Stamps.com® (Nasdaq: STMP), the leading provider of postage
online and shipping software, today announced results for the
quarter ended December 31, 2018.
Fourth Quarter 2018 Financial Highlights
- Total revenue was $170.2 million, up
29% compared to $132.5 million in the fourth quarter of 2017.
- GAAP net income was $42.7 million, up
6% compared to $40.2 million in the fourth quarter of 2017.
- GAAP net income per fully diluted share
was $2.30, up 7% compared to $2.15 in the fourth quarter of
2017.
- Non-GAAP adjusted EBITDA was $71.3
million, up 11% compared to $64.1 million in the fourth quarter of
2017.
- Non-GAAP adjusted income per fully
diluted share was $3.73, down 20% compared to $4.68 in the fourth
quarter of 2017.
“We are pleased with our fourth quarter and fiscal 2018
financial performance,” said Ken McBride, Stamps.com’s Chairman and
CEO. “We achieved strong financial results driven by exceptional
execution in our shipping business and we completed our strategic
acquisition of MetaPack which has positioned Stamps.com as the
leading global e-commerce shipping software company. We are well
positioned to successfully compete on a global scale with a focus
on driving long-term value for our customers, partners and
shareholders.”
Fourth Quarter 2018 Detailed Results
Fourth quarter 2018 total revenue was $170.2 million, up 29%
compared to the fourth quarter of 2017. Fourth quarter 2018 Mailing
and Shipping revenue (which includes service, product and insurance
revenue but excludes Customized Postage and Other revenue) was
$165.4 million, up 29% versus the fourth quarter of 2017. Fourth
quarter 2018 Customized Postage revenue was $4.8 million, up 23%
versus the fourth quarter of 2017.
Fourth quarter 2018 GAAP income from operations was $54.0
million, GAAP net income was $42.7 million, and GAAP net income per
share was $2.30 based on 18.6 million fully diluted shares
outstanding. This compares to fourth quarter 2017 GAAP income from
operations of $51.5 million, GAAP net income of $40.2 million, and
GAAP net income per share of $2.15 based on 18.7 million fully
diluted shares outstanding. Fourth quarter 2018 GAAP income from
operations, GAAP net income, and GAAP income per fully diluted
share increased by 5%, 6% and 7% year-over-year, respectively.
Fourth quarter 2018 GAAP income from operations included $10.0
million of non-cash stock-based compensation expense and $5.6
million of non-cash amortization of acquired intangibles. Fourth
quarter 2018 GAAP net income included $93 thousand of non-cash
amortization of debt issuance costs. Fourth quarter 2018 GAAP
income tax expense was $10.6 million and non-GAAP income tax
benefit was $0.5 million, resulting in an $11.1 million non-GAAP
tax benefit adjustment. The non-GAAP tax benefit adjustment
primarily reflects the tax impact from reconciling the projected
2018 non-GAAP effective tax rates used in the prior three quarters
of 2018 to the actual non-GAAP effective tax rate for fiscal year
2018. See the section later in this release entitled, “About
Non-GAAP Financial Measures” for more information on how non-GAAP
taxes are calculated. Excluding the non-cash stock-based
compensation expense and non-cash amortization of acquired
intangibles, fourth quarter 2018 non-GAAP income from operations
was $69.6 million. Also excluding non-cash amortization of debt
issuance costs and including the non-GAAP tax benefit adjustment,
fourth quarter 2018 non-GAAP adjusted income was $69.4 million or
$3.73 per share based on 18.6 million fully diluted shares
outstanding.
Fourth quarter 2017 GAAP income from operations included $7.2
million of non-cash stock-based compensation expense and $4.0
million of non-cash amortization of acquired intangibles. Fourth
quarter 2017 GAAP net income included $93 thousand of non-cash
amortization of debt issuance costs. Fourth quarter 2017 GAAP
income tax expense was $10.5 million and non-GAAP income tax
benefit was $25.5 million, resulting in a $36.0 million non-GAAP
tax benefit adjustment. The non-GAAP tax benefit adjustment
primarily reflects the tax impact from reconciling the projected
2017 non-GAAP effective tax rates used in the prior three quarters
of 2017 to the actual non-GAAP effective tax rate for fiscal year
2017. Excluding the non-cash stock-based compensation expense and
non-cash amortization of acquired intangibles, fourth quarter 2017
non-GAAP income from operations was $62.7 million. Also excluding
non-cash amortization of debt issuance costs and including the
non-GAAP tax benefit adjustment, fourth quarter 2017 non-GAAP
adjusted income was $87.5 million or $4.68 per share based on 18.7
million fully diluted shares outstanding.
