 Q1
Fiscal Year 2013 Earnings Presentation, Commentary
& Financial Results Supplement
October 25, 2012
Exhibit 99.2 |
 This document
is Vistaprint’s first quarter fiscal year 2013 earnings commentary. This document contains slides and
accompanying comments in the “notes”
section below each slide. |
 Safe
Harbor Statement 2
This presentation and the accompanying notes contain statements about our 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 our financial guidance, outlook, expectations, and investment
areas for fiscal year 2013; our planned investments in our business and the anticipated effects of those
investments; our operational growth strategy and the anticipated development of our business and
financial results in response to our strategy; and the anticipated growth and development of
our business and markets, especially in Europe. Projections are inherently uncertain and are
based on assumptions and judgments by management. Our 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 flaws in the assumptions and judgments upon which our projections and
guidance are based; our failure to make the investments in our business that we plan to make or
the failure of those investments to have the effects that we expect; our failure to execute our
strategy; the willingness of purchasers of marketing services and products to shop online; our
failure to identify and address the causes of our revenue weakness in Europe; currency
fluctuations that affect our revenues and costs; costs and disruptions caused by acquisitions; the
failure of our acquired businesses to perform as expected; difficulties or higher than
anticipated costs in integrating the systems and operations of our acquired businesses into our
systems and operations; unanticipated changes in our market, customers or business; our failure
to acquire new customers and enter new markets, retain our current customers, and sell more products to
current and new customers; our failure to promote and strengthen our brand; the failure of our current
and new marketing channels to attract customers; our failure to manage growth and changes in
our organization; our failure to manage the complexity of our business and expand our
operations; our inability to manage the challenges and risks of our international operations;
competitive pressures; costs and judgments resulting from litigation; changes in the laws and
regulations or in the interpretations of laws or regulations to which we are subject, including tax
laws, or the institution of new laws or regulations that affect our business; and general
economic conditions. You can also find other factors described in our Form 10-K for the
fiscal year ended June 30, 2012 and the other documents we periodically file with the U.S.
Securities and Exchange Commission. |
 Please read
the above safe harbor statement. Additionally, a detailed reconciliation of GAAP and non-GAAP measures is
posted in the appendix of the Q1 fiscal 2013 earnings presentation that accompanies these
remarks. |
 Presentation Organization & Call Details
3
Presentation Organization:
•
Quarterly review and update
on initiatives
•
Q1 FY13 operating and
financial results
•
Looking ahead to Q2 and
remainder of fiscal year
•
Supplementary information
•
Reconciliation of GAAP to
Non-GAAP results
Live Q&A Session:
•
5:15 p.m. Eastern
•
Link from the IR section of
www.vistaprint.com
•
Hosted by:
Robert Keane
President & CEO
Ernst Teunissen
EVP & CFO |
 This
presentation is organized into the categories shown on the left hand of this slide.
Robert Keane, CEO, and Ernst Teunissen, CFO, will host a live question and answer conference
call at 5:15 p.m. US Eastern time which you can access through a link on the investor
relations section of www.vistaprint.com. |
 Quarterly Financial Results
4
Consolidated
$234
$204
$209
$212
$300
$258
$250
$251
Q2 FY11
Q3 FY11
Q4 FY11
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
Webs revenue (millions)
Albumprinter revenue (millions)
Organic revenue (millions)
$0.75
$0.51
$0.32
$0.19
$0.82
$0.01
$0.10
$(0.05)
$0.89
$0.63
$0.43
$0.31
$0.97
$0.29
$0.40
$0.25
Q2 FY11
Q3 FY11
Q4 FY11
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
GAAP EPS*
Non-GAAP EPS*
Revenue and EPS results for the consolidated business, including Albumprinter and Webs results since
October 31, 2011 and December 28, 2011
(dates of purchase, respectively).
Non-GAAP adjusted net income per diluted share for all periods presented excludes
the impact of share-based compensation expense and its related tax effect, amortization of
acquired intangible assets and a tax charge related to the alignment of Webs IP with our global structure. Please see
reconciliation to GAAP net income (loss) at the end of this presentation. * Per
diluted share |
 Our
consolidated revenue in the first quarter of the new fiscal year was at the low end of our guidance range set three
months ago. Revenue grew 23% on a consolidated constant currency basis, to $251
million, including revenue from our Albumprinter and Webs acquisitions. On an
organic constant currency basis, we grew 13% globally. This reflects strikingly
different levels of regional revenue performance: our organic constant currency revenue
growth in North America was strong at 19%, was on track in Asia Pacific at 29%, but in
Europe was well below our expectations and plans at just 1%. We manage our business to
a global budget, but the underlying differences in our regional performance highlight both
encouraging results of our strategy execution in North America, as well as persistent
challenges that we are actively working to address in Europe. As we mentioned
last quarter, while it is possible that the economy in Europe is impacting our
business, we believe our own value proposition and operational execution must improve. In the last quarter we made
some organizational changes that we believe will help drive longer-term improvements in
Europe, but we are very early in this process.
Earnings per share for the quarter was a loss of $0.05, and we are on track and committed to
delivering EPS in line with our annual plan and the annual guidance we provided at the
beginning of the year. |
 Operational Performance:
Reinvigorate Growth in the Core Business
5
Strategy Element
Description
Long-Term Goals
Q1 FY13 Results/Examples
Major improvements to customer
experience, satisfaction and loyalty
Change success metrics from
short-term transaction-focused
value to longer-term life time value
and achieve higher life time value
per customer
•
Continued improvements in net
promoter score, a leading
retention indicator
•
New website experience
•
Improved substrate quality on
T-shirts
•
Continued improvements in
marketing by segment
•
Additional substrate upgrades
Invest more deeply into selected
traditional Vistaprint marketing
channels and expand in relatively
new channels such as broadcast
with higher than average COCA,
but excellent longer term ROI
Accelerate new customer
acquisition
Reach offline audiences not
currently looking to online suppliers
•
New customer growth of 16%
•
Launched new TV broadcast
creative in N.A.
•
Radio testing in N.A.
•
Continued testing into new
channels in Europe and APAC
Accelerate investment in production
process improvements, employee
training, supply chain management
and manufacturing-related
engineering
Step function changes in quality
and reliability
Significantly lower unit
manufacturing costs
•
Upgrades to product quality &
substrates
•
Launch of proprietary
manufacturing system for low-
volume promotional products
•
Continued efforts in improving
manufacturing operating metrics
(quality, speed, delivery, cost,
reliability)
Customer Value
Proposition
Improvements
Life Time Value
Based Marketing
World Class
Manufacturing |
 During the
quarter, we continued to roll out initiatives in each of our strategy elements designed
to reinvigorate growth in our core business.
First, we are steadily improving our customer value proposition.
Compared to a year ago we have more customer service,
better quality product substrates, faster shipping times, clearer website experience, less
price-driven merchandising, more transparent pricing, and upgraded tone,
professionalism and relevance of our retention marketing efforts. As a result, our
Net Promoter Score (NPS) continues to improve globally. In time we expect this to result in
improved life time value of our customers. Specific examples from the first quarter
are: •
•
•
•
Second, we are now investing in advertising based on the life time value of our
customers. This is in full swing in North America, and in the testing phase in
other regions. During the first quarter, we launched new creative in our North
American TV broadcast campaign and tested more heavily into radio. We tested TV
advertising in the UK and Australia, and prepared to do so in Q2 in Germany and
France. We continued to see strong new customer growth in all
geographies, with a total increase of 16% year over year.
