0001140361-14-030176.txt : 20140731 0001140361-14-030176.hdr.sgml : 20140731 20140731150950 ACCESSION NUMBER: 0001140361-14-030176 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20140730 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20140731 DATE AS OF CHANGE: 20140731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STAMPS.COM INC CENTRAL INDEX KEY: 0001082923 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 770454966 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26427 FILM NUMBER: 141005954 BUSINESS ADDRESS: STREET 1: 1990 E. GRAND AVE CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3104825800 MAIL ADDRESS: STREET 1: 1990 E. GRAND AVE CITY: EL SEGUNDO STATE: CA ZIP: 90245 FORMER COMPANY: FORMER CONFORMED NAME: STAMPS COM INC DATE OF NAME CHANGE: 19990421 8-K 1 form8k.htm STAMPS.COM INC 8-K 7-30-2014

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 30, 2014

Stamps.com Inc.

(Exact name of registrant as specified in its charter)
 
Delaware
000-26427
77-0454966
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)

1990 E. Grand Avenue, El Segundo, CA
 
90245
(Address of principal executive offices)
 
(Zip Code)
 
Registrant's telephone number, including area code:
(310) 482-5800

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 


Item 2.02. Results of Operations and Financial Condition.

On July 30, 2014, Stamps.com Inc. issued a press release setting forth its financial results for its second quarter ended June 30, 2014.  A copy of its press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.

The information in the press release is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

The following exhibit is being furnished herewith:

99.1 Press Release of Stamps.com Inc. dated July 30, 2014 announcing Stamps.com Inc.'s financial results for its second quarter ended June 30, 2014.


SIGNATURES
 
Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
Stamps.com Inc.
 
(Registrant)
 
 
July 31, 2014
/s/ Kenneth McBride
Date
(Signature)
 
 
 
Kenneth McBride,
 
Chief Executive Officer

Exhibit Index

Exhibit Number
Description
 
Press Release of Stamps.com Inc. dated July 30, 2014 announcing Stamps.com Inc.'s financial results for its second quarter ended June 30, 2014.

 

EX-99.1 2 ex99_1.htm EXHIBIT 99.1

EXHIBIT 99.1

Investor Contact:
Press Contact:
Jeff Carberry
Eric Nash
Stamps.com Investor Relations
Stamps.com Public Relations
(310) 482-5830
(310) 482-5942
invrel@stamps.com
publicrelations@stamps.com

STAMPS.COM ANNOUNCES SECOND QUARTER 2014 RESULTS
 
Revenue of $34.3 million; Non-GAAP Diluted Earnings Per Share of $0.55
 
El Segundo, CA – July 30, 2014 – Stamps.com® (Nasdaq: STMP), the leading provider of postage online and shipping software solutions, today announced results for the second quarter ended June 30, 2014.
 
Highlights for the second quarter:
 
· During the second quarter, Stamps.com acquired ShipStation®, a leading provider of subscription based online shipping solutions that allow online retailers and e-commerce merchants to organize, process, fulfill and ship their orders quickly and easily. Our second quarter financial results include the results of ShipStation from June 10, 2014 through June 30, 2014.
 
· Core Mailing and Shipping revenue, which includes ShipStation, was $32.4 million, up 7% compared to the second quarter of 2013.
 
· Total revenue was $34.3 million, up 7% compared to the second quarter of 2013.
 
· GAAP net income was $11.2 million or $0.68 per fully-diluted share, including $0.9 million of stock-based compensation expense, $0.4 million of corporate development expenses, $0.1 million of amortization of acquired intangibles and a non-cash income tax benefit of $3.6 million.
 
· On a non-GAAP basis, excluding the stock-based compensation expense, corporate development expenses and intangible amortization expense and also excluding the non-cash income tax benefit, income from operations was $9.1 million, net income was $9.0 million and net income per fully-diluted share was $0.55.
 
"The acquisition of ShipStation represents a significant strategic investment in our high volume and e-commerce shipping business,” said Ken McBride, Stamps.com's chairman and CEO. “E-commerce driven package shipping is the fastest growing segment within the mailing and shipping space and this acquisition will allow us to accelerate our growth in this area. For the second quarter, we were pleased with our core mailing and shipping results in this seasonally slower period. We increased our sales and marketing investment given our continued very attractive returns in order to continue to drive long-term growth in the business. We are excited about the opportunities we see in all of our business areas.”

