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Vistaprint reports 20% YOY revenue growth in Q2

Friday, January 28, 2011

Press release from the issuing company

Venlo, Netherlands - Vistaprint N.V., a leading online provider of professional marketing products and services to micro businesses and the home, today announced financial results for the three month period ended December 31, 2010, the second quarter of its 2011 fiscal year.

"Vistaprint delivered very good second quarter results," said Robert Keane, president and chief executive officer. "Revenue strength was largely driven by our seasonal holiday business, particularly in Europe. Earnings exceeded our expectations due to the higher-than-anticipated revenue and volume-related gross margin improvements. Overall, I am very pleased that we were able to deliver these results in the near term, while at the same time reorganizing the management reporting structures in our business to help us achieve our growth objectives over the longer term."

Financial Metrics:

- Revenue for the second quarter of fiscal year 2011 grew to $234.1 million, a 20 percent increase over revenue of $194.6 million reported in the same quarter a year ago. Excluding the estimated impact from currency exchange rate fluctuations, total revenue grew 23 percent from the same quarter a year ago. Excluding the impact of the termination of membership programs which generated 0.9 percent of total revenue in the second quarter of 2010, but 0 percent of total revenue in the second quarter of 2011, constant currency revenue growth was 25 percent year over year.

- Gross margin (revenue minus the cost of revenue as a percent of total revenue) in the second quarter was 66.3 percent, compared to 65.1 percent in the same quarter a year ago.

- Operating income in the second quarter was $38.2 million, or 16.3 percent of revenue, and reflected a 24 percent increase compared to $30.7 million, or 15.8 percent of revenue in the same quarter a year ago.

- GAAP net income for the second quarter was $34.0 million, or 14.5 percent of revenue, representing a 26 percent increase compared to $26.9 million, or 13.8 percent of revenue in the same quarter a year ago.

- GAAP net income per diluted share for the second quarter was $0.75, versus $0.59 in the same quarter a year ago.

- Non-GAAP adjusted net income for the second quarter, which excludes share-based compensation expense and its related tax effect, was $40.4 million, or 17.3 percent of revenue, representing a 20 percent increase compared to $33.6 million, or 17.3 percent of revenue in the same quarter a year ago.

- Non-GAAP adjusted net income per diluted share for the second quarter, which excludes share-based compensation expense and its related tax effect, was $0.89, versus $0.73 in the same quarter a year ago.

- Capital expenditures in the second quarter were $10.8 million or 4.6 percent of revenue.

- During the second quarter, the company generated $73.9 million in cash from operations and $61.6 million in free cash flow, defined as cash from operations less purchases of property, plant and equipment, purchases of intangible assets, and capitalization of software and website development costs.

- The company had $177.6 million in cash, cash equivalents, and short-term marketable securities as of December 31, 2010.

- During the second quarter, the company purchased 1,294,081 of its ordinary shares for $55.5 million, inclusive of transaction costs, at an average per-share cost of $42.86, as part of the share repurchase program authorized by the Supervisory Board in November 2010.



Operating Metrics:

- Vistaprint acquired approximately 2.2 million new customers in the second fiscal quarter ended December 31, 2010, compared with 1.8 million in the same quarter a year ago.

- Repeat customers generated approximately 67 percent of total quarterly bookings in the second quarter, compared with 66 percent in the same quarter a year ago.

- Average daily order volume in the second quarter of fiscal year 2011 was approximately 71,000, reflecting an increase of approximately 25 percent over an average of approximately 57,000 orders per day in the same quarter a year ago.

- Advertising and commissions expense was $52.2 million, or 22.3 percent of revenue in the second quarter, compared to $39.4 million, or 20.2 percent of revenue in the same quarter a year ago. - The U.S. market contributed 47 percent of total revenue in the second quarter, down from 49 percent in the same quarter a year ago, representing a 15 percent increase in revenue year over year. Non-U.S. markets contributed 53 percent of total revenue in the second quarter, up from 51 percent in the same quarter a year ago, representing a 26 percent increase in revenue year over year and 32 percent in constant currency.

- North American, European and Asia-Pacific revenue contributions in the second quarter of the fiscal year 2011 were 50, 45, and 5 percent of total revenue, respectively.

- Average order value in the second quarter, including revenue from shipping and processing, was $36.17, compared with $36.63 in the same quarter a year ago.

- Website sessions in the second quarter were 87.7 million, a 9 percent increase over 80.5 million in the same quarter a year ago.

- Conversion rates were 7.5 percent in the second quarter of fiscal 2011, compared to 6.6 percent in the same quarter a year ago.

"Year to date, we have made good progress toward our fiscal 2011 goals," said Mike Giannetto, chief financial officer. "We are executing to our financial strategy to invest for higher revenue and scale within the boundaries of our earnings per share targets for the year. Now that we are halfway through the year, with our seasonally driven and largest revenue and earnings quarter behind us, we feel comfortable raising our fiscal 2011 revenue guidance to reflect our recent performance, and narrowing our EPS range toward the high end of the previously established range."

Financial Guidance as of January 27, 2011:

Based on current and anticipated levels of demand, the company expects the following financial results:

Revenue

- For the third quarter of fiscal year 2011, ending March 31, 2011, the company expects revenue of approximately $190 million to $196 million.
- For the full fiscal year ending June 30, 2011, the company expects revenue of approximately $785 million to $800 million.

GAAP Diluted Earnings Per Share

- For the third quarter of fiscal year 2011, ending March 31, 2011, the company expects GAAP diluted earnings per share of approximately $0.35 to $0.38, which assumes 44.5 million weighted average diluted shares outstanding.

- For the full fiscal year ending June 30, 2011, the company expects GAAP diluted earnings per share of approximately $1.72 to $1.80, which assumes 44.9 million weighted average diluted shares outstanding.

Non-GAAP Adjusted Net Income Per Diluted Share

- For the third quarter of fiscal year 2011, ending March 31, 2011, the company expects non-GAAP adjusted net income per diluted share of approximately $0.46 to $0.49, which excludes expected share-based compensation expense and its related tax effect of approximately $5.2 million, and assumes a non-GAAP weighted average diluted share count of approximately 45.0 million shares.

- For the full fiscal year ending June 30, 2011, the company expects non-GAAP adjusted net income per diluted share of approximately $2.19 to $2.27, which excludes expected share-based compensation expense and its related tax effect of approximately $22.2 million, and assumes a non-GAAP weighted average diluted share count of approximately 45.4 million shares.

Capital Expenditures

For the full fiscal year ending June 30, 2011, the company expects to make capital expenditures of approximately $45 million to $55 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.

At approximately 4:20 p.m. (EST) on January 27, 2011, 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 5:15 p.m. (EST) the company will host a live Q&A conference call with management, which will be available via web cast on the Investor Relations section of www.vistaprint.com and via dial-in at (866) 831-6224, access code 89683712. A replay of the Q&A session will be available on the company's website following the call on January 27, 2011.

 

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