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Shutterfly Announces Third Quarter 2017 Financial Results

REDWOOD CITY, Calif.--(BUSINESS WIRE)-- Shutterfly, Inc. (NASDAQ:SFLY), the leading online retailer and manufacturer of high-quality personalized products and services, today announced financial results for the third quarter ended September 30, 2017.

“Q3 marked an important milestone for the company as we substantially completed the platform consolidation and the restructuring announced earlier this year in February,” said Christopher North, President and Chief Executive Officer. “Now, Shutterfly, TinyPrints, and our Weddings business - representing the overwhelming majority of our Consumer customers - are on a single technical platform. Combined with our streamlined cost structure and sharpened focus, we’re in a strong position to execute against our growth plan going forward.”

“Our Shutterfly brand and Shutterfly Business Solutions performed well in Q3. We continue to make good progress against our areas of strategic focus while maintaining strong cost control, and also closed a $500 million credit facility. And we’re ready for the fourth quarter with a beautiful selection of holiday products for both Shutterfly and TinyPrints customers, and having significantly improved customer experiences both on the web and in our mobile app.”

Third Quarter 2017 Financial Highlights

Net revenues totaled $195.4 million, a 4% year-over-year increase. Consumer net revenues totaled $135.4 million, a 6% year-over-year decrease as anticipated, as we migrated TinyPrints customers to the Shutterfly Platform, and shut down Wedding Paper Divas in the quarter and MyPublisher earlier in the year. Shutterfly Business Solutions net revenues totaled $60.0 million, a 39% year-over-year increase.

GAAP Operating loss totaled $35.8 million and Net loss was $25.6 million or $0.78 per share.

On a proforma basis, which excludes restructuring charges of $3.3 million, our operating loss was $32.5 million, Adjusted EBITDA was $3.0 million, and Net loss was $24.0 million or $0.73 per share. Restructuring charges for the third quarter are primarily related to property and equipment, and employee costs. Restructuring costs on a year-to-date basis were $17.0 million. Approximately 30% of these restructuring costs are in cash, which is less than our initial forecast of 50%.

During the third quarter of 2017, we entered into a credit agreement which provides for a $300 million Delayed Draw Term Loan B and a $200 million revolving credit facility. The proceeds from the Term Loan B will finance the repayment of our $300 million convertible debt due in May 2018, which we expect to repay at maturity. Given the economic provisions of the delayed draw, we funded the $300 million term loan in the month of October. The term loan carries variable interest at LIBOR + 250 basis points with a seven-year tenor. Concurrent with the funding, we hedged $150 million of the notional value of the loan with interest rate swaps, resulting in a fixed interest rate of 4.27% for the hedged portion of the debt.

During the third quarter of 2017, we repurchased a total of 632 thousand shares for $30.0 million bringing our year-to-date repurchases to over 1.6 million shares. We anticipate repurchasing approximately $30.0 million in the fourth quarter of 2017, bringing total estimated share repurchases for 2017 to $110.0 million.

Earlier in the year, we announced that we would undertake a strategic review of BorrowLenses. We completed the process in the third quarter, and decided to retain and operate the business. BorrowLenses is growing at a modest growth rate and generates positive cash flow.

Business Outlook [1]

Full Year 2017:

For the full year we are maintaining our guidance for Net revenues and Adjusted EBITDA, raising our guidance for Operating Income and Earnings Per Share, and decreasing our guidance for capital expenditures.

  • Net revenues to range from $1.135 billion to $1.165 billion[2]
  • Gross profit margin to range from 48.0% to 49.0% of net revenues
  • Operating income to range from $59.0 million to $79.0 million
  • Effective tax rate of 37.5%
  • Net income per share to range from $0.60 to $0.95
  • Weighted average shares of approximately 34.2 million
  • Adjusted EBITDA to range from $210.0 million to $230.0 million
  • Capital expenditures to be approximately $70.0 million

Fourth Quarter 2017:

  • Net revenues to range from $538.0 million to $568.0 million
  • Gross profit margin to range from 58.0% to 60.0% of net revenues
  • Operating income to range from $151.5 million to $171.5 million
  • Effective tax rate of 39.0%
  • Net income per share to range from $2.60 to $3.00
  • Weighted average shares of approximately 33.4 million
  • Adjusted EBITDA to range from $191.5 million to $211.5 million

[1] Excludes restructuring charges as well as any costs related to refinancing our convertible debt and capital lease termination charges of $8.1 million.
[2] In 2017, net revenues from SBS segment are expected to increase 20% over 2016.

