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Vistaprint Reports Increase in Revenue for Q4 and Fiscal Year 2012

Friday, July 27, 2012

Press release from the issuing company

Vistaprint N.V.:

  • Fourth quarter 2012 results:
    • Revenue grew 20 percent year over year to $250.4 million
    • Revenue grew 25 percent year over year excluding the impact of currency exchange rate fluctuations
    • Revenue grew 17 percent year over year excluding the impact of currency exchange fluctuations and revenue from acquisitions
    • GAAP net income per diluted share decreased 69 percent year over year to $0.10
    • Non-GAAP adjusted net income per diluted share decreased 7 percent year over year to $0.40
  • Fiscal year 2012 results:
    • Revenue grew 25 percent year over year to $1,020.3 million
    • Revenue grew 25 percent year over year excluding the impact of currency exchange rate fluctuations
    • Revenue grew 20 percent year over year excluding the impact of currency exchange fluctuations and revenue from acquisitions
    • GAAP net income per diluted share decreased 38 percent year over year to $1.13
    • Non-GAAP adjusted net income per diluted share decreased 15 percent year over year to $1.95

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 fourth quarter and fiscal year ended June 30, 2012.

“We are generally pleased with our accomplishments in fiscal 2012,” said Robert Keane, president and chief executive officer. “We sustained strong annual revenue growth while executing on key strategy initiatives. We delivered earnings above our guidance range for the fourth quarter and fiscal year due to favorability on a number of cost items. In the fourth quarter, we were pleased with revenue performance in North America and Asia Pacific; however, we were disappointed with the deterioration of revenue growth rates in Europe.

“Over the last two quarters, we have seen lower growth rates in Europe than in North America, which is a break from the past,” continued Keane. “Although we expected near-term revenue headwinds from the implementation of customer-centric user experience improvements, we have been more successful in mitigating these headwinds in North America than in Europe. We continue to believe that Europe has significant potential for us and are targeting improved growth rates over time.”

Keane continued, “During fiscal 2012, we made significant progress against our strategy initiatives fueled by the new investment approach we announced one year ago. We believe we remain on track to achieve our qualitative long-term strategic goals and continue to target the earnings and constant currency revenue growth goals articulated at that time. In some areas, we are ahead of our plans, and in other areas, such as European revenue growth, we have challenges we must address. We are fortunate to have many drivers within our business, and we will continue to take a flexible approach to managing our resources to drive continued growth.”

Financial Metrics (include Albumprinter and Webs results unless otherwise stated):

  • Revenue for the fourth quarter of fiscal year 2012 grew to $250.4 million, a 20 percent increase over revenue of $208.8 million reported in the same quarter a year ago. Excluding Albumprinter and Webs combined revenue of $15.4 million, total fourth quarter revenue was $235.0 million. For the full fiscal year, revenue grew to $1,020.3 million, a 25 percent increase over revenue of $817.0 million in fiscal year 2011. Excluding the estimated impact from currency exchange rate fluctuations and revenue from acquired businesses, total revenue grew 17 percent year over year in the fourth quarter and 20 percent for the full year.
  • Gross margin (revenue minus the cost of revenue as a percent of total revenue) in the fourth quarter was 64.6 percent, compared to 63.9 percent in the same quarter a year ago. For the full fiscal year, gross margin was 65.2 percent, compared to 64.8 percent in fiscal year 2011.
  • Operating income in the fourth quarter was $5.1 million, or 2.0 percent of revenue, and reflected a 70 percent decrease compared to operating income of $17.0 million, or 8.1 percent of revenue, in the same quarter a year ago. For the full fiscal year, operating income was $55.2 million, or 5.4 percent of revenue, a 41 percent decrease compared to operating income of $93.1 million, or 11.4 percent of revenue, in the prior fiscal year.
  • GAAP net income for the fourth quarter was $3.9 million, or 1.5 percent of revenue, representing a 73 percent decrease compared to $14.4 million, or 6.9 percent of revenue in the same quarter a year ago. For the full fiscal year, GAAP net income was $44.0 million, or 4.3 percent of revenue, a 46 percent decrease compared to GAAP net income of $82.1 million, or 10.0 percent of revenue, in the prior fiscal year.
  • GAAP net income per diluted share for the fourth quarter was $0.10, versus $0.32 in the same quarter a year ago. For the full year, GAAP net income per diluted share was $1.13, versus $1.83 in the prior full fiscal year.
  • Non-GAAP adjusted net income for the fourth quarter, which excludes amortization expense for acquisition-related intangible assets, tax charges related to the alignment of acquisition-related intellectual property with global operations, and share-based compensation expense and its related tax effect, was $14.9 million, or 5.9 percent of revenue, representing a 24 percent decrease compared to non-GAAP adjusted net income of $19.5 million, or 9.4 percent of revenue, in the same quarter a year ago. For the full fiscal year, non-GAAP adjusted net income was $77.0 million, or 7.6 percent of revenue, a 26 percent decrease compared to non-GAAP adjusted net income of $104.5 million, or 12.8 percent of revenue, in the prior fiscal year.
  • Non-GAAP adjusted net income per diluted share for the fourth quarter, as defined above, was $0.40, versus $0.43 in the same quarter a year ago. For the 2012 full fiscal year, non-GAAP adjusted net income per diluted share was $1.95, versus$2.30 in the prior fiscal year.
  • Capital expenditures in the fourth quarter were $13.5 million or 5.4 percent of revenue. During the full fiscal year capital expenditures were $46.4 million or 4.5 percent of revenue.
  • During the fourth quarter, the company generated $19.3 million of cash from operations and $4.6 million in free cash flow, defined as cash from operations less purchases of property, plant and equipment, purchases of intangible assets not related to acquisitions, and capitalization of software and website development costs. During the full fiscal year, the company generated $140.6 million of cash from operations and $88.5 million in free cash flow.
  • The company had net debt of $166.8 million which consisted of $62.2 million in cash and cash equivalents and $229.0 million in long-term debt, with $157.0 million available under its credit facility as of June 30, 2012.
  • During the fourth quarter, the company purchased 2,990,376 of its ordinary shares for $100.1 million, inclusive of transaction costs, at an average per-share cost of $33.46, as part of the share repurchase program authorized by the Supervisory Board in February 2012. During fiscal year 2012, the company repurchased 9,900,980 shares for $309.7 million at an average per-share cost of $31.28, as part of the program referenced above, as well as prior programs.

