Shutterfly Announces Fourth Quarter and Full Year 2016 Financial Results
Full Year 2016 net revenues increased 7% year-over-year to $1.13 billionFull Year net income of $15.9 million
New focus on four strategic areas announced, supported by 2017 restructuring
Significant increases in profitability and quality of earnings in 2017 and 2018 support reinvestment towards sustainable growth
February 01, 2017
REDWOOD CITY, Calif.–(BUSINESS WIRE)–Shutterfly, Inc. (NASDAQ:SFLY), the leading online retailer and manufacturer of high-quality personalized products and services, today announced financial results for the fourth quarter ended December 31, 2016. At the same time, the Company announced a new vision built around four strategic areas. Over the course of 2017, Shutterfly, Inc. will restructure to focus resources on these high-potential opportunities.
2016 Full Year Financial Performance
- Net revenues totaled $1.13 billion, compared to $1.06 billion in 2015.
- Adjusted EBITDA totaled $208.5 million, compared to $192.0 million in 2015.
- GAAP operating income of $49.1 million, compared to $18.3 million in 2015.
- Net income per share was $0.45, compared to a net loss per share of $(0.02) in 2015.
“We’re proud of our 2016 delivery against key initiatives, particularly Shutterfly Business Solutions, mobile, and product range expansion, as well as our continued progress on Operating Income, which more than doubled year-over-year,” said Christopher North, President and Chief Executive Officer of Shutterfly. “At the same time, Consumer growth came towards the low end of our guidance, and Adjusted EBITDA slightly below guidance, as Shutterfly-brand growth was offset by revenue declines in the Tiny Prints, Wedding Paper Divas, MyPublisher, and BorrowLenses brands.”
“To drive sustainable growth and long-term value creation, we’re announcing plans today to significantly simplify our Consumer business in 2017 as the first step in our longer-term strategy,” added North.
Shutterfly shared its vision for the future. The Company’s Consumer vision is to help people share life’s joy by being the leading online retailer and manufacturer of high-quality personalized products. This is complemented by the Company’s Enterprise vision of being the leading digital manufacturing platform for business. To support this vision, Shutterfly announced four areas of strategic focus going forward:
- make purchasing personalized products simple,
- expand our range of categories and products,
- pivot towards mobile, and
- leverage our manufacturing platform.
To focus resources on these four components of the strategic plan, Shutterfly will restructure in 2017, with the following changes occurring over the course of the year:
- Shutterfly is re-investing in Tiny Prints as its premium cards & stationery brand, creating a Tiny Prints boutique on a dedicated tab on Shutterfly.com later this year.
- The new Shutterfly Wedding Store will be the focus of the Company’s wedding strategy, including a premium Wedding Paper Divas-branded stationery collection.
- The MyPublisher brand will be retired in favor of the industry leading Shutterfly Photo Books category.
- Current Tiny Prints, Wedding Paper Divas, and MyPublisher customers will migrate to Shutterfly.com and the legacy websites will shut down.
- Three very small businesses, TripPix and FavePix, as well as the Shutterfly Pro Gallery service will be shut down.
- Santa Clara-based teams will be consolidated into Redwood City corporate headquarters. The Santa Clara office and both New York locations will be closed.
- Headcount will be reduced by approximately 13% or 260 employees.The transition will happen over the course of the first three quarters of 2017 and is expected to be complete before the holiday peak season.
- BorrowLenses will undertake a strategic review for possible sale.
- Going forward, Shutterfly will invest in a single Consumer platform, with all customers benefiting from continued investment in the Shutterfly.com site.
As a result of these changes, the Company expects to incur restructuring charges over the course of 2017 ranging from $15 million to $20 million.“Our vision is strongly motivated by the belief that sustainable growth comes from innovating on behalf of customers over the long term. At the same time, our plan strikes a balance between investing for growth and delivering improvements in profitability. In each of 2017 and 2018, we will deliver sequential improvements in profitability as well as quality of earnings, while funding re-investment in the business to drive growth in 2019 and beyond,” North concluded.
Source: Shutterfly Announces Fourth Quarter and Full Year 2016 Financial Results | Business Wire
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