Therefore, fourth quarter 2018 non-GAAP income from operations
increased by 11% year-over-year, and non-GAAP adjusted income and
non-GAAP adjusted income per fully diluted share decreased by 21%
and 20% year-over-year, respectively.
Non-GAAP income from operations, non-GAAP adjusted income, and
non-GAAP adjusted income per share are described further in the
“About Non-GAAP Financial Measures” section of this press release
and are reconciled to the corresponding GAAP measures in the
following tables (unaudited):
Reconciliation of GAAP to Non-GAAP
Financial Measures (Fourth Quarter 2018)
Fourth Quarter Fiscal 2018
All amounts in millions except
Stock-Based
Intangible Debt per share data:
GAAP
Compensation Amortization Amortization
Income Tax Non-GAAP Amounts Expense
Expense Expense Adjustments Amounts
Cost of Revenues $ 38.82 $ 0.96 $ - $ - $ - $ 37.86
Research & Development 17.75 2.53 - - - 15.22 Sales &
Marketing 33.80 2.07 - - - 31.73 General & Administrative
25.83 4.44 5.55 -
- 15.84 Total Expenses 116.19
10.00 5.55 - - 100.64 Income (Loss) from Operations 54.04
(10.00 ) (5.55 ) - - 69.59 Interest and Other Income (Loss)
(0.79 ) - - (0.09 ) - (0.70 ) Benefit (Expense) for Income
Taxes (10.58 ) - - - (11.06 ) 0.48
Adjusted Income (Loss) 42.66
(10.00 ) (5.55 ) (0.09 ) (11.06 )
69.37 On a diluted per share basis $ 2.30
$ (0.54 ) $ (0.30 ) $ (0.01 ) $ (0.60 ) $ 3.73
Shares used in per share calculation 18.58 18.58 18.58 18.58 18.58
18.58
Reconciliation of GAAP to Non-GAAP
Financial Measures (Fourth Quarter 2017)
Fourth Quarter Fiscal 2017
Stock-Based
Intangible Debt All
amounts in millions except
GAAP Compensation
Amortization Amortization Income Tax
Non-GAAP per share data:
Amounts Expense
Expense Expense Adjustments Amounts
Cost of Revenues $ 20.87 0.34 $ - $ - $ - $ 20.53 Research
& Development 12.02 1.98 - - - 10.04 Sales & Marketing
25.20 1.09 - - - 24.11 General & Administrative 22.87
3.75 4.00 -
- 15.12 Total Expenses 80.96 7.16 4.00 - -
69.81 Income (Loss) from Operations 51.50 (7.16 ) (4.00 ) -
- 62.66 Interest and Other Income (Loss) (0.79 ) - - (0.09 )
- (0.69 ) Benefit (Expense) for Income Taxes (10.52 ) - - -
(36.00 ) 25.48
Adjusted Income (Loss) 40.20 (7.16 )
(4.00 ) (0.09 ) (36.00 ) 87.45
On a diluted per share basis $ 2.15 $ (0.38 ) $ (0.21 ) $
(0.00 ) $ (1.93 ) $ 4.68 Shares used in per share
calculation 18.70 18.70 18.70 18.70 18.70 18.70
Fourth Quarter GAAP Net Income and Non-GAAP Adjusted
EBITDA
Fourth quarter 2018 GAAP net income was $42.7 million, up 6%
compared to $40.2 million in the fourth quarter of 2017.
Fourth quarter 2018 non-GAAP adjusted EBITDA was $71.3 million,
up 11% compared to $64.1 million in the fourth quarter of 2017.
Adjusted EBITDA is a non-GAAP financial measure which is
described further in the “About Non-GAAP Financial Measures”
section of this press release and is reconciled to GAAP net income
in the following table (unaudited):
Reconciliation of GAAP Net Income to
Non-GAAP Adjusted EBITDA
Fourth Quarter
Three Months ended All amounts
in millions
December 31, 2018 2017
GAAP Net Income (Loss) $ 42.66 $ 40.20 Depreciation
and Amortization expense $ 7.24 $ 5.39 Interest & Other Expense
(Income), net $ 0.79 $ 0.79 Income Tax Expense (Benefit), net $
10.58 $ 10.52 Stock-based Compensation Expense $ 10.00 $
7.16 Adjusted EBITDA $ 71.28 $ 64.05
2018 Detailed Results
2018 total revenue was $586.9 million, up 25% compared to 2017.
