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I last commented on Multi-Color (NASDAQ:LABL) on August 6, 2010. In my note I reported on the improved financial outlook for this label printer and also on the increased emphasis on international markets. Multi-Color reported on its last quarter earlier this week. Both of the positive trends are clearly in place.
During the quarter LABL reported revenues up 26% y/y and operating income up 71% y/y. Gross margins increased by 2%. Diluted EPS rose by 54%. While a good part of the increases can be traced to recent international acquisitions, the key North American market also showed good strength. Historically much of the sales base for LABL has come from two key North American companies: P&G and Miller. Weakness from these customers during the economic downturn had driven down the performance and stock price for LABL.
To diversity outside of its historical customer base, Multi-Color has been on an intense drive to find international business opportunities under the new CEO Nigel Vinecombe. This trend continued strongly in the quarter as LABL closed its acquisition of Guidotti CentroStamp, an Italian wine labeler. So far this acquisition has met original expectations according to LABL management. It also acquired Monroe Etiquette a small French wine specialist, purchased property in South Africa to expand it business there, and made an initial foray into the Chinese market with initial operations announced on October 6.
Shares of LABL have increased by about 44% since my August commentary. It is good to see this solid, historically well managed company return to growth. The international diversification is a strong positive. This is an excellent company to accumulate on dips in its price going forward.
I continue to own shares in LABL in individual accounts and accounts managed for Freedom Mountain Investments.

Disclosure: Long LABL
Source: Positive Trends Continue at Multi-Color