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VistaPrint Ltd. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: October 26, 2012 04:04PM

VistaPrint Ltd. (VPRT) filed Quarterly Report for the period ended 2012-09-30. Vistaprint, Ltd. has a market cap of $1.17 billion; its shares were traded at around $29.98 with a P/E ratio of 26.9 and P/S ratio of 1.2. Vistaprint, Ltd. had an annual average earning growth of 26.9% over the past 5 years.

Highlight of Business Operations:

For the three months ended September 30, 2012, we reported revenue of $251.4 million representing 18% growth over the prior year. Constant-currency revenue growth was 23% for this period. Constant-currency organic revenue growth, which excludes the impact of acquisitions, was 13% for the three months ended September 30, 2012. Our organic constant-currency growth in the first quarter was lower than our recent trend, and reflects a contrast of regional executional performance. North America and Most of World ("MOW") delivered strong growth, but European organic constant-currency growth was just 1% in the quarter, a significant decline as compared to past quarters. Revenue from acquisitions contributed approximately 10% to our overall revenue growth during the period.

Despite the growth in our consolidated revenue, diluted earnings per share ("EPS") for the three months ended September 30, 2012 declined 126% from the same prior year period to a loss of $0.05. This decline was due to planned investments we made in support of our long-term growth strategy including increased investment levels in our organic business such as advertising and other marketing expenditures in support of new and repeat customer growth, technology and development resources in support of our customer value proposition and manufacturing, and supply chain efficiency efforts. In addition, we continued to invest in our employee base through increased compensation awards and expansion in key departments, including additional resources in our MOW business unit to develop and implement our long-term strategy for emerging markets. Our fiscal 2012 acquisitions continued to be dilutive with share-based compensation and amortization expense totaling $4.4 million that did not occur during the comparative period.

Revenue for the three months ended September 30, 2012 increased 18% to $251.4 million compared to the three months ended September 30, 2011 due to increases in sales across our product and service offerings in our organic North America and Most of World reporting segments, as well as revenue from the Albumprinter and Webs businesses which we acquired in the second quarter of fiscal 2012 and are not included in the prior year period results. Our organic European business experienced difficulty in executing its growth strategy and contributed an increase of only 1% to constant-currency revenue in the period. We expect our European revenue growth rate to increase for the remainder of fiscal 2013 as compared to the current quarter; however, we expect that growth rate will be less than historical trends. The stronger U.S. dollar negatively impacted our revenue growth by an estimated 50 basis points in the three months ended September 30, 2012, as compared to the prior year period.

The increase in our marketing and selling expenses of $23.7 million for the three months ended September 30, 2012 as compared to the prior 2011 period was driven primarily by increases of $13.7 million in advertising costs and commissions related to new customer acquisition and costs of promotions targeted at our existing customer base, an integral component of our long-term growth strategy, as well as increases in payroll and facility-related costs of $6.7 million and increases in share-based compensation costs of $1.0 million. We continued to expand our marketing organization and our customer service, sales and design support centers and at September 30, 2012, we employed 1,632 employees in these organizations compared to 1,223 employees at September 30, 2011. Other marketing and selling expenses also increased by $1.0 million due to increased depreciation costs, employee travel and training costs, and professional fees. Furthermore, the three months ended September 30, 2012 includes $1.3 million of amortization of acquired customer and brand name intangible assets related to the acquisitions of Albumprinter and Webs in fiscal 2012.

Purchase Obligations. At September 30, 2012, we had unrecorded commitments under contract of $36.0 million, which were principally composed of the site development and construction for the expansion of our Venlo, the Netherlands manufacturing facility and our Jamaican customer service, sales and design support centers of approximately $13.7 million and $2.0 million, respectively, as well as production and computer equipment purchases of approximately $7.8 million, and other unrecorded purchase commitments of $12.5 million.

Read the The complete Report

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