þ |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934.
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Delaware
|
77-0454966
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
No.)
|
Large
accelerated filer o
|
Accelerated
filer x
|
Non-accelerated
filer o ( (Do not
check if a smaller reporting company)
|
Smaller
reporting company o
|
Page
|
|||
PART I - FINANCIAL INFORMATION |
2
|
||
ITEM 1.
|
FINANCIAL
STATEMENTS
|
2
|
|
ITEM 2.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
10
|
|
ITEM 3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
18
|
|
ITEM 4.
|
CONTROLS
AND PROCEDURES
|
19
|
|
PART II - OTHER INFORMATION |
20
|
||
ITEM 1.
|
LEGAL
PROCEEDINGS
|
20
|
|
ITEM 1A.
|
RISK
FACTORS
|
21
|
|
ITEM 2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
21
|
|
ITEM 3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
21
|
|
ITEM 4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
21
|
|
|
|||
ITEM 5.
|
OTHER
INFORMATION
|
21
|
|
ITEM 6.
|
EXHIBITS
|
21
|
March
31,
|
December
31,
|
||||||
2008
|
2007
|
||||||
(unaudited)
|
|||||||
Assets
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
51,482
|
$
|
43,667
|
|||
Restricted
cash
|
554
|
554
|
|||||
Short-term
investments
|
23,044
|
22,084
|
|||||
Trade
accounts receivable, net
|
2,605
|
2,519
|
|||||
Other
accounts receivable
|
446
|
1,209
|
|||||
Other
current assets
|
2,189
|
2,489
|
|||||
Total
current assets
|
80,320
|
72,522
|
|||||
Property
and equipment, net
|
3,523
|
3,790
|
|||||
Intangible
assets, net
|
602
|
871
|
|||||
Long-term
investments
|
15,221
|
24,518
|
|||||
Deferred
income taxes.
|
3,671
|
—
|
|||||
Other
assets
|
3,611
|
3,252
|
|||||
Total
assets
|
$
|
106,948
|
$
|
104,953
|
|||
Liabilities
and Stockholders’ Equity
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable and accrued expenses
|
$
|
10,799
|
$
|
9,935
|
|||
Deferred
revenue
|
2,380
|
2,576
|
|||||
Total
current liabilities
|
13,179
|
12,511
|
|||||
Commitments
and contingencies
|
|||||||
Stockholders’
equity:
|
|||||||
Common
stock, $.001 par value
|
|||||||
Authorized
shares 47,500 in 2008 and 2007
|
|||||||
Issued
shares: 24,277 in
2008 and 24,258 in 2007
|
|||||||
Outstanding
shares: 19,348 in 2008 and 19,813 in 2007
|
47
|
47
|
|||||
Additional
paid-in capital
|
623,728
|
622,781
|
|||||
Accumulated
deficit
|
(461,357
|
)
|
(466,555
|
)
|
|||
Treasury
stock, at cost, 4,929 shares in 2008 and 4,445 shares in 2007
|
(68,237
|
)
|
(63,737
|
)
|
|||
Accumulated
other comprehensive loss
|
(412
|
)
|
(94
|
)
|
|||
Total
stockholders’ equity
|
93,769
|
92,442
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
106,948
|
$
|
104,953
|
Three
Months ended
March
31,
|
|||||||
2008
|
2007
|
||||||
Revenues:
|
|||||||
Service
|
$
|
15,197
|
$
|
13,661
|
|||
PhotoStamps
|
3,004
|
3,176
|
|||||
Product
|
2,483
|
2,358
|
|||||
Insurance
|
388
|
374
|
|||||
Other
|
—
|
453
|
|||||
Total
revenues
|
21,072
|
20,022
|
|||||
Cost
of revenues:
|
|||||||
Service
|
2,742
|
2,343
|
|||||
PhotoStamps
|
2,127
|
2,083
|
|||||
Product
|
880
|
799
|
|||||
Insurance
|
120
|
116
|
|||||
Other
|
—
|
25
|
|||||
Total
cost of revenues
|
5,869
|
5,366
|
|||||
Gross
profit
|
15,203
|
14,656
|
|||||
Operating
expenses:
|
|||||||
Sales
and marketing
|
8,623
|
7,831
|
|||||
Research
and development
|
1,943
|
2,145
|
|||||
General
and administrative
|
3,943
|
2,747
|
|||||
Total
operating expenses
|
14,509
|
12,723
|
|||||
Income
from operations
|
694
|
1,933
|
|||||
Other
income:
|
|||||||
Interest
income
|
917
|
1,213
|
|||||
Other
income
|
21
|
—
|
|||||
Total
other income
|
938
|
1,213
|
|||||
Income
before income taxes
|
1,632
|
3,146
|
|||||
Income
tax (benefit) expense
|
(3,566
|
)
|
92
|
||||
Net
income
|
$
|
5,198
