in Vistaprint, and advertising and operating expenses increased with increased investments in talent and strategic projects. Operating income benefited from $4.0 million of COVID-19-related government incentives, primarily to offset wages for manufacturing and customer service team members in countries where demand decreased but roles were maintained.higher revenue.

Adjusted EBITDA decreased ~~year-over-year,~~year over year, primarily ~~due to~~for the ~~gross profit decrease described above.~~same reasons operating income decreased. Adjusted EBITDA excludes restructuring charges and share-based compensation expense, and includes the realized gains or losses on our currency derivatives intended to hedge adjusted EBITDA. The net year-over-year impact of currency on consolidated adjusted EBITDA was ~~negative~~unfavorable by approximately $4.0 million.

Diluted net income (loss) per share attributable to Cimpress plc increased to income per share of $0.09 during the three months ended September 30, 2021 from a loss per share of $0.39 during the three months ended September 30, 2020. The increase is primarily due to currency exchange rate volatility that resulted in positive year-over-year unrealized currency impacts, as well as decreased interest expense due to our debt refinancing during the fourth quarter of fiscal 2021.

Consolidated Results of Operations

Consolidated Revenue

Our businesses generate revenue primarily from the sale and shipment of customized manufactured products. ToWe also generate revenue, to a much lesser extent (and primarily in our ~~Vistaprint~~Vista business) ~~we provide~~, from digital services, graphic design services, website design and hosting, and email marketing services, as well as ~~generate~~ a small percentage of revenue from order referral fees and other third-party offerings. For additional discussion relating to segment revenue results, refer to the "Reportable Segment Results" section included below.

Total revenue and revenue growth by reportable segment for the three ~~and six~~ months ended ~~December 31,~~September 30, 2021 and 2020 ~~and 2019~~ are shown in the following table:

In thousands Three Months Ended December 31, Currency
Impact: Constant-
Currency Impact of Acquisitions/Divestitures: Constant- Currency Revenue Growth
2020 2019 %
Change (Favorable)/Unfavorable Revenue Growth (1) (Favorable)/Unfavorable Excluding Acquisitions/Divestitures (2)
Vistaprint (3) $ 436,317 $ 433,305 1% (3)% (2)% (4)% (6)%
PrintBrothers 121,806 126,617 (4)% (7)% (11)% —% (11)%
The Print Group 76,204 87,699 (13)% (6)% (19)% —% (19)%
National Pen 114,692 127,985 (10)% (3)% (13)% —% (13)%
All Other Businesses 55,365 49,774 11% 3% 14% —% 14%
Inter-segment eliminations (18,239) (5,047)
Total revenue $ 786,145 $ 820,333 (4)% (3)% (7)% (2)% (9)%


In thousands	In thousands	Six Months Ended December 31,					Currency Impact:	Constant- Currency	Impact of Acquisitions/Divestitures:	Constant- Currency Revenue Growth	In thousands	Three Months Ended September 30,					Currency Impact:	Constant- Currency	Impact of Acquisitions/Divestitures:	Constant- Currency Revenue Growth
		2020		2019		% Change	(Favorable)/Unfavorable	Revenue Growth (1)	(Favorable)/Unfavorable	Excluding Acquisitions/Divestitures (2)		2021		2020		% Change	(Favorable)/Unfavorable	Revenue Growth (1)	(Favorable)/Unfavorable	Excluding Acquisitions/Divestitures (2)
Vistaprint (3)		$	765,608	$	776,476	(1)%	(2)%	(3)%	(2)%	(5)%
Vista											Vista	$	349,480	$	329,291	6%	(1)%	5%	(3)%	2%
PrintBrothers	PrintBrothers	221,918		235,907		(6)%	(6)%	(12)%	(1)%	(13)%	PrintBrothers	125,357		100,112		25%	(1)%	24%	—%	24%
The Print Group	The Print Group	142,641		159,957		(11)%	(5)%	(16)%	—%	(16)%	The Print Group	72,820		66,437		10%	(2)%	8%	—%	8%
National Pen	National Pen	182,341		198,148		(8)%	(2)%	(10)%	—%	(10)%	National Pen	69,264		67,649		2%	—%	2%	—%	2%
All Other Businesses	All Other Businesses	98,843		92,050		7%	3%	10%	—%	10%	All Other Businesses	47,871		43,478		10%	—%	10%	(5)%	5%
Inter-segment eliminations	Inter-segment eliminations	(38,706)		(8,246)							Inter-segment eliminations	(7,193)		(20,467)
Total revenue	Total revenue	$	1,372,645	$	1,454,292	(6)%	(2)%	(8)%	(2)%	(10)%	Total revenue	$	657,599	$	586,500	12%	(1)%	11%	(2)%	9%

_________________

(1) Constant-currency revenue growth, a non-GAAP financial measure, represents the change in total revenue between current and prior year periods at constant-currency exchange rates by translating all non-U.S. dollar denominated revenue generated in the current period using the prior year period’s average exchange rate for each currency to the U.S. dollar. Our reportable segments-related growth is inclusive of inter-segment revenues, which are eliminated in our consolidated results.

(2) Constant-currency revenue growth excluding acquisitions/divestitures, a non-GAAP financial measure, excludes revenue results for businesses in the period in which there is no comparable year-over-year revenue. Our reportable segments-related growth is inclusive of inter-segment revenues, which are eliminated in our consolidated results.

~~(3) The Vistaprint segment includes revenue from our 99designs business since its acquisition date of October 1, 2020.~~

We have provided these non-GAAP financial measures because we believe they provide meaningful information regarding our results on a consistent and comparable basis for the periods presented. Management uses these non-GAAP financial measures, in addition to GAAP financial measures, to evaluate our operating results. These non-GAAP financial measures should be considered supplemental to and not a substitute for our reported financial results prepared in accordance with GAAP.

Consolidated Cost of Revenue

Cost of revenue includes materials used by our businesses to manufacture their products, payroll and related expenses for production and design services personnel, depreciation of assets used in the production process and in support of digital marketing service offerings, shipping, handling and processing costs, third-party production and design costs, costs of free products and other related costs of products our businesses sell.


In thousands	In thousands	Three Months Ended December 31,						Six Months Ended December 31,						In thousands		Three Months Ended September 30,
		2020			2019			2020			2019						2021			2020
Cost of revenue	Cost of revenue	$	385,979		$	394,018		$	684,823		$	719,683			Cost of revenue		$	338,989		$	298,844
% of revenue	% of revenue	49.1		%	48.0		%	49.9		%	49.5		%		% of revenue		51.5		%	51.0		%

For the three ~~and six~~ months ended ~~December 31, 2020,~~September 30, 2021, consolidated cost of revenue ~~decreased~~increased by ~~$8.0~~$40.1 million, ~~and $34.9 million, respectively,~~primarily due to ~~reduced~~the addition of cost of revenue from our 99designs business that is included from the acquisition date of October 1, 2020. We also realized increases in demand-dependent cost of goods sold including third-party fulfillment, material, and shipping costs ~~which decreased across several of our segments that continued~~as revenue continues to berecover while the prior comparative period was more negatively impacted by the ~~COVID-19~~ pandemic. ~~For~~During the ~~three~~current quarter, we experienced impacts from global supply chain disruptions that resulted in cost increases of product substrates like paper, production materials like aluminum plates, freight and ~~six months ended December 31, 2020, we realized approximately $2.5 million~~shipping charges and ~~$5.6 million, respectively,~~a more competitive labor market. The overall impact of ~~wage offset benefits from government incentives in locations where demand decreased materially but roles~~increased costs, net of pricing and manufacturing efficiency actions, were ~~maintained. These decreases were partially offset by $4.5 million and $5.5 million of expense~~not material to gross profit during the ~~three~~first quarter of fiscal 2022. We expect these impacts from global supply chain disruptions to continue to cause inflationary pressure, cost volatility, and ~~six months ended December 31, 2020, respectively, related to losses associated with~~pockets of product availability challenges for the ~~decline in market demand~~remainder of the fiscal year and ~~pricing for disposable masks.~~possibly beyond that.

