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VistaPrint Reports Third Quarter of Fiscal Year 2008 Financial Results
-- Quarterly revenue rose 53 percent year over year to $105.8 million
-- Acquired over 1.2 million new customers in the quarter
-- GAAP net income increased 55 percent year over year
-- 38 percent of revenue came from web sites targeting
non-U.S. markets
HAMILTON, Bermuda, April 29, 2008 (PRIME NEWSWIRE) -- VistaPrint Limited (NasdaqGS:VPRT - News), the small business marketing company, today announced its financial results for the three month period ended March 31, 2008, the third quarter of its 2008 fiscal year. Revenue for the third quarter of fiscal year 2008 was $105.8 million, an increase of 53 percent when compared to revenue of $69.3 million in the same quarter of fiscal year 2007. Net income on a GAAP basis for the third quarter of fiscal year 2008 was $11.5 million, which was 10.8 percent of revenue and $0.25 per share on a fully diluted basis. In the same quarter of fiscal year 2007, the Company achieved net income on a GAAP basis of $7.4 million, which was 10.6 percent of revenue and $0.16 per share on a fully diluted basis. On a non-GAAP basis, excluding share-based compensation expense, adjusted net income for the third quarter of fiscal 2008 was $15.0 million, 14.2 percent of revenue, and $0.32 per fully diluted share. During the same quarter of the prior fiscal year, non-GAAP adjusted net income, excluding share-based compensation expense, was $9.3 million, 13.4 percent of revenue, and $0.20 per fully diluted share. ``VistaPrint delivered an outstanding third quarter,'' said Robert Keane, president and chief executive officer. ``Our growth investments continue to drive our results and have positioned us for ongoing success. We rolled out a line of signage products and just introduced small business websites, both of which we are bringing to market with significant competitive advantages.'' Continuing, Mr. Keane stated, ``These growth investments have allowed us to create a superior value proposition and we continue to reinvest to enhance that value proposition and our competitiveness.'' Financial Metrics
-- Revenue for the third quarter of fiscal year 2008 grew to $105.8
million, a 53 percent increase over revenue of $69.3 million
reported in the same quarter a year ago.
-- Gross margin (revenue minus the cost of revenue) in the third
quarter was 61.3 percent, compared to gross margin of 65.1
percent in the same quarter a year ago.
-- Operating income in the third quarter was $11.1 million, or 10.5
percent of revenue, and reflected a 49 percent increase over
operating income of $7.4 million, or 10.7 percent of revenue, in
the same quarter a year ago.
-- GAAP net income for the third quarter was $11.5 million, or 10.8
percent of revenue, representing a 55 percent increase compared
to GAAP net income of $7.4 million, or 10.6 percent of revenue,
in the same quarter a year ago.
-- GAAP net income per fully diluted share for the third quarter was
$0.25 versus GAAP net income per fully diluted share of $0.16 in
the same quarter a year ago.
-- Non-GAAP adjusted net income for the third quarter, which
excludes share-based compensation expense, was $15.0 million, or
14.2 percent of revenue, representing a 61 percent increase over
non-GAAP adjusted net income of $9.3 million, or 13.4 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 $0.32, versus adjusted net income per fully diluted share of
$0.20 in the same quarter a year ago.
-- The Company had $126.7 million in cash, cash equivalents and
marketable securities as of March 31, 2008 versus $113.0 million
as of March 31, 2007.
-- Capital expenditures in the third quarter were $14.2 million.
-- During the third quarter, the Company generated $17.0 million in
cash from operations and $1.0 million in free cash flow.
Operating Metrics
-- VistaPrint acquired over 1.2 million new customers in the quarter
ending March 31, 2008.
-- Repeat customers generated approximately 64 percent of total
quarterly bookings, slightly higher versus the same quarter a
year ago.
-- Average daily order volume in the third quarter exceeded 33,000,
an increase of over 50 percent compared with average daily order
volume of approximately 21,000 in the same quarter a year ago.
-- Referral fees generated revenue of $7.1 million or 6.7 percent of
total revenue in the third quarter of the current fiscal year,
compared to $5.8 million from referral fees, or 8.3 percent of
total revenue, in the same quarter a year ago.
-- Advertising spending in the third quarter was $19.9 million or
18.8 percent of revenue compared to advertising spending of $14.0
million or 20.1 percent of revenue in the same quarter a year
ago.
