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Press release from Business Wire

Shutterfly Announces Second Quarter 2011 Financial Results

<p class='bwalignc'> <i><b>Net revenues increase 62% year-over-year to $75.8 million</b></i> </p> <p class='bwalignc'> <i><b>PP&S net revenues increase 85% year-over-year to $58.5 million</b></i> </p> <p class='bwalignc'> <i><b>Company increases FY 2011 net revenue and EBITDA profitability outlook</b></i> </p>

Wednesday, July 27, 2011

Shutterfly Announces Second Quarter 2011 Financial Results16:02 EDT Wednesday, July 27, 2011 REDWOOD CITY, Calif. (Business Wire) -- Shutterfly, Inc. (NASDAQ:SFLY), a leading Internet-based social expression and personal publishing service, today announced financial results for the three months ended June 30, 2011. "Bolstered by contributions from our Tiny Prints acquisition, Cards & Stationery and Photo Books once again fueled our strong second quarter performance, reinforcing what we believe is a winning combination of our two companies,” said President and Chief Executive Officer Jeffrey Housenbold. “Our multi-brand strategy combined with our loyal and growing customer base is strengthening our leading position in the online personal expression and photo publishing market.” Second Quarter 2011 Financial Highlights Net revenues increased 62% year-over-year to $75.8 million. Personalized Products & Services (PP&S) net revenues increased 85% year-over-year to $58.5 million. Net revenues from Prints increased 1% year-over-year to $14.5 million. Commercial Print net revenues totaled $2.8 million. Gross profit margin was 47.4% of net revenues, compared to 50.5% in Q2 2010. GAAP net loss was ($3.6) million, compared to ($5.9) million in Q2 2010. GAAP net loss per share was ($0.11), compared to ($0.22) in Q2 2010. Adjusted EBITDA was ($0.3) million, compared to $1.2 million in Q2 2010. At June 30, 2011, cash and cash equivalents totaled $75.9 million. Second Quarter 2011 Operating MetricsShutterfly Existing customers generated 72% of consumer net revenues. Transacting customers totaled 1.4 million, a 26% year-over-year increase. Orders totaled 2.2 million, a 24% year-over-year increase. Average order value was $26.10, a 2% year-over-year increase. Tiny Prints (Pro Forma for the full quarter ended June 30, 2011) Existing customers generated 36% of Tiny Prints net revenues. Transacting customers totaled 224 thousand, a 67% year-over-year increase. Orders totaled 362 thousand, a 124% year-over-year increase. Average order value was $56.43; $112.13 excluding 1:1 greeting cards, a 12% year-over-year increase. Recent Operating Highlights Tiny Prints acquisition already proving successful, evidenced by its 44% year-over-year pro forma second quarter revenue growth, expanding customer base and improvements in key metrics. Made significant progress on Tiny Prints integration, completing the 2011 manufacturing transition plan, migrating Finance and HR systems and coordinating key marketing and merchandising strategies. Introduced the All New Custom Path photo book creation experience, which gives consumers full creative control to tell their story with more designs and the ability to access photos from multiple sources. New and improved Share Site welcome page and site creation path, with an “Events and Celebrations” category, sample sites, larger previews and easier site selection and development. Updates to the Cards & Stationery shopping experience with icon-based navigation, Quick View launching point and infinite scrolling features to facilitate ease of browsing. Business OutlookThird Quarter 2011 Net revenues to range from $73 million to $75 million. GAAP gross profit margin to range from 45% to 46% of net revenues. Non-GAAP gross profit margin to range from 47.5% to 48.5% of net revenues. GAAP operating loss to range from ($25) million to ($28) million. Non-GAAP operating loss to range from ($11) million to ($14) million. GAAP effective tax rate to range from 45% to 55%. GAAP net loss per share to range from ($0.32) to ($0.44). Weighted average shares of approximately 34.8 million. Adjusted EBITDA loss to range from ($6) million to ($7) million. Full Year 2011 Net revenues to range from $475 million to $485 million. GAAP gross profit margin to range from 54.5% to 55.5% of net revenues. Non-GAAP gross profit margin to range from 56.2% to 57.2% of net revenues. GAAP operating income to range from $18 million to $25 million. Non-GAAP operating income to range from $67.5 million to $74.5 million. GAAP effective tax rate to range from 25% to 35%. GAAP diluted net income per share to range from $0.38 to $0.46. Weighted average diluted shares of 35.5 million. Adjusted EBITDA to range from 18.7% to 19.7% of net revenues. Capital expenditures to range from 7.0% to 7.5% of net revenues. Notes to Second Quarter 2011 Financial Results and Business Outlook Unless otherwise stated, all financial measures include the effects of the Tiny Prints acquisition effective April 25, 2011. Adjusted EBITDA is a non-GAAP financial measure that the Company defines as earnings before interest, taxes, depreciation, amortization and stock-based compensation. Free cash flow is a non-GAAP financial measure that the Company defines as Adjusted EBITDA less purchases of property, plant, and equipment and capitalization of software development costs. Personalized Products and Services (“PP&S”) net revenues primarily include Photo Books, Stationery and folded Greeting Cards, Calendars and Photo-based Merchandise. PP&S also includes net revenues from advertising and sponsorship programs. Print net revenues consist of photo prints in Wallet, 2x6, 4x6, 5x7, 8x10 and various large format sizes; as well as personalized Photo Cards manufactured using a silver halide process. Commercial Print net revenues are excluded from PP&S and Print revenues, and primarily include variable, four-color direct marketing collateral manufactured and fulfilled for business customers. 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 financial guidance which should no longer be relied upon. Second Quarter 2011 Conference Call Management will review the second quarter 2011 financial results and its outlook for the third quarter and full year 2011 on a conference call on Wednesday, July 27, 2011 at 2:00 p.m. Pacific Daylight Time (5:00 p.m. Eastern Time). To listen to the call and view the accompanying slide presentation, please visit http://www.shutterfly.com in the Investor Relations area, found in the "About Us" section. Click on the link provided for the webcast, or dial 970-315-0490. The webcast, as well as a podcast, will be archived and available at http://www.shutterfly.com. A replay of the conference call will be available through Wednesday, August 11, 2011. To hear the replay, please dial 706-645-9291, replay passcode 80980083. Non-GAAP Financial Information This press release contains certain non-GAAP financial measures. Tables are provided at the end of this press release that reconcile the non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include non-GAAP gross margins, non-GAAP operating income (loss) and the related operating income (loss) margins, non-GAAP income (loss) per share, adjusted EBITDA and free cash flow. For more information, please see Shutterfly's SEC Filings. To supplement the Company's consolidated financial statements presented on a GAAP basis, we believe that these non-GAAP measures provide useful information about the Company's core operating results and thus are appropriate to enhance the overall understanding of the Company's past financial performance and its prospects for the future. These adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results and trends and performance. Management uses these non-GAAP measures to evaluate the Company's financial results, develop budgets, manage