Consolidated Operating Expenses

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


In thousands	In thousands	Three Months Ended December 31,							Six Months Ended December 31,						In thousands		Three Months Ended September 30,
		2020			2019			2020 vs. 2019	2020			2019			2020 vs. 2019			2021			2020
Technology and development expense	Technology and development expense	$	65,036		$	64,427		1%	$	123,525		$	127,594		(3)%	Technology and development expense		$	67,277		$	58,489
% of revenue	% of revenue	8.3		%	7.9		%		9.0		%	8.8		%		% of revenue		10.2		%	10.0		%
Marketing and selling expense	Marketing and selling expense	$	182,322		$	173,336		5%	$	320,472		$	334,253		(4)%	Marketing and selling expense		$	174,697		$	138,150
% of revenue	% of revenue	23.2		%	21.1		%		23.3		%	23.0		%		% of revenue		26.6		%	23.6		%
General and administrative expense	General and administrative expense	$	42,979		$	51,910		(17)%	$	84,791		$	95,533		(11)%	General and administrative expense		$	46,548		$	41,812
% of revenue	% of revenue	5.5		%	6.3		%		6.2		%	6.6		%		% of revenue		7.1		%	7.1		%
Amortization of acquired intangible assets	Amortization of acquired intangible assets	$	13,453		$	13,150		2%	$	26,758		$	26,168		2%	Amortization of acquired intangible assets		$	13,458		$	13,305
% of revenue	% of revenue	1.7		%	1.6		%		1.9		%	1.8		%		% of revenue		2.0		%	2.3		%
Restructuring expense(1)	Restructuring expense(1)	$	2,182		$	1,897		15%	$	2,096		$	4,087		(49)%	Restructuring expense(1)		$	(309)		$	(86)
% of revenue	% of revenue	0.3		%	0.2		%		0.2		%	0.3		%		% of revenue		0.0		%	0.0		%

_____________________

(1) Refer to Note 13 in our accompanying consolidated financial statements for additional details relating to restructuring expense.

Technology and development expense

Technology and development expense consists primarily of payroll and related expenses for employees engaged in software and manufacturing engineering, information technology operations and content development, as well as amortization of capitalized software and website development costs, including hosting of our websites, asset depreciation, patent amortization, and other technology infrastructure-related costs. Depreciation expense for information technology equipment that directly supports the delivery of our digital marketing services products is included in cost of revenue.

Technology and development expenses increased by ~~$0.6~~$8.8 million for the three months ended ~~December 31, 2020 and decreased by $4.1 million for the six months ended December 31, 2020,~~September 30, 2021, as compared to the prior comparative ~~periods. The~~period. This increase ~~for the second quarter of fiscal 2021 was~~is primarily driven by higher compensation costs due to ~~fluctuations~~increased investment from hiring and the timing of our annual merit cycle, mainly in ~~currency exchange rates. Both periods benefited from decreases in costs from our fiscal 2020 reorganization of~~the Vista business and our central technology ~~and Vistaprint teams as well as continued reductions~~group. We also realized other cost increases in discretionary spend ~~including travel and training expenses.~~

as tighter cost control measures were in place during the prior comparative period when the effects of the pandemic were more severe.

Marketing and selling expense

Marketing and selling expense consists primarily of advertising and promotional costs; payroll and related expenses for our employees engaged in marketing, sales, customer support and public relations activities; direct-mail advertising costs; and third-party payment processing fees. Our ~~Vistaprint,~~Vista, National Pen and BuildASign businesses have higher marketing and selling costs as a percentage of revenue as compared to our PrintBrothers and The Print Group ~~businesses.~~businesses due to differences in the customers that they serve.

~~Our~~For the three months ended September 30, 2021, marketing and selling expenses ~~during the three months ended December 31, 2020~~ increased by ~~$9.0~~$36.5 million, as compared to the prior comparative period, driven primarily by increased spend in our Vistaprint business due to further expanded return on advertising spend targets, as well as increased brand sponsorships and upper-funnel advertising investment along with associated agency fees. These increases were partially offset by reductions in advertising across several of our other businesses as they continue to control advertising spend levels in line with demand.

~~For the six months ended December 31, 2020, marketing and selling expenses decreased by $13.8 million, as compared to the prior year.~~fiscal quarter. The ~~decrease~~increase from the prior comparative period is primarily due to the ~~year-over-year reduction~~increase of advertising and marketing spend in our Vista business of $27.9 million. The increase was driven primarily by self-imposed restrictions on advertising spend during the prior comparative period, whereas the current quarter reflects more normalized spend levels with increased payback thresholds, as well as an increase in upper-funnel brand spend. In addition, many of our other businesses have increased advertising spend in ~~our Vistaprint business, which is partially offset by progressive increases in upper-funnel advertising investments. We also recognized a decrease in marketing costs in~~line with demand, including our National Pen business ~~of $7.9 million, primarily due to pandemic-related initiatives to lower costs,~~ which ~~included reductions to~~has increased direct mail ~~prospecting activities and cost savings from initiatives intended to reduce costs in service centers.~~volumes ahead of their seasonally significant second quarter.

General and administrative expense

General and administrative expense consists primarily of transaction costs, including third-party professional fees, insurance and payroll and related expenses of employees involved in executive management, finance, legal, strategy, human resources and procurement.

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

~~Amortization of acquired intangible assets~~

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

~~Amortization of acquired intangible assets increased by $0.3 million and~~$0.6 million for the three and six months ended December 31, 2020, respectively as compared to the three and six months ended December 31, 2019. The increase is driven by the acquisition of 99designs, as discussed in Note 7 in our accompanying consolidated financial statements, partially offset by the reduction of amortization expense in our BuildASign business as certain intangible assets became fully amortized during the current quarter.

~~Restructuring expense~~

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

During the three and six months ended December 31, 2020, we recognized restructuring expense of $2.2 million and $2.1 million, respectively, due to actions taken in The Print Group reportable segment which are intended to streamline certain activities within the segment. We recognized restructuring expense of $1.9 million and $4.1 million, respectively in the three and six months ended December 31, 2019 due to prior year actions taken in our Vistaprint business.

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For the three months ended September 30, 2021, general and administrative expenses increased by $4.7 million, as compared to the prior-year period, primarily due to the lack of temporary cost-control measures from the year-ago period that drove a year-over-year increase in corporate costs, as well as increases to expense associated with our long-term incentive program.

Other Consolidated Results

Other income (expense) ~~income,~~, net

Other income (expense) ~~income,~~, net generally consists of gains and losses from currency exchange rate fluctuations on transactions or balances denominated in currencies other than the functional currency of our subsidiaries, as well as the realized and unrealized gains and losses on some of our derivative instruments. In evaluating our currency hedging programs and ability to qualify for hedge accounting in light of our legal entity cash flows, we considered the benefits of hedge accounting relative to the additional economic cost of trade execution and administrative burden. Based on this analysis, we execute certain currency derivative contracts that do not qualify for hedge accounting.

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

In thousands
Three Months Ended December 31, Six Months Ended December 31,
2020 2019 2020 2019
(Losses) gains on derivatives not designated as hedging instruments $ (19,020) $ (11,666) $ (32,515) $ 7,691
Currency-related gains (losses), net 1,809 2,645 5,884 (767)
Other gains (losses) 13 (19) 679 (290)
Total other (expense) income, net $ (17,198) $ (9,040) $ (25,952) $ 6,634


In thousands	Three Months Ended September 30,
		2021		2020
Gains (losses) on derivatives not designated as hedging instruments		$	13,327	$	(13,495)
Currency-related gains, net		9,350		4,075
Other (losses) gains		(480)		666
Total other income (expense), net		$	22,197	$	(8,754)

The ~~decrease~~increase in other income (expense) ~~income,~~, net was primarily due to the currency exchange rate volatility impacting our derivatives that are not designated as hedging instruments, of which our Euro and British Pound contracts are the most significant exposures that we economically hedge. We also recognize the impact from de-designated interest swap contracts that are no longer highly effective, which resulted in unrealized losses during the current period. We expect volatility to continue in future periods, as we do not apply hedge accounting for most of our derivative currency contracts.

