March 7, 2017

CafePress Reports Results for Fourth Quarter and Fiscal Year 2016

Company Achieves 7.5% Revenue Growth in the Fourth Quarter

LOUISVILLE, Ky., March 07, 2017 (GLOBE NEWSWIRE) -- CafePress Inc. (NASDAQ:PRSS) today reported financial results for the three months and full year ended December 31, 2016.

Management Commentary

"We are proud to report year-over-year revenue growth in the fourth quarter, capping a successful year that demonstrates the steady progress we are making.  2016 was a year of inflection for CafePress, as years of revenue decline in the core business slowed quarter over quarter and returned to growth," said Fred Durham, Chief Executive Officer.  "While we believe we were a bit too aggressive in our pricing strategy during the fourth quarter when holiday demand was strong, we are actively assessing how to optimize pricing across CafePress.com and Retail Partner Channels.  Our investments in core systems have allowed us to better optimize our customer acquisition efforts and customer experience.  From this base, we look forward to re-energizing the consumer experience and making CafePress an even better place to shop."

"CafePress creates human connection by inspiring people to express themselves with the best assortment of expressive merchandise.  For 2017, we look forward to capitalizing on the momentum we've built by further investing in our brand and experience to connect and engage with our customers," concluded Durham.

Fourth Quarter 2016 Financial Highlights1,2

  • Net revenues totaled $43.7 million, up 7.5% from $40.7 million in the fourth quarter of 2015.
  • Gross profit margin was 38.4% of net revenues, down from 41.4% in the fourth quarter of 2015. 
  • GAAP net income from continuing operations was $2.9 million, or $0.17 per diluted share, up from $0.8 million, or $0.05 per diluted share, in the fourth quarter of 2015. 
  • Non-GAAP Adjusted EBITDA from continuing operations was $4.9 million, up 18.2% from $4.1 million in the fourth quarter of 2015.
  • Income from operations and Non-GAAP Adjusted EBITDA benefited favorably by $1.8 million related to a $1.2 million reversal of escheatment and other tax liabilities and the $0.6 million impact from a change in our paid-time-off policy.

Fourth Quarter 2016 Operating Metrics

  • Orders totaled 1.3 million, a 23.3% year-over-year increase.
  • Average Order Value (AOV) was $32.42, a decrease of 12.1% year-over-year.

Fiscal Year 2016 Financial Highlights1,2

  • Net revenues totaled $102.2 million, down 4.6% from $107.1 million in 2015.
  • Gross profit margin was 40.9% of net revenues, down from 41.1% in 2015. 
  • GAAP net loss from continuing operations was $(26.5) million, or $(1.58) per diluted share, inclusive of a $20.9 million one-time non-cash impairment charge on goodwill, compared to a net loss from continuing operations of $(6.3) million, or $(0.36) per diluted share, in 2015. 
  • Non-GAAP Adjusted EBITDA from continuing operations was $1.5 million, down 61.6% from $3.9 million in 2015.
  • Loss from operations and Non-GAAP Adjusted EBITDA benefited favorably by $2.7 million related to a $1.3 million reversal of escheatment and other tax liabilities, $0.8 million related to the establishment of a commission forfeiture policy, and the $0.6 million impact from a change in our paid-time-off policy.

Fiscal Year 2016 Operating Metrics

  • Orders totaled 3.1 million, a 7.1% year-over-year increase.
  • AOV was $33.06, down 9.8% year-over-year.

Cash and Share Repurchase Activity

  • At December 31, 2016, cash, cash equivalents, and short-term investments totaled $43.8 million, or approximately $2.63 per share.
  • Since authorization of the program in the second quarter of 2015, the Company repurchased approximately 1.2 million shares of common stock totaling $5.2 million.
  • On February 3, 2017, the CafePress Board of Directors voted to terminate the Company's stock repurchase program.

1Continuing operations includes results from CafePress.com and Retail Partners Channels. The Financial Highlights, Operating Metrics, and accompanying tables reflect the results of the Company's divestitures of its Art, Logo, and EZ Prints businesses in discontinued operations for all periods presented.

