Vistaprint Increases Revenue 22%
Press release from the issuing company
HAMILTON, Bermuda -- Vistaprint Limited, the small business marketing company, today announced financial results for the fourth quarter and fiscal year ended June 30, 2009.
"Vistaprint delivered outstanding results for the quarter and for the full year, despite the macroeconomic and currency-related headwinds we encountered most of the year," said Robert Keane, chairman, president and chief executive officer. "Our talented employees continued to execute across functions, geographies and product lines, which is especially impressive in the context of our decision nine months ago to slow down our rate of investment due to the onset of the recession and the deterioration of currency exchange rates. As a result, we showed significant leverage in our business in 2009."
Financial Metrics:
- Revenue for the fourth quarter of fiscal year 2009 grew to $135.2
million, a 22 percent increase over revenue of $110.4 million
reported in the same quarter a year ago. For the full fiscal year,
revenue grew to $515.8 million, a 29 percent increase over revenue
of $400.7 million in fiscal year 2008.
- Gross margin (revenue minus the cost of revenue as a percent of
total revenue) in the fourth quarter was 63.1 percent, compared to
60.6 percent in the same quarter a year ago. For the full fiscal
year, gross margin was 62.8 percent, compared to 61.5 percent in
fiscal 2008.
- Operating income in the fourth quarter was $15.1 million, or 11.2
percent of revenue, and reflected a 33 percent increase compared to
operating income of $11.3 million, or 10.3 percent of revenue, in
the same quarter a year ago. For the full fiscal year, operating
income was $61.6 million, or 11.9 percent of revenue, a 50 percent
increase over operating income of $41.2 million, or 10.3 percent of
revenue, in the prior fiscal year.
- GAAP net income for the fourth quarter was $14.7 million, or 10.9
percent of revenue, representing a 42 percent increase compared to
$10.3 million, or 9.4 percent of revenue in the same quarter a year
ago. For the full fiscal year, GAAP net income was $55.7 million,
or 10.8 percent of revenue, a 40 percent increase over GAAP net
income of $39.8 million, or 9.9 percent of revenue, in the prior
fiscal year.
- GAAP net income per fully diluted share for the fourth quarter was
$0.33, versus $0.22 in the same quarter a year ago. For the full
year, GAAP net income per fully diluted share was $1.25, versus
$0.87 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
$19.5 million, or 14.4 percent of revenue, representing a 30
percent increase over non-GAAP adjusted net income of $15.0
million, or 13.6 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 $75.9 million, or 14.7 percent of revenue, a 38 percent
increase over non-GAAP adjusted net income of $55.1 million, or
13.8 percent of revenue, in the prior fiscal year.
- Non-GAAP adjusted net income per fully diluted share for the fourth
quarter, which excludes share-based compensation expense and its
related tax effect, was $0.43, versus $0.32 in the same quarter a
year ago. For the 2009 full fiscal year, non-GAAP adjusted net
income per fully diluted share, excluding share-based compensation
expense and its related tax effect, was $1.68, versus $1.18 in the
prior full fiscal year.
- Capital expenditures in the fourth quarter were $16.7 million or
12.4 percent of revenue. During the full fiscal year capital
expenditures were $76.3 million or 14.8 percent of revenue.
- During the fourth quarter, the Company generated $27.8 million of
cash from operations and $9.2 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 $120.1
million of cash from operations and $36.6 million in free cash
flow.
- The Company had $134.0 million in cash and cash equivalents as of
June 30, 2009.
Operating Highlights:
- Vistaprint acquired approximately 1.4 million new customers in the
fourth fiscal quarter ending June 30, 2009. For the full 2009
fiscal year, the number of new customer acquisitions totaled
approximately 5.6 million.
- Repeat customers generated approximately 67 percent of total
quarterly bookings in the fourth quarter, compared with 65 percent
in the same quarter a year ago.
- Average daily order volume in the fourth quarter of fiscal 2009 was
approximately 44,000, reflecting a 33 percent increase over an
average of approximately 33,000 orders per day in the same quarter
a year ago.
- Advertising spending in the fourth quarter was $24.7 million, or
18.2 percent of revenue compared to $19.6 million, or 17.7 percent
of revenue in the same quarter a year ago.