|
$
|
3,054
|
|||
Net
income per share (see Note 3):
|
|||||||
Basic
|
$
|
0.26
|
$
|
0.14
|
|||
Diluted
|
$
|
0.26
|
$
|
0.14
|
|||
Weighted
average shares outstanding
|
|||||||
Basic
|
19,723
|
21,892
|
|||||
Diluted
|
19,950
|
22,326
|
Three
Months ended
March
31,
|
|||||||
2008
|
2007
|
||||||
Operating
activities:
|
|||||||
Net
income
|
$
|
5,198
|
$
|
3,054
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Depreciation
and amortization
|
722
|
788
|
|||||
Stock-based
compensation expense
|
779
|
461
|
|||||
Deferred
income tax
|
(3,671
|
)
|
—
|
||||
Changes
in operating assets and liabilities:
|
|||||||
Trade
accounts receivable
|
(86
|
)
|
(27
|
)
|
|||
Other
accounts receivable
|
763
|
(320
|
)
|
||||
Prepaid
expenses
|
300
|
(65
|
)
|
||||
Other
assets
|
(359
|
)
|
101
|
||||
Deferred
revenue
|
(196
|
)
|
160
|
||||
Accounts
payable and accrued expenses
|
864
|
(1,621
|
)
|
||||
Net
cash provided by operating activities
|
4,314
|
2,531
|
|||||
Investing
activities:
|
|||||||
Sale
of short-term investments
|
13,736
|
8,567
|
|||||
Purchase
of short-term investments
|
(15,014
|
)
|
(9,911
|
)
|
|||
Sale
of long-term investments
|
9,297
|
9,351
|
|||||
Purchase
of long-term investments
|
—
|
(2,073
|
)
|
||||
Acquisition
of property and equipment
|
(186
|
)
|
(146
|
)
|
|||
Net
cash provided by investing activities
|
7,833
|
5,788
|
|||||
Financing
activities:
|
|||||||
Proceeds
from exercise of stock options
|
—
|
242
|
|||||
Issuance
of common stock under ESPP
|
168
|
268
|
|||||
Repurchase
of common stock
|
(4,500
|
)
|
(5,309
|
)
|
|||
Net
cash used in financing activities
|
(4,332
|
)
|
(4,799
|
)
|
|||
Net
increase in cash and cash equivalents
|
7,815
|
3,520
|
|||||
Cash
and cash equivalents at beginning of period
|
43,667
|
11,740
|
|||||
Cash
and cash equivalents at end of period
|
$
|
51,482
|
$
|
15,260
|
Three
Months Ended
March
31,
|
|||||||
2008
|
2007
|
||||||
Net
income
|
$
|
5,198
|
$
|
3,054
|
|||
Basic
- weighted average common shares
|
19,723
|
21,892
|
|||||
Diluted
effect of common stock equivalents
|
227
|
434
|
|||||
Diluted
- weighted average common shares
|
19,950
|
22,326
|
|||||
Earnings
per share:
|
|||||||
Basic
|
$
|
0.26
|
$
|
0.14
|
|||
Diluted
|
$
|
0.26
|
$
|
0.14
|
Three
Months Ended
March
31,
|
|||||||
2008
|
2007
|
||||||
Anti-dilutive
stock options shares
|
2,332
|
1,270
|
Three
Months Ended
March
31,
|
|||||||
2008
|
2007
|
||||||
Stock-based
compensation expense relating to:
|
|||||||
Employee
and director stock options
|
$
|
749
|
$
|
414
|
|||
Employee
stock purchases
|
30
|
47
|
|||||
Total
stock-based compensation expense
|
$
|
779
|
$
|
461
|
|||
Stock-based
compensation expense relating to:
|
|||||||
Cost
of revenues
|
$
|
75
|
$
|
76
|
|||
Sales
and marketing
|
176
|
73
|
|||||
Research
and development
|
152
|
150
|
|||||
General
and administrative
|
376
|
162
|
|||||
Total
stock-based compensation expense
|
$
|
779
|
$
|
461
|
Three
Months Ended
March
31,
|
|||||||
2008
|
2007
|
||||||
Expected
dividend yield
|
—
|
—
|
|||||
Risk-free
interest rate
|
2.80
|
%
|
4.67
|
%
|
|||
Expected
volatility
|
51
|
%
|
47
|
%
|
|||
Expected
life (in years)
|
5
|
5
|
|||||
Expected
forfeiture rate
|
16
|
%
|
16
|
%
|
Three
Months Ended
March
31,
|
|||||||
2008
|
2007
|
||||||
Net
income
|
$
|
5,198
|
$
|
3,054
|
|||
Unrealized
(loss) income on investments
|
(318
|
)
|
90
|
||||
Comprehensive
income
|
$
|
4,880
|
$
|
3,144
|
Level 1 - |
Valuations
based on unadjusted quoted prices for identical assets in an active
market
|
Level 2 - |
Valuations
based on quoted prices in markets where trading occurs infrequently
or
whose values are based on quoted prices of instruments with similar
attributes in active markets.