Third, our investments in world-class manufacturing continue. Our engineering and
management teams are leveraging our recently functionally aligned organization to
increase our sharing of best practices and processes across regions. We are
making significant improvements in productivity measures, and achieving cost savings from more professional and
global supply chain management. Our strong gross margin in Q1 was influenced by
multiple positive and negative drivers, but we believe the productivity and supply
chain improvements we are making will help us achieve long-term scale
leverage on the gross margin line. This quarter’s launch of a new line of
promotional products was enabled by proprietary equipment engineering and system
development in our manufacturing team. And across Vistaprint, teams are
standardizing and improving processes such as packaging automation, cutting, recycling, scrap
reduction, and shipment reliability.
We launched a new website navigation and merchandising structure, with more streamlined
shopping categories, a simplified user interface, and enhanced value-based
messaging and merchandising designed to improve the overall experience. In the
December quarter we expect to launch localization tools for this new site that will allow for more
relevant localization of markets outside of the US.
We upgraded our T-shirt stock in a further step to improve our quality across multiple
product lines. Our new Jamaican customer service center opened this quarter, which
should help us better serve our North American customers from a single,
purpose-built location for our growing service staff. We continued efforts in
making our site and retention marketing programs more relevant to our various customer
segments. |
 Operational Performance:
Regional Review
6
North America
•
Acceleration of growth rate
o
Improved customer value proposition
o
LTV based advertising, including but
not limited to television
o
Strong organization effectiveness in
marketing team
•
Strategy implementation is far
Europe
•
Poor revenue performance
o
Weak macroeconomic backdrop, but
we are focusing on improving our
own execution
•
Prior organizational structure
•
Looking forward
o
Anticipate improved growth in FY13
o
Fundamental turn-around requires
longer term perspective
from complete, but off to a strong
start
limited ability to shift marketing
approach
o
New structure in place during Q1 |
 The strategic
initiatives we just described are being rolled out globally, but with some differences
in timing. We also have seen differences in our operational execution across
regions. Let’s take a moment to review our two largest geographic
regions and the differences that we believe are factors in their
diverging Q1 performance.
North America
In our largest geographic market, we have seen revenue growth accelerate from as low as 15%
eight quarters ago, to 18- 22% over the last year. Growth in this quarter of
19% compares to growth of 17% in the first quarter of FY12. In North America our
strategic investments have been further strengthened and propelled by strong organizational
effectiveness in our NA marketing teams. That team has improved the efficiency of our
traditional channels, rolled out new multi-channel campaigns, and expanded our
partner program to extend our market reach. These efforts have been building
over the course of the past three years. Our North American strategy
implementation is far from complete, but the strong revenue growth we are seeing there
makes us confident in both our strategy and our execution.
Europe
As noted above, our poor revenue performance in Europe is a stark contrast to North
America’s success. We are actively working to understand and address the
root causes of this decline in our EU growth rate. While the macroeconomic
environment in Europe is clearly challenging, we are focusing our efforts on improving what
we can control, and on our performance regardless of the economy. We believe our
long-term strategy is the right strategy for Europe, but neither our
implementation of the strategy, nor our operational marketing execution has been as effective in Europe as it has
been in North America to date.
We believe that the reorganization we previously announced, which went into effect July 1st, 2012, will better equip us in steering the European business
back on track. We believe that the move away from our historic transaction-based
customer interaction management to a focus on improving overall value to the customer will be
better executed in an organization that is aligned in functional units as opposed to
the country-based structure we previously had in place. We expect to see an
improved year-over-year growth rate in the EU for the remainder of fiscal 2013 as compared with the
first quarter. However, just as it took time to reverse the growth rate trends in the
US, we believe that fundamental European improvements to achieve our potential in the
market will require time to implement and better execution. |
 Operational Performance:
Build Foundations for Future Growth
7
Strategy Element
Description
Long-Term Goals
Q1 FY13 Results/Examples
Digital small business marketing
offerings (websites, email
marketing, social media)
Lay foundations for continued rapid
growth five and more years in the
future
Seek M&A opportunities of firms that
possess technology, market
presence and/or expertise in target
areas
•
Continued digital subscriber adds in
Q1
•
Launch of Facebook Cover Pages
•
Launched white label Pagemodo
product to Vistaprint base
•
Continued with Webs integration and
technology investments
Enable customers to share and
preserve memories through
personalized products for home
and family use
•
Testing of Albumprinter photo books
with Vistaprint’s EU customer base
•
Albumprinter manufacturing process
improvements based upon work with
Vistaprint manufacturing
•
Preparation for holiday quarter
Expand to markets beyond
Europe and North America
Near term focus on Asia
•
Continued organizational building of
Singapore leadership team
•
Opened India production & service
operations, initial site launch
•
Ops planning, recruitment, cross-
training & process development for
China minority interest
Digital Marketing
Home & Family
Geographic Expansion |
 In addition
to our initiatives in the core business, efforts in our adjacencies continued. Our
Vistaprint-branded digital subscriber base reached 353,000 customers with continued improvement in monthly
revenue per customer, and our Webs-branded paid subscriber base grew at a healthy clip.
Our Webs Pagemodo product surpassed one million users since its initial launch, and we
just released a new Facebook cover page designer. We launched a white labeled version
of that Facebook page builder to Vistaprint customers and enhanced the product bundle
packages of our digital offering. In the home and family area, we continued testing
cross-selling of Albumprinter photo books into the Vistaprint European customer
base, and in early October turned on this new photo book offering in 9 of our European countries.
Our global engineering teams and the Albumprinter manufacturing team implemented more
efficient manufacturing processes in the Albumprinter production facility. We
are also preparing for the upcoming holiday season with new content designs for our
most popular holiday products. In terms of geographic expansion, we continued building
out our Singapore-based APAC leadership team in order to support future
opportunities in global emerging markets. In India we opened Vistaprint’s newest production facility,
recruited and trained our service teams, and launched the first version of our Indian
website. Over the coming year in India we are focused on making significant
strides in terms of localization of content and product, operations ramp up and
initial marketing efforts. And in China, via our minority interest in Namex, we conducted significant operational
planning, cross-training, recruitment and establishment of reporting processes.
|
 Q1
FY 2013 Operating and Financial Results
8 |
 Q1
FY 2013: Key Financial Metrics* 9
*
Financial metrics for the consolidated business, including Albumprinter results
since October 31, 2011 and Webs results since December 28, 2011 (dates of
purchase). **
Non-GAAP adjusted net income and non-GAAP adjusted EPS exclude
share-based compensation expense and its related tax effect,
amortization of acquired intangible assets, and charges related to the alignment
of Webs IP with our global operations. Please see reconciliation to GAAP
net income (loss) and EPS at the end of this presentation. Quarter Ended
09/30/2012 Revenue
•
$251.4 million
18% y/y growth
23% y/y constant currency growth
13% y/y organic constant currency (ex-acquisitions)
GAAP Net Income (Loss)
•
$(1.7) million
(0.7)% net margin vs. 3.8% last year
decrease of 121% y/y
•
$(0.05) Diluted EPS
decrease of 126% y/y
Non-GAAP Adjusted Net
Income**
•
$8.9 million
3.5% net margin vs. 6.1% last year
decrease of 32% y/y
•
$0.25 Diluted EPS
decrease of 19% y/y
Consolidated |
 Turning to
financials, Vistaprint generated revenues of $251 million in the first quarter, reflecting an 18% year over year
increase. In organic constant-currency terms, excluding Albumprinter and Webs, this
reflects 13% year over year growth for the business, at the low end of the
constant-currency expectations we set three months ago. GAAP net loss for
the first quarter was $1.7 million, or negative 0.7% of revenue, reflecting a 121% decrease year over
year. We expected GAAP EPS to decline significantly year over year due to the
investments in our strategy for the traditional organic business as well as the
dilutive impact of the Webs and Albumprinter acquisitions. GAAP EPS in the first
quarter was a loss of $0.05, reflecting a decrease of 126% year over year.
