Attached files
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| 8-K - SHUTTERFLY, INC. 8-K - SHUTTERFLY INC | a50797742.htm |
Exhibit 99.01
Shutterfly Announces Fourth Quarter and Full Year 2013 Financial Results
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Fourth Quarter 2013 net revenues increase 17% year-over-year to $410.8 million
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Full Year 2013 net revenues increase 22% year-over-year to $783.6 million
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Full Year 2013 GAAP net income of $0.24 per diluted share
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Record Full Year adjusted EBITDA of $150.4 million, an increase of 17% year-over-year
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52nd consecutive quarter of year-over-year net revenue growth
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REDWOOD CITY, February 5, 2014 -- Shutterfly, Inc. (NASDAQ:SFLY), the leading manufacturer and digital retailer of high-quality personalized products and services offered through a family of lifestyle brands, today announced financial results for the fourth quarter and full year-ended December 31, 2013.
“Q4 was a strong finish to another outstanding year at Shutterfly resulting in record revenue, adjusted EBITDA and free cash flow,” said President and Chief Executive Officer Jeffrey Housenbold. “We executed well against our 2013 strategic plan while simultaneously focusing on the long-term through smart investments in consumer facing programs and back-end infrastructure projects that will provide future scale and scope efficiencies.”
Fourth Quarter 2013 Financial Highlights
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Net revenues totaled $410.8 million, a 17% year-over-year increase.
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Fourth quarter 2013 represents the 52nd consecutive quarter of year-over-year net revenue growth.
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Consumer net revenues totaled $398.6 million, a 16% year-over-year increase.
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Enterprise net revenues totaled $12.2 million, a 48% year-over-year increase.
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Gross profit margin was 59.9% of net revenues, compared to 60.5% in the fourth quarter of 2012.
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Operating expenses, excluding $14.7 million of stock-based compensation, totaled $126.8 million.
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GAAP net income was $43.6 million, compared to $53.0 million in the fourth quarter of 2012.
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GAAP net income per diluted share was $1.10, compared to $1.40 in the fourth quarter of 2012.
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Non-GAAP net income per diluted share was $1.20, compared to $1.40 in the fourth quarter of 2012.
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Adjusted EBITDA was $141.9 million, compared to $127.2 million in the fourth quarter of 2012.
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At December 31, 2013, cash and cash equivalents totaled $499.1 million.
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Full Year 2013 Financial Highlights
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Net revenues totaled $783.6 million, a 22% year-over-year increase.
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Consumer net revenues totaled $746.0 million, a 22% year-over-year increase.
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Enterprise net revenues totaled $37.7 million, a 39% year-over-year increase.
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Gross profit margin was 52.8% of net revenues, compared to 54.0% in 2012.
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Operating expenses, excluding $51.0 million of stock-based compensation, totaled $340.9 million.
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GAAP net income was $9.3 million, compared to $23.0 million in 2012.
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GAAP net income per diluted share was $0.24, compared to $0.61 in 2012.
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Non-GAAP net income per diluted share was $0.38, compared to $0.61 in 2012.
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Adjusted EBITDA was $150.4 million, compared to $128.1 million in 2012.
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Fourth Quarter 2013 Operating Metrics
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Transacting customers totaled 4.7 million, a 10% year-over-year increase.
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Orders totaled 7.7 million, a 12% year-over-year increase.
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Average order value was $51.80, an increase of 4% year-over-year.
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Full Year 2013 Operating Metrics
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Transacting customers totaled 8.1 million, a 15% year-over-year increase.
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Orders totaled 18.6 million, a 14% year-over-year increase.
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Average order value was $40.19, an increase of 7% year-over-year.
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Business Outlook
First Quarter 2014:
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Net revenues to range from $132.0 million to $135.0 million, a year-over-year increase of 13.1% to 15.7%.
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GAAP gross profit margin to range from 44.5% to 45.0% of net revenues.
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Non-GAAP gross profit margin to range from 47.4% to 47.9% of net revenues.
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GAAP operating loss to range from ($41.5) million to ($43.5) million.
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Non-GAAP operating loss to range from ($14.9) million to ($16.9) million.