2Financial Highlights, Operating Metrics, and accompanying tables are revised for all periods presented to reflect the accounting for platform fees paid to third-party websites selling our products.  Previously, these fees were presented as a reduction to net revenue when the fees should have been presented as sales and marketing expense.  The revision, which we determined is not a material error, had no impact on loss from operations, results of operations, stockholders' equity or cash flows.  Please see Supplemental Selected Quarterly Data included below.

Please see "Non-GAAP Financial Information" for definitions of the terms Non-GAAP Adjusted EBITDA and Non-GAAP Cash contribution margin.  A reconciliation of GAAP to Non-GAAP financial information is presented in the supplementary information section at the end of this press release.

Fourth Quarter 2016 Conference Call

Management will review the fourth quarter and fiscal year 2016 financial results on a conference call on Tuesday, March 7, 2017 at 5:00 p.m. Eastern Standard Time. To participate on the live call, analysts and investors should dial 1-877-681-3376 at least ten minutes prior to the call.  CafePress will also offer a live and archived webcast of the conference call, accessible from the "Investors" section of the Company's Web site at http://investor.cafepress.com

Non-GAAP Financial Information

This press release contains certain non-GAAP financial measures. Tables are provided at the end of this press release that reconcile the non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include Adjusted EBITDA and cash contribution margin. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, please see the information provided at the end of this press release.

To supplement the Company's consolidated financial statements presented on a GAAP basis, we believe that these non-GAAP measures provide useful information about the Company's core operating results and thus are appropriate to enhance the overall understanding of the Company's past financial performance and its prospects for the future. These adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results and trends and performance. Management uses these non-GAAP measures to evaluate the Company's financial results, develop budgets, manage expenditures, and determine employee compensation. The presentation of additional information is not meant to be considered in isolation or as a substitute for or superior to net income (loss) or net income (loss) per share determined in accordance with GAAP.

Notice Regarding Forward Looking Statements

Information set forth in this news release contains various "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 (the "Act") provides certain "safe harbor" provisions for forward-looking statements. All forward-looking statements are made pursuant to the Act.

The reader is cautioned that such forward-looking statements are based on information available at the time and/or management's good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Forward-looking statements speak only as of the date the statement was made. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. Forward-looking statements are typically identified by the use of terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "might," "plan," "predict," "project," "seek," "should," "will," and similar words, although some forward-looking statements are expressed differently.  Examples of forward-looking statements used in this press release include that our core business returned to growth in 2016, our plans and strategies, including re-energizing the consumer experience and making CafePress an even better place to shop, and our plans to capitalize on our momentum in 2017 by investing in our brand and experience.  Important factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, among others, the following: the effect of global economic conditions, including any disruptions in the credit markets; a decrease in consumers' discretionary income; additional taxes and fees; the loss of key personnel; the effect (including possible increases in the cost of doing business) resulting from catastrophic events, including future war and terrorist activities or political uncertainties, or the impact of natural or other disasters on our operations and our ability to obtain insurance recoveries in respect of such losses (including losses related to business interruption); the impact of work stoppages and other labor problems on current and future operations; our ability to comply with governmental regulation and/or other legal obligations related to the privacy of personal information and other data, including the improper disclosure thereof; the impact of system failures or damage from natural disasters, power loss, telecommunications failures, cyber-attacks, or other unforeseen events; the impact of security breaches, computer viruses and hacking attacks on our business and operations; our ability to respond to rapid technological changes in a timely manner; our ability to prevent payment related risks, such as fraudulent use of credit or debit cards; our ability to maintain customer confidence in the integrity of our business; our ability to operate www.cafepress.com in an evolving and highly competitive market segment; our ability to secure new or ongoing content from third party partners; our ability to provide a high-quality customer experience with minimal programming errors, flows and/or technical difficulties; our ability to adequately protect our intellectual property; our ability to maintain or hire additional personnel; and the volatility of our stock price. For further information regarding the risks and uncertainties associated with the Company's business, and important factors that could cause the Company's actual results to vary materially from those expressed or implied in its forward-looking statements, please refer to the factors listed and described under the "Risk Factors" sections of the Company's documents filed from time to time with the U.S. Securities and Exchange Commission, including, but not limited to, the Company's quarterly reports on Form 10-Q, and the Company's Annual Report on Form 10-K, copies of which may be obtained at www.sec.gov