Non-GAAP adjusted net income in the first quarter was $8.9 million, or 3.5% of revenue,
reflecting a decrease of 32% year over year. Non-GAAP adjusted EPS was $0.25
in the first quarter of fiscal 2013, which reflects a decrease of 19% year over
year. Non-GAAP EPS declined less than GAAP EPS primarily due to higher
stock-based compensation from our acquisitions and the accounting timing impact of
our recent premium price stock option grants for our executive officers, of which the
most significant portion has an accelerated expense profile versus traditional stock options
and RSUs. |
 Cash Flow & ROIC Highlights*
Quarterly cash flows and investments (in millions)
Q1FY13
Q1FY12
Cash flow from operations
$6.6
$30.5
Free cash flow**
$(22.4)
$17.8
Capital expenditures
$27.8
$11.0
as % of revenue
11.0%
5.2%
Trailing Twelve Month Return on Invested Capital*** (GAAP)
7%
27%
Trailing Twelve Month Return on Invested Capital*** (Non-GAAP)
15%
35%
10
Share repurchase program
Q1FY13
Shares purchased
-
Average cost per share
-
Total purchase spend, inclusive of transaction costs, in millions
-
Balance sheet (in millions, as of September 30, 2012)
Cash and cash equivalents
$59.3
Consolidated
* Financial results for the consolidated
business, including Albumprinter and Webs results
** FCF
=
Cash
Flow
from
Operations
–
Capital
Expenditures
–
Purchases
of
Intangible
assets
not
related
to
acquisitions
–
Capitalized Software Expenses
*** ROIC
=
NOPAT
/
(Debt
+
Equity
–
Excess
Cash)
Net operating profit after taxes (NOPAT)
Excess cash is cash and investments >10% of last twelve month revenues
Operating leases have not been converted to debt
Non-GAAP TTM ROIC excludes share-based compensation expense and its
related tax effect, amortization of acquired intangibles, and charges
related to the alignment of Webs IP with our global structure on NOPAT |
 Cash and cash
equivalents were approximately $59.3 million as of September 30, 2012. During the
quarter, Vistaprint generated $6.6 million in cash from operations, compared with
$30.5 million in the first quarter of fiscal 2012. Free cash flow was $(22.4)
million in the first quarter, down from $17.8 million in the first quarter of fiscal 2012.
On a trailing twelve-month basis, return on invested capital (or ROIC) as September 30,
2012 declined due to the planned reduced profitability in our business during the
fiscal year. Including share based compensation expense, it was approximately
7%, and excluding share based compensation expense, it was approximately 15%. We expect ROIC to
improve significantly over time, as we expect our FY12 and FY13 investments to bear fruit
later in FY14 and beyond. We did not repurchase shares during the quarter. We have
approximately one million shares left under the repurchase authorization approved by
our shareholders in November 2011. Note that in the proxy for our November 8, 2012 annual
meeting of shareholders, we are asking our shareholders to authorize additional share
repurchases beyond that remainder. |
 Geographic Segment Revenue -
Quarterly
(millions)
North America:
57% of total revenue
22% y/y growth
22% y/y constant currency
growth including Webs
19% y/y organic constant
currency growth
Europe:
36% of total revenue
12% y/y growth
23% y/y constant currency
growth including Albumprinter
1% y/y organic constant
currency growth
Asia Pacific:
7% of total revenue
28% y/y growth
29% y/y constant currency
growth
Revenue results for the consolidated business, including Albumprinter and Webs
results since respective acquisition dates. All Albumprinter revenue
included in European segment. All Webs revenue included in NA segment.
Note: Constant currency basis is estimated by translating all non-U.S. Dollar
denominated revenue generated in the current period using the prior year
period’s average exchange rate for each currency to the U.S. Dollar.
Please see reconciliation to reported revenue growth rates at the end of this
presentation. Q1 FY2013
11
$116.7
$115.5
$119.2
$118.7
$139.8
$139.7
$140.9
$141.6
$2.3
$2.5
$2.6
$105.3
$77.7
$77.8
$80.0
$127.3
$88.4
$79.1
$74.3
$15.7
$11.8
$12.9
$15.4
$12.1
$10.5
$11.8
$13.7
$17.0
$15.4
$15.1
$17.5
Q2 FY11
Q3 FY11
Q4 FY11
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
Asia-Pacific
Albumprinter (inc. in Europe)
Europe
Webs (inc. in North America)
North America
Consolidated |
 For the first
quarter, revenue performance by geography, inclusive of Albumprinter and Webs revenues, was as follows:
•
•
Currency exchange rates in the quarter had a negative impact on revenue growth year over
year. All of our major currencies (the Euro, British pound, Canadian Dollar and
Australian Dollar) weakened against the U.S. dollar since Q1 2012. The net
result of currency movements year over year in Q1 was a negative impact of
approximately $9 million on a consolidated basis.
Sequentially, the Euro weakened against the U.S. dollar, while the Australian Dollar and
Canadian Dollar strengthened slightly and the Pound remained flat. The net
effect of all currencies on revenue was a negative impact of less than $1 million
versus fourth quarter rates. Compared to the currency rates we assumed when we gave guidance in July, currency
helped us by approximately $1.4 million.
North American revenue was $144.2 million, reflecting 22% growth
year over year in both reported and constant currency
terms. This revenue is inclusive of the $2.6 million of revenue
from the Webs acquisition. Excluding Webs, our North
American business grew 19% year over year in constant currency.
We are seeing continued strength in our results in North
America and we consider our performance in this region as a validation of our overall
strategic direction. European revenue was $89.7 million, reflecting 12% growth year
over year as reported and 23% growth year over year in constant currency. This
revenue is inclusive of the $15.4 million of revenue from the Albumprinter acquisition. Excluding
Albumprinter, our European business grew 1% year over year in constant currency. This
growth is much lower than both what we want to see and what we believe is possible
longer term in Europe. We believe it is possible that the macroeconomic
environment in Europe is having an impact on us, but we can’t quantify it. Instead we are focusing on our
own execution in Europe, which we believe can and must improve.
