Stamps.com Reports First Quarter 2017 Results
EL SEGUNDO, CA — (Marketwired) — 05/03/17 —
First Quarter 2017 Financial Highlights
- Total revenue was
$105.0 million, up 28% compared to $81.8 millionin the first quarter of 2016.
- GAAP net income was
$33.1 million, up 150% compared to $13.2 millionin the first quarter of 2016.
- GAAP net income per fully diluted share was
$1.82, up 157% compared to $0.71in the first quarter of 2016.
- Non-GAAP adjusted EBITDA was
$51.2 million, up 47% compared to $34.8 millionin the first quarter of 2016.
- Non-GAAP adjusted income per fully diluted share was
$1.83, up 62% compared to $1.13(adjusted for our current tax rate) in the first quarter of 2016.
“We are very pleased with our continued strong revenue and earnings growth this quarter,” said Ken McBride, Stamps.com’s chairman and CEO. “In addition to our overall revenue and earnings growth, during the first quarter we reached our highest level of paid customers, we saw continued strong growth in our shipping business areas, and we experienced strong contributions from all of our subsidiaries. We remain very excited about our future prospects and, combined with our first quarter performance, led us to increase our guidance for 2017.”
First Quarter 2017 Detailed Results
First quarter 2017 total revenue was
First quarter 2017 GAAP income from operations was
First quarter 2017 GAAP income from operations included
First quarter 2016 GAAP income from operations included
First quarter 2016 non-GAAP income tax expense as reported last year was
Therefore, first quarter 2017 non-GAAP income from operations, non-GAAP adjusted income and non-GAAP adjusted income per fully diluted share increased by 49%, 57% and 62% year-over-year, respectively.
Non-GAAP income from operations, non-GAAP adjusted income and non-GAAP adjusted income per share are described further in the “About Non-GAAP Financial Measures” section of this press release and are reconciled to the corresponding GAAP measures in the following tables (unaudited):
First Quarter GAAP Net Income and Non-GAAP Adjusted EBITDA
First quarter 2017 GAAP net income was
First quarter 2017 non-GAAP adjusted EBITDA was
Adjusted EBITDA is a non-GAAP financial measure which is described further in the “About Non-GAAP Financial Measures” section of this press release and is reconciled to GAAP net income in the following table (unaudited):
Reconciliation of Non-GAAP Adjusted EBITDA to GAAP Net Income
In the first quarter of 2017, the Company adopted Accounting Standards Update No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvement to Employee Share based Payment Accounting (ASU 2016-09), which requires us, among other items, to record excess tax benefits as a reduction of the provision for income taxes in the income statements, whereas they were previously recognized in equity. The impact of adoption has been reflected in our income statement for the period ended March 31, 2017.
For the first quarter of 2017, the Company reported a GAAP income tax expense of
Share Repurchase and Debt Repayment
During the first quarter 2017, the Company repurchased approximately 356 thousand shares at a total cost of approximately
On April 25, 2017, the Board of Directors approved a new share repurchase program that will take effect upon expiration of the current plan on May 8, 2017 and authorizes the Company to repurchase up to another
During the first quarter 2017, the Company made required principal repayments of
Summary of our Updated Business Outlook
Today the company increased its 2017 GAAP financial outlook as follows:
- We expect total 2017 revenue to be in a range of approximately
$405 millionto $430 million; this compares to previous guidance of $400 millionto $425 million
- We expect GAAP net income per fully diluted share to be in a range of approximately
$4.78to $5.69; this compares to previous guidance of $4.20to $5.10
The above GAAP numbers adjusted as detailed below result in the following non-GAAP financial outlook:
- We expect non-GAAP adjusted EBITDA to be in a range of approximately
$205 millionto $225 million; this compares to previous guidance of $200 millionto $220 million.
- We expect non-GAAP adjusted income per fully diluted share is expected to be in a range of
$7.00to $8.00; this compares to previous guidance of $6.00to $7.00.