2018 Mailing and Shipping revenue (which includes service, product
and insurance revenue but excludes Customized Postage and Other
revenue) was $567.3 million, up 26% versus 2017. 2018 Customized
Postage revenue was $19.6 million, up 2% versus 2017.
2018 GAAP income from operations was $194.4 million, GAAP net
income was $168.6 million, and GAAP net income per share was $8.99
based on 18.8 million fully diluted shares outstanding. This
compares to 2017 GAAP income from operations of $163.5 million,
GAAP net income of $150.6 million, and GAAP net income per share of
$8.19 based on fully diluted shares outstanding of 18.4 million.
2018 GAAP income from operations, GAAP net income and GAAP income
per fully diluted share increased by 19%, 12%, and 10%
year-over-year, respectively.
2018 GAAP income from operations included $36.3 million of
non-cash stock-based compensation expense, $18.3 million of
non-cash amortization of acquired intangibles, and $3.1 million of
transaction related expenses associated with the MetaPack
acquisition and legal settlement expense related to the class
action wage and hours case filed against us in February 2018. 2018
GAAP net income also included $374 thousand of non-cash
amortization of debt issuance costs and $1.0 million of foreign
currency loss related to the MetaPack acquisition. 2018 GAAP income
tax expense was $22.3 million and non-GAAP income tax expense was
$29.2 million resulting in a non-GAAP tax expense adjustment of
$6.9 million. The non-GAAP tax expense adjustment primarily
reflects the tax impact from higher non-GAAP income as compared to
GAAP income at the effective tax rate for fiscal 2018. See the
section later in this release entitled “About Non-GAAP Financial
Measures” for more information on how non-GAAP taxes are
calculated. Excluding the non-cash stock-based compensation
expense, non-cash amortization of acquired intangibles, and
transaction related expenses associated with the MetaPack
acquisition, and legal settlement expense, 2018 non-GAAP income
from operations was $252.2 million. Also excluding non-cash
amortization of debt issuance costs and foreign currency loss
related to the MetaPack acquisition, and including the non-GAAP tax
expense adjustment, 2018 non-GAAP adjusted income was $220.9
million or $11.78 per share based on 18.8 million fully diluted
shares outstanding.
2017 GAAP income from operations included $40.8 million of
non-cash stock-based compensation expense, $16.0 million of
non-cash amortization of acquired intangibles, $6.0 million of
executive consulting expense, and $1.9 million of one-time
insurance proceeds relating to a prior legal settlement. 2017 GAAP
net income also included $374 thousand of non-cash amortization of
debt issuance costs. 2017 GAAP income tax expense was $9.6 million
and non-GAAP income tax expense was $13.3 million resulting in a
non-GAAP tax expense adjustment of $3.7 million. The non-GAAP tax
expense adjustment primarily reflects the tax impact from higher
non-GAAP income as compared to GAAP income at the effective tax
rate for fiscal 2017. Excluding the non-cash stock-based
compensation expense, non-cash amortization of acquired
intangibles, executive consulting expense, and one-time insurance
proceeds, 2017 non-GAAP income from operations was $224.5 million.
Also excluding non-cash amortization of debt issuance costs and
including the non-GAAP tax expense adjustment, 2017 non-GAAP
adjusted income was $208.2 million or $11.33 per share based on
18.4 million fully diluted shares outstanding.
Therefore, 2018 non-GAAP income from operations, non-GAAP
adjusted income and non-GAAP adjusted income per fully diluted
share increased by 12%, 6% and 4% year-over-year, respectively.
