[July 27, 2016] |
|
Shutterfly Announces Second Quarter 2016 Financial Results
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 second quarter ended June 30, 2016.
"We're pleased with our second quarter results," said Christopher North,
President and CEO. "Our performance was led by our flagship Shutterfly
brand and continued strength in our SBS business. The team continues to
make solid progress on Shutterfly 3.0, both in mobile and in migrating
customers to the All New Shutterfly. Lastly, I'm delighted to have
joined the Shutterfly team eight weeks ago, and look forward to working
with the team as we enter the next phase of our growth."
Second Quarter 2016 Financial Highlights
-
Net revenues totaled $204.0 million, an 11% year-over-year increase.
-
Consumer net revenues totaled $176.6 million, a 3% year-over-year
increase.
-
Shutterfly Business Solutions net revenues totaled $27.4 million,
a 117% year-over year increase.
-
Excluding a flash deal deferred revenue breakage catch-up in the
second quarter of 2015, net revenues increased 16% year-over-year.
-
Excluding flash deal deferred revenue breakage in the second
quarter of 2015, consumer net revenues increased 8% year-over-year.
-
Gross profit margin was 46.3% of net revenues, compared to 47.4% in
the second quarter of 2015.
-
Excluding the effect of the flash deal deferred revenue breakage
in the second quarter of 2015, gross profit margin was up 110
basis points year-over-year.
-
Operating expenses totaled $115.4 million compared to $115.6 million
in the second quarter of 2015.
-
Excluding marketing expenses related to the flash deal deferred
revenue breakage in the second quarter of 2015, total operating
expenses increased 3% year-over-year.
-
Operating loss totaled $(21.1) million compared to a loss of $(28.4)
million in the second quarter of 2015.
-
Net loss was $(16.5) million, compared to $(23.8) million in the
second quarter of 2015.
-
Net loss per share was $(0.48), compared to $(0.63) in the second
quarter of 2015.
-
Adjusted EBITDA was $18.2 million, compared to $15.6 million in the
second quarter of 2015. Excluding the effect of the flash deal
deferred revenue breakage in the second quarter of 2015 of $4 million,
adjusted EBITDA increased 58%.
-
At June 30, 2016, cash and investments totaled $149.3 million.
-
In the second quarter of 2016, the Company repurchased 658,988 shares
for $30.7 million, at an average price of $46.61 under its share
repurchase program. As of June 30, 2016, $117.1 million remained
authorized under the repurchase program.
Second Quarter 2016 Consumer Operating Metrics
-
Transacting customers totaled 3.3 million, an increase of 4%
year-over-year.
-
Orders totaled 5.3 million, an increase of 5% year-over-year.
-
Average order value was $33.30, an increase of 2% year-over-year.
Business Outlook
Third Quarter 2016:
-
Net revenues to range from $179.2 million to $185.9 million, a
year-over-year increase of 7.0% to 11.0%.
-
Gross profit margin to range from 36.7% to 37.8% of net revenues.
-
Operating loss to range from $(44.2) million to $(47.7) million.
-
Effective tax rate of 38.5%.
-
Net loss per share to range from $(0.90) to $(0.97).
-
Weighted average shares of approximately 34.0 million.
-
Adjusted EBITDA loss to range from $(1.0) million to $(4.0) million.
Full Year 2016:
-
Net revenues to range from $1.130 billion to $1.160 billion, a
year-over-year increase of 6.7% to 9.5%.
-
Gross profit margin to range from 51.3% to 51.7% of net revenues.
-
Operating income to range from $40.8 million to $55.6 million.
-
Effective tax rate to range from 38.5% to 39.5%.
-
Net income per share to range from $0.31 to $0.58.
-
Weighted average shares of approximately 35.3 million.
-
Adjusted EBITDA to range from $210.0 million to $222.9 million, or
18.6% to 19.2% of net revenues.
-
Free cash flow, defined as adjusted EBITDA less capital expenditures,
to range from $130.0 million to $132.9 million.
-
Capital expenditures to range from 7.1% to 7.8% of net revenues.
Notes to the Second Quarter 2016 Financial Results and Operating
Metrics and 2016 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.
