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Shutterfly’s Revenues Spike, but Earnings Lag

May 1, 2012
REDWOOD CITY, CA—April 30, 2012—Shutterfly Inc. announced financial results for the first quarter ended March 31, 2012.

“The first quarter was a solid start to the year for us with strength across all three of our business categories,” said President and CEO Jeffrey Housenbold. “Capitalizing on our scale and profitability, we enhanced our product and service offerings, launched Treat, our 1:1 greeting card service and were successful in negotiating the transfer of Kodak Gallery’s customer accounts and data to Shutterfly.

“Our commitment to innovation, design-forward products and services, customer-friendly policies and industry-leading quality continues to resonate well with our existing and new customers as we continue to solidify our market leadership,” Housenbold added.

First-Quarter 2012 Financial Highlights
  • Net revenues totaled $91.3 million, a 60 percent year-over-year increase. First-quarter 2012 represents the 45th consecutive quarter of year-over-year net revenue growth.
  • Personalized Products & Services net revenues totaled $70.2 million, a 72 percent year-over-year increase. Personalized Products & Services net revenues represented 77 percent of total net revenues.
  • Net revenues from Prints totaled $14.9 million.
  • Commercial Print net revenues totaled $6.2 million, a 171 percent year-over-year increase.
  • GAAP net loss was ($10.0) million, compared to ($7.8) million in the first quarter of 2011.
  • Adjusted EBITDA was $0.6 million, compared to ($1.9) million in the first quarter of 2011.

First Quarter 2012 Operating Metrics

Shutterfly:
  • Transacting customers totaled 1.6 million, an 18 percent year-over-year increase.
  • Orders totaled 2.5 million, a 22 percent year-over-year increase.
  • Average order value was $24.60, a decrease of 8 percent year-over-year.

Tiny Prints (pro forma):
  • Transacting customers totaled 231,000, a 17 percent year-over-year increase.
  • Orders totaled 322,000, a 29 percent year-over-year increase.
  • Average order value, excluding 1:1 Greeting Cards, was $96.92, a decrease of 1 percent year-over-year.

Business Outlook
Our business outlook includes the financial impact of our pending Kodak transaction which is expected to close this week.

Second Quarter 2012:
  • Net revenues to range from $90 million to $92 million, a year-over-year increase of 19 percent to 21 percent. This range assumes minimal revenue from our pending Kodak transaction.
  • GAAP operating loss to range from ($23.8) million to ($27.3) million.
  • Non-GAAP operating loss to range from ($8.7) million to ($12.2) million.
  • Adjusted EBITDA loss to range from ($2.0) million to ($4.0) million.

Full Year 2012:
  • Net revenues to range from $576 million to $586 million, a year-over-year increase of 22 percent to 24 percent. This range assumes approximately $21 million in revenue from our pending Kodak transaction.
  • GAAP operating income to range from $5.0 million to $12.2 million.
  • Non-GAAP operating income to range from $65.0 million to $72.2 million.

About Shutterfly
Founded in 1999, Shutterfly Inc. is an Internet-based social expression and personal publishing company and operates Shutterfly.com, Tiny Prints.com, Weddingpaperdivas.com and Treat.com. 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.

Source: Shutterfly.

 

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