Shutterfly, Inc.
Feb 1, 2017
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Shutterfly Announces Fourth Quarter and Full Year 2016 Financial Results

REDWOOD CITY, Calif.--(BUSINESS WIRE)-- Shutterfly, Inc. (NASDAQ:SFLY), the leading online retailer and manufacturer of high-quality personalized products and services, today announced financial results for the fourth quarter ended December 31, 2016. At the same time, the Company announced a new vision built around four strategic areas. Over the course of 2017, Shutterfly, Inc. will restructure to focus resources on these high-potential opportunities.

2016 Full Year Financial Performance

"We're proud of our 2016 delivery against key initiatives, particularly Shutterfly Business Solutions, mobile, and product range expansion, as well as our continued progress on Operating Income, which more than doubled year-over-year," said Christopher North, President and Chief Executive Officer of Shutterfly. "At the same time, Consumer growth came towards the low end of our guidance, and Adjusted EBITDA slightly below guidance, as Shutterfly-brand growth was offset by revenue declines in the Tiny Prints, Wedding Paper Divas, MyPublisher, and BorrowLenses brands."

"To drive sustainable growth and long-term value creation, we're announcing plans today to significantly simplify our Consumer business in 2017 as the first step in our longer-term strategy," added North.

Shutterfly shared its vision for the future. The Company's Consumer vision is to help people share life's joy by being the leading online retailer and manufacturer of high-quality personalized products. This is complemented by the Company's Enterprise vision of being the leading digital manufacturing platform for business. To support this vision, Shutterfly announced four areas of strategic focus going forward: (1) make purchasing personalized products simple, (2) expand our range of categories and products, (3) pivot towards mobile, and (4) leverage our manufacturing platform.

To focus resources on these four components of the strategic plan, Shutterfly will restructure in 2017, with the following changes occurring over the course of the year:

As a result of these changes, the Company expects to incur restructuring charges over the course of 2017 ranging from $15 million to $20 million.

"Our vision is strongly motivated by the belief that sustainable growth comes from innovating on behalf of customers over the long term. At the same time, our plan strikes a balance between investing for growth and delivering improvements in profitability. In each of 2017 and 2018, we will deliver sequential improvements in profitability as well as quality of earnings, while funding re-investment in the business to drive growth in 2019 and beyond," North concluded.

Fourth Quarter 2016 Financial Highlights

Full Year 2016 Financial Highlights

[1] Total capital expenditures of $75.6 million excludes $9.8 million related to printers that were acquired and immediately sold in the second quarter of 2016.

[2] Adjusted EBITDA minus capital expenditures was referred to as "free cash flow" prior to the fourth quarter of 2016.

Fourth Quarter 2016 Consumer Operating Metrics

Full Year 2016 Consumer Operating Metrics

Business Outlook [3]

First Quarter 2017:

Full Year 2017:

"In an effort to provide a view into the full benefits of the changes we are making, we are providing high level thoughts for 2018, our first full year operating after the restructuring. For 2018, we are targeting an increase to total net revenues of approximately $70.0 million driven by continued growth in SBS of approximately 20% and mid-single digit growth in Consumer. We are targeting an increase to GAAP gross profit of approximately $40.0 million and an increase to both Adjusted EBITDA and GAAP Operating Income of approximately $50.0 million. We are targeting capital expenditures to remain flat at approximately $75.0 million. No restructuring charges are expected in 2018, " said Mike Pope, Chief Financial Officer of Shutterfly.

[3] Excludes restructuring charges ranging from $15 million to $20 million as well as any costs related to refinancing our convertible debt.

[4] In 2017, net revenues from SBS segment to increase 20% over 2016.

Notes to the Fourth Quarter 2016 Financial Results and Operating Metrics and 2017 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.

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. This measure was referred to as "free cash flow" prior to the fourth quarter of 2016.

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.

Fourth Quarter Conference Call

Management will review the fourth quarter 2016 financial results and its expectations for the first quarter and full year 2017 on a conference call on Wednesday, February 1, 2017 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 9725499. 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, February 15, 2017. To hear the replay, please dial (877) 344-7529 or (412) 317-0088, and enter access code 10098795.

