Attached files
| file | filename |
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| 8-K - STAMPS.COM INC | v210862_8k.htm |
EXHIBIT
99.1
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Stamps.com
Investor Contact:
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Press
Contact:
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Stamps.com
Investor Relations
|
Brew
PR
|
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(310)
482-5830
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(310)
600-7160
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http://investor.stamps.com
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dena@brewpr.com
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STAMPS.COM
ANNOUNCES FOURTH QUARTER 2010 RESULTS
Non-GAAP
diluted earnings per share up 69% to $0.30, highest level in the Company's
history
LOS ANGELES – February 10, 2011 – Stamps.com® (Nasdaq:STMP),
the leading provider of postage online and
shipping
software solutions, today announced results for the fourth quarter ended
December 31, 2010.
For the
fourth quarter:
|
·
|
PC
Postage revenue, excluding the enhanced promotion channel, was $19.3
million, up 11% from the fourth quarter of
2009.
|
|
·
|
Total
PC Postage revenue, including the enhanced promotion channel (which
consists of online programs where additional promotions are provided
directly by marketing partners), was $20.3 million, up 8% from the fourth
quarter of 2009.
|
|
·
|
PhotoStamps
revenue was $2.4 million, a decrease of 17% versus the fourth quarter of
2009.
|
|
·
|
Including
the decline in PhotoStamps, total revenue was $22.7 million, up 5%
compared to the fourth quarter of
2009.
|
|
·
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PC
Postage gross margin was 76.8%, PhotoStamps gross margin was 23.7% and
total gross margin was 71.1%.
|
|
·
|
GAAP
net loss was $0.3 million or $0.02 per fully diluted share. This includes
$0.6 million in stock-based compensation expense, a $0.6 million asset
write-off and $3.4 million in dividend-related compensation
expense.
|
|
·
|
Excluding
the stock-based compensation expense, asset write-off and dividend-related
compensation expense, non-GAAP income from operations was $4.1 million,
non-GAAP net income was $4.4 million and non-GAAP net income per fully
diluted share was $0.30.
|
“For the
quarter, our non-GAAP earnings per share was up by 69%, and this was the highest
level of quarterly non-GAAP earnings per share we have generated in the
Company’s history,” said Ken McBride, Stamps.com president and CEO. “We
continue to see strong results across-the-board, including our small business,
enterprise and high volume shipping segments. As we enter 2011, we are well
positioned to continue making progress in each of these business
areas.”
Fourth Quarter
2010 Detailed Results
Stamps.com
reported fourth quarter 2010 GAAP net loss of $0.3 million. On a per share
basis, total fourth quarter 2010 GAAP net loss was $0.02 based on basic shares
outstanding of 14.4 million. Fourth quarter 2010 GAAP net
loss included $0.6 million of stock-based compensation expense, a
$0.6 million asset write-off related to the Company's billing system and
$3.4 million of compensation expense related to the special dividend
and its impact on employee stock options. Non-GAAP and GAAP amounts are
reconciled in the following table:
|
Fourth
Quarter Fiscal 2010
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||||||||||||||||||||
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All
amounts in millions except
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Non-GAAP
|
Stock-Based
|
Asset
|
Dividend
|
GAAP
|
|||||||||||||||
|
per
share or margin data:
|
Amounts
|
Comp.
Exp.
|
Write-Off
|
Related
Exp.
