Robert S. Keane - President & Chief Executive Officer Sean Quinn - EVP & Chief Financial Officer Meredith Burns - Investor Relations Contact.

Youssef Squali - Cantor Fitzgerald Securities Matthew C. Thornton - SunTrust Robinson Humphrey, Inc. Kevin Mark Steinke - Barrington Research Associates, Inc. Christopher David Merwin - Barclays Capital, Inc. Brian P. Fitzgerald - Jefferies LLC Kevin Kopelman - Cowen & Co. LLC Victor Anthony - Axiom Capital Management, Inc..

Ladies and gentlemen, welcome to the Cimpress Fiscal Year 2016 Fourth Quarter Q&A Earnings Conference Call. My name is Vince, and I'll be your operator for today. This call is being hosted by Robert Keane, President and CEO; and Sean Quinn, Executive Vice President and CFO.

As noted in the Safe Harbor statement at the beginning of the earnings presentation, comments may include forward-looking statements, including statements regarding revenue and earnings guidance, and actual results may differ materially.

Risk that could impose those statements are described in the documents that are periodically filed with the Securities and Exchange Commission..

Our first question is from Youssef Squali of Cantor Fitzgerald. Your line is open, sir..

Thank you very much and good morning, Robert and Sean. So just a couple of questions to start. Your new customer account growth within the VBU was positive for the first time, I think, in three years. So, Robert, I was just wondering how you feel about that metric going forward.

Do you feel that you are now in the clear with all the changes that you've made, obviously barring any black swan events? What about orders and order per customer? What's the trend there? And then, secondly – second, you've highlighted some investment – new investment plans for 2017.

I think it calls for $215 million for the first other organic investments. Can you just please help us elaborate on that a little bit. It looks like a big chunk of that may be going into marketing spend, particularly, I guess, for the Upload and Print business, if I understand it correctly.

Maybe, you can help us understand why the focus on marketing there now. And just what's the payback time and expected IRR for that $215 million that you are looking to spend for that division? Thanks..

Great. Good morning, Youssef. So let me start with your second question. The investments that we make, and I'd – and personally, in front of me, I have the letter to investors, which went out. It talks in detail about that. It does lay out the diverse other $215 million you spoke about.

But it's a large amount of money, but only a small component relative to that $215 million is advertising. It's about $65 million out of the $215 million. And that $65 million relates to the $315 million total that we are spending in all types of these long-term investments.

Last year we spent $51 million in advertising just in the Vistaprint business unit. And to be clear this $51 million is, we're talking about the net impact of advertising that pays back in over 12 months.

Going forward, that $51 million to $65 million percent growth includes organic growth in advertising in the Vistaprint business unit, but it also includes the fact that for the first time we will start advertising based on LTV in the Upload and Print. That will remain a minority of that $65 million approximate forecast we have given.

And we certainly would expect order of magnitude for Vistaprint business unit to continue to go up a little bit because we are quite happy, and this will come back to your first question, with the growth of the gross profit per customer in the Vistaprint space and the loyalty of customers, as we've gone through these changes, which means the DCF continues to look good, as we spend into Vistaprint.

The reason we are now looking to spend advertising in addition in the other business units in the Upload and Print space is because we have very, very attractive lifetime cash flows for those customers, and they just have never, as independent businesses invested into that cash flow.

They've been much more like Vistaprint was three years to five years ago, not investing based on long-term. So, the payback is well above our hurdle rate, I won't go into the specific paybacks where we're very comfortable but those would be good investments.

Your question on new customer growth, we are very happy to see the Vistaprint business unit start to grow an absolute number of new customers.

We've always had very large numbers of new customers coming in, but the multi-quarter, multi-year slowdown in that was very much related to the repositioning of the Vistaprint value proposition away from the broad-based, price-driven – price primary focused towards something that's focused on higher expectations.

We don't want to forecast where it's going in the future, but we certainly have aspirations that we will grow the number of new customers we bring in to Vistaprint.

Going forward, whether every single quarter is going to be a growth quarter, I certainly wouldn't say, but we do believe that a lot of those changes in terms of the impact on new customer acquisition are behind us..

And Youssef, this is Sean. Just maybe to add one or two things, just so you know, from an advertising perspective as Robert outlines, we are starting to do more there in the Upload and Print businesses.

