LOS ANGELES, CA--(Marketwire - February 11, 2010) - Stamps.com® (
NASDAQ:
STMP), the leading
provider of
postage online and
shipping software
solutions, today announced results for the fourth quarter ended December
31, 2009.
For the fourth quarter:
-- Excluding the enhanced promotion channel, PC Postage revenue was
$17.4 million, up 7% from the fourth quarter of 2008.
-- The Company continued to reduce its investment in the enhanced
promotion channel (which consists of online programs where additional
promotions are provided directly by marketing partners), and total PC
Postage revenue including that channel was $18.8 million, up 3% from
the fourth quarter of 2008.
-- The Company reduced the overall level of sales and marketing costs for
PhotoStamps by approximately 81% versus the fourth quarter of 2008 and
as a result, total fourth quarter PhotoStamps revenue was $2.9 million,
a decrease of 28% versus the fourth quarter of 2008.
-- With the reduction in revenue from PhotoStamps and the enhanced
promotion channel, total revenue was $21.7 million, down 3% compared to
the fourth quarter of 2008.
-- PC Postage gross margin was 77.3%, PhotoStamps gross margin was 23.6%
and total gross margin was 70.2%.
-- GAAP net income was $2.2 million, or $0.14 per fully diluted share.
This includes a $0.7 million non-cash stock-based compensation expense,
a $0.1 million asset write-down for an other-than-temporary impairment
and a $0.1 million adjustment resulting from the temporary suspension
of the Company's ability to utilize its net operating losses for
California income tax purposes.
-- Excluding the FASB Statement 123R expense, the asset write-down and the
income tax adjustment, non-GAAP income from operations was $2.8 million
and non-GAAP net income per fully diluted share was $0.18.
"For the fourth quarter we generated our highest non-GAAP earnings per
share in the past three years, and we achieved seven percent overall
revenue growth in PC Postage, excluding the enhanced promotion channel,"
said Ken McBride, Stamps.com president and CEO. "We also saw improvements
in our customer metrics and we continued to make good progress in our
enterprise and high volume shipping areas during the quarter."
Fourth Quarter 2009 Detailed Results
Stamps.com reported 2009 fourth quarter GAAP net income of $2.2 million. On
a per share basis, total 2009 fourth quarter GAAP net income was $0.14
based on fully diluted shares outstanding of 15.9 million. Fourth quarter
GAAP net income was reduced by $0.7 million for FASB 123R stock-based
compensation expense, reduced by $0.1 million for an asset write-down of
certain investment holdings for an
other-than-temporary impairment, and increased by $0.1 million for an
income tax adjustment related to the temporary suspension of the Company's
ability to utilize its net operating losses for California income tax
purposes for the tax years 2008 and 2009. Non-GAAP and GAAP amounts are
reconciled in the following table:
Fourth Quarter Fiscal 2009
All amounts in millions
except per share or Asset
margin data: Non-GAAP FASB Write- Income Tax GAAP
Amounts 123R Down Adjustment Amounts
Cost of Sales $ 6.40 $ 0.06 $ - $ - $ 6.47
Research & Development 1.93 0.15 - - 2.07
Sales & Marketing 7.90 0.18 - - 8.09
General & Administrative 2.68 0.32 - - 3.00
-------- ------- ------- ---------- -------
Total Expenses 18.92 0.71 - - 19.63
Gross Margin 70.5% (0.3%) - - 70.2%
Income from Operations 2.76 (0.71) - - 2.05
Interest and Other Income 0.20 0.00 (0.08) - 0.12
-------- ------- ------- ---------- -------
Pre-Tax Income 2.96 (0.71) (0.08) - 2.17
Provision for Income Taxes (0.10) - - 0.10 0.00
-------- ------- ------- ---------- -------
Net Income $ 2.86 $ (0.71) $ (0.08) $ 0.10 $ 2.17
======== ======= ======= ========== =======
-------- ------- ------- ---------- -------
On a diluted per share
basis $ 0.18 $ (0.04) $ (0.01) $ 0.01 $ 0.14
======== ======= ======= ========== =======
Shares used in per share
calculation 15.90 15.90 15.90 15.90 15.90
Excluding the FASB Statement 123R expense, asset write-down and income tax
adjustment, 2009 fourth quarter non-GAAP net income was $2.9 million or
$0.18 per fully diluted share based on fully diluted shares outstanding of
15.9 million. This compares to 2008 fourth quarter non-GAAP net income per
fully diluted share of $0.16. Thus, non-GAAP fourth quarter diluted
earnings per share increased by 16% compared to the same quarter last year.
