* Quarterly revenue rose 21 percent year over year to $127.5 million * GAAP net income per fully diluted share rose 32 percent year over year to $0.33 * Non-GAAP adjusted net income per fully diluted share rose 37 percent year over year to $0.44
HAMILTON, Bermuda, April 30, 2009 (GLOBE NEWSWIRE) -- VistaPrint Limited (Nasdaq:VPRT), the small business marketing company, today announced financial results for the 2009 third fiscal quarter ended March 31, 2009.
"VistaPrint executed well in the third quarter with revenue in line with guidance and earnings that exceeded guidance," said Robert Keane, president and chief executive officer. "These results reflect our strategy of growing both revenue and profits through a combination of new customer acquisition, geographic expansion, and enhanced customer value propositions. Equally important, VistaPrint's ability to execute simultaneously on so many fronts reflects our continued dedication to operational and financial discipline."
VistaPrint recently announced several key strategic and operational developments, including: the company's decision to change its domicile to the Netherlands and re-establish a headquarters office ("quartiers generaux") in Paris, France; VistaPrint's strategic partnership with FedEx Office to provide marketing products and services in the U.S. market; and the introduction of email marketing services.
"We believe these exciting developments will help scale our operations, enhance our services, and reinforce our market leadership," continued Keane. "The new email offering is a continuation of our strategy of being a turnkey marketing solution for small businesses. Our strategic partnership with FedEx Office should help us grow our U.S. revenue by reaching new customers and by combining VistaPrint's strengths with those of FedEx Office, the market leader in retail copy and print services. Finally, the re-domicile of our parent entity in the Netherlands and the re-establishment of an office in France underscores VistaPrint's commitment to becoming a market leader in geographies worldwide."
Financial Metrics: * Revenue for the third quarter of fiscal year 2009 grew to $127.5 million, a 21 percent increase over revenue of $105.8 million reported in the same quarter a year ago. * Gross margin (revenue minus the cost of revenue as a percent of total revenue) in the third quarter was 63.5 percent, compared to 61.3 percent in the same quarter a year ago. * Operating income in the third quarter was $16.0 million, or 12.5 percent of revenue, and reflected a 44 percent increase compared to $11.1 million, or 10.5 percent of revenue in the same quarter a year ago. * GAAP net income for the third quarter was $14.2 million, or 11.1 percent of revenue, representing a 24 percent increase compared to $11.5 million, or 10.8 percent of revenue in the same quarter a year ago. * GAAP net income per fully diluted share for the third quarter was $0.33, representing a 32 percent increase compared to $0.25 in the same quarter a year ago. * Non-GAAP adjusted net income for the third quarter, which excludes share-based compensation expense, was $18.9 million, or 14.8 percent of revenue, representing a 25 percent increase compared to $15.1 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 third quarter, which excludes share-based compensation expense, was $0.44, representing a 37 percent increase compared to $0.32 in the same quarter a year ago. * Capital expenditures in the third quarter were $18.1 million, or 14.2 percent of revenue. * During the third quarter, the Company generated $19.5 million in cash from operations and $(0.5) million in free cash flow, defined as cash from operations less purchases of property, plant and equipment, and capitalization of software and website development costs. * The Company had $114.7 million in cash, cash equivalents and short-term marketable securities as of March 31, 2009. Operating Highlights: * VistaPrint acquired approximately 1.5 million new customers in the third fiscal quarter ended March 31, 2009. * Repeat customers generated approximately 66 percent of total quarterly bookings in the third quarter, compared with 64 percent in the same quarter a year ago. * Average daily order volume in the third quarter of fiscal 2009 exceeded 44,000, reflecting an approximate 33 percent increase over an average of more than 33,000 orders per day in the same quarter a year ago. * Advertising spending in the third quarter was $24.4 million, or 19.2 percent of revenue, compared to $19.9 million, or 18.8 percent of revenue in the same quarter a year ago. * Non-U.S. markets contributed 38 percent of total revenue in the third quarter, flat with 38 percent in the same quarter a year ago. * Average order value in the third quarter including revenue from shipping and processing was $31.06, a 5 percent decrease when compared to $32.54 in the same quarter a year ago. * Web site sessions in the third quarter were 65.8 million, a 38 percent increase over 47.6 million in the same quarter a year ago. * Conversion rates were 6.0 percent in the third quarter of fiscal 2009, compared to 6.4 percent in the same quarter a year ago. * VistaPrint broadened its promotional product offerings with the introduction of key chains and mouse pads.
"Third quarter revenue results were in line with our guidance and we exceeded our earnings guidance due to the seasonal increase in revenue from small business product lines, gross margin improvements, and effective cost controls," noted chief financial officer Mike Giannetto. "Looking ahead, economic conditions and exchange rates remain uncertain, and we have attempted to factor these risks into our financial guidance."