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 adjusted EBITDA minus capital expenditures. 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 first quarter, full year 2017 and full year 2018 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 online retailer and manufacturer of high-quality personalized products and services. 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.

 
Shutterfly, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
   
Three Months Ended Twelve Months Ended
December 31, December 31,
2016   2015 2016   2015
 
Net revenues $ 561,226 $ 548,080 $ 1,134,224 $ 1,059,429
Cost of net revenues 230,048   228,733   566,117   528,078  
Gross profit 331,178   319,347   568,107   531,351  
Operating expenses:
Technology and development 44,043 43,390 166,909 155,318
Sales and marketing 98,301 98,721 233,585 236,749
General and administrative 35,041   35,289   118,503   121,019  
Total operating expenses 177,385   177,400   518,997   513,086  
Income from operations 153,793 141,947 49,110 18,265
Interest expense (5,961 ) (5,664 ) (23,023 ) (20,998 )
Interest and other income, net 122   89   501   744  
Income (loss) before income taxes 147,954 136,372 26,588 (1,989 )
Benefit from (provision for) income taxes (56,972 ) (5,258 ) (10,682 ) 1,146  
Net income (loss) $ 90,982   $ 131,114   $ 15,906   $ (843 )
 
Net income (loss) per share:
Basic $ 2.70   $ 3.73   $ 0.47   $ (0.02 )
Diluted $ 2.63   $ 3.57   $ 0.45   $ (0.02 )
Weighted-average shares outstanding:
Basic 33,683   35,172   34,097   36,761  
Diluted 34,625   36,743   35,190   36,761  
 
 
Stock-based compensation is allocated as follows:
Cost of net revenues $ 1,143 $ 989 $ 4,579 $ 4,134
Technology and development 2,854 3,096 8,550 10,840
Sales and marketing 3,748 4,310 15,445 21,512
General and administrative 4,659   2,232   17,118   23,972  
$ 12,404   $ 10,627   $ 45,692   $ 60,458  
 
Depreciation and amortization is allocated as follows:
Cost of net revenues $ 15,914 $ 13,412 $ 57,362 $ 52,075
Technology and development 7,542 8,598 32,549 32,952
Sales and marketing 3,124 4,724 14,706 19,132
General and administrative 2,013   2,310   9,034   9,118  
$ 28,593   $ 29,044   $ 113,651   $ 113,277  
 
Shutterfly, Inc.
Consolidated Balance Sheets
(In thousands, except par value amounts)
(Unaudited)
   
December 31, December 31,
2016 2015
ASSETS
Current assets:
Cash and cash equivalents $ 289,224 $ 288,863
Short-term investments 26,352 22,918
Accounts receivable, net 57,365 55,222
Inventories 11,751 13,466
Prepaid expenses and other current assets 48,084   31,828  
Total current assets 432,776 412,297
Long-term investments 14,479 29,005
Property and equipment, net 284,110 281,779
Intangible assets, net 43,420 62,323
Goodwill 408,975 408,975
Other assets 11,816   10,948  
Total assets $ 1,195,576   $ 1,205,327  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 58,790 $ 35,329
Accrued liabilities 138,869 149,134
Deferred revenue, current portion 22,929   27,329  
Total current liabilities 220,588 211,792
Convertible senior notes, net 278,792 264,361
Other liabilities 137,035   123,112  
Total liabilities 636,415   599,265  
Stockholders' equity:
Common stock, $0.0001 par value; 100,000 shares authorized; 33,637 and 34,777 shares issued and outstanding on December 31, 2016 and December 31, 2015, respectively 3 4
Additional paid-in capital 949,864 900,218
Accumulated other comprehensive loss (32 ) (68 )
Accumulated deficit (390,674 ) (294,092 )
Total stockholders' equity 559,161   606,062  
Total liabilities and stockholders' equity $ 1,195,576   $ 1,205,327  
 