Operating Highlights (exclude Albumprinter and Webs results unless otherwise stated):

  • Vistaprint acquired approximately 2.2 million new customers in the fourth fiscal quarter ended June 30, 2012, compared with 1.8 million in the same quarter a year ago, reflecting an increase of 22 percent. For the full fiscal year 2012, the number of new customer acquisitions totaled approximately 9.4 million, a 27 percent increase compared with 7.4 million in fiscal year 2011.
  • On a trailing twelve month basis, unique active customer count was 14.4 million. Unique active customer count is the number of individual customers who purchased from us in a given period, with no regard to the frequency of purchase. This was a 26 percent increase compared to 11.4 million in the twelve month period ended June 30, 2011.
  • Total order volume in the fourth quarter of fiscal 2012 was approximately 6.4 million, reflecting an increase of approximately 14 percent over total orders of approximately 5.6 million in the same quarter a year ago.
  • Average order value in the fourth quarter including revenue from shipping and processing was $36.73, compared to $37.72in the same quarter a year ago.
  • Organic advertising and commissions expense in the fourth quarter was $55.3 million, or 23.5 percent of revenue, compared to $47.0 million, or 22.5 percent of revenue, in the same quarter a year ago, and $245.9 million, or 25.2 percent of revenue, for the full fiscal year. Including advertising and commissions expense from the acquired businesses, total advertising and commissions expense in the fourth quarter was $57.7 million, or 23.0 percent of total revenue, and $252.8 million, or 24.8 percent of revenue, for the full fiscal year.
  • Vistaprint acts as a wholesaler to certain retail firms, providing white label solutions for online and/or in-store sales of selectVistaprint products. In the fourth quarter and fiscal year, these partnerships increased the growth of new customers, unique active customers, and order volume, and decreased average order value and advertising as a percent of revenue.
  • Revenue from customers in North America was $143.4 million, or 57 percent of total revenue, in the fourth quarter. This represents 20 percent growth year over year in reported terms and 21 percent growth year over year in constant currency. Excluding Webs revenue of $2.5 million, revenue from customers in North America was $140.9 million, or 60 percent of total organic revenue, in the fourth quarter. This represents 18 percent growth year over year in both reported terms and constant currency.
  • For the full fiscal year, revenue from customers in North America was $543.9 million, or 53 percent of total revenue, representing 20 percent growth year over year in both reported terms and in constant currency. Excluding Webs revenue of$4.7 million, revenue from customers in North America was $539.2 million or 55 percent of total organic revenue for the fiscal year. This represents 19 percent growth year over year in both reported terms and constant currency.
  • Revenue from customers in Europe was $92.0 million or 37 percent of total revenue in the quarter. This represents 18 percent growth year over year in reported terms and 30 percent growth in constant currency. Excluding Albumprinter revenue of $12.9 million, revenue from customers in Europe was $79.1 million, or 34 percent of total organic revenue in the fourth quarter. This represents 2 percent growth year over year in reported terms and 11 percent growth in constant currency.
  • For the full fiscal year, revenue from customers in Europe was $415.2 million, or 41 percent of total revenue, representing 29 percent growth year over year in reported terms and 31 percent growth in constant currency. Excluding Albumprinter revenue of $40.4 million, revenue from customers in Europe was $374.8 million or 38 percent of total organic revenue for the fiscal year. This represents 17 percent growth year over year in reported terms and 18 percent growth year over year in constant currency.
  • Revenue from customers in Asia Pacific was $15.1 million, or 6 percent of total revenue in the fourth quarter. This represents 28 percent growth year over year in reported terms and 33 percent growth in constant currency.
  • For the full fiscal year, revenue from customers in Asia Pacific was $61.2 million, or 6 percent of total revenue for the fiscal year. This represents 44 percent growth year over year in reported terms and 38 percent growth year over year in constant currency.

