Press Releases
Shutterfly Announces Fourth Quarter and Full Year 2017 Financial Results
“Q4 was a strong conclusion to a year in which we made significant
strides in positioning
North continued, “At the same time, today we announced a definitive
agreement to acquire
Fourth Quarter 2017 Financial Highlights
Net revenues totaled
GAAP Operating income totaled
On a proforma basis, which excludes a benefit from tax reform of
During the fourth quarter of 2017, we repurchased a total of 660
thousand shares for
Full Year 2017 Financial Highlights
Net revenues totaled
GAAP Operating income totaled
On a proforma basis, our operating income was
[1] Normalized for restructuring charges of
[2]
Refer to page 14 for reconciliation of GAAP net income to Non-GAAP net
income and reconciliation of GAAP net income to Non-GAAP Adjusted EBITDA.
Business Outlook[1]
Full Year 2018:
-
Net revenues to range from
$1,220.0 million to $1,260.0 million -
Consumer revenue to range from
$1,020.0 million to $1,050.0 million - We anticipate mid-to-high single digit Shutterfly brand growth will be offset by lost revenue from the three websites we shut down
- We expect Consumer revenue to increase throughout the year. We expect a mid-single digit Consumer decline in the first half of 2018, a return to modest growth in the third quarter of 2018, and high-single digit growth in the fourth quarter of 2018, our first, true like-for-like comparable period
-
SBS revenue to range from
$200.0 million to $210.0 million - Gross profit margin to range from 48.5% to 49.5% of net revenues
-
Operating income to range from
$115.0 million to $135.0 million - Effective tax rate of 26.0%
-
Net income per share to range from
$1.94 to $2.38 - Weighted average shares of approximately 33.9 million
-
Adjusted EBITDA to range from
$260.0 million to $280.0 million -
Capital expenditures to be approximately
$65.0 million
First Quarter 2018:
-
Net revenues to range from
$190.0 million to $194.0 million - Consumer net revenue expected to decline mid-single digits over the first quarter of 2017
- Gross profit margin to range from 38.0% to 38.5% of net revenues
-
Operating loss to range from
$34.0 million to $32.0 million - Effective tax rate of 26.0%
-
Net loss per share to range from
$0.96 to $0.92 - Weighted average shares of approximately 32.5 million
-
Adjusted EBITDA to range from
$3.0 million to $5.0 million
[1]Excludes
Notes to the Fourth Quarter 2017 Financial Results and Operating Metrics and 2018 Business Outlook
Adjusted EBITDA is a non-GAAP financial measure that the Company defines as earnings before interest, taxes, depreciation, amortization, stock-based compensation, capital lease termination, and restructuring.
Adjusted EBITDA minus capital expenditures 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.
Free cash flow is a non-GAAP financial measure that the Company defines as cash provided by operating activities less capital expenditures.
Consumer segment includes net revenues from cards and stationery, professionally-bound photo books, home décor, personalized gifts, high quality prints, and other photo-based merchandise, and the related shipping revenues as well as rental revenue from the BorrowLenses brand. Consumer also includes net revenues from advertising displayed in the Company’s website.
Shutterfly Business Solutions (SBS) includes net revenues generated from the printing and shipping of marketing and variable data print products and formats.
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.
