Business News

Shutterfly Announces Second Quarter 2009 Financial Results

Thursday 30. July 2009 - Net Revenues Increase 10% Year-over-Year to $38.9 Million; 34th Consecutive Quarter of Year-over-Year Net Revenue Growth

Adjusted EBITDA1 of $0.2 Million
GAAP Net Loss of ($0.22) per Diluted Share

Shutterfly, Inc. (NASDAQ:SFLY), the leading Internet-based social expression and personal publishing service, today announced financial results for the three-months ended June 30, 2009.

“Shutterfly delivered solid second quarter results with better than expected growth in transacting customers despite the weakened economic environment,” said President and CEO Jeffrey Housenbold. “Our disciplined financial management and strong execution allowed us to continue to deliver innovative products and services that support our strategic imperatives in the photo book, stationery, and memory sharing markets.”

Second Quarter 2009 Financial Highlights

Net revenues totaled $38.9 million, a 10% year-over-year increase.
Q2 2009 represents the 34th consecutive quarter of year-over-year net revenue growth.
Personalized Products & Services2 net revenues totaled $23.6 million, a 20% year-over-year increase.
Personalized Products & Services net revenues represented 61% of total net revenues.
Net revenues from Prints declined 7% year-over-year, to $14.6 million.
Commercial print net revenues totaled $680 thousand.
Existing customers generated 77% of total net revenues.
Gross profit margin was 48% of net revenues, compared to 51% in the second quarter of 2008.
Operating expenses, excluding $2.8 million of stock-based compensation, totaled $25.4 million.
GAAP net loss was ($5.7) million, compared to a net loss of ($4.0) million in the second quarter of 2008.
GAAP net loss per diluted share was ($0.22), compared to ($0.16) in the second quarter of 2008.
Adjusted EBITDA was $0.2 million, compared to $0.4 million in the second quarter of 2008.
At June 30, 2009, the Company had $115.8 million of cash, cash equivalents and long-term investments.
Second Quarter 2009 Operating Metrics

Transacting customers totaled 946,000, a 13% increase over the second quarter of 2008.
Orders totaled 1.7 million, a 6% increase over the second quarter of 2008.
Average order value3 was $23.09, a 2% increase over the second quarter of 2008.
Recent Operating Highlights

Introduced Shutterfly Video for Share sites.
Enhanced stationery offering to include baby & bridal shower invitations, wedding save the dates, notepads & calling cards.
Named Neil Day Senior Vice President and Chief Technology Officer.
Launched new 7×9 and 5×7 sizes for photo books to accommodate every budget.
Redesigned our store to optimize and improve user experience and conversion.
Announced partnership with premier Hollywood baby boutique Petit Trésor.
Ranked 69 on Internet Retailer Top 500 up from 76 in 2008.
Business Outlook

The Company’s current financial expectations for the third quarter and the full year 2009 are as follows:

Third Quarter 2009:

Net revenues to range from $34 million to $36 million, a year-over-year change of (5%) to 0%.
GAAP gross profit margins to range from 45% to 47% of net revenues.
Non-GAAP gross profit margins to range from 47% to 49% of net revenues.
GAAP operating loss to range from ($14) million to ($12) million.
Non-GAAP operating loss to range from ($10) million to ($8) million.
GAAP effective tax rate to range from 25% to 45%.
Non-GAAP effective tax rate to range from 20% to 35%.
GAAP diluted net loss per share to range from ($0.29) to ($0.35).
Non-GAAP diluted net loss per share to range from ($0.20) to ($0.30).
Weighted average diluted shares of approximately 25.4 million.
Adjusted EBITDA2 to range from ($2.0) million to ($3.5) million.
Full Year 2009:

Net revenues to range from $205 million to $220 million, a year-over-year change of (4%) to 3%.
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 ($11) million to break even.
Non-GAAP operating income to range from $4 million to $15 million.
GAAP effective tax rate to range from 25% to 45%.
Non-GAAP effective tax rate to range from 20% to 35%.
GAAP diluted net income (loss) per share to range from a net loss of ($0.21) to net income of $0.03.
Non-GAAP diluted net income per share to range from $0.14 to $0.38.
Weighted average diluted shares of 25.4 million in net loss scenario to 26.7 million in net income scenario.
Adjusted EBITDA to range from 14% to 18% of net revenues.
Capital expenditures to range from $20 million to $22 million.
The foregoing financial guidance replaces any of the Company’s previously issued guidance and all such previous guidance should no longer be relied upon.