LOS ANGELES, CA--(Marketwire - February 10, 2011) - Stamps.com® (
NASDAQ:
STMP), the leading
provider of
postage online and
shipping software
solutions, today announced results for the fourth quarter ended December
31, 2010.
For the fourth quarter:
-- PC Postage revenue, excluding the enhanced promotion channel, was
$19.3 million, up 11% from the fourth quarter of 2009.
-- Total PC Postage revenue, including the enhanced promotion channel
(which consists of online programs where additional promotions are
provided directly by marketing partners), was $20.3 million, up 8%
from the fourth quarter of 2009.
-- PhotoStamps revenue was $2.4 million, a decrease of 17% versus the
fourth quarter of 2009.
-- Including the decline in PhotoStamps, total revenue was $22.7 million,
up 5% compared to the fourth quarter of 2009.
-- PC Postage gross margin was 76.8%, PhotoStamps gross margin was 23.7%
and total gross margin was 71.1%.
-- GAAP net loss was $0.3 million or $0.02 per fully diluted share. This
includes $0.6 million in stock-based compensation expense, a
$0.6 million asset write-off and $3.4 million in dividend-related
compensation expense.
-- Excluding the stock-based compensation expense, asset write-off and
dividend-related compensation expense, non-GAAP income from
operations was $4.1 million, non-GAAP net income was $4.4 million and
non-GAAP net income per fully diluted share was $0.30.
"For the quarter, our non-GAAP earnings per share was up by 69%, and this
was the highest level of quarterly non-GAAP earnings per share we have
generated in the Company's history," said Ken McBride, Stamps.com president
and CEO. "We continue to see strong results across-the-board, including our
small business, enterprise and high volume shipping segments. As we enter
2011, we are well positioned to continue making progress in each of these
business areas."
Fourth Quarter 2010 Detailed Results
Stamps.com reported fourth quarter 2010 GAAP net loss of $0.3 million. On a
per share basis, total fourth quarter 2010 GAAP net loss was $0.02 based on
basic shares outstanding of 14.4 million. Fourth quarter 2010 GAAP net
loss included $0.6 million of stock-based compensation expense, a $0.6
million asset write-off related to the Company's billing system and $3.4
million of compensation expense related to the special dividend and its
impact on employee stock options. Non-GAAP and GAAP amounts are reconciled
in the following table:
Fourth Quarter Fiscal 2010
All amounts in millions
except per share or
margin data: Dividend
Non-GAAP Stock-Based Asset Related GAAP
Amounts Comp. Exp. Write-Off Exp. Amounts
Cost of Sales $ 6.21 $ 0.05 $ - $ 0.28 $ 6.54
Research & Development 2.00 0.12 - 0.71 2.83
Sales & Marketing 7.58 0.17 - 0.83 8.59
General & Administrative 2.78 0.30 - 1.62 4.69
-------- -------- -------- -------- --------
Total Expenses 18.56 0.65 - 3.44 22.65
Gross Margin 72.6% (0.2%) -- (1.2%) 71.1%
Income (Loss) from
Operations 4.12 (0.65) - (3.44) 0.03
Asset Write-Off - - (0.63) - (0.63)
Interest and Other Income 0.14 - - - 0.14
-------- -------- -------- -------- --------
Pre-Tax Income (Loss) 4.25 (0.65) (0.63) (3.44) (0.47)
Provision for Income
Taxes 0.19 - - - 0.19
-------- -------- -------- -------- --------
Net Income $ 4.44 $ (0.65) $ (0.63) $ (3.44) $ (0.28)
======== ======== ======== ======== ========
-------- -------- -------- -------- --------
On a diluted per share
basis $ 0.30 $ (0.04) $ (0.04) $ (0.24) $ (0.02)
======== ======== ======== ======== ========
Shares used in per share
calculation 14.57 14.42 14.42 14.42 14.42
Excluding the stock-based compensation expense, asset write-off and
dividend-related compensation expense, fourth quarter 2010 non-GAAP net
income was $4.4 million or $0.30 per fully diluted share based on fully
diluted shares outstanding of 14.6 million. This compares to fourth quarter
2009 non-GAAP net income of $2.9 million and non-GAAP net income per fully
diluted share of $0.18. Thus, non-GAAP fourth quarter 2010 diluted
earnings per share increased by 69% compared to the same quarter last year.
Fiscal 2010 Detailed Results
Total 2010 revenue was $85.5 million, an increase of 4% versus revenue of
$82.1 million in 2009. Total 2010 PC Postage revenue, including service
revenue, store revenue and insurance revenue, was $78.4 million, up 6%
versus PC Postage revenue of $73.6 million in 2009. Excluding the enhanced
promotion channel, PC Postage revenue in 2010 was $73.8 million, up 10%
versus $67.4 million in 2009. Total 2010 PhotoStamps revenue was $7.2
million, down 16% versus PhotoStamps revenue of $8.5 million in 2009.