Fourth Quarter Conference Call
Management will review the fourth quarter 2017 financial results and its
expectations for the first quarter and full year 2018 on a conference
call on
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 net income (loss) and net income (loss) per share, adjusted EBITDA, adjusted EBITDA minus capital expenditures, 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), net income (loss), or cash
flows provided by (used in) operating activities determined in
accordance with GAAP. For more information, please see
We have provided a reconciliation of each non-GAAP financial measure to
the most directly comparable GAAP financial measure, where possible,
except that we have not reconciled our 2020 non-GAAP Adjusted EBITDA
target of
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 our expected positioning for long-term,
profitable growth; our minimum Adjusted EBITDA targets by 2020; our
business outlook for the first quarter and full year 2018; and
statements about historical results that may suggest trends for our
business. You can identify these statements by the use of terminology
such as “guidance”, “believe”, “expect”, “will”, “should,” “could”,
“estimate”, “anticipate” or similar forward-looking terms. You should
not rely on these forward-looking statements as they involve risks and
uncertainties that may cause actual results to vary materially from the
forward-looking statements. Factors that might contribute to such
differences include, among others, decreased consumer discretionary
spending as a result of general economic conditions; our ability to
expand our customer base and increase sales to existing customers; our
ability to 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 innovative, new products and services on a timely and
cost-effective basis; failure to realize the anticipated benefits of our
2017 restructuring activities; consumer acceptance of our products and
services; our ability to develop additional adjacent lines of
business; unforeseen changes in expense levels; competition and the
pricing strategies of our competitors, which could lead to pricing
pressure; the possibility that the closing conditions to the proposed
About
Shutterfly, Inc. |
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Consolidated Statements of Operations |
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(In thousands, except per share amounts) |
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(Unaudited) |
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Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net revenues | $ | 593,755 | $ | 561,226 | $ | 1,190,202 | $ | 1,134,224 | ||||||||
Cost of net revenues | 254,218 | 230,048 | 619,650 | 566,117 | ||||||||||||
Restructuring | — | — | 1,475 | — | ||||||||||||
Gross profit | 339,537 | 331,178 | 569,077 | 568,107 | ||||||||||||
Operating expenses: | ||||||||||||||||
Technology and development | 43,415 | 44,043 | 168,383 | 166,909 | ||||||||||||
Sales and marketing | 78,503 | 98,301 | 197,708 | 233,585 | ||||||||||||
General and administrative | 38,597 | 35,041 | 117,797 | 118,503 | ||||||||||||
Capital lease termination | — | — | 8,098 | — | ||||||||||||
Restructuring | — | — | 15,491 | — | ||||||||||||
Total operating expenses | 160,515 | 177,385 | 507,477 | 518,997 | ||||||||||||
Income from operations | 179,022 | 153,793 | 61,600 | 49,110 | ||||||||||||
Interest expense | (9,219 | ) | (5,961 | ) | (27,836 | ) | (23,023 | ) | ||||||||
Interest and other income, net | 794 | 122 | 1,481 | 501 | ||||||||||||
Income before income taxes | 170,597 | 147,954 | 35,245 | 26,588 | ||||||||||||
Provision for income taxes | (58,873 | ) | (56,972 | ) | (5,160 | ) | (10,682 | ) | ||||||||
Net income | $ | 111,724 | $ | 90,982 | $ | 30,085 | $ | 15,906 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 3.45 | $ | 2.70 | $ | 0.91 | $ | 0.47 | ||||||||
Diluted | $ | 3.37 | $ | 2.63 | $ | 0.88 | $ | 0.45 | ||||||||
Weighted-average shares outstanding: | ||||||||||||||||
Basic | 32,372 | 33,683 | 33,113 | 34,097 | ||||||||||||
Diluted | 33,114 | 34,625 | 34,106 | 35,190 | ||||||||||||
