SFLY
$44.80
Shutterfly
$.20
.45%
Earnings Details
2nd Quarter June 2017
Tuesday, July 25, 2017 4:02:00 PM
Tweet Share Watch
Summary

Shutterfly Beats

Shutterfly (SFLY) reported a 2nd Quarter June 2017 loss of $0.44 per share on revenue of $209.0 million. The consensus estimate was a loss of $0.56 per share on revenue of $210.3 million. The Earnings Whisper number was for a loss of $0.52 per share. Revenue grew 2.5% on a year-over-year basis.

The company said it expects a third quarter loss of $0.80 to $0.76 per share on revenue of $187.0 million to $193.0 million. The current consensus estimate is a loss of $0.82 per share on revenue of $194.6 million for the quarter ending September 30, 2017. The company also said it continues to expect 2017 earnings of $0.45 to $0.80 per share on revenue of $1.135 billion to $1.165 billion. The current consensus earnings estimate is $0.58 per share on revenue of $1.16 billion for the year ending December 31, 2017.

Shutterfly Inc manufacturers and digitally retails personalized products and services offered through a family of lifestyle brands.

Results
Reported Earnings
($0.44)
Earnings Whisper
($0.52)
Consensus Estimate
($0.56)
Reported Revenue
$209.0 Mil
Revenue Estimate
$210.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Shutterfly Announces Second Quarter 2017 Financial Results

Shutterfly, Inc. (SFLY), the leading online retailer and manufacturer of high-quality personalized products and services, today announced financial results for the second quarter ended June 30, 2017.

"Q2 was a solid quarter for Shutterfly, led by our flagship Shutterfly brand and our SBS segment," said Christopher North, President and Chief Executive Officer. "We made excellent progress against our platform consolidation and restructuring initiatives, and remain on track to complete both prior to the fourth quarter. In particular, we reached a major milestone by re-launching the Tiny Prints boutique on Shutterfly.com, bringing our top two brands onto a single platform. At the same time, we executed against our other areas of strategic focus, adding to our product range in Home Decor and Personalized Gifts, launching significant updates to our mobile app, extending our lead in manufacturing with the second phase of our HP printer upgrade, and improving the speed and reliability of our websites. SBS further expanded its relationship with key clients, supporting our confidence in the full-year plan for 20% SBS growth. Overall, we’re pleased to reiterate our full year guidance for 2017."

Second Quarter 2017 Financial Highlights

Net revenues totaled $209.0 million, a 2% year-over-year increase. Consumer net revenues totaled $179.1 million, a 1% year-over-year increase. Shutterfly Business Solutions net revenues totaled $29.9 million, a 10% year-over-year increase.

GAAP Operating loss totaled $31.8 million and Net loss was $22.8 million or $0.68 per share.

On a proforma basis, which excludes restructuring charges of $4.7 million and capital lease termination charges of $8.1 million, our operating loss was $19.1 million, Adjusted EBITDA was $17.4 million, and Net loss was $14.9 million or $0.44 per share.

"In the quarter we took advantage of an opportunity to complete the upgrade of our printer fleet, which we expect will benefit us through improved quality, increased throughput and automation, and lower consumable costs resulting in approximately $15.0 million of expense savings over the next five years," said Mike Pope, Chief Financial Officer.

As part of the transaction, we purchased leased equipment from the existing vendor for $21.6 million and immediately resold that equipment to HP for $20.5 million, resulting in a minimal cash outlay of $1.1 million. Under GAAP, the purchase of the existing leased equipment reduced the Company’s previously recorded future capital lease obligations on the balance sheet by $12.2 million and resulted in a balance sheet write-off of $8.1 million, which is recognized in our income statement under Capital Lease Termination in the quarter ended June 30, 2017. The remaining $1.3 million was recorded as a capital expenditure.

Restructuring charges for the second quarter totaled $4.7 million and are primarily related to property, plant and equipment and employees costs.

During the second quarter of 2017, we repurchased a total of 603 thousand shares for $30.0 million bringing our year to date repurchases to just over 1.0 million shares. At this time, we anticipate repurchasing approximately $60.0 million over the second half of 2017, bringing total estimated share repurchases for 2017 to $110.0 million, which approximates annual cash expected to be generated in the full year 2017.

Our senior convertible notes due in May 2018 were reclassified from long-term liabilities to current as these are now within one year of maturity. We are currently evaluating a number of alternatives and expect to complete a financing before year-end.