Notes to the Third Quarter 2017 Financial Results and Operating Metrics and 2017 Business Outlook

Adjusted EBITDA is a non-GAAP financial measure that the Company defines as earnings before interest, taxes, depreciation, amortization, stock-based compensation, capital lease termination, and restructuring.

Adjusted EBITDA minus capital expenditures is a non-GAAP financial measure that the Company defines as adjusted EBITDA less purchases of property, plant, and equipment and capitalization of software development costs.

Consumer segment includes net revenues from stationery and greeting cards, photo books, calendars and photo-based merchandise, photo prints, and the related shipping revenues and rental revenue. Consumer also includes net revenues from advertising and sponsorship programs.

Shutterfly Business Solutions (SBS) includes net revenues primarily from variable, four-color direct marketing collateral manufactured and fulfilled for business customers.

Average Order Value (AOV) is defined as total net revenues (excluding SBS) divided by total orders.

The foregoing financial guidance replaces any of the Company’s previously issued financial guidance which should no longer be relied upon.

Third Quarter Conference Call

Management will review the third quarter 2017 financial results and its expectations for the fourth quarter and full year 2017 on a conference call on Tuesday, October 24, 2017 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). To listen to the call and view the accompanying slides, please visit http://www.shutterflyinc.com. In the Investor Relations area, click on the link provided for the webcast, or dial (888) 243-4451 or (412) 542-4135, and ask to be to be joined into the Shutterfly call. The webcast will be archived and available at http://www.shutterflyinc.com in the Investor Relations section. A replay of the conference call will be available through Tuesday, November 7, 2017. To hear the replay, please dial (877) 344-7529 or (412) 317-0088, and enter access code 10112161.

Non-GAAP Financial Information

This press release contains non-GAAP financial measures. Tables are provided at the end of this press release that reconcile the non-GAAP financial measures that the Company uses to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include non-GAAP net income (loss) and net income (loss) per share, adjusted EBITDA, and adjusted EBITDA minus capital expenditures. The method the Company uses to produce non-GAAP financial measures is not computed according to GAAP and may differ from methods used by other companies.

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 gross margins, operating income (loss), or net income (loss) determined in accordance with GAAP. For more information, please see Shutterfly's SEC Filings, including the most recent Form 10-K and Form 10-Q, which are available on the Securities and Exchange Commission's Web site at www.sec.gov.

Notice Regarding Forward-Looking Statements

This media release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties. These forward-looking statements include statements regarding our expected positioning for future growth, our readiness for the all-important fourth quarter and for the full year 2017, our anticipated share repurchase levels and statements about historical results that may suggest trends for our business. You can identify these statements by the use of terminology such as “guidance”, “believe”, “expect”, “will”, “should,” “could”, “estimate”, “anticipate” or similar forward-looking terms. You should not rely on these forward-looking statements as they involve risks and uncertainties that may cause actual results to vary materially from the forward-looking statements. Factors that might contribute to such differences include, among others, decreased consumer discretionary spending as a result of general economic conditions; our ability to expand our customer base and increase sales to existing customers; our ability to meet production requirements; our ability to retain and hire necessary employees, including seasonal personnel, and appropriately staff our operations; the impact of seasonality on our business; our ability to develop innovative, new products and services on a timely and cost-effective basis; failure to realize the anticipated benefits of our 2017 restructuring activities; consumer acceptance of our products and services; our ability to develop additional adjacent lines of business; unforeseen changes in expense levels; and competition and the pricing strategies of our competitors, which could lead to pricing pressure. For more information regarding the risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, as well as risks relating to our business in general, we refer you to the “Risk Factors” section of our SEC filings, including our most recent Form 10-K and 10-Q, which are available on the Securities and Exchange Commission’s Web site at www.sec.gov. These forward-looking statements are based on current expectations and the company assumes no obligation to update this information.