Detailed Discussion of our Updated Business Outlook
For 2017, the Company currently expects total revenue to be in a range of approximately
For 2017, the Company currently expects GAAP net income to be in a range of approximately
The following table is provided to facilitate a reconciliation of 2017 expected non-GAAP adjusted EBITDA to expected GAAP net income:
For 2017, the Company currently expects GAAP net income per fully diluted share to be in a range of approximately
The following table is provided to a facilitate reconciliation of fiscal year 2017 expected non-GAAP adjusted income per fully diluted share to expected GAAP net income per fully diluted share:
This business outlook does not include the impact from potential future acquisitions, including acquisition costs or related financings, or unanticipated events. This business outlook and the related assumptions are forward-looking statements subject to the safe harbor statement contained at the end of this press release, and reflect our views of current and future market conditions. Ranges represent a set of likely assumptions, but actual results could fall outside the range presented. Only a few of our assumptions underlying our guidance are disclosed above, and our actual results will be affected by known and unknown risks, trends, uncertainties and other factors, some of which are beyond our control or ability to predict. Although we believe that the assumptions underlying our guidance are reasonable, they are not guarantees of future performance and some of them will inevitably prove to be incorrect. As a result, our actual future results can be expected to differ from our expectations, and those differences could be material.
Company Metrics and Conference Call
2017 Company metrics, updated to include the first quarter, is available at http://investor.stamps.com (under a tab on the left side called Company Information, Metrics). These metrics are not incorporated into this press release.
The Stamps.com financial results conference call will be webcast today at
About Stamps.com, Endicia, ShipStation, ShipWorks and ShippingEasy
Stamps.com (NASDAQ: STMP) is the leading provider of postage online and shipping software solutions to over 700 thousand customers, including consumers, small businesses, e-commerce shippers, enterprises, and high volume shippers. Stamps.com offers solutions that help businesses run their shipping operations more smoothly and function more successfully under the brand names Stamps.com, Endicia, ShipStation, ShippingEasy and ShipWorks. Stamps.com’s family of brands provides seamless access to mailing and shipping services through integrations with more than 400 unique partner applications.
Endicia is a leading provider of high volume shipping technologies and services for U.S. Postal Service shipping. It offers solutions that help businesses run their shipping operations more smoothly and function more successfully. Endicia also provides seamless access to USPS shipping services through integrations with partner applications.
ShipStation is a leading web-based shipping solution that helps e-commerce retailers import, organize, process, package, and ship their orders quickly and easily from any web browser. ShipStation features the most integrations of any e-commerce web-based solution with more than 150 shopping carts, marketplaces, package carriers, and fulfillment services. Integration partners include eBay, PayPal, Amazon, Etsy, Square, Shopify, BigCommerce, Volusion, Magento, Squarespace, and carriers such as USPS, UPS, FedEx and DHL. ShipStation has sophisticated automation features such as automated order importing, custom hierarchical rules, product profiles, and fulfillment solutions that enable its customers to complete their orders, wherever they sell, and however they ship.
ShipWorks is the leading client-based shipping solution that helps high volume shippers import, organize, process, fulfill, and ship their orders quickly and easily from any standard PC. With integrations to more than 90 shopping carts, marketplaces, package carriers, and fulfillment services, ShipWorks has the most integrations of any high-volume client shipping solution. Package carriers include USPS, UPS, FedEx, DHL, OnTrac and many more. Marketplace and shopping cart integrations include eBay, PayPal, Amazon, Etsy, Shopify, BigCommerce, Volusion, Channel Advisor, Magento, and many more. ShipWorks has sophisticated automation features such as a custom rules engine, automated order importing, automatic product profile detection, and fulfillment automation, which enable high volume shippers to complete their orders quickly and efficiently.
