EXHIBIT
99.1
|
Stamps.com Investor
Contact:
|
Press Contact:
|
|
Stamps.com
Investor Relations
|
Brew
PR
|
|
(310)
482-5830
|
(310)
600-7160
|
|
http://investor.stamps.com
|
dena@brewpr.com
|
STAMPS.COM
ANNOUNCES THIRD QUARTER 2009 RESULTS
PC Postage
®
Revenue of $18.3 million; Non-GAAP
Diluted Earnings Per Share of $0.17
LOS ANGELES
–
October 22
, 200
9
–
Stamps.com® (Nasdaq:STMP),
the leading provider of
postage
online
and
shipping
software
solutions, today announced results for the third quarter
ended September 30, 2009.
For the
third quarter:
|
·
|
Excluding
the enhanced promotion channel, PC Postage revenue was $16.8 million, up
5% from the third quarter of 2008.
|
|
·
|
Including
the enhanced promotion channel (which consists of online programs where
additional promotions are offered to customers), total PC
Postage revenue was $18.3 million, up 1% from the third quarter of
2008.
|
|
·
|
The
Company reduced the overall level of sales and marketing costs for
PhotoStamps by approximately 46% versus the third quarter of 2008 and as a
result, total third quarter PhotoStamps revenue was $1.9 million, a
decrease of 6% versus the third quarter of
2008.
|
|
·
|
Total
revenue was $20.2 million, flat compared to the third quarter of
2008.
|
|
·
|
PC
Postage gross margin was 78.3%, PhotoStamps gross margin was 18.9% and
total gross margin was 72.7%.
|
|
·
|
GAAP
net income was $1.7 million, or $0.11 per fully diluted share. This
includes a $0.8 million non-cash stock-based compensation expense and a
$0.2 million adjustment resulting from the temporary suspension of the
Company’s ability to utilize its net operating losses for California
income tax purposes.
|
|
·
|
Excluding
the FASB Statement 123R expense and the income tax adjustment, non-GAAP
income from operations was $2.5 million and non-GAAP net income per fully
diluted share was $0.17.
|
“In the
third quarter we were pleased that our non-GAAP earnings per share were the
strongest they have been in a year,” said Ken McBride, Stamps.com president and
CEO. “We achieved five percent overall revenue growth in PC Postage, excluding
the enhanced promotion channel. We also saw our lowest cost per new customer
acquired for this year and we continued to make good progress in our enterprise
and shipping areas during the quarter.”
Third
quarter 2009 Detailed Results
Stamps.com
reported 2009 third quarter GAAP net income of $1.7 million. On a per share
basis, total 2009 third quarter GAAP net income was $0.11 based on fully diluted
shares outstanding of 16.2 million. Third quarter GAAP net income was reduced by
$0.8 million for FASB 123R stock-based compensation expense and an income tax
adjustment of $0.2 million resulting from the temporary suspension of the
Company’s ability to utilize its net operating losses for California income tax
purposes based on legislation which was passed in 2008 and is effective for tax
years 2008 and 2009. Non-GAAP and GAAP amounts are reconciled in the following
table:
|
Third
Quarter Fiscal 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
amounts in millions except
|
|
Non-GAAP
|
|
|
FASB
|
|
|
Income
Tax
|
|
|
GAAP
|
|
|
per
share or margin data:
|
|
Amounts
|
|
|
123R
|
|
|
Adjustment
|
|
|
Amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Sales
|
|
$
|
5.45
|
|
|
$
|
0.07
|
|
|
$
|
-
|
|
|
$
|
5.52
|
|
|
Research
& Development
|
|
|
2.02
|
|
|
|
0.18
|
|
|
|
-
|
|
|
|
2.20
|
|
|
Sales
& Marketing
|
|
|
7.16
|
|
|
|
0.20
|
|
|
|
-
|
|
|
|
7.36
|
|
|
General
& Administrative
|
|
|
3.06
|
|
|
|
0.33
|
|
|
|
-
|
|
|
|
3.39
|
|
|
Total
Expenses
|
|
|
17.70
|
|
|
|
0.77
|
|
|
|
-
|
|
|
|
18.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Margin
|
|
|
73.0
|
%
|
|
|
(0.3
|
)%
|
|
|
-
|
|
|
|
72.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from Operations
|
|
|
2.52
|
|
|
|
(0.77
|
)
|
|
|
-
|
|
|
|
1.74
|
|
|
Interest
and Other Income
|
|
|
0.21
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.21
|
|
|
Pre-Tax
Income
|
|
|
2.73
|
|
|
|
(0.77
|
)
|
|
|
-
|
|
|
|
1.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for Income Taxes
|
|
|
(0.01
|
)
|
|
|
-
|
|
|
|
(0.21
|
)
|
|
|
(0.22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
$
|
2.71
|
|
|
$
|
(0.77
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
1.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On
a diluted per share basis
|
|
$
|
0.17
|
|
|
$
|
(0.05
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
used in per share calculation
|
|
|
16.16
|
|
|
|
16.16
|
|
|
|
16.16
|
|
|
|
16.16
|
|
Excluding
the FASB Statement 123R expense and income tax adjustment, 2009 third quarter
non-GAAP net income was $2.7 million or $0.17 per fully diluted share based on
fully diluted shares outstanding of 16.2 million. This compares to 2008 third
quarter non-GAAP net income per fully diluted share of $0.17. Thus,
non-GAAP third quarter diluted earnings per share were flat versus the same
quarter last year.
