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Vistaprint reports Q4 and FY 2010 Results; revenue up 22% year over year

Thursday, July 29, 2010

Press release from the issuing company

Venlo, Netherlands - Vistaprint N.V., a leading online provider of professional marketing products and services to micro businesses, today announced financial results for the fourth quarter and fiscal year ended June 30, 2010.

"Fourth quarter revenue was below our expectations," said Robert Keane, president and chief executive officer. "Since we established fourth quarter guidance in April, unfavorable currency movements impacted our revenue by over $3 million. We are also disappointed in our own constant currency revenue execution for the quarter. On the other hand, we are pleased that our culture of financial discipline enabled us to deliver earnings within our previously established guidance range.

"On an annual basis, we have much to be excited about as we continued our track record of delivering at or above our aggressive annual targets," Robert Keane continued. "Compared to the guidance we established at the beginning of the fiscal year, we outperformed on revenue and delivered at the top end on earnings per share, while making important investments in our business. We delivered new products, tested new marketing channels and approaches, and enhanced our ability to lower our per-unit manufacturing costs through engineering and automation projects. Our customers increased their average annual spend with Vistaprint significantly, and satisfaction remains high. As we enter fiscal year 2011, I believe we are well positioned for continued growth and profitability."

Financial Metrics:
- Revenue for the fourth quarter of fiscal year 2010 grew to $164.3 million, a 22 percent increase over revenue of $135.2 million reported in the same quarter a year ago.  For the full fiscal year, revenue grew to $670.0 million, a 30 percent increase over revenue of $515.8 million in fiscal year 2009. Excluding the estimated impact from currency exchange rate fluctuations, total revenue grew 22 percent year over year in the fourth quarter and 28 percent for the full year. Excluding revenue from membership programs, year-over-year constant currency revenue growth was 26 percent for the fourth quarter of fiscal 2010 and 32 percent for the full fiscal year 2010.
- Gross margin (revenue minus the cost of revenue as a percent of total revenue) in the fourth quarter was 63.6 percent, compared to 63.1 percent in the same quarter a year ago.  For the full fiscal year, gross margin was 64.2 percent, compared to 62.8 percent in fiscal 2009.
- Operating income in the fourth quarter was $13.9 million, or 8.5 percent of revenue, and reflected an 8 percent decrease compared to operating income of $15.1 million, or 11.2 percent of revenue, in the same quarter a year ago. For the full fiscal year, operating income was $76.8 million, or 11.5 percent of revenue, a 25 percent increase over operating income of $61.6 million, or 11.9 percent of revenue, in the prior fiscal year.
- GAAP net income for the fourth quarter was $11.7 million, or 7.1 percent of revenue, representing a 21 percent decrease compared to $14.7 million, or 10.9 percent of revenue in the same quarter a year ago.  For the full fiscal year, GAAP net income was $67.7 million, or 10.1 percent of revenue, a 22 percent increase over GAAP net income of $55.7 million, or 10.8 percent of revenue, in the prior fiscal year.
- GAAP net income per diluted share for the fourth quarter was $0.26, versus $0.33 in the same quarter a year ago. For the full year, GAAP net income per diluted share was $1.49, versus $1.25 in the prior full fiscal year.
- Non-GAAP adjusted net income for the fourth quarter, which excludes share-based compensation expense and its related tax effect, was $17.3 million, or 10.5 percent of revenue, representing an 11 percent decrease over non-GAAP adjusted net income of $19.5 million, or 14.4 percent of revenue, in the same quarter a year ago.  For the full fiscal year, non-GAAP adjusted net income, which excludes share-based compensation expense and its related tax effect, was $90.9 million, or 13.6 percent of revenue, a 20 percent increase over non-GAAP adjusted net income of $75.9 million, or 14.7 percent of revenue, in the prior fiscal year.
- Non-GAAP adjusted net income per diluted share for the fourth quarter, which excludes share-based compensation expense and its related tax effect, was $0.38, versus $0.43 in the same quarter a year ago. For the 2010 full fiscal year, non-GAAP adjusted net income per diluted share, excluding share-based compensation expense and its related tax effect, was $1.98, versus $1.68 in the prior full fiscal year.
- Capital expenditures in the fourth quarter were $27.5 million or 16.7 percent of revenue.  During the full fiscal year capital expenditures were $101.3 million or 15.1 percent of revenue.
- During the fourth quarter, the company generated $30.5 million of cash from operations and $1.3 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. During the full fiscal year, the company generated $153.7 million of cash from operations and $45.9 million in free cash flow.
- The company had $172.3 million in cash, cash equivalents, and short-term marketable securities as of June 30, 2010.