Total 2010 GAAP net income was $5.5 million, including approximately $2.8
million of stock-based compensation expense; a $0.6 million asset
write-off; $3.4 million of dividend-related compensation expense; $5.2
million of legal settlements and reserves; and a $4.0 million non-cash
income tax benefit resulting from the reversal of a portion of the
Company's deferred tax asset valuation allowance. On a per share basis,
total 2010 GAAP net income was $0.38 based on fully diluted shares
outstanding for the year of 14.7 million. Non-GAAP and GAAP amounts are
reconciled in the following table:
Fiscal Year 2010
All amounts in millions
except per share or
margin data:
Stock- Legal
Based Dividend Settle- Income
Non-GAAP Comp. Asset Related ments & Tax GAAP
Amounts Exp. Write-Off Exp. Reserves Benefit Amounts
Cost of
Sales $ 23.15 $ 0.25 $ - $ 0.28 $ - $ - $ 23.68
Research &
Development 8.14 0.57 - 0.71 - - 9.42
Sales &
Marketing 29.61 0.73 - 0.83 - - 31.17
General &
Administrative 11.69 1.29 - 1.62 - - 14.59
Legal
Settlements
& Reserves - - - - 5.21 - 5.21
------- ------- ------- ------- ------- -------- -------
Total Expenses 72.59 2.84 - 3.44 5.21 - 84.08
Gross Margin 72.9% (0.3%) - (0.3%) - - 72.3%
Income
(Loss) from
Operations 12.96 (2.84) - (3.44) (5.21) - 1.47
Asset
Write-Off - - (0.63) - - - (0.63)
Interest and
Other Income 0.76 - - - - - 0.76
------- ------- ------- ------- ------- -------- -------
Pre-Tax Income
(Loss) 13.71 (2.84) (0.63) (3.44) (5.21) - 1.59
Provision for
Income Taxes (0.03) - - - - 3.98 3.95
------- ------- ------- ------- ------- -------- -------
Net Income $ 13.68 $ (2.84) $ (0.63) $ (3.44) $ (5.21) $ 3.98 $ 5.53
======= ======= ======= ======= ======= ======== =======
------- ------- ------- ------- ------- -------- -------
On a diluted
per share
basis $ 0.93 $ (0.19) $ (0.04) $ (0.23) $ (0.35) $ 0.27 $ 0.38
======= ======= ======= ======= ======= ======== =======
Shares used in
per share
calculation 14.68 14.68 14.68 14.68 14.68 14.68 14.68
Excluding the stock-based compensation expense, asset write-off,
dividend-related compensation expense, legal settlements and reserves and
income tax benefit, 2010 non-GAAP net income was $13.7 million. On a per
share basis, 2010 non-GAAP net income per fully diluted share was $0.93
based on 2010 fully diluted shares outstanding of 14.7 million. This
compares to 2009 non-GAAP net income per fully diluted share of $0.62.
Thus, non-GAAP 2010 diluted earnings per share increased by 51% compared to
2009.
Share Repurchase
During 2010 the Company repurchased a total of 1.5 million shares for a
total cost of $13.8 million. The Company did not repurchase any shares
during the fourth quarter of 2010. On February 3, 2011, the Board of
Directors approved a new share repurchase plan effective upon the
expiration of the current plan on February 15, 2011, authorizing the
Company to repurchase up to 1.0 million shares of Stamps.com stock during
the next six months.
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 may be subject to limitations imposed on such
purchases by applicable securities laws and regulations and the rules of
the Nasdaq Stock Market.
Dividend
During the fourth quarter, the Company completed a $2.00 per share special
dividend to shareholders. The total amount of cash distributed in the
dividend payment was $28.9 million based on 14.5 million shares outstanding
as of the November 11, 2010 record date. The Company also incurred
compensation expense of $3.4 million in the fourth quarter related to the
special dividend and its effect on employee stock options.
The Company currently estimates that approximately $1.87 of the $2.00
special dividend will qualify as a tax-free return of capital, with the
remaining amount treated as a taxable dividend. The final tax
classification will be reflected on the form 1099-DIV provided to
shareholders. Shareholders are encouraged to consult with their own tax and
financial advisors regarding the implications of this dividend on their
individual circumstances.