expenditures, and determine employee compensation. The presentation of additional information is not meant to be considered in isolation or as a substitute for or superior to net income (loss) or net income (loss) per share determined in accordance with GAAP. Notice Regarding Forward-Looking Statements This media release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve risks and uncertainties. These forward-looking statements include all statements regarding the Company's financial expectations for the third quarter and full year 2011 set forth under the caption "Business Outlook." The Company's actual results may differ materially from those anticipated in these forward-looking statements. Factors that might contribute to such differences include, among others, economic downturns and the general state of the economy, our ability to expand our customer base and meet production requirements; our ability to retain and hire necessary employees, including seasonal personnel, and appropriately staff our operations; the impact of seasonality on our business; our ability to develop on a timely basis, as well as consumer acceptance of, new products and services; our ability to develop additional adjacent lines of business; unforeseen changes in expense levels; and competition, which could lead to pricing pressure. For more information regarding the risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, as well as risks relating to our business in general, we refer you to the "Risk Factors" sections of the Company's Form 10-Q for the quarter ended March 31, 2011, and the Company's other filings, which are available on the Securities and Exchange Commission's Web site at www.sec.gov. These forward-looking statements are based on current expectations and the Company assumes no obligation to update this information. About Shutterfly Founded in 1999, Shutterfly, Inc. is an Internet-based social expression and personal publishing company and operates Shutterfly.com, Tiny Prints.com and Weddingpaperdivas.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. More information about Shutterfly (NASDAQ:SFLY) is available at www.shutterfly.com. Shutterfly, Inc.Condensed Consolidated Statement of Operations(In thousands, except per share amounts)(Unaudited)         Three Months EndedSix Months EndedJune 30,June 30,   2011     2010     2011     2010     Net revenues $ 75,764 $ 46,807 $ 132,993 $ 92,549 Cost of net revenues   39,881     23,179     69,427     45,757   Gross profit   35,883     23,628     63,566     46,792   Operating expenses: Technology and development 16,971 12,477 30,084 24,646 Sales and marketing 24,930 11,311 39,195 21,468 General and administrative   15,522     9,620     28,813     18,421   Total operating expenses   57,423     33,408     98,092     64,535   Loss from operations (21,540 ) (9,780 ) (34,526 ) (17,743 ) Interest expense - (21 ) - (42 ) Interest and other income, net   6     194     20     436   Loss before income taxes (21,534 ) (9,607 ) (34,506 ) (17,349 ) Benefit from income taxes   17,884     3,722     23,096     6,733   Net loss $ (3,650 ) $ (5,885 ) $ (11,410 ) $ (10,616 )     Net loss per share - basic and diluted $ (0.11 ) $ (0.22 ) $ (0.37 ) $ (0.40 )   Weighted-average shares outstanding - basic and diluted   33,160     26,952     30,917     26,595     Stock-based compensation is allocated as follows:   Cost of net revenues $ 754 $ 129 $ 929 $ 260 Technology and development 2,752 756 3,666 1,557 Sales and marketing 4,156 966 5,517 2,068 General and administrative   4,437     2,208     7,222     4,548   $ 12,099   $ 4,059   $ 17,334   $ 8,433     Shutterfly, Inc.Condensed Consolidated Balance Sheet(In thousands, except par value amounts)(Unaudited)       June 30,December 31,   2011   2010   ASSETS Current assets: Cash and cash equivalents $ 75,935 $ 252,244 Accounts receivable, net 5,606 4,845 Inventories 3,181 3,580 Deferred tax asset, current portion 