|
Amounts
|
|||||||||||||||
|
Cost
of Sales
|
$ | 6.21 | $ | 0.05 | $ | - | $ | 0.28 | $ | 6.54 | ||||||||||
|
Research
& Development
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2.00 | 0.12 | - | 0.71 | 2.83 | |||||||||||||||
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Sales
& Marketing
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7.58 | 0.17 | - | 0.83 | 8.59 | |||||||||||||||
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General
& Administrative
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2.78 | 0.30 | - | 1.62 | 4.69 | |||||||||||||||
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Total
Expenses
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18.56 | 0.65 | - | 3.44 | 22.65 | |||||||||||||||
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Gross
Margin
|
72.6 | % | (0.2 | %) | -- | (1.2 | %) | 71.1 | % | |||||||||||
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Income
(Loss) from Operations
|
4.12 | (0.65 | ) | - | (3.44 | ) | 0.03 | |||||||||||||
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Asset
Write-Off
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- | - | (0.63 | ) | - | (0.63 | ) | |||||||||||||
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Interest
and Other Income
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0.14 | - | - | - | 0.14 | |||||||||||||||
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Pre-Tax
Income (Loss)
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4.25 | (0.65 | ) | (0.63 | ) | (3.44 | ) | (0.47 | ) | |||||||||||
|
Provision
for Income Taxes
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0.19 | - | - | - | 0.19 | |||||||||||||||
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Net
Income
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$ | 4.44 | $ | (0.65 | ) | $ | (0.63 | ) | $ | (3.44 | ) | $ | (0.28 | ) | ||||||
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On
a diluted per share basis
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$ | 0.30 | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.24 | ) | $ | (0.02 | ) | ||||||
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Shares
used in per share calculation
|
14.57 | 14.42 | 14.42 | 14.42 | 14.42 | |||||||||||||||
Excluding
the stock-based compensation expense, asset write-off and dividend-related
compensation expense, fourth quarter 2010 non-GAAP net income was $4.4 million
or $0.30 per fully diluted share based on fully diluted shares outstanding of
14.6 million. This compares to fourth quarter 2009 non-GAAP net income of $2.9
million and non-GAAP net income per fully diluted share of
$0.18. Thus, non-GAAP fourth quarter 2010 diluted earnings per share
increased by 69% compared to the same quarter last year.
Fiscal
2010 Detailed Results
Total
2010 revenue was $85.5 million, an increase of 4% versus revenue of $82.1
million in 2009. Total 2010 PC Postage revenue, including service revenue, store
revenue and insurance revenue, was $78.4 million, up 6% versus PC Postage
revenue of $73.6 million in 2009. Excluding the enhanced promotion
channel, PC Postage revenue in 2010 was $73.8 million, up 10% versus $67.4
million in 2009. Total 2010 PhotoStamps revenue was $7.2 million, down 16%
versus PhotoStamps revenue of $8.5 million in 2009.
Total
2010 GAAP net income was $5.5 million, including approximately $2.8 million of
stock-based compensation expense; a $0.6 million asset write-off; $3.4 million
of dividend-related compensation expense; $5.2 million of legal settlements and
reserves; and a $4.0 million non-cash income tax benefit resulting from the
reversal of a portion of the Company’s deferred tax asset valuation allowance.
On a per share basis, total 2010 GAAP net income was $0.38 based on fully
diluted shares outstanding for the year of 14.7 million. Non-GAAP and
GAAP amounts are reconciled in the following table:
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Fiscal
Year 2010
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Legal
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||||||||||||||||||||||||||
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All
amounts in millions except
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Non-GAAP
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Stock-Based
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Asset
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Dividend
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Settlements
|
Income
Tax
|
GAAP
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|||||||||||||||||||||
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per
share or margin data:
|
Amounts
|
Comp.
Exp.
|
Write-Off
|
Related
Exp.
|
&
Reserves
|
Benefit
|
Amounts
|
|||||||||||||||||||||
|
Cost
of Sales
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$ | 23.15 | $ | 0.25 | $ | - | $ | 0.28 | $ | - | $ | - | $ | 23.68 | ||||||||||||||
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Research
& Development
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8.14 | 0.57 | - | 0.71 | - | - | 9.42 | |||||||||||||||||||||
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Sales
& Marketing
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29.61 | 0.73 | - | 0.83 | - | - | 31.17 | |||||||||||||||||||||
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General
& Administrative
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11.69 | 1.29 | - | 1.62 | - | - | 14.59 | |||||||||||||||||||||
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Legal
Settlements & Reserves
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- | - | - | - | 5.21 | - | 5.21 | |||||||||||||||||||||
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Total
Expenses
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72.59 | 2.84 | - | 3.44 | 5.21 | - | 84.08 | |||||||||||||||||||||
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Gross
Margin
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72.9 | % | (0.3 | %) | - | (0.3 | %) | - | - | 72.3 | % | |||||||||||||||||
|
Income
(Loss) from Operations
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12.96 | (2.84 | ) | - | (3.44 | ) | (5.21 | ) | - | 1.47 | ||||||||||||||||||
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Asset
Write-Off
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- | - | (0.63 | ) | - | - | - | (0.63 | ) | |||||||||||||||||||
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Interest
and Other Income
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0.76 | - | - | - | - | - | 0.76 | |||||||||||||||||||||
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Pre-Tax
Income (Loss)
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13.71 | (2.84 | ) | (0.63 | ) | (3.44 | ) | (5.21 | ) | - | 1.59 | |||||||||||||||||
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Provision
for Income Taxes
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(0.03 | ) | - | - | - | - | 3.98 | 3.95 | ||||||||||||||||||||
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Net
Income
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$ | 13.68 | $ | (2.84 | ) | $ | (0.63 | ) | $ | (3.44 | ) | $ | (5.21 | ) | $ | 3.98 | $ | 5.53 | ||||||||||
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On a
diluted per share basis
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$ | 0.93 | $ | (0.19 | ) | $ | (0.04 | ) | $ | (0.23 | ) | $ | (0.35 | ) | $ | 0.27 | $ | 0.38 | ||||||||||
|
Shares
used in per share calculation
|
14.68 | 14.68 | 14.68 | 14.68 | 14.68 | 14.68 | 14.68 |
Excluding
the stock-based compensation expense, asset write-off, dividend-related
compensation expense, legal settlements and reserves and income tax benefit,
2010 non-GAAP net income was $13.7 million. On a per share basis,
2010 non-GAAP net income per fully diluted share was $0.93 based on 2010 fully
diluted shares outstanding of 14.7 million. This compares to 2009 non-GAAP net
income per fully diluted share of $0.62. Thus, non-GAAP 2010 diluted earnings
per share increased by 51% compared to 2009.