Business Outlook [1]

Third Quarter 2017:

- Net revenues to range from $187.0 million to $193.0 million.

- Gross profit margin to range from 35.0% to 35.5% of net revenues.

- Operating loss to range from $38.0 million to $35.0 million.

- Effective tax rate of 38.0%.

- Net loss per share to range from $0.80 to $0.76.

- Weighted average shares of approximately 33.6 million.

- Adjusted EBITDA to range from $0.0 million to $3.0 million.

Full Year 2017:

- Net revenues to range from $1.135 billion to $1.165 billion.[2]

- Gross profit margin to range from 49.0% to 50.0% of net revenues.

- Operating income to range from $48.5 million to $68.5 million.

- Effective tax rate of 37.5%.

- Net income per share to range from $0.45 to $0.80.

- Weighted average shares of approximately 34.5 million.

- Adjusted EBITDA to range from $210.0 million to $230.0 million.

- Capital expenditures to be approximately $75.0 million.

[1] Excludes full year restructuring charges ranging from $15.0 million to $17.5 million as well as any costs related to refinancing our convertible debt and capital lease termination charges of $8.1 million.

[2] In 2017, net revenues from SBS segment are expected to increase 20% over 2016.

Notes to the Second Quarter 2017 Financial Results and Operating Metrics and 2017 Business Outlook

Adjusted EBITDA is a non-GAAP financial measure that the Company defines as earnings before interest, taxes, depreciation, amortization, stock-based compensation, capital lease termination, and restructuring.

Adjusted EBITDA minus capital expenditures is a non-GAAP financial measure that the Company defines as adjusted EBITDA less purchases of property, plant, and equipment and capitalization of software development costs. This measure was referred to as "free cash flow" prior to the fourth quarter of 2016.

Consumer segment includes net revenues from stationery and greeting cards, photo books, calendars and photo-based merchandise, photo prints, and the related shipping revenues and rental revenue. Consumer also includes net revenues from advertising and sponsorship programs.

Shutterfly Business Solutions (SBS) includes net revenues primarily from variable, four-color direct marketing collateral manufactured and fulfilled for business customers.

Average Order Value (AOV) is defined as total net revenues (excluding SBS) divided by total orders.

The foregoing financial guidance replaces any of the Company’s previously issued financial guidance which should no longer be relied upon.

Second Quarter Conference Call

Management will review the second quarter 2017 financial results and its expectations for the third quarter and full year 2017 on a conference call on Tuesday, July 25, 2017 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). To listen to the call and view the accompanying slides, please visit http://www.shutterflyinc.com. In the Investor Relations area, click on the link provided for the webcast, or dial (888) 317-6003 or (412) 317-6061, and ask to be to be joined into the Shutterfly call. The webcast will be archived and available at http://www.shutterflyinc.com in the Investor Relations section. A replay of the conference call will be available through Tuesday, August 8, 2017. To hear the replay, please dial (877) 344-7529 or (412) 317-0088, and enter access code 10109987.

Non-GAAP Financial Information

This press release contains non-GAAP financial measures. Tables are provided at the end of this press release that reconcile the non-GAAP financial measures that the Company uses to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include non-GAAP net income (loss) and net income (loss) per share, adjusted EBITDA, and adjusted EBITDA minus capital expenditures. The method the Company uses to produce non-GAAP financial measures is not computed according to GAAP and may differ from methods used by other companies.

To supplement the Company’s consolidated financial statements presented on a GAAP basis, we believe that these non-GAAP measures provide useful information about the Company’s core operating results and thus are appropriate to enhance the overall understanding of the Company’s past financial performance and its prospects for the future. These adjustments to the Company’s GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company’s underlying operational results and trends and performance. Management uses these non-GAAP measures to evaluate the Company’s financial results, develop budgets, manage expenditures, and determine employee compensation. The presentation of additional information is not meant to be considered in isolation or as a substitute for or superior to gross margins, operating income (loss), or net income (loss) determined in accordance with GAAP. For more information, please see Shutterfly’s SEC Filings, including the most recent Form 10-K and Form 10-Q, which are available on the Securities and Exchange Commission’s Web site at www.sec.gov.

