The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from GlobeNewswire (a Nasdaq OMX company)

CafePress Reports Second Quarter 2012 Financial Results

Monday, July 30, 2012

CafePress Reports Second Quarter 2012 Financial Results13:15 EDT Monday, July 30, 2012 Net Revenues Increase 26% Year Over Year Adjusted EBITDA Increases 36% Year Over Year LOUISVILLE, Ky. and SAN MATEO, Calif., July 30, 2012 (GLOBE NEWSWIRE) -- CafePress Inc. (Nasdaq:PRSS), The World's Customization EngineTM, today reported financial results for the three months ended June 30, 2012. "In the second quarter CafePress posted 26% revenue growth and 36% adjusted EBITDA growth over last year, led by the addition of new content, products, partnerships and strong marketplace performance. Revenue from political gear and international channels was slightly weaker than expected during the period," said Chief Executive Officer Bob Marino. "We are encouraged by strong e-commerce trends towards customization coupled with recent initiatives, including expansion of our licensed content relationships, growth in large shops such as those for ABC and National Geographic, new mobile and social functionality and solid performance from our most recent acquisition, Logosportswear.com."Second Quarter 2012 Financial Highlights Net revenues totaled $47.1 million, a 26% year over year increase. Adjusted EBITDA was $4.0 million, compared to $3.0 million in the second quarter of 2011, a 36% year over year increase. Gross profit margin was 41.5% of net revenues, compared to 42.2% in the second quarter of 2011. Non-GAAP net income (excluding stock based compensation, amortization of intangible assets, and acquisition costs) was $1.7 million, compared to $0.9 million in the second quarter of 2011, an 84% year over year increase. Non-GAAP net income per diluted share was $0.10, compared to $0.06 in the second quarter of 2011, a 55% year over year increase. GAAP net loss was $(0.3) million (including stock based compensation, amortization of intangible assets, and acquisition costs), compared to $(0.1) million in the second quarter of 2011. GAAP net loss per basic and diluted share was ($0.02), compared to ($0.01) in the second quarter of 2011. At June 30, 2012, cash, cash equivalents, and short term investments totaled $61.2 million.Second Quarter 2012 Operating Metrics Transacting customers totaled 737,000, a 17% year over year increase. Orders totaled 888,000, a 20% year over year increase. Average order size was $52, a 4% year over year increase.Recent Operating Highlights Successful acquisition of Logosportswear.com Launched strategic partnership with YouTube bringing CafePress merchandise to YouTube users Launched over 30 new licensed properties including the official shop for blockbuster film Ted and ABC's The Chew official online shop Added 40 new products across new categories such as home and auto Added Design and List program making it simpler for users to add new designs Created CafePress Entertainment, aggregating entertainment based merchandiseBusiness Outlook "We are taking a cautious approach to our outlook for the second half of 2012 given the current political cycles and macro weakness in Europe. We expect to end the year with a strong holiday season resulting in solid growth and profitability for the year," said Monica Johnson, Chief Financial Officer.Third Quarter 2012: Net revenues of $42.5 million to $45.0 million. Adjusted EBITDA of $2.9 million to $3.5 million. Non-GAAP net income per diluted share of $0.05 to $0.07. GAAP net loss of $(1.0) million to $(0.5) million. GAAP net loss per diluted share of $(0.06) to $(0.03). Weighted average basic shares of approximately 17.1 million.Full Year 2012: Net revenues of $208 million to $217 million, a year over year increase of 19% to 24%. Adjusted EBITDA of $23.0 million to $25.0 million. Non-GAAP net income per diluted share of $0.68 to $0.77. GAAP net income of $4.0 million to $5.4 million. GAAP net income per diluted share of $0.23 to $0.32. Weighted average diluted shares of approximately 16.9 million.Second Quarter 2012 Conference Call Management will review the second quarter 2012 financial results and its expectations for the third quarter and full year 2012 on a conference call on Monday, July 30, 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, non-GAAP operating income, and non-GAAP diluted earnings per share. 