LOS ANGELES, CA--(Marketwire - July 30, 2009) - Stamps.com® (
NASDAQ:
STMP), the leading
provider of
postage online and of
shipping software
solutions, today announced results for the second quarter ended June 30,
2009.
For the second quarter:
-- Excluding the enhanced promotion channel, PC Postage revenue was $16.6
million, up 3% from the second quarter of 2008.
-- Including the enhanced promotion channel (which consists of online
programs where additional promotions are offered to customers), total PC
Postage® revenue was $18.2 million, down 2% from the second quarter of
2008.
-- The Company reduced the overall level of sales and marketing costs for
PhotoStamps by approximately 56% versus the second quarter of 2008 and as a
result, total second quarter PhotoStamps revenue was $2.0 million, a
decrease of 31% versus the second quarter of 2008.
-- Total revenue was $20.2 million, a decrease of 6% versus the second
quarter of 2008.
-- PC Postage gross margin was 77.9%, PhotoStamps gross margin was 23.8%
and total gross margin was 72.5%.
-- GAAP net income was $1.1 million, or $0.06 per fully diluted share.
This includes a $0.8 million non-cash stock-based compensation expense, a
$0.4 million asset write-off and a $0.1 million adjustment resulting from
the temporary suspension of the Company's ability to utilize its net
operating losses for California income tax purposes.
-- Excluding the FASB Statement 123R expense, asset write-off and the
income tax adjustment, non-GAAP income from operations was $2.1 million and
non-GAAP net income per fully diluted share was $0.14.
"In the current tough macroeconomic environment, we were happy with the
strength in our earnings this quarter," said Ken McBride, Stamps.com
president and CEO. "We continued to experience growth in our PC Postage
business outside of the enhanced promotion channel, albeit at a slower rate
than we did before the current economic downturn. We are also making good
progress in our strategic investment areas of enterprise and shipping."
Second quarter 2009 Detailed Results
Stamps.com reported 2009 second quarter GAAP net income of $1.1 million. On
a per share basis, total 2009 second quarter GAAP net income was $0.06
based on fully diluted shares outstanding of 16.4 million. Second quarter
GAAP net income was reduced by $0.8 million for FASB 123R stock-based
compensation expense, a $0.4 million asset write-off of inventory of
discontinued products and an income tax adjustment of $0.1 million
resulting from the temporary suspension of the Company's ability to utilize
its net operating losses for California income tax purposes based on
legislation which was passed in 2008 and is effective for tax years 2008
and 2009. Non-GAAP and GAAP amounts are reconciled in the following table:
Income
Second Quarter Fiscal 2009 Non- Asset Tax
All amounts in millions except GAAP FASB Write- Adjust- GAAP
per share or margin data: Amounts 123R Off ment Amounts
Cost of Sales $ 5.48 $ 0.07 $ - $ - $ 5.55
Research & Development 2.04 0.16 - - 2.20
Sales & Marketing 8.03 0.20 - - 8.23
General & Administrative 2.54 0.39 0.37 - 3.31
------- ------- ------- ------- -------
Total Expenses 18.08 0.82 0.37 - 19.28
Gross margin 72.9% (0.3%) - - 72.5%
Income from Operations 2.10 (0.82) (0.37) - 0.90
Interest and Other Income 0.23 - - - 0.23
------- ------- ------- ------- -------
Pre-Tax Income 2.33 (0.82) (0.37) - 1.14
Provision for Income Taxes (0.03) - - (0.05) (0.08)
------- ------- ------- ------- -------
Net Income $ 2.30 $ (0.82) $ (0.37) $ (0.05) $ 1.05
======= ======= ======= ======= =======
------- ------- ------- ------- -------
On a diluted per share basis $ 0.14 $ (0.05) $ (0.02) $ (0.00) $ 0.06
======= ======= ======= ======= =======
Shares used in per share
calculation 16.43 16.43 16.43 16.43 16.43
Excluding the FASB Statement 123R expense, asset write-off and income tax
adjustment, 2009 second quarter non-GAAP net income was $2.3 million or
$0.14 per fully diluted share based on fully diluted shares outstanding of
16.4 million. This compares to 2008 second quarter non-GAAP net income per
fully diluted share excluding 123R expenses of $0.15 (there were no
comparable asset write-offs or income tax adjustments in the second quarter
of 2008). Thus, non-GAAP second quarter diluted earnings per share
excluding 123R-related expenses were down 6% versus the same quarter last
year.
