LOS ANGELES, CA--(Marketwire - April 23, 2009) -
Stamps.com® (
NASDAQ:
STMP), the leading
provider of
online
postage for small businesses,
enterprises, and
advanced shippers, today
announced results for the first quarter ended March 31, 2009.
For the first quarter:
-- PC Postage® revenue, including service revenue, store revenue and
insurance revenue, was $18.3 million, up 1% from the first quarter of 2008.
Excluding the enhanced promotion channel (which consists of online programs
where additional promotions are offered to customers), PC Postage revenue
was $16.6 million, up 6% from the first quarter of 2008.
-- The Company continued its focus on improving profitability in the
PhotoStamps business with a reduction in sales and marketing cost by
approximately 41% versus the first quarter of 2008; the lower sales and
marketing spending level contributed to a 43% decline in first quarter
PhotoStamps revenue versus the first quarter of 2008.
-- With the decline in the PhotoStamps business, total revenue was down
5% versus the first quarter of 2008 to $20.0 million.
-- Total gross margin was 73.2% versus 72.2% in the first quarter of
2008. PC Postage gross margin was 77.8% versus 79.3% in the first quarter
of 2008, and PhotoStamps gross margin was 24.1% versus 29.2% in the first
quarter of 2008.
-- GAAP net income was $1.2 million, or $0.07 per fully diluted share.
This includes a $0.8 million non-cash stock-based compensation expense and
a $0.2 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 and the income tax
adjustment, non-GAAP income from operations was $1.9 million and non-GAAP
net income per fully diluted share was $0.13.
"The macro-economic environment for the first quarter remained difficult
but we saw reasonable performance in our PC Postage business," said Ken
McBride, Stamps.com president and CEO. "Excluding the enhanced promotion
channel, we saw six percent overall revenue growth in PC Postage and a five
percent increase in the number of customers that paid for our service
versus the first quarter of 2008. New customer acquisition, however,
remained challenging during the first quarter. Overall, we continue to
believe that our core PC postage business is very stable and we expect that
this recurring revenue business will allow us to continue to produce solid
earnings in tough times."
First Quarter 2009 Detailed Results
Stamps.com reported 2009 first quarter GAAP net income of $1.2 million. On
a per share basis, total 2009 first quarter GAAP net income was $0.07 based
on fully diluted shares outstanding of 17.0 million. First quarter GAAP net
income was reduced by a non-cash cost of $0.8 million for FASB 123R
stock-based compensation expense and reduced by an income tax adjustment of
$0.2 million resulting from the temporary suspension of the Company's
ability to utilize its net operating losses for California income tax
purposes based on new legislation which was signed on September 23, 2008
and is effective for tax years 2008 and 2009. Non-GAAP and GAAP amounts are
reconciled in the following table:
First Quarter Fiscal 2009
All amounts in millions
except per share or margin Non-GAAP FASB Income Tax GAAP
data: Amounts 123R Adjustment Amounts
Cost of Sales $ 5.31 $ 0.07 $ - $ 5.38
Research & Development 2.06 0.16 - 2.23
Sales & Marketing 7.87 0.19 - 8.06
General & Administrative 2.90 0.37 - 3.26
---------- ---------- ---------- ----------
Total Expenses 18.14 0.79 - 18.93
Gross margin 73.5% (0.4%) - 73.2%
Income from Operations 1.91 (0.79) - 1.11
Interest and Other Income 0.36 - - 0.36
---------- ---------- ---------- ----------
Pre-Tax Income 2.27 (0.79) - 1.47
Provision for Income Taxes (0.04) - (0.21) (0.25)
---------- ---------- ---------- ----------
Net Income $ 2.22 $ (0.79) $ (0.21) $ 1.22
========== ========== ========== ==========
---------- ---------- ---------- ----------
On a diluted per share
basis $ 0.13 $ (0.05) $ (0.01) $ 0.07
========== ========== ========== ==========
Shares used in per share
calculation 16.99 16.99 16.99 16.99
Excluding the FASB Statement 123R expense and income tax adjustment, 2009
first quarter non-GAAP net income was $2.2 million or $0.13 per fully
diluted share based on fully diluted shares outstanding of 17.0 million.
This compares to 2008 first quarter non-GAAP net income per fully diluted
share excluding 123R expenses of $0.14 (there were no comparable income tax
adjustments in the 2008 period). Thus, non-GAAP first quarter diluted
earnings per share excluding 123R-related expenses were down 5% versus the
same quarter last year.
Share Repurchase
During the first quarter, the Company repurchased a total of 0.8 million
shares for a total cost of $6.9 million. Since 2006 to date the Company has
spent a total of approximately $95 million on its share repurchase
programs.
On February 5, 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 through August 2009. Under this plan to date,
the Company has repurchased 0.7 million shares for a total cost of $5.6
million.
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 NOL 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.