But just to be sure, as a percentage of revenue, that would be nowhere near what it is in the Vistaprint business even though we are starting to invest more there.

And then on the new customer growth, that could fluctuate from quarter-to-quarter, but if you were to pan back and look at the trend line over a multi-year period from two years, three years ago when we were doing our reinvents and really making the main changes that we were in our value proposition in the Vistaprint business, we've climbed back very significantly there.

And so it's great to see this quarter being the first quarter we have positive new customer account growth. And particularly in Europe, the trend line there has been very steep as we've climbed back from the many changes that we've made. So, we're encouraged by the trend there..

Congrats on that. We've been waiting for it for a while. So, it's good to see. And then the last question, 2015, 2016 were definitely big M&A years for you.

Robert, can you speak to maybe your appetite for M&A still as you enter 2017? Maybe size of the pipeline and if you were to do it, are you doing it for scale still, technology, geo, just anything on that would be great? Thanks..

Yeah. So, we started about three years to four years ago being much more proactive in reaching out and building relationships with literally dozens and hundreds of companies to understand what the space was out there, not to necessarily do an acquisition with each one of them, but to get to know them as participants in a mutual market.

And I wouldn't call that set of relationships an M&A pipeline by any means, but it's a strong set of relationships.

And within that we then look for companies that have a combination of great company culture, clear customer value proposition, something that we do not have, or we couldn't develop internally for lower costs, and very importantly, a sane rational evaluation expectation that matches our commitment to learn from mistakes in the past to not overpay for a company.

Now, that comes with a pretty high bar. So, to your question, I don't think we have a difference of opinion than we have in the past for M&A. If we find a strong company that meets those criteria and a few other criteria, and very importantly, we have the financing available to make that deal, we would do that.

And that's very much something that we can't control the timing of. Some of the companies we acquired, we had multiple years of discussions and relationships with before the deal ever was consummated. So, at the highest level the strategy to look at acquisitions is one way to build our capabilities remains.

It just can't be predicted with any precision. And I would say, we talked in our investor deck about our debt capacity and barring the use of equity, which is not something we've done recently. We would see M&A as something it's obviously constrained by our debt covenants..

Got it. Thanks, Robert..

Thank you. Our next question is from Matthew Thornton of SunTrust. Your line is open, sir..

Yeah. Good morning, guys. Thanks for taking the question. Maybe just to start off, on the shipping price reductions, Robert, I'm sorry if I missed this, but I guess, can you just talk little bit about the early feedback, you've seen or the results you've seen from those price reductions in the UK, as well as some of the tests you've done in the U.S.

and elsewhere.

And then just secondly on the Upload and Print business, if I read the commentary correct, it sounds like the weighted portfolio is growing at an organic growth rate at above – up roughly 21%, which is what you reported this quarter, which is interesting because I think the existing base load down a little fast, so we would have thought and we actually expected a further step down when the next cohort of acquisitions entered the base.

But that doesn't seem to be the case, so I just want to make sure, I understood that correctly and again if there is anything that's kind of, changed amongst the different assets there? Thanks.

Okay. So why don't I touch lightly on your first question then turn it to you, Sean. In terms of the reaction and the impact of the shipping price changes in the UK and elsewhere.

The number one, detriment or negative factor we have in customer loyalty in the Vistaprint brand when we've done deep research in what it's otherwise a very, very strong and continually growing Net Promoter Score and our customer loyalty has been our shipping prices.

And so, without going into specifics, we see that addressing that has very positive impact on the number one thing, we need to improve to keep our customers happier. Now, in terms of metrics, Sean, do you want to touch a little bit on what we've seen? If at all, just don't know what we've talked about -.

Yeah, sure. So that I think, we are still early in the process of collecting data as we've talked about. We've done testing, particularly in the UK, in France and Germany, a little bit in the U.S. in Q4.

And it differs by market, but we are encouraged by the trends we see in conversion rate, which is probably the easiest one to measure quickly and also repeat rates which is something that does take a little bit more time to collect that full feedback loop.

But we are encouraged by what we see there, enough so that we feel comfortable making this investment..