Investment in Asian Markets:

Consistent with our announcement one year ago that we would proactively consider M&A as a means to enter adjacent markets, including geographic expansion, Vistaprint today announced an enhanced strategy to drive longer-term growth in China and India. As previously disclosed, Vistaprint acquired the assets of a startup business in India, PrintBell, in fiscal 2012. On July 10, 2012,Vistaprint also made a capital investment in a Chinese business which operates under the name Namex. This resulted in Vistaprintowning a 34.5 percent indirect equity interest in Namex, with call options to increase Vistaprint’s ownership incrementally to 100% over the coming eight years. Both PrintBell and Namex are innovative, focused start-ups in markets that we believe have large long-term potential. In order to help ensure these investments are successful over the long term, Vistaprint anticipates investing in supporting resources that will be managed from a new “Most of World” business unit, with headquarters in Singapore, whose President reports directly into Robert Keane. Neither India nor China is expected to contribute materially to our revenue in fiscal 2013. However, resource investments in those entities and in the supporting Singapore-based team are expected to be dilutive to fiscal 2013 earnings. The financial guidance provided below includes the expected impact of these Asian investments.

Fiscal 2013 Outlook as of July 26, 2012:

Ernst Teunissen, executive vice president and chief financial officer, said, “The fiscal 2013 guidance we are introducing today includes a range of constant currency organic revenue growth of 15 percent to 20 percent. Reaccelerating revenue growth in our core business is an important strategic goal for us, and we expect growth in North America and Asia Pacific to remain strong in fiscal 2013. However, we believe it is realistic and prudent to anticipate the potential for continued revenue weakness in Europethrough fiscal 2013. These expectations are incorporated into our revenue guidance range. Finally, a year ago, we presented a plan for which we anticipated modest GAAP earnings per share growth in fiscal 2013 compared to our fiscal 2012 GAAP earnings guidance range for our organic business. We believe we are on track to deliver this in fiscal 2013. Additionally, our fiscal 2013 earnings guidance includes the negative impact of our acquisitions of Webs and Albumprinter, our investments in Asia, and the incremental accounting impact driven by our recent move to more performance-based executive stock option grants, as well as the positive impact of our fiscal 2012 share repurchases.”

Financial Guidance as of July 26, 2012:

As previously stated, beginning with fiscal year 2013, the company is providing revenue guidance on an annual and quarterly basis, and earnings guidance on an annual basis. Based on current and anticipated levels of demand, the company expects the following financial results:

Fiscal Year 2013 Revenue

  • For the full fiscal year ending June 30, 2013, the company expects revenue of approximately $1,175 million to $1,225 million, or 15 percent to 20 percent growth year over year in reported terms. Excluding currency movements and acquired revenue, we expect constant-currency organic growth of approximately 15 percent to 20 percent. Constant-currency growth expectations assume a recent 30-day currency exchange rate for all currencies.
  • For the first quarter of fiscal year 2013, ending September 30, 2012, the company expects revenue of approximately $250 million to $260 million, or 18 percent to 22 percent growth year over year in reported terms. We expect constant-currency organic growth of approximately 13 percent to 18 percent.

Fiscal Year 2013 GAAP Net Income Per Diluted Share

  • For the full fiscal year ending June 30, 2013, the company expects GAAP net income per share of approximately $0.40 to $0.70, which assumes 35.8 million weighted average diluted shares outstanding.

Fiscal Year 2013 Non-GAAP Adjusted Net Income Per Diluted Share

  • For the full fiscal year ending June 30, 2013, the company expects non-GAAP adjusted net income per diluted share of approximately $1.62 to $1.92, which excludes expected acquisition-related amortization of intangible assets of approximately$7.6 million or approximately $0.21 per diluted share, share-based compensation expense and its related tax effect of approximately $35.3 million or approximately $0.97 per diluted share, and tax charges related to the alignment of acquisition-related intellectual property with global operations of approximately $2.2 million, or $0.06 per diluted share. This guidance assumes a non-GAAP weighted average diluted share count of approximately 36.5 million shares.

Fiscal Year 2013 Capital Expenditures

For the full fiscal year ending June 30, 2013, the company expects to make capital expenditures of approximately $75 million to $95 million. Planned capital investments are designed to support the planned growth of the business and will include the expansion of our European production capacity in our Venlo facility and other investments.

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. (EDT) on July 26, 2012, 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. 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 (800) 659-2056, access code 31992793. A replay of the Q&A session will be available on the company’s Web site following the call on July 26, 2012.

 

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