Share
Repurchase
During
2010 the Company repurchased a total of 1.5 million shares for a total cost of
$13.8 million. The Company did not repurchase any shares during the fourth
quarter of 2010. On February 3, 2011, the Board of Directors approved
a new share repurchase plan effective upon the expiration of the current plan on
February 15, 2011, authorizing the Company to repurchase up to 1.0 million
shares of Stamps.com stock during the next six months.
The
timing of share purchases, if any, and the number of shares to be bought at any
one time will depend on market conditions and also will depend on the Company’s
assessment of risk that its net operating loss asset could be impaired if such a
repurchase were undertaken. Share purchases may be made from time-to-time on the
open market or in negotiated transactions at the Company's discretion in
compliance with Rule 10b-18 of the United States Securities and Exchange
Commission. The Company's purchase of any of its shares may be subject to
limitations imposed on such purchases by applicable securities laws and
regulations and the rules of the Nasdaq Stock Market.
Dividend
During
the fourth quarter, the Company completed a $2.00 per share special dividend to
shareholders. The total amount of cash distributed in the dividend payment was
$28.9 million based on 14.5 million shares outstanding as of the November 11,
2010 record date. The Company also incurred compensation expense of $3.4 million
in the fourth quarter related to the special dividend and its effect on employee
stock options.
The
Company currently estimates that approximately $1.87 of the $2.00 special
dividend will qualify as a tax-free return of capital, with the remaining amount
treated as a taxable dividend. The final tax classification will be reflected on
the form 1099-DIV provided to shareholders. Shareholders are encouraged to
consult with their own tax and financial advisors regarding the implications of
this dividend on their individual circumstances.
The
Company has returned approximately $253 million to its shareholders since 2002
through special dividends and share repurchases. Total special dividends now
represent approximately $107 million including a $78 million special dividend
paid in 2004 and the $29 million special dividend paid in 2010. In addition, the
Company has spent approximately $146 million repurchasing its shares since 2002.
Through its share repurchases, the Company has reduced its current
split-adjusted total shares outstanding by approximately 45% compared to the
total shares outstanding at the beginning of 2002.
Net
Operating Loss (NOL) Update
Stamps.com
currently has approximately $225 million in Federal NOLs and $145 million in
State NOLs. The Company estimates that as of December 31, 2010, its
ownership shift was approximately 22% compared with the 50% level that could
trigger impairment of its NOL asset under Internal Revenue Code Section 382
rules. As part of its ongoing program to preserve future use of
Stamps.com's NOL asset, the Company requests that any shareholder
contemplating becoming a 5% shareholder contact the Company before doing
so.
Business
Outlook
Stamps.com
currently expects total 2011 revenue to be in a range between $82.5 to
$92.5 million. 2011 GAAP net income per share is expected to be in a range
between $0.65 to $0.85, including approximately $3 million of stock-based
compensation expense. Excluding the stock-based compensation expense, non-GAAP
2011 net income per fully diluted share is expected to be in a range
between $0.85 to $1.05.
Company
Customer Metrics
A
complete set of the quarterly customer metrics for the past five fiscal years is
available at http://investor.stamps.com
(under a tab on the left side called Company Information, Metrics).
