EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

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   Contacts:
   Investor Relations:
   Angela White
   ir@vistaprint.com
   781-652-6480
   Media Relations:
   Jason Keith
   publicrelations@vistaprint.com
   781-652-6444

VistaPrint Reports 2008 Fourth Fiscal Quarter and Full Fiscal Year Financial Results

 

 

Fourth quarter results, year over year:

 

   

Revenue rose 52 percent

 

   

Net income per fully diluted share rose 91 percent

 

   

Non-GAAP adjusted net income per fully diluted share rose 60 percent

 

 

Full fiscal year results, year over year:

 

   

Revenue rose 57 percent

 

   

Net income per fully diluted share rose 45 percent

 

   

Non-GAAP adjusted net income per fully diluted share rose 51 percent

Hamilton, Bermuda, July 31, 2008 — VistaPrint Limited (Nasdaq:VPRT), the small business marketing company, today announced financial results for the fourth fiscal quarter and full fiscal year ended June 30, 2008.

“VistaPrint delivered another outstanding quarter and another outstanding fiscal year,” said Robert Keane, president and chief executive officer. “Continuing the track record we have set every year since our 2005 IPO, we delivered very strong profit and revenue growth while continuing to invest in building a successful and enduring business institution. We believe we remain at the early stages of our growth, and in the coming fiscal year expect continuing strong profit and revenue growth.”


Financial Metrics:

 

   

Revenue for the fourth quarter of fiscal year 2008 grew to $110.4 million, a 52 percent increase over revenue of $72.5 million reported in the same quarter a year ago. For the full fiscal year, revenue grew to $400.7 million, a 57 percent increase over revenue of $255.9 million in fiscal year 2007.

 

   

Gross margin (revenue minus the cost of revenue) in the fourth quarter was 60.6 percent, compared to 64.5 percent in the same quarter a year ago. Gross margins were adversely impacted by a number of factors, including unfavorable currency movements, shifts in product mix, and increased shipping costs resulting from fuel surcharges.

 

   

Operating income in the fourth quarter was $11.3 million, or 10.3 percent of revenue, and reflected a 126 percent increase compared to $5.0 million, or 6.9 percent of revenue, in the same quarter a year ago. For the full fiscal year, operating income was $41.2 million, or 10.3 percent of revenue, a 51 percent increase over operating income of $27.2 million, or 10.6 percent of revenue, in the prior fiscal year.

 

   

GAAP net income for the fourth quarter was $10.3 million, or 9.4 percent of revenue, representing a 91 percent increase compared to $5.4 million, or 7.4 percent of revenue in the same quarter a year ago. For the full fiscal year, GAAP net income was $39.8 million, or 9.9 percent of revenue, a 47 percent increase over GAAP net income of $27.1 million, or 10.6 percent of revenue, in the prior fiscal year.

 

   

GAAP net income per fully diluted share for the fourth quarter was $0.22, versus $0.12 in the same quarter a year ago. For the full year, GAAP net income per fully diluted share was $0.87, versus $0.60 in the prior full fiscal year.

 

   

Non-GAAP adjusted net income for the fourth quarter, which excludes share-based compensation expense, was $15.0 million, or 13.6 percent of revenue, representing a 61 percent increase over $9.3 million, or 12.8 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, was $55.1 million, or 13.8 percent of revenue, a 53 percent increase over non-GAAP adjusted net income of $35.9 million, or 14.0 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, was $0.32, versus $0.20 in the same quarter a year ago. For the 2008 full fiscal year, non-GAAP adjusted net income per fully diluted share, excluding share-based compensation expense, was $1.18, versus $0.78 in the prior full fiscal year.


   

Capital expenditures in the fourth quarter were $13.9 million or 13 percent of revenue. During the full fiscal year capital expenditures were $63 million or 16 percent of revenue.

 

   

During the fourth quarter, the Company generated $18.7 million in cash from operations. During the full fiscal year, the Company generated $87.7 million in cash from operations and $18.0 million in free cash flow.

 

   

The Company had $129.7 million in cash, cash equivalents and marketable securities as of June 30, 2008.

Operating Highlights:

 

   

VistaPrint acquired approximately 1.2 million new customers in the fourth fiscal quarter ending June 30, 2008. For the full 2008 fiscal year, the number of new customer acquisitions totaled approximately 4.5 million.

 

   

Repeat customers generated approximately 65 percent of total quarterly bookings in the fourth quarter, compared with 63 percent in the same quarter a year ago.

 

   

Average daily order volume in the fourth quarter of fiscal 2008 exceeded 33,000, reflecting approximately a 50 percent increase over an average of approximately 22,000 orders per day in the same quarter a year ago.