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GAAP effective tax rate to range from 18.8% to 20.2%.
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GAAP net loss per diluted share to range from ($0.93) to ($0.99).
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Non-GAAP net loss per diluted share to range from ($0.86) to ($0.92).
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Weighted average diluted shares of approximately 38.7 million.
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Adjusted EBITDA to range from a loss of ($1.5) million to income of $0.5 million.
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Full Year 2014:
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Net revenues to range from $900.0 million to $920.0 million, a year-over-year increase of 14.8% to 17.4%.
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Net revenue guidance reflects a reduction of $15 million due to the termination of the Costco relationship.
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GAAP gross profit margin to range from 52.0% to 53.0% of net revenues.
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Non-GAAP gross profit margin to range from 53.7% to 54.6% of net revenues.
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GAAP operating income/(loss) to range from a loss of ($11.5) million to income of $1.7 million.
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Non-GAAP operating income to range from $94.5 million to $109.1 million.
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GAAP effective tax rate to range from 18% to 23%.
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GAAP net loss per diluted share to range from ($0.27) to ($0.55).
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Non-GAAP net loss per diluted share to range from ($0.02) to ($0.28).
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Net loss per share guidance reflects the impact of a full year of depreciation from our expanded and acquired manufacturing facilities and acquired rental assets, increased stock-based compensation, and a full year of intangible amortization from 2013 acquisitions.
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Weighted average diluted shares of approximately 40.8 million.
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Adjusted EBITDA to range from $160.2 million to $174.8 million, or 17.8% to 19.0% of net revenues.
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Capital expenditures to range from 9.5% to 10.5% of net revenues.
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Notes to the Fourth Quarter 2013 and Full Year 2013 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.
Non-GAAP earnings per share is defined as non-GAAP net income (loss), which excludes interest expense related to the Company’s issuance of 0.25% convertible senior notes in May 2013, divided by diluted non-GAAP shares outstanding, which is GAAP diluted weighted average shares outstanding less any shares issuable under the Company’s convertible senior notes.
Consumer category includes net revenues from stationery and greeting cards, photo books, calendars and photo-based merchandise, photo prints, and the related shipping revenues and rental revenue. Consumer also includes net revenues from advertising and sponsorship programs.
Enterprise category includes net revenues primarily from variable, four-color direct marketing collateral manufactured and fulfilled for business customers.
Average Order Value (AOV) is defined as total net revenues (excluding Enterprise) 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 2013 Conference Call
Management will review the fourth quarter and full year 2013 financial results and its expectations for the first quarter and full year 2014 on a conference call on Wednesday, February 5, 2014 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). To listen to the call and view the accompanying slides, please visit http://www.shutterflyinc.com. In the Investor Relations area 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.shutterflyinc.com. A replay of the conference call will be available through Wednesday, February 19, 2014. To hear the replay, please dial (855) 859-2056 or (404) 537-3406, replay passcode 31471397.
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 profit margins, non-GAAP operating income (loss) and the related operating income (loss) margins, adjusted EBITDA, free cash flow, and non-GAAP net income (loss) per share. The method the Company uses to produce non-GAAP financial measures is not computed according to GAAP and may differ from methods used by other companies.
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 gross margins, operating income (loss), net income (loss) or net income (loss) per share determined in accordance with GAAP. For more information, please see Shutterfly's SEC Filings, including the most recent Form 10-K and Form 10-Q, which are available on the Securities and Exchange Commission's Web site at www.sec.gov.
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 statements regarding the Company's growth, customer satisfaction with the Company’s products and services and financial expectations for the first quarter and full year 2014 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; decreased consumer discretionary spending as a result of the macroeconomic environment; the loss of sales partners for our products; our ability to expand our customer base and increase sales to existing customers and meet production requirements; our ability to successfully integrate acquired businesses and assets; 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 innovative, new products and services on a timely and cost-effective basis; consumer acceptance of our products and services; our ability to develop additional adjacent lines of business; unforeseen changes in expense levels; and competition and the pricing strategies of our competitors, which could lead to pricing pressure. 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" section of the Company's most recent Form 10-K and Form 10-Q, 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, Inc.