We ~~also~~ experienced currency-related gains due to currency exchange rate volatility on our non-functional currency intercompany relationships, which we may alter from time to time. The impact of certain cross-currency swap contracts designated as cash flow hedges is included in our currency-related gains, ~~(losses),~~ net, offsetting the impact of certain non-functional currency intercompany relationships.

Interest expense, net

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

Interest expense, net ~~increased~~decreased by ~~$14.4 million and $29.9~~$4.8 million during the three ~~and six~~ months ended ~~December 31, 2020,~~September 30, 2021, as compared to the prior ~~comparable periods.~~year quarter. This is primarily due to our Term Loan B refinancing during the ~~additional $200.0 million offering~~fourth quarter of fiscal 2021 that resulted in a reduction to our ~~7% senior unsecured notes in February 2020 and issuance of~~weighted-average interest rate on our ~~$300.0 million 12% second lien notes in May 2020.~~outstanding borrowings.

Income tax expense


In thousands	In thousands	Three Months Ended December 31,						Six Months Ended December 31,						In thousands		Three Months Ended September 30,
		2020			2019			2020			2019						2021			2020
Income tax expense (benefit)		$	12,954		$	(93,795)		$	19,748		$	(87,680)
Income tax expense															Income tax expense		$	9,381		$	6,794
Effective tax rate	Effective tax rate	27.6		%	(96.8)		%	45.3		%	(71.4)		%		Effective tax rate		69.8		%	(206.9)		%

Income tax expense for the three ~~and six~~ months ended ~~December 31, 2020~~September 30, 2021 increased as compared to the prior year primarily attributable to the discrete tax benefit of $114.1 million related to Swiss Tax Reform recorded in the three months ended December 31, 2019. Excluding this benefit, tax expense would have decreased, primarily attributable to decreased pre-tax income for the three and six months ended December 31, 2020 as compared to the same prior year periods. Excluding the effect of discrete tax adjustments, our estimated annual effective tax rate is higher for fiscal 2021 as compared to fiscal 2020 primarilyperiod due to increased ~~non-deductible interest expense. Our effective tax rate continues to be negatively impacted by losses in certain jurisdictions where we are unable to recognize~~pre-tax profits and a ~~tax benefit in the current period.~~less favorable mix of earnings year over year.

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We believe that our income tax reserves are adequately maintained by taking into consideration both the technical merits of our tax return positions and ongoing developments in our income tax audits. However, the final determination of our tax return positions, if audited, is uncertain and therefore there is a possibility that final resolution of these matters could have a material impact on our results of operations or cash flows. Refer to Note 109 in our accompanying consolidated financial statements for additional discussion.

Reportable Segment Results

Our segment financial performance is measured based on segment EBITDA, which is defined as operating income plus depreciation and amortization; plus proceeds from insurance; plus share-based compensation expense related to investment consideration; plus earn-out related charges; plus certain impairments; plus restructuring related charges; less gain on purchase or sale of subsidiaries.

~~Vistaprint~~Vista


In thousands	In thousands	Three Months Ended December 31,							Six Months Ended December 31,							In thousands		Three Months Ended September 30,
		2020			2019			2020 vs. 2019	2020			2019			2020 vs. 2019				2021			2020			2021 vs. 2020
Reported Revenue	Reported Revenue	$	436,317		$	433,305		1%	$	765,608		$	776,476		(1)%		Reported Revenue		$	349,480		$	329,291		6%
Segment EBITDA	Segment EBITDA	112,331			138,858			(19)%	202,488			226,161			(10)%		Segment EBITDA		68,039			90,157			(25)%
% of revenue	% of revenue	26		%	32		%		26		%	29		%			% of revenue		19		%	27		%

Segment Revenue

~~Vistaprint's~~Vista's reported revenue ~~decline~~growth for the three ~~and six~~ months ended ~~December 31, 2020~~September 30, 2021 was positively affected by a currency ~~impacts~~impact of ~~3% and 2%, respectively.~~1%. When excluding the benefit from the recent acquisition of 99designs, ~~Vistaprint's~~Vista's organic constant-currency revenue ~~decline~~growth was ~~6% for~~2%. Vista's growth was driven by product categories such as packaging, labels, signage and promotional products, partially offset by other small business product categories that continue to experience lingering pandemic impacts. In addition, revenue related to face masks has declined significantly as the effects of the pandemic have declined, contributing only 1% of Vista's revenue in the current quarter as compared to 11% in the prior comparative period. Results in North America and Australia continue to perform closer to pre-pandemic levels than in Europe.

Segment Profitability

For the three months ended ~~December 31, 2020 and 5% for the six months ended December 31, 2020. The revenue decline was primarily~~September 30, 2021, segment EBITDA declined $22.1 million largely driven by increased organic investments that support Vista's multi-year transformation journey to become the ~~impact~~expert design and marketing partner to the world's small businesses. Vista's advertising spend also increased, driven in part by expanded performance advertising spend payback thresholds, which were more constrained during the prior-year period when the effects of the pandemic ~~on customer demand,~~were more severe. Upper-funnel advertising increased slightly year-over-year to 1% of Vista revenue. Operating expenses also grew year over year due to the addition of 99designs, which is not included in the comparative period due to the timing of the acquisition. These increases to spend were partially offset by the sale of pandemic-related products, such as face masks. During the second quarter of fiscal 2021, heightened pandemic-related restrictions in certain countries negatively impacted revenue for some business products and event-related consumer products like invitations and announcements, while Vistaprint delivered growth ~~in photo products and other holiday products.~~

~~Segment Profitability~~

~~For the three and six months ended December 31, 2020, the decrease to Vistaprint's segment EBITDA was primarily due to a decline~~ in gross profit driven by the revenue decrease described above, as well as a revenue mix shift to lower margin products during the second quarter of fiscal 2021. This was combined with increased investment in advertising which included expanded return on advertising spend targets and progressive increases in upper-funnel advertising investments (including related agency fees) and brand-based sponsorships. Additionally, an increase in operating expenses was driven by continued hiring and increased spend related to customer experience, partially offset by technology savings from our fiscal 2020 restructuring and reduced spend for consulting projects compared to the prior year periods. For the three and six months ended December 31, 2020, Vistaprint received $2.4 million and $4.9 million,respectively in government incentives to offset wages in locations where demand decreased materially but roles were maintained. Vistaprint's segment EBITDA was positively impacted by currency movements for both periods presented.

year-over-year.

PrintBrothers


In thousands	In thousands	Three Months Ended December 31,							Six Months Ended December 31,							In thousands		Three Months Ended September 30,
		2020			2019			2020 vs. 2019	2020			2019			2020 vs. 2019				2021			2020			2021 vs. 2020
Reported Revenue	Reported Revenue	$	121,806		$	126,617		(4)%	$	221,918		$	235,907		(6)%		Reported Revenue		$	125,357		$	100,112		25%
Segment EBITDA	Segment EBITDA	16,457			16,459			—%	26,172			27,236			(4)%		Segment EBITDA		16,283			9,715			68%
% of revenue	% of revenue	14		%	13		%		12		%	12		%			% of revenue		13		%	10		%

Segment Revenue

PrintBrothers' reported revenue ~~decline~~growth for the three ~~and six~~ months ended ~~December 31, 2020~~September 30, 2021 was positively affected by a currency ~~impacts~~impact of ~~7% and 6%~~1%, ~~respectively,~~ resulting in a constant-currency revenue ~~decline, excluding~~growth of 24%. This increase is driven by signs of overall economic recovery for our businesses in many of our European geographies and leveraging new products introduced in recent years. We also benefited from the ~~impact~~timing of ~~acquisitions,~~elections in Germany, which drove sales of ~~11%~~signage products, flyers and 13%, respectively. The revenue decline was due to impacts from COVID-19, as the pandemic continued to have a negative effect on demand in the quarter, though less so than our upload and print businesses serving southern European and UK markets.brochures.