Asia-Pacific revenue was $17.5 million, reflecting 28% growth year over year in reported
terms and 29% growth year over year in constant currency. This remains our
fastest growing geography, and we are pleased with our results in the first
quarter. |
 Operational Metrics
(Excludes Albumprinter and Webs)
12
5.3
4.8
4.8
5.0
6.5
5.8
5.6
5.9
8.3
7.0
6.4
6.5
Q2
FY10
Q3
FY10
Q4
FY10
Q1
FY11
Q2
FY11
Q3
FY11
Q4
FY11
Q1
FY12
Q2
FY12
Q3
FY12
Q4
FY12
Q1
FY13
Orders (M)
$36.63
$34.79
$34.56
$34.69
$36.17
$36.03
$37.75
$36.38
$34.61
$35.38
$36.73
$36.78
Q2
FY10
Q3
FY10
Q4
FY10
Q1
FY11
Q2
FY11
Q3
FY11
Q4
FY11
Q1
FY12
Q2
FY12
Q3
FY12
Q4
FY12
Q1
FY13
Average Order Value
Organic |
 Vistaprint’s organic business metrics, excluding Albumprinter and Webs, were as follows:
These metrics should be viewed together and not individually, as
factors such as currency, product mix, marketing
campaigns, partner performance, seasonality, and the like, can impact them.
Total orders processed in the quarter were approximately 6.5 million reflecting growth of 10%
year over year. Average order value was $36.78, roughly flat versus an average order
value of $36.38 in Q1 of last fiscal year. AOV was up year over year in North
America, yet down in Europe. |
 Operational Metrics
(Excludes Albumprinter and Webs)
13
Organic
2.2
New Customers
(million)
Implied COCA
Advertising as
% of Revenue
0.0
0.5
1.0
1.5
2.0
2.5
3.0
0 $
5 $
10 $
15 $
20 $
25 $
30 $
35 $
0%
5%
10%
15%
20%
25%
30%
35%
$22
$21
$22
$23
$24
$24
$26
$27
$26
$26
$25
$28
20%
20%
21%
21%
22%
21%
23%
24%
27%
26%
24%
26% |
 Additional
customer metrics for the business on an organic basis, for the period ending September 30, 2012, were as
follows:
Quarterly new customer additions were approximately 2.2 million,
reflecting 16% year over year growth over the
approximately 1.9 million new customer adds in Q1 of last fiscal
year. We are passing the anniversary of two initiatives
that helped us accelerate new customer growth last year: our increased advertising as a
percentage of revenue, and our partnership with Staples. We continue to expect
new customer growth as a part of our efforts to extend our reach, but we don’t
believe we will see 30% growth this fiscal year like we did last year. Vistaprint uses
the term “implied cost of customer acquisition” or “implied
COCA” to describe total advertising expense
in a period divided by the number of unique first time customers
in that period. The second chart illustrates our implied
COCA, which is higher than years past due to our planned increased investment in advertising
over time, and was up from Q4 to Q1 at approximately $28.
Advertising costs for the organic business were $60.8 million, or 26.1% of organic revenue in
the quarter. As part of our strategic investments, we expected this increase
versus years past. As a reminder, our continued success with wholesale
partnerships also reduces our COCA and our advertising as a percent of revenue, because those
partners sell under their own brand and Vistaprint does not incur material advertising
expenses in this type of wholesale partnership. |
 Historical Revenue Driver Metrics
(Quarterly)
14
10.6
11.1
11.4
11.9
*trailing twelve month at period end
12.9
Organic
13.8
14.4
14.9
Q2
FY11
Q3
FY11
Q4
FY11
Q1
FY12
Q2
FY12
Q3
FY12
Q4
FY12
Q1
FY13
TTM Unique Customers (M)
10.6
11.1
11.4
11.9
12.9
13.8
14.4
14.9
TTM New
Customers (M)
7.0
7.2
7.4
7.7
8.4
9.0
9.4
9.7
TTM Repeating
Customers (M)
3.6
3.9
4.0
4.2
4.5
4.8
5.0
5.2
As % of Unique
Customers
TTM New Customers
66%
65%
65%
65%
65%
65%
65%
65%
TTM Repeating Customers
34%
35%
35%
35%
35%
35%
35%
35%
Y/Y
Growth
TTM Unique Customers
19%
21%
19%
19%
22%
24%
26%
25%
TTM New
Customers
15%
16%
16%
17%
20%
25%
27%
26%
TTM Repeating
Customers
29%
30%
25%
24%
25%
23%
25%
24%
Implied
Retention*
40%
42%
42%
42%
42%
43%
44%
44%
*TTM repeating
customers as % of year
-ago unique customers
3.6
3.9
4.0
4.2
4.5
4.8
5.0
5.2
7.0
7.2
7.4
7.7
8.4
9.0
9.4
9.7
Q2
FY11
Q3
FY11
Q4
FY11
Q1
FY12
Q2
FY12
Q3
FY12
Q4
FY12
Q1
FY13
TTM* Unique Customers (M)
New Customers Aquired in Period
Customers Repeating from Prior Periods |
 Our unique
customer metrics for the core business on a trailing twelve month basis were as follows:
On a TTM basis, unique customer count was 14.9 million, reflecting 25% year over year growth
of unique customers. First-time unique customers in the TTM period ending September
30, 2012 grew 26% year over year while unique customers transacting from prior periods
grew 24% year over year. |
 Historical Revenue Driver Metrics
15
Average Customer Spend:
Organic
$54
$54
$55
$55
$53
$52
$51
$50
$98
$99
$100
$102
$100
$100
$99
$99
$70
$70
$72
$73
$71
$69
$68
$67
Q2
FY11
Q3
FY11
Q4
FY11
Q1
FY12
Q2
FY12
Q3
FY12
Q4
FY12
Q1
FY13
Average Spend Per Unique
Customer (USD)
New
Repeat
Total
Q2
FY11
Q3
FY11
Q4
FY11
Q1
FY12
Q2
FY12
Q3
FY12
Q4
FY12
Q1
FY13
Average
Spend per Unique
Customer
$70
$70
$72
$73
$71
$69
$68
$67
Average Spend per New
Customer
$54
$54
$55
$55
$53
$52
$51
$50
Average Spend per Repeat
Customer
$98
$99
$100
$102
$100
$100
$99
$99
Y/Y
Growth
Average
Spend per Unique
Customer
4%
1%
(1%)
(6%)
(8%)
Average Spend
per New
Customer
2%
(2%)
(4%)
(7%)
(9%)
Average Spend
per Repeat
Customer
3%
2%
1%
(1%)
(3%)
FY11-FY16, long-term target of low- to mid- single digit growth in bookings per
unique customer. |
 Average spend
per unique customer for the core business on a trailing twelve month basis developed as follows:
•
•
•
•
•
Average spend per unique customer during the TTM period ending September 30, 2012 was $67,
reflecting an 8% decline year over year. We believe this decline was due to several
factors: The near-term drag created by the changes we made in FY12 to drive
long-term retention, including reduced in- transaction cross sell;
The impact of our success with wholesale partnerships such as FedEx Office and Staples, for
which we receive wholesale revenue per order that is on average lower than our
direct-to-customer business; and A year-over-year negative impact of
currency movements, which impacts this metric, as well as the sub-metrics
below.