About CafePress (PRSS):
CafePress is the world's best online gift shop that has the perfect item for every passion. Our catalog of more than 1 billion uniquely designed products - ranging from apparel to drinkware and home décor - allows our customers to express themselves and connect with others by bringing passions to life through unique items. In addition, our interactive design tools allow customers to personalize items or create their own unique items. CafePress was founded in 1999 and is headquartered in Louisville, Kentucky.  For more information, visit www.cafepress.com or connect with CafePress on Facebook , Twitter , Pinterest or Instagram.

CafePress Inc.
Condensed Consolidated Statement of Operations
(In thousands, except per share amounts)
(Unaudited)
 
  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
  2016 2015
(As Revised)
 2016 2015
(As Revised)
                 
Net revenue $43,727  $40,692  $102,208  $107,125 
Cost of net revenue 26,920  23,856  60,406  63,069 
Gross profit 16,807  16,836  41,802  44,056 
Operating expense:        
Sales and marketing 8,724  7,724  23,167  23,102 
Technology and development 2,930  3,529  12,825  12,490 
General and administrative 1,745  3,241  10,192  12,560 
Impairment charges   788  20,899  788 
Restructuring costs 1,088  781  2,103  1,311 
Total operating expense 14,487  16,063  69,186  50,251 
Income (loss) from operations 2,320  773  (27,384) (6,195)
Interest income 29  30  179  64 
Interest expense (30) (16) (66) (62)
Other income 588  44  411  58 
Income (loss) before income taxes 2,907  831  (26,860) (6,135)
Provision (benefit) for income taxes 4  20  (390) 128 
Net income (loss) from continuing operations 2,903  811  (26,470) (6,263)
Income from discontinued operations, net of tax       8,418 
Net income (loss) $2,903  $811  $(26,470) $2,155 
Net income (loss) per share of common stock:        
Basic:        
Continuing operations $0.17  $0.05  $(1.58) $(0.36)
Discontinued operations $  $  $  $0.49 
Diluted:        
Continuing operations $0.17  $0.05  $(1.58) $(0.36)
Discontinued operations $  $  $  $0.49 
Shares used in computing net income (loss) per share of common stock:        
Basic 16,649  16,907  16,709  17,239 
Diluted 16,721  16,959  16,709  17,296 
             


CafePress Inc.
Condensed Consolidated Balance Sheet
(In thousands, except par value amounts)
(Unaudited)
     
  December 31,
 2016
 December 31,
 2015
         
ASSETS    
CURRENT ASSETS:    
Cash and cash equivalents $19,980  $32,663 
Short-term investments 23,808  17,610 
Accounts receivable 1,288  680 
Inventory, net 3,119  3,850 
Deferred costs 798  619 
Restricted cash   3,417 
Prepaid expenses and other current assets 2,310  2,413 
Total current assets 51,303  61,252 
Property and equipment, net 10,936  8,624 
Goodwill   20,899 
Other assets 681  608 
TOTAL ASSETS $62,920  $91,383 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
CURRENT LIABILITIES:    
Accounts payable $1,803  $3,938 
Accrued royalties payable 3,623  4,292 
Accrued liabilities 11,765  10,701 
Deferred revenue 748  864 
Capital lease obligation, current 347  565 
Total current liabilities 18,286  20,360 
Capital lease obligation, non-current   347 
Other long-term liabilities 166  353 
TOTAL LIABILITIES 18,452  21,060 
Commitments and Contingencies    
Stockholders' Equity:    
Preferred stock, $0.0001 par value: 10,000 shares authorized as of December 31, 2016 and 2015; none issued and outstanding    
Common stock, $0.0001 par value: 500,000 shares authorized; 16,643 and 16,766 outstanding as of December 31, 2016 and 2015, respectively 2  2 
Treasury stock   (203)
Additional paid-in capital 99,756  99,344 
Accumulated deficit (55,290) (28,820)
TOTAL STOCKHOLDERS' EQUITY 44,468  70,323 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $62,920  $91,383 
         