Matt, Trynka is going to spend some time on that in her Investor Day presentation on August 10th, so you will be able to hear more information directly from the President of Vistaprint..

And do you want to talk about the growth in the Upload and Print, Sean?.

Yeah. Matt, so your numbers are correct. So the organic growth for Upload And Print for this quarter was 21%, which did slow down a little bit from sequential quarters, mostly because of a tough comp in Q4 last year, it was 34% last year. And that 21% organic growth is roughly consistent with the pro-forma growth for that portfolio as a whole.

Now there is a mix underneath that, right. So, we have organic of 21%. Those include some of our faster growing businesses within that portfolio.

In Q1 of next year, we will have lapped the acquisition dates for our Q4, 2015 acquisitions, so those all get folded into the organic rate and we expect it that will cause a slowdown organic rate, but that does not include all the acquisitions, right. So that's why you see that difference.

Overtime we do expect, as a portfolio, that the growth rates here will moderate, just you know the law of larger numbers, but we are and we say this in our commentary, comfortable that we can continue to grow this portfolio at double-digits for the foreseeable future..

Perfect. And maybe, Sean, if I could just dive in on that just little further. So, just to make sure I understood that. In the current quarter, September quarter obviously we'll get the exit group and DRUCK to kind to cohort entering the base and you expect that to have some downward pressure on the organic growth rate. If I heard you correct.

And then WIRmachenDRUCK would enter I guess in the June quarter, so the last quarter of this fiscal year, that would have some impact as well? Did I read that right?.

That's correct. The only one that you left out is Tradeprint, but in the – in terms of magnitude, that's smaller in the calculation..

Got you. In the December quarter, I got you. Perfect.

One follow-up, if I could I guess, and then I'll jump back in the queue, any update or progress in the beta partnership or the beta relationship you had with Amazon in the U.S.?.

No, Matt, there is really nothing to report there. And so, it's kind of same as what we've talked about in prior quarters. Remains in test, one product, one location. Amazon is mostly in control of the progress there because they own kind of the development as it relates to the user experience.

And so, we continue to be here to support them, but nothing material to update on..

All right. Terrific. Very helpful. Thanks, guys. I'll jump back in the queue..

Thanks, Matt..

Thank you. Our next question is from Kevin Steinke of Barrington Research. Your line is open, sir..

Good morning. So, you noted that in the fourth quarter you invested more in advertising, particularly in Europe, which you believe contributed to an improved growth in Europe during the quarter.

So, I guess all along, I – part of your narrative has been that you would invest more in advertising in Europe when you felt good about – better about the prospects of the business there and improvements being made.

So, I'm just kind of wondering what you were seeing in Europe that motivated you to spend more on advertising there in the quarter?.

Yeah, Kevin, so I think you've – you read the story line correctly. And this is something that really is the story that – or journey that we've been on for many years, not just any one quarter. So, over the last three or so years we've done a lot to improve the customer value proposition.

And as we've talked about in Europe, we probably had the furthest to go. The team has been hard at work, again, over a multi-year period. And we now feel comfortable starting to spend more against that, given the progress that we've made. When you look at the advertising spend, and this is particularly in the Vistaprint business.

For Q4, a lot of the growth of the spend was in Europe. And we saw favorable results attached to that.

As we said to in an answer to an earlier question, the new customer account growing in Europe, which is – again, is a trend that has been intact for three years or so, but we were in – down quite a bit if you look back to when we were doing our reinvents in Europe. So, yeah, so you're right. We do have increased confidence.

We did increase spend, and we're happy with the results related to that..

Okay. Okay. That's good to hear. And, so, the 100 basis point impact on Vistaprint unit growth that you expect from the shipping price reductions. I believe you say that's net of estimated benefits from improved customer satisfaction.

So, it sounds like presumably you are baking in some benefit from the reduced shipping prices into that 100 basis point number. I don't know how much more detail you want to get into right now.

But I guess any color on the estimated benefits you are expecting, you know – yeah, go ahead, sorry?.

Yeah. I understand the question. So, I will try and put the story together for you a bit more, Kevin. So, you are right. So we've mentioned roughly 100 basis point impact on the top-line which, as you say, is net of the benefit that we expect to get in this next fiscal year from increased conversion rates and repeat rates.