Financial Guidance as of April 30, 2009:
Based on current and anticipated levels of demand, the Company expects the following financial results:
Revenue * For the quarter ending June 30, 2009, the Company expects revenue of approximately $123 million to $129 million. * For the full fiscal year ending June 30, 2009, the Company expects revenue of approximately $504 million to $510 million. GAAP Fully-Diluted Earnings Per Share * For the quarter ending June 30, 2009, the Company expects GAAP fully-diluted earnings per share of approximately $0.24 to $0.28, which assumes 43.6 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 $1.16 to $1.20, which assumes 44.2 million weighted average shares outstanding. Non-GAAP Adjusted Net Income Per Fully-Diluted Share * For the quarter ending June 30, 2009, the Company expects non-GAAP adjusted net income per fully diluted share of approximately $0.35 to $0.39, which assumes a non-GAAP fully diluted weighted average share count of approximately 44.1 million shares, and share-based compensation expense of approximately $4.8 million. * For the full fiscal year ending June 30, 2009, the Company expects non-GAAP adjusted net income per fully diluted share of approximately $1.61 to $1.65, which assumes a non-GAAP fully diluted weighted average share count of approximately 44.6 million shares, and share-based compensation expense of approximately $20.2 million. Capital Expenditures * For the quarter ending June 30, 2009, the Company expects to make capital expenditures of approximately $15 million to $20 million. * For the full fiscal year ending June 30, 2009, the Company expects to make capital expenditures of approximately $75 million to $80 million.
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. (EDT) on April 30, 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. (EDT) 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 April 30, 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 and share count impact. 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 based compensation 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 19 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 April 30, 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, changes in or interpretation of tax laws and treaties, 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 December 31, 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
March 31, June 30,
2009 2008
--------- ---------
(Unaudited)
(In thousands,
except share and per
share data)
Assets
Current assets:
Cash and cash equivalents $ 107,744 $ 103,145
Marketable securities 6,910 26,598
Accounts receivable, net of allowances of $214
and $213, respectively 7,629 6,105
Inventory 3,192 2,548
Prepaid expenses and other current assets 5,683 5,678
--------- ---------
Total current assets 131,158 144,074
Property, plant and equipment, net 181,593 154,520
Software and web site development costs, net 6,483 5,380
Deferred tax assets 3,118 2,956
Other assets 9,979 9,022
--------- ---------
Total assets $ 332,331 $ 315,952
========= =========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 11,179 $ 8,486
Accrued expenses 40,859 35,655
Deferred revenue 2,353 1,893
Current portion of long-term debt 8,625 3,304
--------- ---------
Total current liabilities 63,016 49,338
Deferred tax liability 2,201 2,656
Other liabilities 4,310 1,946
Long-term debt 10,626 19,507
Shareholders' equity:
Common shares, par value $0.001 per share,
500,000,000 shares authorized; 44,064,212 and
44,279,248 shares issued; and 42,258,611 and
44,279,248 shares outstanding, respectively 44 44
Treasury shares, at cost, 1,805,601 and
0 shares, respectively (27,537) --
Additional paid-in capital 195,741 191,271
Retained earnings 84,087 43,098
Accumulated other comprehensive income (157) 8,092
--------- ---------
Total shareholders' equity 252,178 242,505
--------- ---------
Total liabilities and shareholders' equity $ 332,331 $ 315,952
========= =========
VistaPrint Limited
Consolidated Statements of Income
Three Months Ended Nine Months Ended
March 31, March 31,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
(Unaudited)
(in thousands, except share and per share data)
Revenue $ 127,523 $ 105,779 $ 380,658 $ 290,249
Cost of revenue(1) 46,583 40,960 142,119 110,607
Technology and
development expense(1) 15,646 11,390 44,700 31,623
Marketing and selling
expense(1) 39,644 33,732 117,128 94,170
General and
administrative
expense(1) 9,664 8,581 30,240 24,027
---------- ---------- ---------- ----------
Income from operations 15,986 11,116 46,471 29,822
Interest income 251 1,057 1,543 3,378
Other (expense) income,
net (389) 669 (1,755) 766
Interest expense 342 404 1,075 1,260
---------- ---------- ---------- ----------
Income before income
taxes 15,506 12,438 45,184 32,706
