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Press release from GlobeNewswire (a Nasdaq OMX company)

CafePress Reports First Quarter 2012 Financial Results

Tuesday, May 08, 2012

CafePress Reports First Quarter 2012 Financial Results13:15 EDT Tuesday, May 08, 2012 Net Revenues Increase 24% Year Over Year Customers and Orders Each Increase 26% Year Over Year LOUISVILLE, Ky., May 8, 2012 (GLOBE NEWSWIRE) -- CafePress Inc. (Nasdaq:PRSS), The World's Customization EngineTM, today reported financial results for the three months ended March 31, 2012. "CafePress delivered strong revenue and Adjusted EBITDA growth during the first quarter, clearly pointing to solid demand for our wide selection of customized products. We saw especially strong interest in new merchandise categories, licensed content and 2012 political gear in our marketplace," said Chief Executive Officer Bob Marino. "Our first quarter results signal a strong 2012 for CafePress. This performance demonstrates that our formula for growth is working and we plan to continue to expand our product base, increase our reach, create new licensing opportunities and grow our international presence."First Quarter 2012 Financial Highlights Net revenues totaled $39.9 million, a 24% year-over-year increase. Adjusted EBITDA was $2.8 million, compared to $1.8 million in the first quarter of 2011. Gross profit margin was 42.5% of net revenues, compared to 41.5% in the first quarter of 2011. Non-GAAP operating income (excluding stock based compensation, amortization of intangible assets, and acquisition costs) was $1.4 million, compared to $0.3 million in the first quarter of 2011. GAAP net loss was $(0.5) million (including stock based compensation, amortization of intangible assets, and acquisition costs), compared to $(0.8) million in the first quarter of 2011. GAAP net loss per basic and diluted share was ($0.06), compared to ($0.10) in the first quarter of 2011. At March 31, 2012, cash, cash equivalents, and short term investments totaled $27.7 million. The Company subsequently received $42.6 million in net proceeds in connection with its initial public offering, which closed on April 3, 2012. The impact of the initial public offering is not included in the Company's financial results for the period ended March 31, 2012.First Quarter 2012 Operating Metrics Transacting customers totaled 700,000, a 26% year-over-year increase. Orders totaled 839,000, a 26% year-over-year increase. Average order size was $48, a 3% year-over-year decrease.Recent Operating Highlights Completed an initial public offering of 4,500,000 shares of common stock. Completed the acquisition of substantially all of the assets of LogoSportswear.com, an e-commerce provider of personalized apparel and merchandise for groups and organizations. Launched a number of new e-commerce shops and partnerships including Cartoon Network™, Paramount Pictures™ and Rock The Vote™. Released new base goods in the marketplace, including drinkware by KOR®, pajamas, plush toys and mobile phone cases.Business Outlook "We expect to drive strong revenue growth and profitability in 2012, with quarterly results expected to follow typical seasonal patterns for our business. We intend to build on our ability to cost-effectively capture new customers and drive profitability by continuing to improve an already capital efficient business model and manufacturing operation," said Monica Johnson, Chief Financial Officer.Second Quarter 2012: Net revenues of $47 million to $50 million. Adjusted EBITDA of $3.5 million to $4.4 million. GAAP net loss of $(0.1) million to net income of $0.4 million. GAAP diluted loss per share of $(0.01) to earnings per share of $0.02. Weighted average diluted shares of approximately 17.7 million.Full Year 2012: Net revenues of $223 million to $237 million, a year-over-year increase of 27% to 35%. Adjusted EBITDA of $25 million to $28 million. GAAP net income of $6.8 million to $8.3 million. GAAP diluted earnings per share of $0.40 to $0.48. Weighted average diluted shares of approximately 17.2 million.First Quarter 2012 Conference Call Management will review the first quarter 2012 financial results and its expectations for the second quarter and full year 2012 on a conference call on Tuesday, May 8, 2012 at 2:00 p.m. Pacific Daylight Time (5:00 p.m. Eastern Time). To participate on the live call, analysts and investors should dial 877- 941-1427 at least ten minutes prior to the call. CafePress will also offer a live and archived webcast of the conference call, accessible from the "Investors" section of the Company's Web site at http://investor.cafepress.com/.