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Vistaprint Beats, Down Y/Y

Zacks Equity Research

Vistaprint N.V. (VPRT) declared third quarter 2012 adjusted earnings (including stock based compensation expense of 20 cents per share) of 9 cents per share, comprehensively beating the Zacks Consensus Estimate of 9 cents loss per share. The better-than-expected results were driven by double-digit growth in the top line. However, adjusted earnings fell from the year-ago level of 51 cents.

Reported earnings per share (EPS) were in line with the company’s guided range of 14–29 cents. On a GAAP basis, EPS was a penny versus 51 cents in the comparable quarter of last year.

The company registered a 26.5% year-over-year growth in revenues to $257.6 million, including the $14.0 million contribution from Albumprinter and Webs. Revenues were within management’s guidance range of $246 million to $261 million. Geographically, Vistaprint derived 55%, 39% and 6% of revenues from North America, Europe and Asia-Pacific markets, respectively.

Behind the Headline Numbers

In the third quarter, gross margin rose 20 basis points (bps) from the year-ago quarter to 65.5%. Operating income came in at $7.8 million, reflecting a downside of 69% from the prior-year quarter. Operating margin plunged 960 basis points from the prior-year quarter to 3.0%.

However, total order volume increased roughly 21% year over year to 7.0 million in the third quarter of fiscal 2012. Vistaprint added 5.8 million new customers in the quarter.

Financial Position

At quarter end, the company had $52.1 million in cash, cash equivalents and short-term marketable securities. Total assets of the company were $588.0 million while total liabilities amounted to $306.0 million.


For the fourth quarter of 2012, Vistaprint expects adjusted EPS (excluding stock-based compensation expense of 19 cents) in the 15–27 cents range. On a GAAP basis, earnings per share are expected in the range of loss of 10 cents to gain of 2 cents and revenues in the range of $248 million to $264 million.

For full-year 2012, the company reiterated its adjusted EPS guidance (excluding stock-based compensation expense of 63 cents) in the range of $1.71 to $1.83 per share. On a GAAP basis, EPS is projected between 92 cents to $1.04 (versus 86–98 as provided earlier) per share. Revenue is expected in the range of $1018–$1,034 million ($1006–$1,036 million provided earlier).

Our Take

We remain optimistic on Vistaprint’s long-term prospects and a deeper focus on inorganic growth as well as international expansion. Management expects to gain $2 billion revenue by 2016. Additionally, the company has a share repurchase program in place to boost its full-year earnings.

However, 2012 could prove to be a challenging year for Vistaprint as there are a few planned investments, which will weigh on its bottom line. Acquisitions will also be dilutive to earnings.

Vistaprint, which competes with Sykes Enterprises Inc. (SYKE) and TeleTech Holdings Inc. (TTEC), currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are maintaining our long-term Neutral recommendation on the stock.

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