PhotoStamps
During the first quarter, approximately 104 thousand sheets were shipped to
customers. The Company continued its program to increase profitability in
the PhotoStamps business, reducing the overall level of sales and marketing
costs in this area by approximately 41% versus the first quarter of 2008.
As a result of the reduced level of sales and marketing activity, total
first quarter PhotoStamps revenue was $1.7 million, a decrease of 43%
versus the first quarter of 2008.
Business Outlook
Stamps.com currently expects total 2009 revenue to be $80 to $90 million.
2009 GAAP net income per share is expected to be $0.20 to $0.40, including
approximately $3 million of 2009 FASB Statement 123R stock-based
compensation expense and $0.5 to $1.0 million of expected taxes 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 expenses and the additional California income taxes,
non-GAAP 2009 net income per fully diluted share is expected to be $0.40 to
$0.60.
Net Operating Losses (NOL) and Protective Measures
Stamps.com currently has approximately $240 million in Federal NOLs and
$150 million in State NOLs, with a potential value of up to $95 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 March 31,
2009 the Company was at an approximately 32% 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 16.3 million shares outstanding and therefore
ownership of 815 thousand shares or greater would currently constitute a
"5% shareholder." Stamps.com strongly urges that any stockholder
contemplating owning more than 650 thousand shares contact the Company
before doing so.
Company Customer Metrics
A complete set of the quarterly customer metrics for the past three fiscal
years and through the current quarter is available currently at
http://investor.stamps.com (under a tab on the left side called Company
Information, Current and Previous 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
online postage 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 targets its services to small businesses and home offices, and
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. PhotoStamps is
currently available under authorization of the U.S. Postal Service for its
fourth phase market test with an authorization through May 16, 2009.
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
NFL® or
Collegiate. Since launching
PhotoStamps in May 2005, more than 70 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.
These
non-GAAP measures are provided to enhance investors' overall understanding
of the Company's current financial performance and the Company's prospects
for the future and provide further information about the impact of the
adoption of the accounting standard FASB 123R. The Company believes the
non-GAAP measures that exclude stock-based compensation, asset write-offs,
litigation charges, income tax adjustments, and income tax benefits enhance
the comparability of results against prior periods. These measures should
be considered in addition to results prepared in accordance with generally
accepted accounting principles, but should not be considered a substitute
for, or superior to, GAAP results. Reconciliation to the nearest GAAP
measure of all non-GAAP measures included in this press release can be
found in the financial tables included on page 2 of this press release.
"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 INCOME
(in thousands, except per share data: unaudited)
Three Months ended
March 31,
2009 2008
------------ ------------
Revenues:
Service $ 15,314 $ 15,197
Product 2,617 2,483
Insurance 404 388
PhotoStamps 1,713 3,004
------------ ------------
Total revenues 20,048 21,072
Cost of revenues:
Service 3,008 2,742
Product 945 880
Insurance 125 120
PhotoStamps 1,300 2,127
------------ ------------
Total cost of revenues 5,378 5,869
------------ ------------
Gross profit 14,670 15,203
Operating expenses:
Sales and marketing 8,064 8,623
Research and development 2,227 1,943
General and administrative 3,264 3,943
------------ ------------
Total operating expenses 13,555 14,509
------------ ------------
Income from operations 1,115 694
Other income:
Interest income 357 917
Other income - 21
------------ ------------
Total other income, net 357 938
------------ ------------
Income before income taxes 1,472 1,632
Provision (benefit) for income taxes 250 (3,566)
------------ ------------
Net income $ 1,222 $ 5,198
============ ============
Net income per share:
Basic $ 0.07 $ 0.26
============ ============
Diluted $ 0.07 $ 0.26
============ ============
Weighted average shares outstanding:
Basic 16,864 19,723
============ ============
Diluted 16,992 19,950
============ ============
CONDENSED BALANCE SHEETS
(in thousands)
March 31, December 31,
2009 2008
------------ ------------
ASSETS
Cash and investments $ 70,254 $ 74,059
Trade accounts receivable 2,671 2,962
Other accounts receivable 672 1,201
Other current assets 3,855 4,426
Property and equipment, net 2,857 3,086
Intangible assets, net 502 505
Deferred tax 3,671 3,671
Other assets 3,568 3,348
------------ ------------
Total assets $ 88,050 $ 93,258
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 11,008 $ 11,174
Deferred revenue $ 3,583 $ 3,743
------------ ------------
Total liabilities 14,591 14,917
------------ ------------
Stockholders' equity:
Common stock 47 47
Additional paid-in capital 627,747 626,810
Treasury Stock (97,491) (90,613)
Accumulated deficit (455,169) (456,391)
Unrealized loss on investments (1,675) (1,512)
------------ ------------
Total stockholders' equity 73,459 78,341
------------ ------------
Total liabilities and stockholders' equity $ 88,050 $ 93,258
============ ============