327 3,582 Prepaid expenses and other current assets   46,631     6,934 Total current assets 131,680 271,185 Property and equipment, net 46,531 39,726 Intangible assets, net 102,376 5,672 Goodwill 342,730 11,163 Deferred tax asset, net of current portion - 11,314 Other assets   5,330     4,770 Total assets $ 628,647   $ 343,830   LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 4,678 $ 22,341 Accrued liabilities 24,733 38,831 Deferred revenue   10,431     9,731 Total current liabilities 39,842 70,903 Deferred tax liability 17,681 - Other liabilities   5,159     3,320 Total liabilities   62,682     74,223   Stockholders' equity Common stock, $0.0001 par value; 100,000 shares authorized; 34,414 and 27,957 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively 3 3 Additional paid-in-capital 571,494 263,726 Accumulated earnings (deficit)   (5,532 )   5,878 Total stockholders' equity   565,965     269,607 Total liabilities and stockholders' equity $ 628,647   $ 343,830     Shutterfly, Inc.Condensed Consolidated Statement of Cash Flows(In thousands)(Unaudited)     Six Months EndedJune 30,   2011     2010     Cash flows from operating activities: Net loss $ (11,410 ) $ (10,616 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 10,786 12,680 Amortization of intangible assets 4,206 1,289 Stock-based compensation, net of forfeitures 17,334 8,433 Loss/(gain) on disposal of property and equipment 11 (88 ) Deferred income taxes - (3,285 ) Tax benefit from stock-based compensation 11,585 3,710 Excess tax benefits from stock-based compensation (11,607 ) (4,102 ) Changes in operating assets and liabilities: Accounts receivable, net 185 2,575 Inventories 1,311 484 Prepaid expenses and other current assets (38,149 ) (7,905 ) Other assets (887 ) (58 ) Accounts payable (20,786 ) (6,727 ) Accrued and other liabilities (20,787 ) (19,207 ) Deferred revenue   194     (346 ) Net cash used in operating activities   (58,014 )   (23,163 )   Cash flows from investing activities: Acquisition of business and intangibles, net of cash acquired (134,036 ) - Purchases of property and equipment (9,064 ) (8,630 ) Capitalization of software and website development costs (5,044 ) (2,049 ) Proceeds from sale of equipment 20 77 Proceeds from the sale of auction rate securities   -     21,575   Net cash provided by (used in) investing activities   (148,124 )   10,973     Cash flows from financing activities: Principal payments of capital lease obligations (5 ) (6 ) Proceeds from issuance of common stock upon exercise of stock options 18,227 7,884 Excess tax benefits from stock-based compensation   11,607     4,102   Net cash provided by financing activities   29,829     11,980     Net decrease in cash and cash equivalents (176,309 ) (210 ) Cash and cash equivalents, beginning of period   252,244     132,812   Cash and cash equivalents, end of period $ 75,935   $ 132,602     Supplemental schedule of non-cash investing activities Net change in accrued purchases of property and equipment $ 193 $ 914   Shutterfly, Inc.     User Metrics Disclosure   Three Months EndedJune 30,20112010   User Metrics - Shutterfly   Customers 1,413,143 1,117,960 year-over-year growth 26% 18%   Orders 2,234,840 1,801,740 year-over-year growth 24% 9%   Average order value $26.10 $25.56 year-over-year growth 2% 11%   Average orders per customer 1.6x 1.6x   Average order value excludes commercial printing revenue.   