-- 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
======== ========