Shutterfly to Acquire Tiny Prints

Subject to the satisfaction of various closing conditions, Shutterfly currently anticipates that the transaction will close in approximately 30 to 60 days. Tiny Prints stockholders will own approximately 12% of the pro forma combined company. Tiny Prints outside investors will be subject to a six-month lock-up on the sale of Shutterfly shares received in the transaction and the Tiny Prints founders will be subject to a staggered 18-month lock-up. In addition, approximately 9% of the acquisition consideration will be held in escrow for 12 months.

Shutterfly Updated Financial Guidance for Q1-2011
For the quarter ending March 31, 2011, Shutterfly management confirmed that net revenues are now expected to range between $53-$55 million and that its Adjusted EBITDA, including approximately $1.1 million in transaction-related costs, is expected to range between a loss of $1 million and a loss of $2 million, as compared to management’s previous quarterly guidance of $52 to $53 million in net revenues and a loss of $1 million to $2 million in Adjusted EBITDA.

Evercore Partners served as Shutterfly’s exclusive financial advisor on the transaction and Morrison & Foerster LLP served as its legal counsel. Fenwick & West LLP served as Tiny Prints legal counsel.

About Shutterfly
Founded in 1999, Shutterfly Inc. is an Internet-based social expression and personal publishing service. Shutterfly provides high quality products and world class services that make it easy, convenient and fun for consumers to preserve their digital photos in a creative and thoughtful manner. Shutterfly’s flagship product is its award-winning photo book line, which helps consumers celebrate memories and tell their stories in professionally bound coffee table books. Shutterfly was recently named one of the top 25 Best Midsized Companies to Work For by the Great Place to Work Institute. More information about Shutterfly (NASDAQ:SFLY) is available at www.shutterfly.com. Shutterfly and Shutterfly.com are trademarks of Shutterfly, Inc.

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