 

   

Advertising spending in the fourth quarter was $19.6 million, or 17.7 percent of revenue compared to $14.7 million, or 20.2 percent of revenue in the same quarter a year ago.

 

   

Non-US markets contributed 39 percent of total revenue in the fourth quarter, up from 32 percent in the same quarter a year ago.

 

   

Average order value in the fourth quarter including revenue from shipping and processing was $34.00, a 5 percent increase when compared to $32.33 in the same quarter a year ago.


   

Web site sessions in the fourth quarter were 47.8 million, a 37 percent increase over 34.9 million in the same quarter a year ago.

 

   

Conversion rates were 6.4 percent in the fourth quarter of fiscal 2008, compared to 5.9 percent in the same quarter a year ago.

 

   

VistaPrint introduced custom websites for small businesses and broadened its signage offering with window decals and car door magnets.

 

   

VistaPrint was awarded three new U. S. patents.

“Our financial results highlight a number of positive dynamics: in the fourth quarter, we grew rapidly while expanding operating margins, and for the full fiscal year, we saw reduced capital intensity, and increased free cash flow,” noted chief financial officer Harpreet Grewal. “This year we set and announced a number of demanding financial and operational goals. We’ve executed consistently and continued to meet, and at times exceed, our aggressive targets.”

Financial Guidance as of July 31, 2008:

Based on current and anticipated levels of demand, the Company expects the following financial results:

Revenue

 

   

For the first quarter of fiscal year 2009, ending September 30, 2008, the Company expects revenue to be $112 million to $116 million.

 

   

For the full fiscal year ending June 30, 2009, the Company expects revenue to be $540 million to $570 million.

GAAP Fully-Diluted Earnings Per Share

 

   

For the first quarter of fiscal year 2009, ending September 30, 2008, the Company expects GAAP fully-diluted earnings per share to be $0.15 to $0.18.

 

   

For the full fiscal year ending June 30, 2009, the Company expects GAAP fully-diluted earnings per share to be $1.10 to $1.20, which assumes 46.5 million weighted average shares outstanding.


Non-GAAP Adjusted Net Income Per Fully-Diluted Share

The Company is providing the following assumptions to facilitate comparisons with non-GAAP adjusted net income per fully diluted share. For the quarter ending September 30, 2008: non-GAAP fully diluted weighted average share count of approximately 47.0 million shares, share-based compensation expense of approximately $5.2 million. For the full fiscal year ending June 30, 2009: non-GAAP fully diluted weighted average share count of approximately 47.5 million shares, share-based compensation expense of approximately $20 million.

Based on the above assumptions and the Company’s guidance above regarding GAAP expectations, non-GAAP adjusted net income per fully diluted share would be as follows:

 

   

For the first quarter of fiscal year 2009, ending September 30, 2008, non-GAAP adjusted net income per fully diluted share range of approximately $0.25 to $0.28.

 

   

For the full fiscal year 2009, ending June 30, 2009, non-GAAP adjusted net income per fully diluted share range of approximately $1.50 to $1.60.

Capital Expenditures

 

   

For the first quarter of fiscal year 2009, ending September 30, 2008, the Company expects to make capital expenditures of approximately 18 to 22 percent of anticipated fiscal year 2009 first quarter revenue.

 

   

For the full fiscal year ending June 30, 2009, the Company expects to make capital expenditures of approximately 14 to 17 percent of anticipated fiscal year 2009 revenue.

Planned capital investments include two major facility expansions: the larger being an expansion of the Company’s Montego Bay, Jamaica, service center operations which is expected to be completed in approximately eighteen months, and continued work on the expansion of the Company’s Windsor, Ontario manufacturing facilities, which is expected to be completed in the third quarter of fiscal year 2009.

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 31, 2008, 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 5:00 p.m. (EDT) there will be a Web cast of a live Q&A session with VistaPrint management. Links to this Q&A session will also be posted on the investor relations section of the Company’s Web site. A replay of the Q&A session will be available on the Company’s Web site following the call on July 31, 2008.

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. 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 from the non-GAAP measurements for fiscal years 2006, 2007 and 2008.

VistaPrint’s management believes that these non-GAAP financial measures provided 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.

VistaPrint previously announced the Company’s intention to eliminate the use of non-GAAP financial measures in its financial reporting and guidance beginning with the first quarter of the fiscal year ending June 30, 2009, other than to facilitate non-GAAP comparisons during a transition period, because management believes that the reporting of non-GAAP measures would by that time no longer provide meaningful supplemental information to investors regarding the Company’s performance. However, based on subsequent investor feedback, management has concluded that many investors believe they would continue to benefit from referring to these non-GAAP financial measures in assessing VistaPrint’s performance and when forecasting and analyzing future periods. Therefore, the Company intends to continue to use non-GAAP financial measures in its financial reporting and guidance in fiscal year 2009 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.