Stock-based compensation is allocated as follows: | ||||||||||||||||
Cost of net revenues | $ | 1,055 | $ | 1,143 | $ | 4,339 | $ | 4,579 | ||||||||
Technology and development | 2,391 | 2,854 | 9,778 | 8,550 | ||||||||||||
Sales and marketing | 3,211 | 3,748 | 12,229 | 15,445 | ||||||||||||
General and administrative | 4,206 | 4,659 | 17,227 | 17,118 | ||||||||||||
Restructuring | — | — | 814 | — | ||||||||||||
$ | 10,863 | $ | 12,404 | $ | 44,387 | $ | 45,692 | |||||||||
Depreciation and amortization is allocated as follows: | ||||||||||||||||
Cost of net revenues | $ | 15,682 | $ | 15,914 | $ | 60,415 | $ | 57,362 | ||||||||
Technology and development | 6,935 | 7,542 | 28,457 | 32,549 | ||||||||||||
Sales and marketing | 2,122 | 3,124 | 10,393 | 14,706 | ||||||||||||
General and administrative | 985 | 2,013 | 4,597 | 9,034 | ||||||||||||
Restructuring | — | — | 5,999 | — | ||||||||||||
$ | 25,724 | $ | 28,593 | $ | 109,861 | $ | 113,651 | |||||||||
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, 2017 | December 31, 2016 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 489,894 | $ | 289,224 | ||||
Short-term investments | 178,021 | 26,352 | ||||||
Accounts receivable, net | 82,317 | 57,365 | ||||||
Inventories | 11,019 | 11,751 | ||||||
Prepaid expenses and other current assets | 41,383 | 48,084 | ||||||
Total current assets | 802,634 | 432,776 | ||||||
Long-term investments | 9,242 | 14,479 | ||||||
Property and equipment, net | 266,860 | 284,110 | ||||||
Intangible assets, net | 29,671 | 43,420 | ||||||
Goodwill | 408,975 | 408,975 | ||||||
Other assets | 17,418 | 11,816 | ||||||
Total assets | $ | 1,534,800 | $ | 1,195,576 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 297,054 | $ | — | ||||
Accounts payable | 91,473 | 58,790 | ||||||
Accrued liabilities | 159,248 | 138,869 | ||||||
Deferred revenue, current portion | 24,649 | 22,929 | ||||||
Total current liabilities | 572,424 | 220,588 | ||||||
Long-term debt | 292,457 | 278,792 | ||||||
Other liabilities | 119,195 | 137,035 | ||||||
Total liabilities | 984,076 | 636,415 | ||||||
Stockholders’ equity: | ||||||||
Common stock, $0.0001 par value; 100,000 shares authorized; 32,297 and 33,637 shares issued and outstanding on December 31, 2017 and December 31, 2016, respectively |
3 | 3 | ||||||
Additional paid-in capital | 996,301 | 949,864 | ||||||
Accumulated other comprehensive income (loss) | 1,778 | (32 | ) | |||||
Accumulated deficit | (447,358 | ) | (390,674 | ) | ||||
Total stockholders' equity | 550,724 | 559,161 | ||||||
Total liabilities and stockholders' equity | $ | 1,534,800 | $ | 1,195,576 | ||||
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 | ||||||||
December 31, | ||||||||
2017 | 2016 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 30,085 | $ | 15,906 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 88,946 | 93,531 | ||||||
Amortization of intangible assets | 14,916 | 20,120 | ||||||
Amortization of debt discount and issuance costs | 15,508 | 14,432 | ||||||
Stock-based compensation | 43,573 | 45,692 | ||||||
Loss on disposal of property and equipment | 1,141 | 738 | ||||||
Deferred income taxes | (161 | ) | 8,899 | |||||
Tax benefit from stock-based compensation | — | 290 | ||||||
Excess tax benefits from stock-based compensation | — | (2,413 | ) | |||||
Restructuring | 10,882 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (24,952 | ) | (2,142 | ) | ||||
Inventories | (743 | ) | 1,715 | |||||
Prepaid expenses and other assets | 5,603 | (19,140 | ) | |||||
Accounts payable | 32,189 | 27,128 | ||||||
Accrued and other liabilities | 22,537 | (11,333 | ) | |||||
Net cash provided by operating activities | 239,524 | 193,423 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (36,745 | ) | (56,264 | ) | ||||
Capitalization of software and website development costs | (34,006 | ) | (33,423 | ) | ||||
Purchases of investments | (205,466 | ) | (29,422 | ) | ||||
Proceeds from the maturities of investments | 45,257 | 28,234 | ||||||
Proceeds from the sales of investments | 13,874 | 12,213 | ||||||
Proceeds from sale of property and equipment | 21,724 | 14,261 | ||||||
