LOS ANGELES, CA--(Marketwire - October 22, 2009) - Stamps.com® (
NASDAQ:
STMP), the leading
provider of
postage online and
shipping software
solutions, today announced results for the third quarter ended September
30, 2009.
For the third quarter:
-- Excluding the enhanced promotion channel, PC Postage revenue was $16.8
million, up 5% from the third quarter of 2008.
-- Including the enhanced promotion channel (which consists of online
programs where additional promotions are offered to customers), total PC
Postage revenue was $18.3 million, up 1% from the third quarter of 2008.
-- The Company reduced the overall level of sales and marketing costs for
PhotoStamps by approximately 46% versus the third quarter of 2008 and as a
result, total third quarter PhotoStamps revenue was $1.9 million, a
decrease of 6% versus the third quarter of 2008.
-- Total revenue was $20.2 million, flat compared to the third quarter of
2008.
-- PC Postage gross margin was 78.3%, PhotoStamps gross margin was 18.9%
and total gross margin was 72.7%.
-- GAAP net income was $1.7 million, or $0.11 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 $2.5 million and non-GAAP
net income per fully diluted share was $0.17.
"In the third quarter we were pleased that our non-GAAP earnings per share
were the strongest they have been in a year," said Ken McBride, Stamps.com
president and CEO. "We achieved five percent overall revenue growth in PC
Postage, excluding the enhanced promotion channel. We also saw our lowest
cost per new customer acquired for this year and we continued to make good
progress in our enterprise and shipping areas during the quarter."
Third quarter 2009 Detailed Results
Stamps.com reported 2009 third quarter GAAP net income of $1.7 million. On
a per share basis, total 2009 third quarter GAAP net income was $0.11 based
on fully diluted shares outstanding of 16.2 million. Third quarter GAAP net
income was reduced by $0.8 million for FASB 123R stock-based compensation
expense and 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 legislation which was
passed in 2008 and is effective for tax years 2008 and 2009. Non-GAAP and
GAAP amounts are reconciled in the following table:
Third Quarter Fiscal 2009
All amounts in millions except Non-GAAP FASB Income Tax GAAP
per share or margin data: Amounts 123R Adjustment Amounts
Cost of Sales $ 5.45 $ 0.07 $ - $ 5.52
Research & Development 2.02 0.18 - 2.20
Sales & Marketing 7.16 0.20 - 7.36
General & Administrative 3.06 0.33 - 3.39
-------- ------- ---------- --------
Total Expenses 17.70 0.77 - 18.47
Gross Margin 73.0% (0.3%) - 72.7%
Income from Operations 2.52 (0.77) - 1.74
Interest and Other Income 0.21 - - 0.21
-------- ------- ---------- --------
Pre-Tax Income 2.73 (0.77) - 1.95
Provision for Income Taxes (0.01) - (0.21) (0.22)
-------- ------- ---------- --------
Net Income $ 2.71 $ (0.77) $ (0.21) $ 1.73
======== ======= ========== ========
-------- ------- ---------- --------
On a diluted per share basis $ 0.17 $ (0.05) $ (0.01) $ 0.11
======== ======= ========== ========
Shares used in per share
calculation 16.16 16.16 16.16 16.16
Excluding the FASB Statement 123R expense and income tax adjustment, 2009
third quarter non-GAAP net income was $2.7 million or $0.17 per fully
diluted share based on fully diluted shares outstanding of 16.2 million.
This compares to 2008 third quarter non-GAAP net income per fully diluted
share of $0.17. Thus, non-GAAP third quarter diluted earnings per share
were flat versus the same quarter last year.
Share Repurchase
During the third quarter, the Company repurchased a total of 0.5 million
shares for a total cost of $3.9 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 0.3 million shares for a total cost of $2.9 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 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.
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, a $0.4 million asset write-off, 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, asset write-off
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 $235 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 September
30, 2009 the Company was at an approximately 28% 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 15.8 million shares outstanding and therefore
ownership of approximately 788 thousand shares or greater would currently
constitute a "5% shareholder." Stamps.com strongly urges that any
stockholder contemplating owning more than 630 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 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 74 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 OPERATIONS
(in thousands, except per share data: unaudited)
Three Months ended Nine Months ended
September 30, September 30,
2009 2008 2009 2008
---------- ---------- ---------- ---------
Revenues:
Subscription $ 15,401 $ 15,435 $ 45,922 $ 46,209
Product 2,536 2,326 7,733 7,392
Insurance 377 375 1,176 1,140
PhotoStamps 1,901 2,020 5,609 7,897
Other 1 - 6 -
---------- ---------- ---------- ---------
Total revenues 20,216 20,156 60,446 62,638
Cost of revenues:
Subscription 2,926 2,626 8,806 7,630
Product 940 809 2,915 2,637
Insurance 116 124 364 363
PhotoStamps 1,542 1,489 4,363 5,708
---------- ---------- ---------- ---------
Total cost of revenues 5,524 5,048 16,448 16,338
---------- ---------- ---------- ---------
Gross profit 14,692 15,108 43,998 46,300
Operating expenses:
Sales and marketing 7,359 7,654 23,650 25,057
Research and development 2,198 2,243 6,624 6,288
General and administrative 3,391 3,420 9,961 11,820
---------- ---------- ---------- ---------
Total operating expenses 12,948 13,317 40,235 43,165
---------- ---------- ---------- ---------
Income from operations 1,744 1,791 3,763 3,135
Other income, net:
Interest income 208 697 797 2,350
Other income - 5 - 26
---------- ---------- ---------- ---------
Total other income, net 208 702 797 2,376
---------- ---------- ---------- ---------
Pre-tax income 1,952 2,493 4,560 5,511
Income tax expense (benefit) 221 430 555 (3,056)
---------- ---------- ---------- ---------
Net income $ 1,731 $ 2,063 $ 4,005 $ 8,567
========== ========== ========== =========
Net income per share:
Basic $ 0.11 $ 0.11 $ 0.24 $ 0.44
========== ========== ========== =========
Diluted $ 0.11 $ 0.10 $ 0.24 $ 0.43
========== ========== ========== =========
Weighted average shares
outstanding:
Basic 16,035 19,410 16,397 19,505
========== ========== ========== =========
Diluted 16,162 19,726 16,527 19,796
========== ========== ========== =========
CONDENSED BALANCE SHEETS
(in thousands)
September 30, December 31,
2009 2008
------------- -------------
ASSETS
Cash and investments $ 69,878 $ 74,059
Trade accounts receivable 2,806 2,962
Other accounts receivable 2,316 1,201
Other current assets 3,438 4,426
Property and equipment, net 2,358 3,086
Intangible assets, net 499 505
Deferred tax 3,671 3,671
Other assets 3,022 3,348
------------- -------------
Total assets $ 87,988 $ 93,258
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 10,346 $ 11,174
Deferred revenue 4,206 $ 3,743
------------- -------------
Total liabilities 14,552 14,917
------------- -------------
Stockholders' equity:
Common stock 47 47
Additional paid-in capital 629,579 626,810
Treasury Stock (103,162) (90,613)
Accumulated deficit (452,386) (456,391)
Unrealized loss on investments (642) (1,512)
------------- -------------
Total stockholders' equity 73,436 78,341
------------- -------------
Total liabilities and stockholders' equity $ 87,988 $ 93,258
============= =============