About VistaPrint

VistaPrint Limited (Nasdaq:VPRT) is the small business marketing company having served over 15 million customers world-wide. VistaPrint offers small businesses the ability to market their business with a broad range of brand identity and promotional products, marketing services and electronic marketing solutions. A global company, VistaPrint employs more than 1,400 people and operates 19 localized websites serving over 120 countries around the world. A broad range of marketing products and services are available online at www.vistaprint.com. VistaPrint’s products are satisfaction guaranteed.

VistaPrint, the VistaPrint logo and VistaPrint.com are registered trademarks of VistaPrint. All other brand and product names appearing on this announcement may be trademarks or registered trademarks of their respective holders.

This press release contains statements about management’s future expectations, plans and prospects of our business that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning the expected growth and development of our business including the financial guidance set forth under the heading “Financial Guidance as of July 31, 2008,” our operating performance, our margins, our market position, our reinvestment program, and our ability to successfully attract and retain customers. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, our ability to attract customers and to retain customers and to do so in a cost-effective manner, willingness of purchasers of graphic design services and printed products to shop online, failure of our investments, unexpected increases in our use of funds, failure to increase our revenue and keep our expenses consistent with revenue, failures of our web sites or network infrastructure, failure to maintain the prices we charge for our products and services, the inability of our manufacturing operations to meet customer demand, and other factors that are discussed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2007, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, and other documents we periodically file with the SEC.


In addition, the statements in this press release represent our expectations and beliefs as of the date of this press release. We anticipate that subsequent events and developments may cause these expectations and beliefs to change. We specifically disclaim any obligation to update any forward-looking statements. These forward-looking statements should not be relied upon as representing our expectations or beliefs as of any date subsequent to the date of this press release.

Financial Tables to Follow


VistaPrint Limited

Consolidated Balance Sheets

 

     June 30, 2008    June 30, 2007
     (Unaudited)
     (In thousands, except share and per share
data)

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 103,145    $ 69,464

Marketable securities

     26,598      38,578

Accounts receivable, net of allowances of $213 and $148 at June 30, 2008 and June 30, 2007, respectively

     6,105      4,647

Inventory

     2,548      1,144

Prepaid expenses and other current assets

     5,678      4,962
             

Total current assets

     144,074      118,795

Property, plant and equipment, net

     154,520      106,192

Software and web site development costs, net

     5,380      3,841

Deposits, patents, image licenses and other noncurrent assets

     9,322      6,025
             

Total assets

   $ 313,296    $ 234,853
             

Liabilities and shareholders’ equity

     

Current liabilities:

     

Accounts payable

   $ 8,486    $ 9,445

Accrued expenses

     36,532      22,403

Deferred revenue

     1,893      746

Current portion of long-term debt

     3,304      3,202
             

Total current liabilities

     50,215      35,796

Deferred tax liability - non-current

     —        1,225

Accrued compensation costs

     1,069      —  

Long-term debt

     19,507      21,772

Shareholders’ equity:

     

Common shares, par value $0.001 per share, 500,000,000 shares authorized; 44,276,016 and 43,472,317 shares issued and outstanding at June 30, 2008 and June 30, 2007, respectively

     44      43

Additional paid-in capital

     191,271      170,029

Retained earnings

     43,098      4,066

Accumulated other comprehensive income

     8,092      1,922
             

Total shareholders’ equity

     242,505      176,060
             

Total liabilities and shareholders’ equity

   $ 313,296    $ 234,853
             


VistaPrint Limited

Consolidated Statements of Operations

 

     Three Months Ended June 30,     Year Ended June 30,  
     2008     2007     2008    2007  
     (Unaudited)  
     (in thousands, except share and per share data)  

Revenue

   $ 110,408     $ 72,549     $ 400,657    $ 255,933  

Cost of revenue (1)

     43,514       25,744       154,122      89,971  

Technology and development expense (1)

     13,206       8,071       44,828      27,176  

Marketing and selling expense (1)

     33,805       26,454       127,975      87,887  

General and administrative expense (1)

     8,545       7,255       32,572      23,694  
                               

Income from operations

     11,338       5,025       41,160      27,205  

Interest income

     782       1,186       4,160      4,691  

Other income (expense), net

     (339 )     (48 )     427      (45 )