Segment Profitability

The increase in PrintBrothers' segment EBITDA ~~decreased slightly~~ during the three ~~and six~~ months ended ~~December 31, 2020~~September 30, 2021, as compared to the prior ~~comparative periods,~~period, was driven by increases in gross profit due ~~primarily~~ to the constant-currency revenue ~~declines~~growth described ~~above. A portion~~above, continued introductions of ~~the decline in segment EBITDA driven by the revenue decline was partially offset by discretionary cost controls~~new products and government incentive program benefits of $0.9 million and $1.8 million for the three and six months ended December 2020, respectively. PrintBrothers' segment EBITDA was positively impacted by currency movements for both periods presented.improved efficiencies.

The Print Group


In thousands	In thousands	Three Months Ended December 31,							Six Months Ended December 31,							In thousands		Three Months Ended September 30,
		2020			2019			2020 vs. 2019	2020			2019			2020 vs. 2019				2021			2020			2021 vs. 2020
Reported Revenue	Reported Revenue	$	76,204		$	87,699		(13)%	$	142,641		$	159,957		(11)%		Reported Revenue		$	72,820		$	66,437		10%
Segment EBITDA	Segment EBITDA	12,569			18,105			(31)%	24,752			31,739			(22)%		Segment EBITDA		14,389			12,183			18%
% of revenue	% of revenue	16		%	21		%		17		%	20		%			% of revenue		20		%	18		%

Segment Revenue

The Print Group's reported revenue ~~decline~~ for the three ~~and six~~ months ended ~~December 31, 2020~~September 30, 2021 was positively affected by a currency ~~impacts~~impact of ~~6% and 5%~~2%, ~~respectively,~~ resulting in ~~a decrease~~an increase in revenue on a constant-currency basis of ~~19% and~~ ~~16%, respectively. The revenue decline was~~8% due to ~~impacts~~signs of overall economic recovery in many of the European countries in which we compete and leveraging new products introduced in recent years. During the quarter we benefited from the ~~COVID-19 pandemic~~timing of elections in Italy, which drove demand for signage products, flyers and brochures.

Segment Profitability

The increase in The Print Group's segment EBITDA during the three months ended September 30, 2021, as ~~these trends worsened when~~ compared to the ~~first quarter of fiscal~~prior year, ~~2021, due~~was primarily driven by the revenue growth described above. In addition, The Print Group continues to ~~new lockdowns in the geographies that these businesses serve. These businesses benefited~~benefit from the introduction of new products ~~relevant to~~with higher margins, as well as improved efficiencies as the ~~pandemic~~group better leverages its combined capabilities.

National Pen


In thousands	Three Months Ended September 30,
		2021			2020			2021 vs. 2020
Reported Revenue		$	69,264		$	67,649		2%
Segment EBITDA		(8,048)			(10,671)			(25)%
% of revenue		(12)		%	(16)		%

Segment Revenue

National Pen's reported and ~~leveraged by other Cimpress businesses in Europe, which increased inter-segment sales that are included in segment results but eliminated at the consolidated level.~~

~~Segment Profitability~~

~~The Print Group's segment EBITDA decreasedduring the three and six months ended December 31, 2020,~~constant-currency revenue growth was 2% as compared to the prior comparative ~~periods, primarily driven by the revenue decline described above. This was partially~~period. The business has seen improvements in results due to businesses reopening and a return of in-person events in some markets, largely offset by ~~discretionary cost controls, benefits~~a decline in revenue from government incentives totaling $0.7 million and $1.3 million, respectively, and efficiency gains from leveraging our mass customization platform to shift production to lower-cost sources. The Print Group's segment EBITDA was positively impacted by currency movements for both periods presented.

~~National Pen~~

In thousands Three Months Ended December 31, Six Months Ended December 31,
2020 2019 2020 vs. 2019 2020 2019 2020 vs. 2019
Reported Revenue $ 114,692 $ 127,985 (10)% $ 182,341 $ 198,148 (8)%
Segment EBITDA 18,728 28,099 (33)% 8,057 18,249 (56)%
% of revenue 16 % 22 % 4 % 9 %

~~Segment Revenue~~

~~National Pen's reported~~pandemic-related products including masks produced on behalf of other Cimpress businesses. Mask revenue, ~~decrease for~~including the ~~three and six months ended December 31, 2020 was positively affected by currency impacts~~portion produced on behalf of 3% and 2%, respectively, resulting in constant-currency revenue decline of 13% and 10%, respectively. This performance is slightly worse than year-over-year revenue results during the first quarter of fiscal year 2021, but still significantly better than the results during the height of pandemic impact in the fourth quarter of fiscal year 2020. National Pen executed well on its holiday peak in light of the pandemic, but revenue was muted compared to last year. National Pen's sales to larger businesses continue to be negatively impacted due to cancelled trade shows and other large-scale events. Product sales to other Cimpress businesses, ~~continued~~decreased as a percentage of total National Pen revenue from 20% in the prior comparative period to ~~supplement some of~~6% in the ~~lost volume from lower demand.~~current quarter.

Segment Profitability

The ~~decrease~~increase in National Pen's segment EBITDA for the three ~~and six~~ months ended ~~December 31, 2020~~September 30, 2021 was due in part to the revenue ~~decline~~increase described above. The impacts of lower revenue on National Pen's fixed cost base negatively impacted profitability this quarter in comparison to the year ago periods, partially offset by reduced variable cost, advertising and discretionary spend. National Pen was negatively impacted by the sale of disposable masks at a loss,above, as well as ~~the recognition~~improvements in gross profit driven by a normalized mix of ~~an inventory reserves to reduce the carrying value of all remaining disposable masks held~~products and decline in ~~inventory to current market prices of $4.4 million and $5.4 million, respectively, for the three and six months ended December 31, 2020.~~lower-margin pandemic-related products. National Pen's segment EBITDA was ~~positively impacted~~also benefited by ~~currency movements for both periods presented.~~lower operating expense from permanent cost reductions made since the onset of the pandemic.

All Other Businesses

In thousands
Three Months Ended December 31, Six Months Ended December 31,
2020 2019 2020 vs. 2019 2020 2019 2020 vs. 2019
Reported Revenue (1) $ 55,365 $ 49,774 11% $ 98,843 $ 92,050 7%
Segment EBITDA (1) 10,657 3,668 191% 19,266 5,385 258%
% of revenue 19 % 7 % 19 % 6 %

~~___________________~~

~~(1) Our All Other Businesses segment includes the results of our VIDA acquisition from July 2, 2018 through the divestiture date of April 10, 2020.~~


In thousands	Three Months Ended September 30,
		2021			2020			2021 vs. 2020
Reported Revenue		$	47,871		$	43,478		10%
Segment EBITDA		4,891			8,609			(43)%
% of revenue		10		%	20		%

This segment consists of BuildASign, which is a larger and profitable business, and two ~~small, rapidly evolving~~ early-stage businesses ~~through which Cimpress is expanding to new markets. These early-stage businesses~~that we continue to ~~have~~manage at a relatively modest operating ~~losses~~loss as previously described and planned. We expect fluctuations in growth as ~~planned.~~each of their business models evolve in function of customer feedback, testing, and entrepreneurial pivoting.

Segment Revenue

All Other Businesses' constant-currency revenue, excluding the impact of acquisitions, increased by ~~14%~~5% during the three months ended September 30, 2021. This increase was driven by recovery of demand for both our Printi business in Brazil and ~~10%~~signage products offered by BuildASign. Organic constant-currency revenue growth was lower sequentially in this reportable segment as we lapped the increased demand for home decor products in the comparable prior year period.