Average spend per new customer acquired in the TTM period was $50, reflecting a 9% decline
year over year. This decrease is consistent with the changes described above, as
well as our new customer AOV trends which have been down
slightly in the past few quarters due to the impact of less aggressive cross-selling and
growth of wholesale partnerships. Average spend per customer transacting in prior
periods during the TTM period was $99, reflecting a 3% decline year over year.
|
 Looking Ahead
16 |
 Outlook Commentary
17
•
Revenue range reduced by $10M
o
Underperformance of European business (adjusted down by
about $25M)
o
Currency outlook (adjusted up by about $15M)
•
EPS guidance unchanged; actively managing expenses to
enable EPS performance in line with FY13 plan
o
Protecting revenue-generating expenses
o
Slowing some hiring relative to budget (while still growing
headcount year over year in strategic areas)
o
Reducing some travel expenses relative to budget |
 After the
first quarter of fiscal 2013, we are adjusting our full fiscal year 13 guidance as follows:
Revenue
We are lowering our revenue guidance range by $10M. This reflects two factors:
The full fiscal year guidance we initiated last quarter did factor in an expectation for
continued weakness in European revenue at the low end of the range. However, now
we believe it is prudent to lower our expectation further given our
poor performance in the first quarter and the impact that is likely to have on the full
year. As a reminder, our December quarter, traditionally our largest of the
year, is still ahead of us. This quarter is especially significant in Europe, where a
larger percent of our home and family based bookings come from.
With that said, we do have an expectation that European organic constant currency growth
rates can improve from the 1% we delivered in Q1. We have already seen some
improvement in year-over-year bookings growth rates later in the
first quarter and into the first couple weeks of October, and we
are focused on improving execution.
Finally, our expectation is that we can continue to deliver strong growth in North America
and Asia Pacific, in line with our prior expectations.
EPS
We remain committed to delivering EPS in line with our annual plan. As a result, our
FY13 EPS guidance remains unchanged. In order to compensate for a reduced
revenue outlook, we are actively managing our expenses: •
Our operational expectations for European revenue have been lowered by about $25M for the
full year. •
In general, we plan to protect revenue-generating expenses
•
Currency has moved in our favor since we initially gave guidance
in July. We are adjusting our expectations to reflect an
expected $15M benefit for the year.
•
We are slowing some hiring relative to budget, though we are still expecting to grow
headcount year over year •
We are also reducing some travel and other discretionary expenses relative to budget
|
 Financial Guidance*
(as of October 25, 2012)
The
Company
is
providing
the
following
assumptions
to
facilitate
non-GAAP
adjusted
net
income
per
diluted
share
comparisons
that
exclude
share-
based compensation related expenses, amortization of acquired intangible assets and
tax charges related to the alignment of IP with our global operations:
FY13
ending 06/30/2013
Q2 FY13
ending 12/31/2012
Revenue
$1,165
-
$1,215
$335
-
$355
Revenue growth from FY 2012 period
14%
-
19%
12% -
18%
Organic constant currency revenue growth estimate
12%
-
17%
11% -
17%
GAAP EPS
$0.40
-
$0.70
EPS decline from FY 2012 period
(65%)
-
(38%)
GAAP share count
35.3 million
FY13
ending 06/30/2013
Non-GAAP adjusted EPS
$1.62
-
$1.92
EPS decline from FY 2012 period
(17%) –
(2%)
Non-GAAP share count
36.1 million
Non-GAAP exclusions
$45.1
* Millions, except share and per share amounts and as noted
18
Consolidated |
 The table
above is Vistaprint’s financial guidance as of October 25, 2012. This guidance reflects our expected market
opportunity and our ongoing commitment to making investments for
growth and competitive advantage. Vistaprint
specifically disclaims any obligation to update any forward-looking statements, which
should not be relied upon as representing our expectations or beliefs as of any date
subsequent to October 25, 2012, the date of this presentation. Our expectations
for the full fiscal year ending June 30, 2013 are as follows:
•
•
Our revenue expectations for the quarter ending December 31, 2012, the second quarter of
fiscal year 2013, are expected to be in the range of $335 million to $355 million, an
increase of 12% to 18% in U.S. dollars, and 14% to 20% in constant currencies.
We expect organic constant-currency growth of 11% to 17% year over year. For full
year revenue, our organic constant-currency growth expectations are 12% to 17% growth, and consolidated
constant-currency growth expectations are 15% to 20%. If exchange rates stay the
same as they were for the 30-day average in mid-October 2012, we would expect
consolidated revenue to be $1,165 million to $1,215 million, an increase of 14% to 19%
year over year in U.S. dollars. Of course, actual revenue will depend in part on currency exchange rate
development throughout the fiscal year.
Full fiscal year GAAP EPS, on a diluted
basis, is expected to be between $0.40 and $0.70 based on about 35.3 million
weighted average shares outstanding. |
 Financial Guidance*
(as of October 25, 2012)
The
Company
is
providing
the
following
assumptions
to
facilitate
non-GAAP
adjusted
net
income
per
diluted
share
comparisons
that
exclude
share-
based compensation related expenses, amortization of acquired intangible assets and
tax charges related to the alignment of IP with our global operations:
FY13
ending 06/30/2013
Q2 FY13
ending 12/31/2012
Revenue
$1,165 -
$1,215
$335 -
$355
Revenue growth from FY 2012 period
14% -
19%
12% -
18%
Organic constant currency revenue growth estimate
12% -
17%
11% -
17%
GAAP EPS
$0.40 -
$0.70
EPS decline from FY 2012 period
(65%) -
(38%)
GAAP share count
35.3 million
FY13
ending 06/30/2013
Non-GAAP adjusted EPS
$1.62 -
$1.92
EPS decline from FY 2012 period
(17%) –
(2%)
Non-GAAP share count
36.1 million
Non-GAAP exclusions
$45.1
* Millions, except share and per share amounts and as noted
19
Consolidated |
 We are
providing the assumptions noted on our guidance slide to facilitate comparisons with non-GAAP adjusted net
income per diluted share.
•
Based on these assumptions, for the full fiscal year 2013, non-GAAP adjusted EPS is
expected to be between $1.62 and $1.92, and excludes expected acquisition-related
amortization of intangible assets of approximately $7.6 million; share- based
compensation expense and its related tax effect of approximately $35.3 million; charges related to the alignment
of acquisition-related intellectual property with global operations of approximately $2.2
million; and 36.1 million shares outstanding.