Now, that said, you'll also see in Robert's letter to investors and some of our other materials that the total investment that we expect for fiscal 2017 is about $20 million, and the rest of that is related to the increase in the cost of goods sold.

As you have customers come back and repeat more often, essentially the cost of that revenue goes up like-for-like, and so the total investment is about $20 million. So that's how I would kind of put it altogether.

We haven't detailed out exactly what we expect the gross benefit from a top-line perspective to be, but it's clear from that that this will not pay back within 12 months, but we do think it's the right thing to do..

Okay. Fair enough. Thanks for taking my questions..

Thanks, Kevin..

Thank you. Our next question is from Chris Merwin of Barclays. Your line is open..

All right. Great, thank you. Yes, I just had a question on, I guess, a number of the investments. I think altogether I think you got it to about a $20 million headwind from shipping, $17 million from partnerships running off, there is roughly $70 million in investments and then some headwinds from taxes.

And, so, I guess all in it's – it could be $100 million or more. But, I guess, last year you had called out some headwinds, but certainly we saw some strong operating leverage in the Vistaprint business unit, as well as Upload and Print.

So just trying to understand in the context of all the things you called out as headwinds to operating profit, how much of that could be offset by kind of operating leverage in those core businesses. Thanks..

Sure, thanks for the question, Chris. We haven't provided, kind of, consolidated guidance, but let me try and add a little bit to what you said. You are right. There are a number of areas where next year we will see either increased investment or increased cost.

You mentioned the increase in investments that Robert outlined in his letter, which is about $67 million.

We have the loss of partners that we've also talked about in our materials, which is about $70 million, some increased taxes and also increased share based compensation from our new long-term incentive plan, which is really more of a timing thing, but will weigh on profitability next year.

So, that is kind of the collective headwind, if you will, attached to that. Now, that said, we had a strong year this year in terms of the underlying profitability and growth of both the Vistaprint business and our Upload and Print businesses and we remain confident about that as we head into this next year.

We haven't been specific in terms of what the underlying profitability will be for those businesses, but I think it's fair to assume that the growth of those businesses would offset some of this to what extent we haven't been specific about..

Okay. Fair enough, thanks. And I guess just one quick follow-up, I think you had mentioned also an accelerated charge from earn-outs relating to the DRUCK acquisition.

Is €40 million, is that the right charge near-term or is that – am I not thinking about that correctly?.

Yeah, so this is something we mentioned in our forward-looking commentary and €40 million is the total amount of the potential earn-out. And we update our estimates of what we will pay each quarter as we're required to do. The specific item that you're mentioning, Chris is we did amend the earn-out agreement in July.

And so, yeah – and there is really no substantive change in the earn-out agreement but from an accounting perspective, we need to take about €7 million in Q1 related to that.

Those are things that we exclude from our calculation of no path that we disclosed, because we think about that very much as part of the purchase consideration and not something that's part of our operating results..

Could I just clarify that that potential payout of €40 million would fall into our 2018 fiscal year. It's based on results through December of 2017..

Yeah. From a cash flow perspective, yes..

I guess, I'll just add one more thing, which is that these earn-outs are structured to motivate the managers of the acquisitions that we make to generate returns. And so you were super happy every time that we are able to fully payout an earn-out..

Absolutely..

Yes..

All right, great. Thank you all..

Thanks, Chris..

Thank you. Our next question is from Brian Fitzgerald of Jefferies. Your line is open, sir..

Thanks. You noted that repeat bookings continue to grow at a double-digit rate.

Anything you've seen in terms of distinct dynamics from the cohorts to call out there in terms of repeat rates? And then maybe one more, can you walk through the impact to your model that you see from the changes in employee compensation, as well as the changes to accounting for stock-based comp that you implemented in the quarter? Thank you..

Sure, Brian. This is Sean. In terms of repeat rates, I would say, I'm not sure, that there is any real new dynamics to call out. We see continued strength. Obviously, you mentioned that we have double-digit bookings from repeat that remains true. And that's been the case for several quarters, now. So, we continue to be encouraged by the trends there.

And we could say, the same for things like in the Vistaprint business gross profit per customer and PS in the other metrics that we track. So really no new change there. I think the biggest change this quarter really had to do with new customer dynamics, which we've talked about in response to previous questions.

