VistaPrint Reports Fourth Quarter and Full Fiscal Year 2006 Financial Results; Revenue Grew 69 Percent over the Fourth Quarter of Fiscal Year 2005; Net Income More Than Tripled over the Same Quarter of the Prior Year.HAMILTON Hamilton, city, Bermuda Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. , Bermuda Bermuda (bûrmy  `də), British dependency (2005 est. pop. 65,400), 21 sq mi (53 sq km), comprising some 150 coral rocks, islets, and islands (of which some 20 are inhabited), in the -- VistaPrint Limited (Nasdaq:VPRT VPRT Verband Privater Rundfunk und Telekommunikation eV (Germany) ), a leading
online supplier of high-quality graphic design services and customized
printed products to small businesses and consumers, today announced its
financial results for the fourth quarter and fiscal year ended June June: see month. 30,
2006.Total company revenue for the quarter was $45.3 million, an increase of 69 percent as compared to total revenue of $26.8 million in the same quarter of fiscal 2005. For the fourth quarter ended June 30, 2006, net income on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis was $5.6 million, which is 12 percent of revenue, or $0.12 per share on a fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. GAAP net income includes a $2.3 million charge related to share-based compensation and a $686,000 tax benefit associated with the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of previously accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. income taxes. On a non-GAAP basis, excluding the charge associated with share-based compensation and the benefits associated with the reversal of the income tax accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. , adjusted net income was $7.2 million, which is 16 percent of revenue, and reflects adjusted earnings per share of $0.16 on a fully diluted basis. For the same quarter of the prior year, which ended June 30, 2005, the Company achieved net income of $1.9 million, which was 7 percent of revenue. For fiscal year 2006, total company revenue was $152.1 million, an increase of 67 percent as compared to total revenue of $90.9 million for fiscal year 2005. For fiscal year 2006, net income on a GAAP basis was $19.2 million, which is 13 percent of revenue, or $0.45 per share on a fully diluted basis. GAAP net income for fiscal year 2006 includes charges of $4.9 million related to share-based compensation and tax benefits of $938,000 associated with the reversal of previously accrued income taxes. On a non-GAAP basis, excluding charges associated with share-based compensation and benefits associated with the reversal of income tax accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. , adjusted net income for fiscal year 2006 was $23.1 million, which is 15 percent of revenue, and reflects adjusted earnings per share of $0.54 on a fully diluted basis. During fiscal year 2005, the Company reported a GAAP net loss of $16.2 million, which included a $21 million contract termination Defense procurement: the cessation or cancellation, in whole or in part, of work under a prime contract or a subcontract thereunder for the convenience of, or at the option of, the government, or due to failure of the contractor to perform in accordance with the terms of the contract (default). charge related to a payment made to its former North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. print supplier. Excluding this contract termination loss, on a non-GAAP basis, adjusted net income was $4.8 million for fiscal year 2005. "VistaPrint's fourth quarter completes an excellent fiscal year. The investments we have made in our business contributed to our 69 percent revenue growth and many improvements to our customer value proposition," said Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. Keane Keane (IPA: /kiːn/) are an English piano rock band, first established in Battle, East Sussex in 1995, taking their current name in 1997. , president and chief executive officer. "Most significantly, we acquired 564,000 new customers during the quarter while deriving de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. 63 percent of our revenue from our existing customer base by offering value, service, and compelling new products designed to meet our customers' needs." Additional fourth quarter fiscal year 2006 highlights include: --Revenue minus cost of revenue was 67.6 percent of total revenue in the fourth quarter of fiscal 2006, compared to 58.2 percent in the same quarter of the prior fiscal year. --Average order values, including revenue from shipping, were $29.85, consistent with the same quarter in the prior year. --Web site sessions increased by 46 percent in the fourth quarter of fiscal 2006 from the same quarter of fiscal 2005. --Conversion rates were 5.2 percent in the fourth quarter of fiscal 2006, which represents a 14 percent increase over the same quarter in the prior year. --Capital expenditures in the fourth quarter of fiscal 2006 were $8.9 million. --The Company had $108 million in cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has and $115 in current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. at June 30, 2006. --The Company generated cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $11.4 million in the quarter. Full fiscal year 2006 highlights include: --Revenue minus cost of revenue was 67.2 percent of total revenue compared to 59.8 percent during fiscal year 2005. --Capital expenditures were $24.9 million. --The Company generated cash flow from operations of $34.6 million. VistaPrint continued to expand and improve its product line during the quarter. Some of the products developed during the quarter included notepads, envelopes, and a logo generation tool, each of which the Company has launched across all 16 of its web sites. These are examples of products and services as to which the company has applied its innovative technology to deliver increased value and quality to its customer base. At approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 4:15 p.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ) on July July: see month. 31, 2006 VistaPrint will post, on the investor relations Investor relations The process by which the corporation communicates with its investors. section of www.vistaprint.com, a link to a pre-recorded audio visual end-of-quarter presentation along with a downloadable transcript A generic term for any kind of copy, particularly an official or certified representation of the record of what took place in a court during a trial or other legal proceeding. A transcript of record of the prepared remarks that accompany To go along with; to go with or to attend as a companion or associate. A motor vehicle statute may require beginning drivers or drivers under a certain age to be accompanied by a licensed adult driver whenever operating an automobile. this presentation. At 5:30 p.m. (EST) 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 event will be available on the Company's Web site from 7 p.m. (EST) on July 31, 2006 until midnight on August 16, 2006. About non-GAAP financial measures To supplement VistaPrint's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP, VistaPrint uses the following measures defined as non-GAAP financial measures by the SEC: non-GAAP adjusted net income and non-GAAP adjusted earnings per share. The presentation of this 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. VistaPrint's management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenses that may not be indicative indicative: see mood. of our core business operating results. VistaPrint believes that both management and investors benefit 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 facilitate management's internal comparisons to VistaPrint's historical performance and our competitors' operating results. VistaPrint believes these non-GAAP financial measures are useful to investors in allowing for greater transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. with respect to supplemental information used by management in its financial and operational decision making. Management uses these supplemental measures to evaluate performance period over period and to analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. the underlying trends in the Company's business and to establish operational goals and forecasts that are used in allocating resources. VistaPrint expects to compute To perform mathematical operations or general computer processing. For an explanation of "The 3 C's," or how the computer processes data, see computer. its non-GAAP financial measures using the same consistent method from quarter to quarter and year to year. The accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. 