Shutterfly, Inc. is the leading manufacturer and digital retailer of high-quality personalized products and services offered through a family of lifestyle brands. Founded in 1999, the Shutterfly, Inc. family of brands includes Shutterfly, where your photos come to life in photo books, cards and gifts; Tiny Prints, premium cards and stationery for all life’s occasions; Wedding Paper Divas, wedding invitations and stationery for every step of the planning process; Treat, personalized greeting cards that really stand out; MyPublisher, one of the pioneers in the photo book industry and creator of easy-to-use photo book-making software; ThisLife,a private, cloud-based solution that makes it easy for consumers to find, share and enjoy their photos and videos, all in one place; and BorrowLenses, the premier online marketplace for photographic and video equipment rentals. For more information about Shutterfly, Inc. (NASDAQ:SFLY), visit www.shutterflyinc.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 Statements of Income
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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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2013
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2012
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2013
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2012
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Net revenues
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$ | 410,788 | $ | 351,777 | $ | 783,642 | $ | 640,624 | ||||||||
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Cost of net revenues
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164,716 | 138,965 | 369,593 | 294,857 | ||||||||||||
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Gross profit
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246,072 | 212,812 | 414,049 | 345,767 | ||||||||||||
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Operating expenses:
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Technology and development
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30,963 | 24,770 | 108,995 | 85,746 | ||||||||||||
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Sales and marketing
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80,039 | 62,191 | 189,985 | 148,806 | ||||||||||||
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General and administrative
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30,493 | 24,527 | 93,011 | 70,502 | ||||||||||||
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Total operating expenses
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141,495 | 111,488 | 391,991 | 305,054 | ||||||||||||
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Income from operations
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104,577 | 101,324 | 22,058 | 40,713 | ||||||||||||
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Interest expense
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(3,762 | ) | (141 | ) | (9,446 | ) | (597 | ) | ||||||||
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Interest and other income, net
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127 | 12 | 308 | 42 | ||||||||||||
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Income before income taxes
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100,942 | 101,195 | 12,920 | 40,158 | ||||||||||||
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Provision for income taxes
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(57,293 | ) | (48,168 | ) | (3,635 | ) | (17,160 | ) | ||||||||
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Net income
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$ | 43,649 | $ | 53,027 | $ | 9,285 | $ | 22,998 | ||||||||
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Net income per share
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Basic
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$ | 1.15 | $ | 1.46 | $ | 0.25 | $ | 0.64 | ||||||||
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Diluted
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$ | 1.10 | $ | 1.40 | $ | 0.24 | $ | 0.61 | ||||||||
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Weighted-average shares outstanding
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Basic
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38,097 | 36,232 | 37,680 | 35,826 | ||||||||||||
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Diluted
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39,713 | 37,764 | 39,493 | 37,432 | ||||||||||||
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Stock-based compensation is allocated as follows:
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Cost of net revenues
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$ | 683 | $ | 367 | $ | 2,485 | $ | 1,696 | ||||||||
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Technology and development
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2,634 | 2,170 | 9,477 | 8,635 | ||||||||||||
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Sales and marketing
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5,744 | 3,051 | 19,774 | 11,559 | ||||||||||||
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General and administrative
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6,298 | 4,226 | 21,792 | 15,432 | ||||||||||||
| $ | 15,359 | $ | 9,814 | $ | 53,528 | $ | 37,322 | |||||||||
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Shutterfly, Inc.