Non-GAAP income from operations, non-GAAP adjusted income and
non-GAAP adjusted income per share are described further in the
“About Non-GAAP Financial Measures” section of this press release
and are reconciled to the corresponding GAAP measures in the
following tables (unaudited):
Reconciliation of Non-GAAP to GAAP
Financial Measures (2018)
For the Year Ended December 31, 2018
Stock-Based Intangible Acquisition
and Debt All amounts in millions
except
GAAP Compensation Amortization
Litigation Amortization Income Tax
Non-GAAP per share data:
Amounts Expense
Expense Settlement Expense Adjustments
Amounts Expenses Cost of Revenues $ 126.91 $
2.95 $ - $ - $ - $ - $ 123.95 Research & Development 56.59 8.12
- - - - 48.47 Sales & Marketing 112.08 6.89 - - - - 105.19
General & Administrative 96.95 18.38
18.29 3.14 -
- 57.13 Total Expenses 392.53 36.35 18.29 3.14
- - 334.75 Income (Loss) from Operations 194.40 (36.35 )
(18.29 ) (3.14 ) - - 252.18 Interest and Other Income (Loss)
(3.49 ) - - (1.03 ) (0.37 ) - (2.08 ) Benefit (Expense) for
Income Taxes (22.27 ) - - - - 6.91 (29.18 )
Adjusted Income (Loss)
168.64 (36.35 ) (18.29 ) (4.17 )
(0.37 ) 6.91 220.93 On a diluted per
share basis $ 8.99 $ (1.94 ) $ (0.98 ) $ (0.22 ) $ (0.02 ) $
0.37 $ 11.78 Shares used in per share calculation
18.76 18.76 18.76 18.76 18.76 18.76 18.76
Reconciliation of Non-GAAP to GAAP
Financial Measures (2017)
For the Year Ended December 31, 2017
Stock-Based Intangible Executive
One-time Debt All amounts
in millions except
GAAP Compensation
Amortization Consulting Insurance
Amortization Income Tax Non-GAAP per share
data:
Amounts Expense Expense Expenses
Proceeds Expense Adjustments Amounts
Cost of Revenues $ 79.23 $ 1.77 $ - $ - $ - $ - $ - $ 77.45
Research & Development 46.21 9.03 - - - - - 37.17 Sales &
Marketing 91.22 7.29 - - - - - 83.93 General & Administrative
88.55 22.73 15.99
6.00 (1.86 ) - - 45.68
Total Expenses 305.21 40.83 15.99 6.00 (1.86 ) - - 244.24
Income (Loss) from Operations 163.50 (40.83 ) (15.99 ) (6.00
) 1.86 - - 224.46 Interest and Other Income (Loss) (3.26 ) -
- - - (0.37 ) - (2.88 ) Benefit (Expense) for Income Taxes
(9.65 ) - - - - - 3.69 (13.34 )
Adjusted Income (Loss) 150.60
(40.83 ) (15.99 ) (6.00 ) 1.86
(0.37 ) 3.69 208.24 On a
diluted per share basis $ 8.19 $ (2.22 ) $ (0.87 ) $ (0.33 )
$ 0.10 $ (0.02 ) $ 0.20 $ 11.33 Shares used in
per share calculation 18.39 18.39 18.39 18.39 18.39 18.39 18.39
18.39
2018 GAAP Net Income and Non-GAAP Adjusted EBITDA
2018 GAAP net income was $168.6 million, up 12% compared to
$150.6 million in 2017.
2018 non-GAAP adjusted EBITDA was $258.0 million, up 12%
compared to $229.9 million in 2017.
Adjusted EBITDA is a non-GAAP financial measure which is
described further in the “About Non-GAAP Financial Measures”
section of this release and is reconciled to GAAP net income in the
following table (unaudited):
Reconciliation of Non-GAAP Adjusted
EBITDA to GAAP Net Income (2017 and 2018)
Twelve Months ended All amounts in millions
December 31, 2018 2017 GAAP Net
Income (Loss) $ 168.64 $ 150.60 Depreciation and
Amortization expense $ 24.10 $ 21.44 Interest & Other Expense
(Income), net $ 3.49 $ 3.26 Income Tax Expense (Benefit), net $
22.27 $ 9.65 Stock-based Compensation Expense $ 36.35 $
40.83 Executive Consulting Expense $ -- $ 6.00 One-time Insurance
Expense (Proceeds) $ -- ($1.86 ) Acquisition and Litigation
Settlement Expenses $ 3.14 $ -- Adjusted EBITDA $
257.99 $ 229.92
Taxes
For the fourth quarter of 2018, the Company reported a GAAP
income tax expense of $10.6 million representing an effective tax
rate of 19.9%. For the fourth quarter of 2017, the Company reported
a GAAP income tax expense of $10.5 million representing an
effective tax rate of 20.7%.
For 2018, the Company reported a GAAP income tax expense of
$22.3 million representing an effective tax rate of 11.7%. For
2017, the Company reported a GAAP income tax expense of $9.6
million representing an effective tax rate of 6.0%. The higher
effective GAAP tax rate in 2018 was primarily related to fewer
employee stock option exercises in 2018, resulting in lower tax
benefits compared to 2017. Our fiscal year 2018 GAAP net income and
effective tax rate should be understood to have been positively
impacted by employee stock option exercises. The 2018 GAAP
effective tax rate of 11.7% should not be assumed to apply for 2019
as employee stock option exercises are inherently unpredictable and
actual 2019 employee stock option exercises could differ materially
from those in 2018 which could have a material impact on our 2019
effective tax rate as compared to 2018. As discussed below under
the heading, “About Non-GAAP Financial Measures,” we believe our
effective tax rate for 2019 will be approximately 30%.