Net cash used in investing activities | (195,362 | ) | (64,401 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock upon exercise of stock options | 677 | 2,104 | ||||||
Repurchases of common stock | (110,000 | ) | (112,488 | ) | ||||
Excess tax benefits from stock-based compensation | — | 2,413 | ||||||
Principal payments of capital lease and financing obligations | (29,380 | ) | (19,377 | ) | ||||
Payment for contingent consideration liabilities | — | (1,313 | ) | |||||
Proceeds from borrowings, net of issuance costs | 295,211 | — | ||||||
Net cash provided by (used in) financing activities | 156,508 | (128,661 | ) | |||||
Net increase in cash and cash equivalents | 200,670 | 361 | ||||||
Cash and cash equivalents, beginning of period | 289,224 | 288,863 | ||||||
Cash and cash equivalents, end of period | $ | 489,894 | $ | 289,224 | ||||
Supplemental schedule of non-cash investing / financing activities: | ||||||||
Net increase (decrease) in accrued purchases of property and equipment | $ | 2,693 | $ | (4,013 | ) | |||
Net decrease in accrued capitalized software and website development costs | (396 | ) | (319 | ) | ||||
Stock-based compensation capitalized with software and website development costs | 1,373 | 1,560 | ||||||
Property and equipment acquired under capital leases | 19,145 | 23,946 | ||||||
Shutterfly, Inc. |
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Consumer Metrics Disclosure |
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(Unaudited) |
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Three Months Ended | Twelve Months Ended | ||||||||||
December 31, | December 31, | ||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||
Consumer Metrics | |||||||||||
Customers [1] | 6,110,833 | 6,219,011 | 10,048,431 | 10,115,763 | |||||||
year-over-year change | (2 | )% | (1 | )% | |||||||
Orders | 10,463,752 | 10,869,499 | 26,328,121 | 27,108,889 | |||||||
year-over-year change | (4 | )% | (3 | )% | |||||||
Average order value [2] | $49.87 | $47.98 | $37.87 | $36.80 | |||||||
year-over-year change | 4 | % | 3 | % | |||||||
[1] An active customer is defined as one that has transacted in the last trailing twelve months. |
[2] Average order value excludes Shutterfly Business Solutions revenue. |
Shutterfly, Inc. |
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Segment Disclosure |
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(In thousands) |
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(Unaudited) |
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Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Consumer | ||||||||||||||||
Net revenues | $ | 521,809 | $ | 521,484 | $ | 996,963 | $ | 997,556 | ||||||||
Cost of net revenues | 193,320 | 198,949 | 456,665 | 455,387 | ||||||||||||
Restructuring | — | — | 1,475 | — | ||||||||||||
Gross profit | $ | 328,489 | $ | 322,535 | $ | 538,823 | $ | 542,169 | ||||||||
Consumer gross profit margin | 63.0 | % | 61.8 | % | 54.0 | % | 54.3 | % | ||||||||
Shutterfly Business Solutions (SBS) | ||||||||||||||||
Net revenues | $ | 71,946 | $ | 39,742 | $ | 193,239 | $ | 136,668 | ||||||||
Cost of net revenues | 58,812 | 28,673 | 154,068 | 100,582 | ||||||||||||
Gross profit | $ | 13,134 | $ | 11,069 | $ | 39,171 | $ | 36,086 | ||||||||
SBS gross profit margin | 18.3 | % | 27.9 | % | 20.3 | % | 26.4 | % | ||||||||
Corporate [1] | ||||||||||||||||
Net revenues | $ | — | $ | — | $ | — | $ | — | ||||||||
Cost of net revenues | 2,086 | 2,426 | 8,917 | 10,148 | ||||||||||||
Gross profit | $ | (2,086 | ) | $ | (2,426 | ) | $ | (8,917 | ) | $ | (10,148 | ) | ||||
Consolidated | ||||||||||||||||
Net revenues | $ | 593,755 | $ | 561,226 | $ | 1,190,202 | $ | 1,134,224 | ||||||||
Cost of net revenues | 254,218 | 230,048 | 619,650 | 566,117 | ||||||||||||
Restructuring | — | — | 1,475 | — | ||||||||||||
Gross profit | $ | 339,537 | $ | 331,178 | $ | 569,077 | $ | 568,107 | ||||||||
Gross profit margin | 57.2 | % | 59.0 | % | 47.8 | % | 50.1 | % | ||||||||
Gross profit margin excluding restructuring | 57.2 | % | 59.0 | % | 47.9 | % | 50.1 | % | ||||||||