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Consolidated Balance Sheets
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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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December 31,
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2013
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2012
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 499,084 | $ | 245,088 | ||||
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Accounts receivable, net
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21,641 | 13,574 | ||||||
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Inventories
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9,629 | 5,032 | ||||||
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Deferred tax asset, current portion
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26,942 | 7,713 | ||||||
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Prepaid expenses and other current assets
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21,260 | 15,268 | ||||||
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Total current assets
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578,556 | 286,675 | ||||||
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Property and equipment, net
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155,727 | 92,667 | ||||||
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Intangible assets, net
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118,621 | 122,269 | ||||||
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Goodwill
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397,306 | 358,349 | ||||||
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Deferred tax asset, net of current portion
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520 | 854 | ||||||
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Other assets
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15,412 | 4,310 | ||||||
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Total assets
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$ | 1,266,142 | $ | 865,124 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$ | 33,656 | $ | 31,503 | ||||
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Accrued liabilities
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107,448 | 88,472 | ||||||
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Deferred revenue
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24,114 | 17,845 | ||||||
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Total current liabilities
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165,218 | 137,820 | ||||||
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Convertible senior notes, net
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243,493 | - | ||||||
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Deferred tax liability
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42,995 | 24,298 | ||||||
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Other liabilities
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26,341 | 11,720 | ||||||
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Total liabilities
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478,047 | 173,838 | ||||||
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Stockholders' equity
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Common stock, $0.0001 par value; 100,000 shares authorized; 38,196 and 36,358 shares
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issued and outstanding at December 31, 2013 and December 31, 2012, respectively
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4 | 4 | ||||||
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Additional paid-in-capital
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771,875 | 652,110 | ||||||
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Accumulated earnings
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16,216 | 39,172 | ||||||
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Total stockholders' equity
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788,095 | 691,286 | ||||||
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Total liabilities and stockholders' equity
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$ | 1,266,142 | $ | 865,124 | ||||
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Shutterfly, Inc.
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Consolidated Statements 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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2013
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2012
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Cash flows from operating activities:
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Net income
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$ | 9,285 | $ | 22,998 | ||||
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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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43,887 | 29,424 | ||||||
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Amortization of intangible assets
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30,969 | 20,685 | ||||||
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Amortization of debt discount and transaction costs
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7,707 | - | ||||||
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Stock-based compensation, net of forfeitures
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53,528 | 37,322 | ||||||
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(Gain) / Loss on disposal of property and equipment
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13 | (861 | ) | |||||
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Deferred income taxes
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331 | 54 | ||||||
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Tax benefit from stock-based compensation
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2,957 | 14,619 | ||||||
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Excess tax benefits from stock-based compensation
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(3,635 | ) | (16,622 | ) | ||||
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Changes in operating assets and liabilities:
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Accounts receivable, net
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(7,174 | ) | (577 | ) | ||||
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Inventories
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(3,681 | ) | (1,306 | ) | ||||
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Prepaid expenses and other current assets
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(4,347 | ) | (1,399 | ) | ||||
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Other assets
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(7,669 | ) | 212 | |||||
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Accounts payable
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3,583 | 15,230 | ||||||
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Accrued and other liabilities
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16,089 | 26,610 | ||||||
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Deferred revenue
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5,258 | 5,739 | ||||||
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Other non-current liabilities
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167 | (747 | ) | |||||
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Net cash provided by operating activities
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147,268 | 151,381 | ||||||
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Cash flows from investing activities:
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Acquisition of business and intangible assets, net of cash acquired
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(76,893 | ) | (57,212 | ) | ||||
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Purchases of property and equipment
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(62,582 | ) | (40,535 | ) | ||||
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Capitalization of software and website development costs
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(15,760 | ) | (12,528 | ) | ||||
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Proceeds from sale of equipment
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388 | 986 | ||||||
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Net cash used in investing activities
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(154,847 | ) | (109,289 | ) | ||||
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Cash flows from financing activities:
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Proceeds from borrowings of convertible senior notes, net of issuance costs
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291,897 | - | ||||||
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Proceeds from issuance of warrants
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43,560 | - | ||||||
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Purchase of convertible note hedge
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(63,510 | ) | - | |||||
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Proceeds from issuance of common stock upon exercise of stock options
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19,112 | 10,211 | ||||||
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Repurchases of common stock
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(32,241 | ) | (3,752 | ) | ||||
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Excess tax benefits from stock-based compensation
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3,635 | 16,622 | ||||||
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Principal payments of capital lease obligations
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(878 | ) | - | |||||
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Net cash provided by financing activities
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261,575 | 23,081 | ||||||
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Net increase in cash and cash equivalents
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253,996 | 65,173 | ||||||
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Cash and cash equivalents, beginning of period
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245,088 | 179,915 | ||||||
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Cash and cash equivalents, end of period
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$ | 499,084 | $ | 245,088 | ||||
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Supplemental schedule of non-cash activities
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Net increase/ (decrease) in accrued purchases of property and equipment
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$ | (3,372 | ) | $ | 7,694 | |||
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Increase in estimated fair market value of building under build-to-suit lease
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10,080 | 6,372 | ||||||
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Shutterfly, Inc.
