Vistaprint N.V. announced financial results for the three month period ended Dec. 31, 2011, the second quarter of its 2012 fiscal year.
“We are very pleased with our second quarter,” said Robert Keane, president and chief executive officer. “The quarter reflects momentum in our strategy initiatives and investment in resources which we are confident will lead to future growth. Revenue was in the upper half of our guidance range due to strong sales of holiday and small business products during our seasonally strongest quarter of the year. Earnings per share excluding gains from our recent share repurchase activity exceeded our expectations due to a favorable non-operational foreign currency benefit, favorability in our tax rate, the timing of some planned operating expenses and gross margin improvements. We were able to deliver these great results in the organic business while negotiating, performing due diligence, carrying out closing activities and planning integration activities for two acquisitions.”
Financial Metrics (include Albumprinter and Webs results unless otherwise stated):
• Revenue for the second quarter of fiscal year 2012 grew to $299.9 million, a 28 percent increase over revenue of $234.1 million reported in the same quarter a year ago. Excluding Albumprinter revenue of $15.7 million, total second quarter revenue was $284.2 million. There was no revenue recognized during the quarter from the acquired Webs business.
• Excluding the estimated impact from currency exchange rate fluctuations and revenue from acquired businesses, total revenue grew 21 percent from the same quarter a year ago.
• Gross margin (revenue minus the cost of revenue as a percent of total revenue) in the second quarter was 66.8 percent, compared to 66.3 percent in the same quarter a year ago. Excluding the Albumprinter business, gross margin was 67.0 percent.
• Operating income in the second quarter was $32.5 million, or 10.9 percent of revenue, and reflected a 15 percent decrease compared to $38.2 million, or 16.3 percent of revenue in the same quarter a year ago.
• GAAP net income for the second quarter was $31.7 million, or 10.6 percent of revenue, representing a 7 percent decrease compared to $34.0 million, or 14.5 percent of revenue in the same quarter a year ago.
• GAAP net income per diluted share for the second quarter was $0.82, versus $0.75 in the same quarter a year ago.
• Non-GAAP adjusted net income for the second quarter was $37.9 million, or 12.6 percent of revenue, representing a 6 percent decrease compared to $40.4 million, or 17.3 percent of revenue in the same quarter a year ago. Non-GAAP adjusted net income excludes $1.1 million of amortization expense for acquisition-related intangible assets and $5.0 million of share-based compensation expense and its related tax effect.
• Non-GAAP adjusted net income per diluted share for the second quarter, which excludes amortization expense for acquisition-related intangible assets and share-based compensation expense and its related tax effect, was $0.97, versus $0.89 in the same quarter a year ago.
• Capital expenditures in the second quarter were $13.4 million or 4.5 percent of revenue.
• During the second quarter, the company generated $81.1 million in cash from operations and $66.4 million in free cash flow, defined as cash from operations less purchases of property, plant and equipment, purchases of intangible assets not related to acquisitions, and capitalization of software and website development costs.
• The company had $67.5 million in cash and cash equivalents as of Dec. 31, 2011.
• During the second quarter, the company purchased 3,835,772 of its ordinary shares for $118.6 million, inclusive of transaction costs, at an average per-share cost of $30.91, as part of the share repurchase program authorized by the Supervisory Board in August 2011.
Operating Metrics (exclude Albumprinter and Webs results unless otherwise stated):
• Vistaprint acquired approximately 2.9 million new customers in the second fiscal quarter ended Dec. 31, 2011, compared with 2.2 million in the same quarter a year ago, reflecting an increase of 32 percent.
• On a trailing 12-month basis, unique active customer count was 12.9 million. Unique active customer count is the number of individual customers who purchased from us in a given period, with no regard to the frequency of purchase. This compares to 10.6 million in the 12-month period ended Dec. 31, 2010.
• Total order volume in the second quarter of fiscal 2012 was approximately 8.3 million, reflecting an increase of approximately 28 percent over total orders of approximately 6.5 million in the same quarter a year ago.
• Average order value in the second quarter, including revenue from shipping and processing, was $34.61, compared with $36.17 in the same quarter a year ago.
• Advertising and commissions expense was $75.8 million, or 26.7 percent of organic revenue in the second quarter, compared to $52.2 million, or 22.3 percent of revenue in the same quarter a year ago.
• Revenue from customers in North America was $139.8 million, or 47 percent of total revenue in the second quarter. This represents 20 percent growth year over year in both reported terms and in constant currency.