•
We expect these expenses which are excluded from non-GAAP results to be fairly evenly
distributed throughout the fiscal year with the exception of the alignment of the
acquisition-related IP which is recorded based on the timing of how the profits
come in on a quarterly basis. |
 Capital Expenditures Guidance
(as of October 25, 2012)
Expressed as percent of revenue
•
$80M -
$95M
Actuals
Guidance
$63M
$63M
$76M
$95M
$80M
$101M
$37M
20
$46M
14%
6%
6%
3%
2%
2%
2%
2%
8%
7%
7%
9%
2%
2%
4%
3%
3%
3%
2%
3%
1%
1%
2%
1%
FY 2007
FY 2008
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013-
High
FY 2013-
Low
Other
Land and Facilities
Manufacturing &
Automation Equipment
25%
16%
15%
5%
8%
15%
5%
7%
•
7% -
8% of revenue
guidance midpoint
Consolidated
FY 2013 Guidance: |
 This chart
shows capital expenditures in dollars and as a percentage of revenue for the past several years, and also shows
our expectations for fiscal 2013 at the midpoint of our revenue guidance range. We expect
capital expenditures as a percentage of revenue and in absolute dollars to increase in
fiscal 2013 over 2012. For FY 2013, we have narrowed our previous guidance
range and now expect capital expenditures of $80 to $95 million, or 7% to 8% of our revenue guidance
midpoint. This guidance includes the expansion of our Venlo production facility,
capital expenditures to create a small production facility in India, and other IT and
manufacturing equipment requirements to support our growth plans. |
 Commentary on Revenue and EPS Seasonality
21
•
As previously noted, no longer provide quarterly EPS guidance
•
Expect our typical seasonality trends to continue
o
Albumprinter increases seasonal effect of December quarter
•
Expect to deliver majority of annual GAAP EPS in our second
quarter
o
In line with recent years
•
Will provide quarterly revenue guidance
o
Quarterly updates on our annual revenue and EPS guidance |
 With one
quarter behind us, and the seasonality of our upcoming second quarter, we want to provide some color on the
expected trends in the business:
We will continue to provide annual revenue and EPS guidance, with quarterly updates. We
will also provide quarterly revenue guidance.
•
We expect the seasonal revenue trends in our core business to continue, notwithstanding
recent weakness in Europe, which typically has a higher percentage of home and family
oriented revenue than other regions. The addition of Albumprinter increases the
seasonal nature of our business. •
We expect the recent trend of delivering a majority of annual GAAP earnings during our second
quarter to continue in FY 2013. The additional volume of our holiday business adds
significant volume through our facilities, and so we expect to see higher gross margin
in the second quarter due to the absorption of fixed costs. Additionally, we expect our quarterly
tax provision to match the seasonality of our profits as we are required to book the
provision each quarter based on the percentage completion of forecasted profits for
the year. |
 Summary
•
Mixed results, most notably poor EU performance
o
Addressing issues, but this is a longer term effort
•
Strong progress in all other parts of the business
o
Value proposition, LTV advertising, manufacturing
o
Foundations for future in digital, photo books & Asia
o
Great results in North America
•
Believe we have the right strategy to drive
o
Long-term revenue and profit growth
o
Competitive advantage
o
Significant value for long term shareholders
22 |
 In summary,
this quarter’s results were mixed. The notable shortcoming was our poor revenue performance in Europe.
We recognize the need to address this issue and are making plans
to do so, while being realistic that this will not be a
short-term turnaround.
In almost every other part of our business we made strong progress relative to our
objectives. Strategically speaking, our progress included improving our customer value
proposition, investing in life time value based advertising, improving our
manufacturing and supply chain capabilities, expanding our technology resources and laying
foundations for future growth in digital, home and family and Asian markets. Combined
with strong tactical execution this strategy has meant continued strength in our
largest geographic market, North America, whose growth rates have stabilized over the past year.
Our strategic progress and the North American results give us confidence in the approach we
are taking to drive revenue and profit growth worldwide. We will continue to
move these initiatives forward, and believe that we are building a solid future of
growth, competitive advantage and significant value for our long-term shareholders. |
 Q&A Session
Please go to the
Investor Relations section of www.vistaprint.com
for the live Q&A call at
5:15 pm EDT on October 25, 2012 |
 Q1
Fiscal Year 2013 Financial and Operating Results Supplement
|
 Total Company Organic Growth Rates
(Excludes Albumprinter and Webs)
Note: Constant currency basis is estimated by translating all non-U.S. Dollar
denominated revenue generated in the current period using the prior year
period’s average exchange rate for each currency to the U.S. Dollar.
Please see reconciliation to reported revenue growth rates at the end of this
presentation. 10%
reported
13%
constant-currency
FY10
28% constant-currency growth
25
FY11
22% constant-currency growth
FY12
20% constant-currency growth
Organic
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Q2 FY10
Q3 FY10
Q4 FY10
Q1 FY11
Q2 FY11
Q3 FY11
Q4 FY11
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
Constant-Currency
Reported |
 Segment Revenue Growth Rates
Constant Currency Organic
26
Organic
56%
58%
45%
36%
43%
35%
39%
45%
37%
40%
33%
29%
0%
10%
20%
30%
40%
50%
60%
70%
APAC
48%
38%
28%
27%
30%
21%
22%
21%
22%
18%
11%
1%
0%
10%
20%
30%
40%
50%
60%
70%
Europe
21%
17%
18%
15%
16%
21%
18%
17%
20%
21%
18%
19%
0%
10%
20%
30%
40%
50%
60%
70%
North America |
 Gross Margin and Gross Profit
27
FY10 64.2%
FY11 64.8%
FY12 65.2%
Consolidated
$127
$106
$105
$108
$155
$133
$133
$134
$200
$169
$162
$163
65.1%
64.1%
63.6%
63.1%
66.3%
65.3%
63.9%
63.2%
66.8%
65.5%
64.6%
65.0%
Q2 FY10
Q3 FY10
Q4 FY10
Q1 FY11
Q2 FY11
Q3 FY11
Q4 FY11
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
Gross Profit (millions)
GM % |
 GAAP Net Income (Loss) and Net Margin
28
FY10 $68
FY11 $82
FY12 $44
Consolidated
$27
$16
$12
$11
$34
$23
$14
$8
$32
$0
$4
$(2)
9.7%
7.1%
6.3%
14.5%
11.3%
6.9%
3.8%
10.6%
0.1%
1.5%
-0.7%
-5.0%
0.0%
5.0%
10.0%
15.0%
$(2)
$3
$8
$13
$18
$23
$28
$33
$38
$43
$48
$53
$58
Q2 FY10
Q3 FY10
Q4 FY10
Q1 FY11
Q2 FY11
Q3 FY11
Q4 FY11
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
GAAP Net Income (loss), in millions
GAAP Net Margin
13.8% |
 Non-GAAP Adjusted Net Income*
and Adjusted Net Margin
29
FY10 $91
FY11 $105
FY12 $77
Consolidated
$34
$21
$17
$16
$40
$28
$20
$13
$38
$11
$15
$9
17.3%
12.9%
10.5%
9.6%
17.3%
13.8%
9.4%
6.1%
12.6%
4.4%
5.9%
3.5%
Q2 FY10
Q3 FY10
Q4 FY10
Q1 FY11
Q2 FY11