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. The items excluded from the non-GAAP measurements for the fourth quarter and full fiscal year 2006 are share based compensation expense and tax accrual adjustments related to prior years' tax settlement and, for fiscal year 2005, a loss on a contract termination recorded in fiscal year 2005 is excluded. Share-based compensation expense VistaPrint adopted SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 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 APB See Accounting Principles Board (APB). No. 25, Accounting for Stock Issued to Employees, and therefore had not recorded any compensation related to such grants. Management has excluded share based compensation which also includes the impact of an option modification A change or alteration in existing materials. Modification generally has the same meaning in the law as it does in common parlance. The term has special significance in the law of contracts and the law of sales. that occurred in the third quarter of fiscal year 2006, from the non-GAAP measurements for fiscal year 2006 to facilitate comparison and analysis to historical performance and our competitors' operating results. Tax accrual adjustments related to prior years In the quarter ending March 31, 2006, VistaPrint reversed excess income tax reserves related to the completion of an Internal Revenue Service audit of a prior fiscal year for its VistaPrint USA, Incorporated subsidiary. In the quarter ending June 30, 2006, VistaPrint reversed excess income tax reserves related to the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of a tax audit statute of limitations A type of federal or state law that restricts the time within which legal proceedings may be brought. Statutes of limitations, which date back to early Roman Law, are a fundamental part of European and U.S. law. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc a prior fiscal year. These reversals were accounted for as discrete A component or device that is separate and distinct and treated as a singular unit. events and resulted in income tax benefits during these periods. Management has excluded the impact of these tax accrual adjustments from the non-GAAP measurements for fiscal year 2006 to facilitate comparison and analysis of historical performance and to present a view of the current fiscal year's effective tax rate that management believes is more consistent with both historical performance and expected future financial results. Contract Termination Loss In the quarter ended September September: see month. 30, 2004, the Company recorded a loss of $21 million related to the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of a supply agreement with its North American print supplier. This loss was the result of a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. payment made to this supplier that terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: all existing supply agreements in force at that time. Management has excluded the contract termination loss from the non-GAAP measurement to facilitate comparison and analysis to historical and future 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 complete picture of all effects on the Company's profit and loss from any and all events, management does (and investors should) rely upon the GAAP statement of operations See Income statement. . About VistaPrint VistaPrint Limited (NASDAQ:VPRT) is a leading online supplier of high-quality graphic design services and customized printed products to small businesses and consumers. VistaPrint offers custom designed, full-color, low-cost printed products in small quantities. Over 7 million small businesses and consumers have already chosen VistaPrint for products ranging from business cards and brochures to invitations and thank you cards. Products are printed at our two state-of-the-art plants in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). that total over 120,000 square feet
of production space. A global company, VistaPrint employs more than 650
people and operates 16 localized Translated into the spoken language of the country. See localization. web sites serving over 120 countries
around the world. A broad range of design options are available online
at www.vistaprint.com. VistaPrint's printed products are
satisfaction guaranteed Satisfaction Guaranteed may refer to:
VistaPrint, the VistaPrint logo and VistaPrint.com are registered trademarks of VistaPrint. All other brand and product names appearing on this announcement may be trademarks or registered trademarks of their respective holders. This press release contains information about future expectations, plans and prospects of our management that constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. for purposes of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions under The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including statements concerning the expected growth and development of our business, operating performance, our margins, our market position, investments made or to be made in our business, and our ability to successfully attract and retain customers. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, our ability to attract customers and to retain customers and to do so in a cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. manner, willingness of purchasers of graphic design services and printed products to shop online, failure of our investments, unexpected increases in our use of funds, failure to increase our revenue and keep our expenses consistent with revenues, failures of our web sites or network infrastructure, failure to maintain the prices we charge for our products and services, the inability of our manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. to meet customer demand, and other factors that are discussed in our Registration Statement on Form S-1, our Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 2006 and other documents periodically filed with the SEC. In addition, the statements in this press release represent our expectations and beliefs as of the date of this press release. We anticipate that subsequent events and developments may cause these expectations and beliefs to change. We specifically disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any obligation to update any forward-looking statements. These forward-looking statements should not be relied upon as representing our expectations or beliefs as of any date subsequent to the date of this press release.
