Vistaprint Financials Suffer From Strategy Shift
Gross margin (revenue minus the cost of revenue as a percent of total revenue) in the third quarter was 64.7 percent, down from 65.5 percent in the same quarter a year ago. Operating income in the third quarter was $5.2 million, or 1.8 percent of revenue, and reflected a 46 percent decrease compared to operating income of $9.7 million, or 3.4 percent of revenue, in the same quarter a year ago.
GAAP net income attributable to Vistaprint for the third quarter was $1.4 million, or 0.5 percent of revenue, representing a 77 percent decrease compared to $5.9 million, or 2.0 percent of revenue in the same quarter a year ago. During the quarter, Vistaprint incurred transaction costs of $3.4 million related to two recently-announced acquisitions. GAAP net income per diluted share for the third quarter was $0.04, versus $0.17 in the same quarter a year ago.
"We also continue to move forward with many other improvements to our value proposition beyond our pricing and marketing practices," Keane added. "Examples include better customer service availability, improved product substrate quality, more reliable shipping methods, assistance for graphic design creation, new options for premium finishes, and more SKU choices."
As of March 31, 2014, the company had $46.5 million in cash and cash equivalents and $202.0 million of debt. After considering debt covenant limitations, as of March 31, 2014, the company had $301.4 million available for borrowing under its credit facility. Subsequent to the end of the quarter and after incorporating its acquisitions of People & Print Group and Pixartprinting, Vistaprint had roughly $150 million available for borrowing under the facility.
Starting in the first quarter of fiscal 2014, all operating metrics reflect the consolidated business including the company's Albumprinter and Webs acquisitions, and post-acquisition prior-period comparisons have been adjusted to reflect the same consolidated view.