-- VistaPrint web sites that target non-U.S. markets contributed 38
percent of total revenue in the third quarter, up from 32 percent
in the same quarter a year ago. Non-U.S. revenue increased 81
percent year over year in U.S. dollars. Excluding the impact of
changes in foreign currency exchange rates, non-U.S. revenue grew
62 percent year over year. Quarterly revenue from U.S. websites
grew 39 percent year over year.
-- Average order value in the third quarter of fiscal 2008 including
revenue from shipping was $32.54 compared to average order value
of $33.02 in the same quarter a year ago.
-- Web site sessions in the third quarter of fiscal 2008 were 47.6
million compared to 34.9 million web site sessions in the same
quarter a year ago.
-- Conversion rates were 6.4 percent in the third quarter of fiscal
2008, compared to conversion rates of 5.6 percent in the same
quarter a year ago.
Growth Investments and Innovation
-- Invested $14.2 million in capital expenditures in the third
quarter of fiscal 2008.
-- Entered the market for small business signage with window decals
and car door magnets.
-- Launched small business websites in April.
``VistaPrint's third quarter was strong thanks to normal seasonal strength in the company's core SOHO markets,'' noted Executive Vice President and Chief Financial Officer Harpreet Grewal. He continued, ``Our superior value proposition produced strong operating and financial results despite a slowing U.S. economy.'' Financial Guidance as of April 29, 2008 As previously disclosed, VistaPrint ceased issuing quarterly gross margin guidance following the quarter ended September 30, 2007 and does not plan to provide annual gross margin guidance beyond the fiscal year ending June 30, 2008. Also as previously disclosed, the Company does not plan to provide non-GAAP adjusted net income per fully diluted share guidance for any periods beyond the fiscal year ending June 30, 2008. However, the Company will continue to disclose share-based compensation expense in its reported results to facilitate non-GAAP earnings per share comparisons during a transition period. Based on current and anticipated levels of demand, the Company expects the following: Revenue
-- For the fourth quarter of fiscal year 2008, ending June 30, 2008,
the Company expects revenue to be $105 million to $110 million.
-- For the full fiscal year ending June 30, 2008, the Company
expects revenue to be $395 million to $400 million.
Gross Margins
-- For the full fiscal year ending June 30, 2008, the Company
expects gross margins to be 61 percent to 63 percent.
GAAP Fully-Diluted Earnings Per Share
-- For the fourth quarter of fiscal year 2008, ending June 30, 2008,
the Company expects GAAP fully-diluted earnings per share to be
$0.18 to $0.22.
-- For the full fiscal year ending June 30, 2008, the Company
expects GAAP fully-diluted earnings per share to be $0.82 to
$0.86.
Non-GAAP Adjusted Net Income Per Fully Diluted Share
-- For the fourth quarter of fiscal year 2008, ending June 30, 2008,
the Company expects non-GAAP adjusted net income per fully
diluted share, which excludes share-based compensation expenses,
to be $0.27 to $0.31.
-- For the full fiscal year ending June 30, 2008, the Company
expects non-GAAP adjusted net income per fully diluted share,
which excludes share-based compensation expenses, to be $1.12 to
$1.16.
Capital Expenditures
-- For the fourth quarter of fiscal year 2008, ending June 30, 2008,
the Company expects to make capital expenditures of approximately
17 to 20 percent of fiscal year 2008 fourth quarter revenue.
-- For the full fiscal year ending June 30, 2008, the Company
expects to make capital expenditures of approximately 17 to 18
percent of fiscal year 2008 revenue.
Guidance for the full fiscal year ending June 30, 2009
-- For the full fiscal year ending June 30, 2009, the Company
expects GAAP fully-diluted earnings per share to be $1.10 to
$1.20, which assumes 47.5 million weighted average shares
outstanding.
-- The Company is providing the following assumptions to facilitate
comparisons with non-GAAP adjusted net income per fully diluted
share: non-GAAP fully diluted weighted average share count for
the fiscal year ending June 30, 2009 of approximately 48.2
million shares, share-based compensation of approximately $20
million, and, based on those assumptions, fiscal year 2009
non-GAAP adjusted net income per fully diluted share range of
approximately $1.50 to $1.60. Please note, however, that earnings
per share guidance for any period beyond June 30, 2008 is
GAAP-based and any additional assumptions are provided solely to
facilitate comparisons.
