|SHUTTERSTOCK, INC. filed this Form 8-K on 08/07/2013|
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 7, 2013
(Exact name of registrant as specified in its charter)
60 Broad Street, 30th Floor
New York, NY 10004
(Address of principal executive offices, including zip code)
(Registrants telephone number, including area code)
(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 August 7, 2013, Shutterstock, Inc. issued a press release announcing its financial results for the fiscal quarter ended June 30, 2013. A copy of the press release is furnished as Exhibit 99.1 to this current report and is incorporated herein by reference.
The information furnished on this Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: August 7, 2013
Shutterstock Reports Second Quarter 2013 Financial Results
· Quarterly revenue increases 40% from prior year period to $56.8 million
· Adjusted EBITDA increases 61% to $13.4 million
· Quarterly image downloads increase 33% to 24.3 million
· Revenue per download increases 5% to $2.33
· Collection currently exceeds 29 million images and video clips
· Language offerings grow to 20 with addition of Thai and Korean
NEW YORK, NY August 7, 2013 Shutterstock, Inc. (NYSE: SSTK), a leading global provider of commercial digital imagery, today announced financial results for the second quarter ended June 30, 2013.
We delivered strong results in the second quarter, with 40% revenue growth driven by both new customer additions and expanding usage, said Founder and CEO Jon Oringer. We also made good progress solidifying our global footprint, adding both Thai and Korean to our 18 existing language offerings.
Revenue for the second quarter was $56.8 million, a 40% increase from the second quarter of 2012.
Net income for the second quarter of 2013 increased 13% to $6.9 million as compared to $6.1 million in the second quarter of 2012. Net income in the second quarter of 2012 was not subject to federal and state income tax, as the Company was operating as a limited liability company prior to its reorganization to a Delaware corporation in October 2012, while the current quarters net income is taxed at the federal and state income tax levels.
Net income available to common stockholders/members for the second quarter of 2013 was $6.8 million or $0.20 per share on a fully diluted basis as compared to $4.6 million or $0.22 per share on a fully diluted basis in the second quarter of 2012.
Non-GAAP net income for the second quarter of 2013 was $7.8 million or $0.23 per share on a fully diluted basis as compared to $7.5 million or $0.27 per share on a fully diluted basis in the second quarter of 2012. Non-GAAP net income excludes the after tax impact of non-cash equity-based compensation expense.
Adjusted EBITDA for the second quarter of 2013 was $13.4 million, a 61% increase as compared to $8.3 million in the second quarter of 2012.
The Companys cash balance was $112.8 million as of June 30, 2013 as compared to $102.1 million as of December 31, 2012. The Company had no bank debt as of June 30, 2013. The Company generated $4.0 million of cash from operations in the second quarter of 2013.
Also during the second quarter, the Company incurred planned capital expenditures related primarily to the purchase of computer servers and networking equipment, and to a lesser extent leasehold improvements, resulting in a cash outlay of approximately $1.9 million. Cash outlays in this category for the second quarter of 2012 totaled $1.4 million.
Free cash flow for the second quarter of 2013 was $2.1 million as compared to $7.7 million in the second quarter of 2012. The decrease in free cash flow was caused primarily by the income tax impacts of the Companys reorganization to a Delaware corporation in October 2012.
The Companys current financial and operating expectations for the third quarter of 2013 and full year 2013 are as follows:
Third Quarter 2013
· Revenue of $56 - $57 million
· Adjusted EBITDA of $11.0 - $12.0 million
· Non-cash equity-based compensation expense of approximately $2 million
· An effective tax rate of approximately 40%
Full Year 2013
· We are increasing our expectations for revenue to $227 - $229 million
· We are increasing our expectations for adjusted EBITDA to $48 - $50 million
· Non-cash equity-based compensation expense of approximately $8 million
· An effective tax rate of approximately 40%
· Capital expenditures related to network servers and technology of approximately $5 million
· Capital expenditures for non-recurring leasehold improvements related to headquarters office relocation of approximately $10 million
Earnings Teleconference Information
The Company will discuss its second quarter 2013 financial results during a teleconference today, August 7, 2013, at 5:00 PM ET. The conference call can be accessed at (866) 515-2911 or (617) 399-5125 (outside the US), conference ID# 814 376 47. The call will also be broadcast simultaneously at http://investor.shutterstock.com.
Following completion of the call, a recorded replay of the webcast will be available on Shutterstocks website. To listen to the telephone replay, call toll-free (888) 286-8010 or (617) 801-6888 (outside the US), conference ID# 409 267 26. The telephone replay will be available from 7:00 PM ET August 7 through August 21, 2013. Additional investor information can be accessed at http://shutterstock.com.