CafePress Inc.
Condensed Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
   
  Twelve Months Ended
December 31,
  2016 2015
         
Cash Flows from Operating Activities:    
Net (loss) income $(26,470) $2,155 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:    
Depreciation and amortization 4,256  6,808 
Amortization of intangible assets   1,229 
Loss on disposal of fixed assets 2  1,147 
Stock-based compensation 1,607  1,753 
Impairment charges 20,899  8,099 
Gain on sale of businesses   (17,319)
Deferred income taxes (338) 88 
Changes in operating assets and liabilities, net of effect of divestitures:    
Accounts receivable (608) 349 
Inventory 731  2,900 
Prepaid expenses, deferred costs and other current assets (76) 3,433 
Other assets 19  38 
Accounts payable (2,105) (4,100)
Partner commissions payable   (1,100)
Accrued royalties payable (669) (1,591)
Accrued and other liabilities 1,022  (1,580)
Assets and liabilities held for sale   (2,608)
Deferred revenue (116) (1,584)
Net cash used in operating activities (1,846) (1,883)
Cash Flows from Investing Activities    
Purchase of short-term investments (23,808) (27,570)
Proceeds from maturities of short-term investments 17,610  9,960 
Purchase of property and equipment (4,089) (3,346)
Capitalization of software and website development costs (2,415) (1,903)
Proceeds from disposal of fixed assets 29  12 
Change in restricted cash 3,417  (3,417)
Proceeds from sale of business, net of expenses paid   34,438 
Net cash (used in) provided by investing activities (9,256) 8,174 
Cash Flows from Financing Activities:    
Principal payments on capital lease obligations (565) (492)
Proceeds from exercise of common stock options 5  399 
Repurchase of common stock (1,021) (4,184)
Net cash used in financing activities (1,581) (4,277)
Change in cash of discontinued operations   3,678 
Net (decrease) increase in cash and cash equivalents (12,683) 5,692 
Cash and cash equivalents—beginning of period 32,663  26,971 
Cash and cash equivalents—end of period $19,980  $32,663 
Supplemental Disclosures of Cash Flow Information:    
Cash paid for interest $44  $77 
Income taxes refunded during the period (13) (1,094)
Non-cash Investing and Financing Activities:    
Accrued purchases of property and equipment $103  $30 
Note receivable from sale of business   405 
       


Stock-based compensation included in continuing operations is allocated as follows:
     
  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
  2016 2015 2016 2015
                 
  (Unaudited) (Unaudited)
Cost of net revenue $4  $40  $49  $163 
Sales and marketing 60  58  269  300 
Technology and development   42  81  180 
General and administrative 353  295  1,208  1,063 
Total stock-based compensation expense $417  $435  $1,607  $1,706 
                 


CafePress Inc.
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA
(In thousands)
(Unaudited)
 
  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
  2016 2015 2016 2015
Net income (loss) $2,903  $811  $(26,470) $2,155 
Discontinued operations, net of income taxes       8,418 
Net income (loss) from continuing operations 2,903  811  (26,470) (6,263)
Non-GAAP adjustments:        
Interest and other (income) expense (587) (58) (524) (60)
Provision (benefit) for income taxes 4  20  (390) 128 
Depreciation and amortization 1,077  1,369  4,256  6,251 
Stock-based compensation 417  435  1,607  1,706 
Impairment charges   788  20,899  788 
Restructuring costs 1,088  781  2,103  1,311 
Adjusted EBITDA* $4,902  $4,146  $1,481  $3,861 
                 
* Adjusted EBITDA is a non-GAAP financial measure which we define as net income (loss) from continuing operations less interest and other income (expense), provision for (benefit from) income taxes, depreciation and amortization, stock-based compensation, impairment charges, and restructuring costs.


