Vistaprint Reports Increase Revenue Q1 2013
Friday, October 26, 2012
Press release from the issuing company
First quarter 2013 results:
- Revenue grew 18 percent year over year to $251.4 million
- Revenue grew 23 percent year over year excluding the impact of currency exchange rate fluctuations
- Revenue grew 13 percent year over year excluding the impact of currency exchange rate fluctuations and revenue from acquisitions
- GAAP net income per diluted share decreased 126 percent year over year to $(0.05)
- Non-GAAP adjusted net income per diluted share decreased 19 percent year over year to $0.25
VENLO, Netherlands - Vistaprint N.V. (Nasdaq: VPRT), 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 September 30, 2012, the first quarter of its 2013 fiscal year.
"Our first quarter results reflect continuing revenue disappointment in Europe, solid revenue performance in North America and Asia Pacific, and continued progress on the broad set of strategic initiatives we have discussed frequently in the past," said Robert Keane, president and chief executive officer. "We delivered earnings per share results in line with our expectations for the quarter.
"Our organic constant currency year-over-year revenue growth in Europe was, at one percent, well below our plans," Keane continued. "We are actively working to understand and address the root causes of this poor performance. There is a weak macroeconomic backdrop in Europe, but we cannot quantify the impact to our business. Instead, we are focused on improving our own execution. As announced previously, we have recently reorganized our core business operations into a functional structure, and we believe this will allow us to make greater progress on improvements to our customer value proposition and business performance in Europe.
"In stark contrast to Europe, in North America our organic constant currency revenue growth accelerated to 19 percent versus 18 percent last quarter and 17 percent the same quarter a year ago. In Asia Pacific, revenue grew 29 percent in constant currency. Both were in line with our high expectations for growth in those regions," said Keane.
"We review our revenue results in the context of the strategic plan we announced 15 months ago and in Q1 we progressed as planned on the vast majority of our objectives in that strategy," Keane continued.
During the first quarter, Vistaprint advanced in the following areas of its strategy:
- In our core business, we continued to improve our customer value proposition, strengthened our manufacturing capabilities and expanded our advertising reach. We believe these investments contributed significantly to our North American and Asia Pacific first quarter revenue success.
- Beyond our core business, we advanced our foundations for future growth in India and China and at our Webs and Albumprinter businesses.
- We continued our recruiting of engineering teams and began a multi-year investment to upgrade our software architecture.
Keane concluded, "Despite our disappointing European revenue growth in the first quarter, we anticipate that year-over-year growth in that region will improve for the rest of the year. More broadly, we remain focused on rolling out company-wide our long-term strategic initiatives, and we see some positive indicators in all regions, such as strong new customer acquisition and improved net promoter scores. This strategy includes achieving the annual earnings per share targets that we set at the beginning of this year, and we remain confident that we will achieve them."
Financial Metrics (include Albumprinter and Webs results unless otherwise stated):
- Revenue for the first quarter of fiscal year 2013 grew to $251.4 million, an 18 percent increase over revenue of $212.4 million reported in the same quarter a year ago. Excluding Albumprinter and Webs combined revenue of $18.0 million, total first quarter revenue was $233.4 million. Excluding the estimated impact from currency exchange rate fluctuations and revenue from acquired businesses, total revenue grew 13 percent year over year in the first quarter.
- Gross margin (revenue minus the cost of revenue as a percent of total revenue) in the first quarter was 65.0 percent, compared to 63.2 percent in the same quarter a year ago.
- Operating income in the first quarter was $0.2 million, or 0.1 percent of revenue, and reflected a 98 percent decrease compared to operating income of $9.7 million, or 4.6 percent of revenue, in the same quarter a year ago. This result was in line with our expectations.
- GAAP net income for the first quarter was $(1.7) million, or (0.7) percent of revenue, representing a 121 percent decrease compared to $8.2 million, or 3.8 percent of revenue in the same quarter a year ago. This result was in line with our expectations.
- GAAP net income per diluted share for the first quarter was $(0.05), versus $0.19 in the same quarter a year ago.
- Non-GAAP adjusted net income for the first 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 $8.9 million, or 3.5 percent of revenue, representing a 32 percent decrease compared to non-GAAP adjusted net income of $13.0 million, or 6.1 percent of revenue, in the same quarter a year ago.
- Non-GAAP adjusted net income per diluted share for the first quarter, as defined above, was $0.25, versus $0.31 in the same quarter a year ago.
- Capital expenditures in the first quarter were $27.8 million or 11.0 percent of revenue.
- During the first quarter, the company generated $6.6 million of cash from operations and $(22.4) 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.
- The company had $59.3 million in cash and cash equivalents and $259.3 million in long-term debt, with $128.2 million remaining under its credit facility as of September 30, 2012.
- During the first quarter, the company did not repurchase shares.
Operating metrics are now provided as a table-based supplement to this press release.
Fiscal 2013 Outlook as of October 25, 2012:
Ernst Teunissen, executive vice president and chief financial officer, said, "While we believe our full year European revenue growth will improve versus our first quarter results, it is appropriate to lower our guidance range previously set on July 26, 2012 to reflect our Q1 performance and the recognition that significant improvement will take time. Therefore, we are lowering our fiscal 2013 revenue guidance range by $10 million based on our lowered expectations in Europe, partially offset by improved currency rates since we initiated guidance in July. We continue to expect strong growth in North America and Asia Pacific. Despite the reduction in our revenue outlook, we remain committed to delivering against our profit objectives for the year. Therefore, we are reiterating our fiscal 2013 earnings per share guidance that we announced in July."
Financial Guidance as of October 25, 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 $1,165 million to $1,215 million, or 14 percent to 19 percent growth year over year in reported terms. Excluding currency movements and acquired revenue, we expect constant-currency organic growth of approximately 12 percent to 17 percent. Reported (USD) growth expectations assume a recent 30-day currency exchange rate for all currencies. Constant-currency growth is estimated by applying the respective prior year quarterly average exchange rates to all estimated non-U.S. dollar denominated revenue expected for future periods.
- For the second quarter of fiscal year 2013, ending December 31, 2012, the company expects revenue of approximately $335 million to $355 million, or 12 percent to 18 percent growth year over year in reported terms. We expect constant-currency organic growth of approximately 11 percent to 17 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 35.3 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 36.1 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 $80 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 Dutch (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 October 25, 2012, Vistaprint will post, on the Investor Relations section of www.vistaprint.com, an 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 (866) 804-6929, access code 63070756. A replay of the Q&A session will be available on the company's Web site following the call on October 25, 2012.
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