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Safe HarborThis presentation contains information about future expectations, plans and prospects of our management that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning the expected growth and development of our business including financial guidance, operating performance, our margins, our market position, investments made or to be made in our business, and our ability to successfully attract and retain customers. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, our ability to attract customers and to retain customers and to do so in a cost-effective manner, willingness of purchasers of graphic design services and printed products to shop online, failure of our investments, unexpected increases in our use of funds, failure to increase our revenue and keep our expenses consistent with revenues, failures of our web sites or network infrastructure, failure to maintain the prices we charge for our products and services, the inability of our manufacturing operations to meet customer demand, and other factors that are discussed in our Form 10-K for the year-ended June 30, 2007, our Form 10-Q for the quarter-ended September 30, 2007, and other documents periodically filed with the SEC.
In addition, the statements in this presentation represent our expectations and beliefs as of the date of this presentation. We anticipate that subsequent events and developments may cause these expectations and beliefs to change. We specifically disclaim any obligation to update any forward-looking statements. These forward-looking statements should not be relied upon as representing our expectations or beliefs as of any date subsequent to the date of this presentation.
2
3
Agenda
Robert S. Keane President, CEO and ChairmanTrynka Shineman SVP North American Marketing
Cadence of our Business: Quarterly & TTM non-GAAP Net Income* & Guidance**
$5.8
$7.2 $7.2 $7.3
$10.0$9.3 $9.3
$9.9
$12.6-14.4
Q2FY'06
Q3 Q4 Q1FY'07
Q2 Q3 Q4 Q1FY'08
Q2**
$, millions** Guidance as of October 25, 2007
$12.8
$17.8
$23.1
$27.5
$31.7$33.9
$35.9
$38.5
$41-43
Q2FY'06
Q3 Q4 Q1FY'07
Q2 Q3 Q4 Q1FY'08
Q2**
TTMQuarterly
Steady sequential increasesStep function and plateaus
49
97
Financial strategy
Three pronged financial strategy• Grow as fast as we can for as long as we can to leverage large
market opportunity• Deliver against strong but fixed net profit and EPS growth objectives• Re-invest additional earning potential back into business to gain
market share and scale-based advantages
Disciplined and analytically-driven investment decisions• Returns (ROIC) remain far in excess of hurdle rate
When growth slows, margins can expand• Leverage from lower expenses relating to marketing, product and
software development, and G&A along with higher capacity utilization enables additional EPS growth
98
FY ’07: Reinvest Excess Earnings
$0.65
$0.70
$0.75
$0.80
$0.85
$0.75
$0.71
Prior guidance as of 10/23/06
$0.84
$0.78
Post Q2 potential run rate range
($0.06)
Select incremental discretionary 2H
investments (manufacturing & org. architecture)
$0.78
Year-end results (07/31/07)
170 bpoperating
margin impact in 2H FY ‘07
50
99
Closing Financial Remarks
Large market opportunity
Consistently strong and predictable financial performance
Building a disruptive, industry-changing business institution
Three pronged financial strategy in support of vision
100
Agenda
Robert S. Keane President, CEO and Chairman
Trynka Shineman SVP North American Marketing
Mike Ewing SVP Global Partnerships
Wendy Cebula EVP & Chief Operating Officer
Harpreet Grewal EVP & Chief Financial Officer
Q&A
51
101
Q&A
Investor Day
November 15, 2007
102
Appendix A
52
103
Financial Guidance
Revenue $92 - $98 mm
Growth over FY ’07 period 42% - 53%
Gross Margins n/a3
GAAP EPS $0.19 - $0.23
Non-GAAP EPS2 $0.27 - $0.31
Cap ex (% of revenue guidance) 17% – 20%
Notes:1. As of October 25, 2007.
2. Q2 FY ’08 non-GAAP results exclude an estimated $3.7 million of share based compensation expense. 2008 full fiscal year non-GAAP results exclude an estimated $15.5 million of share based compensation expense.