Share
Repurchase
During
the third quarter, the Company repurchased a total of 0.5 million shares for a
total cost of $3.9 million. On July 23, 2009, Stamps.com’s Board of Directors
approved a new share repurchase plan authorizing the Company to repurchase up to
2.5 million shares of Stamps.com stock from August 2009 through February 2010.
Under this plan to date, the Company has repurchased 0.3 million shares for a
total cost of $2.9 million.
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 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.
Business
Outlook
Stamps.com
currently expects total 2009 revenue to be $80 to $90 million. 2009 GAAP net
income per share is expected to be $0.20 to $0.40, including approximately $3
million of 2009 FASB Statement 123R stock-based compensation expense, a $0.4
million asset write-off, and $0.5 to $1.0 million of expected taxes resulting
from the temporary suspension of the Company’s ability to utilize its net
operating losses for California income tax purposes. Excluding the FASB
Statement 123R expenses, asset write-off and the additional California income
taxes, non-GAAP 2009 net income per fully diluted share is expected to be $0.40
to $0.60.
Net
Operating Losses (NOL) and Protective Measures
Stamps.com
currently has approximately $235 million in Federal NOLs and $150 million in
State NOLs, with a potential value of up to $95 million in tax savings over the
next 15 years. Under Internal Revenue Code Section 382 rules, if a
change of ownership is triggered, the Company’s NOL asset may be impaired. A
change in ownership can occur whenever there is a shift in ownership by more
than 50 percentage points by one or more 5% shareholders within a three-year
period. We estimate that as of September 30, 2009 the Company was at an
approximately 28% level compared with the 50% level that would trigger
impairment of our NOL asset.
During
the second quarter of 2008, the Company received shareholder approval to amend
its articles of incorporation in order to protect its NOL asset (the “NOL
Protective Measures”) and those measures are now in effect. Under the NOL
Protective Measures there is no change to the way that existing Stamps.com
shares are held or traded, but any person, company or investment firm which
wishes to become a “5% shareholder” of Stamps.com must first obtain a waiver
from the Company’s board of directors. In addition, any person, company or
investment firm which is already a “5% shareholder” of Stamps.com cannot make
any additional purchases of Stamps.com stock without a waiver from the Company’s
board of directors.
Stamps.com currently has
15.8
million shares outstanding and
therefore ownership of
approximately 788
thousand shares or greater would
currently constitute a
“
5%
shareholder”
.
Stamps.com strongly urges that any
stockholder contemplating owning more than
63
0
thousand
shares contact the Company before doing
so.
Company
Customer Metrics
A
complete set of the quarterly customer metrics for the past three fiscal years
and through the current quarter is available currently at
http://investor.stamps.com
(under a tab on the left side called Company Information, Current and Previous
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, 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. Since launching PhotoStamps in May 2005, more than 74 million
individual PhotoStamps have been shipped to customers. Stamps.com currently has
PhotoStamps partnerships with Apple, Google/Picassa, HP/Snapfish, Costco, 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. These non-GAAP measures are provided to
enhance investors’ overall understanding of the Company’s current financial
performance and the Company’s prospects for the future and provide further
information about the impact of the adoption of the accounting standard FASB
123R. The Company believes the non-GAAP measures that exclude stock-based
compensation, asset write-offs, litigation charges, income tax adjustments, and
income tax benefits enhance the comparability of results against prior periods.
These measures should be considered in addition to results prepared in
accordance with generally accepted accounting principles, but should not be
considered a substitute for, or superior to, GAAP results. Reconciliation to the
nearest GAAP measure of all non-GAAP measures included in this press release can
be found in the financial tables included on page 2 of this press
release.
"Safe
Harbor" Statement under the Private Securities Litigation Reform Act of 1995:
This release includes forward-looking statements about our anticipated results
and our PhotoStamps spend 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, 2008, 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.