Quarterly
Conference Call
The
Stamps.com financial results conference call will be web cast today at 5:00 p.m.
Eastern Time and may be accessed at http://investor.stamps.com.
The Company plans to discuss its business outlook during the conference call.
Following the conclusion of the web cast, a replay of the call will be available
at the same website.
About
Stamps.com and PhotoStamps
Stamps.com (Nasdaq:
STMP) is a leading provider of Internet-based postage services. Stamps.com’s
service enables small businesses, enterprises, advanced shippers, and
consumers to print U.S. Postal Service-approved postage with just a PC, printer
and Internet connection, right from their home or office. The Company currently
has PC Postage partnerships with Avery Dennison, Microsoft, HP, Office Depot,
the U.S. Postal Service and others.
PhotoStamps is a
patented Stamps.com product that couples the technology of PC Postage with the
simplicity of a web-based image upload and order process. Customers may create
full custom PhotoStamps with their own digital photograph, or they may choose a
licensed image from one of many PhotoStamps collections such as the collegiate
collection. Stamps.com currently has PhotoStamps partnerships with Apple,
Google/Picasa, HP/Snapfish, Adobe and others.
Non-GAAP
Measures
To
supplement the Company’s condensed financial statements presented in accordance
with GAAP, Stamps.com uses non-GAAP measures of certain components of financial
performance. These non-GAAP measures include non-GAAP income from operations,
non-GAAP pre-tax income, non-GAAP net income, non-GAAP earnings per diluted
share, and non-GAAP gross margin. Reconciliation to the nearest GAAP measures of
all non-GAAP measures included in this press release can be found in the
financial tables on page 2 and 3 of this press release.
Non-GAAP
measures are provided to enhance investors’ overall understanding of the
Company’s current financial performance, prospects for the future and as a means
to evaluate period-to-period comparisons. The Company believes that these
non-GAAP measures provide meaningful supplemental information regarding
financial performance by excluding certain expenses and benefits that may not be
indicative of recurring core business operating results. The Company believes
the non-GAAP measures that exclude stock-based compensation, asset write-offs,
dividend-related compensation expense, legal settlements and reserves, and
income tax adjustments, when viewed with GAAP results and the accompanying
reconciliation, enhance the comparability of results against prior periods and
allow for greater transparency of financial results. The Company believes
non-GAAP measures facilitate management’s internal comparison of the Company’s
financial performance to that of prior periods as well as trend analysis for
budgeting and planning purposes. The presentation of non-GAAP measures are not
intended to be considered in isolation or as a substitute for, or superior to,
the financial information prepared and presented in accordance with
GAAP.
"Safe
Harbor" Statement under the Private Securities Litigation Reform Act of 1995:
This release includes forward-looking statements about our anticipated results
that involve risks and uncertainties. Important factors, including the Company's
ability to complete and ship its products, maintain desirable economics for its
products and obtain or maintain regulatory approval, which could cause actual
results to differ materially from those in the forward-looking statements, are
detailed in filings with the Securities and Exchange Commission made from time
to time by STAMPS.COM, including its Annual Report on Form 10-K for the year
ended December 31, 2009, Quarterly Reports on Form 10-Q, and Current Reports on
Form 8-K. STAMPS.COM undertakes no obligation to release publicly any revisions
to any forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.
Stamps.com,
the Stamps.com logo and PhotoStamps are trademarks or registered trademarks of
Stamps.com Inc. All other brands and names are property of their respective
owners.