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Consumer 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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2013
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2012
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2013
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2012
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Consumer Metrics
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Customers
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4,652,682 | 4,227,247 | 8,094,038 | 7,062,001 | ||||||||||||
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year-over-year growth
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10 | % | 15 | % | ||||||||||||
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Orders
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7,693,863 | 6,897,969 | 18,561,022 | 16,321,828 | ||||||||||||
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year-over-year growth
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12 | % | 14 | % | ||||||||||||
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Average order value*
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$ | 51.80 | $ | 49.80 | $ | 40.19 | $ | 37.58 | ||||||||
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year-over-year growth
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4 | % | 7 | % | ||||||||||||
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* Average order value excludes Enterprise revenue.
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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, 2014
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Net revenues
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$ | 132.0 | $ | 135.0 | - | - | $ | 132.0 | $ | 135.0 | ||||||||||||||
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Gross profit margin
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44.5 | % | 45.0 | % | 2.9 | % | 2.9 | % | [a] | 47.4 | % | 47.9 | % | |||||||||||
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Operating loss
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$ | (43.5 | ) | $ | (41.5 | ) | $ | 26.6 | $ | 26.6 | [b] | $ | (16.9 | ) | $ | (14.9 | ) | |||||||
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Operating margin
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(33 | %) | (31 | %) | 20 | % | 20 | % | [b] | (13 | %) | (11 | %) | |||||||||||
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Stock-based compensation
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$ | 18.0 | $ | 18.0 | $ | 18.0 | $ | 18.0 | - | - | ||||||||||||||
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Amortization of intangible assets
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$ | 8.6 | $ | 8.6 | $ | 8.6 | $ | 8.6 | - | - | ||||||||||||||
|
Adjusted EBITDA*
|
$ | (1.5 | ) | $ | 0.5 | |||||||||||||||||||
|
Diluted loss per share
|
$ | (0.99 | ) | $ | (0.93 | ) | $ | 0.07 | $ | 0.07 | [e] | $ | (0.92 | ) | $ | (0.86 | ) | |||||||
|
Diluted shares
|
38.7 | 38.7 | ||||||||||||||||||||||
|
Effective tax rate
|
18.8 | % | 20.2 | % | ||||||||||||||||||||
|
Twelve Months Ending December 31, 2014
|
||||||||||||||||||||||||
|
Net revenues
|
$ | 900.0 | $ | 920.0 | - | - | $ | 900.0 | $ | 920.0 | ||||||||||||||
|
Gross profit margin
|
52.0 | % | 53.0 | % | 1.7 | % | 1.6 | % | [c] | 53.7 | % | 54.6 | % | |||||||||||
|
Operating income / (loss)
|
$ | (11.5 | ) | $ | 1.7 | $ | 106.0 | $ | 107.5 | [d] | $ | 94.5 | $ | 109.1 | ||||||||||
|
Operating margin
|
(1 | %) | 0 | % | 12 | % | 12 | % | [d] | 11 | % | 12 | % | |||||||||||
|
Stock-based compensation
|
$ | 72.5 | $ | 72.5 | $ | 72.5 | $ | 72.5 | - | - | ||||||||||||||
|
Amortization of intangible assets
|
$ | 33.5 | $ | 35.0 | $ | 33.5 | $ | 35.0 | - | - | ||||||||||||||
|
Adjusted EBITDA*
|
$ | 160.2 | $ | 174.8 | ||||||||||||||||||||
|
Adjusted EBITDA* margin
|
17.8 | % | 19.0 | % | ||||||||||||||||||||
|
Diluted loss per share
|
$ | (0.55 | ) | $ | (0.27 | ) | $ | 0.27 | $ | 0.26 | [f] | $ | (0.28 | ) | $ | (0.02 | ) | |||||||
|
Diluted shares
|
40.8 | 40.8 | ||||||||||||||||||||||
|
Effective tax rate
|
18 | % | 23 | % | ||||||||||||||||||||
|
Capital expenditures - % of net revenues
|
9.5 | % | 10.5 | % | ||||||||||||||||||||
|
*
|
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 $1.0 million and amortization of purchased intangible assets of approximately $2.8 million.