VistaPrint Limited
Consolidated Balance Sheets
June 30,
------------------
2006 2005
--------- --------
(In thousands,
except share and
per share data)
Assets
Current assets:
Cash and cash equivalents $64,653 $26,402
Marketable securities 43,474 -
Accounts receivable, net of allowances of $50 and
$57 at
June 30, 2006 and June 30, 2005, respectively 1,465 1,186
Inventory 1,407 354
Prepaid expenses and other current assets 3,564 2,651
--------- --------
Total current assets 114,563 30,593
Property, plant and equipment, net 50,311 29,913
Software and web site development costs, net 2,417 1,916
Patents 1,417 1,556
Deferred tax asset 435 317
Deposits, image licenses and other noncurrent assets 2,249 1,691
--------- --------
Total assets $171,392 $65,986
========= ========
Liabilities, redeemable convertible preferred shares and
shareholders' equity (deficit)
Current liabilities:
Trade accounts payable:
Mod-Pac Corporation $- $1,628
All other vendors 6,240 2,889
Accrued expenses 13,716 10,585
Deferred revenue 1,924 540
Current portion of long-term debt 2,482 1,281
--------- --------
Total current liabilities 24,362 16,923
Long-term debt 23,046 15,696
Commitments and contingencies
Series A redeemable convertible preferred shares,
par value $0.001 per share, 0 and 11,000,000
shares authorized, 0 and 9,845,849 shares issued
and outstanding at June 30, 2006 and 2005,
respectively (aggregate liquidation preference of
$0 and $14,080, respectively) - 13,556
Series B redeemable convertible preferred shares,
par value $0.001 per share, 0 and 13,008,515
shares authorized, 0 and 12,874,694 shares issued
and outstanding at June 30, 2006 and 2005,
respectively (aggregate liquidation preference of
$0 and $52,915, respectively) - 57,880
Shareholders' equity (deficit):
Common shares, par value $0.001 per share, 500,000,000 and
39,289,197
shares authorized at June 30, 2006 and 2005,
respectively; 41,500,750 and 11,374,892 shares
issued and
outstanding at June 30, 2006 and 2005,
respectively 42 11
Additional paid-in capital 146,354 2,679
Accumulated deficit (23,077) (41,017)
Accumulated other comprehensive income 665 258
--------- --------
Total shareholders' equity (deficit) 123,984 (38,069)
--------- --------
Total liabilities, redeemable convertible preferred
shares and shareholders' equity (deficit) $171,392 $65,986
========= ========
VistaPrint Limited
Consolidated Statements of Operations
Three Months Ended
June 30, Year Ended June 30,
----------------------- -----------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
(in thousands, except share and per share data)
Revenue $45,282 $26,826 $152,149 $90,885
Cost of revenue (1) 14,656 11,223 49,858 36,528
Technology and
development expense
(1) 4,972 2,883 15,628 10,839
Marketing and selling
expense (1) 14,473 8,859 51,174 32,372
General and
administrative expense
(1) 6,506 1,687 16,624 5,813
Loss on contract
termination - - - 21,000
----------- ----------- ----------- -----------
Income (loss) from
operations 4,675 2,174 18,865 (15,667)
Other income
(expenses), net 1,003 (48) 2,409 (78)
Interest expense 434 192 1,256 390
----------- ----------- ----------- -----------
Income (loss) from
operations before
income taxes 5,244 1,934 20,018 (16,135)
Income tax provision
(benefit) (360) 81 783 84
----------- ----------- ----------- -----------
Net income (loss) $5,604 $1,853 $19,235 $(16,219)
=========== =========== =========== ===========
Net income (loss) attributable to
common shareholders:
Basic $5,604 $186 $16,889 $(21,032)
Diluted $5,604 $209 $19,235 $(21,032)
Basic net income (loss)
per share $0.14 $0.02 $0.51 $(1.85)
=========== =========== =========== ===========
Diluted net income
(loss) per share $0.12 $0.02 $0.45 $(1.85)
=========== =========== =========== ===========
Weighted average common
shares outstanding -
basic 40,859,578 11,374,554 33,147,287 11,358,575