Consumer segment 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.
Shutterfly Business Solutions (SBS) 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
SBS) 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.
Second Quarter Conference Call
Management will review the second quarter 2016 financial results and its
expectations for the third quarter and full year 2016 on a conference
call on Wednesday, July 27, 2016 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 (888) 317-6003 or (412) 317-6061, and enter the
conference access code 8724055. The webcast will be archived and
available at http://www.shutterflyinc.com
in the investor relations section. A replay of the conference call will
be available through Wednesday, August 10, 2016. To hear the replay,
please dial (877) 344-7529 or (412) 317-0088, and enter access code
10088423.
Non-GAAP Financial Information
This press release contains non-GAAP financial measures. Tables are
provided at the end of this press release that reconcile the non-GAAP
financial measures that the Company uses 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 margin, non-GAAP operating income (loss) and
operating margin, adjusted EBITDA, and free cash flow. 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), or net income (loss)
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, that
involve risks and uncertainties. These forward-looking statements
include statements regarding the Company's growth and financial
expectations for the third quarter and full year 2016 set forth under
the caption "Business Outlook," and statements about historical results
that may suggest trends for our business. 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;
changes in 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, 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 and implement innovative, new products and services
on a timely and cost-effective basis, including our next generation
Shutterfly platform; consumer acceptance of our products and services;
our ability to develop additional adjacent lines of business; unforeseen
changes in expense levels; and competition and 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 website
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; MyPublisher,
one of the pioneers in the photo book industry and creator of
easy-to-use photo book-making software; BorrowLenses,
the premier online marketplace for photographic and video equipment
rentals; and GrooveBook,
an iPhone
and Android
app and subscription service that prints up to 100 mobile phone photos
in a GrooveBook and mails it to customers every month. For more
information about Shutterfly, Inc. (SFLY),
visit www.shutterflyinc.com.
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Shutterfly, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
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June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
203,961
|
|
|
$
|
183,879
|
|
|
$
|
385,670
|
|
|
$
|
343,857
|
|
Cost of net revenues
|
|
109,592
|
|
|
96,647
|
|
|
218,315
|
|
|
191,354
|
|
Gross profit
|
|
94,369
|
|
|
87,232
|
|
|
167,355
|
|
|
152,503
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Technology and development
|
|
41,313
|
|
|
36,502
|
|
|
79,582
|
|
|
73,862
|
|
Sales and marketing
|
|
47,539
|
|
|
50,446
|
|
|
93,381
|
|
|
94,976
|
|
General and administrative
|
|
26,592
|
|
|
28,676
|
|
|
57,281
|
|
|
58,281
|
|
Total operating expenses
|
|
115,444
|
|
|
115,624
|
|
|
230,244
|
|
|
227,119
|
|
Loss from operations
|
|
(21,075
|
)
|
|
(28,392
|
)
|
|
(62,889
|
)
|
|
(74,616
|
)
|
Interest expense
