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Vistaprint Announces New Organizational Structure, Reports Double-Digit Growth

October 28, 2010
VENLO, NETHERLANDS—Oct. 28, 2010—Vistaprint N.V. announced a new organizational structure with the creation of the roles of Chief Customer Officer and Chief Operating Officer, the promotion of two senior executives who will lead the North American and European business units, and a broad series of promotions, organizational changes and reporting structure evolutions in the company’s marketing, manufacturing and technology organizations. The new structure is designed to help Vistaprint increase its focus on customers and to act as an organizational foundation on which Vistaprint can extend its established history of strong growth.

In its first-quarter 2011 financials, the company reported revenue grew to $170.5 million, an 18 percent increase over revenue of $145.1 million reported in the same quarter a year ago. Operating income in the first quarter was $12.3 million, or 7.2 percent of revenue, and reflected a 14 percent decrease compared to $14.4 million, or 9.9 percent of revenue in the same quarter a year ago.

A summary of the most senior changes is as follows:

• Janet Holian, a 10-year veteran of the company and current president of the European business unit, will assume the role of Chief Customer Officer, reporting to CEO Robert Keane. In this role, Holian will have worldwide responsibility for driving customer focus and for the training and development of marketing teams.

• Wendy Cebula, also a 10-year veteran of the company and current president of the North American business unit, will assume the role of Chief Operating Officer, reporting to Keane. In this role, Cebula will oversee the European and North American business units as well as global groups that have responsibility for cross-business-unit aspects of marketing, manufacturing and technology development.

• Trynka Shineman, who joined the company in 2004 and is currently chief marketing officer of Vistaprint North America, will become president of the North American business unit reporting to Cebula.

• Nick Ruotolo, who joined the company in 2005 and is currently chief marketing officer of Vistaprint Europe, will become president of the European business unit reporting to Cebula.

• As president and CEO, Robert Keane will be most active in areas of strategy, executive and organizational development, company-wide culture and communications, corporate finance and governance, long-term R&D activities, and geographic expansion into Japan and emerging markets.

“The dedication, talent and leadership of Janet, Wendy, Trynka and Nick have been instrumental in building Vistaprint into the successful organization that it is today,” said Robert Keane. “I congratulate them on their well deserved promotions and look forward to working with them to continue to build a transformational and enduring business institution for the mutual benefit of Vistaprint’s customers, employees and shareholders.”

Financial Metrics:

• Revenue for the first quarter of fiscal year 2011 grew to $170.5 million, an 18 percent increase over revenue of $145.1 million reported in the same quarter a year ago.  Excluding the estimated impact from currency exchange rate fluctuations, total revenue grew 20 percent from the first quarter a year ago. Excluding the impact of the termination of membership programs which generated 2.3 percent of total revenue in the first quarter of 2010, but 0 percent of total revenue in the first quarter of 2011, constant currency revenue growth was 23 percent year over year.

• Operating income in the first quarter was $12.3 million, or 7.2 percent of revenue, and reflected a 14 percent decrease compared to $14.4 million, or 9.9 percent of revenue in the same quarter a year ago.

• Gross margin (revenue minus the cost of revenue as a percent of total revenue) in the first quarter was 63.1 percent, compared to 63.6 percent in the same quarter a year ago.

• GAAP net income for the first quarter was $10.8 million, or 6.3 percent of revenue, representing a 17 percent decrease compared to $13.0 million, or 8.9 percent of revenue in the same quarter a year ago.

• Non-GAAP adjusted net income for the first quarter, which excludes share-based compensation expense and its related tax effect, was $16.3 million, or 9.6 percent of revenue, representing a 12 percent decrease compared to $18.5 million, or 12.7 percent of revenue in the same quarter a year ago.

• Capital expenditures in the first quarter were $14.1 million, or 8.3 percent of revenue.

• During the first quarter, the company generated $18.8 million in cash from operations and $2.9 million in free cash flow, defined as cash from operations less purchases of property, plant and equipment, and capitalization of software and website development costs.

