Vistaprint Reports Its Earnings Exceed Expectations

VENLO, NETHERLANDS—April 28, 2011—Vistaprint N.V., a leading online provider of professional marketing products and services to micro businesses and the home, announced financial results for the three-month period ended March 31, 2011, the third quarter of its 2011 fiscal year.

“Vistaprint just completed a very strong third quarter,” said Robert Keane, president and CEO. “Earnings exceeded our expectations for three reasons: total revenue that was higher than our previous guidance, gross margin improvements that are the result of prior decisions to invest in manufacturing and procurement capabilities, and a delay in the timing of planned operating expenses.”

Keane continued, “Additionally, though it is still very early, we are progressing against the multi-year growth strategy we outlined at our recent investor day in New York. During the quarter, we researched and tested initiatives to deliver greater value to our customers; we moved forward to further drive manufacturing excellence; we invested more in established marketing channels; and we tested investments in new marketing channels."

Third-quarter Financial Metrics:

Revenue for the third quarter of its fiscal year 2011 grew to $203.7 million, a 23 percent increase from the $166 million reported in the same quarter a year ago. Excluding the estimated impact from currency exchange rate fluctuations, total revenue grew 22 percent from the same quarter a year ago.

Vistaprint’s gross margin (revenue minus the cost of revenue as a percent of total revenue) in the quarter was 65.3 percent, compared to 64.1 percent in the same quarter a year ago.

Operating income was $25.6 million, or 12.6 percent of revenue, which was a 44 percent increase compared to $17.8 million, or 10.7 percent of revenue, in the same quarter a year ago.

GAAP net income was $22.9 million, or 11.3 percent of revenue, a 42 percent increase compared to $16.2 million, or 9.7 percent of revenue in the same quarter a year ago.

Non-GAAP adjusted net income for the quarter, which excludes share-based compensation expense and its related tax effect, was $28.2 million, or 13.8 percent of revenue, a 31 percent increase compared to $21.5 million, or 12.9 percent of revenue in the same quarter a year ago.

Capital expenditures in the third quarter were $4.2 million, or 2.1 percent of revenue.

During the third quarter, the company generated $33.7 million in cash from operations and $27.8 million in free cash flow, defined as cash from operations less purchases of property, plant and equipment, purchases of intangible assets, and capitalization of software and website development costs.

Operating Metrics for the Third Quarter:

Vistaprint acquired approximately 1.8 million new customers in its third fiscal quarter ended March 31, 2011, compared with 1.6 million in the same quarter a year ago.

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

Total order volume was approximately 5.8 million, reflecting an increase of approximately 21 percent over approximately 4.8 million orders in the same quarter a year ago.

The U.S. market contributed 54 percent of total revenue in the quarter, down from 55 percent in the same quarter a year ago, representing a 19 percent increase in revenue year over year. Non-U.S. markets contributed 46 percent of total revenue, up from 45 percent in the same quarter a year ago, representing a 27 percent increase in revenue year over year and 25 percent in constant currency.

North American, European and Asia-Pacific revenue contributions in the quarter were 57, 38, and 5 percent of total revenue, respectively.

Average order value in the third quarter, including revenue from shipping and processing, was $36.03, compared with $34.79 in the same quarter a year ago.

Total Website sessions in the quarter were 79.4 million, a 3 percent decrease from 81.9 million in the same quarter a year ago.

The conversion rate was 7.3 percent, compared to 5.9 percent in the same quarter a year ago.

“With three quarters of good execution behind us, we believe that we will deliver stronger than previously anticipated revenue and earnings results for the full fiscal year,” said Ernst Teunissen, CFO. “Therefore, we are raising our fiscal 2011 revenue and earnings guidance to reflect our recent performance and outlook for the fourth quarter. Our guidance factors in our plan to make additional investments in the fourth quarter to drive longer-term growth that are in line with our well-established financial strategy of targeting annual, not quarterly, EPS objectives.”

Financial Guidance as of April 28, 2011:

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

Revenue—For the fourth quarter of fiscal year 2011, ending June 30, 2011, the company expects revenue of approximately $202 million to $207 million. For the full fiscal year ending June 30, 2011, the company expects revenue of approximately $810 million to $815 million.

Capital Expenditures—For the full fiscal year ending June 30, 2011, the company expects to make capital expenditures of approximately $40 million to $45 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 10 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 2,700 people, operates 24 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.

Source: financial release.