STATEMENTS
OF OPERATIONS
(in
thousands, except per share data: unaudited)
|
|
|
Three Months ended
September 30,
|
|
|
Nine Months ended
September 30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription
|
|
$
|
15,401
|
|
|
$
|
15,435
|
|
|
$
|
45,922
|
|
|
$
|
46,209
|
|
|
Product
|
|
|
2,536
|
|
|
|
2,326
|
|
|
|
7,733
|
|
|
|
7,392
|
|
|
Insurance
|
|
|
377
|
|
|
|
375
|
|
|
|
1,176
|
|
|
|
1,140
|
|
|
PhotoStamps
|
|
|
1,901
|
|
|
|
2,020
|
|
|
|
5,609
|
|
|
|
7,897
|
|
|
Other
|
|
|
1
|
|
|
|
-
|
|
|
|
6
|
|
|
|
-
|
|
|
Total
revenues
|
|
|
20,216
|
|
|
|
20,156
|
|
|
|
60,446
|
|
|
|
62,638
|
|
|
Cost
of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription
|
|
|
2,926
|
|
|
|
2,626
|
|
|
|
8,806
|
|
|
|
7,630
|
|
|
Product
|
|
|
940
|
|
|
|
809
|
|
|
|
2,915
|
|
|
|
2,637
|
|
|
Insurance
|
|
|
116
|
|
|
|
124
|
|
|
|
364
|
|
|
|
363
|
|
|
PhotoStamps
|
|
|
1,542
|
|
|
|
1,489
|
|
|
|
4,363
|
|
|
|
5,708
|
|
|
Total
cost of revenues
|
|
|
5,524
|
|
|
|
5,048
|
|
|
|
16,448
|
|
|
|
16,338
|
|
|
Gross
profit
|
|
|
14,692
|
|
|
|
15,108
|
|
|
|
43,998
|
|
|
|
46,300
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
and marketing
|
|
|
7,359
|
|
|
|
7,654
|
|
|
|
23,650
|
|
|
|
25,057
|
|
|
Research
and development
|
|
|
2,198
|
|
|
|
2,243
|
|
|
|
6,624
|
|
|
|
6,288
|
|
|
General
and administrative
|
|
|
3,391
|
|
|
|
3,420
|
|
|
|
9,961
|
|
|
|
11,820
|
|
|
Total
operating expenses
|
|
|
12,948
|
|
|
|
13,317
|
|
|
|
40,235
|
|
|
|
43,165
|
|
|
Income
from operations
|
|
|
1,744
|
|
|
|
1,791
|
|
|
|
3,763
|
|
|
|
3,135
|
|
|
Other
income, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
208
|
|
|
|
697
|
|
|
|
797
|
|
|
|
2,350
|
|
|
Other
income
|
|
|
-
|
|
|
|
5
|
|
|
|
-
|
|
|
|
26
|
|
|
Total
other income, net
|
|
|
208
|
|
|
|
702
|
|
|
|
797
|
|
|
|
2,376
|
|
|
Pre-tax
income
|
|
|
1,952
|
|
|
|
2,493
|
|
|
|
4,560
|
|
|
|
5,511
|
|
|
Income
tax expense (benefit)
|
|
|
221
|
|
|
|
430
|
|
|
|
555
|
|
|
|
(3,056
|
)
|
|
Net
income
|
|
$
|
1,731
|
|
|
$
|
2,063
|
|
|
$
|
4,005
|
|
|
$
|
8,567
|
|
|
Net
income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.11
|
|
|
$
|
0.11
|
|
|
$
|
0.24
|
|
|
$
|
0.44
|
|
|
Diluted
|
|
$
|
0.11
|
|
|
$
|
0.10
|
|
|
$
|
0.24
|
|
|
$
|
0.43
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
16,035
|
|
|
|
19,410
|
|
|
|
16,397
|
|
|
|
19,505
|
|
|
Diluted
|
|
|
16,162
|
|
|
|
19,726
|
|
|
|
16,527
|
|
|
|
19,796
|
|
CONDENSED
BALANCE SHEETS
(in
thousands)
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Cash
and investments
|
|
$
|
69,878
|
|
|
$
|
74,059
|
|
|
Trade
accounts receivable
|
|
|
2,806
|
|
|
|
2,962
|
|
|
Other
accounts receivable
|
|
|
2,316
|
|
|
|
1,201
|
|
|
Other
current assets
|
|
|
3,438
|
|
|
|
4,426
|
|
|
Property
and equipment, net
|
|
|
2,358
|
|
|
|
3,086
|
|
|
Intangible
assets, net
|
|
|
499
|
|
|
|
505
|
|
|
Deferred
tax
|
|
|
3,671
|
|
|
|
3,671
|
|
|
Other
assets
|
|
|
3,022
|
|
|
|
3,348
|
|
|
Total
assets
|
|
$
|
87,988
|
|
|
$
|
93,258
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
$
|
10,346
|
|
|
$
|
11,174
|
|
|
Deferred
revenue
|
|
|
4,206
|
|
|
$
|
3,743
|
|
|
Total
liabilities
|
|
|
14,552
|
|
|
|
14,917
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
47
|
|
|
|
47
|
|
|
Additional
paid-in capital
|
|
|
629,579
|
|
|
|
626,810
|
|
|
Treasury
Stock
|
|
|
(103,162
|
)
|
|
|
(90,613
|
)
|
|
Accumulated
deficit
|
|
|
(452,386
|
)
|
|
|
(456,391
|
)
|
|
Unrealized
loss on investments
|
|
|
(642
|
)
|
|
|
(1,512
|
)
|
|
Total
stockholders' equity
|
|
|
73,436
|
|
|
|
78,341
|
|
|
Total
liabilities and stockholders' equity
|
|
$
|
87,988
|
|
|
$
|
93,258
|
|