Segment Profitability

The decrease in segment EBITDA for the three ~~and six~~ months ended ~~December 31, 2020, respectively. This~~September 30, 2021 was primarily driven by continued growth at BuildASign, whose home décor and pandemic-focused signage products continued to generate strong results. In addition, the business benefited from higher volumes of political signage in comparison to the prior year due to ~~the 2020 election season~~a combination of factors including that in the ~~United States. BuildASign's strong stand-alone execution is compounded by~~year-ago period BuildASign had pulled back on advertising and other operating expenses, the ~~business increasingly leveraging our mass customization platform to drive new product introduction~~cost of performance advertising has increased from its pandemic low point last year, and ~~improve customer experience. Revenue also grew year-over-year in our smaller Printi~~inflation on input costs including shipping, materials and ~~YSD businesses.~~

~~Segment Profitability~~

Within the All Other Businesses segment, each business improved its profitability for the three and six months ended December 31, 2020 as compared to the comparable periods, with the overall improvement primarily driven by revenue growth and advertising efficiency in BuildASign. Printi and YSD reduced losses through revenue growth and improved efficiency. Our divestiture of loss-making VIDA in the fourth quarter of fiscal year 2020 also contributed to year-over-year profit improvements in the secondlabor put pressure on profits this quarter.

Central and Corporate Costs

Central and corporate costs ~~decreased~~increased by ~~$7.4 million and $10.1~~$4.3 million during the three ~~and six~~ months ended ~~December 31, 2020, respectively,~~September 30, 2021, as compared to the prior year, ~~periods,~~ due to ~~lower professional fees, share-based compensation expense~~the lack of temporary cost-control measures from the year-ago period which drove a year-over-year increase in corporate costs and ~~discretionary spend, including travel~~investments in our mass customization platform, and ~~training costs.~~an uplift in demand drove higher central operating costs year over year.

Liquidity and Capital Resources

Consolidated Statements of Cash Flows Data


In thousands	Three Months Ended September 30,
	2021		2020
Net cash provided by operating activities	$	36,567	$	105,681
Net cash used in investing activities	(13,181)		(21,084)
Net cash used in financing activities	(10,351)		(91,979)

In thousands
Six Months Ended December 31,
2020 2019
Net cash provided by operating activities $ 256,168 $ 265,097
Net cash used in investing activities (76,677) (53,816)
Net cash used in financing activities (191,754) (207,390)

At December 31, 2020, we had $36.9 million of cash and cash equivalents and $1,315.4 million of debt, excluding debt issuance costs, and debt premiums and discounts. Under the terms of our April 28, 2020 credit facility amendment, we are required to use cash balances in excess of $100.0 million, if any, to repay the revolving loans under our senior secured credit facility.

The cash flows during the ~~six~~three months ended ~~December 31, 2020~~September 30, 2021 related primarily to the following items:

Cash inflows:

•Net income of ~~$23.8~~$4.1 million

•Adjustments for non-cash items of ~~$136.3~~$28.4 million primarily related to positive adjustments for depreciation and amortization of ~~$85.9~~$44.4 million and share-based compensation costs of ~~$13.5~~$11.0 million, which were partially offset by negative adjustments for unrealized currency-related gains of $25.4 million and ~~unrealized currency-related losses~~deferred taxes of ~~$29.4~~$1.1 million

•~~The changes in operating~~Proceeds from the maturity of held-to-maturity securities of $10.0 million

•Proceeds from the sale of assets ~~and liabilities~~of $1.7 million

•Total net working capital impacts of $4.1 million were a source of ~~cash during the period, driven by increases in accounts~~cash. Accounts payable and accrued ~~expenses, largely driven~~expense inflows were partially offset by ~~our seasonally strong second quarter~~inventory, accounts receivable and other asset outflows

Cash outflows:

•~~Payments of debt of $171.5 million, net of borrowings and inclusive of debt issuance costs~~

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

•Internal and external costs of ~~$26.4~~$15.6 million for software and website development that we have capitalized

•Capital expenditures of ~~$16.8~~$8.6 million of which the majority related to the purchase of manufacturing and automation equipment for our production facilities ~~and computer and office equipment~~

•Payments for debt of $4.1 million

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

•~~Purchase of noncontrolling interest of $5.1 million and distribution to noncontrolling interest holders of $4.6~~$2.6 million

•Payments for finance lease arrangements of ~~$3.3~~$2.5 million

•Financing fees of $1.1 million from our fourth quarter fiscal year 2021 credit facility amendment that we have capitalized

Additional Liquidity and Capital Resources Information. At September 30, 2021, we had $193.2 million of cash and cash equivalents, $192.4 million of marketable securities and $1,751.5 million of debt, excluding debt issuance costs and debt premiums and discounts. During the ~~six~~three months ended ~~December 31, 2020,~~September 30, 2021, we financed our operations and strategic investments through internally generated cash flows from operations and debt financing. We expect to finance our future operations through our cash, investments, operating cash flow and borrowings under our debt arrangements.

As of ~~December 31, 2020,~~September 30, 2021, a portion of our cash and cash equivalents were held by our subsidiaries, and undistributed earnings of our subsidiaries that are considered to be indefinitely reinvested were ~~$40.4~~$44.6 million. We do not intend to repatriate these funds as the cash and cash equivalent balances are generally used and available, without legal restrictions, to fund ordinary business operations and investments of the respective subsidiaries. If there is a change in the future, the repatriation of undistributed earnings from certain subsidiaries, in the form of dividends or otherwise, could have tax consequences that could result in material cash outflows.

We have historically allocated a material amount of capital to purchases of our ordinary shares and corporate acquisitions. The April 2020 amendment to our credit facility prohibits us from repurchasing our shares and limits acquisitions for the period in which the financial maintenance covenants associated with our senior secured credit facility are suspended.

Debt. As of ~~December 31, 2020,~~September 30, 2021, we ~~had aggregate loan commitments from~~have borrowings under our amended and restated senior secured credit ~~facility totaling $994.4 million. The~~agreement dated as of May 17, 2021 (the "Restated Credit Agreement") of $1,140.2 million consisting of the Term Loan B, which amortizes over the loan ~~commitments consisted~~period, with a final maturity date of ~~revolving loan borrowings~~May 17, 2028. Our $250.0 million revolver under our Restated Credit Agreement has $244.0 million unused as of ~~$260.0 million and term loans of $144.4 million. We have other financial obligations that constitute additional indebtedness based~~September 30, 2021. There are no drawn amounts on the ~~definitions within the~~revolver, but our outstanding letters of credit ~~facility. As of December 31, 2020, the amount available for borrowing under~~reduce our ~~senior secured credit facility was~~unused balance. Our unused balance can be drawn at any time so long as ~~follows:~~


~~In thousands~~
	~~December 31, 2020~~
~~Maximum aggregate available for borrowing~~	$	~~994,375~~
~~Outstanding borrowings of senior secured credit facility~~	~~(404,375)~~
~~Remaining amount~~	~~590,000~~
~~Limitations to borrowing due to debt covenants and other obligations (1)~~	~~(4,950)~~
~~Amount available for borrowing as of December 31, 2020 (2)~~	$	~~585,050~~

~~_________________~~

~~(1) As of December 31, 2020, our pre-existing financial maintenance covenants are suspended and~~ we are in compliance with our debt covenants.

Senior Unsecured Notes. Our $600.0 million of 7.0% Senior Notes due 2026 bear interest at a rate of 7.0% per annum and mature on June 15, 2026. Interest on the ~~new restrictions~~notes is payable semi-annually on June 15 and December 15 of each year.

Debt Covenants. The Restated Credit Agreement and the indenture that governs our 7.0% Senior Notes due 2026 contain covenants that restrict or limit certain activities and transactions by Cimpress and our subsidiaries. As of September 30, 2021, we were in ~~place,~~compliance with all covenants under our Restated Credit Agreement and the ~~primary maintenance covenant during the suspension period that we must maintain liquidity above $50.0 million.~~indenture governing our 2026 Notes. Refer to Note ~~9 in our accompanying consolidated financial statements for further description of the restrictions in place during the covenant suspension period.~~

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

~~Debt Covenants~~. The April 2020 amendment to our senior secured facility suspended our pre-existing financial maintenance covenants until December 31, 2021, including the total and senior secured leverage covenants and interest coverage ratio covenant. Refer to Note 98 in our accompanying consolidated financial statements for additional information.

