Stock Update (NASDAQ:PRSS): CafePress Inc Reports Results for Second Quarter 2015 Following Successful Streamlining of its Business


CafePress Inc (NASDAQ:PRSS) reported financial results for the three months ended June 30, 2015.CafePress reported positive Adjusted EBITDA of $0.7 million, the first EBITDA positive non-peak quarter in more than two years, and contribution margin of 29% representing a year-over-year improvement of over 1,300 basis points. The Company also reported a GAAP net loss from continuing operations of $(1.1) million and gross profit margin of 41%. Additionally, CafePress repurchased approximately 490,000 shares of common stock within the period.

Management Commentary

“During the second quarter, CafePress drove a healthier contribution margin and positive Adjusted EBITDA, delivering on our commitment to restore profitability. We are unlocking the strength of the core CafePress.com business, which we believe had been obscured by the complexity of the consolidated company. The core business has quickly surpassed the bottom line results of the more complex company that we had last year and we are very excited for the future,” said Fred Durham, Chief Executive Officer.

Second Quarter 2015 Financial Highlights1

  • Net revenues totaled $21.8 million, compared to $29.1 million in the second quarter of 2014.
  • Gross profit margin was 40.8% of net revenues, compared to 35.6% in the second quarter of 2014.
  • GAAP net loss from continuing operations was $(1.1) million, or $(0.06) per diluted share, compared to a net loss of $(4.2) million, or $(0.24) per diluted share, in the second quarter of 2014.
  • GAAP net loss from discontinued operations was $(7.7) million, or $(0.44) per diluted share, compared to a net loss of $(0.1) million, or $(0.01)per diluted share, in the second quarter of 2014.
  • Non-GAAP Adjusted EBITDA from continuing operations was $0.7 million, compared to Adjusted EBITDA of $(1.8) million in the second quarter of 2014.
  • Non-GAAP Contribution margin was 29% of net revenues, compared to 16% in the second quarter of 2014.
  • Non-GAAP net loss from continuing operations was $(0.5) million, or $(0.03) per diluted share, compared to a non-GAAP net loss of $(2.4) million, or $(0.14) per diluted share in the second quarter of 2014.
  • At June 30, 2015, cash, cash equivalents, and short-term investments totaled $42.7 million.
  • Repurchased 489,187 shares of common stock for $2.3 million.

Second Quarter 2015 Operating Metrics

  • Average Order Size (AOS) was $36, flat to Q1 2015 and down 8% year-over-year.
  • Orders totaled 0.6 million, a 1% decline over Q1 2015 and 17% year-over-year decline.

The year-over-year decrease in order count in the second quarter was primarily driven by the shift in our marketing focus toward higher quality ROI channels. The year-over-year decrease in average order size is primarily due to an increase in volume of single-item orders through CafePress Services.

1Financial Highlights and Operating Metrics include the assets and liabilities related to the EZ Prints Business as held for sale and the results of their operations are reported in discontinued operations.

Intent to Divest EZ Prints Business

  • The Company has concluded that its EZ Prints white label and photo-fulfillment business (the “EZ Prints Business”) is not core to the CafePressstrategy and is taking steps to divest it.
  • The accompanying financial statements reflect the results of the EZ Prints business as discontinued operations and its assets and liabilities as held for sale.
  • An impairment charge of approximately $7.3 million was recorded based on deal terms under consideration.
  • The divestiture is expected to be completed during the third quarter of 2015. (Original Source)

Shares of CafePress opened today at $4.45 and are currently trading down at $4.44. PRSS has a 1-year high of $5.36 and a 1-year low of $1.95. The stock’s 50-day moving average is $4.43 and its 200-day moving average is $3.96.

On the ratings front, Cantor Fitzgerald analyst Youssef Squali maintained a Hold rating on PRSS, with a price target of $4, in a report issued on May 13. The current price target represents a potential downside of 9.9% from where the stock is currently trading. According to TipRanks.com, Squali has a total average return of 19.2%, a 61.2% success rate, and is ranked #24 out of 3734 analysts.

CafePress Inc provides e-commerce platform which enables customers to create, buy and sell a wide variety of customized and personalized products.