CafePress Inc.
Definition of Non-GAAP Cash Contribution Margin from Continuing Operations
(In thousands)
(Unaudited)
     
  Three Months Ended December 31, Twelve Months Ended December 31,
  2016 2015 2016 2015
Net revenue as previously reported $43,727  100.0% $39,696  100.0% $102,208  100.0% $104,508  100.0%
Revision     996        2,617   
Net revenue as revised 43,727  100.0  40,692  100.0  102,208  100.0  107,125  100.0 
Cost of net revenue 26,920  61.6  23,856  58.6  60,406  59.1  63,069  60.3 
Gross profit as previously reported 16,807  38.4  15,840  39.9  41,802  40.9  41,439  39.7 
Revision     996  1.5      2,617  1.4 
Gross profit as revised 16,807  38.4  16,836  41.4  41,802  40.9  44,056  41.1 
Non-GAAP adjustments:                
Add: Stock-based compensation 4    40    49    163  0.2 
Add: Depreciation and amortization 406  0.9  771  1.9  1,926  1.9  3,065  2.9 
Less: Variable sales and marketing costs as previously reported (7,355) (16.8) (4,828) (12.2) (16,717) (16.4) (13,342) (12.8)
Revision     (996) (2.1)     (2,617) (2.1)
Less: Variable sales and marketing costs as revised (7,355) (16.8) (5,824) (14.3) (16,717) (16.4) (15,959) (14.9)
Contribution margin (from continuing operations) as previously reported 9,862  22.6  11,052  27.8  27,060  26.5  28,260  27.0 
Revision     771  1.3      3,065  2.2 
Cash contribution margin (from continuing operations) as revised $9,862  22.6% $11,823  29.1% $27,060  26.5% $31,325  29.2%
                             
* During 2016, we began using a non-GAAP financial measure called cash contribution margin in lieu of contribution margin, a non-GAAP financial measure that we used previously.  Cash contribution margin (a non-GAAP financial measure that we reconcile to "Gross profit" in our consolidated statements of operations) consists of gross profit plus stock-based compensation and depreciation and amortization included in cost of net revenue less variable sales and marketing expense.  In addition, variable sales and marketing expense includes platform fees paid to third-party websites selling our products.  Previously, these fees were presented as a reduction to net revenue when the fees should have been presented as sales and marketing expense.  Finally, our definition of variable sales and marketing expense was updated to include fees we pay third parties to manage our keyword advertising spend.  The prior year amounts were reclassified to conform to this presentation.
 


CafePress Inc.
User Metrics Disclosure
(Unaudited)
     
  Three Months Ended Twelve Months Ended
  December 31 December 31
  2016 2015 % Change 2016 2015 % Change
Orders 1,345  1,091  23.3% 3,088  2,884  7.1%
Average Order Value $32.42  $36.90  (12.1)% $33.06  $36.65  (9.8)%
                       


CafePress Inc.
Supplemental Selected Quarterly Data
(In thousands, except per share amounts)
(Unaudited)
 
During the year ended December 31, 2016, we revised our Consolidated Statement of Operations for the period ended December 31, 2015 to reflect the accounting for platform fees paid to third-party websites selling our products.  Previously, these fees were presented as a reduction to net revenue when the fees should have been presented as sales and marketing expense.  The net impact of the revision on our net revenue, gross profit, and operating expense is presented in the quarterly information below.  The revision, which we determined is not a material error, had no impact on the other items presented below.
  
 For the Three Months Ended,
 Mar 31,
 2016
 Jun 30,
 2016
 Sep 30,
 2016
 Dec 31,
 2016
Net revenue as previously reported$18,078  $19,841  $19,165  $43,727 
Revision441  463  493   
Net revenue as revised18,519  20,304  19,658  43,727 
Gross profit as previously reported7,435  8,219  7,944  16,807 
Revision441  463  493   
Gross profit as revised7,876  8,682  8,437  16,807 
Sales and marketing as previously reported4,612  4,320  4,114  8,724 
Revision441  463  493   
Sales and marketing as revised5,053  4,783  4,607  8,724 
Total operating expense as previously reported10,432  31,571  11,299  14,487 
Revision441  463  493   
Total operating expense as revised10,873  32,034  11,792  14,487 
Net (loss) income(2,981) (22,979) (3,413) 2,903 
Total net (loss) income per basic and diluted common share$(0.18) $(1.37) $(0.20) $0.17 
                