=========== =========== =========== ===========
Weighted average common
shares outstanding -
diluted 45,076,661 13,564,503 42,624,689 11,358,575
=========== =========== =========== ===========
(1) Share-based
compensation is
allocated as follows:
Three Months Ended
June 30, Year Ended June 30,
----------------------- -----------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
(in thousands)
Cost of revenue $21 $- $79 $-
Technology and
development expense 248 - 596 -
Marketing and selling
expense 70 - 159 -
General and
administrative expense 1,990 - 4,016 -
----------- ----------- ----------- -----------
$2,329 $- $4,850 $-
=========== =========== =========== ===========
VistaPrint Limited
Reconciliations of Non-GAAP Financial Measures
Three Months
Ended Year Ended June
June 30, 30,
--------------- ------------------
Reconciliation of Non-GAAP Financial
Measures 2006 2005 2006 2005
------- ------- -------- ---------
(in thousands, except per share
data)
Non-GAAP adjusted net income
reconciliation:
Net income (loss) $5,604 $1,853 $19,235 $(16,219)
Add back:
Share based compensation expense 2,329 - 4,850 -
Income tax benefit from reserve
reversal (686) - (938) -
Loss on contract termination - - - 21,000
------- ------- -------- ---------
Non-GAAP adjusted net income $7,247 $1,853 $23,147 $4,781
======= ======= ======== =========
Non-GAAP adjusted net income per diluted
share reconciliation:
Net income per diluted share $0.12 $0.02 $0.45 $(1.85)
Add back:
Share based compensation expense 0.05 - 0.11 -
Income tax benefit from reserve
reversal (0.01) - (0.02) -
Loss on contract termination - - - 1.85
------- ------- -------- ---------
Non-GAAP adjusted net income per
diluted share $0.16 $0.02 $0.54 $-
======= ======= ======== =========
Note: Non-GAAP adjusted net income per diluted share results in $0.00
due to the accretion of preferred share dividends of $4,813.
VistaPrint Limited
Consolidated Statements of Cash Flows
Year Ended June 30,
---------------------
2006 2005
--------- ---------
(in thousands)
Operating activities
Net income (loss) $19,235 $(16,219)
Adjustments to reconcile net income (loss) to net
cash
provided by (used in) operating activities:
Depreciation and amortization 7,786 5,902
Share-based compensation expense 4,850 -
Deferred taxes 218 (420)
Provision for (recovery of) doubtful accounts (7) 9
Changes in operating assets and liabilities:
Accounts receivable (266) (457)
Interest Receivable (351) -
Inventory (1,030) (316)
Prepaid expenses and other assets (1,682) (1,774)
Accounts payable 1,649 1,665
Accrued expenses and other current liabilities 4,235 4,939
--------- ---------
Net cash provided by (used in) operating activities 34,637 (6,671)
Investing activities
Purchases of property, plant and equipment, net (24,929) (18,629)
Purchases of marketable securities (75,705) -
Sales of marketable securities 31,880 -
Capitalization of software and website development
costs (2,656) (1,908)
--------- ---------
Net cash used in investing activities (71,410) (20,537)
Financing activities
Proceeds from long-term debt 9,600 11,361
Repayment of long-term debt (1,386) (307)
Payment of offering costs (1,387) (255)
Net proceeds from public offering 61,380 -
Proceeds from issuance of series B preferred
shares, net - 22,688
Proceeds from issuance of common shares 6,645 47
--------- ---------
Net cash provided by financing activities 74,852 33,534
Effect of exchange rate changes on cash 172 16
--------- ---------
Net increase in cash and cash equivalents 38,251 6,342
Cash and cash equivalents at beginning of period 26,402 20,060
--------- ---------
Cash and cash equivalents at end of period $64,653 $26,402
========= =========
Supplemental Noncash Financing Activities
Accretion of preferred shares $1,295 $4,813
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