Shutterfly, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
Twelve Months Ended
December 31,
2016   2015
Cash flows from operating activities:
Net income (loss) $ 15,906 $ (843 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 93,531 86,290
Amortization of intangible assets 20,120 26,987
Amortization of debt discount and transaction costs 14,432 13,647
Stock-based compensation 45,692 60,458
Loss on disposal of property and equipment 738 1,755
Deferred income taxes 8,899 (2,149 )
Tax benefit from stock-based compensation 290 98
Excess tax benefits from stock-based compensation (2,413 ) (1,813 )
Changes in operating assets and liabilities:
Accounts receivable (2,142 ) (24,117 )
Inventories 1,715 (450 )
Prepaid expenses and other assets (19,140 ) (7,436 )
Accounts payable 27,128 3,139
Accrued and other liabilities (11,333 ) 9,471  
Net cash provided by operating activities 193,423   165,037  
 
Cash flows from investing activities:
Purchases of property and equipment (56,264 ) (55,448 )
Capitalization of software and website development costs (33,423 ) (21,221 )
Purchases of investments (29,422 ) (31,073 )
Proceeds from the maturities and sales of investments 40,447 73,454
Proceeds from sale of property and equipment 14,261 1,298
Acquisition of business and intangible assets, net of cash acquired   (127 )
Net cash used in investing activities (64,401 ) (33,117 )
 
Cash flows from financing activities:
Proceeds from issuance of common stock upon exercise of stock options 2,104 3,221
Repurchases of common stock (112,488 ) (179,090 )
Excess tax benefits from stock-based compensation 2,413 1,813
Principal payments of capital lease and financing obligations (19,377 ) (12,723 )
Prepayment of accelerated share repurchase (75,000 )
Refund of accelerated share repurchase 38,179
Payment for contingent consideration liabilities (1,313 )  
Net cash used in financing activities (128,661 ) (223,600 )
 
Net increase (decrease) in cash and cash equivalents 361 (91,680 )
Cash and cash equivalents, beginning of period 288,863   380,543  
Cash and cash equivalents, end of period $ 289,224   $ 288,863  
 
 
Supplemental schedule of non-cash investing / financing activities:
Net increase (decrease) in accrued purchases of property and equipment $ (4,013 ) $ 3,818
Net increase (decrease) in accrued capitalized software and website development costs (319 ) 892
Stock-based compensation capitalized with software and website development costs 1,560 1,247
Increase in estimated fair market value of buildings under build-to-suit leases 17,161
Property and equipment acquired under capital leases 23,946 29,097
 
Shutterfly, Inc.
Consumer Metrics Disclosure
   
Three Months Ended Twelve Months Ended
December 31, December 31,
2016   2015 2016   2015
Consumer Metrics
Customers 6,219,011 6,141,073 10,115,763 9,750,590
year-over-year growth 1 % 4 %
 
Orders 10,869,499 10,280,487 27,108,889 25,805,801
year-over-year growth 6 % 5 %
 
Average order value [1] $47.98 $48.96 $36.80 $37.26
year-over-year growth (2 )% (1 )%

[1] Average order value excludes Shutterfly Business Solutions revenue.

 
Shutterfly, Inc.
Segment Disclosure
(In thousands)
(Unaudited)
   
Three Months Ended Twelve Months Ended
December 31, December 31,
2016   2015 2016   2015
Consumer
Net revenues $ 521,484 $ 503,331 $ 997,556 $ 961,418
Cost of net revenues 198,949   189,125   455,387   436,050  
Gross profit 322,535   314,206   542,169   525,368  
Consumer gross profit margin 61.8 % 62.4 % 54.3 % 54.6 %
 
Shutterfly Business Solutions (SBS)
Net revenues 39,742 44,749 136,668 98,011
Cost of net revenues 28,673   37,090   100,582   79,789  
Gross profit 11,069   7,659   36,086   18,222  
SBS gross profit margin 27.9 % 17.1 % 26.4 % 18.6 %
 
Corporate [1]
Net revenues
Cost of net revenues 2,426   2,518   10,148   12,239  
Gross profit (2,426 ) (2,518 ) (10,148 ) (12,239 )
 
Consolidated
Net revenues 561,226 548,080 1,134,224 1,059,429
Cost of net revenues 230,048   228,733   566,117   528,078  
Gross profit $ 331,178   $ 319,347   $ 568,107   $ 531,351  
 
