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Vistaprint Q2 Earnings Zoom Past Estimates

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Business services provider Vistaprint N.V. reported impressive second quarter fiscal 2014 results with a healthy year-over-year increase in revenues and earnings backed by solid execution of its operational plans. Net income for the reported quarter almost doubled to $40.9 million from $23.0 million in the year-earlier quarter. On a per share basis, earnings for second quarter fiscal 2014 were $1.18 compared with 66 cents in the year-ago quarter.

Excluding one-time items, adjusted earnings for the reported quarter were $52.7 million or $1.50 per share compared with $35.9 million or $1.02 per share in the prior-year period. The quarterly adjusted earnings were well ahead of the Zacks Consensus Estimate of $1.00.

Total revenue in second quarter fiscal 2014 increased 6.5% year over year to $370.8 million. The year-over-year increase in revenues was primarily attributable to a strong holiday performance across the globe with continued improvements in customer engagements. Reported revenues, however, missed the Zacks Consensus Estimate of $375 million. Geographically, revenues were up 13% and 1% year over year in North America and Europe, respectively, to $189.4 million and $161.0 million.

In the reported quarter, gross margin improved marginally to 67.4% from 67.2% in the year-ago period. Operating income increased to $52.5 million in the reported quarter from $33.0 million in the prior-year period.

Balance Sheet & Cash Flow

The company exited the quarter with $62.3 million in cash and cash equivalents. Total debt was $204.5 million. The company had $289.7 million available under its credit facility. Vistaprint did not repurchase any share during the reported quarter.

The company generated $95.0 million of cash from operations compared with $88.5 million in second quarter fiscal 2013. Free cash flow for the reported quarter was $67.8 million compared with $58.7 million in the year-ago period. Capital expenditures for second quarter fiscal 2014 were $24.6 million.


For fiscal 2014, the company updated its revenue and earnings guidance to better reflect the current market conditions. Revenues for the current fiscal are expected in the range of $1,235 million to $1,265 million, down from the earlier projection of $1,250 million to $1,300 million. Fiscal 2014 GAAP earnings are expected in the range of $1.55 –$1.80 per share, up from $1.35 –$1.70 expected earlier. Adjusted earnings for fiscal 2014 are expected in the range of $2.68–$2.93 per share, up from the prior range of $2.49–$2.83 per share. Capital expenditures for fiscal 2014 are expected within $80 million to $90 million, down from previous guidance range of $85 million to $100 million.

Vistaprint is focused on leveraging its investments and expects meaningful earnings growth in fiscal 2014. The company expects its strategic initiatives to drive customer loyalty and lifetime value. Expansion in new geographic areas and customer additions will bear fruit in the long term. We are also confident of the company delivering solid results in the imminent future on the back of these initiatives.

Vistaprint currently has a Zacks Rank #3 (Hold). Stocks that look promising and are worth considering now include Automatic Data Processing, Inc. (ADP - Free Report) , Huron Consulting Group Inc. (HURN - Free Report) and Paychex, Inc. (PAYX - Free Report) , each carrying a Zacks Rank #2 (Buy).

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