Share Repurchase and Debt Repayment
During the fourth quarter of 2018, the Company repurchased
approximately 531 thousand shares at a total cost of approximately
$88.5 million.
On January 18, 2019, the Company completed its current
Board-approved share repurchase program, which expired upon
completion of the authorized repurchase of $90 million of stock.
The Board has not authorized a successor share repurchase program
to the currently expired share repurchase program.
During the fourth quarter of 2018, the Company made a required
principal repayment of $2.6 million against the borrowings under
the Company’s existing credit agreement related to the Endicia
acquisition. As of December 31, 2018, total debt under the credit
agreement, excluding debt issuance costs, was $61.4 million.
Summary of our Updated Business Outlook
For fiscal year 2019, the Company currently expects its GAAP
financial outlook to be as follows:
- We expect total revenue to be in a
range of approximately $540 million to $570 million.
- We expect GAAP net income to be in a
range of approximately $55 million to $69 million.
- We expect GAAP net income per fully
diluted share to be in a range of approximately $2.86 to
$3.76.
- We expect our 2019 effective tax rate
to be 30.0%.
The above GAAP amounts, adjusted as detailed below, result in
the following non-GAAP financial outlook:
- We expect non-GAAP adjusted EBITDA to
be in a range of approximately $145 million to $165 million.
- We expect non-GAAP adjusted income per
fully diluted share to be in a range of $5.15 to $6.15.
The Company plans to discuss certain strategic items during its
conference call that impact our business outlook for 2019.
Detailed Discussion of our Business Outlook
As noted above, for 2019, the Company currently expects total
revenue to be in a range of approximately $540 million to $570
million.
Also, for 2019, the Company currently expects GAAP net income to
be in a range of approximately $55 million to $69 million.
The expected GAAP net income range includes depreciation and
amortization expense of approximately $28 million, stock-based
compensation expense of approximately $ 40 million, interest income
and other income, net of approximately $1 million, and income tax
expense of approximately $23 million to $29 million. Excluding the
depreciation and amortization expense, stock-based compensation
expense, interest income and other income, net and income tax
expense, we expect non-GAAP adjusted EBITDA to be in a range of
approximately $145 million to $165 million.
The following table is provided to facilitate a reconciliation
of 2019 expected non-GAAP adjusted EBITDA to expected GAAP net
income:
Fiscal Year 2019 Guidance All amounts in
millions
Low End of Range High End of
Range GAAP net income $ 54.7 $ 68.7
Adjustments to
reconcile adjusted EBITDA to GAAP net income:
Depreciation and amortization expense $ 27.5 $ 27.5 Stock-based
compensation expense $ 40.0 $ 40.0 Interest income and other
income, net ($0.6 ) ($0.6 )
Income tax
expense
$ 23.4 $ 29.4
Total adjustments excluded from adjusted EBITDA $ 90.3 $ 96.3
Adjusted EBITDA $ 145.0 $ 165.0
As noted above, for 2019, the Company currently expects GAAP net
income per fully diluted share to be in a range of approximately
$2.86 to $3.76. The expected GAAP net income per fully diluted
share range includes non-cash stock-based compensation expense of
approximately $40 million, non-cash amortization of acquired
intangibles expense of approximately $22 million, and non-cash
amortization of debt issuance costs of approximately $0.4 million.
Excluding the stock-based compensation expense, amortization of
acquired intangibles expense, and amortization of debt issuance
costs, and including higher expected non-GAAP income taxes of
approximately $19 million from the expected tax effects of these
adjustments at an assumed 30% effective full-year tax rate,
non-GAAP adjusted income per fully diluted share is expected to be
in a range of $5.15 to $6.15.
The following table is provided to facilitate a reconciliation
of 2019 expected non-GAAP adjusted income per fully diluted share
to expected GAAP net income per fully diluted share:
Fiscal Year 2019 Guidance All amounts in
millions except percentages and per share data
Low End of
Range High End of Range GAAP
net income per fully diluted share $ 2.86 $ 3.76
Adjustments to
reconcile non-GAAP to GAAP:
Stock-based compensation expense $ 40.0 $ 40.0 Amortization of
acquired intangibles $ 22.0 $ 22.0
Amortization of debt
issuance costs
$ 0.4 $
0.4
Total adjustments excluded from non-GAAP $ 62.4 $ 62.4 Projected
effective tax rate 30.0 % 30.0 %
Increased tax
expense from non-GAAP adjustments
$ 18.7 $ 18.7
Total tax affected adjustments excluded from non-GAAP $ 43.7 $ 43.7
Fully diluted shares 19.1 18.3 Total adjustments excluded
from non-GAAP adjusted income per fully diluted share $ 2.29 $ 2.39
Non-GAAP adjusted income per fully diluted share $ 5.15 $
6.15
This business outlook does not include the impact from potential
future acquisitions, including acquisition costs or related
financings, or unanticipated events. This business outlook also
does not include the impact of foreign currency fluctuations, or
other geopolitical events, such as trade negotiations or Brexit.
