Business News
Shutterfly Announces Fourth Quarter and Full Year 2009 Financial Results
Monday 08. February 2010 - ? Fourth Quarter 2009 net revenues increase 22% year-over-year to $131.1 million ? Full Year 2009 net revenues increase 15% year-over-year to $246.4 million ? Fourth Quarter 2009 GAAP Net Income of $0.88 per diluted share ? Record Full Year 2009 Adjusted EBITDA of $50.2 million, representing 20.4% of net revenues ? Record Full Year 2009 Free Cash Flows of $32.5 million
Shutterfly, Inc. (NASDAQ:SFLY), the leading Internet-based social expression and personal publishing service, today announced financial results for the fourth quarter and full year 2009.
“Our strategic investments throughout 2009, combined with our focus on strong execution, innovation and improved efficiencies led to record revenues, profits, and free cash flows”
“Our strategic investments throughout 2009, combined with our focus on strong execution, innovation and improved efficiencies led to record revenues, profits, and free cash flows,” said President and Chief Executive Officer Jeffrey Housenbold. “We continue to outpace the industry in terms of innovation, user experience, quality, and customer service. With the social expression and personal publishing markets still in the early stages, Shutterfly will focus on extending our leadership position in these large markets throughout 2010.”
Fourth Quarter 2009 Financial Highlights
? Net revenues totaled $131.1 million, a 22% year-over-year increase.
? Fourth quarter 2009 represents the 36th consecutive quarter of year-over-year net revenue growth.
? Personalized Products & Services net revenues totaled $93.2 million, a 29% year-over-year increase.
? Personalized Products & Services net revenues represented 71% of total net revenues.
? Net revenues from prints increased 4% year-over-year, to $36.6 million.
? Commercial print net revenues totaled $1.2 million.
? Existing customers generated 73% of total net revenues.
? Referral fee revenues totaled $2.5 million, an 8% year-over-year decrease.
? Gross profit margin was 61% of net revenues, consistent with 61% in the fourth quarter of 2008.
? Operating expenses, excluding $4.4 million of stock-based compensation, totaled $39.6 million.
? GAAP net income was $24.1 million, compared to net income of $14.4 million in the fourth quarter of 2008.
? GAAP net income per diluted share was $0.88, compared to $0.56 in the fourth quarter of 2008.
? Adjusted EBITDA was $47.9 million, compared to $38.6 million in the fourth quarter of 2008.
? At December 31, 2009, the Company had $180.7 million of cash, cash equivalents and short-term investments.
Full Year 2009 Financial Highlights
? Net revenues totaled $246.4 million, a 15% year-over-year increase.
? Personalized Products & Services net revenues totaled $161.7 million, a 25% year-over-year increase.
? Personalized Products & Services net revenues represented 66% of total net revenues.
? Net revenues from prints declined 3% year-over-year, to $80.9 million.
? Commercial print net revenues totaled $3.8 million.
? Existing customers generated 75% of total net revenues.
? Referral fee revenues totaled $6.2 million, or 2.5% of net revenues, a 6% year-over-year decrease.
? Gross profit margin was 55% of net revenues, consistent with 55% in 2008.
? Operating expenses, excluding $13.9 million of stock-based compensation, totaled $112.2 million.
? GAAP net income was $5.9 million, compared to net income of $3.7 million in 2008.
? GAAP net income per diluted share was $0.22, compared to $0.14 in 2008.
? Adjusted EBITDA was $50.2 million, compared to $38.4 million in 2008.
Fourth Quarter 2009 Operating Metrics
? Transacting customers totaled 1.9 million, an 18% increase over the fourth quarter of 2008.
? Orders totaled 3.1 million, a 12% increase over the fourth quarter of 2008.
? Average order value was $42.40, an 8% increase over the fourth quarter of 2008.
Full Year 2009 Operating Metrics
? Transacting customers totaled 3.3 million, an 18% increase over 2008.
? Orders totaled 7.9 million, a 4% increase over 2008.
? Average order value was $30.74, a 9% increase over 2008.
Recent Operating Highlights
? Launched SimplePathTM Photo Book creation experience, allowing customers to make a Photo Book in just a few clicks.
? Launched our largest holiday card collection, including Shutterfly “Support -A- Cause” cards from organizations like LiveSTRONG and Special Olympics and expanded our Cards and Stationery line to include more designs for baby, wedding and social occasions.
? Deepened our presence in social media and mobile platforms with the acquisition of Tiny Pictures and the launch of WinkTM by Shutterfly.
Business Outlook
The referral fee program with Web Loyalty will be discontinued effective March 31, 2010. As a result, referral fee revenues during 2010 are expected to total less than 1% of total net revenues and no referral fee revenues are expected after the first quarter. After giving full effect to the expected reduction in 2010 referral fee revenues, the Company’s current financial expectations for the first quarter and the full year 2010 are as follows:
First Quarter 2010:
? Net revenues to range from $40.0 million to $42.0 million, a 11% to 17% year-over-year increase.
? 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 ($10) million to ($11) million.
? Non-GAAP operating loss to range from ($5) million to ($6) million.
? GAAP effective tax rate to range from 34% to 38%.
? Non-GAAP effective tax rate to range from 33% to 37%.
? GAAP diluted net loss per share to range from ($0.23) to ($0.27).
? Non-GAAP diluted net loss per share to range from ($0.12) to ($0.15).
? Weighted average diluted shares of approximately 26.2 million.
? Adjusted EBITDA to range from break-even to $1 million.
Full Year 2010:
? Net revenues to range from $267 million to $277 million, a 9% to 13% year-over-year increase.
? GAAP gross profit margins to range from 53% to 55% of net revenues.
? Non-GAAP gross profit margins to range from 54% to 56% of net revenues.
? GAAP operating income to range from $8 million to $15 million.
? Non-GAAP operating income to range from $26 million to $33 million.
? GAAP effective tax rate to range from 34% to 38%.
? Non-GAAP effective tax rate to range from 33% to 37%.
? GAAP diluted net income per share to range from $0.18 to $0.33.
? Non-GAAP diluted net income per share to range from $0.61 to $0.74.
? Weighted average diluted shares of approximately 28.2 million.
? Adjusted EBITDA to range from 18% to 20% of net revenues.
? Capital expenditures to approximate 7% to 9% of 2010 net revenues.
Notes to the Fourth Quarter and Full Year 2009 Financial Results, and Business Outlook
Adjusted EBITDA is a non-GAAP financial measure that the Company defines as earnings before interest, taxes, depreciation, amortization and stock-based compensation.
Free cash flow is a non-GAAP financial measure that the Company defines as Adjusted EBITDA minus purchases of property, plant, and equipment, and capitalization of software and website development costs.
Print revenues consist of photo prints in wallet, 4×6, 5×7, 8×10, photocards, and large format sizes.
Personalized Products and Services (“PPS”) revenues primarily include photo books, stationery and folded greeting cards, calendars, and photo-based merchandise. PPS also includes revenue from advertising and sponsorship programs and referral fees.
Commercial printing revenues are a separate component of net revenues and are excluded from prints and PPS revenues.
Average order value is defined as total net revenues, excluding commercial printing revenue, divided by total orders.
Fourth quarter 2008 financial results are as restated. See Form 8-K dated October 23, 2009 for details of restatement which recorded an additional $1.1 million of stock-based compensation in FY 2008, of which $0.4 million related to fourth quarter 2008.
The foregoing financial guidance replaces any of the Companys previously issued guidance and all such previous guidance should no longer be relied upon.