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Vistaprint Beats on EPS, Top Line

Zacks Equity Research

Vistaprint N.V. (VPRT) declared fourth quarter 2012 adjusted earnings (including stock-based compensation expense of 23 cents per share) of 17 cents per share, comprehensively beating the Zacks Consensus Estimate of 5 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 32 cents. On a GAAP basis, earnings per share (including stock based compensation expense) were 10 cents versus 32 cents in the comparable quarter of last year.

In full-fiscal 2012, adjusted earnings were $1.30 per share versus $1.83 per share in fiscal 2010. On a GAAP basis, earnings were $1.95 as against $2.30 in the prior year.

In the fourth quarter, the company registered 19.9% year-over-year growth in revenues to $250.4 million, including the $15.4 million contribution from Albumprinter & Webs. Revenues lagged the Zacks Consensus Estimate of $258.0 million. In full-fiscal 2012, revenues were $1,020.3 million, up 25.0% year over year.

Geographically, Vistaprint derived 57%, 37% and 6% of revenues from the North America, Europe and Asia-Pacific markets, respectively.

Behind the Headline Numbers

In the fourth quarter, gross margin rose 70 basis points (bps) from the year-ago quarter to 64.6%. Operating income came in at $5.1 million, reflecting a downside of 70% from the prior-year quarter. Operating margin plunged 610 bps from the prior-year quarter to 2.0%.

Total order volume increased roughly 14% year over year to 6.4 million in the fourth quarter. Vistaprint added 2.2 million new customers in the quarter.


The company exited the quarter with $62.2 million in cash, cash equivalents and short-term marketable securities. Total assets of the company were $592.4 million while total liabilities amounted to $403.1 million.

Share Repurchase

During the quarter under review, the company bought back 2,990,376 of its shares for $100.1 million.


For full-year 2013, the company expects adjusted earnings per share guidance (excluding stock-based compensation expense of 97 cents) in the range of $1.62–$1.92 per share. On a GAAP basis, earnings per share are expected in the range of 40–70 cents. Revenue is expected in the range of $1,175.0–$1,225.0 million.

For the first quarter of 2013, revenues are expected in the range of $250–$260 million.

Our Take

We remain optimistic on Vistaprint’s long-term prospects and a deeper focus on inorganic growth as well as international expansion. The company remains all set to expand its Asian presence. 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, 2013 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 fiscal 2013 earnings. Moreover, increasing headwinds in currency translation remains a concern given Vistaprint’s huge exposure to the European region.

Vistaprint, which competes with Sykes Enterprises Inc. (SYKE) and TeleTech Holdings Inc. (TTEC), currently retains a Zacks #1 Rank, which translates into a short-term Strong Buy rating. We are maintaining our long-term Outperform recommendation on the stock.

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