Fiscal 2009 Detailed Results
Total 2009 revenue was $82.1 million, a decrease of 3% versus revenue of
$84.9 million in 2008. Total 2009 PC Postage revenue, including service
revenue, store revenue and insurance revenue, was $73.6 million, up 1%
versus PC Postage revenue of $73.0 million in 2008. Excluding the enhanced
promotion channel, PC Postage revenue in 2009 was $67.4 million, up 5%
versus $63.9 million in 2008. Total 2009 PhotoStamps revenue was $8.5
million, down 29% versus PhotoStamps revenue of $11.9 million in 2008.
Total 2009 GAAP net income was $6.2 million, including approximately $3.1
million of FASB Statement 123R stock-based compensation expense; $0.4
million asset write-down of inventory of discontinued products; $0.1
million asset write-down of certain investment holdings for
other-than-temporary impairment; and $0.4 million in additional California
income tax relating to the temporary suspension of the Company's ability to
utilize its net operating losses for California income tax purposes. On a
per share basis, total 2009 GAAP net income was $0.38 based on fully
diluted shares outstanding for the year of 16.4 million. Non-GAAP and GAAP
amounts are reconciled in the following table:
Fiscal Year 2009
All amounts in millions
except per share or Asset
margin data: Non-GAAP FASB Write- Income Tax GAAP
Amounts 123R Down Adjustment Amounts
Cost of Sales $ 22.64 $ 0.28 $ - $ - $ 22.91
Research & Development 8.05 0.65 - - 8.70
Sales & Marketing 30.97 0.77 - - 31.74
General & Administrative 11.18 1.40 0.37 - 12.96
-------- ------- ------- ---------- -------
Total Expenses 72.84 3.10 0.37 - 76.31
Gross Margin 72.4% (0.3%) - - 72.1%
Income from Operations 9.29 (3.10) (0.37) - 5.81
Interest and Other Income 1.00 0.00 (0.08) - 0.92
-------- ------- ------- ---------- -------
Pre-Tax Income 10.28 (3.10) (0.46) - 6.73
Provision for Income Taxes (0.19) - - (0.37) (0.55)
-------- ------- ------- ---------- -------
Net Income $ 10.10 $ (3.10) $ (0.46) $ (0.37) $ 6.18
======== ======= ======= ========== =======
-------- ------- ------- ---------- -------
On a diluted per share
basis $ 0.62 $ (0.19) $ (0.03) $ (0.02) $ 0.38
======== ======= ======= ========== =======
Shares used in per share
calculation 16.37 16.37 16.37 16.37 16.37
Excluding the FASB Statement 123R expense, the asset write-downs and the
additional California income tax, 2009 non-GAAP net income was $10.1
million. On a per share basis, 2009 non-GAAP net income per fully diluted
share was $0.62 based on 2009 fully diluted shares outstanding of 16.4
million. This compares to 2008 non-GAAP net income per fully diluted share
of $0.61. Thus, non-GAAP 2009 diluted earnings per share increased by 1%
compared to 2008.
Share Repurchase
During the fourth quarter, the Company repurchased a total of 0.1 million
shares for a total cost of $1.2 million. On July 23, 2009, Stamps.com's
Board of Directors approved a new share repurchase plan authorizing the
Company to repurchase up to 2.5 million shares of Stamps.com stock from
August 2009 through February 2010. Under this plan to date, the Company has
repurchased approximately 0.6 million shares for a total cost of
approximately $5.2 million. On February 4, 2010, the Board of Directors
voted to extend the currently authorized share repurchase program for an
additional six months through August of 2010.
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 is subject to limitations that may be imposed
on such purchases by applicable securities laws and regulations and the
rules of the Nasdaq Stock Market.
Net Operating Losses (NOL) and Protective Measures
Stamps.com currently has approximately $230 million in Federal NOLs and
$150 million in State NOLs, with a potential value of up to $94 million in
tax savings over the next 15 years. Under Internal Revenue Code Section
382 rules, if a change of ownership is triggered, the Company's NOL asset
may be impaired. A change in ownership can occur whenever there is a shift
in ownership by more than 50 percentage points by one or more 5%
shareholders within a three-year period. We estimate that as of December
31, 2009, the Company was at an approximately 26% level compared with the
50% level that would trigger impairment of our NOL asset.
During the second quarter of 2008, the Company received shareholder
approval to amend its articles of incorporation in order to protect its NOL
asset (the "NOL Protective Measures") and those measures are now in effect.