Other ~~Debt~~Debt.. Other debt primarily consists of term loans acquired through our various acquisitions or used to fund certain capital investments. As of ~~December 31, 2020,~~September 30, 2021, we had ~~$11.0~~$11.3 million outstanding for other debt payable through ~~March 2025.~~January 2026.

Contractual Obligations

Contractual obligations at ~~December 31, 2020~~September 30, 2021 are as follows:


In thousands	In thousands	Payments Due by Period										In thousands	Payments Due by Period
		Total		Less than 1 year		1-3 years		3-5 years		More than 5 years			Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Operating leases, net of subleases (1) (2)		$	154,721	$	37,085	$	54,324	$	33,877	$	29,435
Operating leases, net of subleases (1)												Operating leases, net of subleases (1)	$	96,401	$	30,074	$	43,593	$	16,852	$	5,882
Purchase commitments	Purchase commitments	226,290		121,172		89,243		15,875		—		Purchase commitments	250,458		138,118		83,639		28,701		—
Senior unsecured notes and interest payments	Senior unsecured notes and interest payments	831,000		42,000		84,000		84,000		621,000		Senior unsecured notes and interest payments	810,000		42,000		84,000		684,000		—
Second lien notes and interest payments		462,000		36,000		72,000		354,000		—
Other debt and interest payments (3)		520,394		51,548		88,050		380,796		—
Senior secured credit facility and interest payments (2)												Senior secured credit facility and interest payments (2)	1,470,201		65,624		124,757		118,654		1,161,166
Other debt												Other debt	11,347		3,414		5,478		2,045		410
Finance leases, net of subleases (1)	Finance leases, net of subleases (1)	20,304		6,729		9,651		3,123		801		Finance leases, net of subleases (1)	56,901		29,694		7,778		5,472		13,957
Other	Other	45,369		943		44,426		—		—		Other	44,852		44,852		—		—		—
Total ~~(4)~~(3)	Total ~~(4)~~(3)	$	2,260,078	$	295,477	$	441,694	$	871,671	$	651,236	Total ~~(4)~~(3)	$	2,740,160	$	353,776	$	349,245	$	855,724	$	1,181,415

___________________

(1) Operating and finance lease payments ~~included~~ above include only amounts which are fixed under lease agreements. Our leases may also incur variable expenses which are not ~~included~~reflected in ~~these payments.~~the contractual obligations above.

(2) On January 6, 2021, we amended our Waltham lease agreement to reduce the amount of space leased. As part of the agreement, we will pay $8.8 million in two equal installments, which includes both an early termination penalty and the rent we would have otherwise paid for the terminated space through June 30, 2021. We have separately entered into a lease agreement for a new office space in Waltham, Massachusetts, which will commence on June 1, 2021. The amended lease terms, combined with the new lease agreement, will result in a reduction to total lease commitments of $47.5 million, exclusive of the termination penalty. Refer to Note 13 in our accompanying consolidated financial statements for additional details.

~~(3) Other debt~~Senior secured credit facility and interest payments include the effects of interest rate swaps, whether they are expected to be payments or receipts of cash. We have excluded the effect of interest rate swaps of $0.6 million within the more than five years category above as that period extends beyond the term of our debt and the interest rate swaps do not yet offset contractual interest payments.

~~(4)~~(3) We may be required to make cash outlays related to our uncertain tax positions. However, due to the uncertainty of the timing of future cash flows associated with our uncertain tax positions, we are unable to make reasonably reliable estimates of the period of cash settlement, if any, with the respective taxing authorities. Accordingly, uncertain tax positions of ~~$8.1~~$9.2 million as of ~~December 31, 2020~~September 30, 2021 have been excluded from the contractual obligations table above. ~~For further information on uncertain tax positions, see~~See Note 9 in our accompanying consolidated financial statements for ~~additional details.~~further information on uncertain tax positions.

Operating Leases. We rent office space under operating leases expiring on various dates through 2034. The terms of certain lease agreements require security deposits in the form of bank guarantees and letters of credit in the amount of ~~$2.1 million.~~$2.0 million in the aggregate.

Purchase Commitments. At ~~December 31, 2020,~~September 30, 2021, we had unrecorded commitments under contract of ~~$226.3~~$250.5 million. Purchase commitments consisted of third-party web services of ~~$97.6~~$100.7 million, ~~production and computer equipment purchases~~software of ~~$24.9~~$53.0 million, inventory and third-party fulfillment purchase commitments of ~~$18.4~~$55.7 million, advertising of ~~$17.8~~$10.1 million, commitments for professional and consulting fees of ~~$8.4~~$8.0 million, production and computer equipment purchases of $10.0 million and other unrecorded purchase commitments of ~~$59.2~~$13.0 million.

Senior Unsecured Notes and Interest Payments. Our ~~senior unsecured notes due~~$600.0 million of 2026 Notes bear interest at a rate of 7.0% per annum and mature on June 15, 2026. Interest on the notes is payable semi-annually on June 15 and December 15 of each year and has been included in the table above.

~~Second Lien Notes and Interest Payments.~~ Our senior secured notes due 2025 bear interest at a rate of 12.0% per annum and mature on May 15, 2025. Interest on the notes is payable semi-annually on May 15 and November 15 of each year and has been included in the table above. At our option, we may elect to pay interest on up to 50.0% of the then outstanding principal amount of the notes as paid-in-kind and applied to the outstanding principal balance of the notes.

~~Other Debt~~Senior Secured Credit Facility and Interest Payments. At ~~December 31, 2020,~~September 30, 2021, the ~~term loans~~Term Loan B of ~~$144.4~~$1,140.2 million outstanding under our ~~credit agreement~~Restated Credit Agreement had repayments due on various dates through ~~November 15, 2024, with the revolving loans outstanding~~May 17, 2028, and we did not have any amounts drawn under our ~~$260.0 million revolving credit facility~~Revolving Credit Facility due on ~~November 15, 2024.~~May 17, 2026. Interest payable included in this table is based on the interest rate as of ~~December 31, 2020,~~September 30, 2021, and assumes all LIBOR-based revolving loan amounts outstanding will not be paid until maturity, but that the term loan amortization payments will be made according to our defined schedule.

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be made according to our defined schedule and all Prime rate based revolving loan amounts will be paid within a year. Interest payable includes the estimated impact of our interest rate swap agreements.

Other Debt.In addition, we have other debt which consists primarily of term loans acquired through our various acquisitions or used to fund certain capital ~~investments, and as~~investments. As of ~~December 31, 2020~~September 30, 2021, we had~~$11.0~~ $11.3 million outstanding for those obligations that have repayments due on various dates through ~~March 2025.~~January 2026.

Finance Leases.We lease certain machinery and plant equipment under finance lease agreements that expire at various dates through ~~2027.~~2034. The aggregate carrying value of the leased equipment under finance leases included in property, plant and equipment, net in our consolidated balance sheet at ~~December 31, 2020,~~September 30, 2021 is ~~$60.5~~$33.7 million, net of accumulated depreciation of ~~$41.6~~$38.6 million. The present value of lease installments not yet due included in other current liabilities and other liabilities in our consolidated balance sheet at ~~December 31, 2020~~September 30, 2021 amounts to ~~$24.9~~$48.7 million.

Other ~~Obligations~~Obligations.. Other obligations include deferred payments related to previous acquisitions of ~~$45.4~~$44.9 million in the ~~aggregate.This~~aggregate. This balance includes the deferred payment related to the 99designs acquisition totaling ~~$43.7~~$44.4 million. ~~Refer to Note 7 in our accompanying consolidated financial statements for additional details.~~

Additional Non-GAAP Financial Measures

Adjusted EBITDA and adjusted free cash flow presented below, and constant-currency revenue growth and constant-currency revenue growth excluding acquisitions/divestitures presented in the consolidated results of operations section above, are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. Adjusted EBITDA is defined as GAAP operating income plus depreciation and amortization plus share-based compensation expense plus proceeds from insurance plus earn-out related charges plus certain impairments plus restructuring related charges plus realized gains or losses on currency derivatives less interest expense related to our Waltham, Massachusetts office lease less gain on purchase or sale of subsidiaries.