|
|
(5,661
|
)
|
|
(4,985
|
)
|
|
(11,336
|
)
|
|
(9,721
|
)
|
Interest and other income, net
|
|
128
|
|
|
120
|
|
|
249
|
|
|
222
|
|
Loss before income taxes
|
|
(26,608
|
)
|
|
(33,257
|
)
|
|
(73,976
|
)
|
|
(84,115
|
)
|
Benefit from income taxes
|
|
10,123
|
|
|
9,480
|
|
|
28,055
|
|
|
15,235
|
|
Net loss
|
|
$
|
(16,485
|
)
|
|
$
|
(23,777
|
)
|
|
$
|
(45,921
|
)
|
|
$
|
(68,880
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share - basic and diluted
|
|
$
|
(0.48
|
)
|
|
$
|
(0.63
|
)
|
|
$
|
(1.34
|
)
|
|
$
|
(1.82
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding - basic and diluted
|
|
34,177
|
|
|
37,537
|
|
|
34,386
|
|
|
37,753
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation is allocated as follows:
|
|
|
|
|
|
|
|
|
Cost of net revenues
|
|
$
|
1,081
|
|
|
$
|
1,001
|
|
|
$
|
2,305
|
|
|
$
|
2,193
|
|
Technology and development
|
|
2,512
|
|
|
3,309
|
|
|
2,971
|
|
|
5,301
|
|
Sales and marketing
|
|
3,754
|
|
|
5,654
|
|
|
8,033
|
|
|
11,873
|
|
General and administrative
|
|
3,577
|
|
|
6,351
|
|
|
7,765
|
|
|
14,708
|
|
|
|
$
|
10,924
|
|
|
$
|
16,315
|
|
|
$
|
21,074
|
|
|
$
|
34,075
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization is allocated as follows:
|
|
|
|
|
|
|
|
|
Cost of net revenues
|
|
$
|
13,842
|
|
|
$
|
12,697
|
|
|
$
|
27,384
|
|
|
$
|
25,376
|
|
Technology and development
|
|
8,430
|
|
|
8,010
|
|
|
16,823
|
|
|
15,840
|
|
Sales and marketing
|
|
3,694
|
|
|
4,779
|
|
|
8,409
|
|
|
9,681
|
|
General and administrative
|
|
2,391
|
|
|
2,220
|
|
|
4,855
|
|
|
4,403
|
|
|
|
$
|
28,357
|
|
|
$
|
27,706
|
|
|
$
|
57,471
|
|
|
$
|
55,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Shutterfly, Inc.
Consolidated Balance Sheets
(In thousands, except par value amounts)
(Unaudited)
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
2016
|
|
2015
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
99,249
|
|
|
$
|
288,863
|
|
Short-term investments
|
|
31,564
|
|
|
22,918
|
|
Accounts receivable, net
|
|
28,946
|
|
|
55,222
|
|
Inventories
|
|
11,515
|
|
|
13,466
|
|
Prepaid expenses and other current assets
|
|
67,595
|
|
|
31,828
|
|
Total current assets
|
|
238,869
|
|
|
412,297
|
|
Long-term investments
|
|
18,504
|
|
|
29,005
|
|
Property and equipment, net
|
|
267,846
|
|
|
281,779
|
|
Intangible assets, net
|
|
51,763
|
|
|
62,323
|
|
Goodwill
|
|
408,975
|
|
|
408,975
|
|
Other assets
|
|
12,838
|
|
|
10,948
|
|
Total assets
|
|
$
|
998,795
|
|
|
$
|
1,205,327
|
|
|
|
|
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LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
11,642
|
|
|
$
|
35,329
|
|
Accrued liabilities
|
|
71,522
|
|
|
149,134
|
|
Deferred revenue, current portion
|
|
25,243
|
|
|
27,329
|
|
Total current liabilities
|
|
108,407
|
|
|
211,792
|
|
Convertible senior notes, net
|
|
271,476
|
|
|
264,361
|
|
Other liabilities
|
|
110,078
|
|
|
123,112
|
|
Total liabilities
|
|
489,961
|
|
|
599,265
|
|
Stockholders' equity:
|
|
|
|
|
Common stock, $0.0001 par value; 100,000 shares authorized; 33,950
and 34,777 shares issued and outstanding on June 30, 2016 and
December 31, 2015, respectively
|
|
3
|
|
|
4
|
|
Additional paid-in capital
|
|
926,956
|
|
|
900,218
|
|
Accumulated other comprehensive income (loss)
|
|
60
|
|
|
(68
|
)
|
Accumulated deficit
|
|
(418,185
|
)
|
|
(294,092
|
)
|
Total stockholders' equity
|
|
508,834
|
|
|
606,062
|
|
Total liabilities and stockholders' equity
|
|
$
|
998,795
|
|
|
$
|
1,205,327
|
|
|
|
|
|
|
|
|
|
|
Shutterfly, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
|
|
|
|
|
Six Months Ended
|
|
|
June 30,
|
|
|
2016
|
|
2015
|
