-- Quarterly revenue rose 32 percent year over year to $138.9 million -- GAAP net income per fully diluted share rose 75 percent year over year to $0.42 -- Non-GAAP adjusted net income per fully diluted share rose 66 percent year over year to $0.53 -- 42 percent of revenue came from non-U.S. markets
HAMILTON, Bermuda, Jan. 27, 2009 (GLOBE NEWSWIRE) -- VistaPrint Limited (Nasdaq:VPRT), the small business marketing company, today announced financial results for the 2009 second fiscal quarter ending December 31, 2008.
"VistaPrint executed well in the second quarter with revenue and earnings that exceeded guidance," said Robert Keane, president and chief executive officer. "We believe that VistaPrint remains on track to achieve our goal of transforming small business marketing thanks to a superior value proposition, numerous competitive advantages, dedicated and talented employees, and financial and operating discipline."
Financial Metrics: -- Revenue for the second quarter of fiscal year 2009 grew to $138.9 million, a 32 percent increase over revenue of $105.0 million reported in the same quarter a year ago. -- Gross margin (revenue minus the cost of revenue) in the second quarter was 63.5 percent, compared to 62.0 percent in the same quarter a year ago. -- Operating income in the second quarter was $20.7 million, or 14.9 percent of revenue, and reflected a 75 percent increase compared to $11.8 million, or 11.2 percent of revenue in the same quarter a year ago. -- GAAP net income for the second quarter was $18.5 million, or 13.4 percent of revenue, representing a 66 percent increase compared to $11.2 million, or 10.6 percent of revenue in the same quarter a year ago. -- GAAP net income per fully diluted share for the second quarter was $0.42, representing a 75 percent increase compared to $0.24 in the same quarter a year ago. -- Non-GAAP adjusted net income for the second quarter, which excludes share-based compensation expense, was $23.5 million, or 16.9 percent of revenue, representing a 57 percent increase compared to $15.0 million, or 14.3 percent of revenue in the same quarter a year ago. -- Non-GAAP adjusted net income per fully diluted share for the second quarter, which excludes share-based compensation expense, was $0.53, representing a 66 percent increase compared to $0.32 in the same quarter a year ago. -- Capital expenditures in the second quarter were $27.3 million, or 19.6 percent of revenue. -- During the second quarter, the Company generated $44.1 million in cash from operations and $15.1 million in free cash flow, defined as cash from operations less purchases of property, plant and equipment, net, and capitalization of software and website development costs. -- The Company had $111.0 million in cash, cash equivalents and short-term marketable securities as of December 31, 2008. -- During the second quarter the Company repurchased 2,554,302 common shares for $45.5 million, at an average per-share price of $17.82, as part of the share repurchase program authorized by the Board of Directors.
Operating Highlights: -- VistaPrint acquired approximately 1.5 million new customers in the second fiscal quarter ended December 31, 2008. -- Repeat customers generated approximately 65 percent of total quarterly bookings in the second quarter, compared with 63 percent in the same quarter a year ago. -- Average daily order volume in the second quarter of fiscal 2009 exceeded 43,000, reflecting an approximate 43 percent increase over an average of more than 30,000 orders per day in the same quarter a year ago. -- Advertising spending in the second quarter was $27.8 million, or 20.0 percent of revenue, compared to $20.9 million, or 19.9 percent of revenue in the same quarter a year ago. -- Non-U.S. markets contributed 42 percent of total revenue in the second quarter, up from 39 percent in the same quarter a year ago. -- Average order value in the second quarter including revenue from shipping and processing was $33.57, a 5 percent decrease when compared to $35.50 in the same quarter a year ago. -- Web site sessions in the second quarter were 61.4 million, a 16 percent increase over 53.0 million in the same quarter a year ago. -- Conversion rates were 6.5 percent in the second quarter of fiscal 2009, compared to 5.4 percent in the same quarter a year ago.
"VistaPrint exceeded its second quarter targets thanks to the success of seasonal holiday product lines, gross margin improvements, and effective cost controls," noted chief financial officer Mike Giannetto. "However, economic conditions and exchange rates remain uncertain, and we have attempted to factor these risks into our financial guidance for future periods."
Financial Guidance as of January 27, 2009:
Based on current and anticipated levels of demand, the Company expects the following financial results:
Revenue -- For the third quarter of fiscal year 2009, ending March 31, 2009, the Company expects revenue of approximately $121 million to $130 million. -- For the full fiscal year ending June 30, 2009, the Company expects revenue of approximately $495 million to $515 million.
