Business News
VistaPrint Reports 2008 Fourth Fiscal Quarter and Full Fiscal Year Financial Results
Wednesday 06. August 2008 - * 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 (PRIME NEWSWIRE) — 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-U.S. 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.