[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. |
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Consumer Revenues by Brand |
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(In thousands) |
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(Unaudited) |
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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, | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2016 | 2017 | ||||||||||||||||||||||||||||||
Consumer net revenues | |||||||||||||||||||||||||||||||||||||||
Shutterfly brand | $ | 114,407 | $ | 133,387 | $ | 111,035 | $ | 404,101 | $ | 123,903 | $ | 139,908 | $ | 115,883 | $ | 464,547 | $ | 762,930 | $ | 844,242 | |||||||||||||||||||
Tiny Prints Boutique | — | — | — | — | — | — |
1,942 |
48,932 | — | 50,874 | |||||||||||||||||||||||||||||
Tiny Prints [1] | 12,202 | 14,757 | 7,963 | 93,635 | 10,465 | 12,917 | — | — | 128,557 | 23,382 | |||||||||||||||||||||||||||||
Wedding Paper Divas [2] | 16,407 | 14,642 | 11,423 | 8,957 | 14,290 | 11,365 | 8,523 | — | 51,429 | 34,178 | |||||||||||||||||||||||||||||
MyPublisher [3] | 4,980 | 4,538 | 4,413 | 6,561 | 4,936 | 6,056 | — | — | 20,492 | 10,992 | |||||||||||||||||||||||||||||
Other | 7,385 | 9,293 | 9,240 | 8,230 | 7,051 | 8,844 | 9,070 | 8,330 | 34,148 | 33,295 | |||||||||||||||||||||||||||||
Total | $ | 155,381 | $ | 176,617 | $ | 144,074 | $ | 521,484 | $ | 160,645 | $ | 179,090 | $ | 135,418 | $ | 521,809 | $ | 997,556 | $ | 996,963 | |||||||||||||||||||
[1] Tiny Prints website shut down on June 28, 2017. | |||||||||||||||||||||||||||||||||||||||
[2] Wedding Paper Divas website shut down on September 13, 2017. | |||||||||||||||||||||||||||||||||||||||
[3] MyPublisher website shut down on May 15, 2017. | |||||||||||||||||||||||||||||||||||||||
Shutterfly, Inc. |
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Restructuring |
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(In thousands) |
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(Unaudited) |
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Twelve Months Ended | |||
December 31, 2017 | |||
Restructuring: | |||
Property and equipment | $ | 8,414 | |
Employee costs | 5,851 | ||
Inventory | 1,475 | ||
Other costs | 1,226 | ||
Total | $ | 16,966 | |
There were no restructuring charges for the three months ended
Shutterfly, Inc. |
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Reconciliation of Net Income (Loss) to Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) per Share |
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(In thousands, except per share amounts) |
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(Unaudited) |
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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, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2016 | 2017 | |||||||||||||||||||||||||||||||
GAAP net income (loss) | $ | (29,436 | ) | $ | (16,485 | ) | $ | (29,155 | ) | $ | 90,982 | $ | (33,194 | ) | $ | (22,838 | ) | $ | (25,607 | ) | $ | 111,724 | $ | 15,906 | $ | 30,085 | ||||||||||||||
Capital lease termination | — | — | — | — | — | 8,098 | — | — | — | 8,098 | ||||||||||||||||||||||||||||||
Restructuring | — | — | — | — | 8,976 | 4,673 | 3,317 | — | — | 16,966 | ||||||||||||||||||||||||||||||
Tax benefit impact of restructuring and capital lease termination charges | — | — | — | — | (3,948 | ) | (4,829 | ) | (1,669 | ) | — | — | (10,446 | ) | ||||||||||||||||||||||||||
Benefit from 2017 tax reform legislation | — | — | — | — | — | — | — | (8,875 | ) | — | (8,875 | ) | ||||||||||||||||||||||||||||
Non-GAAP net income (loss) | $ | (29,436 | ) | $ | (16,485 | ) | $ | (29,155 | ) | $ | 90,982 | $ | (28,166 | ) | $ | (14,896 | ) | $ | (23,959 | ) | $ | 102,849 | $ | 15,906 | $ | 35,828 | ||||||||||||||
GAAP diluted shares outstanding | 34,596 | 34,177 | 33,932 | 34,625 | 33,712 | 33,579 | 32,878 | 33,114 | 35,190 | 34,106 | ||||||||||||||||||||||||||||||
Non-GAAP diluted shares outstanding | 34,596 | 34,177 | 33,932 | 34,625 | 33,712 | 33,579 | 32,878 | 33,114 | 35,190 | 34,106 | ||||||||||||||||||||||||||||||