GAAP Fully-Diluted Earnings Per Share -- For the third quarter of fiscal year 2009, ending March 31, 2009, the Company expects GAAP fully-diluted earnings per share of approximately $0.23 to $0.28, which assumes 43.0 million weighted average shares outstanding. -- For the full fiscal year ending June 30, 2009, the Company expects GAAP fully-diluted earnings per share of approximately $1.07 to $1.16, which assumes 44.1 million weighted average shares outstanding.
Non-GAAP Adjusted Net Income Per Fully-Diluted Share -- For the quarter ending March 31, 2009, the Company expects non-GAAP adjusted net income per fully diluted share of approximately $0.34 to $0.39, which assumes a non-GAAP fully diluted weighted average share count of approximately 43.6 million shares, and share-based compensation expense of approximately $4.9 million. -- For the full fiscal year ending June 30, 2009, the Company expects non-GAAP adjusted net income per fully diluted share of approximately $1.52 to $1.61, which assumes a non-GAAP fully diluted weighted average share count of approximately 44.6 million shares, and share-based compensation expense of approximately $20.9 million.
Capital Expenditures -- For the third quarter of fiscal year 2009, ending March 31, 2009, the Company expects to make capital expenditures of approximately $25 million to $30 million. -- For the full fiscal year ending June 30, 2009, the Company expects to make capital expenditures of approximately $77 million to $87 million.
Planned capital investments in fiscal 2009 include two major facility projects: the construction of a new service center facility to accommodate the company's Montego Bay, Jamaica operations, which is expected to be completed at the end of calendar year 2010, and continued work on the expansion of the Company's Windsor, Ontario manufacturing facility, the current phase of which is expected to be completed in the third quarter of fiscal year 2009.
The foregoing guidance supersedes any guidance previously issued by the Company. All such previous guidance should no longer be relied upon.
At approximately 4:20 p.m. (EST) on January 27, 2009, VistaPrint will post, on the investor relations section of www.vistaprint.com, a link to a pre-recorded audio visual end-of-quarter presentation along with a downloadable transcript of the prepared remarks that accompany that presentation. At 5:00 p.m. (EST) there will be a Web cast of a live Q&A session with VistaPrint management. Links to this Q&A session will also be posted on the investor relations section of the Company's Web site. A replay of the Q&A session will be available on the Company's Web site following the call on January 27, 2009.
About non-GAAP financial measures
To supplement VistaPrint's consolidated financial statements presented in accordance with U.S. generally accepted accounting principles, or GAAP, VistaPrint has used the following measures defined as non-GAAP financial measures by the SEC: non-GAAP adjusted net income and non-GAAP adjusted net income per diluted share. The item excluded from the non-GAAP measurements is share-based compensation expense inclusive of income tax effects. The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of Non-GAAP Financial Measures" included at the end of this release. The table has more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliation between these financial measures.
Share-based compensation expense
VistaPrint adopted SFAS 123(R), Share-Based Payments, on July 1, 2005 and began expensing the fair value of share option grants issued to employees and directors. Prior to that date, the Company had accounted for share option grants under the provisions of APB No. 25, Accounting for Stock Issued to Employees, and therefore had not recorded any compensation expense related to such grants.
VistaPrint's management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenses that may not be indicative of our core business operating results. VistaPrint believes that both management and investors have historically benefited from referring to these non-GAAP financial measures in assessing VistaPrint's performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also have facilitated management's internal comparisons to VistaPrint's historical performance and our competitors' operating results. Management believes that these benefits were particularly important during the period following adoption of SFAS 123(R), as prospective equity grants resulted in incremental share-based compensation expenses not previously reported by VistaPrint prior to adoption of SFAS 123(R), which management believes were not indicative of core business operating results.
VistaPrint previously announced the Company's intention to eliminate the use of non-GAAP financial measures in its financial reporting and guidance beginning with the first quarter of the fiscal year ending June 30, 2009, other than to facilitate non-GAAP comparisons during a transition period, because management believed that the reporting of non-GAAP measures would by that time no longer provide meaningful supplemental information to investors regarding the Company's performance. However, based on subsequent investor feedback, management has concluded that many investors believe they would continue to benefit from referring to these non-GAAP financial measures in assessing VistaPrint's performance and when forecasting and analyzing future periods. Therefore, the Company intends to continue to use non-GAAP financial measures in its financial reporting and guidance in fiscal year 2009 and will reevaluate their use in future periods. Until VistaPrint ceases to include non-GAAP financial measures in its reporting, it expects to compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year.
Management provides these non-GAAP financial measures as a courtesy to investors. However, to gain a more complete understanding of the Company's financial performance, management does (and investors should) rely upon GAAP financial statements.