Notice Regarding Forward-Looking Statements

This media release contains "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, that involve risks and uncertainties. These forward-looking statements include statements about the status of our restructuring, the anticipated benefits of upgrading our printer fleet, our expectation of completing a financing before year end, and our business outlook for the third quarter and full year 2017 and statements about historical results that may suggest trends for our business. You can identify these statements by the use of terminology such as "guidance", "believe", "expect", "will", "should," "could", "estimate", "anticipate" or similar forward-looking terms. You should not rely on these forward-looking statements as they involve risks and uncertainties that may cause actual results to vary materially from the forward-looking statements. Factors that might contribute to such differences include, among others, decreased consumer discretionary spending as a result of general economic conditions; our ability to expand our customer base and increase sales to existing customers; our ability to meet production requirements; our ability to successfully integrate acquired businesses and assets; our ability to retain and hire necessary employees, including seasonal personnel, and appropriately staff our operations; the impact of seasonality on our business; our ability to develop innovative, new products and services on a timely and cost-effective basis, including our next generation Shutterfly platform; unforeseen difficulties executing on planned strategic restructuring activities; consumer acceptance of our products and services; our ability to develop additional adjacent lines of business; unforeseen changes in expense levels; and competition and the pricing strategies of our competitors, which could lead to pricing pressure. For more information regarding the risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, as well as risks relating to our business in general, we refer you to the "Risk Factors" section of our SEC filings, including our most recent Form 10-K and 10-Q, which are available on the Securities and Exchange Commission’s Web site at www.sec.gov. These forward-looking statements are based on current expectations and the company assumes no obligation to update this information.

About Shutterfly, Inc.

Shutterfly, Inc. is the leading online retailer and manufacturer of high-quality personalized products and services. Founded in 1999, the Shutterfly, Inc. brands includes Shutterfly, where your photos come to life in photo books, gifts, and cards and stationery with premium offerings in its Tiny Prints boutique; Wedding Paper Divas, wedding invitations and stationery for every step of the planning process; BorrowLenses, the premier online marketplace for photographic and video equipment rentals; and GrooveBook, an iPhone and Android app and subscription service that prints up to 100 mobile phone photos in a GrooveBook and mails it to customers every month. For more information about Shutterfly, Inc. (SFLY), visit www.shutterflyinc.com.