This business outlook also does not include the impact of employee
stock option exercises and any associated tax effects. This
business outlook and the related assumptions are forward-looking
statements subject to the safe harbor statement contained at the
end of this press release, and reflect our views of current and
future market conditions as of the date of this press release.
Ranges reflect our business assumptions, but actual results could
fall outside the range presented. Only a few of our assumptions
underlying our guidance are disclosed above, and our actual results
will be affected by known and unknown risks, trends, uncertainties
and other factors, some of which are beyond our control or ability
to predict. Although we believe that the assumptions underlying our
guidance are reasonable, they are not guarantees of future
performance and some of them will inevitably prove to be incorrect.
As a result, our actual future results can be expected to differ
from our expectations, and those differences could be material. We
do not undertake any obligation to release publicly any revisions
to our business outlook or other forward-looking statements to
reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.
Company Metrics and Conference Call
2018 Company metrics, updated to include the fourth quarter, is
available at http://investor.stamps.com (under a tab on the left
side called “Company Information, Metrics”). These metrics are not
incorporated into this press release.
The Stamps.com financial results conference call will be webcast
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 webcast, a replay of the call will be available
at the same website.
About Stamps.com, Endicia, ShipStation, ShipWorks,
ShippingEasy and MetaPack
Stamps.com (Nasdaq: STMP) is the leading provider of postage
online and shipping software solutions to customers, including
consumers, small businesses, e-commerce shippers, enterprises, and
high volume shippers. Stamps.com offers solutions that help
businesses run their shipping operations more smoothly and function
more successfully under the brand names Stamps.com, Endicia,
ShipStation, ShipWorks, ShippingEasy and MetaPack.
Stamps.com’s family of brands provides seamless access to mailing
and shipping services through integrations with more than 500
unique partner applications.
Endicia is a leading brand for high volume shipping technologies
and services for U.S. Postal Service shipping. Under this brand we
offer solutions that help businesses run their shipping operations
more smoothly and function more successfully. Our Endicia branded
solutions also provide seamless access to USPS shipping services
through integrations with partner applications.
ShipStation is a leading web-based shipping solution that helps
e-commerce retailers import, organize, process, package, and ship
their orders quickly and easily from any web browser. ShipStation
features the most integrations of any e-commerce web-based solution
with more than 300shopping carts, marketplaces, package carriers,
and fulfillment services. Integration partners include eBay,
PayPal, Amazon, Etsy, Square, Shopify, BigCommerce, Volusion,
Magento, Squarespace, and carriers such as USPS, UPS, FedEx and
DHL. ShipStation has sophisticated automation features such as
automated order importing, custom hierarchical rules, product
profiles, and fulfillment solutions that enable its customers to
complete their orders, wherever they sell, and however they
ship.
ShipWorks is a leading brand for client-based shipping solutions
that help high volume shippers import, organize, process, fulfill,
and ship their orders quickly and easily from any standard PC. With
integrations to more than 100 shopping carts, marketplaces, package
carriers, and fulfillment services, ShipWorks has the most
integrations of any high-volume client shipping solution. Package
carriers include USPS, UPS, FedEx, DHL, OnTrac and many more.
Marketplace and shopping cart integrations include eBay, PayPal,
Amazon, Etsy, Shopify, BigCommerce, Volusion, ChannelAdvisor,
Magento, and many more. ShipWorks has sophisticated automation
features such as a custom rules engine, automated order importing,
automatic product profile detection, and fulfillment automation,
which enable high volume shippers to complete their orders quickly
and efficiently.
ShippingEasy is a leading web-based shipping software solution
that allows online retailers and e-commerce merchants to organize,
process, fulfill and ship their orders quickly and easily.
ShippingEasy integrates with leading marketplaces, shopping carts,
and e-commerce platforms to allow order fulfillment and tracking
data to populate in real time across all systems. The ShippingEasy
software downloads orders from selling channels and automatically
maps custom shipping preferences, rates and delivery options across
all supported carriers.
