Vistaprint Reveals Revenue Growth for Q3 of 2013

VENLO, THE NETHERLANDS—April 25, 2013—Vistaprint N.V., a leading online provider of professional marketing products and services to micro businesses and the home, today announced financial results for the three month period ended March 31, 2013, the third quarter of its 2013 fiscal year.

“We delivered third quarter revenue results in-line with the expectations we set three months ago,” said Robert Keane, president and CEO. “Our earnings per share were above our expectations due to lower than planned advertising and operating expenses, and better than expected gross margins. Notwithstanding the revenue challenges we continue to face relative to our initial annual target, we believe we are making progress against our long-term strategy that is designed to help us capture market opportunity and maintain strong competitive positioning in the years ahead.”

Financial Metrics (including Albumprinter and Webs results unless otherwise stated):

• Revenue for the third quarter of fiscal year 2013 grew to $287.7 million, a 12 percent increase over revenue of $257.6 million reported in the same quarter a year ago. Excluding Albumprinter and Webs combined revenue of $18.0 million, total third quarter revenue was $269.7 million. Excluding the estimated impact from currency exchange rate fluctuations and revenue from acquired businesses, total revenue grew 11 percent year over year in the third quarter.
• Gross margin (revenue minus the cost of revenue as a percent of total revenue) in the third quarter was 65.5 percent, flat with the third quarter a year ago.
• Operating income in the third quarter was $9.7 million, or 3.4 percent of revenue, and reflected an increase compared to operating income of $7.8 million, or 3.0 percent of revenue, in the same quarter a year ago.
• GAAP net income for the third quarter was $5.9 million, or 2.0 percent of revenue, representing an increase compared to $0.3 million, or 0.1 percent of revenue in the same quarter a year ago.
• GAAP net income per diluted share for the third quarter was $0.17, versus $0.01 in the same quarter a year ago.
• Non-GAAP adjusted net income for the third quarter, which excludes amortization expense for acquisition-related intangible assets, tax charges related to the alignment of acquisition-related intellectual property with global operations, and share-based compensation expense and its related tax effect, was $16.9 million, or 5.9 percent of revenue, representing a 51 percent increase compared to non-GAAP adjusted net income of $11.2 million, or 4.4 percent of revenue, in the same quarter a year ago.
• Non-GAAP adjusted net income per diluted share for the third quarter, as defined above, was $0.48, versus $0.29 in the same quarter a year ago.
• Capital expenditures in the third quarter were $11.2 million, or 3.9 percent of revenue.
• During the third quarter, the company generated $8.1 million of cash from operations and $(5.5) 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.
• As of March 31, 2013, the company had $51.3 million in cash and cash equivalents and $238.5 million in short-term and long-term debt. After considering debt covenant limitations, the company had $237.3 million available for borrowing under its credit facility as of March 31, 2013.
• During the third quarter, the company purchased 410,400 of its ordinary shares for $16.2 million, inclusive of transaction costs, at an average per-share cost of $39.50, as part of the share repurchase programs authorized by the Supervisory Board.
• Subsequent to the end of the third quarter and through April 17, 2013, the company purchased an additional 493,700 shares for $18.7 million, inclusive of transaction costs, at an average per-share cost of $37.90, as part of the share repurchase program authorized by the Supervisory Board in February 2013.

Fiscal 2013 Outlook as of April 25, 2013:
Ernst Teunissen, executive vice president and chief financial officer, noted, “Our revenue expectations for the year remain relatively unchanged from the outlook we shared in January. With one quarter left in the fiscal year, we have narrowed our prior full-year revenue guidance range. Turning to profits, we are confident in our ability to deliver EPS in line with or above our prior annual guidance range. As a result, we are raising our fiscal 2013 EPS guidance range to incorporate our strong performance in the third quarter. We do expect EPS to be lower in the fourth quarter than in the third quarter, which is reflected in the new guidance range.”

Teunissen continued, “While we are not providing guidance beyond the current fiscal year, we remain committed to driving toward our plans for meaningful earnings growth and margin expansion in fiscal year 2014, which we believe we can deliver by leveraging the substantial investments we’ve made over the past two years.”

Financial Guidance as of April 25, 2013:
As previously stated, beginning with fiscal year 2013, the company has provided revenue guidance on an annual and quarterly basis, and earnings guidance on an annual basis. Based on current and anticipated levels of demand, the company expects the following financial results:

Fiscal Year and Fourth Quarter 2013 Revenue

• For the full fiscal year ending June 30, 2013, the company expects revenue of approximately $1,150 million to $1,165 million, or 13 percent to 14 percent growth year over year in reported terms. Excluding currency movements and revenue from acquisitions, we expect constant-currency organic growth of approximately 11 percent to 12 percent. Reported (USD) growth expectations assume a recent 30-day currency exchange rate for all currencies. Constant-currency growth is estimated by applying the respective prior year quarterly average exchange rates to all estimated non-U.S. dollar denominated revenue expected for future periods and excludes the estimated impact of gains and losses on currency hedges.
• For the fourth quarter of fiscal year 2013, ending June 30, 2013, the company expects revenue of approximately $263 million to $278 million, or 5 percent to 11 percent growth year over year in both reported terms and in terms of constant-currency organic growth.

Fiscal Year 2013 GAAP Net Income Per Diluted Share

• For the full fiscal year ending June 30, 2013, the company expects GAAP net income per diluted share of approximately $0.60 to $0.80, which assumes 34.5 million weighted average diluted shares outstanding.

Fiscal Year 2013 Non-GAAP Adjusted Net Income Per Diluted Share

• For the full fiscal year ending June 30, 2013, the company expects non-GAAP adjusted net income per diluted share of approximately $1.94 to $2.14, which excludes expected acquisition-related amortization of intangible assets of approximately $10.4 million or approximately $0.29 per diluted share, share-based compensation expense and its related tax effect of approximately $34.4 million or approximately $0.98 per diluted share, and tax charges related to the alignment of acquisition-related intellectual property with global operations of approximately $2.4 million, or $0.07 per diluted share. This guidance assumes a non-GAAP weighted average diluted share count of approximately 35.2 million shares.

Fiscal Year 2013 Capital Expenditures

• For the full fiscal year ending June 30, 2013, the company expects to make capital expenditures of approximately $85 million to $95 million. Planned capital investments are designed to support the planned growth of the business and are expected to include the expansion of our European production capacity in our facility in the Netherlands and other investments.

The foregoing guidance supersedes any guidance previously issued by the company. All such previous guidance should no longer be relied upon.

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 not related to acquisitions, 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 and excludes the impact of gains and losses on effective currency hedges recognized in revenue. 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.

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.

About Vistaprint
Vistaprint N.V. (Nasdaq: VPRT) empowers more than 15 million micro businesses and consumers annually with affordable, professional options to make an impression. With a unique business model supported by proprietary technologies, high-volume production facilities, and direct marketing expertise, Vistaprint offers a wide variety of products and services that micro businesses can use to expand their business. A global company, Vistaprint employs over 4,100 people, operates more than 25 localized websites globally and ships to more than 130 countries around the world. Vistaprint's broad range of products and services are easy to access online, 24 hours a day at www.vistaprint.com.

Source: Vistaprint.