|
|
[b]
|
Reflects estimated adjustments for stock-based compensation expense of approximately $18.0 million and amortization of purchased intangible assets of approximately $8.6 million
|
|
[c]
|
Reflects estimated adjustments for stock-based compensation expense of approximately $3.7 million and amortization of purchased intangible assets of approximately $11.3 million.
|
|
[d]
|
Reflects estimated adjustments for stock-based compensation expense of approximately $72.5 million and amortization of purchased intangible assets of approximately $33.5 million to $35.0 million.
|
|
[e]
|
Reflects estimated adjustments for interest expense of approximately $2.7 million, net of tax.
|
|
[f]
|
Reflects estimated adjustments for interest expense of approximately $10.5 million to $11.2 million, net of tax.
|
|
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,
|
|||||||||||||||||||||||||||||||
|
2012
|
2012
|
2012
|
2012
|
2013
|
2013
|
2013
|
2013
|
2012
|
2013
|
|||||||||||||||||||||||||||||||
|
GAAP gross profit
|
$ | 41,238 | $ | 48,310 | $ | 43,407 | $ | 212,812 | $ | 54,855 | $ | 61,745 | $ | 51,377 | $ | 246,072 | $ | 345,767 | $ | 414,049 | ||||||||||||||||||||
|
Stock-based compensation
|
462 | 443 | 424 | 367 | 564 | 592 | 646 | 683 | 1,696 | 2,485 | ||||||||||||||||||||||||||||||
|
Amortization of intangible assets
|
1,454 | 1,516 | 1,570 | 1,856 | 2,390 | 2,608 | 2,685 | 2,800 | 6,396 | 10,483 | ||||||||||||||||||||||||||||||
|
Non-GAAP gross profit
|
$ | 43,154 | $ | 50,269 | $ | 45,401 | $ | 215,035 | $ | 57,809 | $ | 64,945 | $ | 54,708 | $ | 249,555 | $ | 353,859 | $ | 427,017 | ||||||||||||||||||||
|
Non-GAAP gross profit margin
|
47 | % | 51 | % | 46 | % | 61 | % | 50 | % | 49 | % | 45 | % | 61 | % | 55 | % | 54 | % | ||||||||||||||||||||
|
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,
|
|||||||||||||||||||||||||||||||
|
2012
|
2012
|
2012
|
2012
|
2013
|
2013
|
2013
|
2013
|
2012
|
2013
|
|||||||||||||||||||||||||||||||
|
GAAP operating income (loss)
|
$ | (19,080 | ) | $ | (17,786 | ) | $ | (23,745 | ) | $ | 101,324 | $ | (23,964 | ) | $ | (23,933 | ) | $ | (34,622 | ) | $ | 104,577 | $ | 40,713 | $ | 22,058 | ||||||||||||||
|
Stock-based compensation
|
9,617 | 9,526 | 8,365 | 9,814 | 11,538 | 12,649 | 13,982 | 15,359 | 37,322 | 53,528 | ||||||||||||||||||||||||||||||
|
Amortization of intangible assets
|
4,013 | 5,090 | 5,658 | 5,924 | 6,511 | 7,539 | 8,189 | 8,730 | 20,685 | 30,969 | ||||||||||||||||||||||||||||||
|
Non-GAAP operating income (loss)
|
$ | (5,450 | ) | $ | (3,170 | ) | $ | (9,722 | ) | $ | 117,062 | $ | (5,915 | ) | $ | (3,745 | ) | $ | (12,451 | ) | $ | 128,666 | $ | 98,720 | $ | 106,555 | ||||||||||||||
|
Non-GAAP operating margin
|
(6 | %) | (3 | %) | (10 | %) | 33 | % | (5 | %) | (3 | %) | (10 | %) | 31 | % | 15 | % | 14 | % | ||||||||||||||||||||
|
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,
|
|||||||||||||||||||||||||||||||
|
2012
|
2012
|
2012
|
2012
|
2013
|
2013
|
2013
|
2013
|
2012
|
2013
|
|||||||||||||||||||||||||||||||
|
GAAP net income (loss)
|