The Company has returned approximately $253 million to its shareholders
since 2002 through special dividends and share repurchases. Total special
dividends now represent approximately $107 million including a $78 million
special dividend paid in 2004 and the $29 million special dividend paid in
2010. In addition, the Company has spent approximately $146 million
repurchasing its shares since 2002. Through its share repurchases, the
Company has reduced its current split-adjusted total shares outstanding by
approximately 45% compared to the total shares outstanding at the beginning
of 2002.
Net Operating Loss (NOL) Update
Stamps.com currently has approximately $225 million in Federal NOLs and
$145 million in State NOLs. The Company estimates that as of December 31,
2010, its ownership shift was approximately 22% compared with the 50% level
that could trigger impairment of its NOL asset under Internal Revenue Code
Section 382 rules. As part of its ongoing program to preserve future use
of Stamps.com's NOL asset, the Company requests that any shareholder
contemplating becoming a 5% shareholder contact the Company before doing
so.
Business Outlook
Stamps.com currently expects total 2011 revenue to be in a range between
$82.5 to $92.5 million. 2011 GAAP net income per share is expected to be in
a range between $0.65 to $0.85, including approximately $3 million of
stock-based compensation expense. Excluding the stock-based compensation
expense, non-GAAP 2011 net income per fully diluted share is expected to be
in a range between $0.85 to $1.05.
Company Customer Metrics
A complete set of the quarterly customer metrics for the past five fiscal
years is available 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, 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. 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. Stamps.com currently has PhotoStamps
partnerships with Apple, Google/Picasa, HP/Snapfish, 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 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-offs, dividend-related compensation
expense, legal settlements and reserves, 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 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, 2009, 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. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months ended Twelve Months ended
December 31, December 31,
Unaudited Unaudited Unaudited
2010 2009 2010 2009
-------- -------- -------- ---------
Revenues:
Service $ 16,428 $ 15,450 $ 64,607 $ 61,372
Product 3,107 2,920 11,725 10,653
Insurance 741 422 2,023 1,598
PhotoStamps 2,396 2,877 7,162 8,485
Other 5 9 27 16
-------- -------- -------- ---------
Total revenues 22,677 21,678 85,544 82,124
Cost of revenues:
Service 3,338 3,064 13,282 11,869
Product 1,124 1,073 4,337 3,989
Insurance 251 130 641 494
PhotoStamps 1,829 2,198 5,424 6,562
-------- -------- -------- ---------
Total cost of revenues 6,542 6,465 23,684 22,914
-------- -------- -------- ---------
Gross profit 16,135 15,213 61,860 59,210
Operating expenses:
Sales and marketing 8,590 8,086 31,174 31,735
Research and development 2,826 2,075 9,420 8,699
General and administrative 4,689 3,000 14,590 12,961
Legal settlements and reserves - - 5,211 -
-------- -------- -------- ---------
Total operating expenses 16,105 13,161 60,395 53,395
-------- -------- -------- ---------
Income from operations 30 2,052 1,465 5,815
Non-operating asset write-off (634) - (634) -
Interest and other income, net 136 119 756 916
-------- -------- -------- ---------
Income (loss) before taxes (468) 2,171 1,587 6,731
Income tax expense (benefit) (185) (1) (3,945) 554
-------- -------- -------- ---------
Net income (loss) $ (283) $ 2,172 $ 5,532 $ 6,177
======== ======== ======== =========
Net income (loss) per share:
Basic $ (0.02) $ 0.14 $ 0.38 $ 0.38
======== ======== ======== =========
Diluted $ (0.02) $ 0.14 $ 0.38 $ 0.38
======== ======== ======== =========
Weighted average shares
outstanding:
Basic 14,417 15,764 14,529 16,238
======== ======== ======== =========
Diluted 14,417* 15,897 14,685 16,369
======== ======== ======== =========
* Common equivalent shares are excluded from the diluted earnings per share
calculation as their effect is anti-dilutive
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Unaudited
December 31, December 31,
2010 2009
----------- -----------
ASSETS
Cash and investments $ 35,299 $ 71,745
Accounts receivable 4,868 4,367
Other current assets 4,015 3,288
Property and equipment, net 1,694 2,102
Intangible assets, net 885 498
Deferred tax assets 7,650 3,671
Other assets 3,031 3,587
----------- -----------
Total assets $ 57,442 $ 89,258
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable and accrued expenses $ 9,011 $ 9,583
Deferred revenue 4,193 4,070
----------- -----------
Total liabilities 13,204 13,653
Stockholders' equity:
Common stock 47 47
Additional paid-in capital 608,522 630,322
Treasury Stock (118,151) (104,344)
Accumulated deficit (446,603) (450,214)
Unrealized gain (loss) on investments 423 (206)
----------- -----------
Total stockholders' equity 44,238 75,605
----------- -----------
Total liabilities and stockholders' equity $ 57,442 $ 89,258
=========== ===========