bob marino - jefferies · forward-looking statements largely on its estimates of its financial...
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1 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners 1 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners
May 2013
2 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners
These slides and the accompanying oral presentation contain forward-looking statements. All statements other than statements of historical facts contained in these slides and the accompanying oral
presentation, including statements regarding CafePress’ (“CafePress” or the “Company”) future operations, future financial position, future revenue, projected expenses, opportunities, prospects and
plans and objectives of management are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intent,”
“may,” “might,” “plan,” “project,” “will,” “would,” “should,” “could,” “can,” “predict,” “potential,” “continue,” “objective,” or the negative of these terms or similar expressions. The Company has based these
forward-looking statements largely on its estimates of its financial results and its current expectations and projections about future events and financial trends that it believes may affect its financial
condition, results of operations, business strategy, short term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks,
uncertainties and assumptions, including, but not limited to, our operation in an emerging market and our relatively new and evolving business model, our ability to evaluate our current and future
prospects, our ability to generate additional revenue on a cost-effective basis, our ability to attract and retain advertisers, our ability to increase our customer base, our ability to continue operating under
existing laws and a number of other factors outside of our control. These risks and uncertainties may also include those described under the heading “Risk Factors” and elsewhere in the Company’s
periodic reports on file with the Securities and Exchange Commission (the “SEC”). Moreover, the Company operates in a very competitive and rapidly changing environment. New risks emerge from
time to time. It is not possible for Company management to predict all risks, nor can the Company assess the impact of all factors on its business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in any forward-looking statements the Company may make. In light of these risks, uncertainties and assumptions, the forward-
looking events and circumstances discussed in these slides and the accompanying oral presentation may not occur and actual results could differ materially and adversely from those anticipated or
implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, the Company cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking
statements will be achieved or occur. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Any forward-
looking statement speaks only as of its date. Except as required by law, the Company undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this
presentation, to conform these statements to actual results or to changes in the Company’s expectations.
This presentation includes Adjusted EBITDA, a non-GAAP measure that the Company’s management uses to assess operating performance. The Company uses Adjusted EBITDA as a key
performance measure because it believes that it facilitates operating performance comparisons from period to period by excluding potential differences caused by variations in capital structures
(affecting net interest expense), tax positions (such as the impact on periods of changes in effective tax rates or fluctuations in permanent differences or discrete quarterly items), the impact of
depreciation and amortization, amortization of intangible assets, acquisition-related costs, stock-based compensation and impairment charges. Because Adjusted EBITDA facilitates internal
comparisons of our historical operating performance on a more consistent basis, the Company also uses Adjusted EBITDA for business planning purposes and to incentivize and compensate its
management personnel.
The Company’s use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider this measure in isolation or as a substitute for analysis of our results as reported under
GAAP as the excluded items may have significant effects on our operating results and financial condition. When evaluating our performance, you should consider Adjusted EBITDA alongside other
financial performance measures, including various cash flow metrics, net income and our other GAAP results.
SAFE HARBOR
3 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners 3 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners
BOB MARINO CHIEF EXECUTIVE OFFICER
4 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners
Net Revenues
$52.5M
EBITDA $0.1M
Margin 37.4%
Orders 1.4 Million