Shutterfly, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2017
2016
2017
2016
Net revenues
$ 209,032
$ 203,961
$ 401,004
$ 385,670
Cost of net revenues
118,205
109,592
234,324
218,315
Restructuring
196
--
1,436
--
Gross profit
90,631
94,369
165,244
167,355
Operating expenses:
Technology and development
39,398
41,313
85,353
79,582
Sales and marketing
42,987
47,539
85,874
93,381
General and administrative
27,511
26,592
55,306
57,281
Capital lease termination
8,098
--
8,098
--
Restructuring
4,477
--
12,213
--
Total operating expenses
122,471
115,444
246,844
230,244
Loss from operations
(31,840 )
(21,075 )
(81,600 )
(62,889 )
Interest expense
(5,955 )
(5,661 )
(11,919 )
(11,336 )
Interest and other income, net
244
128
433
249
Loss before income taxes
(37,551 )
(26,608 )
(93,086 )
(73,976 )
Benefit from income taxes
14,713
10,123
37,054
28,055
Net loss
$ (22,838 )
$ (16,485 )
$ (56,032 )
$ (45,921 )
Net loss per share - basic and diluted
$
(0.68 )
$
(0.48 )
$
(1.67 )
$
(1.34 )
Weighted-average shares outstanding - basic and diluted
33,579
34,177
33,646
34,386
Stock-based compensation is allocated as follows:
Cost of net revenues
$
1,074
$
1,081
$
2,243
$
2,305
Technology and development
2,179
2,512
4,875
2,971
Sales and marketing
2,980
3,754
6,153
8,033
General and administrative
4,236
3,577
8,703
7,765
Restructuring
--
--
814
--
$
10,469
$
10,924
$
22,788
$
21,074
Depreciation and amortization is allocated as follows:
Cost of net revenues
$
15,069
$
13,842
$
30,052
$
27,384
Technology and development
7,099
8,430
14,888
16,823
Sales and marketing
2,693
3,694
5,787
8,409
General and administrative
1,096
2,391
2,594
4,855
Restructuring
2,493
--
5,335
--
$
28,450
$
28,357
$
58,656
$
57,471
Shutterfly, Inc.
Consolidated Balance Sheets
(In thousands, except par value amounts)
(Unaudited)
June 30, 2017
December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents
$
126,081
$
289,224
Short-term investments
44,550
26,352
Accounts receivable, net
30,079
57,365
Inventories
8,900
11,751
Prepaid expenses and other current assets
76,370
48,084
Total current assets
285,980
432,776
Long-term investments
17,015
14,479
Property and equipment, net
252,485
284,110
Intangible assets, net
35,816
43,420
Goodwill
408,975
408,975
Other assets
21,796
11,816
Total assets
$ 1,022,067
$
1,195,576
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Convertible senior notes, current
$
286,316
$ --
Accounts payable
20,270
58,790
Accrued liabilities
77,527
138,869
Deferred revenue, current portion
22,747
22,929
Total current liabilities
406,860
220,588
Convertible senior notes, net
--
278,792
Other liabilities
114,870
137,035
Total liabilities
521,730
636,415
Stockholders’ equity:
Common stock, $0.0001 par value; 100,000 shares authorized; 33,339
3
3
and 33,637 shares issued and outstanding on June 30, 2017 and
December 31, 2016, respectively
Additional paid-in capital
973,930
949,864
Accumulated other comprehensive loss
(44 )
(32 )
Accumulated deficit
(473,552 )
(390,674 )
Total stockholders’ equity
500,337
559,161
Total liabilities and stockholders’ equity
$ 1,022,067
$
1,195,576
Shutterfly, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
June 30,
2017
2016
Cash flows from operating activities:
Net loss
$ (56,032 )
$ (45,921 )
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization
45,121
46,278
Amortization of intangible assets
8,200
11,193
Amortization of debt discount and issuance costs
7,524
7,115
Stock-based compensation
21,974
21,074
Loss on disposal of property and equipment
467
324
Deferred income taxes
(7,103 )
(3,567 )
Tax benefit from stock-based compensation
--
4,021
Excess tax benefits from stock-based compensation
--
(5,233 )
Restructuring
10,764
--
Changes in operating assets and liabilities:
Accounts receivable
27,286
26,277
Inventories
1,415
1,951
Prepaid expenses and other assets
(19,776 )
(34,045 )
Accounts payable
(39,949 )
(18,970 )
Accrued and other liabilities
(58,605 )
(76,191 )
Net cash used in operating activities
(58,714 )
(65,694 )
Cash flows from investing activities:
Purchases of property and equipment
(8,176 )
(33,067 )
Capitalization of software and website development costs
(17,058 )
(18,083 )
Purchases of investments
(39,805 )
(15,936 )
Proceeds from the maturities of investments
19,033
17,890
Proceeds from sale of property and equipment
11,678
10,247
Net cash used in investing activities
(34,328 )
(38,949 )
Cash flows from financing activities:
Proceeds from issuance of common stock upon exercise of stock options
520
685
Repurchases of common stock
(50,000 )
(78,172 )
Excess tax benefits from stock-based compensation
--
5,233
Principal payments of capital lease and financing obligations
(20,621 )
(11,404 )
Payment for contingent consideration liabilities
--
(1,313 )
Net cash used in financing activities
(70,101 )
(84,971 )
Net decrease in cash and cash equivalents
(163,143 )
(189,614 )
Cash and cash equivalents, beginning of period
289,224
288,863
Cash and cash equivalents, end of period
$ 126,081
$
99,249
Supplemental schedule of non-cash investing / financing
activities:
Net increase (decrease) in accrued purchases of property and
$
745
$
(5,565 )
equipment
Net increase in accrued capitalized software and website development
270
137
costs
Stock-based compensation capitalized with software and website
758
959
development costs
Property and equipment acquired under capital leases
6,228
--
Net increase in receivable proceeds from the sale of property and
9,250
3,765
equipment
Shutterfly, Inc.
Consumer Metrics Disclosure
Three Months Ended
June 30,
2017
2016
Consumer Metrics
Customers
3,350,434
3,259,915
year-over-year growth
3
%
Orders
5,467,763
5,303,137
year-over-year growth
3
%
Average order value [1]
$
32.75
$
33.30
year-over-year growth
(2
)%

[1] Average order value excludes Shutterfly Business Solutions revenue.