Cash flows from operating activities:
|
|
|
|
|
Net loss
|
|
$
|
(45,921
|
)
|
|
$
|
(68,880
|
)
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
Depreciation and amortization
|
|
46,278
|
|
|
40,881
|
|
Amortization of intangible assets
|
|
11,193
|
|
|
14,419
|
|
Amortization of debt discount and transaction costs
|
|
7,115
|
|
|
6,728
|
|
Stock-based compensation
|
|
21,074
|
|
|
34,075
|
|
Loss on disposal of property and equipment
|
|
324
|
|
|
498
|
|
Deferred income taxes
|
|
(3,567
|
)
|
|
(6,623
|
)
|
Tax benefit from stock-based compensation
|
|
4,021
|
|
|
13,986
|
|
Excess tax benefits from stock-based compensation
|
|
(5,233
|
)
|
|
(14,372
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
26,277
|
|
|
6,962
|
|
Inventories
|
|
1,951
|
|
|
2,552
|
|
Prepaid expenses and other assets
|
|
(34,045
|
)
|
|
(20,563
|
)
|
Accounts payable
|
|
(18,970
|
)
|
|
(17,753
|
)
|
Accrued and other liabilities
|
|
(77,504
|
)
|
|
(77,470
|
)
|
Net cash used in operating activities
|
|
(67,007
|
)
|
|
(85,560
|
)
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
Purchases of property and equipment
|
|
(33,067
|
)
|
|
(28,935
|
)
|
Capitalization of software and website development costs
|
|
(18,083
|
)
|
|
(9,297
|
)
|
Purchases of investments
|
|
(15,936
|
)
|
|
(4,400
|
)
|
Proceeds from the maturities of investments
|
|
17,890
|
|
|
32,358
|
|
Proceeds from sale of property and equipment
|
|
10,247
|
|
|
265
|
|
Net cash used in investing activities
|
|
(38,949
|
)
|
|
(10,009
|
)
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
Proceeds from issuance of common stock upon exercise of stock options
|
|
685
|
|
|
2,312
|
|
Repurchases of common stock
|
|
(78,172
|
)
|
|
(87,757
|
)
|
Excess tax benefits from stock-based compensation
|
|
5,233
|
|
|
14,372
|
|
Principal payments of capital lease and financing obligations
|
|
(11,404
|
)
|
|
(5,347
|
)
|
Prepayment of accelerated share repurchase
|
|
-
|
|
|
(75,000
|
)
|
Net cash used in financing activities
|
|
(83,658
|
)
|
|
(151,420
|
)
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
(189,614
|
)
|
|
(246,989
|
)
|
Cash and cash equivalents, beginning of period
|
|
288,863
|
|
|
380,543
|
|
Cash and cash equivalents, end of period
|
|
$
|
99,249
|
|
|
$
|
133,554
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental schedule of non-cash investing / financing
activities:
|
|
|
|
|
Net increase (decrease) in accrued purchases of property and
equipment
|
|
$
|
(5,565
|
)
|
|
$
|
2,242
|
|
Net increase in accrued capitalized software and website development
costs
|
|
137
|
|
|
161
|
|
Stock-based compensation capitalized with software and website
development costs
|
|
959
|
|
|
673
|
|
Increase in estimated fair market value of buildings under
build-to-suit leases
|
|
-
|
|
|
16,414
|
|
Property and equipment acquired under capital leases
|
|
-
|
|
|
21,640
|
|
|
|
|
|
|
|
|
Shutterfly, Inc.
Consumer Metrics Disclosure
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
June 30,
|
|
|
|
|
2016
|
|
2015
|
Consumer Metrics
|
|
|
|
|
|
|
Customers
|
|
|
|
3,259,915
|
|
|
3,134,346
|
year-over-year growth
|
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
Orders
|
|
|
|
5,303,137
|
|
|
5,038,421
|
year-over-year growth
|
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
Average order value*
|
|
|
|
|
$33.30
|
|
|
|
$32.50
|
year-over-year growth
|
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
* Average order value excludes Shutterfly Business Solutions
revenue. AOV for the second quarter of 2015 excluded a flash deal
deferred revenue breakage catch-up.
|
|
|
|
|
|
|
Shutterfly, Inc.