Income tax provision 1,340 985 4,195 3,204
---------- ---------- ---------- ----------
Net income $ 14,166 $ 11,453 $ 40,989 $ 29,502
========== ========== ========== ==========
Basic net income per
share $ 0.34 $ 0.26 $ 0.95 $ 0.67
========== ========== ========== ==========
Diluted net income per
share $ 0.33 $ 0.25 $ 0.92 $ 0.64
========== ========== ========== ==========
Weighted average common
shares outstanding
- basic 42,183,100 44,062,407 43,290,985 43,815,062
========== ========== ========== ==========
Weighted average common
shares outstanding
- diluted 43,109,786 46,002,304 44,469,114 46,038,479
========== ========== ========== ==========
(1) Share-based compensation cost is allocated as follows:
Three Months Ended Nine Months Ended
March 31, March 31,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
(Unaudited)
(in thousands)
Cost of revenue $ 183 $ 248 $ 565 $ 593
Technology and
development expense 1,247 1,005 3,707 2,865
Marketing and selling
expense 1,010 879 3,032 2,685
General and
administrative expense 2,156 1,392 7,575 4,110
---------- ---------- ---------- ----------
$ 4,596 $ 3,524 $ 14,879 $ 10,253
========== ========== ========== ==========
VistaPrint Limited
Reconciliations of Non-GAAP Financial Measures
Three Months Ended Nine Months Ended
March 31, March 31,
-------------------- --------------------
2009 2008 2009 2008
-------- -------- -------- --------
(Unaudited) (Unaudited)
(in thousands, except (in thousands, except
per share data) per share data)
Non-GAAP adjusted net
income reconciliation:
Net income $ 14,166 $ 11,453 $ 40,989 $ 29,502
Add back:
Share-based
compensation
expense, inclusive
of income tax
effects 4,761(a) 3,652(b) 15,413(c) 10,627(d)
-------- -------- -------- --------
Non-GAAP adjusted net
income $ 18,927 $ 15,105 $ 56,402 $ 40,129
======== ======== ======== ========
Non-GAAP adjusted net
income per diluted
share reconciliation:
Net income per diluted
share $ 0.33 $ 0.25 $ 0.92 $ 0.64
Add back:
Share-based
compensation
expense, inclusive
of income tax
effects 0.11 0.07 0.34 0.21
-------- -------- -------- --------
Non-GAAP adjusted net
income per diluted
share $ 0.44 $ 0.32 $ 1.26 $ 0.85
======== ======== ======== ========
(a) Includes share-based compensation charges of $4,596 and the
income tax effects related to those charges of $165
(b) Includes share-based compensation charges of $3,524 and the
income tax effects related to those charges of $128
(c) Includes share-based compensation charges of $14,879 and the
income tax effects related to those charges of $534
(d) Includes share-based compensation charges of $10,253 and the
income tax effects related to those charges of $374
VistaPrint Limited
Consolidated Statements of Cash Flows
Nine Months Ended
March 31,
------------------
2009 2008
-------- --------
(Unaudited)
(in thousands)
Operating activities
Net income $ 40,989 $ 29,502
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 25,991 17,769
Loss on disposal of long lived assets 1,331 112
Share-based compensation expense 14,879 10,253
Tax benefits derived from share-based
compensation awards (4,408) (185)
Changes in operating assets and liabilities:
Accounts receivable (1,769) (1,625)
Inventory (844) (860)
Prepaid expenses and other assets (1,484) (4,231)
Accounts payable 2,942 2,219
Accrued expenses and other current liabilities 14,625 16,109
-------- --------
Net cash provided by operating activities 92,252 69,063
Investing activities
Purchases of property, plant and equipment (59,575) (48,889)
Purchases of marketable securities (6,078) (45,761)
Sales of marketable securities 25,037 55,942
Purchase of intangible assets -- (1,250)
Capitalization of software and website development
costs (5,319) (3,999)
-------- --------
Net cash used in investing activities (45,935) (43,957)
Financing activities
Repayments of long-term debt (2,423) (2,425)
Payment of withholding taxes in connection with
settlement of RSUs (1,832) (2,228)
Repurchase of common shares (45,518) --
Tax benefits derived from share-based compensation
awards 4,408 185
Proceeds from issuance of common shares 4,757 7,364
-------- --------
Net cash (used in) provided by financing
activities (40,608) 2,896
Effect of exchange rate changes on cash (1,110) 1,110
-------- --------
Net increase in cash and cash equivalents 4,599 29,112
Cash and cash equivalents at beginning of period 103,145 69,464
-------- --------
Cash and cash equivalents at end of period $107,744 $ 98,576
======== ========
Free cash flow reconciliation:
Net cash provided by operating activities $ 92,252 $ 69,063
Purchases of property, plant and equipment (59,575) (48,889)
Capitalization of software and website
development costs (5,319) (3,999)
-------- --------
Total free cash flow $ 27,358 $ 16,175
======== ========