Share Repurchase
Under the current share repurchase plan originally approved by the Board of
Directors on February 5, 2009, the Company has repurchased 0.85 million
shares for a total cost of $7.1 million. On July 23, 2009, Stamps.com's
Board of Directors approved a new share repurchase plan, effective upon the
expiration of the current plan in August 2009, authorizing the Company to
repurchase up to 2.5 million shares of Stamps.com stock from August 2009
through February 2010.
The timing of share purchases, if any, and the number of shares to be
bought at any one time will depend on market conditions and also will
depend on the Company's assessment of risk that its net operating loss
asset could be impaired if such a repurchase were undertaken. Share
purchases may be made from time-to-time on the open market or in negotiated
transactions at the Company's discretion in compliance with Rule 10b-18 of
the United States Securities and Exchange Commission. The Company's
purchase of any of its shares is subject to limitations that may be imposed
on such purchases by applicable securities laws and regulations and the
rules of the Nasdaq Stock Market.
Business Outlook
Stamps.com currently expects total 2009 revenue to be $80 to $90 million.
2009 GAAP net income per share is expected to be $0.20 to $0.40, including
approximately $3 million of 2009 FASB Statement 123R stock-based
compensation expense, $0.4M asset write-off and $0.5 to $1.0 million of
expected taxes resulting from the temporary suspension of the Company's
ability to utilize its net operating losses for California income tax
purposes. Excluding the FASB Statement 123R expenses, asset write-off and
the additional California income taxes, non-GAAP 2009 net income per fully
diluted share is expected to be $0.40 to $0.60.
Net Operating Losses (NOL) and Protective Measures
Stamps.com currently has approximately $235 million in Federal NOLs and
$150 million in State NOLs, with a potential value of up to $95 million in
tax savings over the next 15 years. Under Internal Revenue Code Section
382 rules, if a change of ownership is triggered, the Company's NOL asset
may be impaired. A change in ownership can occur whenever there is a shift
in ownership by more than 50 percentage points by one or more 5%
shareholders within a three-year period. We estimate that as of June 30,
2009 the Company was at an approximately 28% level compared with the 50%
level that would trigger impairment of our NOL asset.
During the second quarter of 2008, the Company received shareholder
approval to amend its articles of incorporation in order to protect its NOL
asset (the "NOL Protective Measures") and those measures are now in effect.
Under the NOL Protective Measures there is no change to the way that
existing Stamps.com shares are held or traded, but any person, company or
investment firm which wishes to become a "5% shareholder" of Stamps.com
must first obtain a waiver from the Company's board of directors. In
addition, any person, company or investment firm which is already a "5%
shareholder" of Stamps.com cannot make any additional purchases of
Stamps.com stock without a waiver from the Company's board of directors.
Stamps.com currently has 16.1 million shares outstanding and therefore
ownership of approximately 805 thousand shares or greater would currently
constitute a "5% shareholder". Stamps.com strongly urges that any
stockholder contemplating owning more than 650 thousand shares contact the
Company before doing so.
Company Customer Metrics
A complete set of the quarterly customer metrics for the past three fiscal
years and through the current quarter is available currently at
http://investor.stamps.com (under a tab on the left side called Company
Information, Current and Previous Metrics).
Quarterly Conference Call
The Stamps.com financial results conference call will be web cast today at
5:00 p.m. Eastern Time and may be accessed at
http://investor.stamps.com.
The Company plans to discuss its business outlook during the conference
call. Following the conclusion of the web cast, a replay of the call will
be available at the same website.
About Stamps.com and PhotoStamps
Stamps.com
(
NASDAQ:
STMP) is a leading provider of Internet-based postage services.
Stamps.com's service enables small businesses, enterprises, advanced
shippers, and consumers to print U.S. Postal Service-approved postage with
just a PC, printer and Internet connection, right from their home or
office. The Company currently has PC Postage partnerships with Avery
Dennison, Microsoft, HP, the U.S. Postal Service and others.
PhotoStamps is a patented
Stamps.com product that couples the technology of PC Postage with the
simplicity of a web-based image upload and order process. Customers may
create full custom PhotoStamps with their own digital photograph, or they
may choose a licensed image from one of many PhotoStamps collections such
as the collegiate collection. Since launching PhotoStamps in May 2005, more
than 70 million individual PhotoStamps have been shipped to customers.
Stamps.com currently has PhotoStamps partnerships with Apple,
Google/Picassa, HP/Snapfish, Costco, Adobe and others.
Non-GAAP Measures
To supplement the Company's condensed financial statements presented in
accordance with GAAP, Stamps.com uses non-GAAP measures of certain
components of financial performance. These non-GAAP measures include
non-GAAP income from operations, non-GAAP pre-tax income, non-GAAP net
income, non-GAAP earnings per diluted share, and non-GAAP gross margin.