Second Quarter 2014 Detailed Results
 
Core Mailing and Shipping revenue, including our small business, enterprise and high volume shipping customer segments, and excluding enhanced promotion and PhotoStamps revenue, was $32.4 million, up 7% versus the second quarter of 2013.  Non-core Mailing and Shipping revenue from the enhanced promotion channel, which includes online programs where additional promotions are provided directly by marketing partners, was $0.5 million, down 26% versus the second quarter of 2013 as the Company continued to minimize its investment in this area. Non-core PhotoStamps revenue was $1.4 million, up 11% versus the second quarter of 2013 as a result of increased high volume business orders. Mailing and Shipping gross margin was 80.4%, PhotoStamps gross margin was 14.8% and total gross margin was 77.8%.
 
Second quarter GAAP net income was $11.2 million. On a per share basis, total second quarter 2014 GAAP net income was $0.68 based on 16.4 million fully-diluted shares outstanding. Second quarter 2014 GAAP net income was reduced by $0.9 million of stock-based compensation expense, $0.4 million of acquisition related corporate development expenses, and $0.1 million of amortization of acquired intangibles and increased by a non-cash income tax benefit of $3.6 million resulting from the reversal of a portion of the Company’s net deferred tax asset valuation allowance.
 
Non-GAAP and GAAP amounts are reconciled in the following table:
 
Second Quarter Fiscal 2014
All amounts in millions except
per share or margin data:
 
Non-GAAP
Amounts
   
Stock-Based
Compensation
Expense
   
Corporate
Development
Expense
   
Intangible
Amortization
Expense
   
Income Tax
Benefit
   
GAAP
Amounts
 
 
 
   
   
   
   
   
 
Cost of Sales
 
$
7.53
   
$
0.08
   
$
-
   
$
-
   
$
-
   
$
7.62
 
Research & Development
   
2.87
     
0.16
     
-
     
-
     
-
     
3.04
 
Sales & Marketing
   
10.52
     
0.14
     
-
     
-
     
-
     
10.66
 
General & Administrative
   
4.28
     
0.54
     
0.42
     
0.11
     
-
     
5.35
 
Total Expenses
   
25.21
     
0.93
     
0.42
     
0.11
     
-
     
26.67
 
 
                                               
Gross Margin
   
78.0
%
   
(0.2
%)
   
--
     
--
     
--
     
77.8
%
 
                                               
Income (Loss) from Operations
   
9.07
     
(0.93
)
   
(0.42
)
   
(0.11
)
   
-
     
7.62
 
 
                                               
Operating Margin
   
26.5
%
   
(2.7
%)
   
(1.2
%)
   
(0.3
%)
   
-
     
22.2
%
 
                                               
Interest and Other Income
   
0.09
     
-
     
-
     
-
     
-
     
0.09
 
Pre-Tax Income (Loss)
   
9.16
     
(0.93
)
   
(0.42
)
   
(0.11
)
   
-
     
7.71
 
 
                                               
Provision for Income Taxes
   
(0.17
)
   
-
     
-
     
-
     
3.63
     
3.47
 
 
                                               
Net Income
   
9.00
     
(0.93
)
   
(0.42
)
   
(0.11
)
   
3.63
     
11.17
 
 
                                               
On a diluted per share basis
 
$
0.55
   
$
(0.06
)
 
$
(0.03
)
 
$
(0.01
)
 
$
0.22
   
$
0.68
 
 
                                               
Shares used in per share calculation
   
16.38
     
16.38
     
16.38
     
16.38
     
16.38
     
16.38
 

Excluding the stock-based compensation expense, corporate development expenses, intangible amortization expense and non-cash income tax benefit, second quarter 2014 non-GAAP operating income was $9.1 million and non-GAAP net income was $9.0 million or $0.55 per share based on 16.4 million fully-diluted shares outstanding. This compares to second quarter 2013 non-GAAP operating income of $9.6 million and non-GAAP net income of $9.7 million or $0.60 per share based on fully-diluted shares outstanding of 16.2 million. Thus, second quarter non-GAAP operating income, non-GAAP net income and non-GAAP fully-diluted earnings per share decreased by 6%, 7% and 8% year-over-year, respectively.