The foregoing guidance supersedes any guidance previously issued by the Company. Any previous guidance should no longer be relied upon. At approximately 4:20 p.m. (EDT) on April 29, 2008, VistaPrint will post, on the investor relations section of http://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 29, 2008. 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. 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. VistaPrint's management believes that these non-GAAP financial measures can 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) on July 1, 2005, which management believes were not indicative of core business operating results. Beginning with the Company's first quarter of the fiscal year ending June 30, 2009, VistaPrint plans to eliminate the use of non-GAAP financial measures in our financial reporting and guidance. At that point in time, VistaPrint will have reported share-based compensation expense in our financial statements for a period of three fiscal years. As such, management believes that the reporting of non-GAAP measures will no longer be required to facilitate management's and investors' comparisons to VistaPrint's historical performance, and therefore will not provide meaningful supplemental information regarding our performance. Until VistaPrint ceases to include non-GAAP financial measures in our reporting, we expect to compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year. 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. Management has excluded share-based compensation expense from the non-GAAP measurements for fiscal years 2006, 2007 and 2008 to facilitate comparison and analysis to historical performance and our competitors' operating results. Although management believes that these non-GAAP financial measures are helpful to understanding the Company's financial performance, to gain a more complete understanding of the Company's financial performance, management does (and investors should) rely upon GAAP statements of operations. About VistaPrint VistaPrint Limited (NasdaqGS:VPRT - News) is the small business marketing company having served over 13 million customers world-wide. VistaPrint offers small businesses everything they need to market their business with brand identity and promotional products, marketing services and electronic marketing solutions. A global company, VistaPrint employs more than 1,300 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 http://www.vistaprint.com. VistaPrint's products are satisfaction guaranteed. VistaPrint, the VistaPrint logo and VistaPrint.com 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 29, 2008,'' 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, and other factors that are discussed in our Annual Report on Form 10-K for the year ended June 30, 2007, our Quarterly Report on Form 10-Q for the quarter ended December 31, 2007, 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,
2008 2007
-------- --------
(Unaudited)
(In thousands, except share
and per share data)
Assets
Current assets:
Cash and cash equivalents $ 98,576 $ 69,464
Marketable securities 28,151 38,578
Accounts receivable, net of allowances of
$191 and $148 at March 31, 2008 and
June 30, 2007, respectively 6,470 4,647
Inventory 2,098 1,144
Prepaid expenses and other current assets 7,544 4,962
-------- --------
Total current assets 142,839 118,795
Property, plant and equipment, net 146,875 106,192
Software and web site development costs, net 4,876 3,841
Patents 1,173 1,277
Deposits, image licenses and other
noncurrent assets 7,716 4,748
-------- --------
Total assets $303,479 $234,853
======== ========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 8,427 $ 9,445
Accrued expenses 40,130 22,403
Deferred revenue 2,139 746
Current portion of long-term debt 3,304 3,202
-------- --------
Total current liabilities 54,000 35,796
Deferred tax liability - non-current 1,312 1,225
Accrued compensation costs 1,015 --
Long-term debt 20,337 21,772
Shareholders' equity:
Common shares, par value $0.001 per
share, 500,000,000 shares authorized;
44,131,331 and 43,472,317 shares issued
and outstanding at March 31, 2008 and
June 30, 2007, respectively 44 43
Additional paid-in capital 185,770 170,029
Retained earnings 32,768 4,066
Accumulated other comprehensive income 8,233 1,922
-------- --------
Total shareholders' equity 226,815 176,060
-------- --------
Total liabilities and shareholders' equity $303,479 $234,853
======== ========
VistaPrint Limited Index
Consolidated Statements of Operations
Three Months Ended Nine Months Ended
March 31, March 31,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
(Unaudited)
(in thousands, except share and per share data)
