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 September 30, 2014, the first quarter of its 2015 fiscal year.
“We are off to a good start to fiscal 2015 and remain confident in our strategy and our ability to execute operationally,” said Robert Keane, president and chief executive officer. “Quarterly revenue was in line with our expectations for improved growth in our Vistaprint brand and strong growth from recent acquisitions. Profitability, operating cash flow and free cash flow were also strong. We continued to improve the customer value proposition for our Vistaprint brand, began to integrate our recent acquisitions, and accelerated investment in software for our mass customization platform.”
Consolidated Financial Metrics:
- Revenue for the first quarter of fiscal year 2015 was $333.9 million, a 21 percent increase compared to revenue of $275.1 million reported in the same quarter a year ago. Excluding the estimated impact from currency exchange rate fluctuations and revenue from businesses acquired during the past twelve months, total revenue grew 6 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 61.0 percent, down from 65.2 percent in the same quarter a year ago. The year-over-year reduction in gross margin was primarily due to our recent acquisitions of People & Print Group and Pixartprinting, which have lower gross margins than our Vistaprint-branded business. Excluding the businesses we acquired during the past twelve months, our gross margin increased slightly year over year.
- Operating income in the first quarter was $16.9 million, or 5.1 percent of revenue, a significant increase compared to $8.4 million, or 3.1 percent of revenue, in the same quarter a year ago.
- GAAP net income for the first quarter was $23.7 million, or 7.1 percent of revenue, compared to$0.4 million, or 0.1 percent of revenue in the same quarter a year ago. Part of the significant year-over-year growth in GAAP net income is due to below-the-line currency movements which created losses in the year-ago period but gains in the current period.
- GAAP net income per diluted share for the first quarter was $0.71, versus $0.01 in the same quarter a year ago, due in part to the currency movements described above.
- 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 our operational structure, the change in the fair-value estimate of our acquisition-related earn-outs, unrealized currency gains and losses on currency hedges and intercompany financing arrangements included in net income, and share-based compensation expense and its related tax effect, was $28.8 million, or 8.6 percent of revenue, representing a 79 percent increase compared to $16.1 million, or 5.9 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 $0.86, versus $0.46 in the same quarter a year ago.
- Capital expenditures in the first quarter were $16.7 million, or 5.0 percent of revenue.
- During the first quarter, the company generated $52.6 million of cash from operations and $32.3 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, 2014, the company had $60.9 million in cash and cash equivalents and$447.9 million of debt. After considering debt covenant limitations, as of September 30, 2014 the company had $268.1 million available for borrowing under its committed credit facility.
Operating metrics are provided as a table-based supplement to this press release. Starting in the first quarter of fiscal 2014, all operating metrics include Albumprinter and Webs, and post-acquisition prior-period comparisons have been adjusted to reflect the same consolidated view. The recent acquisitions ofPeople & Print Group, Pixartprinting and FotoKnudsen are not yet incorporated into our customer metrics.
Fiscal 2015 Outlook as of October 29, 2014:
Ernst Teunissen, executive vice president and chief financial officer, said, “Our operational outlook for the full year remains unchanged. We continue to expect mid-to-high single-digit constant-currency revenue growth rates for the Vistaprint brand and double-digit revenue growth for our recently acquired brands. We also continue to expect higher operating margin, earnings, operating cash flow and free cash flow for fiscal 2015 versus fiscal 2014 even as we make important investments in our business. We have updated our revenue guidance to reflect recent currency movements since we last provided our outlook in July, but our constant currency growth expectations remain the same. Our non-GAAP EPS guidance is unchanged, as these currency movements are expected to have limited impact on the bottom line. We have increased our GAAP EPS guidance to reflect a few non-operational impacts from the first quarter change in items we exclude from our non-GAAP reporting.”
Financial Guidance as of October 29, 2014:
The company provides revenue and earnings guidance on only a fiscal year basis, not quarterly. Our guidance incorporates completed acquisitions and share repurchases, and outstanding debt obligations, as of October 29, 2014. Based on current and anticipated levels of demand, the company expects the following financial results:
Fiscal Year 2015 Revenue
- The company expects revenue of approximately $1,430 million to $1,500 million, or 13 percent to 18 percent growth year over year in reported terms and 15 percent to 20 percent growth on a constant-currency basis. Constant-currency growth expectations assume a recent 30-day currency exchange rate for all currencies.
Fiscal Year 2015 GAAP Net Income Per Diluted Share
- The company expects GAAP net income per diluted share of approximately $2.24 to $2.74, which assumes 33.3 million weighted average diluted shares outstanding. Based on a recent 30-day currency exchange rate for relevant currencies, we estimate that realized gains and losses on currency forward contracts as well as natural hedges will largely offset the currency impact to revenue in our full-year net income results.
Fiscal Year 2015 Non-GAAP Adjusted Net Income Per Diluted Share
- The company expects non-GAAP adjusted net income per diluted share of approximately $3.46 to $3.96, which excludes our expectations for the following items:
- Acquisition-related amortization of intangible assets of approximately $21.7 million or approximately $0.64 per diluted share
- Share-based compensation expense and its related tax effect of approximately $22.9 million or approximately $0.68 per diluted share
- The change in fair-value estimate of our acquisition-related earn-outs of approximately $3.7 million or approximately $0.11 per diluted share
- 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
- An unrealized currency transaction gain of $8.0 million, or $0.23 per diluted share, based on a recent 30-day currency exchange rate for relevant currencies
- Based on a recent 30-day currency exchange rate for relevant currencies, we estimate that changes in unrealized gains and losses on currency forward contracts will have an immaterial impact on our full-year results. This guidance assumes a non-GAAP weighted average diluted share count of approximately 33.8 million shares.
Fiscal Year 2015 Depreciation and Amortization and Capital Expenditures
- The company expects depreciation and amortization expense to be approximately $100 million to $105 million. This includes the amortization of acquisition-related intangible assets described above in our non-GAAP earnings per share expectations, as well as our expectations for capitalized software development costs.
- The company expects to make capital expenditures of approximately $80 million to $100 million. The majority of planned capital investments are designed to support the planned long-term growth of the business. This fiscal year, we expect to invest about $20 million to build a new manufacturing facility in Japan as part of our joint venture there and about $20 million to $25 million in the expansion of our product lines and other new manufacturing capabilities.
The foregoing guidance supersedes any guidance previously issued by the company. All such previous guidance should no longer be relied upon.