Q3 FY11
Q4 FY11
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
Non-GAAP Adjusted Net Income (millions)
Non-GAAP Adjusted Net Margin
*Non-GAAP adjusted net income for all periods presented excludes the impact of share-based
compensation expense and its related tax effect, amortization of acquired intangibles, and
charges related to the alignment of Webs IP with our global structure. Please see
reconciliation to GAAP net income at the end of this presentation. |
 Q1
Income Statement Comparison to Prior Year (as a percentage of revenue)
30
Consolidated
0.1%
4.6%
10.1%
10.1%
15.0%
12.6%
39.8%
35.9%
35.0%
36.8%
Q1 FY2013
Q1 FY2012
Cost of revenue
Marketing and selling
Technology and development
General and administrative
Income from operations |
 Q1
Income Statement Comparison to Prior Quarter (as a percentage of
revenue) 31
0.1%
2.0%
10.1%
11.5%
15.0%
14.8%
39.8%
36.3%
35.0%
35.4%
Q1 FY2013
Q4 FY2012
Cost of revenue
Marketing and selling
Technology and development
General and administrative
Income from operations
Consolidated |
 Share-Based Compensation* (millions)
* Share-based compensation (SBC) expense
includes SBC-related tax adjustment. 32
FY10 $23.2
FY11 $22.4
FY12 $26.1
$6.7
$5.3
$5.7
$5.6
$6.4
$5.3
$5.1
$4.9
$5.0
$7.6
$8.6
$8.4
Q2 FY10
Q3 FY10
Q4 FY10
Q1 FY11
Q2 FY11
Q3 FY11
Q4 FY11
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
Consolidated |
 Revenue Seasonality
(Excludes Albumprinter and Webs)
* Home and family revenue is calculated using a product format-based
approach 33
$195
$166
$164
$170
$234
$204
$209
$212
$284
$244
$235
$233
Q2 FY10
Q3 FY10
Q4 FY10
Q1 FY11
Q2 FY11
Q3 FY11
Q4 FY11
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
Small Business Marketing
Home and Family*
Organic |
 Q1
FY 2013 Bookings by Marketing Channel (excludes Albumprinter and Webs
bookings) ~2.2 million new customers in Q1 FY2013
Paid
Search
Other
Channels
and Partners
3
Party Permission-
Based email
Direct URL Type-In
Paid
Search
Other
Channels and
Partners
Our Own
Permission-Based
email
Direct URL Type-
In
First-time Order Bookings: 32%
Repeat Order Bookings: 68%
Our Own
Permission-Based
email
34
Organic
rd |
 Balance Sheet Highlights
Balance Sheet highlights, in millions, at period end
09/30/12
06/30/12
3/31/12
12/31/11
09/30/11
Total assets
$620.5
$592.4
$588.0
$590.3
$469.0
Cash and cash equivalents
$59.3
$62.2
$52.1
$67.5
$161.1
Total current assets
$114.6
$115.6
$103.5
$123.7
$194.0
Goodwill and intangible assets
$179.5
$180.7
$192.0
$196.6
$5.1
Total liabilities
$421.3
$403.1
$306.0
$322.5
$108.8
Current liabilities
$129.4
$142.0
$148.1
$166.2
$97.1
Long-term debt
$259.3
$229.0
$126.5
$140.5
$-
Shareholders’
Equity
$199.2
$189.3
$281.9
$267.8
$360.2
Treasury shares (in millions)
15.7
15.8
13.0
13.1
9.8
35
Consolidated |
 Long-Term Debt
Availability under our credit facility
09/30/12
Maximum aggregate available borrowing amounts
$387.5M
Outstanding borrowings of credit facility
($259.3M)
Remaining amount
$128.2M
($39.9M)
Amount available borrowing as of September 30, 2012
$88.3M
36
Consolidated
* Our borrowing ability can be limited by our debt covenants each quarter. These
covenants may limit our borrowing capacity depending on our leverage, other
indebtedness, such as installment obligations and letters of credit, and
other
factors
that
are
outlined
in
the
credit
agreement
filed
as
an
exhibit
in
our
Form
8-K
filed
on
October
26,
2011.
•
Credit facility in place with aggregate loan commitments of $387.5M
•
Interest
rate
is
LIBOR
plus
1.25%
-
1.50%
•
Currently in compliance with all covenants. Key covenants are:
o
Senior leverage ratio not to exceed 2.75x TTM EBITDA
o
Total leverage ratio not to exceed 3.5x TTM EBITDA
o
Interest coverage ratio of at least 3.0
o
Total cash/debt use for share repurchases of $400M since inception of credit
facility (10/21/2011) Limitations to borrowing due to debt covenants and other
obligations* |
 Q1
FY13 Capital Expenditure Breakdown Q1 CapEx: $27.8M
1
3
2
37
Consolidated
56%
22%
22%
Land/Facilities
Mfg & Automation Equipment
Other
1 Land, building and construction, leasehold improvements, and furniture and
fixtures 2 All manufacturing and automation equipment, including offset and digital print lines,
other printing equipment, pre-press and post-press equipment such as cutters, and
automation equipment
3 IT infrastructure, software and office equipment
|
 Appendix
Including a Reconciliation of
GAAP to Non-GAAP Financial
Measures |
 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 Securities and Exchange Commission, or
SEC, rules: non-GAAP adjusted net income, non-GAAP adjusted net income
per diluted share, free cash flow, constant-currency revenue growth, and
constant-currency organic revenue growth. The items excluded from the
non-GAAP adjusted net income measurements are share-based compensation expense and its
related tax effect, amortization of acquisition-related intangibles, and tax
charges related to the alignment of acquisition-
related intellectual property with global operations. Free cash
flow is defined as net cash provided by operating activities
less purchases of property, plant and equipment, purchases of intangible assets,
and capitalization of software and website development costs.
Constant-currency revenue growth is estimated by translating all non-U.S. dollar
denominated revenue generated in the current period using the prior year
period’s average exchange rate for each currency to the U.S.
dollar. Constant-currency organic revenue growth excludes the impact of currency as defined
above and revenue from acquired companies.
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
tables
captioned
“Reconciliations
of
Non-GAAP
Financial
Measures”
included
at
the
end of this release. The tables have 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. (continued on next
page) 39 |
 About
non-GAAP financial measures
continued…
Vistaprint’s management believes that these non-GAAP financial measures
provide meaningful supplemental information in assessing our performance and
when 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 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 and cash
flow. 40 |
 Reconciliation: GAAP to Non-GAAP Results
FY 2003
FY 2004
FY 2005*
FY 2006
FY 2007
FY 2008
FY 2009
FY2010
FY2011
FY2012
GAAP Net Income
$473
$3,440
($16,218)
$19,234
$27,143
$39,831
$55,686
$67,741
$82,109
$43,994
Share-based
compensation and
related tax effect
$0
$0
$0
$4,850
$8,765
$15,275
$20,177
$23,156
$22,400
$26,060
Amortization of
acquired intangible
assets
-
-
-
-
-
-
-
-
-
$5,754
Webs IP transfer
-
-
-
-
-
-
-
-
-
$1,235
Non-GAAP
Adjusted Net Income
$473
$3,440
$4,782
$23,146
$35,908
$55,106
$75,863
$90,897
$104,509
$77,043
Net Income –
Annual
($ in thousands)
*Fiscal 2005 non-GAAP results exclude a contract termination payment of
$21mm Note: share-based compensation expense includes tax effects
41 |
 Reconciliation: GAAP to Non-GAAP Results
Net Income –
Quarterly
($ in thousands)
42
.