Pro FormaThree Months EndedJune 30,20112010   User Metrics - Tiny Prints(Pro Forma for the full Quarter ended June 30, 2011)   Customers 224,276 134,269 year-over-year growth 67%   Orders 362,211 161,836 year-over-year growth 124%   Average order value (excluding 1:1 greeting cards) $112.13 $100.17 year-over-year growth 12%   Average orders per customer 1.6x 1.2x   Shutterfly, Inc.Reconciliation of Forward-Looking Guidance for Non-GAAP Financial Measures to GAAP Measures (In millions, except per share amounts)                   Forward-Looking GuidanceGAAPNon-GAAPRange of EstimateAdjustmentsRange of EstimateFrom   ToFrom   ToFromTo   Three Months Ending September 30, 2011   Net revenues $73.0$75.0 - - $73.0$75.0 Gross profit margin 45.0% 46.0% 2.5% 2.5% [a] 47.5% 48.5% Operating loss ($28.0) ($25.0) $14.0 $14.0 [b] ($14.0) ($11.0) Operating margin (38%) (33%) 19% 18% [b] (19%) (15%)   Stock-based compensation $9.8 $9.8 $9.8 $9.8 - - Amortization of intangible assets $3.9 $3.9 $3.9 $3.9 - -   Adjusted EBITDA* ($7.0) ($6.0)   Diluted loss per share ($0.44) ($0.32) Diluted shares 34.8 34.8 Effective tax rate 45% 55%   Twelve Months Ending December 31, 2011   Net revenues $475.0$485.0 - - $475.0$485.0 Gross profit margin 54.5% 55.5% 1.7% 1.7% [c] 56.2% 57.2% Operating income $18.0 $25.0 $49.5 $49.5 [d] $67.5 $74.5 Operating margin 4% 5% 10% 10% [d] 14% 15%   Stock-based compensation $37.2 $37.2 $37.2 $37.2 - - Amortization of intangible assets $12.3 $12.3 $12.3 $12.3 - -   Adjusted EBITDA* $89 $96 Adjusted EBITDA* margin 18.7% 19.7%   Diluted earnings per share $0.38 $0.46 Diluted shares 35.5 35.5 Effective tax rate 25% 35%   Capital expenditures - % of net revenues 7.0% 7.5%       * Adjusted EBITDA is a non-GAAP financial measure defined as earnings before interest, taxes, depreciation, amortization and stock-based compensation. [a] Reflects estimated adjustments for stock-based compensation expense of approximately $500k and amortization of purchased intangible assets of approximately $1.4 million. [b] Reflects estimated adjustments for stock-based compensation expense of approximately $9.8 million and amortization of purchased intangible assets of approximately $3.9 million [c] Reflects estimated adjustments for stock-based compensation expense of approximately $2.0 million and amortization of purchased intangible assets of approximately $4.9 million. [d] Reflects estimated adjustments for stock-based compensation expense of approximately $37.2 million and amortization of purchased intangible assets of approximately $12.3 million.   Shutterfly, Inc.Reconciliation of GAAP Gross Profit Margin to Non-GAAP Gross Profit Margin (In thousands) (Unaudited)                 Three Months EndedYear EndedMar. 31,Jun. 30,Sep. 30,Dec. 31,Mar. 31,Jun. 30,Dec. 31,   2010       2010       2010       2010       2011       2011       2010     GAAP gross profit $ 23,164 $ 23,628 $ 24,052 $ 102,372 $ 27,683 $ 35,883 $ 173,216 Stock-based compensation 131 129 120 128 175 754 508 Amortization of intangible assets 556 552 541 646 611 1,345 2,295               Non-GAAP gross profit $ 23,851   $ 24,309   $ 24,713   $ 103,146   $ 28,469   $ 37,982   $ 176,019     Non-GAAP gross profit margin   52 %   52 %   50 %   62 %   50 %   50 %   57 %   Shutterfly, Inc.Reconciliation of GAAP Operating Margin to Non-GAAP Operating Margin (In thousands) (Unaudited) Three Months EndedYear EndedMar. 31,Jun. 30,Sep. 30,Dec. 31,Mar. 31,Jun. 30,Dec. 31,   2010       2010       2010       2010       2011       2011       2010     GAAP operating income (loss) $ (7,963 ) $ (9,780 ) $ (7,977 ) $ 50,495 $ (12,986 ) $ (21,540 ) $ 24,775 Stock-based compensation 4,374 4,059 3,866 4,067 5,235 12,099 16,366 Amortization of intangible assets 647 642 603 651 719 3,487 2,543               Non-GAAP operating income (loss) $ (2,942 ) $ (5,079 ) $ (3,508 ) $ 55,213   $ (7,032 ) $ (5,954 ) $ 43,684     Non-GAAP operating margin   (6 %)   (11 %)   (7 %)   33 %   (12 %)   (8 %)   14 %   Shutterfly, Inc.Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss) (In thousands) (Unaudited) Three Months EndedYear EndedMar. 