VistaPrint Reports Third Quarter of Fiscal Year 2008 Financial Results (Press Release)
-- Graphic Arts Online, 4/29/2008 7:43:00 AM
HAMILTON, Bermuda, April 29, 2008 (PRIME NEWSWIRE) -- VistaPrint Limited (Nasdaq:VPRT), the small business marketing company, today announced its financial results for the three month period ended March 31, 2008, the third quarter of its 2008 fiscal year.Revenue for the third quarter of fiscal year 2008 was $105.8 million, an increase of 53 percent when compared to revenue of $69.3 million in the same quarter of fiscal year 2007.
Net income on a GAAP basis for the third quarter of fiscal year 2008 was $11.5 million, which was 10.8 percent of revenue and $0.25 per share on a fully diluted basis. In the same quarter of fiscal year 2007, the Company achieved net income on a GAAP basis of $7.4 million, which was 10.6 percent of revenue and $0.16 per share on a fully diluted basis.
On a non-GAAP basis, excluding share-based compensation expense, adjusted net income for the third quarter of fiscal 2008 was $15.0 million, 14.2 percent of revenue, and $0.32 per fully diluted share. During the same quarter of the prior fiscal year, non-GAAP adjusted net income, excluding share-based compensation expense, was $9.3 million, 13.4 percent of revenue, and $0.20 per fully diluted share.
"VistaPrint delivered an outstanding third quarter," said Robert Keane, president and chief executive officer. "Our growth investments continue to drive our results and have positioned us for ongoing success. We rolled out a line of signage products and just introduced small business websites, both of which we are bringing to market with significant competitive advantages." Continuing, Mr. Keane stated, "These growth investments have allowed us to create a superior value proposition and we continue to reinvest to enhance that value proposition and our competitiveness."
Financial Metrics
-- Revenue for the third quarter of fiscal year 2008 grew to $105.8
million, a 53 percent increase over revenue of $69.3 million
reported in the same quarter a year ago.
-- Gross margin (revenue minus the cost of revenue) in the third
quarter was 61.3 percent, compared to gross margin of 65.1
percent in the same quarter a year ago.
-- Operating income in the third quarter was $11.1 million, or 10.5
percent of revenue, and reflected a 49 percent increase over
operating income of $7.4 million, or 10.7 percent of revenue, in
the same quarter a year ago.
-- GAAP net income for the third quarter was $11.5 million, or 10.8
percent of revenue, representing a 55 percent increase compared
to GAAP net income of $7.4 million, or 10.6 percent of revenue,
in the same quarter a year ago.
-- GAAP net income per fully diluted share for the third quarter was
$0.25 versus GAAP net income per fully diluted share of $0.16 in
the same quarter a year ago.
-- Non-GAAP adjusted net income for the third quarter, which
excludes share-based compensation expense, was $15.0 million, or
14.2 percent of revenue, representing a 61 percent increase over
non-GAAP adjusted net income of $9.3 million, or 13.4 percent of
revenue, in the same quarter a year ago.
-- Non-GAAP adjusted net income per fully diluted share for the
third quarter, which excludes share-based compensation expense,
was $0.32, versus adjusted net income per fully diluted share of
$0.20 in the same quarter a year ago.
-- The Company had $126.7 million in cash, cash equivalents and
marketable securities as of March 31, 2008 versus $113.0 million
as of March 31, 2007.
-- Capital expenditures in the third quarter were $14.2 million.
-- During the third quarter, the Company generated $17.0 million in
cash from operations and $1.0 million in free cash flow.
Operating Metrics
-- VistaPrint acquired over 1.2 million new customers in the quarter
ending March 31, 2008.
-- Repeat customers generated approximately 64 percent of total
quarterly bookings, slightly higher versus the same quarter a
year ago.
-- Average daily order volume in the third quarter exceeded 33,000,
an increase of over 50 percent compared with average daily order
volume of approximately 21,000 in the same quarter a year ago.
-- Referral fees generated revenue of $7.1 million or 6.7 percent of
total revenue in the third quarter of the current fiscal year,
compared to $5.8 million from referral fees, or 8.3 percent of
total revenue, in the same quarter a year ago.
-- Advertising spending in the third quarter was $19.9 million or
18.8 percent of revenue compared to advertising spending of $14.0
million or 20.1 percent of revenue in the same quarter a year
ago.
-- VistaPrint web sites that target non-U.S. markets contributed 38
percent of total revenue in the third quarter, up from 32 percent
in the same quarter a year ago. Non-U.S. revenue increased 81
percent year over year in U.S. dollars. Excluding the impact of
changes in foreign currency exchange rates, non-U.S. revenue grew
62 percent year over year. Quarterly revenue from U.S. websites
grew 39 percent year over year.
-- Average order value in the third quarter of fiscal 2008 including
revenue from shipping was $32.54 compared to average order value
of $33.02 in the same quarter a year ago.