Under the NOL Protective Measures there is no change to the way that
existing Stamps.com shares are held or traded, but any person, company or
investment firm which wishes to become a "5% shareholder" of Stamps.com
must first obtain a waiver from the Company's board of directors. In
addition, any person, company or investment firm which is already a "5%
shareholder" of Stamps.com cannot make any additional purchases of
Stamps.com stock without a waiver from the Company's board of directors.
Stamps.com currently has 15.5 million shares outstanding and therefore
ownership of approximately 777 thousand shares or greater would currently
constitute a "5% shareholder." Stamps.com strongly urges that any
stockholder contemplating owning more than 625 thousand shares contact the
Company before doing so.
Business Outlook
Stamps.com currently expects total 2010 revenue to be $80 to $90 million.
2010 GAAP net income per share is expected to be $0.50 to $0.70, including
approximately $3.5 million of 2010 FASB Statement 123R stock-based
compensation expense and $3.7 million of non-cash tax benefit resulting
from the potential additional partial release of the valuation allowance
against our deferred tax asset. Excluding the FASB Statement 123R expenses
and the non-cash tax benefit, non-GAAP 2010 net income per fully diluted
share is expected to be $0.50 to $0.70.
Company Customer Metrics
A complete set of the quarterly customer metrics for the past four fiscal
years is available currently 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, 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. Since launching PhotoStamps in May 2005, more
than 78 million individual PhotoStamps have been shipped to customers.
Stamps.com currently has PhotoStamps partnerships with Apple,
Google/Picassa, HP/Snapfish, Costco, 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 page 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-downs, litigation charges 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 and our PhotoStamps spend 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, 2008, 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.
STATEMENTS OF OPERATIONS
(in thousands, except per share data: unaudited)
Three Months ended Twelve Months ended
December 31, December 31,
2009 2008 2009 2008
-------- --------- --------- --------
Revenues:
Subscription $ 15,450 $ 15,347 $ 61,372 $ 61,556
Product 2,920 2,515 10,653 9,906
Insurance 422 433 1,598 1,574
PhotoStamps 2,877 3,979 8,485 11,876
Other 9 - 16 -
-------- --------- --------- --------
Total revenues 21,678 22,274 82,124 84,912
Cost of revenues:
Subscription 3,064 2,735 11,869 10,365
Product 1,073 883 3,989 3,520
Insurance 130 135 494 498
PhotoStamps 2,198 2,817 6,562 8,525
-------- --------- --------- --------
Total cost of revenues 6,465 6,570 22,914 22,908
-------- --------- --------- --------
Gross profit 15,213 15,704 59,210 62,004
Operating expenses:
Sales and marketing 8,086 8,481 31,735 33,538
Research and development 2,075 2,137 8,699 8,425
General and administrative 3,000 3,761 12,961 15,581
-------- --------- --------- --------
Total operating expenses 13,161 14,379 53,395 57,544
-------- --------- --------- --------
Income from operations 2,052 1,325 5,815 4,460
Interest and other income, net 119 542 916 2,918
-------- --------- --------- --------
Income before income taxes 2,171 1,867 6,731 7,378
Income tax expense (benefit) (1) 270 554 (2,786)
-------- --------- --------- --------
Net income $ 2,172 $ 1,597 $ 6,177 $ 10,164
======== ========= ========= ========
Net income per share:
Basic $ 0.14 $ 0.09 $ 0.38 $ 0.53
======== ========= ========= ========
Diluted $ 0.14 $ 0.09 $ 0.38 $ 0.53
======== ========= ========= ========
Weighted average shares
outstanding:
Basic 15,764 17,820 16,238 19,081
======== ========= ========= ========
Diluted 15,897 17,994 16,369 19,345
======== ========= ========= ========
CONDENSED BALANCE SHEETS
(in thousands)
December 31, December 31,
2009 2008
------------ ------------
ASSETS
Cash and investments $ 71,745 $ 74,059
Accounts receivable 4,367 4,163
Other current assets 3,288 4,426
Property and equipment, net 2,102 3,086
Intangible assets, net 498 505
Deferred tax assets 3,671 3,671
Other assets 3,587 3,348
------------ ------------
Total assets $ 89,258 $ 93,258
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 9,583 $ 11,174
Deferred revenue $ 4,070 $ 3,743
------------ ------------
Total liabilities 13,653 14,917
------------ ------------
Stockholders' equity:
Common stock 47 47
Additional paid-in capital 630,322 626,810
Treasury Stock (104,344) (90,613)
Accumulated deficit (450,214) (456,391)
Unrealized loss on investments (206) (1,512)
------------ ------------
Total stockholders' equity 75,605 78,341
------------ ------------
Total liabilities and stockholders'
equity $ 89,258 $ 93,258
============ ============