Gross profit margin 59.0 % 58.3 % 50.1 % 50.2 %

[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,   Sep. 30,   Dec. 31, Dec. 31,   Dec. 31,
2015 2015 2015 2015 2016 2016 2016 2016 2015 2016
 
GAAP gross profit $ 65,271 $ 87,232 $ 59,501 $ 319,347 $ 72,986 $ 94,369 $ 69,574 $ 331,178 $ 531,351 $ 568,107
Stock-based compensation 1,192 1,001 952 989 1,224 1,081 1,131 1,143 4,134 4,579
Amortization of intangible assets 2,849   2,014   1,713   1,526   1,452   1,424   1,409   1,283   8,102   5,568  
Non-GAAP gross profit $ 69,312   $ 90,247   $ 62,166   $ 321,862   $ 75,662   $ 96,874   $ 72,114   $ 333,604   $ 543,587   $ 578,254  
 
Non-GAAP gross profit margin 43 % 49 % 37 % 59 % 42 % 47 % 38 % 59 % 51 % 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,   Sep. 30,   Dec. 31, Dec. 31,   Dec. 31,
2015 2015 2015 2015 2016 2016 2016 2016 2015 2016
 
GAAP operating income (loss) $ (46,224 ) $ (28,392 ) $ (49,066 ) $ 141,947 $ (41,814 ) $ (21,075 ) $ (41,794 ) $ 153,793 $ 18,265 $ 49,110
Stock-based compensation 17,760 16,315 15,756 10,627 10,150 10,924 12,214 12,404 60,458 45,692
Amortization of intangible assets 7,684   6,735   6,379   6,252   6,119   5,074   4,551   4,376   27,050   20,120  
Non-GAAP operating income (loss) $ (20,780 ) $ (5,342 ) $ (26,931 ) $ 158,826   $ (25,545 ) $ (5,077 ) $ (25,029 ) $ 170,573   $ 105,773   $ 114,922  
 
Non-GAAP operating margin (13 )% (3 )% (16 )% 29 % (14 )% (2 )% (13 )% 30 % 10 % 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,   Sep. 30,   Dec. 31, Dec. 31,   Dec. 31,
2015 2015 2015 2015 2016 2016 2016 2016 2015 2016
 
GAAP net income (loss) $ (45,103 ) $ (23,777 ) $ (63,077 ) $ 131,114 $ (29,436 ) $ (16,485 ) $ (29,155 ) $ 90,982 $ (843 ) $ 15,906
Interest expense 4,736 4,985 5,613 5,664 5,675 5,661 5,726 5,961 20,998 23,023
Interest and other income, net (102 ) (120 ) (433 ) (89 ) (121 ) (128 ) (130 ) (122 ) (744 ) (501 )
Tax (benefit) provision (5,755 ) (9,480 ) 8,831 5,258 (17,932 ) (10,123 ) (18,235 ) 56,972 (1,146 ) 10,682
Depreciation and amortization 27,593 27,707 28,933 29,044 29,114 28,357 27,587 28,593 113,277 113,651
Stock-based compensation 17,760   16,315   15,756   10,627   10,150   10,924   12,214   12,404   60,458   45,692  
 
Non-GAAP Adjusted EBITDA $ (871 ) $ 15,630   $ (4,377 ) $ 181,618   $ (2,550 ) $ 18,206   $ (1,993 ) $ 194,790   $ 192,000   $ 208,453  
 
Shutterfly, Inc.
Reconciliation of Cash Flow from Operating Activities to Non-GAAP Adjusted EBITDA and Adjusted EBITDA minus Capital Expenditures
(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,
2015 2015 2015 2015

2016 [3]