-- Web site sessions in the third quarter of fiscal 2008 were 47.6
million compared to 34.9 million web site sessions in the same
quarter a year ago.
-- Conversion rates were 6.4 percent in the third quarter of fiscal
2008, compared to conversion rates of 5.6 percent in the same
quarter a year ago.
Growth Investments and Innovation
-- Invested $14.2 million in capital expenditures in the third
quarter of fiscal 2008.
-- Entered the market for small business signage with window decals
and car door magnets.
-- Launched small business websites in April.
"VistaPrint's third quarter was strong thanks to normal seasonal strength in the company's core SOHO markets," noted Executive Vice President and Chief Financial Officer Harpreet Grewal. He continued, "Our superior value proposition produced strong operating and financial results despite a slowing U.S. economy."
Financial Guidance as of April 29, 2008
As previously disclosed, VistaPrint ceased issuing quarterly gross margin guidance following the quarter ended September 30, 2007 and does not plan to provide annual gross margin guidance beyond the fiscal year ending June 30, 2008. Also as previously disclosed, the Company does not plan to provide non-GAAP adjusted net income per fully diluted share guidance for any periods beyond the fiscal year ending June 30, 2008. However, the Company will continue to disclose share-based compensation expense in its reported results to facilitate non-GAAP earnings per share comparisons during a transition period.
Based on current and anticipated levels of demand, the Company expects the following:
Revenue
-- For the fourth quarter of fiscal year 2008, ending June 30, 2008,
the Company expects revenue to be $105 million to $110 million.
-- For the full fiscal year ending June 30, 2008, the Company
expects revenue to be $395 million to $400 million.
Gross Margins
-- For the full fiscal year ending June 30, 2008, the Company
expects gross margins to be 61 percent to 63 percent.
GAAP Fully-Diluted Earnings Per Share
-- For the fourth quarter of fiscal year 2008, ending June 30, 2008,
the Company expects GAAP fully-diluted earnings per share to be
$0.18 to $0.22.
-- For the full fiscal year ending June 30, 2008, the Company
expects GAAP fully-diluted earnings per share to be $0.82 to
$0.86.
Non-GAAP Adjusted Net Income Per Fully Diluted Share
-- For the fourth quarter of fiscal year 2008, ending June 30, 2008,
the Company expects non-GAAP adjusted net income per fully
diluted share, which excludes share-based compensation expenses,
to be $0.27 to $0.31.
-- For the full fiscal year ending June 30, 2008, the Company
expects non-GAAP adjusted net income per fully diluted share,
which excludes share-based compensation expenses, to be $1.12 to
$1.16.
Capital Expenditures
-- For the fourth quarter of fiscal year 2008, ending June 30, 2008,
the Company expects to make capital expenditures of approximately
17 to 20 percent of fiscal year 2008 fourth quarter revenue.
-- For the full fiscal year ending June 30, 2008, the Company
expects to make capital expenditures of approximately 17 to 18
percent of fiscal year 2008 revenue.
Guidance for the full fiscal year ending June 30, 2009
-- 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 47.5 million weighted average shares
outstanding.
-- The Company is providing the following assumptions to facilitate
comparisons with non-GAAP adjusted net income per fully diluted
share: non-GAAP fully diluted weighted average share count for
the fiscal year ending June 30, 2009 of approximately 48.2
million shares, share-based compensation of approximately $20
million, and, based on those assumptions, fiscal year 2009
non-GAAP adjusted net income per fully diluted share range of
approximately $1.50 to $1.60. Please note, however, that earnings
per share guidance for any period beyond June 30, 2008 is
GAAP-based and any additional assumptions are provided solely to
facilitate comparisons.
The foregoing guidance supersedes any guidance previously issued by the Company. Any previous guidance should no longer be relied upon.
At approximately 4:20 p.m. (EDT) on April 29, 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 April 29, 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.
VistaPrint's management believes that these non-GAAP financial measures can provide meaningful supplemental information regarding our performance by excluding certain expenses that may not be 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) on July 1, 2005, which management believes were not indicative of core business operating results.
Beginning with the Company's first quarter of the fiscal year ending June 30, 2009, VistaPrint plans to eliminate the use of non-GAAP financial measures in our financial reporting and guidance. At that point in time, VistaPrint will have reported share-based compensation expense in our financial statements for a period of three fiscal years. As such, management believes that the reporting of non-GAAP measures will no longer be required to facilitate management's and investors' comparisons to VistaPrint's historical performance, and therefore will not provide meaningful supplemental information regarding our performance. Until VistaPrint ceases to include non-GAAP financial measures in our reporting, we expect to compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year.
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 to facilitate comparison and analysis to historical performance and our competitors' operating results.
Although management believes that these non-GAAP financial measures are helpful to understanding the Company's financial performance, 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 13 million customers world-wide. VistaPrint offers small businesses everything they need to market their business with brand identity and promotional products, marketing services and electronic marketing solutions. A global company, VistaPrint employs more than 1,300 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
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