CafePress Inc.
Supplemental Selected Quarterly Data, Continued
(In thousands, except per share amounts)
(Unaudited)
   
  For the Three Months Ended,
  Mar 31,
 2015
 Jun 30,
 2015
 Sep 30,
 2015
 Dec 31,
 2015
Net revenue as previously reported $23,576  $21,764  $19,472  $39,696 
Revision 616  510  495  996 
Net revenue as revised 24,192  22,274  19,967  40,692 
Gross profit as previously reported 8,702  8,888  8,009  15,840 
Revision 616  510  495  996 
Gross profit as revised 9,318  9,398  8,504  16,836 
Sales and marketing as previously reported 5,416  4,195  4,146  6,728 
Revision 616  510  495  996 
Sales and marketing as revised 6,032  4,705  4,641  7,724 
Total operating expense as previously reported 11,760  10,707  10,100  15,067 
Revision 616  510  495  996 
Total operating expense as revised 12,376  11,217  10,595  16,063 
Net (loss) income from continuing operations (2,330) (1,074) (3,670) 811 
Income (loss) from discontinued operations, net of tax 14,512  (7,704) 1,610   
Net income (loss) 12,182  (8,778) (2,060) 811 
Net (loss) income per basic and diluted common share from continuing operations $(0.13) $(0.06) $(0.21) $0.05 
Net income (loss) per basic and diluted common share from discontinued operations $0.83  $(0.44) $0.09  $ 
Total net income (loss) per diluted common share $0.69  $(0.50) $(0.12) $0.05 
                 


CafePress Inc.
Reconciliation of GAAP Net Income (Loss) Non-GAAP Adjusted EBITDA
(In thousands)
(Unaudited)
 
  For the Three Months Ended,
  Mar 31,
 2016
 Jun 30,
 2016
 Sep 30,
 2016
 Dec 31,
 2016
Net income (loss) $(2,981) $(22,979) $(3,413) $2,903 
Discontinued operations, net of income taxes        
Net income (loss) from continuing operations (2,981) (22,979) (3,413) 2,903 
Non-GAAP adjustments:        
Interest and other (income) expense (14) 29  48  (587)
Provision (benefit) for income taxes (2) (402) 10  4 
Depreciation and amortization 1,108  1,032  1,039  1,077 
Stock-based compensation 278  468  444  417 
Impairment charges   20,899     
Restructuring costs     1,015  1,088 
Adjusted EBITDA* $(1,611) $(953) $(857) $4,902 
                 
  For the Three Months Ended,
  Mar 31,
 2015
 Jun 30,
 2015
 Sep 30,
 2015
 Dec 31,
 2015
Net income (loss) $12,182  $(8,778) $(2,060) $811 
Discontinued operations, net of income taxes  14,512   (7,704)  1,610    
Net income (loss) from continuing operations  (2,330)  (1,074)  (3,670)  811 
Non-GAAP adjustments:                
Interest and other (income) expense  (33)  (27)  58   (58)
Provision (benefit) for income taxes  (695)  (718)  1,521   20 
Depreciation and amortization  1,666   1,593   1,623   1,369 
Stock-based compensation  429   423   419   435 
Restructuring costs     526   4   781 
Adjusted EBITDA* $(963) $723  $(45) $4,146 
                 
* Adjusted EBITDA is a non-GAAP financial measure which we define as net income (loss) from continuing operations less interest and other income (expense), provision for (benefit from) income taxes, depreciation and amortization, stock-based compensation, impairment charges, and restructuring costs.
 


CafePress Inc.                          
Definition of Non-GAAP Cash Contribution Margin from Continuing Operations                     
(In thousands)                          
(Unaudited)                          
                             
During 2016, we began using a non-GAAP financial measure called cash contribution margin in lieu of contribution margin, a non-GAAP financial measure that we used previously.  Cash contribution margin (a non-GAAP financial measure that we reconcile to "Gross profit" in our consolidated statements of operations) consists of gross profit plus stock-based compensation and depreciation and amortization included in cost of net revenue less variable sales and marketing expense.  In addition, variable sales and marketing expense includes platform fees paid to third-party websites selling our products.  Previously, these fees were presented as a reduction to net revenue when the fees should have been presented as sales and marketing expense.  Finally, our definition of variable sales and marketing expense was updated to include fees we pay third parties to manage our keyword advertising spend.  The prior year amounts were reclassified to conform to this presentation.
                             