About VistaPrint
VistaPrint Limited (Nasdaq:VPRT) is the small business marketing company having served over 17 million customers world-wide. VistaPrint offers small businesses the ability to market their business with a broad range of brand identity and promotional products, marketing services and electronic marketing solutions. A global company, VistaPrint employs more than 1,600 people and operates 19 localized websites serving over 120 countries around the world. A broad range of marketing products and services are available online at www.vistaprint.com. VistaPrint's products are satisfaction guaranteed.
VistaPrint and the VistaPrint logo are registered trademarks of VistaPrint. All other brand and product names appearing on this announcement may be trademarks or registered trademarks of their respective holders.
This press release contains statements about management's future expectations, plans and prospects of our business that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning the expected growth and development of our business including the financial guidance set forth under the heading "Financial Guidance as of January 27, 2009," our operating performance, our margins, our market position, our reinvestment program, and our ability to successfully attract and retain customers. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, our ability to attract customers and to retain customers and to do so in a cost-effective manner, willingness of purchasers of graphic design services and printed products to shop online, failure of our investments, unexpected increases in our use of funds, failure to increase our revenue and keep our expenses consistent with revenue, failures of our web sites or network infrastructure, failure to maintain the prices we charge for our products and services, the inability of our manufacturing operations to meet customer demand, exchange rate fluctuations, downturns in general economic conditions, and other factors that are discussed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2008, our Form 10-Q for the quarter ended September 30, 2008, and other documents we periodically file with the SEC.
In addition, the statements in this press release represent our expectations and beliefs as of the date of this press release. We anticipate that subsequent events and developments may cause these expectations and beliefs to change. We specifically disclaim any obligation to update any forward-looking statements. These forward-looking statements should not be relied upon as representing our expectations or beliefs as of any date subsequent to the date of this press release.
VistaPrint Limited Consolidated Balance Sheets December 31, June 30, 2008 2008 --------- --------- (Unaudited) In thousands, except share and per share data) Assets Current assets: Cash and cash equivalents $ 97,892 $ 103,145 Marketable securities 13,123 26,598 Accounts receivable, net of allowances of $200 and $213 at December 31, 2008 and June 30, 2008, respectively 4,989 6,105 Inventory 4,069 2,548 Prepaid expenses and other current assets 7,202 5,678 --------- --------- Total current assets 127,275 144,074 Property, plant and equipment, net 174,646 154,520 Software and web site development costs, net 5,992 5,380 Deferred tax assets 2,956 2,956 Other assets 9,655 9,022 --------- --------- Total assets $ 320,524 $ 315,952 ========= ========= Liabilities and shareholders' equity Current liabilities: Accounts payable $ 12,506 $ 8,486 Accrued expenses 47,528 35,655 Deferred revenue 2,516 1,893 Current portion of long-term debt 8,977 3,304 --------- --------- Total current liabilities 71,527 49,338 Deferred tax liability 2,578 2,656 Other liabilities 3,905 1,946 Long-term debt 11,432 19,507 Shareholders' equity: Common shares, par value $0.001 per share, 500,000,000 shares authorized; 43,878,282 and 44,279,248 shares issued and 42,091,892 and 44,279,248 shares outstanding at December 31, 2008 and June 30, 2008, respectively 45 44 Treasury shares at cost: 1,786,390 shares at December 31, 2008 (27,111) -- Additional paid-in capital 185,237 191,271 Retained earnings 69,921 43,098 Accumulated other comprehensive income 2,990 8,092 --------- --------- Total shareholders' equity 231,082 242,505 --------- --------- Total liabilities and shareholders' equity $ 320,524 $ 315,952 ========= ========= VistaPrint Limited Consolidated Statements of Operations Three Months Ended Six Months Ended December 31, December 31, ----------------------- ----------------------- 2008 2007 2008 2007 ---------- ---------- ---------- ---------- (Unaudited) (in thousands, except share and per share data) Revenue $ 138,903 $ 105,017 $ 253,135 $ 184,470 Cost of revenue (1) 50,692 39,896 95,536 69,648 Technology and development expense (1) 15,246 11,124 29,054 20,232 Marketing and selling expense (1) 42,683 34,123 77,484 60,439 General and adminis- trative expense (1) 9,629 8,076 20,576 15,445 ---------- ---------- ---------- ---------- Income from operations 20,653 11,798 30,485 18,706 Interest income 564 1,147 1,291 