NOL Update
 
The Company has significant Federal and State net operating losses (“NOL”) which could potentially be impaired by shifts in ownership under Section 382 of the Internal Revenue Code. The Company estimates its ownership shift was at approximately 14% as of June 30, 2014, which is below the 50% level that could trigger a potential impairment of its NOL asset. As part of its ongoing program to preserve future use of its NOL asset, the Company requests that any shareholder contemplating becoming a 5% shareholder contact the Company before doing so.
 
Share Repurchase
 
During the second quarter of 2014, the Company repurchased approximately 435 thousand shares at a total cost of $12.9 million. The Company’s current repurchase plan remains in effect through April 2015 with a remaining authorization of approximately 565 thousand shares.
 
Business Outlook
 
Stamps.com currently expects 2014 revenue to be in a range of $130 to $145 million; this compares to previous guidance of $125 to $140 million. GAAP net income per share for 2014 is expected to be in a range of $1.90 to $2.30; this compares to previous guidance of $1.80 to $2.20. GAAP net income per fully diluted shares includes approximately $5 million of stock-based compensation expense, approximately $0.4 million of corporate development expenses, approximately $1.1 million of intangible amortization expense and a non-cash income tax benefit of $3.6 million. Excluding the stock-based compensation expense, corporate development expenses, intangible amortization expense and non-cash income tax benefit, non-GAAP 2014 net income per fully-diluted share is expected to be in a range of $2.10 to $2.50 which is unchanged from our previous guidance.
 
Company Customer Metrics
 
A complete set of the quarterly customer metrics for the past eight fiscal years and current year-to-date is available at http://investor.stamps.com (under a tab on the left side called Company Information, Metrics).
 
Quarterly Conference Call
 
The Stamps.com financial results conference call will be web cast 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 web cast, a replay of the call will be available at the same website.

About Stamps.com, ShipStation and PhotoStamps
 
Stamps.com (Nasdaq: STMP) is a leading provider of Internet-based postage services. Stamps.com’s service enables customers to print U.S. Postal Service-approved postage with just a computer, printer and Internet Connection, right from their homes or offices.  The Company has been the leader in transforming the world of mailing and shipping for small business owners, e-commerce sellers, high volume shippers and enterprise organizations alike. The Company currently has PC Postage partnerships with Avery, Microsoft, HP, the U.S. Postal Service and others.
 
ShipStation is a leading web-based shipping software that is built to help online retailers organize and process their orders, while fulfilling and shipping them quickly and easily. With automatic order importing from over 40 shopping carts and marketplaces, including eBay, Amazon, Shopify, Bigcommerce, Volusion, Squarespace and more, and automation features like custom hierarchical rules and product profiles, ShipStation helps online retailers ship their orders no matter where they sell or how they ship.

PhotoStamps is a patented Stamps.com product that couples the technology of PC Postage with the simplicity of a web-based image upload and order process. Customers may create full custom PhotoStamps with their own digital photograph, or they may choose a licensed image. Stamps.com currently has PhotoStamps partnerships with HP/Snapfish and others.

About Non-GAAP Measures and Share Repurchase Timing

To supplement the Company’s condensed financial statements presented in accordance with GAAP, Stamps.com uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP income from operations, non-GAAP pre-tax income, non-GAAP net income, non-GAAP earnings per diluted share, and non-GAAP gross margin and non-GAAP operating margin. Reconciliation to the nearest GAAP measures of all non-GAAP measures included in this press release can be found in the financial tables of this earnings release.

Non-GAAP measures are provided to enhance investors’ overall understanding of the Company’s current financial performance, prospects for the future and as a means to evaluate period-to-period comparisons. The Company believes that these non-GAAP measures provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of recurring core business operating results. The Company believes the non-GAAP measures that exclude items such as stock-based compensation, asset write-offs, dividend-related compensation expense, legal settlements and reserves, amortization expense of acquired intangibles, one-time expenses such as those associated with the relocation of our corporate headquarters and acquisition and integration related corporate development expenses and non-cash income tax adjustments, when viewed with GAAP results and the accompanying reconciliation, enhance the comparability of results against prior periods and allow for greater transparency of financial results. The Company believes non-GAAP measures facilitate management’s internal comparison of the Company’s financial performance to that of prior periods as well as trend analysis for budgeting and planning purposes. The presentation of non-GAAP measures are 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.