  For the Three Months Ended,
  Mar 31,
2016
 Jun 30,
2016
 Sep 30,
2016
 Dec 31,
2016
Net revenue as previously reported $18,078  100.0% $19,841  100.0% 19,165  100.0% $43,727  100.0%
Revision 441    463    493       
Net revenue as revised 18,519  100.0  20,304  100.0  19,658  100.0  43,727  100.0 
Cost of net revenue 10,643  57.5  11,622  57.2  11,221  57.1  26,920  61.6 
Gross profit as previously reported 7,435  41.1  8,219  41.4  7,944  41.5  16,807  38.4 
Revision 441  1.4  463  1.4  493  1.4     — 
Gross profit as revised 7,876  42.5  8,682  42.8  8,437  42.9  16,807  38.4 
Non-GAAP adjustments:                
Add: Stock-based compensation 24  0.1  12    9    4   
Add: Depreciation and amortization 560  3.1  501  2.4  459  2.4  406  1.0 
Less: Variable sales and marketing costs as previously reported (2,580) (14.3) (2,506) (12.6) (2,612) (13.6) (7,335) (16.8)
Revision (642) (3.1) (610) (2.7) (412) (1.8)    
Less: Variable sales and marketing costs as revised (3,222) (17.4) (3,116) (15.3) (3,024) (15.4) (7,335) (16.8)
Contribution margin (from continuing operations) as previously reported 4,879  27.0  5,725  28.9  5,341  27.9  9,862  22.6 
Revision 359  1.3  354  1.0  540  2.1     
Cash contribution margin (from continuing operations) as revised $5,238  28.3% $6,079  29.9% $5,881  29.9% $9,862  22.6%
                             
CafePress Inc.                          
Definition of Non-GAAP Cash Contribution Margin from Continuing Operations, Continued                    
(In thousands)                          
(Unaudited)                          
                             
  For the Three Months Ended,
  Mar 31,
2015
 Jun 30,
2015
 Sep 30,
2015
 Dec 31,
2015
Net revenue as previously reported $23,576  100.0% $21,764  100.0% 19,472  100.0% $39,696  100.0%
Revision 616    510    495    996   
Net revenue as revised 24,192  100.0  22,274  100.0  19,967  100.0  40,692  100.0 
Cost of net revenue 14,874  61.5  12,876  57.8  11,463  57.4  23,856  58.6 
Gross profit as previously reported 8,702  36.9  8,888  40.8  8,009  41.1  15,840  39.9 
Revision 616  1.6  510  1.4  495  1.5  996  1.5 
Gross profit as revised 9,318  38.5  9,398  42.2  8,504  42.6  16,836  41.4 
Non-GAAP adjustments:                
Add: Stock-based compensation 40  0.2  42  0.2  41  0.2  40  0.1 
Add: Depreciation and amortization 760  3.1  770  3.4  764  3.8  771  1.9 
Less: Variable sales and marketing costs as previously reported (3,474) (14.7) (2,521) (11.6) (2,519) (12.9) (4,828) (12.2)
Revision (616) (2.2) (510) (2.0) (495) (2.2) (996) (2.1)
Less: Variable sales and marketing costs as revised (4,090) (16.9) (3,031) (13.6) (3,014) (15.1) (5,824) (14.3)
Contribution Margin (from continuing operations) as previously reported 5,268  22.3  6,409  29.4  5,531  28.4  11,052  27.8 
Revision 760  1.6  770  2.8  764  3.1  771  1.3 
Contribution Margin (from continuing operations) as revised $6,028  24.9% $7,179  32.2% $6,295  31.5% $11,823  29.1%
 
CafePress Inc.
Media Relations:
pr@cafepress.com

Investor Relations:
The Blueshirt Group
Whitney Kukulka
415-489-2187
whitney@blueshirtgroup.com


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