About Shutterfly, Inc.

Shutterfly, Inc. is the leading online retailer and manufacturer of high-quality personalized products and services. Founded in 1999, the Shutterfly, Inc. brands includes Shutterfly, where your photos come to life in photo books, gifts, and cards and stationery - with premium offerings in its Tiny Prints boutique - as well as wedding invitations and stationery for every step of the planning process; BorrowLenses, the premier online marketplace for photographic and video equipment rentals; and GrooveBook, an iPhone and Android app and subscription service that prints up to 100 mobile phone photos in a GrooveBook and mails it to customers every month. For more information about Shutterfly, Inc. (SFLY), visit www.shutterflyinc.com.

Shutterfly, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Net revenues $ 195,443 $ 187,328 $ 596,447 $ 572,998
Cost of net revenues 131,108 117,754 365,432 336,069
Restructuring 39 1,475
Gross profit 64,296 69,574 229,540 236,929
Operating expenses:
Technology and development 39,614 43,284 124,968 122,866
Sales and marketing 33,331 41,903 119,205 135,284
General and administrative 23,894 26,181 79,200 83,462
Capital lease termination 8,098
Restructuring 3,278 15,491
Total operating expenses 100,117 111,368 346,962 341,612
Loss from operations (35,821 ) (41,794 ) (117,422 ) (104,683 )
Interest expense (6,699 ) (5,726 ) (18,617 ) (17,062 )
Interest and other income, net 253 130 687 379
Loss before income taxes (42,267 ) (47,390 ) (135,352 ) (121,366 )
Benefit from income taxes 16,660 18,235 53,713 46,290
Net loss $ (25,607 ) $ (29,155 ) $ (81,639 ) $ (75,076 )
Net loss per share - basic and diluted $ (0.78 ) $ (0.86 ) $ (2.45 ) $ (2.19 )
Weighted-average shares outstanding - basic and diluted 32,878 33,932 33,363 34,235
Stock-based compensation is allocated as follows:
Cost of net revenues $ 1,041 $ 1,131 $ 3,284 $ 3,436
Technology and development 2,512 2,725 7,388 5,696
Sales and marketing 2,864 3,664 9,017 11,697
General and administrative 4,319 4,694 13,021 12,459
Restructuring 814
$ 10,736 $ 12,214 $ 33,524 $ 33,288
Depreciation and amortization is allocated as follows:
Cost of net revenues $ 14,681 $ 14,063 $ 44,733 $ 41,447
Technology and development 6,634 8,184 21,522 25,007
Sales and marketing 2,484 3,174 8,271 11,582
General and administrative 1,016 2,166 3,611 7,022
Restructuring 665 5,999
$ 25,480 $ 27,587 $ 84,136 $ 85,058
Shutterfly, Inc.
Consolidated Balance Sheets
(In thousands, except par value amounts)
(Unaudited)
September 30, 2017 December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents $ 55,959 $ 289,224
Short-term investments 44,977 26,352
Accounts receivable, net 61,468 57,365
Inventories 12,057 11,751
Prepaid expenses and other current assets 81,322 48,084
Total current assets 255,783 432,776
Long-term investments 11,739 14,479
Property and equipment, net 269,145 284,110
Intangible assets, net 32,544 43,420
Goodwill 408,975 408,975
Other assets 28,751 11,816
Total assets $ 1,006,937 $ 1,195,576
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Convertible senior notes, current $ 290,157 $
Accounts payable 25,098 58,790
Accrued liabilities 90,596 138,869
Deferred revenue, current portion 22,794 22,929
Total current liabilities 428,645 220,588
Convertible senior notes, net 278,792
Other liabilities 121,522 137,035
Total liabilities 550,167 636,415
Stockholders’ equity:
Common stock, $0.0001 par value; 100,000 shares authorized; 32,798 and 33,637 shares issued and outstanding on September 30, 2017 and December 31, 2016, respectively 3 3
Additional paid-in capital 985,098 949,864
Accumulated other comprehensive income (loss) 828 (32 )
Accumulated deficit (529,159 ) (390,674 )