Segment Disclosure
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Consumer
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
176,617
|
|
|
$
|
171,274
|
|
|
$
|
331,998
|
|
|
$
|
320,062
|
|
Cost of net revenues
|
|
85,276
|
|
|
83,387
|
|
|
171,613
|
|
|
164,165
|
|
Gross profit
|
|
91,341
|
|
|
87,887
|
|
|
160,385
|
|
|
155,897
|
|
Consumer gross profit margin
|
|
51.7
|
%
|
|
51.3
|
%
|
|
48.3
|
%
|
|
48.7
|
%
|
|
|
|
|
|
|
|
|
|
Shutterfly Business Solutions (SBS)
|
|
|
|
|
|
|
|
|
Net revenues
|
|
27,344
|
|
|
12,605
|
|
|
53,672
|
|
|
23,795
|
|
Cost of net revenues
|
|
21,810
|
|
|
10,245
|
|
|
41,520
|
|
|
20,133
|
|
Gross profit
|
|
5,534
|
|
|
2,360
|
|
|
12,152
|
|
|
3,662
|
|
SBS gross profit margin
|
|
20.2
|
%
|
|
18.7
|
%
|
|
22.6
|
%
|
|
15.4
|
%
|
|
|
|
|
|
|
|
|
|
Corporate (1)
|
|
|
|
|
|
|
|
|
Net revenues
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Cost of net revenues
|
|
2,506
|
|
|
3,015
|
|
|
5,182
|
|
|
7,056
|
|
Gross profit
|
|
(2,506
|
)
|
|
(3,015
|
)
|
|
(5,182
|
)
|
|
(7,056
|
)
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
Net revenues
|
|
203,961
|
|
|
183,879
|
|
|
385,670
|
|
|
343,857
|
|
Cost of net revenues
|
|
109,592
|
|
|
96,647
|
|
|
218,315
|
|
|
191,354
|
|
Gross profit
|
|
$
|
94,369
|
|
|
$
|
87,232
|
|
|
$
|
167,355
|
|
|
$
|
152,503
|
|
|
|
|
|
|
|
|
|
|
Gross profit margin
|
|
46.3
|
%
|
|
47.4
|
%
|
|
43.4
|
%
|
|
44.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Corporate category includes activities that are not directly
attributable or allocable to a specific segment. This category
consists of stock-based compensation and amortization of
intangible assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
Dec. 31,
|
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
$
|
65,271
|
|
|
$
|
87,232
|
|
|
$
|
59,501
|
|
|
$
|
319,347
|
|
|
$
|
72,986
|
|
|
$
|
94,369
|
|
|
$
|
531,351
|
|
Stock-based compensation
|
|
1,192
|
|
|
1,001
|
|
|
952
|
|
|
989
|
|
|
1,224
|
|
|
1,081
|
|
|
4,134
|
|
Amortization of intangible assets
|
|
2,849
|
|
|
2,014
|
|
|
1,713
|
|
|
1,526
|
|
|
1,452
|
|
|
1,424
|
|
|
8,102
|
|
Non-GAAP gross profit
|
|
$
|
69,312
|
|
|
$
|
90,247
|
|
|
$
|
62,166
|
|
|
$
|
321,862
|
|
|
$
|
75,662
|
|
|
$
|
96,874
|
|
|
$
|
543,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit margin
|
|
43
|
%
|
|
49
|
%
|
|
37
|
%
|
|
59
|
%
|
|
42
|
%
|
|
47
|
%
|
|
51
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
Dec. 31,
|
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss)
|
|
$
|
(46,224
|
)
|
|
$
|
(28,392
|
)
|
|
$
|
(49,066
|
)
|
|
$
|
141,947
|
|
|
$
|
(41,814
|
)
|
|
$
|
(21,075
|
)
|
|
$
|
18,265
|
|
Stock-based compensation
|
|
17,760
|
|
|
16,315
|
|
|
15,756
|
|
|
10,627
|
|
|
10,150
|
|
|
10,924
|
|
|
60,458
|
|
Amortization of intangible assets
|
|
7,684
|
|
|
6,735
|
|
|
6,379
|
|
|
6,252
|
|
|
6,119
|
|
|
5,074
|
|
|
27,050
|
|
Non-GAAP operating income (loss)
|
|
$
|
(20,780
|
)
|
|
$
|
(5,342
|
)
|
|
$
|
(26,931
|
)
|
|
$
|
158,826