Interest expense

     395       437       1,655      1,828  
                               

Income before income taxes

     11,386       5,726       44,092      30,023  

Income tax provision

     1,057       329       4,261      2,880  
                               

Net income

   $ 10,329     $ 5,397     $ 39,831    $ 27,143  
                               

Basic net income per share

   $ 0.23     $ 0.12     $ 0.91    $ 0.64  
                               

Diluted net income per share

   $ 0.22     $ 0.12     $ 0.87    $ 0.60  
                               

Weighted average common shares outstanding - basic

     44,207,288       43,285,950       43,913,119      42,445,991  
                               

Weighted average common shares outstanding - diluted

     45,950,019       45,812,683       46,016,364      45,364,257  
                               

 

(1)    Share-based compensation is allocated as follows:

    
     Three Months Ended June 30,     Year Ended June 30,  
     2008     2007     2008    2007  
     (Unaudited)  
     (in thousands)  

Cost of revenue

   $ 161     $ 122     $ 755    $ 427  

Technology and development expense

     1,245       684       4,108      2,184  

Marketing and selling expense

     1,037       2,045       3,722      3,176  

General and administrative expense

     2,051       1,032       6,162      2,978  
                               
   $ 4,494     $ 3,883     $ 14,747    $ 8,765  
                               


VistaPrint Limited

Reconciliations of Non-GAAP Financial Measures

 

     Three Months Ended
June 30,
   Year Ended June 30,
     2008     2007    2008     2007
     (Unaudited)
     (in thousands, except per share data)

Non-GAAP adjusted net income reconciliation:

         

Net income

   $ 10,329     $ 5,397    $ 39,831     $ 27,143

Add back:

         

Share-based compensation expense, inclusive of income tax effects

     4,648 (a)     3,883      15,275 (b)     8,765
                             

Non-GAAP adjusted net income

   $ 14,977     $ 9,280    $ 55,106     $ 35,908
                             

Non-GAAP adjusted net income per diluted share reconciliation:

         

Net income per diluted share

   $ 0.22     $ 0.12    $ 0.87     $ 0.60

Add back:

         

Share-based compensation expense, inclusive of income tax effects

     0.10       0.08      0.31       0.18
                             

Non-GAAP adjusted net income per diluted share

   $ 0.32     $ 0.20    $ 1.18     $ 0.78
                             

 

(a) Includes share-based compensation charges of $4,494 and the income tax effects related to those charges of $154
(b) Includes share-based compensation charges of $14,747 and the income tax effects related to those charges of $528


VistaPrint Limited

Consolidated Statements of Cash Flows

 

     Year Ended June 30,  
     2008     2007  
     (Unaudited)  
     (in thousands)  

Operating activities

    

Net income

   $ 39,831     $ 27,143  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     25,193       14,874  

Loss on disposal of equipment

     71       474  

Impairment loss on equipment

     62       876  

Share-based compensation expense

     14,747       8,765  

Deferred taxes

     (2,029 )     1,290  

Tax benefits derived from share-based compensation awards

     (1,301 )     —    

Changes in operating assets and liabilities:

    

Accounts receivable

     (1,257 )     (3,124 )

Inventory

     (1,309 )     298  

Prepaid expenses and other assets

     (2,173 )     (3,177 )

Accounts payable

     2,439       (240 )

Accrued expenses and other current liabilities

     13,457       7,061  
                

Net cash provided by operating activities

     87,731       54,240  

Investing activities

    

Purchases of property, plant and equipment, net

     (62,740 )     (62,845 )

Proceeds from sale of equipment

     —         256  

Purchases of marketable securities

     (49,487 )     (52,399 )

Sales of marketable securities

     61,117       57,000  

Purchase of intangible assets

     (1,250 )     —    

Capitalization of software and website development costs

     (5,696 )     (4,189 )
                

Net cash used in investing activities

     (58,056 )     (62,177 )

Financing activities

    

Proceeds from long-term debt

     —         1,630  

Repayment of long-term debt

     (3,251 )     (2,620 )

Payment of witholding taxes in connection with settlement of RSUs

     (3,391 )     —    

Tax benefits derived from share-based compensation awards

     1,301       —    

Proceeds from issuance of common shares

     8,321       13,706  
                

Net cash provided by financing activities

     2,980       12,716  

Effect of exchange rate changes on cash

     1,026       32  
                

Net increase in cash and cash equivalents

     33,681       4,811  

Cash and cash equivalents at beginning of period

     69,464       64,653  
                

Cash and cash equivalents at end of period

   $ 103,145     $ 69,464  
                

Free Cash Flow Reconciliation:

    

Net cash provided by operating activities

   $ 87,731     $ 54,240  

Purchases of property, plant and equipment, net

     (62,740 )     (62,845 )

Purchase of intangible assets

     (1,250 )     —    

Capitalization of software and website development costs

     (5,696 )     (4,189 )
                

Total free cash flow

   $ 18,045     $ (12,794 )