Total stockholders' equity 456,770 559,161
Total liabilities and stockholders' equity $ 1,006,937 $ 1,195,576
Shutterfly, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2017 2016
Cash flows from operating activities:
Net loss $ (81,639 ) $ (75,076 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 66,367 69,314
Amortization of intangible assets 11,770 15,744
Amortization of debt discount and issuance costs 11,365 10,747
Stock-based compensation 32,710 33,288
Loss on disposal of property and equipment 705 378
Deferred income taxes (8,607 ) 5,786
Tax benefit from stock-based compensation 263
Excess tax benefits from stock-based compensation (886 )
Restructuring 11,636
Changes in operating assets and liabilities:
Accounts receivable (4,103 ) 10,463
Inventories (1,782 ) 2,115
Prepaid expenses and other assets (34,064 ) (61,113 )
Accounts payable (35,819 ) (15,105 )
Accrued and other liabilities (49,198 ) (66,493 )
Net cash used in operating activities (80,659 ) (70,575 )
Cash flows from investing activities:
Purchases of property and equipment (22,960 ) (43,733 )
Capitalization of software and website development costs (25,977 ) (27,136 )
Purchases of investments (44,381 ) (21,891 )
Proceeds from the maturities of investments 28,456 25,070
Proceeds from sale of property and equipment 21,232 14,071
Net cash used in investing activities (43,630 ) (53,619 )
Cash flows from financing activities:
Proceeds from issuance of common stock upon exercise of stock options 626 1,935
Repurchases of common stock (80,000 ) (90,837 )
Excess tax benefits from stock-based compensation 886
Principal payments of capital lease and financing obligations (24,813 ) (15,128 )
Payment for contingent consideration liabilities (1,313 )
Payment of credit agreement issuance costs (4,789 )
Net cash used in financing activities (108,976 ) (104,457 )
Net decrease in cash and cash equivalents (233,265 ) (228,651 )
Cash and cash equivalents, beginning of period 289,224 288,863
Cash and cash equivalents, end of period $ 55,959 $ 60,212
Supplemental schedule of non-cash investing / financing activities:
Net increase (decrease) in accrued purchases of property and equipment $ 4,263 $ (1,274 )
Net decrease in accrued capitalized software and website development costs (161 ) (97 )
Stock-based compensation capitalized with software and website development costs 1,084 1,322
Property and equipment acquired under capital leases 18,224 23,946
Shutterfly, Inc.
Consumer Metrics Disclosure
Three Months Ended
September 30,
2017 [2] 2016
Consumer Metrics
Customers 2,969,451 3,150,894
year-over-year change (6 )%
Orders 4,861,262 5,394,902
year-over-year change (10 )%
Average order value [1] $27.86 $26.71
year-over-year change 4 %
[1] Average order value excludes Shutterfly Business Solutions revenue.
[2] In the third quarter of 2017, customers and orders decreased over the prior year, primarily due to the platform consolidation.
Shutterfly, Inc.
Segment Disclosure
(In thousands)
(Unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Consumer
Net revenues $ 135,418 $ 144,074 $ 475,153 $ 476,072
Cost of net revenues 81,439 84,825 263,345 256,438
Restructuring 39 1,475
Gross profit

$

53,940

$

59,249

$

210,333

$

219,634

Consumer gross profit margin 39.8 % 41.1 % 44.3 % 46.1 %
Shutterfly Business Solutions (SBS)
Net revenues

$

60,025

$

43,254

$

121,294

$

96,926

Cost of net revenues 47,520 30,389 95,256 71,909
Gross profit

$

12,505

$

12,865

$

26,038

$

25,017

SBS gross profit margin 20.8 % 29.7 % 21.5 % 25.8 %
Corporate [1]
Net revenues

$

$

$

$

Cost of net revenues 2,149 2,540 6,831 7,722
Gross profit

$

(2,149 )

$

(2,540 )

$

(6,831 )