GAAP net income (loss) per share | $ | (0.85 | ) | $ | (0.48 | ) | $ | (0.86 | ) | $ | 2.63 | $ | (0.98 | ) | $ | (0.68 | ) | $ | (0.78 | ) | $ | 3.37 | $ | 0.45 | $ | 0.88 | ||||||||||||||
Non-GAAP net income (loss) per share | $ | (0.85 | ) | $ | (0.48 | ) | $ | (0.86 | ) | $ | 2.63 | $ | (0.84 | ) | $ | (0.44 | ) | $ | (0.73 | ) | $ | 3.11 | $ | 0.45 | $ | 1.05 | ||||||||||||||
Shutterfly, Inc. |
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Reconciliation of Net Income (Loss) to Non-GAAP Adjusted EBITDA |
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(In thousands) |
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(Unaudited) |
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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, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2016 | 2017 | |||||||||||||||||||||||||||||||
GAAP net income (loss) | $ | (29,436 | ) | $ | (16,485 | ) | $ | (29,155 | ) | $ | 90,982 | $ | (33,194 | ) | $ | (22,838 | ) | $ | (25,607 | ) | $ | 111,724 | $ | 15,906 | $ | 30,085 | ||||||||||||||
Interest expense | 5,675 | 5,661 | 5,726 | 5,961 | 5,964 | 5,955 | 6,699 | 9,219 | 23,023 | 27,836 | ||||||||||||||||||||||||||||||
Interest and other income, net | (121 | ) | (128 | ) | (130 | ) | (122 | ) | (189 | ) | (244 | ) | (253 | ) | (794 | ) | (501 | ) | (1,481 | ) | ||||||||||||||||||||
Tax (benefit) provision | (17,932 | ) | (10,123 | ) | (18,235 | ) | 56,972 | (22,341 | ) | (14,713 | ) | (16,660 | ) | 58,873 | 10,682 | 5,160 | ||||||||||||||||||||||||
Depreciation and amortization | 29,114 | 28,357 | 27,587 | 28,593 | 27,364 | 25,957 | 24,815 | 25,724 | 113,651 | 103,862 | ||||||||||||||||||||||||||||||
Stock-based compensation | 10,150 | 10,924 | 12,214 | 12,404 | 11,505 | 10,469 | 10,736 | 10,863 | 45,692 | 43,573 | ||||||||||||||||||||||||||||||
Capital lease termination | — | — | — | — | — | 8,098 | — | — | — | 8,098 | ||||||||||||||||||||||||||||||
Restructuring | — | — | — | — | 8,976 | 4,673 | 3,317 | — | — | 16,966 | ||||||||||||||||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | (2,550 | ) | $ | 18,206 | $ | (1,993 | ) | $ | 194,790 | $ | (1,915 | ) | $ | 17,357 | $ | 3,047 | $ | 215,609 | $ | 208,453 | $ | 234,099 | |||||||||||||||||
Shutterfly, Inc. |
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Reconciliation of Cash Flow from Operating Activities to Non-GAAP Adjusted EBITDA and Adjusted EBITDA minus Capital Expenditures |
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(In thousands) |
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(Unaudited) |
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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, | |||||||||||||||||||||||||||||||
2016 [2] | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2016 | 2017 | |||||||||||||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | (82,610 | ) | $ | 16,916 | $ | (4,881 | ) | $ | 263,998 | $ | (72,386 | ) | $ | 13,672 | $ | (21,945 | ) | $ | 320,183 | $ | 193,423 | $ | 239,524 | ||||||||||||||||
Interest expense | 5,675 | 5,661 | 5,726 | 5,961 | 5,964 | 5,955 | 6,699 | 9,219 | 23,023 | 27,836 | ||||||||||||||||||||||||||||||
Interest and other income, net | (121 | ) | (128 | ) | (130 | ) | (122 | ) | (189 | ) | (244 | ) | (253 | ) | (794 | ) | (501 | ) | (1,481 | ) | ||||||||||||||||||||
Tax (benefit) provision | (17,932 | ) | (10,123 | ) | (18,235 | ) | 56,972 | (22,341 | ) | (14,713 | ) | (16,660 | ) | 58,873 | 10,682 | 5,160 | ||||||||||||||||||||||||
Changes in operating assets and liabilities | 98,604 | 2,374 | 29,155 | (126,361 | ) | 92,194 | (2,565 | ) | 35,336 | (159,600 | ) | 3,772 | (34,634 | ) | ||||||||||||||||||||||||||
Other adjustments | (6,166 | ) | 3,506 | (13,628 | ) | (5,658 | ) | (6,265 | ) | 5,377 | (2,575 | ) | (13,026 | ) | (21,946 | ) | (16,488 | ) | ||||||||||||||||||||||
Capital lease termination | — | — | — | — | — | 8,098 | — | — | — | 8,098 | ||||||||||||||||||||||||||||||
Cash restructuring | — | — | — | — | 1,108 | 1,777 | 2,445 | 754 | — | 6,084 | ||||||||||||||||||||||||||||||