Non-GAAP Financial Measures
Shutterstock considers adjusted EBITDA, non-GAAP net income, and free cash flow to be important financial indicators of the Companys operational strength and the performance of its business. Shutterstock defines adjusted EBITDA as net income adjusted for interest income/(expense), income taxes, depreciation, amortization and non-cash equity-based compensation; non-GAAP net income as net income excluding the after tax impact of
non-cash equity-based compensation; and free cash flow as cash provided by (used in) operating activities adjusted for capital expenditures and interest income/(expense). These figures are non-GAAP financial measures and should be considered in addition to results prepared in accordance with generally accepted accounting principles (GAAP), and should not be considered as a substitute for, or superior to, GAAP results. In addition, adjusted EBITDA, non-GAAP net income, and free cash flow should not be construed as indicators of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that they fail to address. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our current results with our results from other reporting periods and with the results of other companies.
A reconciliation of the differences between adjusted EBITDA, non-GAAP net income, and free cash flow, and the most comparable financial measure calculated and presented in accordance with GAAP, is presented under the heading Reconciliation of Non-GAAP Financial Information to GAAP immediately following the Consolidated Statements of Cash Flows included below.
Historical Operating Metrics
(1) During the second quarter of fiscal year 2013, the Company identified an understatement of the number of paid downloads in the first quarter of 2013 by 0.1 million. As a result, the Company has updated the revenue per download for the first quarter of fiscal year 2013 from $2.29 to $2.28. This did not impact the consolidated financial statements for the first quarter of 2013.
Non-Cash Equity-Based Compensation
Included in the accompanying financial results are expenses related to non-cash equity-based compensation, as follows (in thousands):
Amortization of Intangible Assets and Depreciation
Included in the accompanying financial results are expenses related to the amortization of intangible assets, as follows (in thousands):
Included in the accompanying financial results are expenses related to depreciation, as follows (in thousands):
Shutterstock is a leading global provider of high-quality licensed photographs, vectors, illustrations and videos to businesses, marketing agencies and media organizations around the world. Shutterstock works closely with its growing contributor community of photographers, videographers, illustrators and designers to curate a global marketplace for royalty-free imagery. Shutterstock adds tens of thousands of rights-cleared images each week, and with more than 25 million images and video clips currently available, the Company recently surpassed 300 million image downloads. Shutterstock also owns Bigstock, a value-oriented stock media agency; Offset, a high-end image collection; and Skillfeed, an online marketplace for learning. Shutterstock is headquartered in New York City.
For more information, please visit http://www.shutterstock.com, and follow Shutterstock on Twitter and Facebook.
Safe Harbor Provision
The statements contained in this press release that are not purely historical are forward looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, including statements regarding the Companys expectations, predictions, beliefs, hopes, intentions or strategies regarding the future. Forward looking statements include statements regarding the Companys business strategy, timing of, and plans for, the introduction of new products and enhancements, future sales, market growth and direction, competition, market share, revenue growth, operating margins and profitability. All forward looking statements included in this document are based upon information available to the Company as of the date hereof. Actual events or results could differ materially from those contained in the Companys current projections or forward-looking statements. It is routine for internal projections and expectations to change as the quarter progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which the Company bases its expectations may change prior to the end of the quarter. Although these expectations may change, the Company assumes no obligation to update any such forward looking statement, whether as a result of new information, future developments or otherwise. Factors that could cause or contribute to such differences include the Companys inability to continue to attract customers and contributors to its online marketplace for commercial digital imagery; a decrease in repeat customer purchases or in content contributed to our online marketplace; the Companys inability to successfully operate in a new and rapidly changing market and to evaluate its future prospects; competitive factors; the Companys inability to prevent the misuse of its imagery; assertions by third parties of infringement or other violations of intellectual property rights by the Company; the Companys inability to increase market awareness of the Company and its services; the Companys inability to effectively manage its growth; the Companys inability to increase the percentage of its revenues that come from larger companies; the Companys inability to continue expansion into international markets; various income tax and other tax liabilities; failure to respond to technological changes or upgrade the Companys website and technology systems; failure to adequately protect the Companys intellectual property; general economic conditions worldwide; and other factors and risks detailed in reports and documents we file from time to time with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.
Consolidated Balance Sheets
(In thousands, except per share data)
Consolidated Statements of Operations
(In thousands, except for share and per share data)
Reconciliation of Non-GAAP Financial Information to GAAP
(In thousands, except for share and per share information)
Unaudited Supplemental Data
The following information is not a financial measure under generally accepted accounting principles (GAAP). In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with GAAP, or as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities as there may be significant factors or trends that it fails to address. We present this financial information because we believe that it is helpful to some investors as one measure of our operations. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our results with our results from other reporting periods and with the results of other companies.
(1) Earnings/(loss) before interest income/(expense), income taxes, depreciation, amortization, non-cash equity-based compensation and other non-cash charges.
(2) The weighted average diluted shares for the three and six months ended June 30, 2012 give effect to our reorganization from a New York limited company to a Delaware corporation and includes incremental shares for profit interest awards and preferred shares that are excluded from the weighted average shares.