3. As announced on July 31, 2007, VistaPrint no longer provides quarterly gross margin guidance.
FY’08 Q2 ending 12/31/07
$360 - $380 mm
41% - 48%
63% - 67%
$0.78 - $0.86
$1.10 - $1.18
15% - 20%
FY ‘08 ending 6/30/08
1
104
7%11% 11%
11%5%
1%
7%
3%1%
2%
2%2%
3%
2%
3%
12%
0%
10%
20%
30%
FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 Guidance
Other
Post-PressAutomation
New Products
Land
Facilities
Off-set & DigitalPresses
July 31st Guidance: Cap-Ex to Revenue
23%20%
16%
Total capital expenditures (million)$25$13 $19
Capi
tal e
xpen
ditu
res
as
a %
of
reve
nue
25%
$63 $55 to $75
15% to 20%
53
105
$14
44.6
10.212.2
13.6 14.315.6 15.8
18.620.2
27.8
25.327.3 27.1
34.3
34.934.9
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
Q2'04
Q3'04
Q4'04
Q1'05
Q2'05
Q3'05
Q4'05
Q1'06
Q2'06
Q3'06
Q4'06
Q1'07
Q2'07
Q3'07
Q4'07
Q1'08
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%Sessions (million)Average order value (AOV)Conversion Rate
$16 $17 $18$25$21
$29$27
$36
$42$45
$50
$64
$69$73
Revenues, Sessions, Conversion & AOV
Revenues ($ million)
$80
106
Appendix B
Including a Reconciliation of GAAP to Non-GAAP Financial Measures
54
107
About non-GAAP financial measures
To supplement VistaPrint’s consolidated financial statements presented in accordance with GAAP, VistaPrint uses the following measures defined as non-GAAP financial measures by the SEC: non-GAAP adjusted net income and non-GAAP adjusted earnings per share. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the slides captioned "Reconciliation GAAP to Non-GAAP Results” included at the end of this presentation.
VistaPrint’s management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenses that may not be indicative of our core business operating results. VistaPrint believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing VistaPrint’s performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to VistaPrint’s historical performance and our competitors' operating results. VistaPrint believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. Management uses these supplemental measures to evaluate performance period over period and to analyze the underlying trends in the Company's business and to establish operational goals and forecasts that are used in allocating resources.
VistaPrint expects to compute its non-GAAP financial measures using the same consistent method from quarter to quarter and year to year. The accompanying table has more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliation between these financial measures. The items excluded from the non-GAAP measurements for fiscal year 2007 and the first quarter of fiscal year 2008 are share based compensation expense and; for the fourth quarter and full fiscal year 2006 are share based compensation expense and tax accrual adjustments related to prior years’ tax settlement; and, for fiscal year 2005, a loss on a contract termination recorded in fiscal year 2005 is excluded.
(Continued on next slide)
108
About non-GAAP financial measurescontinued…
Share-based compensation expenseVistaPrint adopted SFAS 123(R) Share-Based Payments on July 1, 2005 and began expensing the fair value of share option grants issued to employees and directors. Prior to that date, the Company had accounted for share option grants under the provisions of APB No. 25, Accounting for Stock Issued to Employees, and therefore had not recorded any compensation related to such grants. Management has excluded share based compensation from the non-GAAP measurements for fiscal years 2006 and 2007 to facilitate comparison and analysis to historical performance and our competitors’ operating results.
Tax accrual adjustments related to prior yearsIn the quarter ending March 31, 2006, VistaPrint reversed excess income tax reserves related to the completion of an Internal Revenue Service audit of a prior fiscal year for its VistaPrint USA, Incorporated subsidiary. In the quarter ending June 30, 2006, VistaPrint reversed excess income tax reserves related to the expiration of a tax audit statute of limitations relating to a prior fiscal year. These reversals were accounted for as discrete events and resulted in income tax benefits during these periods. Management has excluded the impact of these tax accrual adjustments from the non-GAAP measurements for fiscal year 2006 to facilitate comparison and analysis of historical performance and to present a view of the current fiscal year’s effective tax rate that management believes is more consistent with both historical performance and expected future financial results.
Contract Termination LossIn the quarter ended September 30, 2004, the Company recorded a loss of $21 million related to the termination of a supply agreement with its North American print supplier. This loss was the result of a one-time payment made to this supplier that terminated all existing supply agreements in force at that time. Management has excluded the contract termination loss from the non-GAAP measurement to facilitate comparison and analysis to historical and future performance and our competitors’ operating results.
Although management believes that these non-GAAP financial measures are helpful to understanding the Company’s financial performance, to gain a complete picture of all effects on the Company's profit and loss from any and all events, management does (and investors should) rely upon the GAAP statement of operations.