ShippingEasy is a leading web-based shipping software solution that allows online retailers and e-commerce merchants to organize, process, fulfill and ship their orders quickly and easily. ShippingEasy integrates with leading marketplaces, shopping carts, and e-commerce platforms to allow order fulfillment and tracking data to populate in real time across all systems. The ShippingEasy software downloads orders from all selling channels and automatically maps custom shipping preferences, rates and delivery options across all supported carriers.
About Non-GAAP Financial Measures
To supplement the Company’s condensed consolidated 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 adjusted income, non-GAAP adjusted income per fully diluted share and adjusted EBITDA. Non-GAAP adjusted income per fully diluted share is calculated as adjusted non-GAAP net income divided by fully diluted shares. Prior to the second quarter 2016, the Company referred to non-GAAP adjusted income as non-GAAP net income. Adjusted EBITDA as calculated in this press release represents earnings before interest and other expense, net, interest and other income, net, income tax expense or benefit, depreciation and amortization and excludes certain items, such as stock-based compensation expense, described in this release used to reconcile GAAP to non-GAAP income from operations. The presentation of non-GAAP financial measures is 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. These non-GAAP financial measures may differ from similarly titled measures used by other companies. Reconciliation of non-GAAP financial measures included in this press release to the corresponding GAAP measures can be found in the financial tables of this earnings release.
Non-GAAP financial measures are provided to enhance investors’ overall understanding of the Company’s financial performance and prospects for the future and as a means to evaluate period-to-period comparisons. The Company believes the non-GAAP measures that exclude certain non-cash items including stock-based compensation expense, amortization of acquired intangibles, amortization of debt issuance costs, contingent consideration charges and income tax adjustments, and exclude certain expenses such as acquisition related expenses and litigation settlement expenses, provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be reflective of core business operating results. The Company believes that non-GAAP financial measures, 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. Management uses non-GAAP financial measures in making financial, operating, compensation and planning decisions. The Company believes non-GAAP financial measures facilitate management and investors comparison of the Company’s financial performance to that of prior periods as well as trend analysis over time.
Non-GAAP adjusted income and non-GAAP adjusted income per fully diluted share utilizes a fixed annual projected non-GAAP tax rate in order to provide better consistency across the interim reporting periods by eliminating the effects of non-recurring and period-specific items which can vary in size and frequency. When projecting this annual rate, the Company evaluated a one-year financial projection that excludes the following non-cash items: stock-based compensation expense, amortization of intangibles, and amortization of debt issuance costs. The projected annual rate also assumes no new option exercise, and considers other factors including the Company’s tax structure, its tax positions in various jurisdictions where the Company operates. This expected annual rate is re-evaluated on an annual basis and for any significant events that may materially affect this rate. The expected non-GAAP tax rate for 2017 is 32.5%.
Share Repurchase Timing
The timing of share repurchases, if any, and the number of shares to be bought at any one time will depend on market conditions, the Company’s compliance with the covenants in its Credit Agreement and the Company’s assessment of the risk that its net operating loss asset could be impaired if such repurchases were undertaken. Share repurchases 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.
“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that are not historical facts, and may relate to future events or the company’s anticipated results, business strategies or capital requirements, among other things, all of which involve risks and uncertainties. You can identify many (but not all) such forward-looking statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “projects,” “seeks,” “intends,” “plans,” “could,” “would,” “may” or other similar expressions. Important factors, including the Company’s ability to successfully integrate and realize the benefits of its past or future strategic acquisitions or investments, to complete and ship its products and to maintain desirable economics for its products, as well as the timing of when the Company will utilize its deferred tax assets, 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, 2016, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Matters described in forward-looking statements may also be affected by other known and unknown risks, trends, uncertainties and factors, many of which are beyond the company’s ability to control or predict. 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, Endicia, ShipStation, ShipWorks, and ShippingEasy are trademarks or registered trademarks of Stamps.com Inc. and its subsidiaries. All other brands and names are property of their respective owners.
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