Non-GAAP Adjusted EBITDA | (2,550 | ) | 18,206 | (1,993 | ) | 194,790 | (1,915 | ) | 17,357 | 3,047 | 215,609 | 208,453 | 234,099 | |||||||||||||||||||||||||||
Less: Purchases of property and equipment | (5,497 | ) | (22,005 | ) | (14,957 | ) | (9,792 | ) | (1,669 | ) | (7,252 | ) | (18,302 | ) | (12,215 | ) | (52,251 | ) | (39,438 | ) | ||||||||||||||||||||
Less: Capitalized technology & development costs | (8,168 | ) | (10,052 | ) | (8,819 | ) | (6,065 | ) | (7,726 | ) | (9,602 | ) | (8,488 | ) | (7,794 | ) | (33,104 | ) | (33,610 | ) | ||||||||||||||||||||
Add: Capex adjustments [1] | — | 9,827 | — | — | — | — | — | — | 9,827 | — | ||||||||||||||||||||||||||||||
Adjusted EBITDA minus capital expenditures | $ | (16,215 | ) | $ | (4,024 | ) | $ | (25,769 | ) | $ | 178,933 | $ | (11,310 | ) | $ | 503 | $ | (23,743 | ) | $ | 195,600 | $ | 132,925 | $ | 161,051 | |||||||||||||||
[1] In the second quarter of 2016, the Company acquired and immediately sold $9.8 million of printers. | ||||||||||||||||||||||||||||||||||||||||
[2]The Company reclassified an immaterial contingent consideration payment (to Groovebook Founders) in the first quarter of 2016 between operating and financing activities within the cash flow statement. | ||||||||||||||||||||||||||||||||||||||||
Shutterfly, Inc. |
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Reconciliation of GAAP Operating Cash Flow to Free Cash Flow |
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(In thousands) |
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(Unaudited) |
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Year Ended | |||||||||||
2017 | 2016 | 2015 | |||||||||
Net cash provided by operating activities | $ | 239,524 | $ | 193,423 | $ | 165,037 | |||||
Less: capital expenditures[1] | 70,751 | 79,860 | 76,669 | ||||||||
Free cash flow | $ | 168,773 | $ | 113,563 | $ | 88,368 | |||||
% Growth over prior year | 49 | % | 29 | % | |||||||
[1] Excludes purchase of printers of $9.8 million that the Company acquired and immediately sold during the second quarter of 2016. | |||||||||||
Shutterfly, Inc. |
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Reconciliation of Forward-Looking Guidance for Non-GAAP Financial Measures |
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(In millions, except per share amounts) |
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(Unaudited) |
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Forward-Looking Guidance [1] | ||||||||||||
Three Months Ending March 31, 2018 |
Twelve Months Ending December 31, 2018 |
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Low | High | Low | High | |||||||||
Net revenues | $190.0 | $194.0 | $1,220.0 | $1,260.0 | ||||||||
Consumer revenues | $1,020.0 | $1,050.0 | ||||||||||
SBS revenues | $200.0 | $210.0 | ||||||||||
Gross profit margin | 38.0 | % | 38.5 | % | 48.5 | % | 49.5 | % | ||||
Operating income (loss) | ($34.0 | ) | ($32.0 | ) | $115.0 | $135.0 | ||||||
Operating margin | (17.9 | %) | (16.5 | %) | 9.4 | % | 10.7 | % | ||||
Operating income (loss) | ($34.0 | ) | ($32.0 | ) | $115.0 | $135.0 | ||||||
Stock-based compensation | $12.0 | $12.0 | $50.0 | $50.0 | ||||||||
Amortization of intangible assets | $2.4 | $2.4 | $6.0 | $6.0 | ||||||||
Depreciation | $22.5 | $22.5 | $89.0 | $89.0 | ||||||||
Adjusted EBITDA | $3.0 | $5.0 | $260.0 | $280.0 | ||||||||
Adjusted EBITDA margin | 1.6 | % | 2.6 | % | 21.3 | % | 22.2 | % | ||||
Capital expenditures | $65.0 | $65.0 | ||||||||||
Capital expenditures as % of net revenues | 5.3 | % | 5.2 | % | ||||||||
Tax rate | 26.0 | % | 26.0 | % | 26.0 | % | 26.0 | % | ||||
Net income (loss) per share | ||||||||||||
Basic | ($0.96 | ) | ($0.92 | ) | — | — | ||||||
Diluted | — | — | $1.94 | $2.38 | ||||||||
Weighted average shares | ||||||||||||
Basic | 32.5 | 32.5 | — | — | ||||||||
Diluted | — | — | 33.9 | 33.9 | ||||||||
[1] Excludes Lifetouch and acquisition-related expenses. | ||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20180130006325/en/
Source:
Shutterfly, Inc.
Investor Relations:
Shawn Tabak, 650-610-6026
stabak@shutterfly.com
or
Media
Relations:
Nicole Stier, 650-610-6013
nstier@shutterfly.com