Operating Highlights:
- Vistaprint acquired approximately 1.6 million new customers in the fourth fiscal quarter ending June 30, 2010.  For the full 2010 fiscal year, the number of new customer acquisitions totaled approximately 6.4 million.
- Repeat customers generated approximately 67 percent of total quarterly bookings in the fourth quarter, consistent with 67 percent in the same quarter a year ago.
- Average daily order volume in the fourth quarter of fiscal 2010 was approximately 53,000, reflecting a 20 percent increase over an average of approximately 44,000 orders per day in the same quarter a year ago.
- Advertising and commissions expense in the fourth quarter was $35.1 million, or 21.4 percent of revenue compared to $24.7 million, or 18.2 percent of revenue in the same quarter a year ago.
- Non-U.S. markets contributed 41 percent of total revenue in the fourth quarter, compared to 39 percent to the same quarter a year ago, reflecting a 30 percent increase in revenue from non-U.S. markets year over year. For the full year, non-U.S. markets contributed 45 percent of total revenue, compared to 39 percent in fiscal 2009, reflecting a 48 percent increase year over year.
- Average order value in the fourth quarter including revenue from shipping and processing was $34.56, compared to $33.31 in the same quarter a year ago.
- Website sessions in the fourth quarter were 77.8 million, a 25 percent increase over 62.1 million in the same quarter a year ago.
- Conversion rates were 6.2 percent in the fourth quarter of fiscal 2010, compared to 6.4 percent in the same quarter a year ago.

During the fourth quarter, Vistaprint added stickers and mailing labels to its product offerings, launched websites for Portugal and Singapore, and completed construction on its manufacturing facility in Deer Park, Australia which will serve the Asia-Pacific region.

Mike Giannetto, executive vice president and chief financial officer, added, "In fiscal 2010, we set and met demanding goals, delivering healthy growth in revenue, profitability and free cash flow while making disciplined investments that we believe will enhance our competitive advantage and provide opportunities for leverage over the long-term. As we look ahead to fiscal year 2011, we remain focused on achieving our goals with the same disciplined company culture. While we currently expect currency exchange rates to negatively impact our reported revenue and earnings growth in 2011, and we are cautious about our near-term outlook, the fundamentals of our business remain solid and we expect to deliver good growth for the year."

Financial Guidance as of July 28, 2010:
Based on current and anticipated levels of demand and recent foreign currency rates, the company expects the following financial results:

Revenue
- For the full fiscal year ending June 30, 2011, the company expects revenue of approximately $750 million to $780 million.
- For the quarter ending September 30, 2010, the company expects revenue of approximately $159 million to $164 million.

GAAP Diluted Earnings Per Share
- For the full fiscal year ending June 30, 2011, the company expects GAAP diluted earnings per share of approximately $1.65 to $1.80, which assumes 46.0 million weighted average shares outstanding.
- For the quarter ending September 30, 2010, the company expects GAAP diluted earnings per share of approximately $0.15 to $0.20, which assumes 45.9 million weighted average shares outstanding.

Non-GAAP Adjusted Net Income Per Diluted Share
- For the full fiscal year ending June 30, 2011, the company expects non-GAAP adjusted net income per diluted share of approximately $2.09 to $2.24, which excludes expected share-based compensation expense and its related tax effect of approximately $21.6 million, and assumes a non-GAAP diluted weighted average share count of approximately 46.6 million shares.
- For the quarter ending September 30, 2010, the company expects non-GAAP adjusted net income per diluted share of approximately $0.27 to $0.32, which excludes expected share-based compensation expense and its related tax effect of approximately $5.7 million, and assumes a non-GAAP diluted weighted average share count of approximately 46.5 million shares.

Capital Expenditures
For the full fiscal year ending June 30, 2011, the company expects to make capital expenditures of approximately $55 million to $70 million. Planned capital investments are designed to support the planned growth of the business.

The foregoing guidance supersedes any guidance previously issued by the company. All such previous guidance should no longer be relied upon.

 

 

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