In terms of your question on the cost of the – our change incentive plan, there are a number of things that I think will be kind of, helpful to go through and I actually plan to – amongst other housekeeping items, I plan to go through this in a little bit more detail at our Investor Day.

But let me give you some of the headlines, which is that we have because of the new plan, which we are very excited about and our employees very much embraced as they had to go through their elections for this next year. There is definitely a shift from a more cash centric LTI plan to a more equity-centric plan.

And the way that the accounting rules work for the awards that we issued is that we have to expense them on an accelerated profile. And so there is this big timing shift that we'll experience in fiscal 2017.

In our forward-looking commentary, we mentioned an increase in share-based compensation, of about $15 million, which is subject to some things that are still yet to happen, but that's our best estimate as of now.

About $10 million of that is simply a timing shift in terms of how we need to expense these awards versus how we expensed our RSUs in the past. So we will experience that that $10 million timing difference this year.

I'll go through some of the other dynamics that are less material at our Investor Day, like how it could impact working capital over time and so forth, but I think that's the most material one to call out..

Great, thanks, Sean..

Sure..

Thank you. Our next question is from Youssef Squali of Cantor Fitzgerald. Your line is open, sir..

Thank you very much. Just want to come back to couple of house – basically some easy questions.

Sean, can you speak to that $18.2 million in other income? What is that from because that had material impacts at the bottom line? And then on the gross margin that 53.5%, it seems to have hit a historic low, what are the ins and outs there for the quarter? And I have a quick follow-up?.

So in our other income, the biggest driver there, Youssef, is clearly the unrealized gains on our hedging contracts and also in our company loans, which we've talked about in the past.

There are some other smaller items in there, for example we had a final payment on the recoveries from the fire at our Venlo production facility earlier in the year, which was a little under $1 million. But the predominance to that about $16 million relates to unrealized gains on hedging and our company loans.

Now within that, clearly we experienced some FX volatility in Q4 on the back of the Brexit vote. As I think you know, Youssef and we've talked about it in the past, we do have an active hedging program where we averaging over 15 months to 18 months period to cover our EBITDA exposures from an FX standpoint.

And so, a lot of what you see in Q4 below the line is the change in value of our pound contracts, which we entered into all before the Brexit vote. And so, we have from that have good visibility to what our FY 2017-pound rates are and even some of FY 2018, but that is the biggest change below the line.

In terms of gross margin, Youssef, I think, again, the predominant trend here is the mix shift towards our Upload and Print businesses. So, that is the biggest thing to call out. There are a few other puts and takes within here. One is we had about a $1.2 million write-down of some equipment that runs through that line.

We have some of the amortization of the acquired intangible assets from our WIRmachenDRUCK acquisition flow-through COGS and therefore impact gross margin. And that was offset by some recoveries on the Venlo fire as well. So, those are the things there is puts and takes, not that material. The biggest thing is the mix shift towards Upload and Print..

Got it. And then Robert on Brexit, can you just tell us how you think about it? I guess, FX notwithstanding, because God knows where FX rates are going to end up being. But how big is the UK for you? How big are the cross border transactions that may or may not be impacted by the Brexit vote? Thanks..

So, the immediate effect, obviously, is to make exports from our European production facilities more expensive into the UK. But we with the Tradeprint acquisition have a UK production facility, we also have UK suppliers and we also have some coverage out 12 months, 18 months for the hedging that Sean just spoke to.

So, we had been looking at European wide networks of production, including the UK over the last two years to three years. One of the reasons we were interested in Tradeprint was the UK based production.

So, I think this is something that we are aware of but it's not a material shift in our outlook and I would not be surprised if we shift some production into the UK over the coming 18 months, but it is certainly an important market for us. And the impact of Brexit on our near-term business is pretty minimal.

The UK is the market where we, I think, have the biggest mismatch between costs and revenues. That being said, we do have, besides the Tradeprint Group, we have a fairly established business or office in London for Vistaprint.

We have advertising that we take in pounds, and, so we do have quite a bit of cost which are matched, it's not a perfect match by any means. Net-net, Sean, if you feel different, I don't see this is a big issue for the business..