$

(7,722 )
Consolidated
Net revenues

$

195,443

$

187,328

$

596,447

$

572,998

Cost of net revenues 131,108 117,754 365,432 336,069
Restructuring 39 1,475
Gross profit $ 64,296 $ 69,574 $ 229,540 $ 236,929
Gross profit margin 32.9 % 37.1 % 38.5 % 41.3 %
Gross profit margin excluding restructuring 32.9 % 37.1 % 38.7 % 41.3 %
[1] Corporate category includes activities that are not directly attributable or allocable to a specific segment. This category consists of stock-based compensation and amortization of intangible assets.
Shutterfly, Inc.
Restructuring
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, 2017 September 30, 2017
Restructuring:
Property and equipment $ 1,798 $ 8,414
Employee costs 697 5,851
Inventory 39 1,475
Other costs 783 1,226
Total $ 3,317 $ 16,966
Shutterfly, Inc.
Reconciliation of Net Income (Loss) to Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) per Share
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Year Ended
Mar. 31, Jun. 30, Sep. 30, Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31,
2016 2016 2016 2016 2017 2017 2017 2016
GAAP net income (loss) $ (29,436 ) $ (16,485 ) $ (29,155 ) $ 90,982 $ (33,194 ) $ (22,838 ) $ (25,607 ) $ 15,906
Capital lease termination 8,098
Restructuring 8,976 4,673 3,317
Tax benefit impact of restructuring and capital lease termination charges (3,948 ) (4,829 ) (1,669 )
Non-GAAP net income (loss) $ (29,436 ) $ (16,485 ) $ (29,155 ) $ 90,982 $ (28,166 ) $ (14,896 ) $ (23,959 ) $ 15,906
GAAP diluted shares outstanding 34,596 34,177 33,932 34,625 33,712 33,579 32,878 35,190
Non-GAAP diluted shares outstanding 34,596 34,177 33,932 34,625 33,712 33,579 32,878 35,190
GAAP net income (loss) per share $ (0.85 ) $ (0.48 ) $ (0.86 ) $ 2.63 $ (0.98 ) $ (0.68 ) $ (0.78 ) $ 0.45
Non-GAAP net income (loss) per share $ (0.85 ) $ (0.48 ) $ (0.86 ) $ 2.63 $ (0.84 ) $ (0.44 ) $ (0.73 ) $ 0.45
Shutterfly, Inc.
Reconciliation of Net Income (Loss) to Non-GAAP Adjusted EBITDA
(In thousands)
(Unaudited)