“Vistaprint delivered solid results in revenue and earnings per share in the first quarter of the new fiscal year relative to our guidance. Increased operational focus accompanied by currency tailwinds resulted in higher-than-anticipated quarterly revenue,” said Keane. “This, along with cost controls and better-than-expected gross margins, resulted in earnings per share that exceeded the high end of the guidance we set in July. We are encouraged by these results; however, we believe we have a lot more work to do, organizational evolution to come and investments to make to ensure that Vistaprint remains a high-growth company for the foreseeable future.”

Operating Metrics:

• Vistaprint acquired approximately 1.6 million new customers in the first fiscal quarter ended Sept. 30, 2010.

• Repeat customers generated approximately 68 percent of total quarterly bookings in the first quarter, compared with 67 percent in the same quarter a year ago.

• Average daily order volume in the first quarter of fiscal 2011 was approximately 54,000, reflecting an increase of approximately 20 percent over an average of approximately 45,000 orders per day in the same quarter a year ago.

• Advertising and commissions expense was $36.1 million, or 21.2 percent of revenue in the first quarter, compared to $29.1 million, or 20.0 percent of revenue in the same quarter a year ago.

• The U.S. market contributed 57 percent of total revenue in the first quarter, down from 59 percent in the same quarter a year ago, representing a 14 percent increase in revenue year over year. Non-U.S. markets contributed 43 percent of total revenue in the first quarter, up from 41 percent in the same quarter a year ago, representing a 23 percent increase in revenue year over year and 30 percent in constant currency.

• North American, European and Asia-Pacific revenue contributions in the first quarter of the 2011 fiscal year were 59, 36, and 5 percent of total revenue, respectively.

• Average order value in the first quarter, including revenue from shipping and processing, was $34.69, slightly up from $34.23 in the same quarter a year ago.

• Website sessions in the first quarter were 68.9 million, a 6 percent increase over 65.1 million in the same quarter a year ago.

• Conversion rates were 7.3 percent in the first quarter of fiscal 2011, compared to 6.4 percent in the same quarter a year ago.

During the quarter, Vistaprint broadened its product offering with engraved pens, extra large banners, personalized email domain names, web site blogs, and a search engine optimization tool for web site customers.

“While we are off to a positive start to fiscal 2011 with our first quarter results, we remain at the very early stages of the holiday-related seasonal peak that is critical to our full fiscal year results,” said Mike Giannetto, chief financial officer. “We have updated our revenue guidance for fiscal 2011 to reflect our second quarter outlook at recent currency exchange rates. However, we do not believe it is prudent at this time to assume those recent exchange rates will persist through the back half of the year, because we are operating within a volatile currency environment.”

Financial Guidance as of October 28, 2010:

Based on current and anticipated levels of demand, the company expects the following financial results:

Revenue

• For the full fiscal year ending June 30, 2011, the company expects revenue of approximately $755 million to $790 million.

• For the second quarter of fiscal year 2011, ending December 31, 2010, the company expects revenue of approximately $210 million to $230 million.

Capital Expenditures

For the full fiscal year ending June 30, 2011, the company expects to make capital expenditures of approximately $55 million to $70 million. Planned capital investments are designed to support the planned growth of the business.

The foregoing guidance supersedes any guidance previously issued by the company. All such previous guidance should no longer be relied upon.

About Vistaprint
Vistaprint N.V. (Nasdaq:VPRT) empowers more than 9 million micro businesses and consumers annually with affordable, professional options to make an impression. With a unique business model supported by proprietary technologies, high-volume production facilities, and direct marketing expertise, Vistaprint offers a wide variety of products and services that micro businesses can use to expand their business. A global company, Vistaprint employs over 2,500 people, operates 22 localized websites globally and ships to more than 120 countries around the world. Vistaprint’s broad range of products and services are easy to access online, 24 hours a day at www.vistaprint.com.

Vistaprint and the Vistaprint logo are trademarks of Vistaprint N.V. or its subsidiaries. All other brand and product names appearing on this announcement may be trademarks or registered trademarks of their respective holders.

Source: Press release.

 

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