|
|
|
$
|
(25,545
|
)
|
|
$
|
(5,077
|
)
|
|
$
|
105,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating margin
|
|
(13
|
)%
|
|
(3
|
)%
|
|
(16
|
)%
|
|
29
|
%
|
|
(14
|
)%
|
|
(2
|
)%
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
Dec. 31,
|
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
$
|
(45,103
|
)
|
|
$
|
(23,777
|
)
|
|
$
|
(63,077
|
)
|
|
$
|
131,114
|
|
|
$
|
(29,436
|
)
|
|
$
|
(16,485
|
)
|
|
$
|
(843
|
)
|
Interest expense
|
|
4,736
|
|
|
4,985
|
|
|
5,613
|
|
|
5,664
|
|
|
5,675
|
|
|
5,661
|
|
|
20,998
|
|
Interest and other income, net
|
|
(102
|
)
|
|
(120
|
)
|
|
(433
|
)
|
|
(89
|
)
|
|
(121
|
)
|
|
(128
|
)
|
|
(744
|
)
|
Tax (benefit) provision
|
|
(5,755
|
)
|
|
(9,480
|
)
|
|
8,831
|
|
|
5,258
|
|
|
(17,932
|
)
|
|
(10,123
|
)
|
|
(1,146
|
)
|
Depreciation and amortization
|
|
27,593
|
|
|
27,707
|
|
|
28,933
|
|
|
29,044
|
|
|
29,114
|
|
|
28,357
|
|
|
113,277
|
|
Stock-based compensation
|
|
17,760
|
|
|
16,315
|
|
|
15,756
|
|
|
10,627
|
|
|
10,150
|
|
|
10,924
|
|
|
60,458
|
|
Non-GAAP Adjusted EBITDA
|
|
$
|
(871
|
)
|
|
$
|
15,630
|
|
|
$
|
(4,377
|
)
|
|
$
|
181,618
|
|
|
$
|
(2,550
|
)
|
|
$
|
18,206
|
|
|
$
|
192,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shutterfly, Inc.
Reconciliation of Cash Flow from Operating Activities 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,
|
|
Dec. 31,
|
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
$
|
(107,731
|
)
|
|
$
|
22,171
|
|
|
$
|
(22,140
|
)
|
|
$
|
272,737
|
|
|
$
|
(83,923
|
)
|
|
$
|
16,916
|
|
|
$
|
165,037
|
|
Interest expense
|
|
4,736
|
|
|
4,985
|
|
|
5,613
|
|
|
5,664
|
|
|
5,675
|
|
|
5,661
|
|
|
20,998
|
|
Interest and other income, net
|
|
(102
|
)
|
|
(120
|
)
|
|
(433
|
)
|
|
(89
|
)
|
|
(121
|
)
|
|
(128
|
)
|
|
(744
|
)
|
Tax (benefit) provision
|
|
(5,755
|
)
|
|
(9,480
|
)
|
|
8,831
|
|
|
5,258
|
|
|
(17,932
|
)
|
|
(10,123
|
)
|
|
(1,146
|
)
|
Changes in operating assets and liabilities
|
|
113,075
|
|
|
(6,803
|
)
|
|
134
|
|
|
(87,013
|
)
|
|
99,917
|
|
|
2,374
|
|
|
19,393
|
|
Other adjustments
|
|
(5,094
|
)
|
|
4,877
|
|
|
3,618
|
|
|
(14,939
|
)
|
|
(6,166
|
)
|
|
3,506
|
|
|
(11,538
|
)
|
Non-GAAP Adjusted EBITDA
|
|
(871
|
)
|
|
15,630
|
|
|
(4,377
|
)
|
|
181,618
|
|
|
(2,550
|
)
|
|
18,206
|
|
|
192,000
|
|
Less: Purchases of property and equipment
|
|
(13,978
|
)
|
|
(17,199
|
)
|
|
(15,117
|
)
|
|
(12,972
|
)
|
|
(5,497
|
)
|
|
(22,005
|
)
|
|
(59,266
|
)
|
Less: Capitalized technology & development costs
|
|
(4,072
|
)
|
|
(5,386
|
)
|
|
(6,353
|
)
|
|
(6,302
|
)
|
|
(8,168
|
)
|
|
(10,052
|
)
|
|
(22,113
|
)
|
Add: Capex adjustments [1]
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
9,827
|
|
|
-
|
|
Free cash flow
|
|
$
|
(18,921
|
)
|
|
$
|
(6,955
|
)
|
|
$
|
(25,847
|
)
|
|
$
|
162,344
|
|
|
$
|
(16,215
|
)
|
|
$
|
(4,024
|
)
|
|
$
|
110,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[1] In the second quarter of 2016, the Company acquired and
immediately sold $9.8 million of printers.