$ | (10,040 | ) | $ | (9,511 | ) | $ | (10,478 | ) | $ | 53,027 | $ | (12,405 | ) | $ | (11,811 | ) | $ | (10,148 | ) | $ | 43,649 | $ | 22,998 | $ | 9,285 | ||||||||||||||
|
Interest expense
|
152 | 156 | 148 | 141 | 139 | 1,936 | 3,609 | 3,762 | 597 | 9,446 | ||||||||||||||||||||||||||||||
|
Interest and other income, net
|
(7 | ) | (9 | ) | (14 | ) | (12 | ) | (7 | ) | (35 | ) | (139 | ) | (127 | ) | (42 | ) | (308 | ) | ||||||||||||||||||||
|
Tax (benefit) provision
|
(9,185 | ) | (8,422 | ) | (13,401 | ) | 48,168 | (11,691 | ) | (14,023 | ) | (27,944 | ) | 57,293 | 17,160 | 3,635 | ||||||||||||||||||||||||
|
Depreciation and amortization
|
10,024 | 11,820 | 12,244 | 16,021 | 15,738 | 17,580 | 19,573 | 21,965 | 50,109 | 74,856 | ||||||||||||||||||||||||||||||
|
Stock-based compensation
|
9,617 | 9,526 | 8,365 | 9,814 | 11,538 | 12,649 | 13,982 | 15,359 | 37,322 | 53,528 | ||||||||||||||||||||||||||||||
|
Non-GAAP Adjusted EBITDA
|
$ | 561 | $ | 3,560 | $ | (3,136 | ) | $ | 127,159 | $ | 3,312 | $ | 6,296 | $ | (1,067 | ) | $ | 141,901 | $ | 128,144 | $ | 150,442 | ||||||||||||||||||
|
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,
|
|||||||||||||||||||||||||||||||
|
2012
|
2012
|
2012
|
2012
|
2013
|
2013
|
2013
|
2013
|
2012
|
2013
|
|||||||||||||||||||||||||||||||
|
Net cash provided by (used in) operating activities
|
$ | (47,961 | ) | $ | 9,339 | $ | (3,568 | ) | $ | 193,571 | $ | (83,504 | ) | $ | 11,923 | $ | 309 | $ | 218,540 | $ | 151,381 | $ | 147,268 | |||||||||||||||||
|
Interest expense
|
152 | 156 | 148 | 141 | 139 | 1,936 | 3,609 | 3,762 | 597 | 9,446 | ||||||||||||||||||||||||||||||
|
Interest and other income, net
|
(7 | ) | (9 | ) | (14 | ) | (12 | ) | (7 | ) | (35 | ) | (139 | ) | (127 | ) | (42 | ) | (308 | ) | ||||||||||||||||||||
|
Tax (benefit) provision
|
(9,185 | ) | (8,422 | ) | (13,401 | ) | 48,168 | (11,691 | ) | (14,023 | ) | (27,944 | ) | 57,293 | 17,160 | 3,635 | ||||||||||||||||||||||||
|
Changes in operating assets and liabilities
|
55,912 | 739 | 11,482 | (111,895 | ) | 101,426 | 2,555 | 19,961 | (126,168 | ) | (43,762 | ) | (2,226 | ) | ||||||||||||||||||||||||||
|
Other adjustments
|
1,650 | 1,757 | 2,217 | (2,814 | ) | (3,051 | ) | 3,940 | 3,137 | (11,399 | ) | 2,810 | (7,373 | ) | ||||||||||||||||||||||||||
|
Non-GAAP Adjusted EBITDA
|
561 | 3,560 | (3,136 | ) | 127,159 | 3,312 | 6,296 | (1,067 | ) | 141,901 | 128,144 | 150,442 | ||||||||||||||||||||||||||||
|
Less: Purchases of property and equipment
|
(6,499 | ) | (12,264 | ) | (16,628 | ) | (12,838 | ) | (10,832 | ) | (15,869 | ) | (20,343 | ) | (12,166 | ) | (48,229 | ) | (59,210 | ) | ||||||||||||||||||||
|
Less: Capitalized technology & development costs
|
(3,072 | ) | (2,801 | ) | (3,730 | ) | (2,925 | ) | (3,495 | ) | (4,255 | ) | (4,307 | ) | (3,703 | ) | (12,528 | ) | (15,760 | ) | ||||||||||||||||||||
|
Free cash flow
|
$ | (9,010 | ) | $ | (11,505 | ) | $ | (23,494 | ) | $ | 111,396 | $ | (11,015 | ) | $ | (13,828 | ) | $ | (25,717 | ) | $ | 126,032 | $ | 67,387 | $ | 75,472 | ||||||||||||||
|
Shutterfly, Inc.
