Stamps.Com Reports Fourth Quarter And Fiscal Year 2003 Financial Results
Fourth Quarter Revenue up 41% Year over Year; Company Anticipates Profitability Beginning in First Quarter of 2005
SANTA MONICA, Calif. – January 28, 2004 – Stamps.com (Nasdaq: STMP) today announced financial results for the fourth quarter of 2003 and the fiscal year ended December 31, 2003. Fourth quarter revenue was $6.4 million, up 41% versus fourth quarter of 2002, and up 20% versus the third quarter of 2003. Additionally, Stamps.com announced that it currently anticipates profitability beginning in the first quarter of 2005.
Additional fourth quarter financial highlights include the following:
- Total Stamps.com online store revenue (including revenue related to sales of NetStamps labels) was $1.1 million, up 160% versus the fourth quarter of 2002, and up 37% versus the third quarter of 2003.
- Gross margin was 60%, up 2% versus the third quarter of 2003.
- Total postage printed using the Stamps.com service was $32.7 million, up 86% versus the fourth quarter of 2002.
- Net loss on a GAAP basis was $2.7 million, or $0.06 per weighted average share.
- The Company ended the quarter with $3.69 per share total cash and cash equivalents, calculated as explained below.
“We were very pleased with our fourth quarter revenue and subscriber growth, particularly the continued acquisition of higher value power plan customers and our continued robust growth in sales of consumables and other supplies” said president and CEO Ken McBride. “We plan to continue to build on this momentum in 2004 as we drive the business to an anticipated profitability beginning the first quarter of 2005.”
Following the fourth quarter results and the anticipated profitability in 2005, the Stamps.com Board of Directors also announced today that it has declared a one-time return of capital dividend of $1.75 per share. Stamps.com also announced that at its annual meeting on April 23, 2004, shareholders of Stamps.com will be asked to grant the Board of Directors the authority to select a one-for-two (1:2), one-for-three (1:3) or one-for-four (1:4) reverse split, with the exact ratio determined by the Board of Directors when it effects the split.
Fourth quarter 2003 revenue growth continued to be driven by an increase in service fee revenue, particularly from higher value Power Plan customers, and from continued robust sales of consumables and supplies. Total revenue for fiscal 2003 was $21.2 million, up 30% versus fiscal 2002. Stamps.com reported net loss on a GAAP basis of $2.7 million for the fourth quarter of 2003 compared to a net loss of $1.7 million in the third quarter of 2003 and a net loss of $1.4 million in the fourth quarter of 2002. On a per share basis, the net loss was $0.06 in the fourth quarter of 2003 based on the weighted average common shares outstanding of 44.1 million.
For fiscal year ended December 31, 2003, net loss was $9.3 million or 21 cents per weighted average share. This compares to a loss of $6.8 million or 14 cents per weighted average share for the fiscal year ended December 31, 2002. The increase in the 2003 year loss is attributable to increased 2003 investment in sales and marketing, and continued heavy 2003 spending on legal fees. On December 22, 2003, Stamps.com announced it had reached a settlement with Pitney Bowes in all of the respective patent infringement litigation between the companies. The settlement included a five-year patent cross-licensing agreement, and there were no material financial payment between the companies.
Total cash and cash equivalents, including restricted cash, short-term investments and long-term investments, ended the quarter at $162.8 million, or $3.69 per share based on fourth quarter ending balance sheet shares outstanding of 44.2 million, which excludes treasury stock. This compares to $164.8 million, or $3.74 per share, at the end of the third quarter and calculated on the same basis. Stamps.com did not repurchase any shares during the fourth quarter of 2003.
Stamps.com also announced today that Jim Bortnak, former VP of Business Development, has been appointed to the new role of VP of Sales and Marketing. In his four and a half year tenure at Stamps.com, Jim Bortnak has a strong track record of creating partnerships with companies such as NCR, Microsoft, Office Depot and Earthlink that have resulted in significant customer acquisition. He is also responsible for the Company’s successful third and fourth quarter 2003 online advertising customer acquisition efforts. In his new role, Jim Bortnak will be managing all of Stamps.com’s marketing and business development efforts.
For the full year 2004, Stamps.com expects total revenue to be up approximately 35% over fiscal year end 2003 revenue; this is an increase from the Company’s previous guidance of 25% revenue growth for fiscal 2004. Gross margins for fiscal 2004 are expected to be in the low 60% range. Stamps.com expects 2004 net loss of approximately $8 million or $0.18 on a per share basis, including an estimated $3 million one-time expense, approximately $0.07 per share, in the first quarter of 2004 related to today’s announced one-time dividend and its effect on employee stock options.
For the first quarter of 2004, Stamps.com expects revenue to be up 5% from the fourth quarter of 2003. First quarter gross margin is expected to be approximately 60%. First quarter 2004 net loss is expected to be approximately $4.5 million or $0.10 on a per share basis, including the estimated $3 million one-time expense.
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. 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 are property of their respective owners.