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 Adjusted EBITDA and non-GAAP operating income. For more information, please see the Company's Registration Statement filed with the Securities and Exchange Commission on March 28, 2012, which is available on the Securities and Exchange Commission's Web site at www.sec.gov. 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 first quarter and full year 2012 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; intense competition, which could lead to pricing pressure among other effects; 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 timely develop new product and service offerings, as well as consumer acceptance of new products and services; our ability to develop additional adjacent lines of business to complement our growth strategies; and unforeseen changes in expense levels. 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 Registration Statement filed with the Securities and Exchange Commission on March 28, 2012, which is 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 CafePress (PRSS): CafePress is The World's Customization EngineTM. Launched in 1999, CafePress empowers individuals, groups, businesses and organizations to create, buy and sell customized and personalized products online using the company's innovative and proprietary print-on-demand services and e-commerce platform. Today, CafePress' portfolio of e-commerce websites include CafePress.com, CanvasOnDemand.com, GreatBigCanvas.com, Imagekind.com, InvitationBox.com, and LogoSportswear.com. The CafePress logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=12183            CafePress Inc.    Condensed Consolidated Statement of Operations  (In thousands, except per share amounts)    (Unaudited)            Three Months Ended March 31,  20122011  (Unaudited)     Net revenues  $39,881 $32,036 Cost of net revenues  22,938 18,757 Gross Profit 16,943 13,279       Operating expenses:     Sales and marketing 10,161 7,903 Technology and development 2,964 3,447 General and administrative 3,934 2,686 Acquisition-related costs 654 511 Total operating expenses 17,713 14,547       Loss from operations (770) (1,268)       Interest income 8 17 Interest expense (51) (50) Other income (expense), net  -- -- Loss before provision for income taxes (813) (1,301) Benefit from income taxes (269) (470) Net loss ($544) ($831)       Net loss per share of common stock:     Basic and diluted ($0.06) ($0.10)       Shares used in computing net loss per share of common stock:     Basic and diluted 8,944 8,638 Stock-based compensation is allocated as follows:  Three Months Ended March 31,  20122011  (Unaudited) Cost of revenues $51 $38 Sales and marketing 155 134 Technology and development 58 93 General and administrative 566 265 Total stock-based compensation expense $830 $530                  CafePress, Inc.    Condensed Consolidated Balance Sheet    (In thousands, except par value amounts)    (Unaudited)            March 31, 2012December 31, 2011ASSETS     CURRENT ASSETS:     Cash and cash equivalents  $20,854 $27,900 Short-term investments  6,895 8,437 Accounts receivable  2,678 2,210 Inventory  5,062 6,726 Deferred tax assets  1,842 1,842 Prepaid expenses and other current assets  6,983 5,418 Total current assets  44,314 52,533       Property and equipment, net  12,799 13,303 Goodwill  11,076 11,076 Intangible assets, net  6,072 6,756 Deferred tax assets  2,113 2,115 Other assets  4,854 3,199       TOTAL ASSETS  $81,228 $88,982      LIABILITIES AND STOCKHOLDERS' EQUITY     CURRENT LIABILITIES:     Accounts payable  $5,087 $10,512 Accrued and other current liabilities  14,293 16,706 Deferred revenue  8,110 6,870 Capital lease obligation, current  480 472 Total current liabilities  27,970 34,560       Capital lease obligation, non-current  2,579 2,702 Other long-term liabilities  1,936 3,289       TOTAL LIABILITIES  $32,485 $40,551       Convertible preferred stock $0.0001 par value - 12,345 shares authorized, 5,535 shares issued and outstanding as of March 31, 2012 and December 31, 2011; liquidation preference of $17,902 as of March 31, 2012 and December 31, 2011  22,811 22,811       Stockholders' Equity :     Common stock, $0.0001 par value- 34,815 shares authorized as of March 31, 2012 and December 31, 2011; 8,945 and 8,944 shares issued and outstanding as of March 31, 2012 and December 31, 2011  1 1 Additional paid-in capital  26,976 26,120 Accumulated deficit  (1,045) (501)       TOTAL STOCKHOLDERS' EQUITY  $25,932 $25,620       TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY  $81,228 $88,982                  CafePress Inc.    