- Non-U.S. markets contributed 39 percent of total revenue in the
fourth quarter, the same percentage as compared to the same quarter
a year ago, reflecting a 21 percent increase in revenue from non-
U.S. markets year over year. For the full year, non-U.S. markets
contributed 39 percent of total revenue, compared to 38 percent in
fiscal 2008, reflecting a 33 percent increase year over year.
- Average order value in the fourth quarter including revenue from
shipping and processing was $33.31, compared to $34.00 in the same
quarter a year ago.
- Website sessions in the fourth quarter were 62.1 million, a 30
percent increase over 47.8 million in the same quarter a year ago.
- Conversion rates were 6.4 percent in the fourth quarter of fiscal
2009, compared to 6.4 percent in the same quarter a year ago.
During the fourth quarter, Vistaprint introduced email marketing for small businesses and broadened its promotional products and signage offerings with tote bags and banners. Additionally, Vistaprint launched its strategic partnership with FedEx Office. The company also launched a site redesign and new branding strategy.
"Our performance in 2009 gives us added confidence in our ability to grow robustly, even though we believe that we continue to operate in a recessionary economy," continued Keane. "Looking ahead to 2010, we expect to continue building on our strong foundation with investments that we believe will fuel our long-term growth and enhance our market-leading position."
Mike Giannetto, executive vice president and chief financial officer, added, "Our guidance reflects our expectations for healthy revenue growth, and also reflects several targeted investments that we believe are important for us to capitalize on our long-term growth opportunity and continue to improve our competitive position. Some of these investments are geographic expansion, including our European infrastructure and a new manufacturing facility in Australia; automation enhancements in our manufacturing facilities; expanding our customer service capabilities; and a more deliberate strategy to target home and family customers."
Financial Guidance as of July 30, 2009:
Based on current and anticipated levels of demand, the Company expects the following financial results:
Revenue
- For the quarter ending September 30, 2009, the Company expects
revenue of approximately $135 million to $140 million.
- For the full fiscal year ending June 30, 2010, the Company expects
revenue of approximately $605 million to $635 million.
GAAP Fully Diluted Earnings Per Share
- For the quarter ending September 30, 2009, the Company expects GAAP
fully diluted earnings per share of approximately $0.20 to $0.23,
which assumes 44.6 million weighted average shares outstanding.
- For the full fiscal year ending June 30, 2010, the Company expects
GAAP fully diluted earnings per share of approximately $1.37 to
$1.49, which assumes 45.0 million weighted average shares
outstanding.
Non-GAAP Adjusted Net Income Per Fully Diluted Share
- For the quarter ending September 30, 2009, the Company expects non-
GAAP adjusted net income per fully diluted share of approximately
$0.32 to $0.35, which excludes expected share-based compensation
expense and its related tax effect of approximately $5.5 million,
and assumes a non-GAAP fully diluted weighted average share count
of approximately 45.3 million shares.
- For the full fiscal year ending June 30, 2010, the Company expects
non-GAAP adjusted net income per fully diluted share of
approximately $1.83 to $1.95, which excludes expected share-based
compensation expense and its related tax effect of approximately
$22.0 million, and assumes a non-GAAP fully diluted weighted
average share count of approximately 45.6 million shares.
Capital Expenditures
For the full fiscal year ending June 30, 2010, the Company expects to make capital expenditures of approximately $75 million to $90 million. Planned capital investments include the expansion of the Company's Canadian manufacturing facility, which is expected to be completed toward the end of fiscal year 2010, an investment in new presses and manufacturing equipment to support the growth of the business, as well as an investment to build a new manufacturing facility in Australia which is expected to be operational in fiscal year 2011.
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 30, 2009, 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. (EDT) 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) 510-0711, access code 60030544. A replay of the Q&A session will be available on the Company's Web site following the call on July 30, 2009.
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 and its related tax effect. 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.
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 and its related tax effect, if any, from the non-GAAP measurements for fiscal years 2006, 2007, 2008 and 2009.
Vistaprint's management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenses that may not have been 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), which management believes were not indicative of core business operating results.
The Company intends to continue to use non-GAAP financial measures in its financial reporting and guidance in fiscal year 2010 and will reevaluate for future periods. Until Vistaprint ceases to include non-GAAP financial measures in its reporting, it expects to compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year.