MetaPack helps e-commerce and delivery professionals to meet
with the consumer’s growing expectations of delivery, while
maintaining and optimizing operational efficiency. MetaPack’s SaaS
solution offers a wide range of personalized delivery services,
from global order tracking to simplified return procedures, through
a catalog of more than 450 carriers and 5,000 services available
that span every country in the world.
About Non-GAAP Financial Measures
To supplement the Company’s condensed consolidated balance sheet
and consolidated statement of income presented in accordance with
GAAP, the Company uses non-GAAP measures of certain components of
financial performance. These non-GAAP measures include non-GAAP
income from operations, non-GAAP adjusted income, non-GAAP adjusted
income per fully diluted share and adjusted EBITDA.
Non-GAAP financial measures are provided to enhance investors’
overall understanding of the Company’s financial performance and
prospects for the future and as a means to evaluate
period-to-period comparisons. The Company believes the non-GAAP
measures that: (1) exclude certain non-cash items including
stock-based compensation expense, amortization of acquired
intangibles, amortization of debt issuance costs, contingent
consideration charges; (2) exclude certain expenses and gains such
as acquisition related expenses, litigation settlement expenses,
executive consulting expenses, insurance proceeds; and (3) includes
income tax adjustments provide meaningful supplemental information
regarding financial performance by excluding certain expenses and
benefits that may not be reflective of our underlying operating
performance.
Non-GAAP adjusted income is calculated as GAAP net income plus
the cumulative impact of the adjustments outlined in the paragraph
immediately above.
Non-GAAP adjusted income per fully diluted share is calculated
as non-GAAP adjusted income divided by fully diluted shares. Prior
to the third quarter 2016, the Company referred to non-GAAP
adjusted income as non-GAAP net income.
Non-GAAP income tax expense for the first, second and third
quarters of our fiscal year are calculated by multiplying the
projected annual effective tax rate in that quarter by the non-GAAP
adjusted income before taxes for the quarter. The projected annual
effective tax rate does not reflect potential future employee
option exercises in the remaining quarters of the fiscal year due
to the inherent difficulty in forecasting employee option
exercises. The projected annual effective tax rate also considers
other factors including the Company’s tax structure and its tax
positions in various jurisdictions where the Company operates. The
actual annual effective tax rate realized for the fiscal year could
differ materially from our projected annual effective tax rate used
in the first, second and third quarters.
Non-GAAP income tax expense for the fourth quarter of the fiscal
year is calculated by multiplying the actual effective tax rate for
the fiscal year by the non-GAAP adjusted income before taxes for
the fiscal year and subtracting the non-GAAP income tax expense or
benefit reported in the first, second and third quarters. As a
result, the fourth quarter reflects the tax impact of reconciling
the first, second and third quarter projected annual effective
rates to the actual effective tax rate for the fiscal year.
The projected non-GAAP full-year tax rate for 2019 is 30%.
Adjusted EBITDA as calculated in this press release represents
earnings before interest and other expense, net, interest and other
income, net, income tax expense or benefit, depreciation and
amortization and excludes certain items, such as stock-based
compensation expense.
The presentation of non-GAAP financial measures is not intended
to be considered in isolation or as a substitute for, or superior
to, the financial information prepared and presented in accordance
with GAAP. These non-GAAP financial measures may differ from
similarly titled measures used by other companies. Reconciliation
of non-GAAP financial measures included in this press release to
the corresponding GAAP measures can be found in the financial
tables of this press release.
The Company believes that non-GAAP financial measures, when
viewed with GAAP results and the accompanying reconciliation,
enhance the comparability of operating results against prior
periods and allow for greater transparency of operating results.
Management uses non-GAAP financial measures in making financial,
operating, compensation and planning decisions. The Company
believes non-GAAP financial measures facilitate management and
investors in comparing the Company’s financial performance to that
of prior periods as well as in performing trend analysis over
time.
Share Repurchase Timing
The timing of share repurchases, if any, and the number of
shares to be bought at any one time will depend on factors
including market conditions and the Company’s compliance with the
covenants in its Credit Agreement. Share repurchases 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 may be subject to limitations imposed
on such purchases by applicable securities laws and regulations and
the rules of the Nasdaq Stock Market.