These
non-GAAP measures are provided to enhance investors' overall understanding
of the Company's current financial performance and the Company's prospects
for the future and provide further information about the impact of the
adoption of the accounting standard FASB 123R. The Company believes the
non-GAAP measures that exclude stock-based compensation, asset write-offs,
litigation charges, income tax adjustments, and income tax benefits enhance
the comparability of results against prior periods. These measures should
be considered in addition to results prepared in accordance with generally
accepted accounting principles, but should not be considered a substitute
for, or superior to, GAAP results. Reconciliation to the nearest GAAP
measure of all non-GAAP measures included in this press release can be
found in the financial tables included on page 2 of this press release.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: This release includes forward-looking statements about our
anticipated results and our PhotoStamps spend that involve risks and
uncertainties. Important factors, including the Company's ability to
complete and ship its products, maintain desirable economics for its
products and obtain or maintain regulatory approval, which could cause
actual results to differ materially from those in the forward-looking
statements, are detailed in filings with the Securities and Exchange
Commission made from time to time by STAMPS.COM, including its Annual
Report on Form 10-K for the year ended December 31, 2008, Quarterly Reports
on Form 10-Q, and Current Reports on Form 8-K. STAMPS.COM undertakes no
obligation to release publicly any revisions to any forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Stamps.com, the Stamps.com logo and PhotoStamps are trademarks or
registered trademarks of Stamps.com Inc. All other brands and names are
property of their respective owners.
STAMPS.COM INC.
STATEMENTS OF OPERATIONS
(in thousands, except per share data: unaudited)
Three Months ended Six Months ended
June 30, June 30,
2009 2008 2009 2008
--------- --------- --------- --------
Revenues:
Subscription $ 15,207 $ 15,577 $ 30,521 $ 30,774
Product 2,580 2,583 5,197 5,066
Insurance 395 377 799 765
PhotoStamps 1,995 2,873 3,708 5,877
Other 5 - 5 -
--------- --------- --------- --------
Total revenues 20,182 21,410 40,230 42,482
Cost of revenues:
Subscription 2,872 2,262 5,880 5,004
Product 1,030 948 1,975 1,828
Insurance 123 119 248 239
PhotoStamps 1,521 2,092 2,821 4,219
--------- --------- --------- --------
Total cost of revenues 5,546 5,421 10,924 11,290
--------- --------- --------- --------
Gross profit 14,636 15,989 29,306 31,192
Operating expenses:
Sales and marketing 8,227 8,780 16,291 17,403
Research and development 2,199 2,102 4,426 4,045
General and administrative 3,306 4,457 6,570 8,400
--------- --------- --------- --------
Total operating expenses 13,732 15,339 27,287 29,848
--------- --------- --------- --------
Income from operations 904 650 2,019 1,344
Other income, net:
Interest income 232 736 589 1,653
Other income - - - 21
--------- --------- --------- --------
Total other income, net 232 736 589 1,674
--------- --------- --------- --------
Pre-tax income 1,136 1,386 2,608 3,018
Income tax expense (benefit) 84 80 334 (3,486)
--------- --------- --------- --------
Net income $ 1,052 $ 1,306 $ 2,274 $ 6,504
========= ========= ========= ========
Net income per share:
Basic $ 0.06 $ 0.07 $ 0.14 $ 0.33
========= ========= ========= ========
Diluted $ 0.06 $ 0.07 $ 0.14 $ 0.33
========= ========= ========= ========
Weighted average shares
outstanding:
Basic 16,301 19,382 16,581 19,553
========= ========= ========= ========
Diluted 16,427 19,712 16,709 19,831
========= ========= ========= ========
CONDENSED BALANCE SHEETS
(in thousands)
June 30, December 31,
2009 2008
------------ ------------
ASSETS
Cash and investments $ 70,242 $ 74,059
Trade accounts receivable 2,936 2,962
Other accounts receivable 494 1,201
Other current assets 3,791 4,426
Property and equipment, net 2,608 3,086
Intangible assets, net 500 505
Deferred tax 3,671 3,671
Other assets 3,028 3,348
------------ ------------
Total assets $ 87,270 $ 93,258
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 9,195 $ 11,174
Deferred revenue 3,422 $ 3,743
------------ ------------
Total liabilities 12,617 14,917
------------ ------------
Stockholders' equity:
Common stock 47 47
Additional paid-in capital 628,647 626,810
Treasury Stock (99,238) (90,613)
Accumulated deficit (454,117) (456,391)
Unrealized loss on investments (686) (1,512)
------------ ------------
Total stockholders' equity 74,653 78,341
------------ ------------
Total liabilities and stockholders' equity $ 87,270 $ 93,258
============ ============