Condensed Consolidated Statement of Cash Flows    (In thousands)    (Unaudited)            Three Months Ended March 31,    20122011  (Unaudited)Cash Flows from Operating Activities:     Net loss  ($544) ($831) Adjustments to reconcile net loss to net cash provided by operating activities:     Depreciation and amortization  1,434 1,526 Amortization of intangible assets  684 542 Loss (gain) on disposal of fixed assets  (7) (210) Stock-based compensation  830 530 Change in fair value of contingent considerations liability  137 -- Deferred income taxes  2 83 Tax benefits from stock-based compensation  (3) (67) Excess tax benefits from stock-based compensation  -- (16) Changes in operating assets and liabilities, net of effect of acquisitions:     Accounts receivable  (468) 381 Inventory  1,664 870 Prepaid expenses and other current assets  (1,552) (1,751) Other assets  (1,004) (8) Accounts payable  (5,053) (5,206) Accrued and other current liabilities  (3,903) (3,787) Deferred revenue  1,240 2,565 Net cash used in operating activities  (6,543) (5,379)      Cash Flows from Investing Activities:     Purchase of short-term investments  (1,743) (3,986) Proceeds from maturities of short-term investments  3,285 4,004 Purchase of property and equipment  (470) (137) Capitalization of software and website development costs  (829) (334) Proceeds from disposal of fixed assets  14 40 Net cash provided by (used in) investing activities  257 (413)      Cash Flows from Financing Activities:     Principal payments on capital lease obligations  (115) (111) Payments for deferred offering costs  (651) -- Proceeds from exercise of common stock options  6 205 Excess tax benefits from stock-based compensation  -- 16 Net cash provided by (used in) financing activities  (760) 110       Net Decrease in Cash and Cash Equivalents  (7,046) (5,682) Cash And Cash Equivalents — Beginning of period  27,900 19,276 Cash And Cash Equivalents — End of period  $20,854 $13,594     Supplemental Disclosures of Cash Flow Information:     Cash paid for interest  $50 $49 Income taxes paid during the period  $1,822 $1,775      Noncash Investing and Financing Activities:     Accrued purchases of property and equipment  $36 $121 Deferred offering costs not yet paid $1,599 $ --                  CafePress, Inc.    User Metrics Disclosure          Three Months Ended March 31,  20122011User Metrics          Customers 700,019 557,309 year-over-year growth 26% 35%       Orders 839,020 665,088 year-over-year growth 26% 41%       Average Order Size $48 $50 year-over-year growth -3% 8%                  CafePress Inc.    Reconciliation of Net Income (Loss) to Adjusted EBITDA (In thousands)            Three Months Ended March 31,    20122011  (Unaudited) Net income  ($544) ($831) Non-GAAP adjustments:     Interest and other (income) expense  43 33 Benefit from income taxes  (269) (470) Depreciation and amortization  1,434 1,526 Amortization of intangible assets  684 542 Acquisition-related costs  654 511 Stock-based compensation  830 530 Adjusted EBITDA*  $2,832 $1,841      * Adjusted EBITDA is a non-GAAP financial measure which we define as net income (loss) less interest and other income (expense), provision for (benefit from) income taxes, depreciation and amortization, amortization of intangible assets, acquisition-related costs, stock-based compensation and impairment charges. Acquisition-related costs include performance-based compensation payments, any changes in the estimated fair value of performance-based contingent consideration payments which were initially recorded in connection with our acquisition of substantially all of the assets of L&S Retail Ventures, Inc., and third-party fees incurred as part of our acquisitions of L&S Retail Ventures, Inc. and LogoSportswear.com.                      CafePress Inc.    Reconciliation of GAAP Operating Income to Non-GAAP Operating Income(In thousands)            Three Months Ended March 31,    20122011  (Unaudited) Loss from operations  ($770) ($1,268) Non-GAAP adjustments:     Amortization of intangible assets  684 542 Acquisition-related costs  654 511 Stock-based compensation  830 530 Non-GAAP operating income  $1,398 $315      CONTACT: CafePress Inc. Media Relations: Kim Hughes The Blueshirt Group 415-516-6187 kim@blueshirtgroup.com Investor Relations: The Blueshirt Group Alex Wellins, 415-217-5861 alex@blueshirtgroup.com