2,321 Other income (expense), net (426) 100 (1,366) 98 Interest expense 353 421 733 856 ---------- ---------- ---------- ---------- Income before income taxes 20,438 12,624 29,677 20,269 Income tax provision 1,889 1,455 2,854 2,220 ---------- ---------- ---------- ---------- Net income $ 18,549 $ 11,169 $ 26,823 $ 18,049 ========== ========== ========== ========== Basic net income per share $ 0.43 $ 0.25 $ 0.61 $ 0.41 ========== ========== ========== ========== Diluted net income per share $ 0.42 $ 0.24 $ 0.59 $ 0.39 ========== ========== ========== ========== Weighted average common shares outstanding - basic 43,297,815 43,838,575 43,838,748 43,691,390 ========== ========== ========== ========== Weighted average common shares outstanding - diluted 44,253,345 46,313,960 45,133,894 46,056,567 ========== ========== ========== ========== (1) Share-based compensation cost is allocated as follows: Three Months Ended Six Months Ended December 31, December 31, ----------------------- ----------------------- 2008 2007 2008 2007 ---------- ---------- ---------- ---------- (Unaudited) (in thousands) Cost of revenue $ 186 $ 210 $ 382 $ 345 Technology and devel- opment expense 1,196 1,056 2,460 1,861 Marketing and selling expense 985 989 2,022 1,805 General and adminis- trative expense 2,428 1,434 5,419 2,719 ---------- ---------- ---------- ---------- $ 4,795 $ 3,689 $ 10,283 $ 6,730 ========== ========== ========== ========== VistaPrint Limited Reconciliations of Non-GAAP Financial Measures Three Months Ended Six Months Ended December 31, December 31, --------------------- --------------------- 2008 2007 2008 2007 --------- -------- -------- -------- (Unaudited) (Unaudited) Non-GAAP adjusted (in thousands, except (in thousands, except net income per share data) per share data) reconciliation: Net income $ 18,549 $ 11,169 $ 26,823 $ 18,049 Add back: Share-based compensation expense, inclusive of income tax effects 4,971(a) 3,822(b) 10,652(c) 6,976(d) --------- -------- -------- -------- Non-GAAP adjusted net income $ 23,520 $ 14,991 $ 37,475 $ 25,025 ========= ======== ======== ======== Non-GAAP adjusted net income per diluted share reconciliation: Net income per diluted share $ 0.42 $ 0.24 $ 0.59 $ 0.39 Add back: Share-based compensation expense, inclusive of income tax effects 0.11 0.08 0.23 0.14 --------- -------- -------- -------- Non-GAAP adjusted net income per diluted share $ 0.53 $ 0.32 $ 0.82 $ 0.53 ========= ======== ======== ======== (a) Includes share-based compensation charges of $4,795 and the income tax effects related to those charges of $176 (b) Includes share-based compensation charges of $3,689 and the income tax effects related to those charges of $133 (c) Includes share-based compensation charges of $10,283 and the income tax effects related to those charges of $369 (d) Includes share-based compensation charges of $6,730 and the income tax effects related to those charges of $246 VistaPrint Limited Consolidated Statements of Cash Flows Six Months Ended December 31, ---------------------- 2008 2007 -------- -------- (Unaudited) (in thousands) Operating activities Net income $ 26,823 $ 18,049 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 16,646 11,068 Loss on disposal of long lived assets -- 50 Write-off of long lived assets 1,331 62 Share-based compensation expense 10,283 6,730 Tax benefits derived from share-based compensation awards (28) -- Changes in operating assets and liabilities: Accounts receivable 979 1,344 Inventory (1,628) (1,176) Prepaid expenses and other assets (2,046) (3,119) Accounts payable 3,848 5,432 Accrued expenses and other current liabilities 16,496 13,590 -------- -------- Net cash provided by operating activities 72,704 52,030 Investing activities Purchases of property, plant and equipment (41,500) (34,692) Purchases of marketable securities (6,078) (28,970) Sales of marketable securities 18,837 32,597 Purchase of intangible assets -- (1,250) Capitalization of software and website development costs (3,327) (2,155) -------- -------- Net cash used in investing activities (32,068) (34,470) Financing activities Repayments of long-term debt (1,624) (1,611) Payment of withholding taxes in connection with settlement of RSUs (1,405) (1,583) Repurchase of common shares (45,518) -- Tax benefits derived from share-based compensation awards 28 -- Proceeds from issuance of common shares 3,285 5,822 -------- -------- Net cash provided by financing activities (45,234) 2,628 Effect of exchange rate changes on cash (655) 530 -------- -------- Net increase (decrease) in cash and cash equivalents (5,253) 20,718 Cash and cash equivalents at beginning of period 103,145 69,464 -------- -------- Cash and cash equivalents at end of period $ 97,892 $ 90,182 ======== ======== Free cash flow reconciliation: Net cash provided by operating activities $ 72,704 $ 52,030 Purchases of property, plant and equipment, net (41,500) (34,692) Capitalization of software and website development costs (3,327) (2,155) -------- -------- Total free cash flow $ 27,877 $ 15,183 ======== ========