FAST FACTS 7 brands
19 million members
500+ base goods
100,000 new designs/week (average)
400 million + unique products
3 million + shops
Q1 2013
HIGHLIGHTS
2
3
3
1 For CafePress.com only as of 12/31/12
3 As of 12/31/12
1
2 For CafePress.com Marketplace and Shops only; for the year ended 12/31/12
5 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners
A PERSONALIZED E-COMMERCE PLATFORM
PRIMAL NEED FOR SELF EXPRESSION
EXPLOSION OF
CONSUMER CHOICE
CUSTOMIZE ANY BASE
GOOD
MANUFACTURE TO A UNIT OF ONE
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LARGE AND EXPANDING
ADDRESSABLE MARKET
U.S. E-COMMERCE
$197 BILLION1
BACK END: CUSTOMIZATION TECHNOLOGY AND FULFILLMENT
FRONT END: EFFICIENT CUSTOMER ACQUISITION
CUSTOMIZED
CONSUMER DEMAND FOR CUSTOMIZATION
1 U.S. Online Retail Forecast, 2010 To 2015, Forrester Research, Inc., February 2011
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Examples
THE WORLD’S CUSTOMIZATION ENGINE
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Examples
THE WORLD’S CUSTOMIZATION ENGINE
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CREATE & BUY
MARKETPLACE SHOPS SELL BUY
PLATFORM
FIND
MARKETPLACE
DESIGN
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MARKETPLACE
NETWORK EFFECT
FINANCIAL LEVERAGE
REVENUE NETWORK AMPLIFIES GROWTH
GROSS MARGIN PRICING CONTROL & ELASTICITY
MARKETING EFFICIENCY LOW COST PER ORDER
OPERATING LEVERAGE LOW FIXED COSTS
BRANDS
OUR MEMBERS (M) UNIQUE PRODUCTS (M)
CONTENT
CROWD SOURCED CONTENT ENABLES LONG TAIL MARKETING
11 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners
CREATE & BUY
HOW IT WORKS WHO USES IT
Individuals
Groups
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CORPORATE SHOPS SMALL SHOPS
SHOPS
Feeds long tail marketing
Focus on Design Community
LEGACY FUTURE
Acquired EZ Prints in 2012
Drive own traffic
Launched CafePress Services in Q1 ‘13
Revenue from Shops Doubled in Q1 ‘13
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CONSUMER SATISFACTION
QUALITY
SPEED
PRICE
SERVICE
SELECTION
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3D SUBSTRATES
VARIABLE DATA PRINTING
QUALITY AT SCALE AND SPEED
OPERATIONS:
PROPRIETARY PRINT TECHNOLOGY
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Consolidating manufacturing to drive efficiency
Will impact margins in 2013 but lead to long-term margin expansion
OPERATIONS: CONSOLIDATION
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EXPAND BASE
GOODS INCREASE CONTENT
GROW OUR
BRANDS GROW CORP
SHOPS ENHANCE
EXPERIENCE
MULTIPLE GROWTH PATHS
17 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners 17 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners
MONICA JOHNSON CHIEF FINANCIAL OFFICER
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• Strong top line growth
• Demonstrated profitability
• Multiple revenue drivers
• Variable cost drivers
• ROI-driven customer acquisition
• Improving operating metrics
• Proprietary and innovative technology
• Low capex and inventory
• Consumer driven marketplace and create & buy
• Shops platform expands corporate and B2B DIVERSIFIED BUSINESS MODEL
DIVERSIFIED DRIVERS
COMPELLING ECONOMICS
CAPITAL EFFICIENCY
FINANCIAL HIGHLIGHTS
GROWTH & PROFITABILITY
19 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners
1 Excludes interest and other income (expense), provision for income taxes, depreciation and amortization, amortization of intangible assets,
acquisition-related costs, stock-based compensation and impairment charges
SCALING GROWTH
REVENUE
ADJUSTED EBITDA1
($ millions)
($ millions)
SCALE: $218mm 2012 revenue
GROWTH: Grew Revenue 32% YoY for Q1 ’13
Long track record of profitability
GROWTH & PROFITABILITY
20 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners
QUARTERLY GROWTH AND PROFITABILITY
REVENUE
ADJUSTED EBITDA1
($ millions)
1 Excludes interest and other income (expense), provision for income taxes, depreciation and amortization, amortization of intangible assets,
acquisition-related costs, stock-based compensation and impairment charges
21 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners
COST OF GOODS
Materials
Shipping
Labor
Commissions
Fixed Costs
OPERATING EXPENSE
Variable Marketing
SG&A
Customer Acquisition
Merchandise
Partnerships
Customer Lifetime Value
Macro Drivers
REVENUE DRIVERS COST DRIVERS
LEVERS ALLOW DAILY CONTROL AND VISIBILITY INTO BUSINESS
DIVERSIFIED DRIVERS
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($ millions)
WEBSITE
MANUFACTURING
CAPITAL EFFICIENCY
Positive free cash flow Generated $10M operating cash flow in 2012
ANNUAL CAPEX – Averages 5% of revenue
23 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners 23 All content copyright © 2013 CafePress. All rights reserved. CafePress is a registered trademarks of CafePress Inc. All other trademarks noted herein are those of their respective owners
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