Vistaprint Tops Zacks View - Analyst Blog

Vistaprint N.V.’s (VPRT) second quarter (ending December 31) earnings for fiscal year 2010 came in at 59 cents per share. The company had earned 42 cents in the year-ago quarter. Excluding share-based compensation expense and its related tax impact, the company would have earned 73 cents versus 53 cents in the prior-year quarter. 

Results were well ahead of the Zacks Consensus Estimate of 47 cents. The results were driven by higher-than-expected revenue increases. Key operating metrics also remained strong. 

Vistaprint reported a 40% year-over-year increase in revenue to $194.6 million. Gross margin improved 160 basis points from the year-ago quarter to 65.1%. 

Operating income was $30.7 million, reflecting an increase of 49% from the prior-year period. Operating margin was up 90 basis points to 15.8%. 

On Dec 30, 2009, Vistaprint acquired Soft Sight Inc., a small, privately held software development company based in Endicott, NY, for $6.5 million. This acquisition would help the company to offer custom-embroidered products by using Soft Sight's software competence for automatically rendering stitch patterns from custom designs uploaded to the website. 

Vistaprint expects to launch this new product line in the first half of fiscal 2010. Therefore, this acquisition won’t be accretive to the company’s revenue base this fiscal year but would have a dilutive impact on earnings per share for the remainder of fiscal 2010. 

Turning to key metrics, we note that website sessions were 80.5 million, representing a 31% increase from the prior-year quarter while average daily order volume increased nearly 33% from the prior-year period to 57,000 orders per day. Approximately 1.8 million new customers were acquired by Vistaprint in the quarter. Around 66% of bookings came from repeat customers. 

Outlook 

For the third quarter ending March 31, 2010, Vistaprint expects earnings to range from 39 cents to 42 cents per share, excluding stock compensation costs (GAAP earnings per share to range between 28 cents to 31 cents), based on revenues in the range of approximately $165 million to $170 million. 

Vistaprint has raised its full-year revenue guidance and narrowed the margins. For the full fiscal year 2010, the company expects earnings to range from $1.92 to $2.00 per share, excluding stock compensation costs (GAAP earnings to range between $1.44 and $1.52 per share), based on revenues in the range of approximately $675 million to $685 million. This compares to the previous earnings guidance of $1.85 to $1.95 per share on revenues of $615 million and $645 million. 

Vistaprint expects capital expenditures of around $90 million to $100 million in fiscal year 2010. This includes the expansion of its Canadian manufacturing facility, which is anticipated to be completed towards the end of fiscal year 2010, new manufacturing equipment to support the growth of the business and a new manufacturing facility in Australia, which is projected to become operational in the first quarter of fiscal year 2011. 

The fact that the company has again posted such an impressive quarter in the midst of extremely challenging economic conditions augurs well for its potential to weather the recession, in our opinion.
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