Fiscal Year 2010
Fiscal Year 2011
Fiscal Year 2012
Fiscal
Year 2013
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
GAAP Net Income
$26,948
$16,167
$11,650
$10,781
$34,014
$22,917
$14,397
$8,172
$31,697
$274
$3,851
$(1,696)
Share-based
compensation and
related tax effect
$6,679
$5,315
$5,662
$5,550
$6,435
$5,285
$5,129
$4,876
$5,021
$7,566
$8,596
$8,445
Amortization of
acquired intangible
assets
-
-
-
-
-
-
-
-
$1,148
$2,381
$2,225
$2,178
Webs IP Transfer
-
-
-
-
-
-
-
-
-
$1,017
$218
-
Non-GAAP
Adjusted Net
Income
$33,627
$21,482
$17,312
$16,331
$40,449
$28,202
$19,526
$13,048
$37,866
$11,238
$14,890
$8,927 |
 Diluted Earnings Per Share -
Annual
Reconciliation: GAAP to Non-GAAP Results
43
FY 2006
FY 2007
FY 2008
FY 2009
FY2010
FY2011
FY2012
GAAP Net Income Per Share
$0.45
$0.60
$0.87
$1.25
$1.49
$1.83
$1.13
Share-based Compensation
Per Share*
$0.09
$0.18
$0.31
$0.43
$0.49
$0.47
$0.65
Amortization of acquired
intangible assets
-
-
-
-
-
-
$0.14
Webs IP Transfer
-
-
-
-
-
-
$0.03
Non-GAAP Adjusted Net
Income Per Share
$0.54
$0.78
$1.18
$1.68
$1.98
$2.30
$1.95
Weighted average shares
used in computing
(millions)
42.651
45.825
46.780
45.099
45.989
45.448
39.426
*Note: share-based compensation expense includes tax effects
|
 Reconciliation: GAAP to Non-GAAP Results
Earnings Per Diluted Share -
Quarterly
*Note: share-based compensation expense includes tax effects
44
.
Fiscal Year 2010
Fiscal Year 2011
Fiscal Year 2012
Fiscal
Year 2013
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
GAAP Net Income Per
Share
$0.59
$0.35
$0.26
$0.24
$0.75
$0.51
$0.32
$0.19
$0.82
$0.01
$0.10
$(0.05)
Share-based Compensation
Per Share*
$0.14
$0.11
$0.12
$0.12
$0.14
$0.12
$0.11
$0.12
$0.12
$0.20
$0.23
$0.24
Amortization of acquired
intangible assets
-
-
-
-
-
-
-
-
$0.03
$0.06
$0.06
$0.06
Webs IP Transfer
-
-
-
-
-
-
-
-
-
$0.02
$0.01
-
Non-GAAP Adjusted Net
Income Per Share
$0.73
$0.46
$0.38
$0.36
$0.89
$0.63
$0.43
$0.31
$0.97
$0.29
$0.40
$0.25
Weighted average shares
used in computing Non-
GAAP
(millions)
46.027
46.231
46.136
45.704
45.625
45.079
45.156
42.569
39.041
38.346
37.620
35.793 |
 Reconciliation: Free Cash Flow
(in thousands)
45
Three Months Ended
September 30,
2012
2011
Net cash provided by operating activities
$ 6,650
$ 30,541
Purchases of property, plant and equipment
(27,759)
(10,998)
Purchases of intangibles assets
(9)
(89)
Capitalization of software and website
development costs
(1,301)
(1,682)
Free cash flow
$ (22,419)
$ 17,772
|
 Reconciliation:
Constant-Currency Revenue Growth Rates
Quarterly
46
Q2
FY2010
Q3 FY10
Q4 FY10
Q1 FY11
Q2 FY11
Q3 FY11
Q4 FY11
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
Reported revenue growth
40%
30%
22%
18%
20%
23%
27%
25%
28%
26%
20%
18%
Currency impact
(8%)
(5%)
0%
2%
3%
(1%)
(7%)
(5%)
0%
2%
5%
5%
Revenue growth in constant
currency
32%
25%
22%
20%
23%
22%
20%
20%
28%
28%
25%
23%
Impact of acquisitions to growth in
constant currency
(7%)
(7%)
(8%)
(10%)
Revenue growth rate, ex
acquisitions, in constant currency
32%
25%
22%
20%
23%
22%
20%
20%
21%
21%
17%
13%
Note: Constant-currency revenue growth is estimated by translating all
non-U.S. dollar denominated revenue generated in the current period using the prior year period’s
average exchange rate for each currency to the U.S. dollar.
|
 Reconciliation:
Constant-Currency Revenue Growth Rates
Annual
47
FY2009
FY2010
FY2011
FY2012
Reported revenue growth
29%
30%
22%
25%
Currency impact
7%
(2%)
-
0%
Revenue growth in constant currency
36%
28%
22%
25%
Impact of acquisition to growth in constant currency
-
-
-
(5%)
Revenue growth rate, ex acquisition, in constant currency
36%
28%
22%
20%
Note: Constant-currency revenue growth is estimated by translating all
non-U.S. dollar denominated revenue generated in the current period using the prior year period’s
average exchange rate for each currency to the U.S. dollar.
|
 Reconciliation:
Non-U.S. Constant-Currency Revenue Growth Rates
and Reported Growth Rates, ex Albumprinter
48
Non-US Revenue Growth
Q2 FY10
Q3 FY10
Q4 FY10
Q1 FY11
Q2 FY11
Q3 FY11
Q4 FY11
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
Non-US reported revenue
growth
68%
55%
30%
23%
26%
27%
41%
35%
36%
31%
20%
15%
Currency impact
(20%)
(14%)
1%
7%
6%
(2%)
(16%)
(11%)
-
3%
10%
10%
Non-US revenue growth in
constant currency
48%
41%
31%
30%
32%
25%
25%
24%
36%
34%
30%
25%
Impact of acquisition to non-
US growth in constant
currency
-
-
-
-
-
-
-
-
(13%)
(13%)
(15%)
(18%)
Non-US organic growth in
constant currency
48%
41%
31%
30%
32%
25%
25%
24%
23%
21%
15%
7%
Note: Constant-currency revenue growth is estimated by translating all
non-U.S. dollar denominated revenue generated in the current period using the prior year period’s
average exchange rate for each currency to the U.S. dollar.
|
 Reconciliation:
Constant-Currency Revenue Growth Rates
and Reported Growth Rates (U.S. v. Non-U.S.)
49
Note: Constant-currency revenue growth is estimated by translating all
non-U.S. dollar denominated revenue generated in the current period using the prior year period’s
average exchange rate for each currency to the U.S. dollar.
Q1 FY2013
US
Non-US
Total
Company
Reported revenue growth
21%
15%
18%
Currency impact
-
10%
5%
Revenue growth in constant currency
21%
25%
23%
Impact of acquisition to growth in
constant currency
(2%)
(18%)
(10%)
Revenue growth rate, ex acquisition, in
constant currency
19%
7%
13% |
 Reconciliation:
Geographic Segment Constant-Currency Revenue Growth
Rates and Reported Growth Rates
50
Note: Constant-currency revenue growth is estimated by translating all
non-U.S. dollar denominated revenue generated in the current period
using the prior year period’s average exchange rate for each currency to the
U.S. dollar. Q1 FY2013
North America
Europe
Asia-Pacific
Total
Company
Reported revenue growth
22%
12%
28%
18%
Currency impact
-%
11%
1%
5%
Revenue growth in constant currency
22%
23%
29%
23% |