Management provides these non-GAAP financial measures as a courtesy to investors. However, to gain a more complete understanding of the Company's financial performance, management does (and investors should) rely upon GAAP statements of operations.
"Vistaprint delivered outstanding results for the quarter and for the full year, despite the macroeconomic and currency-related headwinds we encountered most of the year," said Robert Keane, chairman, president and chief executive officer. "Our talented employees continued to execute across functions, geographies and product lines, which is especially impressive in the context of our decision nine months ago to slow down our rate of investment due to the onset of the recession and the deterioration of currency exchange rates. As a result, we showed significant leverage in our business in 2009."
Financial Metrics:
- Revenue for the fourth quarter of fiscal year 2009 grew to $135.2
million, a 22 percent increase over revenue of $110.4 million
reported in the same quarter a year ago. For the full fiscal year,
revenue grew to $515.8 million, a 29 percent increase over revenue
of $400.7 million in fiscal year 2008.
- Gross margin (revenue minus the cost of revenue as a percent of
total revenue) in the fourth quarter was 63.1 percent, compared to
60.6 percent in the same quarter a year ago. For the full fiscal
year, gross margin was 62.8 percent, compared to 61.5 percent in
fiscal 2008.
- Operating income in the fourth quarter was $15.1 million, or 11.2
percent of revenue, and reflected a 33 percent increase compared to
operating income of $11.3 million, or 10.3 percent of revenue, in
the same quarter a year ago. For the full fiscal year, operating
income was $61.6 million, or 11.9 percent of revenue, a 50 percent
increase over operating income of $41.2 million, or 10.3 percent of
revenue, in the prior fiscal year.
- GAAP net income for the fourth quarter was $14.7 million, or 10.9
percent of revenue, representing a 42 percent increase compared to
$10.3 million, or 9.4 percent of revenue in the same quarter a year
ago. For the full fiscal year, GAAP net income was $55.7 million,
or 10.8 percent of revenue, a 40 percent increase over GAAP net
income of $39.8 million, or 9.9 percent of revenue, in the prior
fiscal year.
- GAAP net income per fully diluted share for the fourth quarter was
$0.33, versus $0.22 in the same quarter a year ago. For the full
year, GAAP net income per fully diluted share was $1.25, versus
$0.87 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
$19.5 million, or 14.4 percent of revenue, representing a 30
percent increase over non-GAAP adjusted net income of $15.0
million, or 13.6 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 $75.9 million, or 14.7 percent of revenue, a 38 percent
increase over non-GAAP adjusted net income of $55.1 million, or
13.8 percent of revenue, in the prior fiscal year.
- Non-GAAP adjusted net income per fully diluted share for the fourth
quarter, which excludes share-based compensation expense and its
related tax effect, was $0.43, versus $0.32 in the same quarter a
year ago. For the 2009 full fiscal year, non-GAAP adjusted net
income per fully diluted share, excluding share-based compensation
expense and its related tax effect, was $1.68, versus $1.18 in the
prior full fiscal year.
- Capital expenditures in the fourth quarter were $16.7 million or
12.4 percent of revenue. During the full fiscal year capital
expenditures were $76.3 million or 14.8 percent of revenue.
- During the fourth quarter, the Company generated $27.8 million of
cash from operations and $9.2 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 $120.1
million of cash from operations and $36.6 million in free cash
flow.
- The Company had $134.0 million in cash and cash equivalents as of
June 30, 2009.
Operating Highlights:
- Vistaprint acquired approximately 1.4 million new customers in the
fourth fiscal quarter ending June 30, 2009. For the full 2009
fiscal year, the number of new customer acquisitions totaled
approximately 5.6 million.
- Repeat customers generated approximately 67 percent of total
quarterly bookings in the fourth quarter, compared with 65 percent
in the same quarter a year ago.
- Average daily order volume in the fourth quarter of fiscal 2009 was
approximately 44,000, reflecting a 33 percent increase over an
average of approximately 33,000 orders per day in the same quarter
a year ago.
- Advertising spending in the fourth quarter was $24.7 million, or
18.2 percent of revenue compared to $19.6 million, or 17.7 percent
of revenue in the same quarter a year ago.
- Non-U.S. markets contributed 39 percent of total revenue in the
fourth quarter, the same percentage as compared to the same quarter
a year ago, reflecting a 21 percent increase in revenue from non-
U.S. markets year over year. For the full year, non-U.S. markets
contributed 39 percent of total revenue, compared to 38 percent in
fiscal 2008, reflecting a 33 percent increase year over year.