No, I think – I think it's yet to be seen what some of the real specific changes will be and the timing of those. So, we will react to those as they come. But certainly it's not a big discussion inside the walls here other than for currency, which we've outlined.

The pound is our biggest EBITDA exposure, and – but like I said, we've got good visibility to our pound rates for FY 2017 as well as part of FY 2018 because of our effective currency hedging program..

Okay, thanks for the color..

Thanks, Youssef..

Thank you. Our next question is from Kevin Kopelman of Cowen & Co. Your line is open..

Hi. Thanks a lot. Just I was hoping to ask about the major organic investments in fiscal 2017. Clearly, the mass customization platform really taking precedent there. And I just wanted to, was hoping if you could give us a little bit more color on the development of the MCP. And then conversely, on Columbus, we see the investment going down.

Is that just a product of revenue growth and any additional color you can provide? Thanks..

Qualitatively, I'm going to talk about the platform itself, we are continuing along a multi-year path, which is very much in line with what we thought we would be doing when we started on this path two years ago.

The absolute investment is almost doubling next year, or more than doubling from $24 million to $50 million (32:17), if you look at it in a NOPAT perspective and $27 million to $55 million (32:20), if you look it from a free cash flow perspective.

That is because we do feel that we've gotten far enough in the development that we see some major opportunity to have synergies in revenue via expanding product line and product depth across our different brands through platform, in cost opportunities by unifying the production flows.

And when you look at the size of our P&L, even slight changes in those areas, revenue growth or COGS can have a very significant payback. That being said, this is a complicated project. We've known it's been a complicated project for quite some time.

We feel that right now we have enough tests that have been completed and given us enough confidence that we can do this over the coming years in an increasing percentage of our transactions. It makes us feel very comfortable that we should be spending this money.

Now, Columbus, I will just talk about – let the – the impact, financial impact, Sean you talked about this on both of these, but we are very happy with the growth we're seeing in that product line. We are pretty much online with what we expect to do for FY 2016 in terms of the revenue growth. And we are continuing to invest in that.

But we do see some positive impact as we start to get gross margin from the revenues that are coming through there.

Anything you want to add there?.

Yeah. The only thing, I'll add is that for both Columbus and most of world, these are still significant areas of investment for us as we enter this next year but, Kevin, as you pointed out, these are investments that experienced revenue as well, right. And so the revenue growth is happening at a higher pace than the growth in the investment.

For Columbus, back at our Investor Day last year, Trynka, who's the President of our Vistaprint business, mentioned a target of $20 million in revenue for her business with Columbus. We've hit that target this year. So, as Robert said, we're encouraged by what we see there.

And then in our most of world businesses, as we say in our commentary, those businesses are growing very quickly off of a small base. And so, we continue to invest there but the revenue overtakes the cost of those investments in FY 2017..

And Kevin, I'll just add that the MCP investment that we talk about is different. So for Columbus and M.O. (34:55) we show these as net investments, they are sort of like mini P&Ls where you do have revenue that offset the investment there.

For the MCP investment that we list here, that is pure investment and the revenue synergies that Robert was talking about would come through on the merchant side.

And so, that is not captured in this model, but as we do start to get revenue synergies from our brands, as well as partner companies connecting to the platform, those returns would actually show up elsewhere..

And Meredith, that's absolutely right. And the same thing goes for COGS savings as we use the platform that would not show up in this line, which show up in our COGS line..

Great, thanks so much for the detail..

Thank you, Kevin..

Thank you. Our next question is from Victor Anthony of Axiom Capital. Your line is open..

Thanks. Maybe could another question on shipping, wondering if there is a scenario where you think there is enough market pressure on shipping that you eventually have to reduce it to zero? That is one.

And second, Robert, I know you got this question since day one of the IPO, but any interest in aggressively pursuing personalized consumer products services market similar to what Shutterfly come in the office?.

Sure, Victor. On the first question, the market certainly has shifted in terms of what customers expect to pay for shipping. And so, we want to be right in the middle of the bell curve of the market.

Now, people – we found it, we're going to done much more deep research on our customers, our customers tend to be small businesses who use shipping services like DHL or UPS or whoever and they know very well the cost of shipping a product. And they would expect that we would have better cost than them. So we have to align with that.