Shutterfly, Inc.
Segment Disclosure
(In thousands)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2017
2016
2017
2016
Consumer
Net revenues
$ 179,090
$ 176,617
$ 339,735
$ 331,998
Cost of net revenues
92,049
85,276
181,903
171,613
Restructuring
196
--
1,436
--
Gross profit
86,845
91,341
156,396
160,385
Consumer gross profit margin
48.5
%
51.7
%
46.0
%
48.3
%
Shutterfly Business Solutions (SBS)
Net revenues
29,942
27,344
61,269
53,672
Cost of net revenues
23,900
21,810
47,738
41,520
Gross profit
6,042
5,534
13,531
12,152
SBS gross profit margin
20.2
%
20.2
%
22.1
%
22.6
%
Corporate [1]
Net revenues
--
--
--
--
Cost of net revenues
2,256
2,506
4,683
5,182
Gross profit
(2,256 )
(2,506 )
(4,683 )
(5,182 )
Consolidated
Net revenues
209,032
203,961
401,004
385,670
Cost of net revenues
118,205
109,592
234,324
218,315
Restructuring
196
--
1,436
--
Gross profit
$
90,631
$
94,369
$ 165,244
$ 167,355
Gross profit margin
43.4
%
46.3
%
41.2
%
43.4
%
Gross profit margin excluding restructuring
43.5
%
46.3
%
41.6
%
43.4
%

[1] Corporate category includes activities that are not directly attributable or allocable to a specific segment. This category consists of stock-based compensation and amortization of intangible assets.