|
||||||||||||||||||||||||||||||||||||||||
|
Reconciliation of Net Income/(Loss) per Share to Non-GAAP Net Income/(Loss) per Share
|
||||||||||||||||||||||||||||||||||||||||
|
(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,
|
|||||||||||||||||||||||||||||||
|
2012
|
2012
|
2012
|
2012
|
2013
|
2013
|
2013
|
2013
|
2012
|
2013
|
|||||||||||||||||||||||||||||||
|
GAAP net income (loss)
|
$ | (10,040 | ) | $ | (9,511 | ) | $ | (10,478 | ) | $ | 53,027 | $ | (12,405 | ) | $ | (11,811 | ) | $ | (10,148 | ) | $ | 43,649 | $ | 22,998 | $ | 9,285 | ||||||||||||||
|
Add back interest expense related to:
|
||||||||||||||||||||||||||||||||||||||||
|
Amortization of debt discount
|
- | - | - | - | - | 1,401 | 2,771 | 2,830 | - | 7,002 | ||||||||||||||||||||||||||||||
|
Amortization of debt issuance costs
|
- | - | - | - | - | 160 | 260 | 285 | - | 705 | ||||||||||||||||||||||||||||||
|
0.25% coupon
|
- | - | - | - | - | 93 | 188 | 188 | - | 469 | ||||||||||||||||||||||||||||||
|
Tax effect
|
- | - | - | - | - | (770 | ) | (2,046 | ) | 516 | - | (2,300 | ) | |||||||||||||||||||||||||||
|
Non-GAAP net income (loss)
|
$ | (10,040 | ) | $ | (9,511 | ) | $ | (10,478 | ) | $ | 53,027 | $ | (12,405 | ) | $ | (10,927 | ) | $ | (8,975 | ) | $ | 47,468 | $ | 22,998 | $ | 15,161 | ||||||||||||||
|
GAAP diluted shares outstanding
|
35,199 | 35,812 | 36,062 | 37,764 | 37,034 | 37,775 | 37,814 | 39,713 | 37,432 | 39,493 | ||||||||||||||||||||||||||||||
|
Add back:
|
||||||||||||||||||||||||||||||||||||||||
|
Dilutive effect of convertible notes
|
- | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
|
Non-GAAP diluted shares outstanding
|
35,199 | 35,812 | 36,062 | 37,764 | 37,034 | 37,775 | 37,814 | 39,713 | 37,432 | 39,493 | ||||||||||||||||||||||||||||||
|
GAAP net income (loss) per share
|
$ | (0.29 | ) | $ | (0.27 | ) | $ | (0.29 | ) | $ | 1.40 | $ | (0.33 | ) | $ | (0.31 | ) | $ | (0.27 | ) | $ | 1.10 | $ | 0.61 | $ | 0.24 | ||||||||||||||
|
Non-GAAP net income (loss) per share
|
$ | (0.29 | ) | $ | (0.27 | ) | $ | (0.29 | ) | $ | 1.40 | $ | (0.33 | ) | $ | (0.29 | ) | $ | (0.24 | ) | $ | 1.20 | $ | 0.61 | $ | 0.38 | ||||||||||||||