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 as to growth and profitability for the third quarter and full year 2012 set forth under the caption "Business Outlook." These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially from those expressed 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 speak only as of the date hereof. The Company assumes no obligation to update these forward-looking statements.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=12183CafePress Inc.Condensed Consolidated Statement of Operations(In thousands, except per share amounts)(Unaudited)            Three Months Ended June 30,Six Months Ended June 30,  2012201120122011  (Unaudited)(Unaudited)       Net revenues   $47,098  $ 37,335  $ 86,979  $ 69,371 Cost of net revenues  27,536 21,592 50,474 40,349           Gross Profit 19,562 15,743 36,505 29,022           Operating expenses:         Sales and marketing 11,776 8,743 21,937 16,646 Technology and development 3,185 3,141 6,149 6,588 General and administrative 4,244 3,448 8,178 6,134 Acquisition-related costs 720 579 1,374 1,090 Total operating expenses 19,925 15,911 37,638 30,458           Loss from operations (363) (168) (1,133) (1,436)           Interest income 32 16 40 33 Interest expense (49) (47) (100) (97)           Loss before provision for income taxes (380) (199) (1,193) (1,500) Benefit from income taxes (120) (70) (389) (540)           Net loss ($260) ($129) ($804) ($960)           Net loss per share of common stock:         Basic and diluted ($0.02) ($0.01) ($0.06) ($0.11)           Shares used in computing net loss per share of common stock:         Basic and diluted 16,888 8,727 12,916 8,683           Stock-based compensation is allocated as follows:            Three Months Ended June 30,Six Months Ended June 30,  2012201120122011  (Unaudited)(Unaudited)       Cost of revenues $63 $41 $114 $79 Sales and marketing 153 104 308 238 Technology and development 59 51 117 144 General and administrative 968 335 1,534 600           Total stock-based compensation expense $1,243 $531 $2,073 $1,061          CafePress, Inc.Condensed Consolidated Balance Sheet(In thousands, except par value amounts)(Unaudited)        June 30,December 31,  20122011ASSETS   CURRENT ASSETS:     Cash and cash equivalents  $53,518 $27,900 Short-term investments  7,656 8,437 Accounts receivable  2,188 2,210 Inventory  5,883 6,726 Deferred tax assets  1,842 1,842 Deferred costs 2,539 2,787 Prepaid expenses and other current assets  5,766 2,631 Total current assets  79,392 52,533       Property and equipment, net  14,513 13,303 Goodwill  17,204 11,076 Intangible assets, net  10,865 6,756 Deferred tax assets  2,874 2,115 Other assets  339 3,199       TOTAL ASSETS  $125,187 $88,982      LIABILITIES AND STOCKHOLDERS' EQUITY     CURRENT LIABILITIES:     Accounts payable  $6,112 $10,512 Accrued royalties payable 4,439 6,454 Accrued liabilities 12,596 8,713 Income taxes payable  --  1,539 Deferred revenue 5,097 6,870 Capital lease obligations, current portion 487 472 Total current liabilities  28,731 34,560       Capital lease obligations, net of current portion 2,454 2,702 Deferred rent 23 20 Other long-term liabilities  3,522 3,269       TOTAL LIABILITIES  $34,730 $40,551       Convertible preferred stock $0.0001 par value; -0- and 12,345 shares authorized and -0- and 5,535 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively; liquidation preference of $0 and $17,902 as of June 30, 2012 and December 31, 2011, respectively.  0 22,811       Stockholders' Equity :     Common stock: $0.0001 par value; 500,000 and 34,815 shares authorized and 17,072 and 8,944 shares issued and outstanding as of June 30, 2012 and December 31, 2011, respectively. 2 1 Additional paid-in capital  91,760 26,120 Accumulated deficit  (1,305) (501)       TOTAL STOCKHOLDERS' EQUITY  $90,457 $25,620       TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY  $125,187 $88,982      CafePress Inc.Condensed Consolidated Statement of Cash Flows(In thousands)(Unaudited)        Six Months Ended June 30,  20122011  (Unaudited)Cash Flows from Operating Activities:     Net loss  ($804) ($960) Adjustments to reconcile net loss to net cash provided by operating activities:     Depreciation and amortization  2,903 3,003 Amortization of intangible assets  1,631 1,084 Loss (gain) on disposal of fixed assets   (86)  (210) Stock-based compensation   