The timing of share repurchases, if any, and the number of shares to be bought at any one time will depend on market conditions and the Company’s assessment of the risk that its net operating loss asset could be impaired if such repurchases were undertaken. 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 about our anticipated results that involve risks and uncertainties. Important factors, including the Company's ability to complete and ship its products, maintain desirable economics for its products and obtain or maintain regulatory approval, which could cause actual results to differ materially from those in the forward-looking statements, 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, 2013, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. 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.

Stamps.com, the Stamps.com logo, ShipStation and PhotoStamps are trademarks or registered trademarks of Stamps.com Inc. and its subsidiaries. All other brands and names are property of their respective owners.

STAMPS.COM INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data: unaudited)
 
 
 
Three Months ended
June 30,
   
Six Months ended
June 30,
 
 
 
2014
   
2013
   
2014
   
2013
 
Revenues:
 
   
   
   
 
Service
 
$
26,921
   
$
24,888
   
$
52,564
   
$
49,736
 
Product
   
3,955
     
4,075
     
8,568
     
8,551
 
Insurance
   
2,047
     
1,917
     
4,040
     
3,663
 
PhotoStamps
   
1,359
     
1,229
     
2,408
     
2,259
 
Other
   
2
     
-
     
2
     
1
 
Total revenues
   
34,284
     
32,109
     
67,582
     
64,210
 
Cost of revenues:
                               
Service
   
4,449
     
4,015
     
8,818
     
8,570
 
Product
   
1,292
     
1,382
     
2,834
     
3,007
 
Insurance
   
717
     
676
     
1,405
     
1,317
 
PhotoStamps
   
1,158
     
1,015
     
2,004
     
1,846
 
Total cost of revenues
   
7,616
     
7,088
     
15,061
     
14,740
 
Gross profit
   
26,668
     
25,021
     
52,521
     
49,470
 
Operating expenses:
                               
Sales and marketing
   
10,663
     
9,792
     
22,033
     
20,175
 
Research and development
   
3,036
     
2,718
     
5,952
     
5,343
 
General and administrative
   
5,350
     
3,966
     
9,547
     
7,592
 
Total operating expenses
   
19,049
     
16,476
     
37,532
     
33,110
 
Income from operations
   
7,619
     
8,545
     
14,989
     
16,360
 
 
                               
Interest and other income, net
   
89
     
95
     
225
     
249
 
Income before income taxes
   
7,708
     
8,640
     
15,214
     
16,609
 
Income tax (benefit) expense
   
(3,466
)
   
27
     
(3,294
)
   
90
 
Net income
 
$
11,174
   
$
8,613
   
$
18,508
   
$
16,519
 
Net income per share:
                               
Basic
 
$
0.70
   
$
0.56
   
$
1.15
   
$
1.07
 
Diluted
 
$
0.68
   
$
0.53
   
$
1.12
   
$
1.03
 
Weighted average shares outstanding:
                               
Basic
   
15,993
     
15,486
     
16,107
     
15,407
 
Diluted
   
16,378
     
16,163
     
16,521
     
16,082
 


CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
 
 
 
June 30,
   
December 31,
 
 
 
2014
   
2013
 
 
 
   
 
ASSETS
 
   
 
Cash and investments
 
$
52,800
   
$
87,210
 
Accounts receivable
   
9,191
     
17,504
 
Other current assets
   
6,490
     
6,541
 
Property and equipment, net
   
29,526
     
29,763
 
Goodwill and intangible assets, net
   
66,587
     
1,047
 
Deferred tax
   
43,896
     
40,262
 
Other assets
   
7,119
     
4,791
 
Total assets
 
$
215,609
   
$
187,118
 
 
               
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Liabilities:
               
Accounts payable and accrued expenses
 
$
16,720
   
$
13,928
 
Contingent consideration
   
16,242
     
-
 
Deferred revenue
   
1,565
     
1,425
 
Total liabilities
   
34,527
     
15,353
 
 
               
Stockholders' equity:
               
Common stock
   
51
     
51
 
Additional paid-in capital
   
672,444
     
668,724
 
Treasury Stock
   
(172,410
)
   
(159,522
)
Accumulated deficit
   
(319,120
)
   
(337,628
)
Accumulated other comprehensive income
   
117
     
140
 
Total stockholders' equity
   
181,082
     
171,765
 
Total liabilities and stockholders' equity
 
$
215,609
   
$
187,118