Three Months Ended Year Ended
Mar. 31, Jun. 30, Sep. 30, Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31,
2016 2016 2016 2016 2017 2017 2017 2016
GAAP net income (loss) $ (29,436 ) $ (16,485 ) $ (29,155 ) $ 90,982 $ (33,194 ) $ (22,838 ) $ (25,607 ) $ 15,906
Interest expense 5,675 5,661 5,726 5,961 5,964 5,955 6,699 23,023
Interest and other income, net (121 ) (128 ) (130 ) (122 ) (189 ) (244 ) (253 ) (501 )
Tax (benefit) provision (17,932 ) (10,123 ) (18,235 ) 56,972 (22,341 ) (14,713 ) (16,660 ) 10,682
Depreciation and amortization 29,114 28,357 27,587 28,593 27,364 25,957 24,815 113,651
Stock-based compensation 10,150 10,924 12,214 12,404 11,505 10,469 10,736 45,692
Capital lease termination 8,098
Restructuring 8,976 4,673 3,317
Non-GAAP Adjusted EBITDA $ (2,550 ) $ 18,206 $ (1,993 ) $ 194,790 $ (1,915 ) $ 17,357 $ 3,047 $ 208,453
Shutterfly, Inc.
Reconciliation of Cash Flow from Operating Activities to Non-GAAP Adjusted EBITDA and Adjusted EBITDA minus Capital Expenditures
(In thousands)
(Unaudited)
Three Months Ended Year Ended
Mar. 31, Jun. 30, Sep. 30, Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31,
2016 [2] 2016 2016 2016 2017 2017 2017 2016
Net cash provided by (used in) operating activities $ (82,610 ) $ 16,916 $ (4,881 ) $ 263,998 $ (72,386 ) $ 13,672 $ (21,945 ) $ 193,423
Interest expense 5,675 5,661 5,726 5,961 5,964 5,955 6,699 23,023
Interest and other income, net (121 ) (128 ) (130 ) (122 ) (189 ) (244 ) (253 ) (501 )
Tax (benefit) provision (17,932 ) (10,123 ) (18,235 ) 56,972 (22,341 ) (14,713 ) (16,660 ) 10,682
Changes in operating assets and liabilities 98,604 2,374 29,155 (126,361 ) 92,194 (2,565 ) 35,336 3,772
Other adjustments (6,166 ) 3,506 (13,628 ) (5,658 ) (6,265 ) 5,377 (2,575 ) (21,946 )
Capital lease termination 8,098
Cash restructuring 1,108 1,777 2,445
Non-GAAP Adjusted EBITDA (2,550 ) 18,206 (1,993 ) 194,790 (1,915 ) 17,357 3,047 208,453
Less: Purchases of property and equipment (5,497 ) (22,005 ) (14,957 ) (9,792 ) (1,669 ) (7,252 ) (18,302 ) (52,251 )
Less: Capitalized technology & development costs (8,168 ) (10,052 ) (8,819 ) (6,065 ) (7,726 ) (9,602 ) (8,488 ) (33,104 )
Add: Capex adjustments [1] 9,827 9,827
Adjusted EBITDA minus capital expenditures $ (16,215 ) $ (4,024 ) $ (25,769 ) $ 178,933 $ (11,310 ) $ 503 $ (23,743 ) $ 132,925
[1] In the second quarter of 2016, the Company acquired and immediately sold $9.8 million of printers.
[2]

The Company reclassified an immaterial contingent consideration payment (to GrooveBook Founders) in the first quarter of 2016 between operating and financing activities within the cash flow statement.

Shutterfly, Inc.
Reconciliation of Forward-Looking Guidance for Non-GAAP Financial Measures
(In millions, except per share amounts)
Forward-Looking Guidance [1]
Three Months Ending Twelve Months Ending
December 31, 2017 December 31, 2017
Low High Low High
Net revenues [2] $ 538.0 $ 568.0 $ 1,135.0 $ 1,165.0
Gross profit margin 58.0 % 60.0 % 48.0 % 49.0 %
Operating income $ 151.5 $ 171.5 $ 59.0 $ 79.0
Operating margin 28.1 % 30.2 % 5.2 % 6.8 %
Operating income $ 151.5 $ 171.5 $ 59.0 $ 79.0
Stock-based compensation $ 13.3 $ 13.3 $ 46.0 $ 46.0
Amortization of intangible assets $ 3.1 $ 3.1 $ 15.0 $ 15.0
Depreciation $ 23.6 $ 23.6 $ 90.0 $ 90.0
Adjusted EBITDA $ 191.5 $ 211.5 $ 210.0 $ 230.0
Adjusted EBITDA margin 35.6 % 37.2 % 18.5 % 19.7 %
Capital expenditures $ 70.0 $ 70.0
Capital expenditures as % of net revenues 6.2 % 6.0 %
Adjusted EBITDA minus capital expenditures $ 140.0 $ 160.0
Adjusted EBITDA minus capital expenditures as % of net revenues 12.3 % 13.7 %
Tax rate 39.0 % 39.0 % 37.5 % 37.5 %
Net income per share
Diluted $ 2.60 $ 3.00 $ 0.60 $ 0.95
Weighted average shares
Diluted 33.4 33.4 34.2 34.2
[1] Excludes restructuring charges as well as any costs related to refinancing our convertible debt and capital lease termination charges of $8.1 million.
[2] In 2017, net revenues from SBS Segment to increase 20% over 2016.

View source version on businesswire.com: http://www.businesswire.com/news/home/20171024006596/en/

Shutterfly, Inc.
Investor Relations:
Shawn Tabak, 650-610-6026
stabak@shutterfly.com
or
Media Relations:
Nicole Stier, 650-610-6013
nstier@shutterfly.com

Source: Shutterfly, Inc.