2016 2016 2016 2015 2016
 
Net cash provided by (used in) operating activities $ (107,731 ) $ 22,171 $ (22,140 ) $ 272,737 $ (82,610 ) $ 16,916 $ (4,881 ) $ 263,998 $ 165,037 $ 193,423
Interest expense 4,736 4,985 5,613 5,664 5,675 5,661 5,726 5,961 20,998 23,023
Interest and other income, net (102 ) (120 ) (433 ) (89 ) (121 ) (128 ) (130 ) (122 ) (744 ) (501 )
Tax (benefit) provision (5,755 ) (9,480 ) 8,831 5,258 (17,932 ) (10,123 ) (18,235 ) 56,972 (1,146 ) 10,682
Changes in operating assets and liabilities 113,075 (6,803 ) 134 (87,013 ) 98,604 2,374 29,155 (126,361 ) 19,393 3,772
Other adjustments (5,094 ) 4,877   3,618   (14,939 ) (6,166 ) 3,506   (13,628 ) (5,658 ) (11,538 ) (21,946 )
Non-GAAP Adjusted EBITDA (871 ) 15,630   (4,377 ) 181,618   (2,550 ) 18,206   (1,993 ) 194,790   192,000   208,453  
Less: Purchases of property and equipment (13,978 ) (17,199 ) (15,117 ) (12,972 ) (5,497 ) (22,005 ) (14,957 ) (9,792 ) (59,266 ) (52,251 )
Less: Capitalized technology & development costs (4,072 ) (5,386 ) (6,353 ) (6,302 ) (8,168 ) (10,052 ) (8,819 ) (6,065 ) (22,113 ) (33,104 )
Add: Capex adjustments [1]           9,827         9,827  
Adjusted EBITDA minus capital expenditures [2] $ (18,921 ) $ (6,955 ) $ (25,847 ) $ 162,344   $ (16,215 ) $ (4,024 ) $ (25,769 ) $ 178,933   $ 110,621   $ 132,925  

 

[1] In the second quarter of 2016, the Company acquired and immediately sold $9.8 million of printers.

[2] Adjusted EBITDA minus capital expenditures was referred to as "free cash flow" prior to the fourth quarter of 2016.

[3] 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.
Reconciliation of Forward-Looking Guidance for Non-GAAP Financial Measures to GAAP Measures
(In millions, except per share amounts)
 
Forward-Looking Guidance [1]
Three Months Ending   Twelve Months Ending
March 31, 2017 December 31, 2017
Low   High Low   High
 
Net revenues [2] $185.0 $190.0 $1,135.0 $1,165.0
 
GAAP gross profit margin 37.0 % 37.5 % 49.0 % 50.0 %
 
GAAP operating income (loss) ($48.0 ) ($45.5 ) $48.5 $68.5
GAAP operating margin (26.0 %) (24.0 %) 4.3 % 5.9 %
 
GAAP operating income (loss) ($48.0 ) ($45.5 ) $48.5 $68.5
Stock-based compensation $12.4 $12.4 $49.0 $49.0
Amortization of intangible assets $4.3 $4.3 $14.9 $14.9
Depreciation $24.3   $24.3   $97.6   $97.6  
Adjusted EBITDA ($7.0 ) ($4.5 ) $210.0   $230.0  
Adjusted EBITDA margin (3.8 %) (2.4 %) 18.5 % 19.7 %
 
Capital expenditures $75.0 $75.0
Capital expenditures as % of net revenues 6.6 % 6.4 %
 
Adjusted EBITDA minus capital expenditures [3] $135.0 $155.0
Adjusted EBITDA minus capital expenditures as % of net revenues 11.9 % 13.3 %
 
Tax rate 37.5 % 37.5 % 37.5 % 37.5 %
 
Net income (loss) per share
Basic ($1.00 ) ($0.95 )
Diluted $0.45 $0.80
 
Weighted average shares
Basic 33.7 33.7
Diluted 34.5 34.5

 

[1] Excludes expected restructuring charges ranging from $15 million to $20 million as well as any costs related to refinancing our convertible debt.

[2] In 2017, net revenues from SBS Segment to increase 20% over 2016.

[3] Adjusted EBITDA minus capital expenditures was referred to as "free cash flow" prior to the fourth quarter of 2016.

Shutterfly, Inc.
Investor Relations:
Shawn Tabak, 650-610-6026
stabak@shutterfly.com
or
Media Relations:
Nicole Stier, 650-610-6013
nstier@shutterfly.com

Source: Shutterfly, Inc.

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