- Average order value in the fourth quarter including revenue from
shipping and processing was $33.31, compared to $34.00 in the same
quarter a year ago.
- Website sessions in the fourth quarter were 62.1 million, a 30
percent increase over 47.8 million in the same quarter a year ago.
- Conversion rates were 6.4 percent in the fourth quarter of fiscal
2009, compared to 6.4 percent in the same quarter a year ago.
During the fourth quarter, Vistaprint introduced email marketing for small businesses and broadened its promotional products and signage offerings with tote bags and banners. Additionally, Vistaprint launched its strategic partnership with FedEx Office. The company also launched a site redesign and new branding strategy.
"Our performance in 2009 gives us added confidence in our ability to grow robustly, even though we believe that we continue to operate in a recessionary economy," continued Keane. "Looking ahead to 2010, we expect to continue building on our strong foundation with investments that we believe will fuel our long-term growth and enhance our market-leading position."
Mike Giannetto, executive vice president and chief financial officer, added, "Our guidance reflects our expectations for healthy revenue growth, and also reflects several targeted investments that we believe are important for us to capitalize on our long-term growth opportunity and continue to improve our competitive position. Some of these investments are geographic expansion, including our European infrastructure and a new manufacturing facility in Australia; automation enhancements in our manufacturing facilities; expanding our customer service capabilities; and a more deliberate strategy to target home and family customers."
Financial Guidance as of July 30, 2009:
Based on current and anticipated levels of demand, the Company expects the following financial results:
Revenue
- For the quarter ending September 30, 2009, the Company expects
revenue of approximately $135 million to $140 million.
- For the full fiscal year ending June 30, 2010, the Company expects
revenue of approximately $605 million to $635 million.
GAAP Fully Diluted Earnings Per Share
- For the quarter ending September 30, 2009, the Company expects GAAP
fully diluted earnings per share of approximately $0.20 to $0.23,
which assumes 44.6 million weighted average shares outstanding.
- For the full fiscal year ending June 30, 2010, the Company expects
GAAP fully diluted earnings per share of approximately $1.37 to
$1.49, which assumes 45.0 million weighted average shares
outstanding.
Non-GAAP Adjusted Net Income Per Fully Diluted Share
- For the quarter ending September 30, 2009, the Company expects non-
GAAP adjusted net income per fully diluted share of approximately
$0.32 to $0.35, which excludes expected share-based compensation
expense and its related tax effect of approximately $5.5 million,
and assumes a non-GAAP fully diluted weighted average share count
of approximately 45.3 million shares.
- For the full fiscal year ending June 30, 2010, the Company expects
non-GAAP adjusted net income per fully diluted share of
approximately $1.83 to $1.95, which excludes expected share-based
compensation expense and its related tax effect of approximately
$22.0 million, and assumes a non-GAAP fully diluted weighted
average share count of approximately 45.6 million shares.
Capital Expenditures
For the full fiscal year ending June 30, 2010, the Company expects to make capital expenditures of approximately $75 million to $90 million. Planned capital investments include the expansion of the Company's Canadian manufacturing facility, which is expected to be completed toward the end of fiscal year 2010, an investment in new presses and manufacturing equipment to support the growth of the business, as well as an investment to build a new manufacturing facility in Australia which is expected to be operational in fiscal year 2011.
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 30, 2009, 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. (EDT) 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) 510-0711, access code 60030544. A replay of the Q&A session will be available on the Company's Web site following the call on July 30, 2009.
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 and its related tax effect. 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.
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 and its related tax effect, if any, from the non-GAAP measurements for fiscal years 2006, 2007, 2008 and 2009.
Vistaprint's management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenses that may not have been 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), which management believes were not indicative of core business operating results.
The Company intends to continue to use non-GAAP financial measures in its financial reporting and guidance in fiscal year 2010 and will reevaluate for future periods. Until Vistaprint ceases to include non-GAAP financial measures in its reporting, it expects to compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year.
Management provides these non-GAAP financial measures as a courtesy to investors. However, to gain a more complete understanding of the Company's financial performance, management does (and investors should) rely upon GAAP statements of operations.
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