Stamps.Com Reports Third Quarter 2003 Financial Results
Revenue Up 32% Year over Year; Customer Acquisition Momentum Builds
SANTA MONICA, Calif. – October 29, 2003 – Stamps.com (Nasdaq: STMP) today announced financial results for the third fiscal quarter ended September 30, 2003. Third quarter revenue was up 32% versus the same quarter last year, and up 7% versus the second fiscal quarter of 2003. In addition, the company reported an increase in customer acquisition during the third quarter, particularly with higher value Power Plan customers.
Third quarter 2003 financial results include the following:
- Total revenue was $5.3 million, up 32% from $4.0 million in the third quarter of 2002, and up 7% from $5.0 million in the second quarter of 2003. Revenue growth was driven by an increase in service fee revenue, particularly from Power Plan customers, and by increased sales of new consumable items such as specialized postage printers.
- Gross margin for the quarter was 58%, down from 64% in the second quarter of 2003. The decreased margin is primarily due to a larger cost of sales expense caused by increased promotional expense related to higher third quarter customer acquisition.
- Net loss was $1.7 million compared with a net loss of $2.2 million in the third quarter of 2002, and $2.8 million in the second quarter of 2003. The company continued to increase its investment in sales and marketing, but saw a large decrease in general and administrative expense during the third quarter of 2003.
- Total cash and cash equivalents, as defined below, ended the quarter at $164.8 million, or $3.74 per share, based on the third quarter ending balance sheet shares outstanding of 44.1 million.
“We are pleased with our continued string of sequential revenue growth and the increase in customer acquisition momentum during the third quarter,” said president and CEO Ken McBride. “Our third quarter number of net new registered customers was twice that of the second quarter, with the majority of our growth in the higher value Power Plan customers.”
Stamps.com reported net loss on a GAAP (Generally Accepted Accounting Principles) basis of $1.7 million for the third quarter of 2003, compared to a net loss of $2.2 million in the same quarter last year. On a per share basis, the net loss was $0.04 in the third quarter of 2003 based on the weighted average common shares outstanding of 44.0 million; this compares to a net loss of $0.04 in the same quarter last year based on the weighted average common shares outstanding of 49.5 million.
Total cash and cash equivalents, including restricted cash, short-term investments and long-term investments, ended the quarter at $164.8 million, or $3.74 per share based on third quarter ending balance sheet shares outstanding of 44.1 million, excluding treasury stock. This compares to $165.4 million, or $3.76 per share, at the end of the second quarter calculated on the same basis. The company did not repurchase any shares during the third quarter of 2003.
Stamps.com also announced today that its Board of Directors has authorized a new repurchase program for up to $20 million of its common stock over the next 12 months. 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. Purchases may be made in the open market or in privately negotiated transactions from time to time at management’s discretion. The timing of purchases, if any, and the number of shares to be bought at any one time will depend on market conditions.
For the fourth quarter of 2003, the company expects revenue to be approximately $5.6 million. Gross margin is expected to be in the mid 50% range. Total operating expense for the fourth quarter is expected to increase by approximately two million from the third quarter level due to an anticipated increase in fourth quarter general and administrative expense, and due to plans to increase fourth quarter sales and marketing spend. On a per share basis, fourth quarter 2003 GAAP net income is expected to be a loss of approximately nine cents per share. For the full fiscal year 2004, the company expects total revenue to increase approximately 25% over 2003 levels, gross margin is expected to be approximately sixty percent, and total net loss is expected to be approximately $0.20 per share.
Stamps.com (Nasdaq: STMP) is a leading provider of Internet-based postage services. Stamps.com enables customers to print U.S. Postal Service-approved postage with just a PC, printer and Internet connection. The company targets its services to small businesses, home offices, and individuals, and currently has partnerships with companies including CompUSA, Earthlink, HP, Microsoft, NCR, Office Depot, Vendio and the U.S. Postal Service.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release may contain forward-looking statements that involve risks and uncertainties. Important factors, including the company’s ability to complete its products and obtain 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 fiscal year ended December 31, 2002, its subsequent Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K, if any. 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, NetStamps and Hidden Postage are trademarks or registered trademarks of Stamps.com Inc. All other brands and names, if any, are property of their respective owners.