GSI Commerce Inc. reported income from operations rose 10.5% to $47 million on a 9.9% increase in net revenues to $430.2 million in the fourth quarter ended Jan. 1. The company, which provides e-commerce, marketing and fulfillment services to national retailers and brands including Dick’s Sporting Goods, Timberland and adidas, said net income was $23.6 million, or 38 cents per diluted share, compared to net income of $23.1 million or 45 cents per diluted share.
For the year, income from operations swung from a loss of $10.3 million to a gain of $10.3 million on net revenues of $1.0 billion, up from $966.9 million in the prior fiscal year. That resulted in a net loss of $11.0 million, or 21 cents per share after depreciation, amortization and stock based compensation and other non-cash expenses, compared to a net loss of $23.0 million, or 49 cents per share a year earlier. Cash flow from operating activites rose to $140.2 million from $96.0 million, produing free cash flor of $97.2 million for the year, up from $38.8 million.
Our strong fourth quarter capped a remarkable years performance for the company as we grew our 2009 non-GAAP income from operations 30 percent to $106.4 million and we achieved free cash flow of $97.2 million, meaningfully exceeding the average analyst expectation of $54.6 million, said Michael G. Rubin, chairman, president and CEO of GSI. Our results reflect the secular growth of e-commerce and interactive marketing, the continued success of our proven business model and our excellent execution. I am confident in the overall strength of our business, the industry and the opportunities for continued growth in 2010 and beyond, supported by solid quarter to date trends.
The company provided the following guidance for fiscal 2010 first quarter:
- Net revenues are expected to be $260.0 million.
- Loss from operations is expected to be $19.5 million.
- Non-GAAP income from operations, which does not include depreciation, amortization, stock based compensation and other expenses, is expected to be $10.0 million.
The company provides the following guidance for fiscal year 2010:
- Income from operations is expected to be $21.4 million.
- Non-GAAP income from operations is expected to be $135.0 million. This compares to the previous comfort level expressed by the company of $130.0 million and includes start up expenses for a new business in the companys consumer engagement segment.
- Capital expenditures are expected to be approximately $60.0 million.
| GSI COMMERCE, INC. AND SUBSIDIARIES | ||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||
| January 3, | January 2, | January 3, | January 2, | |||||||||||||||
| 2009 (1)(2) | 2010 | 2009 | 2010 | |||||||||||||||
| Revenues: | ||||||||||||||||||
| Net revenues from product sales | $ | 244,759 | $ | 254,099 | $ | 577,073 | $ | 542,249 | ||||||||||
| Service fee revenues | 146,621 | 176,149 | 389,853 | 461,966 | ||||||||||||||
| Net revenues | 391,380 | 430,248 | 966,926 | 1,004,215 | ||||||||||||||
| Costs and expenses: | ||||||||||||||||||
| Cost of revenues from product sales | 168,304 | 181,259 | 405,254 | 398,604 | ||||||||||||||
| Marketing | 30,141 | 27,829 | 70,282 | 54,831 | ||||||||||||||
| Account management and operations, inclusive of $3,301 | ||||||||||||||||||
| $2,344, $7,505 and $9,028 of stock-based compensation | 84,599 | 96,101 | 260,325 | 273,070 | ||||||||||||||
| Product development, inclusive of $2,115, $1,897, $4,118 | ||||||||||||||||||
| and $5,740 of stock-based compensation | 30,637 | 35,305 | 104,208 | 120,176 | ||||||||||||||
| 24_4098″> General and administrative, inclusive of $440, $1,799, | ||||||||||||||||||
| $7,780 and $9,994 of stock-based compensation | 16,527 | 24,753 | 68,964 | 82,922 | ||||||||||||||
| Depreciation and amortization | 18,650 | 17,060 | 68,153 | 63,395 | ||||||||||||||
| Changes in fair value of deferred acquisition payments | – | 951 | – | 951 | ||||||||||||||
| Total costs and expenses | 348,858 | 383,258 | 977,186 | 993,949 | ||||||||||||||
| Income (loss) from operations | 42,522 | 46,990 | (10,260 | ) | 10,266 | |||||||||||||
| Other (income) expense: | ||||||||||||||||||
| Interest expense | 5,023 | 4,978 | 18,841 | 19,430 | ||||||||||||||
| Interest income | (375 | ) | (174 | ) | (1,772 | ) | (478 | ) | ||||||||||
| Other (income) expense | 729 | 195 | 1,562 | (2 | ) | |||||||||||||
| Impairment of equity investments | 1,665 | |||||||||||||||||