|
STAMPS.COM
INC. AND SUBSIDIARY
|
||||||||||||||||
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CONSOLIDATED
STATEMENTS OF INCOME
|
||||||||||||||||
|
(in
thousands, except per share data)
|
||||||||||||||||
|
Three
Months ended
December
31,
|
Twelve
Months ended
December
31,
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|||||||||||||||
|
Unaudited
|
Unaudited
|
Unaudited
|
||||||||||||||
|
2010
|
2009
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2010
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2009
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|||||||||||||
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Revenues:
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||||||||||||||||
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Service
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$ | 16,428 | $ | 15,450 | $ | 64,607 | $ | 61,372 | ||||||||
|
Product
|
3,107 | 2,920 | 11,725 | 10,653 | ||||||||||||
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Insurance
|
741 | 422 | 2,023 | 1,598 | ||||||||||||
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PhotoStamps
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2,396 | 2,877 | 7,162 | 8,485 | ||||||||||||
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Other
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5 | 9 | 27 | 16 | ||||||||||||
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Total
revenues
|
22,677 | 21,678 | 85,544 | 82,124 | ||||||||||||
|
Cost
of revenues:
|
||||||||||||||||
|
Service
|
3,338 | 3,064 | 13,282 | 11,869 | ||||||||||||
|
Product
|
1,124 | 1,073 | 4,337 | 3,989 | ||||||||||||
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Insurance
|
251 | 130 | 641 | 494 | ||||||||||||
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PhotoStamps
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1,829 | 2,198 | 5,424 | 6,562 | ||||||||||||
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Total
cost of revenues
|
6,542 | 6,465 | 23,684 | 22,914 | ||||||||||||
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Gross
profit
|
16,135 | 15,213 | 61,860 | 59,210 | ||||||||||||
|
Operating
expenses:
|
||||||||||||||||
|
Sales
and marketing
|
8,590 | 8,086 | 31,174 | 31,735 | ||||||||||||
|
Research
and development
|
2,826 | 2,075 | 9,420 | 8,699 | ||||||||||||
|
General
and administrative
|
4,689 | 3,000 | 14,590 | 12,961 | ||||||||||||
|
Legal
settlements and reserves
|
- | - | 5,211 | - | ||||||||||||
|
Total
operating expenses
|
16,105 | 13,161 | 60,395 | 53,395 | ||||||||||||
|
Income
from operations
|
30 | 2,052 | 1,465 | 5,815 | ||||||||||||
|
Non-operating
asset write-off
|
(634 | ) | - | (634 | ) | - | ||||||||||
|
Interest
and other income, net
|
136 | 119 | 756 | 916 | ||||||||||||
|
Income
(loss) before taxes
|
(468 | ) | 2,171 | 1,587 | 6,731 | |||||||||||
|
Income
tax expense (benefit)
|
(185 | ) | (1 | ) | (3,945 | ) | 554 | |||||||||
|
Net
income (loss)
|
$ | (283 | ) | $ | 2,172 | $ | 5,532 | $ | 6,177 | |||||||
|
Net
income (loss) per share:
|
||||||||||||||||
|
Basic
|
$ | (0.02 | ) | $ | 0.14 | $ | 0.38 | $ | 0.38 | |||||||
|
Diluted
|
$ | (0.02 | ) | $ | 0.14 | $ | 0.38 | $ | 0.38 | |||||||
|
Weighted
average shares outstanding:
|
||||||||||||||||
|
Basic
|
14,417 | 15,764 | 14,529 | 16,238 | ||||||||||||
|
Diluted
|
14,417 | * | 15,897 | 14,685 | 16,369 | |||||||||||
|
*
Common equivalent shares are excluded from the diluted earnings per share
calculation as their effect is anti-dilutive
|
||||||||||||||||
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
|
(in
thousands)
|
||||||||
|
Unaudited
|
||||||||
|
December
31,
|
December
31,
|
|||||||
|
2010
|
2009
|
|||||||
|
ASSETS
|
||||||||
|
Cash
and investments
|
$ | 35,299 | $ | 71,745 | ||||
|
Accounts
receivable
|
4,868 | 4,367 | ||||||
|
Other
current assets
|
4,015 | 3,288 | ||||||
|
Property
and equipment, net
|
1,694 | 2,102 | ||||||
|
Intangible
assets, net
|
885 | 498 | ||||||
|
Deferred
tax assets
|
7,650 | 3,671 | ||||||
|
Other
assets
|
3,031 | 3,587 | ||||||
|
Total
assets
|
$ | 57,442 | $ | 89,258 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Liabilities
|
||||||||
|
Accounts
payable and accrued expenses
|
$ | 9,011 | $ | 9,583 | ||||
|
Deferred
revenue
|
4,193 | 4,070 | ||||||
|
Total
liabilities
|
13,204 | 13,653 | ||||||
|
Stockholders'
equity:
|
||||||||
|
Common
stock
|
47 | 47 | ||||||
|
Additional
paid-in capital
|
608,522 | 630,322 | ||||||
|
Treasury
Stock
|
(118,151 | ) | (104,344 | ) | ||||
|
Accumulated
deficit
|
(446,603 | ) | (450,214 | ) | ||||
|
Unrealized
gain (loss) on investments
|
423 | (206 | ) | |||||
|
Total
stockholders' equity
|
44,238 | 75,605 | ||||||
|
Total
liabilities and stockholders' equity
|
$ | 57,442 | $ | 89,258 | ||||