31,Jun. 30,Sep. 30,Dec. 31,Mar. 31,Jun. 30,Dec. 31,   2010       2010       2010       2010       2011       2011       2010     GAAP net income (loss) $ (4,731 ) $ (5,885 ) $ (4,770 ) $ 32,513 $ (7,760 ) $ (3,650 ) $ 17,127 Stock-based compensation 4,374 4,059 3,866 4,067 5,235 12,099 16,366 Amortization of intangible assets 647 642 603 651 719 3,487 2,543 Related income taxes (2,028 ) (1,945 ) (1,908 ) (2,064 ) (2,587 ) (15,862 ) (7,945 )               Non-GAAP net income (loss) $ (1,738 ) $ (3,129 ) $ (2,209 ) $ 35,167   $ (4,393 ) $ (3,926 ) $ 28,091       Diluted net income (loss) per share: GAAP   ($0.18 )   ($0.22 )   ($0.17 ) $ 1.09     ($0.27 )   ($0.11 ) $ 0.59   Non-GAAP   ($0.07 )   ($0.12 )   ($0.08 ) $ 1.18     ($0.15 )   ($0.12 ) $ 0.96     Shares used in GAAP and non-GAAP diluted net income (loss) per-share calculation   26,238     26,952     27,292     29,924     28,674     33,160     29,249       Shutterfly, Inc.Reconciliation of GAAP to Non-GAAP Effective Tax Rate (In thousands) (Unaudited) Three Months EndedYear EndedMar. 31,Jun. 30,Sep. 30,Dec. 31,Mar. 31,Jun. 30,Dec. 31,   2010       2010       2010       2010       2011       2011       2010     GAAP benefit (provision) for income taxes $ 3,011 $ 3,722 $ 3,181 $ (18,002 ) $ 5,212 $ 17,884 $ (8,088 ) Income taxes associated with certain non-GAAP entries (2,028 ) (1,945 ) (1,908 ) (2,064 ) (2,587 ) (15,862 ) (7,945 )               Non-GAAP benefit (provision) for income taxes $ 983   $ 1,777   $ 1,273   $ (20,066 ) $ 2,625   $ 2,022   $ (16,033 )   GAAP income (loss) before income taxes $ (7,742 ) $ (9,607 ) $ (7,951 ) $ 50,515 $ (12,972 ) $ (21,534 ) $ 25,215 Stock-based compensation 4,374 4,059 3,866 4,067 5,235 12,099 16,366 Amortization of intangible assets 647 642 603 651 719 3,487 2,543               Non-GAAP income (loss) before income taxes $ (2,721 ) $ (4,906 ) $ (3,482 ) $ 55,233   $ (7,018 ) $ (5,948 ) $ 44,124     GAAP effective tax rate   39 %   39 %   40 %   36 %   40 %   83 %   32 %   Non-GAAP effective tax rate   36 %   36 %   37 %   36 %   37 %   34 %   36 %     Shutterfly, Inc.Reconciliation of Net Income (Loss) to Non-GAAP Adjusted EBITDA (In thousands) (Unaudited) Three Months EndedYear EndedMar. 31,Jun. 30,Sep. 30,Dec. 31,Mar. 31,Jun. 30,Dec. 31,   2010       2010       2010       2010       2011       2011       2010     GAAP net income (loss) $ (4,731 ) $ (5,885 ) $ (4,770 ) $ 32,513 $ (7,760 ) $ (3,650 ) $ 17,127 Interest expense 21 21 - - - - 42 Interest and other income, net (242 ) (194 ) (26 ) (20 ) (14 ) (6 ) (482 ) Tax benefit (provision) (3,011 ) (3,722 ) (3,181 ) 18,002 (5,212 ) (17,884 ) 8,088 Depreciation and amortization 7,020 6,949 6,321 5,682 5,833 9,159 25,972 Stock-based compensation 4,374 4,059 3,866 4,067 5,235 12,099 16,366               Non-GAAP Adjusted EBITDA $ 3,431   $ 1,228   $ 2,210   $ 60,244   $ (1,918 ) $ (282 ) $ 67,113     Shutterfly, Inc.Reconciliation of Cash Flow from Operating Activities to Non-GAAP Adjusted EBITDA and Free Cash Flow (In thousands) (Unaudited) Three Months EndedYear EndedMar. 31,Jun. 30,Sep. 30,Dec. 31,Mar. 31,Jun. 30,Dec. 31,   2010       2010       2010       2010       2011       2011       2010     Net cash provided by (used in) operating activities $ (28,264 ) $ 5,101 $ 5,271 $ 94,053 $ (52,849 ) (5,165 ) $ 76,161 Interest expense 21 21 - - - - 42 Interest and other income, net (242 ) (194 ) (26 ) (20 ) (14 ) (6 ) (482 ) Tax benefit (provision) (3,011 ) (3,722 ) (3,181 ) 18,002 (5,212 ) (17,884 ) 8,088 Changes in operating assets and liabilities 33,153 (1,969 ) (2 ) (46,196 ) 55,702 23,217 (15,014 ) Other adjustments   1,774     1,991     148     (5,595 )   455     (444 )   (1,682 ) Non-GAAP Adjusted EBITDA   3,431     1,228     2,210     60,244     (1,918 )   (282 )   67,113   Less: Purchases of property and equipment (5,534 ) (4,010 ) (2,729 ) (2,688 ) (5,446 ) (3,811 ) (14,961 ) Less: Capitalized technology & development costs (802 ) (1,247 ) (2,559 ) (2,797 ) (2,318 ) (2,726 ) (7,405 )               Free cash flow $ (2,905 ) $ (4,029 ) $ (3,078 ) $ 54,759   $ (9,682 ) $ (6,819 ) $ 44,747   Shutterfly, Inc.Media Relations:Gretchen Sloan, 650-610-5276gsloan@shutterfly.comInvestor Relations:Annie Leschin, 650-610-3567aleschin@shutterfly.comVanessa Lehrvlehr@shutterfly.com