Shutterfly, Inc.
Restructuring
(In thousands)
(Unaudited)
Three Months Ended
Six Months Ended
June 30, 2017
June 30, 2017
Restructuring:
Property, plant and equipment
$
2,797
$
6,616
Employee costs
1,356
5,154
Inventory
196
1,436
Other costs
324
443
Total
$
4,673
$
13,649
Shutterfly, Inc.
Reconciliation of Net Income (Loss) to Non-GAAP Net Income
(Loss) and Non-GAAP Net Income (Loss) per Share
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
Year Ended
Mar. 31,
Jun. 30,
Sep. 30,
Dec. 31,
Mar. 31,
Jun. 30,
Dec. 31,
2016
2016
2016
2016
2017
2017
2016
GAAP net income (loss)
$ (29,436 )
$ (16,485 )
$ (29,155 )
$
90,982
$ (33,194 )
$ (22,838 )
$
15,906
Capital lease termination
--
--
--
--
--
8,098
--
Restructuring
--
--
--
--
8,976
4,673
--
Tax (benefit) provision restructuring and capital lease termination
--
--
--
--
(3,948 )
(4,829 )
--
charges impact
Non-GAAP net income (loss)
$ (29,436 )
$ (16,485 )
$ (29,155 )
$
90,982
$ (28,166 )
$ (14,896 )
$
15,906
GAAP diluted shares outstanding
34,596
34,177
33,932
34,625
33,712
33,579
35,190
Non-GAAP diluted shares outstanding
34,596
34,177
33,932
34,625
33,712
33,579
35,190
GAAP net income (loss) per share
$
(0.85 )
$
(0.48 )
$
(0.86 )
$
2.63
$
(0.98 )
$
(0.68 )
$
0.45
Non-GAAP net income (loss) per share
$
(0.85 )
$
(0.48 )
$
(0.86 )
$
2.63
$
(0.84 )
$
(0.44 )
$
0.45
Shutterfly, Inc.
Reconciliation of Net Income (Loss) to Non-GAAP Adjusted EBITDA
(In thousands)
(Unaudited)
Three Months Ended
Year Ended
Mar. 31,
Jun. 30,
Sep. 30,
Dec. 31,
Mar. 31,
Jun. 30,
Dec. 31,
2016
2016
2016
2016
2017
2017
2016
GAAP net income (loss)
$ (29,436 )
$ (16,485 )
$ (29,155 )
$
90,982
$ (33,194 )
$ (22,838 )
$
15,906
Interest expense
5,675
5,661
5,726
5,961
5,964
5,955
23,023
Interest and other income, net
(121 )
(128 )
(130 )
(122 )
(189 )
(244 )
(501 )
Tax (benefit) provision
(17,932 )
(10,123 )
(18,235 )
56,972
(22,341 )
(14,713 )
10,682
Depreciation and amortization
29,114
28,357
27,587
28,593
27,364
25,957
113,651
Stock-based compensation
10,150
10,924
12,214
12,404
11,505
10,469
45,692
Capital lease termination
--
--
--
--
--
8,098
--
Restructuring
--
--
--
--
8,976
4,673
--
Non-GAAP Adjusted EBITDA
$
(2,550 )
$
18,206
$
(1,993 )
$ 194,790
$
(1,915 )
$
17,357
$ 208,453
Shutterfly, Inc.
Reconciliation of Cash Flow from Operating Activities to
Non-GAAP Adjusted EBITDA and Adjusted EBITDA minus Capital
Expenditures
(In thousands)
(Unaudited)
Three Months Ended
Year Ended
Mar. 31,
Jun. 30,
Sep. 30,
Dec. 31,
Mar. 31,
Jun. 30,
Dec. 31,
2016 [2]
2016
2016
2016
2017
2017
2016
Net cash provided by (used in) operating activities
$ (82,610 )
$
16,916
$
(4,881 )
$ 263,998
$ (72,386 )
$
13,672
$ 193,423
Interest expense
5,675
5,661
5,726
5,961
5,964
5,955
23,023
Interest and other income, net
(121 )
(128 )
(130 )
(122 )
(189 )
(244 )
(501 )
Tax (benefit) provision
(17,932 )
(10,123 )
(18,235 )
56,972
(22,341 )
(14,713 )
10,682
Changes in operating assets and liabilities
98,604
2,374
29,155
(126,361 )
92,194
(2,565 )
3,772
Other adjustments
(6,166 )
3,506
(13,628 )
(5,658 )
(6,265 )
5,377
(21,946 )
Capital lease termination
--
--
--
--
--
8,098
--
Cash restructuring
--
--
--
--
1,108
1,777
--
Non-GAAP Adjusted EBITDA
(2,550 )
18,206
(1,993 )
194,790
(1,915 )
17,357
208,453
Less: Purchases of property and equipment
(5,497 )
(22,005 )
(14,957 )
(9,792 )
(1,669 )
(7,252 )
(52,251 )
Less: Capitalized technology & development costs
(8,168 )
(10,052 )
(8,819 )
(6,065 )
(7,726 )
(9,602 )
(33,104 )
Add: Capex adjustments [1]
--
9,827
--
--
--
--
9,827
Adjusted EBITDA minus capital expenditures
$ (16,215 )
$
(4,024 )
$ (25,769 )
$ 178,933
$ (11,310 )
$
503
$ 132,925
[1] In the second quarter of 2016, the Company acquired
and immediately sold $9.8 million of printers.
[2] The Company reclassified an immaterial
contingent consideration payment (to Groovebook Founders) in the
first quarter of 2016 between operating and financing activities
within the cash flow statement.
Shutterfly, Inc.
Reconciliation of Forward-Looking Guidance for Non-GAAP Financial
Measures
(In millions, except per share amounts)
Forward-Looking Guidance [1]
Three Months Ending
Twelve Months Ending
September 30, 2017
December 31, 2017
Low
High
Low
High
Net revenues [2]
$
187.0
$
193.0
$
1,135.0
$
1,165.0
Gross profit margin
35.0 %
35.5 %
49.0 %
50.0 %
Operating income (loss)
($38.0 )
($35.0 )
$
48.5
$
68.5
Operating margin
(20.3 %)
(18.1 %)
4.3 %
5.9 %
Operating income (loss)
($38.0 )
($35.0 )
$
48.5
$
68.5
Stock-based compensation
$
11.4
$
11.4
$
49.0
$
49.0
Amortization of intangible assets
$
3.6
$
3.6
$
14.9
$
14.9
Depreciation
$
23.0
$
23.0
$
97.6
$
97.6
Adjusted EBITDA
$
0.0
$
3.0
$
210.0
$
230.0
Adjusted EBITDA margin
0.0 %
1.5 %
18.5 %
19.7 %
Capital expenditures
$
75.0
$
75.0
Capital expenditures as % of net revenues
6.6 %
6.4 %
Adjusted EBITDA minus capital expenditures
$
135.0
$
155.0
Adjusted EBITDA minus capital expenditures as % of net revenues
11.9 %
13.3 %
Tax rate
38.0 %
38.0 %
37.5 %
37.5 %
Net income (loss) per share
Basic
($0.80 )
($0.76 )
--
--
Diluted
--
--
$
0.45
$
0.80
Weighted average shares
Basic
33.6
33.6
--
--
Diluted
--
--
34.5
34.5
[1] Excludes full year 2017 expected restructuring
charges ranging from $15.0 million to $17.5 million as well as any
costs related to refinancing our convertible debt and capital lease
termination charges of $8.1 million.
[2] In 2017, net revenues from SBS Segment to increase
20% over 2016.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170725006348r1&sid=cmtx6&distro=nx&

View source version on businesswire.com: http://www.businesswire.com/news/home/20170725006348/en/

SOURCE: Shutterfly, Inc.

Shutterfly, Inc.
Investor Relations:
Shawn Tabak, 650-610-6026
stabak@shutterfly.com
or
Media Relations:
Nicole Stier, 650-610-6013
nstier@shutterfly.com