Bloomberg reports leading photo products retailer Shutterfly LLC released preliminary third-quarter earnings reflecting steeper losses than last year, according to people with knowledge of the private results in the article.
The Apollo Global Management-backed company booked a preliminary loss of $45 million to $55 million before interest, taxes, depreciation, and amortization, said the source, who asked not to be identified because they weren’t authorized to speak publicly. That compares to a $41 million loss in the same period last year, the people said.
For the last twelve months, Shutterfly’s revenue was between $338 million and $348 million, they said. A measure of earnings that allows the company to add back certain costs and make other adjustments were in the $345 million to $355 million range, according to the people.
Shutterfly’s business is highly seasonal and earns the majority of its revenues in the fourth quarter.
The Bloomberg article said Shutterfly may be heading into a cash crunch as the cost of its floating-rate debt rises and consumers pull back on discretionary spending in a potential recession. The company’s debt load may become unsustainable in a recession, according to a note from credit grader S&P Global Ratings.
At end of September, Shutterfly’s revolving credit was nearly tapped out, putting liquidity at $65 million to $70 million, one of the people said. The company’s first-lien term loan due 2026 is quoted at around 62 cents on the dollar, down from roughly 70 cents on Sept. 28, according to data compiled by Bloomberg.
Bloomberg said Shutterfly and Apollo reps had no comment.
Apollo’s private equity arm acquired Shutterfly in a 2019 leveraged buyout and later combined the company with Snapfish. This was after Shutterfly bought volume photography leader Lifetouch in 2018 in the hopes the seasonality of the school portrait business would offset Shutterfly’s peak seasons. Since then, Shutterfly has been shuttering Lifetouch plants and staff to boost profitability.
Shutterfly raised roughly $1.1 billion of debt to finance the acquisition of home decor marketplace Spoonflower last summer.