“Safe Harbor” Statement Under the Private Securities
Litigation Reform Act of 1995
This release includes “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Forward-looking statements are statements that
are not historical facts, and may relate to future events or the
company’s anticipated results, business strategies or capital
requirements, among other things, all of which involve risks and
uncertainties. You can identify many (but not all) such
forward-looking statements by looking for words such as “assumes,”
“approximates,” “believes,” “expects,” “anticipates,” “estimates,”
“projects,” “seeks,” “intends,” “plans,” “could,” “would,” “may” or
other similar expressions. Important factors which could cause
actual results to differ materially from those in the
forward-looking statements, include (i) the Company’s ability to
successfully integrate and realize the benefits of its past or
future strategic acquisitions or investments, (ii) the impact of
foreign exchange fluctuations and geopolitical risks, and (iii)
other important factors that 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, 2017 and its upcoming Annual Report on Form 10-K
for the year ended December 31,2018, Quarterly Reports on Form
10-Q, and Current Reports on Form 8-K. Matters described in
forward-looking statements may also be affected by other known and
unknown risks, trends, uncertainties and factors, many of which are
beyond the company’s ability to control or predict. 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.
Trademarks
Stamps.com, the Stamps.com logo, Endicia, ShipStation, ShipWorks
and ShippingEasy are registered trademarks of Stamps.com Inc. and
its subsidiaries, and MetaPack is a trade mark of MetaPack
registered in the UK Intellectual Property Office. All other brands
and names used in this release are the property of their respective
owners.
STAMPS.COM INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per
share data: unaudited)
Three Months ended
Twelve Months ended December 31, December
31, 2018 2017 2018
2017 Revenues: Service $ 156,750 $ 118,638 $ 530,682 $
411,272 Product 5,148 5,414 20,424 20,715 Insurance * 3,505 4,453
16,189 17,385 Customized postage 4,828 3,938 19,583 19,244 Other
- 24 52 93
Total revenues 170,231 132,467 586,930 468,709 Cost of revenues:
Service 33,560 14,647 101,921 51,931 Product 1,539 1,688 6,153
6,618 Insurance * - 1,090 2,945 4,637 Customized postage
3,717 3,440 15,890 16,040
Total cost of revenues 38,816 20,865
126,909 79,226 Gross profit
131,415 111,602 460,021 389,483 Operating expenses: Sales and
marketing 33,800 25,204 112,080 91,222 Research and development
17,746 12,021 56,591 46,208 General and administrative
25,832 22,874 96,951
88,550 Total operating expenses 77,378
60,099 265,622 225,980 Income
from operations 54,037 51,503 194,399 163,503 Foreign
currency exchange gain (loss), net (35 ) - (992 ) - Interest
expense (687 ) (890 ) (2,595 ) (3,669 ) Interest income and other
income (loss), net (73 ) 105 102
414 Income before income taxes 53,242 50,718 190,914
160,248 Income tax expense 10,581 10,518
22,272 9,645 Net income $ 42,661
$ 40,200 $ 168,642 $ 150,603 Net income
per share: Basic $ 2.37 $ 2.30 $ 9.39 $ 8.81
Diluted $ 2.30 $ 2.15 $ 8.99 $ 8.19
Weighted average shares outstanding: Basic 17,983
17,484 17,952 17,099
Diluted 18,578 18,699
18,762 18,387
*Beginning on October 1, 2018, insurance revenue represents the
amount we receive from customers net of the costs paid to our
insurance providers. For the periods presented prior to October 1,
2018, insurance revenue represented the gross amount charged to the
customer for purchasing insurance and the related cost represented
the amount paid to our insurance providers.
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands,
unaudited)
December 31, December
31, 2018 2017 ASSETS Cash and cash
equivalents $ 113,757 $ 153,903 Accounts receivable, net 83,595
80,797 Current income taxes 8,465 22,344 Prepaid expenses and other
current assets 23,794 14,449 Property and equipment, net 36,337
37,507 Goodwill and intangible assets, net 545,569 320,695 Deferred
income taxes, net 29,874 43,148 Other assets 11,383
6,261 Total assets $ 852,774 $ 679,104
LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities:
Accounts payable, accrued expenses, and other liabilities $ 152,642
$ 108,386 Debt, net of debt issuance costs 60,643 69,034 Deferred
income taxes, net 18,665 - Deferred revenue 7,159
3,871 Total liabilities 239,109 181,291
Stockholders' equity: Common stock 56 55 Additional paid-in capital
1,049,669 962,227 Treasury stock (528,529 ) (387,545 ) Retained
earnings (accumulated deficit) 91,712 (76,930 ) Accumulated other
comprehensive income 757 6 Total
stockholders' equity 613,665 497,813
Total liabilities and stockholders' equity $ 852,774 $
679,104
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190221005893/en/
Investor Contact:Suzanne
ParkStamps.com Investor Relations(310) 482-5830invrel@stamps.com
Press Contact:Eric NashStamps.com
Public Relations(310) 482-5942enash@stamps.com
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