Shutterfly Reports 13% Revenue Growth
Digital photobook printing firm reports $40.5 million revenue; plans $18 M to $21 M in capital investment
Press Release -- Graphic Arts Online, October 29, 2009
● Net revenues increase 13% year-over-year to $40.5 million● 35th consecutive quarter of year-over year net revenue growth
● GAAP net loss of ($0.25) per diluted share
● Adjusted EBITDA1 of $2.0 million
Shutterfly, Inc. (NASDAQ:SFLY), the leading Internet-based social expression and personal publishing service, today announced financial results for the three months ended September 30, 2009.
"Shutterfly delivered very solid third quarter results with better than expected revenue and EBITDA growth, despite an increasingly tough macro-economic environment," said President and Chief Executive Officer Jeffrey Housenbold. "During the quarter we launched the innovative Simple Path photo book creation experience, enhanced our cards and stationery offering and acquired Tiny Pictures. We also made strong progress on our commercial printing initiative and prepared our manufacturing facilities in Charlotte and Phoenix for the seasonally busy fourth quarter."
Third Quarter 2009 Financial Highlights
● Net revenues totaled $40.5 million, a 13% year-over-year increase.
● Third quarter 2009 represents the 35th consecutive quarter of year-over-year net revenue growth.
● Personalized Products & Services2 net revenues totaled $23.6 million, a 22% year-over-year increase.
● Personalized Products & Services net revenues represented 58% of total net revenues.
● Net revenues from prints declined 6% year-over-year, to $15.6 million.
● Commercial print net revenues totaled $1.2 million.
● Existing customers generated 76% of total net revenues.
● Gross profit margin was 47% of net revenues, compared to 49%3 in the third quarter of 2008.
● Operating expenses, excluding $4.0 million of stock-based compensation, totaled $24.1 million.
● GAAP net loss was ($6.3) million, compared to a net loss of ($2.8)3 million in the third quarter of 2008.
● GAAP net loss per diluted share was ($0.25), compared to ($0.11)3 in the third quarter of 2008.
● Adjusted EBITDA was $2.0 million, compared to $0.1 million in the third quarter of 2008.
● At September 30, 2009, the Company had $111.6 million of cash, cash equivalents and short-term investments.
Third Quarter 2009 Operating Metrics
● Transacting customers totaled 982,000, a 7% increase over the third quarter of 2008.
● Orders totaled 1.7 million, a 3% increase over the third quarter of 2008.
● Average order value4 was $23.03, a 6% increase over the third quarter of 2008.
Recent Operating Highlights
● Introduced Shutterfly Simple Path creation experience that automatically makes photo books.
● Acquired Tiny Pictures, a leading developer of mobile and social applications.
● Launched our 2009 holiday cards and stationery collection including Shutterfly Support-a-Cause cards from organizations like LiveSTRONG and Special Olympics.
● Enhanced Share Sites to include a solution for Youth Sports and announced partnerships with national and regional youth sports organizations.
● Launched next generation of Shutterfly Video and iPhone application.
● Named Brian Swette to the Board of Directors.
Business Outlook
The Company's current financial expectations for the fourth quarter and the full year 2009 are as follows:
Fourth Quarter 2009:
● Net revenues to range from $102.6 million to $112.6 million, a year-over-year change of (4%) to 5%.
● GAAP gross profit margins to range from 55% to 59% of net revenues.
● Non-GAAP gross profit margins to range from 56% to 60% of net revenues.
● GAAP operating income to range from $21 million to $27 million.
● Non-GAAP operating income to range from $26 million to $32 million.
● GAAP effective tax rate to range from 30% to 35%.
● Non-GAAP effective tax rate to range from 30% to 35%.
● GAAP diluted net income per share to range from $0.55 to $0.66.
● Non-GAAP diluted net income per share to range from $0.68 to $0.78.
● Weighted average diluted shares of approximately 27.2 million.
● Adjusted EBITDA to range from $33 million to $39 million.
Full Year 2009:
● Net revenues to range from $218 million to $228 million, a year-over-year change of 2% to 7%.
● GAAP gross profit margins to range from 51% to 53% of net revenues.
● Non-GAAP gross profit margins to range from 52% to 54% of net revenues.
● GAAP operating loss to range from ($7) million to $0 million.
● Non-GAAP operating income to range from $10 million to $16 million.
● GAAP effective tax rate to range from 25% to 40%.
● Non-GAAP effective tax rate to range from 30% to 35%.
● GAAP diluted net income (loss) per share to range from a net loss of ($0.14) to net income of $0.01.
● Non-GAAP diluted net income per share to range from $0.27 to $0.40.
● Weighted average diluted shares of 25.8 million in net loss scenario to 26.8 million in net income scenario.
● Adjusted EBITDA to range from 16% to 18% of net revenues.
● Capital expenditures to range from $19 million to $21 million.
