VENLO, the 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 September 30, 2013, the first quarter of its 2014 fiscal year.
“Our first quarter revenue results were consistent with our expectations across all geographic regions, and we continued to make good progress against our strategic initiatives,” said Robert Keane, president and chief executive officer. “Our operating profitability this quarter was also in line with our expectations. With the first quarter behind us, we are focused on delivering against our holiday expectations during our second quarter, as well as continued improvement of our customer value proposition globally and our marketing execution in Europe.”
Consolidated Financial Metrics:
- Revenue for the first quarter of fiscal year 2014 grew to $275.1 million, a 9 percent increase over revenue of $251.4 million reported in the same quarter a year ago. Excluding the estimated impact from currency exchange rate fluctuations, total revenue also grew 9 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 65.2 percent, up from 65.0 percent in the same quarter a year ago.
- Operating income in the first quarter was $8.4 million, or 3.1 percent of revenue, and reflected an increase compared to operating income of $0.2 million, or 0.1 percent of revenue, in the same quarter a year ago.
- GAAP net income for the first quarter was $0.4 million, or 0.1 percent of revenue, compared to$(1.7) million, or (0.7) percent of revenue in the same quarter a year ago. GAAP net income was negatively impacted in the first quarter by unrealized non-cash losses of $4.9 million on currency hedges not designated for hedge accounting. Although the first quarter impact was significant, we do not expect this hedging activity to have a material EPS impact for the full year relative to our previously established fiscal 2014 guidance as we expect the below-the-line impact of these hedges to be broadly neutralized by the above-the-line currency impacts of the hedged forecasted activity over the remainder of the fiscal year.
- GAAP net income per diluted share for the first quarter was $0.01, versus $(0.05) 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 $11.3 million, or 4.1 percent of revenue, representing a 26 percent increase compared to non-GAAP adjusted net income of $8.9 million, or 3.6 percent of revenue, in the same quarter a year ago. Non-GAAP net income was also negatively impacted by the unrealized losses on hedges discussed above, and we similarly expect the impact to be broadly neutralized over the remainder of the fiscal year.
- Non-GAAP adjusted net income per diluted share for the first quarter, as defined above, was$0.32, versus $0.25 in the same quarter a year ago.
- Capital expenditures in the first quarter were $17.6 million, or 6.4 percent of revenue.
- During the first quarter, the company generated $(0.1) million of cash from operations and $(19.6) 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.
- As of September 30, 2013, the company had $64.7 million in cash and cash equivalents and$270.0 million in short-term and long-term debt. After considering debt covenant limitations, the company had $226.0 million available for borrowing under its credit facility as of September 30, 2013.
- The company did not repurchase shares during the first quarter.
Operating metrics are provided as a table-based supplement to this press release. Starting in the first quarter of fiscal 2014, all operating metrics reflect the consolidated business including past acquisitions, and post-acquisition prior-period comparisons have been adjusted to reflect the same consolidated view.
Fiscal 2014 Outlook as of October 29, 2013:
Ernst Teunissen, executive vice president and chief financial officer, said, “This early in the fiscal year we are not updating our operational revenue outlook, but we are increasing our revenue guidance range to reflect recent currency movements. As described in August, we expect to deliver lower year-over-year revenue growth in Europe than in North America, primarily due to planned changes we are making in our business in Europe to improve our customer value proposition, marketing execution and profitability. Our earnings per share guidance is unchanged, and we remain confident in our ability to drive meaningful growth in our profit margins and earnings per share this year.”
Financial Guidance as of October 29, 2013:
As previously stated, beginning with fiscal year 2014, the company is providing revenue and earnings guidance on an annual basis. Based on current and anticipated levels of demand, the company expects the following financial results:
Fiscal Year 2014 Revenue
- For the full fiscal year ending June 30, 2014, the company expects revenue of approximately$1,250 million to $1,300 million, or 7 percent to 11 percent growth year over year in reported terms. Excluding currency movements, we expect constant-currency growth of approximately 7 percent to 11 percent, unchanged from our prior guidance range. Constant-currency growth expectations assume a recent 30-day currency exchange rate for all currencies.
Fiscal Year 2014 GAAP Net Income Per Diluted Share
- For the full fiscal year ending June 30, 2014, the company expects GAAP net income per diluted share of approximately $1.35 to $1.70, which assumes 34.4 million weighted average diluted shares outstanding.
Fiscal Year 2014 Non-GAAP Adjusted Net Income Per Diluted Share
- For the full fiscal year ending June 30, 2014, the company expects non-GAAP adjusted net income per diluted share of approximately $2.49 to $2.83, which excludes expected acquisition-related amortization of intangible assets of approximately $8.7 million or approximately $0.25 per diluted share, share-based compensation expense and its related tax effect of approximately$29.5 million or approximately $0.84 per diluted share, and tax charges related to the alignment of acquisition-related intellectual property with global operations of approximately $2.3 million, or$0.07 per diluted share. This guidance assumes a non-GAAP weighted average diluted share count of approximately 35.0 million shares.
Fiscal Year 2014 Capital Expenditures
For the full fiscal year ending June 30, 2014, the company expects to make capital expenditures of approximately $85 million to $100 million. Planned capital investments are designed to support the planned growth of the business and will include various investments in new manufacturing capabilities.
The foregoing guidance supersedes any guidance previously issued by the company. All such previous guidance should no longer be relied upon.