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VistaPrint Limited (VPRT)

F4Q09 (Qtr End 06/30/09) Earnings Call Transcript

July 30, 2009 5:15 pm ET


Robert Keane – President and CEO

Mike Giannetto – EVP and CFO


Jennifer Watson – Goldman Sachs

Jim Friedland – Cowen and Company

Mark Mahaney – Citigroup

Youssef Squali – Jefferies & Company

Mark May – Needham & Company

Mitch Bartlett – Craig-Hallum Capital



Ladies and gentlemen, welcome to the VistaPrint 2009 fourth quarter and fiscal year Q&A earnings conference call. My name is Jeremy and I will be your coordinator for today. This call is being hosted by Robert Keane, President and CEO, and Mike Giannetto, Executive Vice President and CFO.

Before we take the first call, as noted in the Safe Harbor statement at the beginning of the earnings presentation, comments may include forward-looking statements, including statements regarding revenue and earnings guidance, and actual results may differ materially. Risks that could impact those statements are described in the documents that are periodically filed with the Securities and Exchange Commission.

Now, we'll proceed to the first call.

Question-and-Answer Session


(Operator instructions) And ladies and gentlemen, your first question comes from the line of Jennifer Watson with Goldman Sachs. You may proceed.

Jennifer WatsonGoldman Sachs

Great. Thank you so much. Quick question on the investments or the extension to the home and family segment, can you talk about what kind of products you would be targeting there? And from my perspective, it sounds though that there is probably a pretty competitive area with minimal pricing power. Can you just talk about what you can bring there and how that might impact the financial statements?

Robert Keane

Sure. Jennifer, this is Robert speaking. One, we have had a very strong growth in home and family products over the last four or five years and it was above 15% of the revenues in the last fiscal year, so 15% of over $500 million, its already a substantial business. We are very happy with the gross margins and the bottom line margins that we are getting on those products and we believe if we have a lot of more, it would be very good for the business.

We think one of the big reasons we can be very competitive in the business is our ability to have such high scale in the manufacturing and where we get very, very cost competitive products. So for years, we have had things like holiday cards or in the recent year’s calendars which were used a lot by defenders, but are also used by individual consumers. And as we’ve gotten into other products like T-shirts or mouse pads or signage, all of those have actually, for instance banners, each one of those maybe used by small businesses, but we found a significant up tick by consumers.

And so, we do see a proliferation of additional products, but they won’t be drastically different than what we’ve been doing in the past. We see as more of the same thing. We are happy with the margins there, we are happy with our competitive advantages. So one last thing I would say in addition to the manufacturing efficiencies we have just because of scale, one big advantage we have is that we have business which really operates year-round. Many of the people who operate in the consumer market are very, very dependent on the December quarter and a lot of the amortization has to happen over what is really a very short period of time whereas we have a very significant amount of business year-round and we think that adds besides just the pure scale advantages, the diminished seasonality is advantageous.

Jennifer WatsonGoldman Sachs

Great. Thank you.

Robert Keane

Thank you.


And your next question will be from the line of Jim Friedland with Cowen and Company. You may proceed.

Jim FriedlandCowen and Company

Thanks. A quick follow-up question on the home products category just to ask straight and direct, you allow people to upload photos today, sometimes with an incremental charge sometimes without, would you have some sort of free photo storage and sharing component here or is it really just to go down the path that you were on and then I have a quick follow-up on the new Australia facility.

Robert Keane

Okay, Jim. I would say, first of all, I want to be too specific on future products and that being said, I will give a broad statement about our philosophies that the model of storing photos is changing very quickly. There is a proliferation of great and highly competitive free storage sites out in the world on the Internet, and rather than trying to create yet another one, we would try to leverage off with those, but I don’t want to get too much more specific than that.

Jim FriedlandCowen and Company

Okay. Great. And then the second answer – the second question relating to the build out in Australia, two quick questions, are you planning to do local marketing? Have that on the ground there when you launched that facility? And then the second, can you tell us in fiscal 2009 what Australia, Japan, New Zealand represented as a percentage of total revenues?

Mike Giannetto

Jim, it's Mike. The intent is to have local marketing on the ground in Australia in addition to the manufacturing facility we will be constructing there. In terms of the office and the manufacturing site, we would expect it to be up and running in our fiscal 2011.

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