|
|
Shutterfly, Inc.
Reconciliation of Forward-Looking Guidance for Non-GAAP
Financial Measures to GAAP Measures
(In millions, except per share amounts)
|
|
|
|
|
|
Forward-Looking Guidance
|
|
|
Three Months Ending
September 30, 2016
|
|
Twelve Months Ending
December 31, 2016
|
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$179.2
|
|
|
$185.9
|
|
|
$1,130.0
|
|
|
$1,160.0
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit margin
|
|
36.7
|
%
|
|
37.8
|
%
|
|
51.3
|
%
|
|
51.7
|
%
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss)
|
|
($47.7
|
)
|
|
($44.2
|
)
|
|
$40.8
|
|
|
$55.6
|
|
GAAP operating margin
|
|
(26.6
|
%)
|
|
(23.8
|
%)
|
|
3.6
|
%
|
|
4.8
|
%
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss)
|
|
($47.7
|
)
|
|
($44.2
|
)
|
|
$40.8
|
|
|
$55.6
|
|
Stock-based compensation
|
|
$13.0
|
|
|
$12.5
|
|
|
$48.9
|
|
|
$47.0
|
|
Amortization of intangible assets
|
|
$4.6
|
|
|
$4.6
|
|
|
$20.1
|
|
|
$20.1
|
|
Depreciation
|
|
$26.1
|
|
|
$26.1
|
|
|
$100.2
|
|
|
$100.2
|
|
Adjusted EBITDA
|
|
($4.0
|
)
|
|
($1.0
|
)
|
|
$210.0
|
|
|
$222.9
|
|
Adjusted EBITDA margin
|
|
(2.2
|
%)
|
|
(0.5
|
%)
|
|
18.6
|
%
|
|
19.2
|
%
|
|
|
|
|
|
|
|
|
|
Capital expenditures*
|
|
|
|
|
|
$80.0
|
|
|
$90.0
|
|
Capital expenditures as % of net revenues
|
|
|
|
|
|
7.1
|
%
|
|
7.8
|
%
|
|
|
|
|
|
|
|
|
|
Free cash flow**
|
|
|
|
|
|
$130.0
|
|
|
$132.9
|
|
Free cash flow as % of net revenues
|
|
|
|
|
|
11.5
|
%
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
Tax rate
|
|
38.5
|
%
|
|
38.5
|
%
|
|
39.5
|
%
|
|
38.5
|
%
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share
|
|
|
|
|
|
|
|
|
Basic
|
|
($0.97
|
)
|
|
($0.90
|
)
|
|
-
|
|
|
-
|
|
Diluted
|
|
-
|
|
|
-
|
|
|
$0.31
|
|
|
$0.58
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
|
|
|
|
|
|
|
|
|
Basic
|
|
34.0
|
|
|
34.0
|
|
|
-
|
|
|
-
|
|
Diluted
|
|
-
|
|
|
-
|
|
|
35.3
|
|
|
35.3
|
|
|
|
|
|
|
|
|
|
|
* Excludes $9.8 million related to printers that were acquired and
then immediately sold in the second quarter of 2016
|
** Free cash flow is defined as adjusted EBITDA less capital
expenditures
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160727006283/en/
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