Revenue $ 105,779 $ 69,348 $ 290,249 $ 183,384
Cost of revenue (1) 40,960 24,168 110,607 64,227
Technology and develop-
ment expense (1) 11,390 7,158 31,623 19,105
Marketing and selling
expense (1) 33,732 23,589 94,170 61,433
General and administra-
tive expense (1) 8,581 6,991 24,027 16,439
---------- ---------- ---------- ----------
Income from operations 11,116 7,442 29,822 22,180
Interest income 1,057 1,181 3,378 3,505
Other income, net 669 100 766 3
Interest expense 404 446 1,260 1,391
---------- ---------- ---------- ----------
Income from operations
before income taxes 12,438 8,277 32,706 24,297
Income tax provision 985 892 3,204 2,551
---------- ---------- ---------- ----------
Net income $ 11,453 $ 7,385 $ 29,502 $ 21,746
========== ========== ========== ==========
Basic net income
per share $ 0.26 $ 0.17 $ 0.67 $ 0.52
========== ========== ========== ==========
Diluted net income
per share $ 0.25 $ 0.16 $ 0.64 $ 0.48
========== ========== ========== ==========
Weighted average common
shares outstanding
- basic 44,062,407 42,744,295 43,815,062 42,166,004
========== ========== ========== ==========
Weighted average common
shares outstanding
- diluted 46,002,304 45,794,099 46,038,479 45,214,782
========== ========== ========== ==========
(1) Share-based compensation cost is allocated as follows:
Three Months Ended Nine Months Ended
March 31, March 31,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
(Unaudited)
(in thousands)
Cost of revenue $ 248 $ 123 $ 593 $ 305
Technology and develop-
ment expense 1,005 586 2,865 1,499
Marketing and selling
expense 879 413 2,685 1,131
General and administra-
tive expense 1,392 812 4,110 1,947
---------- ---------- ---------- ----------
$ 3,524 $ 1,934 $ 10,253 $ 4,882
========== ========== ========== ==========
VistaPrint Limited
Reconciliations of Non-GAAP Financial Measures
Three Months Ended Nine Months Ended
March 31, March 31,
---------------- ----------------
2008 2007 2008 2007
------- ------- ------- -------
(Unaudited)
(in thousands, except per share data)
Non-GAAP adjusted net income
reconciliation:
Net income $11,453 $ 7,385 $29,502 $21,746
Add back:
Share-based compensation expense 3,524 1,934 10,253 4,882
------- ------- ------- -------
Non-GAAP adjusted net income $14,977 $ 9,319 $39,755 $26,628
======= ======= ======= =======
Non-GAAP adjusted net income
per diluted share reconciliation:
Net income per diluted share $ 0.25 $ 0.16 $ 0.64 $ 0.48
Add back:
Share-based compensation expense 0.07 0.04 0.21 0.11
------- ------- ------- -------
Non-GAAP adjusted net income
per diluted share $ 0.32 $ 0.20 $ 0.85 $ 0.59
======= ======= ======= =======
VistaPrint Limited
Consolidated Statements of Cash Flows
Nine Months Ended
March 31,
--------------------
2008 2007
-------- --------
(Unaudited)
(in thousands)
Operating activities
Net income $ 29,502 $ 21,746
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 17,769 10,304
Loss on disposal of equipment 50 357
Impairment loss on equipment 62 1,013
Share-based compensation expense 10,253 4,882
Deferred taxes -- 134
Changes in operating assets and
liabilities:
Accounts receivable (1,625) (2,066)
Inventory (860) 199
Prepaid expenses and other assets (4,231) (4,095)
Accounts payable 2,219 833
Accrued expenses and other current
liabilities 15,924 9,685
-------- --------
Net cash provided by operating
activities 69,063 42,992
Investing activities
Purchases of property, plant and
equipment, net (48,889) (45,013)
Proceeds from sale of equipment -- 256
Purchases of marketable securities (45,761) (48,700)
Sales of marketable securities 55,942 42,660
Purchase of intangible assets (1,250) --
Capitalization of software and
website development costs (3,999) (2,944)
-------- --------
Net cash used in investing activities (43,957) (53,741)
Financing activities
Proceeds from long-term debt -- 1,630
Repayment of long-term debt (2,425) (1,820)
Payment of withholding taxes in
connection with settlement of RSUs (2,228) --
Tax benefits derived from share-based
compensation awards 185 --
Proceeds from issuance of common shares 7,364 10,185
-------- --------
Net cash provided by financing activities 2,896 9,995
Effect of exchange rate changes on cash 1,110 (43)
-------- --------
Net increase (decrease) in cash
and cash equivalents 29,112 (797)
Cash and cash equivalents at beginning
of period 69,464 64,653
-------- --------
Cash and cash equivalents at end of period $ 98,576 $ 63,856
======== ========
Contact: VistaPrint
Investor Relations:
Angela White
781-652-6480
ir@vistaprint.com
Media Relations:
Manya Chait
781-652-6444
publicrelations@vistaprint.com
Source: VistaPrint Limited
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