• Revenue from customers in Europe was $143.0 million, or 48 percent of total revenue in the quarter. This represents 36 percent growth year over year in reported terms and 37 percent growth in constant currency. Excluding Albumprinter revenue of $15.7 million, revenue from customers in Europe was $127.3 million, or 45 percent of total organic revenue in the second quarter.
• Revenue from customers in Asia Pacific was $17.0 million, or 6 percent of total revenue in the second quarter. This represents 41 percent growth year over year in reported terms and 37 percent growth in constant currency.
Ernst Teunissen, executive vice president and chief financial officer, said, “Based on the results of the first half of fiscal 2012, we remain confident we will deliver against our operational expectations for the full year. We are now updating our guidance for fiscal 2012 to reflect several items unrelated to our organic operational performance. First, currency rates have moved unfavorably since we last gave guidance in October 2011, which primarily impacts our revenue guidance in U.S. dollars. Second, we have repurchased a significant number of Vistaprintshares since October, which will benefit our earnings per share relative to our prior expectations. And finally, our expectations for the Webs acquisition are now incorporated into our guidance. As previously disclosed, we expect the Webs acquisition will add a small amount of revenue in the back half of the year, and will be dilutive to GAAP and non-GAAP earnings.”
Financial Guidance as of Jan. 26, 2012:
Based on current and anticipated levels of demand, the company expects the following financial results:
Revenue
• For the full fiscal year ending June 30, 2012, the company expects revenue of approximately $1,006 million to $1,036 million, or 23 percent to 27 percent growth year over year in reported terms. Excluding currency movements and acquired revenue, we expect constant-currency organic growth of approximately 19 percent to 23 percent. Constant-currency growth expectations assume a recent 30-day currency exchange rate for all currencies.
• For the third quarter of fiscal year 2012, ending March 31, 2012, the company expects revenue of approximately $246 million to $261 million, or 21 percent to 28 percent growth year over year in reported terms. We expect constant-currency organic growth of approximately 16 percent to 23 percent.
GAAP Diluted Earnings Per Share
• We expect to generate GAAP net income for the full year fiscal 2012 but expect to be unprofitable on a GAAP basis for the third and fourth quarters of fiscal 2012 due to the dilution of our recent acquisitions. As a result, full year earnings per share will be calculated using weighted average diluted shares outstanding, but our third and fourth quarters will be calculated using weighted average basic shares outstanding. Therefore, we expect the full year earnings per share results will not equal the sum of the earnings per share results of each quarter.
• For the full fiscal year ending June 30, 2012, the company expects GAAP earnings per share of approximately $0.86 to $0.98, which assumes 39.4 million weighted average diluted shares outstanding.
• For the third quarter of fiscal year 2012, ending March 31, 2012, the company expects GAAP earnings (loss) per share of approximately ($0.19) to ($0.04), which assumes 36.4 million weighted average basic shares outstanding.
Non-GAAP Adjusted Net Income Per Diluted Share
• For the full fiscal year ending June 30, 2012, the company expects non-GAAP adjusted net income per diluted share of approximately $1.71 to $1.83, which excludes expected acquisition-related amortization of intangible assets of approximately $5.9 million or approximately $0.15 per diluted share, share-based compensation expense and its related tax effect of approximately $26.5 million or approximately $0.67 per diluted share, and tax charges related to the alignment of acquisition-related intellectual property with global operations of approximately$1.5 million, or $0.04 per diluted share. This guidance assumes a non-GAAP weighted average diluted share count of approximately 39.7 million shares.
• For the third quarter of fiscal year 2012, the company expects non-GAAP adjusted net income per diluted share of approximately $0.14 to $0.29, which excludes expected acquisition-related amortization of intangible assets of approximately $2.4 million or approximately $0.06 per diluted share, share-based compensation expense and its related tax effect of approximately $8.8 million or approximately $0.23 per diluted share, and tax charges related to the alignment of acquisition-related intellectual property with global operations of approximately $1.5 million, or $0.04 per diluted share. This guidance assumes a non-GAAP weighted average diluted share count of approximately 38.5 million shares.
Capital Expenditures
For the full fiscal year ending June 30, 2012, the company expects to make capital expenditures of approximately $60 million to $70 million. Planned capital investments are designed to support the planned growth of the business.
The foregoing guidance supersedes any guidance previously issued by the company. All such previous guidance should no longer be relied upon.
For more information, visit Vistaprint’s website.
