Shutterfly Reports Double-Digit Gains in All Services
REDWOOD CITY, CA—Feb. 02, 2011—Shutterfly Inc., a leading Internet-based social expression and personal publishing service, announced financial results for the fourth quarter and full-year ended Dec. 31, 2010.
“Our strategic investments throughout 2010, combined with our focus on strong execution, innovation and improved efficiencies led to record revenues, profits, and free cash flows” said President and CEO Jeffrey Housenbold. “We continue to outpace the industry in terms of innovation, user experience, on-trend designs, quality, and customer service. With the social expression and personal publishing markets still in the early stages, Shutterfly will focus on extending our leadership position in these large markets throughout 2011.”
Fourth Quarter 2010 Financial Highlights
• Net revenues totaled $166.2 million, a 27 percent year-over-year increase; 29 percent increase excluding referral fees.
• Personalized Products & Services net revenues totaled $123.8 million, a 33 percent year-over-year increase; 37 percent increase excluding referral fees.
• Net revenues from Prints totaled $40.1 million, a 10 percent year-over-year increase.
• ommercial Print net revenues totaled $2.3 million.
• Existing customers generated 72 percent of total net revenues.
• Gross profit margin was 62 percent of net revenues, compared to 61 percent in the fourth quarter of 2009.
• GAAP net income was $32.5 million, compared to $24.1 million in the fourth quarter of 2009.
• Adjusted EBITDA was $60.2 million, compared to $47.9 million in the fourth quarter of 2009.
Full Year 2010 Financial Highlights
• Net revenues totaled $307.7 million, a 25 percent year-over-year increase; 27 percent increase excluding referral fees.
• Personalized Products & Services net revenues totaled $218.7 million, a 35 percent year-over-year increase; 39 percent increase excluding referral fees.
• Net revenues from Prints totaled $83.9 million, a 4 percent year-over-year increase.
• Commercial Print net revenues totaled $5.1 million, a 33 percent year-over-year increase.
• Existing customers generated 73 percent of total net revenues.
• Gross profit margin was 56 percent of net revenues, compared to 55 percent in 2009.
• Operating expenses, excluding $15.9 million of stock-based compensation, totaled $132.6 million.
• GAAP net income was $17.1 million, compared to $5.9 million in 2009.
• Adjusted EBITDA was $67.1 million, compared to $50.2 million in 2009.
Fourth Quarter 2010 Operating Metrics
• Transacting customers totaled 2.3 million, a 23 percent year-over-year increase.
• Orders totaled 3.7 million, a 21 percent year-over-year increase.
• Average order value was $44.41, a 5 percent year-over-year increase.
Full Year 2010 Operating Metrics
• Transacting customers totaled 4.1 million, a 24 percent year-over-year increase.
• Orders totaled 9.2 million, a 17 percent year-over-year increase.
• Average order value was $32.88, a 7 percent year-over-year increase.
Business Outlook
First Quarter 2011:
• Net revenues to range from $52 million to $53 million, a year-over-year increase of 14 percent to 16 percent; 20 percent to 22 percent excluding referral fees.
• GAAP operating loss to range from $12 million to $13 million.
• Non-GAAP operating loss to range from $6 million to $7 million.
• Adjusted EBITDA loss to range from $1.0 million to $2.0 million.
Full Year 2011:
• Net revenues to range from $363 million to $373 million, a year-over-year increase of 18 percent to 21 percent; 19 percent to 22 percent excluding referral fees.
• GAAP operating income to range from $35 million to $40 million.
• Non-GAAP operating income to range from $56 million to $61 million.
• Adjusted EBITDA to range from 21 percent to 22 percent of net revenues.
• Capital expenditures to range from 7.5 percent to 8.5 percent of net revenues.
Notes to the Fourth Quarter and Full Year 2010 Financial Results and Business Outlook
Personalized Products and Services (“PPS”) net revenues primarily include Photo Books, Stationery and folded Greeting Cards, Calendars and Photo-based Merchandise. PPS also includes net revenues from advertising and sponsorship programs and referral fees. The Company’s referral fee program was discontinued effective March 31, 2010, and no referral fee revenues have been recorded subsequent to that date.
Print net revenues consist of photo prints in Wallet, 2x6, 4x6, 5x7, 8x10, Photo Cards and large format sizes.
Commercial Print net revenues are excluded from net revenues from PPS and Prints.
Average Order Value ("AOV") is defined as total net revenues (excluding Commercial Print), divided by total orders.
The foregoing financial guidance replaces any of the company’s previously issued guidance and all previous guidance should no longer be relied upon.
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. More information about Shutterfly (NASDAQ:SFLY) is available at www.shutterfly.com. Shutterfly and Shutterfly.com are trademarks of Shutterfly Inc.
Source: Financial release.