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- Net Sales increased to $31.7 million, slightly higher than last year's second quarter.
- Net Income of $1.7 million was also up slightly from the same period a year ago.
- Earnings Per Share (EPS) were $0.25 per diluted share, the same as the prior-year quarter.

The Company reported that second quarter sales reflected the recovery of orders that a major customer had postponed in the first quarter, offset by reduced demand from a major beverage customer and from personal care customers.

Frank Gerace, President and CEO of Multi-Color Corporation, stated that "We saw an improvement in sales in our second quarter compared to the first quarter this year, however our sales growth compared with the second quarter last year was less robust than we anticipated."

Second-quarter sales in the Company's Packaging Services division increased 14% from the second quarter a year ago as a result of strong seasonal business with existing customers. Second-quarter sales in the Decorating Solutions division were 3% less than the prior-year quarter, but 2% better than the first quarter of fiscal 2005.

"Our Packaging Services division continued to perform above expectations as our customers rewarded us with new business in their strong retail segments," Gerace said. "Our Decorating Solutions division, however, did not achieve its 8% historical organic growth rate in the first or second quarter. As a result, we have made significant changes in that division's sales organization. We believe that those changes, along with stronger demand, will contribute to improving organic growth from the Decorating Solutions division in the second half of our fiscal year."

The Company also reported that gross margins improved over the first quarter as a result of excellent operating performance in the Packaging Services division, coupled with the impact of increased sales volume. During the quarter, however the Company's Decorating Solutions division began receiving raw material price increase notifications from key suppliers. The Company intends on recovering these increases through price increases on affected products.

The Company's SG&A expenses were up 3% compared to the prior year due to increased recruiting and relocation costs incurred during the quarter.


"Our team devoted significant attention during the second quarter toward initiatives that will make us stronger and more competitive in the years to come," Gerace said. "We have strengthened our management team with new talent in several key positions, brought our new gravure press in Scottsburg on-line, and continued our exploration of strategic opportunities for growth within the packaging industry. As we execute these and other initiatives, I remain confident that Multi-Color is poised to restore the growth and earnings trends that our shareholders have come to expect," said Gerace.

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