And they are – our research says our customers are perfectly willing and happy to pay a fair – what they perceive is a fair transparent price for shipping.

What they don't want to do is pay something that they say is materially above the cost that they themselves can buy from this small business just because we include our processing costs in that overall amount. Now, there are companies that are going towards no shipping charges.

We've tested that and we do not see that that is something we need to go to. Our pricing stays very, very value based as a holistic pricing including the product cost itself.

Now that being said, in Europe for our Upload and Print businesses, our predominant model, there may be exceptions to this, is that we give the pricing inclusive of shipping and there is no extra charge. So, we know how to run it both ways and we see success both ways.

But the Vistaprint customer seems to very much focus on fairness and transparency as opposed to free. Now, that, I think, is especially true as we moved away from price primary where customers were much interested in getting a deep discount or something for free and free shipping would fall into that.

And this is much more consumer like behavior and we've moved towards higher expectations over the last few years as we talked about. In terms of the consumer products, we are happy with our consumer business.

Just to recall for everyone, we have the focused consumer business, which is the Albumprinter business, which is focused in the Benelux and Nordic markets and is really the clear leader there. We are happy with the growth in that business. It's very strong growth excluding the fact that we talked about losing a partnership in a B2B relationship there.

But that is a great business and we are happy with the growth. We see good growth in the future. In the Vistaprint brand, in all the markets we operate, so Australia, the U.S., Canada and Europe, the consumer products are a material portion of our business. They are seasonal. They really spike in the December quarter.

But we continue to see very good growth at the Vistaprint business overall. And within that, even though our big focus has been on the business value proposition – or value proposition to small business, we have seen that had a great spillover effect in the confidence people have for all their types of purchases including consumer products.

So that the consumer products is a healthy growth business for us and we have costs, which are quite a bit lower than most of the other competitors out there or at least prices that are lower. And because of that, I think we are continuing to take share in that, even though it's not our primary focus..

Got it. Thank you..

Thank you. Our next question is from Matthew Thornton of SunTrust. Your line is open, sir..

Hey, guys. Just two quick housekeeping items. Can you remind me, the new incentive comp program, did that start day one of the quarter or I guess, when does that kind of, kick off in price? And then just secondly, cash tax, as you talked about them being up year-on-year. Was that on a tax rate basis or just an absolute dollar basis? Thanks..

Yeah, Matt, good question. So the new incentive plan, the cash part of that really starts at the beginning of this fiscal year. We as a Dutch company cannot grant the equity portion of that until we get out of a blackout period, which we are in now. So that will start August 15th.

And the $15 million number that's mentioned in our forward-looking commentary reflects that. In terms of the cash tax is, so the comment we made in our forward-looking remarks is about the dollars. And so, the way I would think about that, Matt, is we had our actual cash taxes were up year-over-year.

Order of magnitude – I think – I don't have the number right in front of me, but $17 million or so. Within that we had an $8.5 million tax refund in the U.S. this year, which we would not expect to repeat. So, that will create an increase.

And then the other thing is, and I'm sure in your modeling you probably captured this, but our Upload and Print businesses operate in higher rate tax jurisdictions and we will have a full year of WIRmachenDRUCK results in this next fiscal year. So that will cause our cash taxes in dollars to go up..

Perfect. Thanks so much..

Thanks, Matt..

Thank you. At this time, there is no other questions in queue. I'd like to turn the call back to management for any closing remarks..

Well, no specific closing remarks on the quarter. But I do want to step back and talk about how we are looking to the next year, which is we continue to be very confident in the trends, we are seeing throughout the business.

We are obviously investing quite a bit into this business and that's based on projects, which for the most part, we've been doing for multiple years and we have good track record on the execution of that. So, we had a great year looking to the past.

We look to next year and saying, we want to continue that momentum and that building momentum, which we've had over the last, I'd say, three quarters to eight quarters. We certainly look forward to going into our plans for the next year in more detail with you in the coming week when we get to our Investor Day in New York.

But, if I were to sum up how we feel about the company, it's definitely confident about the future and happy with the performance we've been putting up-to-date. So thank you very much for your time. We appreciate it and look forward to seeing many of you in New York very soon..

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect..