Attached files
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| 8-K - SHUTTERFLY, INC. 8-K - SHUTTERFLY INC | a50153013.htm |
Exhibit 99.01
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Shutterfly Announces Fourth Quarter and Full Year 2011 Financial Results
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Fourth Quarter 2011 net revenues increase 59% year-over-year to $263.8 million
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Full Year 2011 net revenues increase 54% year-over-year to $473.3 million
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Fourth Quarter GAAP net income of $0.97 per diluted share
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Record Full Year Adjusted EBITDA of $83.7 million, representing 17.7% of net revenues
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Record Full Year Free Cash Flows of $50.1 million
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REDWOOD CITY, February 1, 2012 -- Shutterfly, Inc. (NASDAQ:SFLY), a leading Internet-based social expression and personal publishing service, today announced financial results for the fourth quarter and full-year ended December 31, 2011.
"Our strategic investments throughout 2011, combined with our focus on strong execution, diverse product offerings and improved efficiencies led to record revenues, adjusted EBITDA, 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 is well prepared to extend our leadership position in these large markets."
Fourth Quarter 2011 Financial Highlights
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Net revenues totaled $263.8 million, a 59% year-over-year increase.
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Q4 2011 represents the 44th consecutive quarter of year-over-year net revenue growth.
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Personalized Products & Services net revenues totaled $218.9 million, a 77% year-over-year increase.
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Personalized Products & Services net revenues represented 83% of total net revenues.
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Net revenues from Prints totaled $40.3 million.
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Commercial Print net revenues totaled $4.6 million, a 104% year-over-year increase.
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Gross profit margin was 59% of net revenues, compared to 62% in the fourth quarter of 2010.
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Operating expenses, excluding $6.1 million of stock-based compensation, totaled $76.6 million.
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GAAP net income was $35.4 million, compared to $32.5 million in the fourth quarter of 2010.
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GAAP net income per diluted share was $0.97, compared to $1.09 in the fourth quarter of 2010.
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Adjusted EBITDA was $89.3 million, compared to $60.2 million in the fourth quarter of 2010.
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At December 31, 2011, cash and cash equivalents totaled $179.9 million.
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Full Year 2011 Financial Highlights
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Net revenues totaled $473.3 million, a 54% year-over-year increase.
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Personalized Products & Services net revenues totaled $374.7 million, a 71% year-over-year increase.
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Personalized Products & Services net revenues represented 79% of total net revenues.
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Net revenues from Prints totaled $85.0 million.
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Commercial Print net revenues totaled $13.5 million, a 165% year-over-year increase.
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Gross profit margin was 54% of net revenues, compared to 56% in 2010.
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Operating expenses, excluding $31.7 million of stock-based compensation, totaled $206.6 million.
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GAAP net income was $14.0 million, compared to $17.1 million in 2010.
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GAAP net income per diluted share was $0.40, compared to $0.59 in 2010.
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Adjusted EBITDA was $83.7 million, compared to $67.1 million in 2010.
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Fourth Quarter 2011 Operating Metrics
Shutterfly
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Transacting customers totaled 2.8 million, a 23% year-over-year increase.
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Orders totaled 4.6 million, a 24% year-over-year increase.
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Average order value was $43.05, a decrease of 3% year-over-year.
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TinyPrints
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Transacting customers totaled 465 thousand, a 25% year-over-year increase.
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Orders totaled 617 thousand, a 33% year-over-year increase.
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Average order value, excluding 1:1 Greeting Cards, was $116.81, a 10% year-over-year increase.
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Full Year 2011 Operating Metrics
Shutterfly
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Transacting customers totaled 4.9 million, a 20% year-over-year increase.
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Orders totaled 11.3 million, a 22% year-over-year increase.
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Average order value was $32.57, a decrease of 1% year-over-year.
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TinyPrints (Pro Forma)
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Transacting customers totaled 1.0 million, a 36% year-over-year increase.
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Orders totaled 1.4 million, a 54% year-over-year increase.
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Average order value, excluding 1:1 Greeting Cards, was $110.63, an 8% year-over-year increase.
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Business Outlook
First Quarter 2012:
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Net revenues to range from $83 million to $85 million, a year-over-year increase of 45% to 49%.
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GAAP gross profit margin to range from 42% to 43% of net revenues.
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Non-GAAP gross profit margin to range from 44.5% to 45.5% of net revenues.
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GAAP operating loss to range from ($25) million to ($28) million.
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Non-GAAP operating loss to range from ($12) million to ($15) million.
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GAAP effective tax rate to range from 45% to 55%.
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GAAP diluted net loss per share to range from ($0.31) to ($0.43).
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Weighted average diluted shares of approximately 35.9 million.
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Adjusted EBITDA to range from ($6.5) million to ($8.0) million.
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Full Year 2012:
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Net revenues to range from $550 million to $560 million, a year-over-year increase of 16% to 18%.
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GAAP gross profit margin to range from 52% to 54% of net revenues.
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Non-GAAP gross profit margin to range from 53% to 56% of net revenues.
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GAAP operating income to range from $17 million to $24 million.
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Non-GAAP operating income to range from $64 million to $71 million.
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GAAP effective tax rate to range from 45% to 55%.
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GAAP diluted net income per share to range from $0.25 to $0.28.
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Weighted average diluted shares of 38.9 million.
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Adjusted EBITDA to range from 17% to 18% of net revenues.
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Capital expenditures to range from 7.0% to 7.5% of net revenues.
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Notes to the Fourth Quarter and Full Year 2011 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 less purchases of property, plant, and equipment and capitalization of software development costs.
Personalized Products and Services (“PP&S”) net revenues primarily include Photo Books, Stationery and folded Greeting Cards, Calendars and Photo-based Merchandise. PP&S also includes net revenues from advertising and sponsorship programs.
Print net revenues consist of photo prints in Wallet, 4x6, 5x7, 8x10 and various large format sizes; as well as personalized Photo Cards manufactured using a silver halide process.
Commercial Print net revenues are excluded from PP&S and Print revenues, and primarily include variable, four-color direct marketing collateral manufactured and fulfilled for business customers.
Average Order Value (AOV) is defined as total net revenues (excluding Commercial Print) divided by total orders.
The foregoing financial guidance replaces any of the Company’s previously issued financial guidance which should no longer be relied upon.
Fourth Quarter and Full Year 2011 Conference Call
Management will review the fourth quarter and full year 2011 financial results and its expectations for the first quarter and full year 2012 on a conference call on Wednesday, February 1, 2012 at 2:00 p.m. Pacific Daylight Time (5:00 p.m. Eastern Time). To listen to the call and view the accompanying slides, please visit http://www.shutterfly.com. In the Investor Relations area, found in the "About Us" section, click on the link provided for the webcast, or dial 970-315-0490. The webcast, as well as a podcast, will be archived and available at http://www.shutterfly.com. A replay of the conference call will be available through Tuesday, February 14, 2012. To hear the replay, please dial (404) 537-3406, replay passcode 41083885.
Non-GAAP Financial Information
This press release contains certain non-GAAP financial measures. Tables are provided at the end of this press release that reconcile the non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include non-GAAP gross margins, non-GAAP operating income (loss) and the related operating income (loss) margins, non-GAAP income (loss) per share, adjusted EBITDA and free cash flow. For more information, please see Shutterfly's SEC Filings.
To supplement the Company's consolidated financial statements presented on a GAAP basis, we believe that these non-GAAP measures provide useful information about the Company's core operating results and thus are appropriate to enhance the overall understanding of the Company's past financial performance and its prospects for the future. These adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results and trends and performance. Management uses these non-GAAP measures to evaluate the Company's financial results, develop budgets, manage expenditures, and determine employee compensation. The presentation of additional information is not meant to be considered in isolation or as a substitute for or superior to net income (loss) or net income (loss) per share determined in accordance with GAAP.
Notice Regarding Forward-Looking Statements
This media release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve risks and uncertainties. These forward-looking statements include all statements regarding the Company's financial expectations for the first quarter and full year 2012 set forth under the caption "Business Outlook." The Company's actual results may differ materially from those anticipated in these forward-looking statements. Factors that might contribute to such differences include, among others, economic downturns and the general state of the economy, competition, which could lead to pricing pressure; our ability to expand our customer base and meet production requirements; our ability to retain and hire necessary employees, including seasonal personnel, and appropriately staff our operations; the impact of seasonality on our business; our ability to develop on a timely basis, as well as consumer acceptance of, new products and services; our ability to develop additional adjacent lines of business; and unforeseen changes in expense levels. For more information regarding the risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, as well as risks relating to our business in general, we refer you to the "Risk Factors" sections of the Company's Form 10-Q for the quarter ended September 30, 2011, and the Company's other filings, which are available on the Securities and Exchange Commission's Web site at www.sec.gov. These forward-looking statements are based on current expectations and the Company assumes no obligation to update this information.
# # #
About Shutterfly
Founded in 1999, Shutterfly, Inc. is an Internet-based social expression and personal publishing company and operates Shutterfly.com, Tiny Prints.com and Weddingpaperdivas.com. Shutterfly provides high quality products and world class services that make it easy, convenient and fun for consumers to preserve their digital photos in a creative and thoughtful manner. Shutterfly's flagship product is its award-winning photo book line, which helps consumers celebrate memories and tell their stories in professionally bound coffee table books. Shutterfly was recently named one of the top 25 Best Midsized Companies to Work For by the Great Place to Work Institute. More information about Shutterfly (NASDAQ:SFLY) is available at www.shutterfly.com.
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Contacts
Media Relations:
Gretchen Sloan, 650-610-5276
gsloan@shutterfly.com
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Investor Relations:
Michael Look, 650-610-5910
mlook@shutterfly.com
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Shutterfly, Inc.
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Consolidated Statement of Operations
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(In thousands, except per share amounts)
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(Unaudited)
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Three Months Ended
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Twelve Months Ended
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December 31,
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December 31,
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2011
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2010
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2011
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2010
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Net revenues
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$ | 263,754 | $ | 166,200 | $ | 473,270 | $ | 307,707 | ||||||||
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Cost of net revenues
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108,468 | 63,828 | 219,542 | 134,491 | ||||||||||||
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Gross profit
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155,286 | 102,372 | 253,728 | 173,216 | ||||||||||||
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Operating expenses:
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Technology and development
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17,485 | 12,145 | 65,675 | 48,393 | ||||||||||||
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Sales and marketing
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49,505 | 26,316 | 113,952 | 59,284 | ||||||||||||
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General and administrative
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15,687 | 13,416 | 58,710 | 40,764 | ||||||||||||
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Total operating expenses
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82,677 | 51,877 | 238,337 | 148,441 | ||||||||||||
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Income from operations
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72,609 | 50,495 | 15,391 | 24,775 | ||||||||||||
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Interest expense
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(64 | ) | - | (64 | ) | (42 | ) | |||||||||
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Interest and other income, net
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10 | 20 | 35 | 482 | ||||||||||||
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Income before income taxes
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72,555 | 50,515 | 15,362 | 25,215 | ||||||||||||
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Provision for income taxes
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(37,144 | ) | (18,002 | ) | (1,314 | ) | (8,088 | ) | ||||||||
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Net income
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$ | 35,411 | $ | 32,513 | $ | 14,048 | $ | 17,127 | ||||||||
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Net income per share:
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Basic
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$ | 1.02 | $ | 1.18 | $ | 0.43 | $ | 0.63 | ||||||||
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Diluted
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$ | 0.97 | $ | 1.09 | $ | 0.40 | $ | 0.59 | ||||||||
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Weighted-average shares outstanding:
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Basic
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34,743 | 27,618 | 32,788 | 27,025 | ||||||||||||
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Diluted
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36,490 | 29,924 | 35,007 | 29,249 | ||||||||||||
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Stock-based compensation is allocated as follows:
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Cost of net revenues
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$ | 625 | $ | 128 | $ | 2,138 | $ | 508 | ||||||||
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Technology and development
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2,182 | 753 | 8,201 | 3,069 | ||||||||||||
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Sales and marketing
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2,574 | 985 | 11,350 | 3,923 | ||||||||||||
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General and administrative
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1,333 | 2,201 | 12,181 | 8,866 | ||||||||||||
| $ | 6,714 | $ | 4,067 | $ | 33,870 | $ | 16,366 | |||||||||
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Shutterfly, Inc.
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Consolidated Balance Sheet
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(In thousands, except par value amounts)
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(Unaudited)
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December 31,
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2011
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2010
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 179,915 | $ | 252,244 | ||||
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Accounts receivable, net
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12,997 | 4,845 | ||||||
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Inventories
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3,726 | 3,580 | ||||||
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Deferred tax asset, current portion
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598 | 3,582 | ||||||
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Prepaid expenses and other current assets
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13,870 | 6,934 | ||||||
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Total current assets
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211,106 | 271,185 | ||||||
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Property and equipment, net
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54,123 | 39,726 | ||||||
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Intangible assets, net
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95,016 | 5,672 | ||||||
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Goodwill
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340,408 | 11,163 | ||||||
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Deferred tax asset, net of current portion
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3,785 | 11,314 | ||||||
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Other assets
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5,448 | 4,770 | ||||||
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Total assets
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$ | 709,886 | $ | 343,830 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$ | 9,470 | $ | 22,341 | ||||
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Accrued liabilities
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59,271 | 38,831 | ||||||
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Deferred revenue
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12,106 | 9,731 | ||||||
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Total current liabilities
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80,847 | 70,903 | ||||||
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Deferred tax liability
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13,948 | - | ||||||
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Other liabilities
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6,094 | 3,320 | ||||||
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Total liabilities
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100,889 | 74,223 | ||||||
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Stockholders' equity
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Common stock, $0.0001 par value; 100,000 shares authorized; 34,839 and
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27,957 shares issued and outstanding at December 31, 2011 and
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December 31, 2010, respectively
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4 | 3 | ||||||
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Additional paid-in-capital
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589,067 | 263,726 | ||||||
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Accumulated earnings
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19,926 | 5,878 | ||||||
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Total stockholders' equity
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608,997 | 269,607 | ||||||
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Total liabilities and stockholders' equity
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$ | 709,886 | $ | 343,830 | ||||
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Shutterfly, Inc.
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Consolidated Statement of Cash Flows
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(In thousands)
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(Unaudited)
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Twelve Months Ended
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December 31,
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2011
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2010
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Cash flows from operating activities:
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Net income
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$ | 14,048 | $ | 17,127 | ||||
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Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
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22,316 | 23,429 | ||||||
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Amortization of intangible assets
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12,136 | 2,543 | ||||||
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Stock-based compensation, net of forfeitures
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33,870 | 16,366 | ||||||
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Gain on disposal of property and equipment
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(301 | ) | (345 | ) | ||||
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Deferred income taxes
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(5,766 | ) | 2,021 | |||||
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Tax benefit from stock-based compensation
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8,391 | 5,973 | ||||||
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Excess tax benefits from stock-based compensation
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(8,380 | ) | (5,967 | ) | ||||
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Gain on auction rate securities Rights
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- | (6,266 | ) | |||||
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Loss on auction rate securities
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- | 6,266 | ||||||
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Changes in operating assets and liabilities:
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Accounts receivable, net
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(7,205 | ) | 688 | |||||
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Inventories
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766 | (558 | ) | |||||
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Prepaid expenses and other current assets
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(5,667 | ) | (2,402 | ) | ||||
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Other assets
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(1,402 | ) | 2 | |||||
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Accounts payable
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(16,458 | ) | 8,652 | |||||
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Accrued and other liabilities
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15,030 | 7,504 | ||||||
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Deferred revenue
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1,870 | 1,128 | ||||||
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Net cash provided by operating activities
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63,248 | 76,161 | ||||||
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Cash flows from investing activities:
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Acquisition of business and intangibles, net of cash acquired
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(133,705 | ) | (5,981 | ) | ||||
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Purchases of property and equipment
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(23,149 | ) | (14,405 | ) | ||||
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Capitalization of software and website development costs
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(10,050 | ) | (7,405 | ) | ||||
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Proceeds from sale of equipment
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676 | 2,476 | ||||||
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Proceeds from the sale of auction rate securities
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- | 47,925 | ||||||
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Net cash (used in) provided by investing activities
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(166,228 | ) | 22,610 | |||||
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Cash flows from financing activities:
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Principal payments of capital lease obligations
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(6 | ) | (9 | ) | ||||
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Proceeds from issuance of common stock upon exercise of stock options
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22,277 | 14,703 | ||||||
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Excess tax benefits from stock-based compensation
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8,380 | 5,967 | ||||||
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Net cash provided by financing activities
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30,651 | 20,661 | ||||||
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Net (decrease) increase in cash and cash equivalents
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(72,329 | ) | 119,432 | |||||
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Cash and cash equivalents, beginning of period
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252,244 | 132,812 | ||||||
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Cash and cash equivalents, end of period
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$ | 179,915 | $ | 252,244 | ||||
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Supplemental schedule of non-cash investing activities
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Net change in accrued purchases of property and equipment
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412 | 556 | ||||||
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Shutterfly, Inc.
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User Metrics Disclosure
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Three Months Ended
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Twelve Months Ended
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December 31,
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December 31,
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2011
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2010
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2011
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2010
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User Metrics - Shutterfly
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Customers
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2,800,456 | 2,280,815 | 4,863,944 | 4,069,020 | ||||||||||||
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year-over-year growth
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23 | % | 23 | % | 20 | % | 24 | % | ||||||||
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Orders
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4,572,872 | 3,691,558 | 11,258,967 | 9,203,925 | ||||||||||||
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year-over-year growth
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24 | % | 21 | % | 22 | % | 17 | % | ||||||||
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Average order value
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$ | 43.05 | $ | 44.41 | $ | 32.57 | $ | 32.88 | ||||||||
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year-over-year growth
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-3 | % | 5 | % | -1 | % | 7 | % | ||||||||
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Average orders per customer
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1.6 | x | 1.6 | x | 2.3 | x | 2.3 | x | ||||||||
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Average order value excludes commercial printing revenue.
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Three Months Ended
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Twelve Months Ended
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December 31,
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December 31,
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
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(Pro-Forma)
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User Metrics - Tiny Prints
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Customers
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464,809 | 370,528 | 1,030,221 | 759,417 | ||||||||||||
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year-over-year growth
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25 | % | 36 | % | ||||||||||||
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Orders
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617,071 | 464,755 | 1,417,488 | 919,840 | ||||||||||||
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year-over-year growth
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33 | % | 54 | % | ||||||||||||
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Average order value (excluding 1:1 greeting cards)
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$ | 116.81 | $ | 106.62 | $ | 110.63 | $ | 102.40 | ||||||||
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year-over-year growth
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10 | % | 8 | % | ||||||||||||
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Average orders per customer
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1.3 | x | 1.3 | x | 1.4 | x | 1.2 | x | ||||||||
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Shutterfly, Inc.
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Reconciliation of Forward-Looking Guidance for Non-GAAP Financial Measures to GAAP Measures
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(In millions, except per share amounts)
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Forward-Looking Guidance
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GAAP
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Non-GAAP
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Range of Estimate
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Adjustments
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Range of Estimate
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From
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To
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From
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To
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From
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To
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Three Months Ending March 31, 2012
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Net revenues
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$83.0 | $85.0 | - | - | $83.0 | $85.0 | |||||||||||||||||||||
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Gross profit margin
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42.0% | 43.0% | 2.5% | 2.5% | [a] | 44.5% | 45.5% | ||||||||||||||||||||
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Operating loss
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$(28.0) | $(25.0) | $13.0 | $13.0 | [b] | $(15.0) | $(12.0) | ||||||||||||||||||||
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Operating margin
|
(34%) | (29%) | 16% | 15% | [b] | (18%) | (14%) | ||||||||||||||||||||
|
Stock-based compensation
|
$9.0 | $9.0 | $9.0 | $9.0 | - | - | |||||||||||||||||||||
|
Amortization of intangible assets
|
$4.0 | $4.0 | $4.0 | $4.0 | - | - | |||||||||||||||||||||
|
Adjusted EBITDA*
|
$(8.0) | $(6.5) | |||||||||||||||||||||||||
|
Diluted loss per share
|
$(0.43) | $(0.31) | |||||||||||||||||||||||||
|
Diluted shares
|
35.9 | 35.9 | |||||||||||||||||||||||||
|
Effective tax rate
|
45% | 55% | |||||||||||||||||||||||||
|
Twelve Months Ending December 31, 2012
|
|||||||||||||||||||||||||||
|
Net revenues
|
$550.0 | $560.0 | - | - | $550.0 | $560.0 | |||||||||||||||||||||
|
Gross profit margin
|
52.0% | 54.0% | 1.0% | 2.0% | [c] | 53.0% | $56.0% | ||||||||||||||||||||
|
Operating income
|
$17.0 | $24.0 | $47.0 | $47.0 | [d] | $64.0 | $71.0 | ||||||||||||||||||||
|
Operating margin
|
3% | 4% | 9% | 9% | [d] | 12% | 13% | ||||||||||||||||||||
|
Stock-based compensation
|
$31.4 | $31.4 | $31.4 | $31.4 | - | - | |||||||||||||||||||||
|
Amortization of intangible assets
|
$15.6 | $15.6 | $15.6 | $15.6 | - | - | |||||||||||||||||||||
|
Adjusted EBITDA*
|
$94 | $101 | |||||||||||||||||||||||||
|
Adjusted EBITDA* margin
|
17.0% | 18.0% | |||||||||||||||||||||||||
|
Diluted earnings per share
|
$0.25 | $0.28 | |||||||||||||||||||||||||
|
Diluted shares
|
38.9 | 38.9 | |||||||||||||||||||||||||
|
Effective tax rate
|
45% | 55% | |||||||||||||||||||||||||
|
Capital expenditures - % of net revenues
|
7.0% | 7.5% | |||||||||||||||||||||||||
|
*
|
Adjusted EBITDA is a non-GAAP financial measure defined as earnings before interest, taxes, depreciation, amortization and stock-based compensation.
|
|
[a]
|
Reflects estimated adjustments for stock-based compensation expense of approximately $500k and amortization of purchased intangible assets of approximately $1.4 million.
|
|
[b]
|
Reflects estimated adjustments for stock-based compensation expense of approximately $9.0 million and amortization of purchased intangible assets of approximately $4.0 million
|
|
[c]
|
Reflects estimated adjustments for stock-based compensation expense of approximately $1.7 million and amortization of purchased intangible assets of approximately $6.5 million.
|
|
[d]
|
Reflects estimated adjustments for stock-based compensation expense of approximately $31.4 million and amortization of purchased
|
|
intangible assets of approximately $15.6 million.
|
|
Shutterfly, Inc.
|
||||||||||||||||||||||||||||||||||||||||
|
Reconciliation of GAAP Gross Profit Margin to Non-GAAP Gross Profit Margin
|
||||||||||||||||||||||||||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||
|
Three Months Ended
|
Year Ended
|
|||||||||||||||||||||||||||||||||||||||
|
Mar. 31,
|
Jun. 30,
|
Sep. 30,
|
Dec. 31,
|
Mar. 31,
|
Jun. 30,
|
Sep. 30, |
Dec. 31,
|
Dec. 31,
|
Dec. 31,
|
|||||||||||||||||||||||||||||||
|
2010
|
2010
|
2010
|
2010
|
2011
|
2011
|
2011
|
2011
|
2010
|
2011
|
|||||||||||||||||||||||||||||||
|
GAAP gross profit
|
$ | 23,164 | $ | 23,628 | $ | 24,052 | $ | 102,372 | $ | 27,683 | $ | 35,883 | $ | 34,876 | $ | 155,286 | $ | 173,216 | $ | 253,728 | ||||||||||||||||||||
|
Stock-based compensation
|
131 | 129 | 120 | 128 | 175 | 754 | 584 | 625 | 508 | 2,138 | ||||||||||||||||||||||||||||||
|
Amortization of intangible
assets
|
556 | 552 | 541 | 646 | 611 | 1,345 | 1,417 | 1,425 | 2,295 | 4,798 | ||||||||||||||||||||||||||||||
|
Non-GAAP gross profit
|
$ | 23,851 | $ | 24,309 | $ | 24,713 | $ | 103,146 | $ | 28,469 | $ | 37,982 | $ | 36,877 | $ | 157,336 | $ | 176,019 | $ | 260,664 | ||||||||||||||||||||
|
Non-GAAP gross profit margin
|
52 | % | 52 | % | 50 | % | 62 | % | 50 | % | 50 | % | 48 | % | 60 | % | 57 | % | 55 | % | ||||||||||||||||||||
|
Shutterfly, Inc.
|
||||||||||||||||||||||||||||||||||||||||
|
Reconciliation of GAAP Operating Margin to Non-GAAP Operating Margin
|
||||||||||||||||||||||||||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||
|
Three Months Ended
|
Year Ended
|
|||||||||||||||||||||||||||||||||||||||
|
Mar. 31,
|
Jun. 30,
|
Sep. 30,
|
Dec. 31,
|
Mar. 31,
|
Jun. 30,
|
Sep. 30,
|
Dec. 31,
|
Dec. 31,
|
Dec. 31,
|
|||||||||||||||||||||||||||||||
| 2010 | 2010 | 2010 | 2010 | 2011 | 2011 | 2011 | 2011 | 2010 | 2011 | |||||||||||||||||||||||||||||||
|
GAAP operating income (loss)
|
$ | (7,963 | ) | $ | (9,780 | ) | $ | (7,977 | ) | $ | 50,495 | $ | (12,986 | ) | $ | (21,540 | ) | $ | (22,692 | ) | $ | 72,609 | $ | 24,775 | $ | 15,391 | ||||||||||||||
|
Stock-based compensation
|
4,374 | 4,059 | 3,866 | 4,067 | 5,235 | 12,099 | 9,822 | 6,714 | 16,366 | 33,870 | ||||||||||||||||||||||||||||||
|
Amortization of intangible
assets
|
647 | 642 | 603 | 651 | 719 | 3,487 | 3,961 | 3,969 | 2,543 | 12,136 | ||||||||||||||||||||||||||||||
|
Non-GAAP operating income (loss)
|
$ | (2,942 | ) | $ | (5,079 | ) | $ | (3,508 | ) | $ | 55,213 | $ | (7,032 | ) | $ | (5,954 | ) | $ | (8,909 | ) | $ | 83,292 | $ | 43,684 | $ | 61,397 | ||||||||||||||
|
Non-GAAP operating margin
|
(6 | %) | (11 | %) | (7 | %) | 33 | % | (12 | %) | (8 | %) | (12 | %) | 32 | % | 14 | % | 13 | % | ||||||||||||||||||||
|
Shutterfly, Inc.
|
||||||||||||||||||||||||||||||||||||||||
|
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss)
|
||||||||||||||||||||||||||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||
|
Three Months Ended
|
Year Ended
|
|||||||||||||||||||||||||||||||||||||||
|
Mar. 31,
|
Jun. 30,
|
Sep. 30,
|
Dec. 31,
|
Mar. 31,
|
Jun. 30,
|
Sep. 30,
|
Dec. 31,
|
Dec. 31,
|
Dec. 31,
|
|||||||||||||||||||||||||||||||
| 2010 | 2010 | 2010 | 2010 | 2011 | 2011 | 2011 | 2011 | 2010 | 2011 | |||||||||||||||||||||||||||||||
|
GAAP net income (loss)
|
$ | (4,731 | ) | $ | (5,885 | ) | $ | (4,770 | ) | $ | 32,513 | $ | (7,760 | ) | $ | (3,650 | ) | $ | (9,953 | ) | $ | 35,411 | $ | 17,127 | $ | 14,048 | ||||||||||||||
|
Stock-based compensation
|
4,374 | 4,059 | 3,866 | 4,067 | 5,235 | 12,099 | 9,822 | 6,714 | 16,366 | 33,870 | ||||||||||||||||||||||||||||||
|
Amortization of intangible
assets
|
647 | 642 | 603 | 651 | 719 | 3,487 | 3,961 | 3,969 | 2,543 | 12,136 | ||||||||||||||||||||||||||||||
|
Related income taxes
|
(2,028 | ) | (1,945 | ) | (1,908 | ) | (2,064 | ) | (2,587 | ) | (15,862 | ) | (9,102 | ) | 7,736 | (7,945 | ) | (19,815 | ) | |||||||||||||||||||||
|
Non-GAAP net income (loss)
|
$ | (1,738 | ) | $ | (3,129 | ) | $ | (2,209 | ) | $ | 35,167 | $ | (4,393 | ) | $ | (3,926 | ) | $ | (5,272 | ) | $ | 53,830 | $ | 28,091 | $ | 40,239 | ||||||||||||||
|
Diluted net income (loss) per share:
|
||||||||||||||||||||||||||||||||||||||||
|
GAAP
|
$ | (0.18 | ) | $ | (0.22 | ) | $ | (0.17 | ) | $ | 1.09 | $ | (0.27 | ) | $ | (0.11 | ) | $ | (0.29 | ) | $ | 0.97 | $ | 0.59 | $ | 0.40 | ||||||||||||||
|
Non-GAAP
|
$ | (0.07 | ) | $ | (0.12 | ) | $ | (0.08 | ) | $ | 1.18 | $ | (0.15 | ) | $ | (0.12 | ) | $ | (0.15 | ) | $ | 1.48 | $ | 0.96 | $ | 1.15 | ||||||||||||||
|
Shares used in GAAP and non-
GAAP diluted net income (loss)
|
||||||||||||||||||||||||||||||||||||||||
|
per-share calculation
|
26,238 | 26,952 | 27,292 | 29,924 | 28,674 | 33,160 | 34,576 | 36,490 | 29,249 | 35,007 | ||||||||||||||||||||||||||||||
|
Shutterfly, Inc.
|
||||||||||||||||||||||||||||||||||||||||
|
Reconciliation of GAAP to Non-GAAP Effective Tax Rate
|
||||||||||||||||||||||||||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||
|
Three Months Ended
|
Year Ended
|
|||||||||||||||||||||||||||||||||||||||
|
Mar. 31,
|
Jun. 30,
|
Sep. 30,
|
Dec. 31,
|
Mar. 31,
|
Jun. 30,
|
Sep. 30,
|
Dec. 31,
|
Dec. 31,
|
Dec. 31,
|
|||||||||||||||||||||||||||||||
| 2010 | 2010 | 2010 | 2010 | 2011 | 2011 | 2011 | 2011 | 2010 | 2011 | |||||||||||||||||||||||||||||||
|
GAAP benefit (provision) for income taxes
|
$ | 3,011 | $ | 3,722 | $ | 3,181 | $ | (18,002 | ) | $ | 5,212 | $ | 17,884 | $ | 12,734 | $ | (37,144 | ) | $ | (8,088 | ) | $ | (1,314 | ) | ||||||||||||||||
|
Income taxes associated with
certain non-GAAP entries
|
(2,028 | ) | (1,945 | ) | (1,908 | ) | (2,064 | ) | (2,587 | ) | (15,862 | ) | (9,102 | ) | 7,736 | (7,945 | ) | (19,815 | ) | |||||||||||||||||||||
|
Non-GAAP benefit (provision) for income taxes
|
$ | 983 | $ | 1,777 | $ | 1,273 | $ | (20,066 | ) | $ | 2,625 | $ | 2,022 | $ | 3,632 | $ | (29,408 | ) | $ | (16,033 | ) | $ | (21,129 | ) | ||||||||||||||||
|
GAAP income (loss) before income taxes
|
$ | (7,742 | ) | $ | (9,607 | ) | $ | (7,951 | ) | $ | 50,515 | $ | (12,972 | ) | $ | (21,534 | ) | $ | (22,687 | ) | $ | 72,555 | $ | 25,215 | $ | 15,362 | ||||||||||||||
|
Stock-based compensation
|
4,374 | 4,059 | 3,866 | 4,067 | 5,235 | 12,099 | 9,822 | 6,714 | 16,366 | 33,870 | ||||||||||||||||||||||||||||||
|
Amortization of intangible
assets
|
647 | 642 | 603 | 651 | 719 | 3,487 | 3,961 | 3,969 | 2,543 | 12,136 | ||||||||||||||||||||||||||||||
|
Non-GAAP income (loss) before income taxes
|
$ | (2,721 | ) | $ | (4,906 | ) | $ | (3,482 | ) | $ | 55,233 | $ | (7,018 | ) | $ | (5,948 | ) | $ | (8,904 | ) | $ | 83,238 | $ | 44,124 | $ | 61,368 | ||||||||||||||
|
GAAP effective tax rate
|
39 | % | 39 | % | 40 | % | 36 | % | 40 | % | 83 | % | 56 | % | 51 | % | 32 | % | 9 | % | ||||||||||||||||||||
|
Non-GAAP effective tax rate
|
36 | % | 36 | % | 37 | % | 36 | % | 37 | % | 34 | % | 41 | % | 35 | % | 36 | % | 34 | % | ||||||||||||||||||||
|
Shutterfly, Inc.
|
||||||||||||||||||||||||||||||||||||||||
|
Reconciliation of Net Income (Loss) to Non-GAAP Adjusted EBITDA
|
||||||||||||||||||||||||||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
Three Months Ended
|
Year Ended
|
||||||||||||||||||||||||||||||||||||||
|
Mar. 31,
|
Jun. 30,
|
Sep. 30,
|
Dec. 31,
|
Mar. 31,
|
Jun. 30,
|
Sep. 30,
|
Dec. 31,
|
Dec. 31,
|
Dec. 31,
|
|||||||||||||||||||||||||||||||
| 2010 | 2010 | 2010 | 2010 | 2011 | 2011 | 2011 | 2011 | 2010 | 2011 | |||||||||||||||||||||||||||||||
|
GAAP net income (loss)
|
$ | (4,731 | ) | $ | (5,885 | ) | $ | (4,770 | ) | $ | 32,513 | $ | (7,760 | ) | $ | (3,650 | ) | $ | (9,953 | ) | $ | 35,411 | $ | 17,127 | $ | 14,048 | ||||||||||||||
|
Interest expense
|
21 | 21 | - | - | - | - | - | 64 | 42 | 64 | ||||||||||||||||||||||||||||||
|
Interest and other income, net
|
(242 | ) | (194 | ) | (26 | ) | (20 | ) | (14 | ) | (6 | ) | (5 | ) | (10 | ) | (482 | ) | (35 | ) | ||||||||||||||||||||
|
Tax benefit (provision)
|
(3,011 | ) | (3,722 | ) | (3,181 | ) | 18,002 | (5,212 | ) | (17,884 | ) | (12,734 | ) | 37,144 | 8,088 | 1,314 | ||||||||||||||||||||||||
|
Depreciation and amortization
|
7,020 | 6,949 | 6,321 | 5,682 | 5,833 | 9,159 | 9,534 | 9,926 | 25,972 | 34,452 | ||||||||||||||||||||||||||||||
|
Stock-based compensation
|
4,374 | 4,059 | 3,866 | 4,067 | 5,235 | 12,099 | 9,822 | 6,714 | 16,366 | 33,870 | ||||||||||||||||||||||||||||||
|
Non-GAAP Adjusted EBITDA
|
$ | 3,431 | $ | 1,228 | $ | 2,210 | $ | 60,244 | $ | (1,918 | ) | $ | (282 | ) | $ | (3,336 | ) | $ | 89,249 | $ | 67,113 | $ | 83,713 | |||||||||||||||||
|
Shutterfly, Inc.
|
||||||||||||||||||||||||||||||||||||||||
|
Reconciliation of Cash Flow from Operating Activities to Non-GAAP Adjusted EBITDA and Free Cash Flow
|
||||||||||||||||||||||||||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||
|
Three Months Ended
|
Year Ended
|
|||||||||||||||||||||||||||||||||||||||
|
Mar. 31,
|
Jun. 30,
|
Sep. 30,
|
Dec. 31,
|
Mar. 31,
|
Jun. 30,
|
Sep. 30,
|
Dec. 31,
|
Dec. 31,
|
Dec. 31,
|
|||||||||||||||||||||||||||||||
| 2010 | 2010 | 2010 | 2010 | 2011 | 2011 | 2011 | 2011 | 2010 | 2011 | |||||||||||||||||||||||||||||||
|
Net cash provided by (used in) operating activities
|
$ | (28,264 | ) | $ | 5,101 | $ | 5,271 | $ | 94,053 | $ | (52,849 | ) | $ | (5,165 | ) | $ | (1,577 | ) | $ | 122,839 | $ | 76,161 | $ | 63,248 | ||||||||||||||||
|
Interest expense
|
21 | 21 | - | - | - | - | - | 64 | 42 | 64 | ||||||||||||||||||||||||||||||
|
Interest and other income, net
|
(242 | ) | (194 | ) | (26 | ) | (20 | ) | (14 | ) | (6 | ) | (5 | ) | (10 | ) | (482 | ) | (35 | ) | ||||||||||||||||||||
|
Tax benefit (provision)
|
(3,011 | ) | (3,722 | ) | (3,181 | ) | 18,002 | (5,212 | ) | (17,884 | ) | (12,734 | ) | 37,144 | 8,088 | 1,314 | ||||||||||||||||||||||||
|
Changes in operating assets
and liabilities
|
33,153 | (1,969 | ) | (2 | ) | (46,196 | ) | 55,702 | 23,217 | 8,962 | (74,815 | ) | (15,014 | ) | 13,066 | |||||||||||||||||||||||||
|
Other adjustments
|
1,774 | 1,991 | 148 | (5,595 | ) | 455 | (444 | ) | 2,018 | 4,027 | (1,682 | ) | 6,056 | |||||||||||||||||||||||||||
|
Non-GAAP Adjusted EBITDA
|
3,431 | 1,228 | 2,210 | 60,244 | (1,918 | ) | (282 | ) | (3,336 | ) | 89,249 | 67,113 | 83,713 | |||||||||||||||||||||||||||
|
Less: Purchases of property and equipment
|
(5,534 | ) | (4,010 | ) | (2,729 | ) | (2,688 | ) | (5,446 | ) | (3,811 | ) | (9,310 | ) | (4,994 | ) | (14,961 | ) | (23,561 | ) | ||||||||||||||||||||
|
Less: Capitalized technology & development costs
|
(802 | ) | (1,247 | ) | (2,559 | ) | (2,797 | ) | (2,318 | ) | (2,726 | ) | (2,833 | ) | (2,173 | ) | (7,405 | ) | (10,050 | ) | ||||||||||||||||||||
|
Free cash flow
|
$ | (2,905 | ) | $ | (4,029 | ) | $ | (3,078 | ) | $ | 54,759 | $ | (9,682 | ) | $ | (6,819 | ) | $ | (15,479 | ) | $ | 82,082 | $ | 44,747 | $ | 50,102 | ||||||||||||||