2,073  1,061 Change in fair value of contingent considerations liability   355  -- Deferred income taxes   (759)  279 Tax benefits from stock-based compensation   82  (11) Excess tax benefits from stock-based compensation   (142)  (155) Changes in operating assets and liabilities, net of effect of acquisitions:     Accounts receivable   61  469 Inventory   906  (675) Prepaid expenses and other current assets   (2,476)  (3,691) Other assets   310  (1,063) Accounts payable   (5,400)  (4,346) Accrued royalties payable  (2,015)  (1,944) Accrued and other liabilities   234  1,715 Income taxes payable  (1,539)  (1,521) Deferred revenue   (1,999)  5,085 Net cash used in operating activities  (6,665) (1,880)      Cash Flows from Investing Activities:     Purchase of short-term investments   (5,170)  (6,652) Proceeds from maturities of short-term investments   5,951  9,784 Purchase of property and equipment   (1,678)  (717) Capitalization of software and website development costs   (1,565)  (908) Proceeds from disposal of fixed assets   102  220 Increase in restricted cash  (170)  -- Acquisition of businesses, net of cash acquired  (7,071)  -- Net cash provided by (used in) investing activities  (9,601) 1,727      Cash Flows from Financing Activities:     Principal payments on capital lease obligations   (233)  (223) Payments for deferred offering costs   --  (72) Proceeds from exercise of stock options   204  1,410 Proceeds from issuance of common stock  41,771  -- Excess tax benefits from stock based compensation  142  155 Net cash provided by (used in) financing activities  41,884 1,270       Net Increase in Cash and Cash Equivalents  25,618 1,117 Cash And Cash Equivalents — Beginning of period  27,900 19,276 Cash And Cash Equivalents — End of period  $53,518 $20,393     Supplemental Disclosures of Cash Flow Information:     Cash paid for interest   99  97 Income taxes paid during the period   2,059  1,785      Noncash Investing and Financing Activities:     Conversion of preferred stock  22,811  -- Common stock issued for acquisition  830  -- Accrued purchases of property and equipment  894  75 Deferred offering costs not yet paid  --  935        Three Months Ended June 30,  20122011User Metrics          Customers 737,148 629,170 year-over-year growth 17% 35%       Orders 888,439 742,529 year-over-year growth 20% 36%       Average Order Value $52 $50 year-over-year growth 4% 7%      CafePress Inc.Reconciliation of Net Income (Loss) to Adjusted EBITDA (In thousands)            Three Months Ended June 30,Six Months Ended June 30,  2012201120122011  (Unaudited)(Unaudited)       Net income   $ (260)  $ (129)  $ (804)  $ (960) Non-GAAP adjustments:         Interest and other (income) expense   17  31  60  64 Benefit from income taxes   (120)  (70)  (389)  (540) Depreciation and amortization   1,469  1,477  2,903  3,003 Amortization of intangible assets   947  542  1,631  1,084 Acquisition-related costs   720  579  1,374  1,090 Stock-based compensation   1,243  531  2,073  1,061 Adjusted EBITDA*  $4,016 $2,961 $6,848 $4,802          CafePress Inc.Reconciliation of GAAP Operating Income to Non-GAAP Operating Income(In thousands)            Three Months Ended June 30,Six Months Ended June 30,  2012201120122011  (Unaudited)(Unaudited)       Loss from operations   $ (363)  $ (168)  $ (1,133)  $ (1,436) Non-GAAP adjustments:         Amortization of intangible assets   947  542  1,631  1,084 Acquisition-related costs   720  579  1,374  1,090 Stock-based compensation   1,243  531  2,073  1,061 Non-GAAP operating income  $2,547 $1,484 $3,945 $1,799          CafePress Inc.Reconciliation of Net Income (Loss) to Non-GAAP Net Income and Non-GAAP Net Income per Diluted Share(In thousands)            Three Months Ended June 30,Six Months Ended June 30,  2012201120122011  (Unaudited)(Unaudited)       Net income (loss)  $ (260)  $ (129)  $ (804)  $ (960) Non-GAAP adjustments:         Benefit from income taxes   (919)  (581)  (1,636)  (1,153) Amortization of intangible assets   947  542  1,631  1,084 Acquisition-related costs   720  579  1,374  1,090 Stock-based compensation   1,243  531  2,073  1,061 Non-GAAP net income $1,731 $942 $2,638 $1,122           Fully-diluted shares outstanding  17,544  14,817  16,336  14,771           Non-GAAP net income per diluted share  $ 0.10  $ 0.06  $ 0.16  $ 0.08          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