Adjusted EBITDA is the primary profitability metric by which we measure our consolidated financial performance and is provided to enhance investors' understanding of our current operating results from the underlying and ongoing business for the same reasons it is used by management. For example, as we have become more acquisitive over recent years we believe excluding the costs related to the purchase of a business (such as amortization of acquired intangible assets, contingent consideration, or impairment of goodwill) provides further insight into the performance of the underlying acquired business in addition to that provided by our GAAP operating income. As another example, as we do not apply hedge accounting for certain derivative contracts, we believe inclusion of realized gains and losses on these contracts that are intended to be matched against operational currency fluctuations provides further insight into our operating performance in addition to that provided by our GAAP operating income. We do not, nor do we suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Adjusted free cash flow is the primary financial metric by which we set quarterly and annual budgets both for individual businesses and Cimpress-wide. Adjusted free cash flow is defined as net cash provided by operating activities less purchases of property, plant and equipment, purchases of intangible assets not related to acquisitions, and capitalization of software and website development costs that are included in net cash used in investing activities, plus the payment of contingent consideration in excess of acquisition-date fair value and gains on proceeds from insurance that are included in net cash provided by operating activities, if any. We use this cash flow metric because we believe that this methodology can provide useful supplemental information to help investors better understand our ability to generate cash flow after considering certain investments required to maintain or grow our business, as well as eliminate the impact of certain cash flow items presented as operating cash flows that we do not believe reflect the cash flow generated by the underlying business.

Our adjusted free cash flow measure has limitations as it may omit certain components of the overall cash flow statement and does not represent the residual cash flow available for discretionary expenditures. For example, adjusted free cash flow does not incorporate our cash payments to reduce the principal portion of our debt or cash payments for business acquisitions. Additionally, the mix of property, plant and equipment purchases that we choose to finance may change over time. We believe it is important to view our adjusted free cash flow measure only as a complement to our entire consolidated statement of cash flows.

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The table below sets forth operating income and adjusted EBITDA for the three ~~and six~~ months ended ~~December 31, 2020~~September 30, 2021 and ~~2019:~~2020:


In thousands	In thousands	Three Months Ended December 31,				Six Months Ended December 31,				In thousands		Three Months Ended September 30,
		2020		2019		2020		2019					2021		2020
GAAP operating income	GAAP operating income	$	94,194	$	121,595	$	130,180	$	146,974		GAAP operating income		$	16,939	$	35,986
Exclude expense (benefit) impact of:	Exclude expense (benefit) impact of:										Exclude expense (benefit) impact of:
Depreciation and amortization	Depreciation and amortization	43,597		42,356		85,887		84,891			Depreciation and amortization		44,432		42,290

Share-based compensation expense (1)		5,243		8,325		13,526		13,075

Certain impairments and other adjustments		(215)		936		568		760
Share-based compensation expense											Share-based compensation expense		11,006		8,283

Certain impairments and other adjustments (1)											Certain impairments and other adjustments (1)		(780)		783
Restructuring-related charges	Restructuring-related charges	2,182		1,897		2,096		4,087			Restructuring-related charges		(309)		(86)

Realized (losses) gains on currency derivatives not included in operating income		(1,578)		10,408		(361)		15,246
Realized (losses) gains on currency derivatives not included in operating income (2)											Realized (losses) gains on currency derivatives not included in operating income (2)		(3,672)		1,217
Adjusted EBITDA	Adjusted EBITDA	$	143,423	$	185,517	$	231,896	$	265,033		Adjusted EBITDA		$	67,616	$	88,473

_________________

(1) ~~The adjustment~~Certain impairments and other adjustments includes gains or losses on disposal of property, plant and equipment, net of cash received, as well as routine impairments of capitalized software.

(2) These realized (losses) gains include only the impacts of currency derivatives for ~~share-based compensation expense excludes the portion of share-based compensation expense included~~which we do not apply hedge accounting. See Note 4 in ~~restructuring related charges, if any, to avoid double counting.~~our accompanying consolidated financial statements for further information.

The table below sets forth net cash provided by operating activities and adjusted free cash flow for the three ~~and six~~ months ended ~~December 31, 2020~~September 30, 2021 and ~~2019:~~2020:

In thousands Six Months Ended December 31,
2020 2019
Net cash provided by operating activities $ 256,168 $ 265,097
Purchases of property, plant and equipment (16,790) (28,094)
Capitalization of software and website development costs (26,445) (23,417)
Adjusted free cash flow $ 212,933 $ 213,586


In thousands	Three Months Ended September 30,
		2021		2020
Net cash provided by operating activities (1)		$	36,567	$	105,681
Purchases of property, plant and equipment		(8,624)		(8,383)

Capitalization of software and website development costs		(15,639)		(14,804)

Adjusted free cash flow		$	12,304	$	82,494

_________________

(1) The decrease of net cash provided by operating activities was driven by the decrease in operating income as described earlier in this section, as well as unfavorable year-over-year impacts from changes in working capital due to significant cash preservation measures in place during the prior comparative period.

Item 3.7A. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk. Our exposure to interest rate risk relates primarily to our cash, cash equivalents and debt.

As of ~~December 31, 2020,~~September 30, 2021, our cash and cash equivalents consisted of standard depository accounts which are held for working capital ~~purposes.~~purposes, money market funds, and marketable securities with an original maturity of less than 90 days. We do not believe we have a material exposure to interest rate fluctuations related to our cash and cash equivalents.

As of ~~December 31, 2020,~~September 30, 2021, we had $~~404.4~~1,140 million of variable-rate debt. As a result, we have exposure to market risk for changes in interest rates related to these obligations. In order to mitigate our exposure to interest rate changes related to our variable rate debt, we execute interest rate swap contracts to fix the interest rate on a portion of our outstanding or forecasted long-term debt with varying maturities. As of ~~December 31, 2020,~~September 30, 2021, a hypothetical 100 basis point increase in rates, inclusive of our outstanding interest rate swaps, would result in ~~an immaterial~~a $4.0 million impact to interest expense over the next 12 months.

Currency Exchange Rate Risk. We conduct business in multiple currencies through our worldwide operations but report our financial results in U.S. dollars. We manage these currency risks through normal operating activities and, when deemed appropriate, through the use of derivative financial instruments. We have policies governing the use of derivative instruments and do not enter into financial instruments for trading or speculative purposes. The use of derivatives is intended to reduce, but does not entirely eliminate, the impact of adverse currency exchange rate movements. A summary of our currency risk is as follows:

•Translation of our non-U.S. dollar revenues and expenses: Revenue and related expenses generated in currencies other than the U.S. dollar could result in higher or lower net income when, upon consolidation, those transactions are translated to U.S. dollars. When the value or timing of revenue and expenses in a given currency are materially different, we may be exposed to significant impacts on our net income and non-GAAP financial metrics, such as adjusted EBITDA.

Our currency hedging objectives are targeted at reducing volatility in our forecasted U.S. dollar-equivalent adjusted EBITDA in order to ~~protect~~maintain stability on our incurrence-based debt covenants. Since adjusted EBITDA excludes non-cash items such as depreciation and amortization that are included in net income, we may experience increased, not decreased, volatility in our GAAP results due to our hedging approach. Our most significant net currency exposures by volume are in the Euro and British Pound.

In addition, we elect to execute currency derivatives contracts that do not qualify for hedge accounting. As a result, we may experience volatility in our consolidated statements of operations due to (i) the impact of unrealized gains and losses reported in other income (expense) ~~income,~~, net, on the mark-to-market of outstanding contracts and (ii) realized gains and losses recognized in other income (expense) ~~income,~~, net, whereas the offsetting economic gains and losses are reported in the line item of the underlying activity, for example, revenue.

•Translation of our non-U.S. dollar assets and liabilities: Each of our subsidiaries translates its assets and liabilities to U.S. dollars at current rates of exchange in effect at the balance sheet date. The resulting gains and losses from translation are included as a component of accumulated other comprehensive loss on the consolidated balance sheet. Fluctuations in exchange rates can materially impact the carrying value of our assets and liabilities.

We have currency exposure arising from our net investments in foreign operations. We enter into currency derivatives to mitigate the impact of currency rate changes on certain net investments.

•Remeasurement of monetary assets and liabilities: Transaction gains and losses generated from remeasurement of monetary assets and liabilities denominated in currencies other than the functional currency of a subsidiary are included in other income (expense) ~~income,~~, net, on the consolidated statements of operations. Certain of our subsidiaries hold intercompany loans denominated in a currency other than their functional currency. Due to the significance of these balances, the revaluation of intercompany loans can have a material impact on other income (expense) ~~income,~~, net. We expect these impacts may be volatile in the

future, although our largest intercompany loans do not have a U.S. dollar cash impact for the consolidated group because they are either 1) U.S. dollar loans or 2) we elect to hedge certain non-U.S. dollar loans with cross-currency ~~swaps.~~swaps and forward contracts. A hypothetical 10% change in currency exchange rates was applied to total net monetary assets denominated in currencies other than the functional currencies at the balance sheet dates to compute the impact these changes would have had on our income before taxes in the near term. The balances are inclusive of the notional value of any cross-currency swaps designated as cash flow hedges. A hypothetical decrease in exchange rates of 10% against the functional currency of our subsidiaries would have resulted in a ~~decrease~~change of $0.9 millionand ~~an increase of $14.2~~$9.5 million, on our income (loss) before income taxes for the years ended three months ended ~~December 31,~~September 30, 2021 and 2020, ~~and 2019,~~ respectively.

Item 4.9A. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~December 31, 2020.~~September 30, 2021. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of

possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of ~~December 31, 2020,~~September 30, 2021, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There were no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended ~~December 31, 2020~~September 30, 2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information required by this item is incorporated by reference to the information set forth in Item 1 of Part I, “Financial Statements - Note 1312 — Commitments and Contingencies,” in the accompanying notes to the consolidated financial statements included in this Report.

Item 1A. Risk Factors

There have been no material changes with respect to the risk factors we disclosed in our Form 10-K for the fiscal year ended June 30, ~~2020 and our Form 10-Q for the fiscal quarter ended September 30, 2020.~~

2021.

~~Item 2.~~ ~~Unregistered Sales of Equity Securities and Use of Proceeds~~

On November 25, 2019, we announced that our Board had authorized us to repurchase up to 5,500,000 of our issued and outstanding ordinary shares on the open market (including block trades), through privately negotiated transactions, or in one or more self-tender offers. This repurchase program expires on May 22, 2021, and we may suspend or discontinue our share repurchases at any time.

On April 28, 2020, we entered into an amendment to our senior secured credit agreement, which suspended our financial maintenance covenants in addition to prohibiting us from repurchasing shares during the suspension period. Refer to Note 9 for additional information. We did not purchase any of our ordinary shares during the three months ended December 31, 2020.

Item 6. Exhibits and Financial Statement Schedules


Exhibit No.						Description
~~10.1~~						~~2020 Equity Incentive Plan is incorporated by reference to our Current Report on Form 8-K filed with the SEC on November 30, 2020~~
~~10.2~~						~~Form of Restricted Share Unit Agreement under our 2020 Equity Incentive Plan~~
~~10.3~~						~~Form of Performance Share Unit Agreement for employees and executives under our 2020 Equity Incentive Plan~~
~~10.4~~						~~Form of Performance Share Unit Agreement for our Chief Executive Officer under our 2020 Equity Incentive Plan~~
~~10.5~~						~~Form of Performance Share Unit Agreement for our Board of Directors under our 2020 Equity Incentive Plan~~
31.1						Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Rule 13a-14(a)/15d-14(a), by Chief Executive Officer
31.2						Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Rule 13a-14(a)/15d-14(a), by Chief Financial Officer
32.1						Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Executive Officer and Chief Financial Officer
101						The following materials from this ~~Quarterly~~Annual Report on Form 10-Q, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Statements of Shareholder's Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to ~~Condensed~~ Consolidated Financial Statements.
104						Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~January~~October 28, 2021 Cimpress plc


			By:			/s/ Sean E. Quinn
						Sean E. Quinn
						Chief Financial Officer (Principal Financial and Accounting Officer)

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	Three Months Ended December 31, 2020
	Vistaprint		PrintBrothers		The Print Group		National Pen		All Other		Total
Revenue by Geographic Region:
North America	$	268,736	$	0	$	0	$	48,678	$	49,662	$	367,076
Europe	126,877		121,564		69,343		47,578		0		365,362
Other	40,033		—		—		8,699		4,975		53,707
Inter-segment	671		242		6,861		9,737		728		18,239
Total segment revenue	436,317		121,806		76,204		114,692		55,365		804,384
Less: inter-segment elimination	(671)		(242)		(6,861)		(9,737)		(728)		(18,239)
Total external revenue	$	435,646	$	121,564	$	69,343	$	104,955	$	54,637	$	786,145


	Six Months Ended December 31, 2020
	Vistaprint		PrintBrothers		The Print Group		National Pen		All Other		Total
Revenue by Geographic Region:
North America	$	500,831	$	0	$	0	$	78,999	$	88,606	$	668,436
Europe	204,125		221,505		129,721		68,182		0		623,533
Other	59,559		—		—		12,347		8,770		80,676
Inter-segment	1,093		413		12,920		22,813		1,467		38,706
Total segment revenue	765,608		221,918		142,641		182,341		98,843		1,411,351
Less: inter-segment elimination	(1,093)		(413)		(12,920)		(22,813)		(1,467)		(38,706)
Total external revenue	$	764,515	$	221,505	$	129,721	$	159,528	$	97,376	$	1,372,645


	Three Months Ended December 31, 2019
	Vistaprint		PrintBrothers		The Print Group		National Pen		All Other		Total
Revenue by Geographic Region:
North America	$	284,345	$	0	$	0	$	54,400	$	44,221	$	382,966
Europe	121,143		126,288		86,713		60,887		0		395,031
Other	25,292		—		—		11,732		5,312		42,336
Inter-segment	2,525		329		986		966		241		5,047
Total segment revenue	433,305		126,617		87,699		127,985		49,774		825,380
Less: inter-segment elimination	(2,525)		(329)		(986)		(966)		(241)		(5,047)
Total external revenue	$	430,780	$	126,288	$	86,713	$	127,019	$	49,533	$	820,333


	Six Months Ended December 31, 2019
	Vistaprint		PrintBrothers		The Print Group		National Pen		All Other		Total
Revenue by Geographic Region:
North America	$	531,430	$	0	$	0	$	95,942	$	79,627	$	706,999
Europe	195,601		235,335		158,539		83,200		0		672,675
Other	45,592		—		—		17,059		11,967		74,618
Inter-segment	3,853		572		1,418		1,947		456		8,246
Total segment revenue	776,476		235,907		159,957		198,148		92,050		1,462,538
Less: inter-segment elimination	(3,853)		(572)		(1,418)		(1,947)		(456)		(8,246)
Total external revenue	$	772,623	$	235,335	$	158,539	$	196,201	$	91,594	$	1,454,292


	Severance and Related Benefits		Other Restructuring Costs		Total
Accrued restructuring liability as of June 30, 2020	$	5,969	$	77	$	6,046
Restructuring charges	1,453		643		2,096
Cash payments	(3,961)		—		(3,961)
Non-cash charges (1)	—		(643)		(643)
Accrued restructuring liability as of December 31, 2020	$	3,461	$	77	$	3,538