|
Level 3 - |
Valuations
based on inputs that are unobservable and involve management judgment
and
our own assumptions about market participants and pricing.
|
Fair
Value Measurement at Reporting Date Using
|
|||||||||||||
Description
|
March 31, 2008
|
Quoted
Prices
in
Active
Markets
for
Identical Assets
(Level
1)
|
Significant
Other
Observable
Inputs
(Level
2)
|
Significant
Unobservable
Inputs
(Level
3)
|
|||||||||
Cash
and cash equivalents
|
$
|
51,482
|
$
|
51,482
|
—
|
—
|
|||||||
Available-for-sale
debt securities
|
38,265
|
—
|
$
|
38,265
|
—
|
||||||||
Total
|
$
|
89,747
|
$
|
51,482
|
$
|
38,265
|
—
|
ITEM 2. |
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Three
Months Ended
March
31,
|
|||||||
2008
|
2007
|
||||||
Total
Revenues
|
|||||||
Service
|
72
|
%
|
68
|
%
|
|||
Product
|
12
|
%
|
12
|
%
|
|||
Insurance
|
2
|
%
|
2
|
%
|
|||
PhotoStamps
|
14
|
%
|
16
|
%
|
|||
Other
|
0
|
%
|
2
|
%
|
|||
Total
revenues
|
100
|
%
|
100
|
%
|
|||
Cost
of revenues
|
|||||||
Service
|
13
|
%
|
12
|
%
|
|||
Product
|
4
|
%
|
4
|
%
|
|||
Insurance
|
1
|
%
|
1
|
%
|
|||
PhotoStamps
|
10
|
%
|
10
|
%
|
|||
Other
|
0
|
%
|
0
|
%
|
|||
Total
cost of revenues
|
28
|
%
|
27
|
%
|
|||
Gross
profit
|
72
|
%
|
73
|
%
|
|||
Operating
expenses:
|
|||||||
Sales
and marketing
|
41
|
%
|
39
|
%
|
|||
Research
and development
|
9
|
%
|
11
|
%
|
|||
General
and administrative
|
19
|
%
|
14
|
%
|
|||
Total
operating expenses
|
69
|
%
|
64
|
%
|
|||
Income
from operations
|
3
|
%
|
10
|
%
|
|||
Other
income (expense), net
|
5
|
%
|
6
|
%
|
|||
Income
before income taxes
|
8
|
%
|
16
|
%
|
|||
Income
tax (benefit) expense
|
(17
|
)%
|
1
|
%
|
|||
Net
income
|
25
|
%
|
15
|
%
|
Operating
|
||||
Nine
months ending December 31, 2008
|
$
|
568
|
||
Years
ending December 31:
|
||||
2009
|
794
|
|||
2010
|
134
|
|||
2011
|
-
|
|||
$
|
1,496
|
Period
|
Total Number of
shares Purchased
|
Average Price Paid
per Share
|
Total Number of
Shares Purchased as Part of Publicly
Announced Plans or Programs
|
Approximate Dollar
Value of Shares That May Yet be
Purchased Under the Plans or Programs
(in 000’s)
|
|||||||||
January 1,
2008 - January
31, 2008
|
—
|
—
|
—
|
—
|
|||||||||
February
1, 2008 - February
29, 2008
|
—
|
—
|
—
|
—
|
|||||||||
March
1, 2008 - March 31, 2008
|
484,000
|
$
|
9.30
|
484,000
|
$
|
6,659
|
31.1 |
Certification
Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
31.2 |
Certification
Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
32.1 |
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section
906 of
the Sarbanes-Oxley Act of 2002.
|
32.2 |
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section
906 of
the Sarbanes-Oxley Act of 2002.
|
STAMPS.COM INC. | ||
(Registrant) | ||
May
9, 2008
|
By:
|
/s/
KEN MCBRIDE
|
Ken
McBride
|
||
Chief
Executive Officer
|
||
May
9, 2008
|
By:
|
/s/
KYLE HUEBNER
|
Kyle
Huebner
|
||
Chief
Financial Officer
|