Company presentation
Download
1 / 30

DP Presentation - PowerPoint PPT Presentation


  • 231 Views
  • Uploaded on

Company Presentation. November 2008. Safe Harbor.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'DP Presentation' - DoraAna


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Company presentation l.jpg

Company Presentation

November 2008


Safe harbor l.jpg
Safe Harbor

This presentation contains forward-looking statements that involve risks and uncertainties, including discussion of product and business plans and financial projections.  Important risk factors, including the company's ability to complete its products and obtain regulatory approval, which could cause actual results to differ materially from those in the forward-looking statements, are detailed in filings with the Securities and Exchange Commission made from time to time by Stamps.com, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2007, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. We encourage you to review the risk factors in these filings.


Agenda l.jpg
Agenda

  • PC Postage Service Overview

  • PC Postage Marketing

  • PhotoStamps

  • Financials


Service overview l.jpg
Service Overview

  • Software-based Internet service that lets customers buy and print their own USPS postage

    • Requires only your existing PC, printer & Internet connection

    • Monthly service fee (+ the cost of postage)

  • Three ways to print postage

    • Print your own stamps (NetStamps)

    • Print shipping labels

    • Print directly on envelopes


Internet postage feature l.jpg
Internet Postage Feature

  • Print postage directly onto envelopes or onto labels

  • Internet postage is ideal for business and mass mailings

    • Address verification and correction

    • Integration with MSFT Word, Office and other address databases


Netstamps feature l.jpg
NetStamps Feature

  • Print your own stamps

    • Use for any stamp value

    • Use for any class of postage

  • Increased flexibility

    • Not tied to an address

    • No expiration date

  • Customers buy blank label stock

  • Photo NetStamps allow customers to print postage on blank label stock with their customized logo

  • Consumable revenue stream


Shipping label feature l.jpg
Shipping Label Feature

  • All-in-one shipping label designed specifically for package use

  • Printed on plain printer paper or on adhesive labels

  • Discounts on postal rates

    • 3% discount on Express1

    • 1 – 11% discount on Priority (average 3.5%)1

    • 6 – 8% discount on Global Priority & Express

    • $0.57 - $0.65 per package for electronic delivery confirmation

  • Ability to hide postage amount

  • E-mail tracking notifications

  • Avoid 1lb package restrictions

1 Discounts on Priority & Express become effective May 12, 2008; 3.5% is the expected average discount on Priority per the USPS


Microsoft integration l.jpg
Microsoft Integration

  • Enhanced integration with Microsoft Office System 2003 & later

  • Access Stamps.com from multiple locations within Office

    • Under Tools -> Envelopes and Labels (single envelope)

    • As part of a Mail Merge (multiple envelopes)


Customer benefits l.jpg
Customer Benefits

Save Time

Mail or ship from home or office

Avoid trips to the post office

Available 24 hours x 7 days a week

Save Money

Discounted postal rates (Priority, Express, Global Priority & Express)

Discounted package tracking (Delivery and Signature Confirmation)

Save 10% on package insurance compared to USPS

Avoid costly returned mail with address verification

Avoid wasted postage by calculating exact postage amount

Access to cost effective mail classes (media mail, parcel post, etc.)


Customer benefits10 l.jpg
Customer Benefits

  • Enhance business productivity and image

    • Produce more professional looking mail

    • Easy mass mailings w/ Microsoft Word

    • Track, control and reduce postage expenditures

  • Improve efficiency of shipping operations

    • Hidden postage value allows shipping & handling markup

    • Integrated Package Insurance

    • Online package tracking capabilities with e-mail notifications


Agenda11 l.jpg
Agenda

  • PC Postage Service Overview

  • PC Postage Marketing

  • PhotoStamps

  • Financials


Industry overview l.jpg
Industry Overview

  • Large market opportunity1

    • $51B U.S. Postage Market (addressable by STMP’s solution)

    • 8M Small Businesses + 14M Home Businesses

  • Significant barriers to entry exist

    • Long and complex USPS regulatory approval process (2 ½ years for original approval, multi-year for NetStamps approval)

    • Stamps has a very strong patent portfolio (66 issued, 100 pending US Patents)

  • Stamps.com is the category leader

    • 3 approved PC Postage vendors (Stamps, Pitney Bowes, Endicia.com)

    • ~85% of all PC Postage subscription customers2

1Source: International Data Corporation Reports and USPS 2006 Annual Report (excludes Standard Mail & Periodicals)

2 Source: USPS PC Postage Data and Stamps.com Company estimates; excludes estimated customers on a no-monthly fee plan.


Current soho pricing l.jpg
Current SOHO Pricing

  • Fees are in addition to postage (face value) and other supplies

Pro Plan

Premier Plan

  • $17.99 per month

  • Unlimited service usage

  • Auto-billed monthly

  • $5 free initial postage

  • $25 free postage rebate1

  • Free scale rebate1

  • $24.99 per month

  • All features of Pro

  • Plus: FedEx Label Printing (and 5-10% discount)

  • Plus: Higher meter balance

  • Plus: More cost codes

  • Plus: Certified Mail Solution

1 Certain Promotional items are redeemable after a customer completes their trial and is successfully billed


Cost vs a postage meter l.jpg
Cost vs. A Postage Meter

1 Price after 1 year promotional period is $25.75/month plus an extra $5/month for a 5 lb. scale (free 5 lb. scale included w/Stamps.com)

2 Fee charged each time postage is purchased; first two resets in meter life are included for free and all resets are $5 thereafter.

3 Based on USPS reports, total CY 2006 small business meter postage divided by CY 2006 average meter count.

4 Assumes one reset/month, $0.80 average per print, and meter cleaned as recommended. Range is for low cartridge (400) to high cartridge (800) yield at avg. $185/month usage. Postal rate change updates cost extra with meter (free with Stamps.com). Cost codes also cost extra with meter (10 included with Stamps.com Pro Plan).


Marketing channels l.jpg
Marketing Channels

Stamps.com has a diversified set of marketing programs:

  • Affiliate Program

  • Direct Mail

  • Online Media (banners, permission e-mails, pop-ups, paid search words)

  • Referral Program

  • Stamps.com web site

  • Strategic Partners (Microsoft, EarthLink, Peachtree, Avery)

  • Telemarketing

  • Traditional media

  • Online Enhanced Promotion Channel1

1 Enhanced Promotion Channel includes partners that advertise our service on the Internet in which the partner typically offers an incremental promotion (in addition to any promotion offered by us) in order to get the customer to try our service.


2008 pc postage plan l.jpg
2008 PC Postage Plan

  • Increase and optimize our Small Business marketing investment

    • Expect to increase customer acquisition spend in the non-enhanced promotion channels (e.g. Direct Mail) by 25 - 30% in 2008

    • Continue to run online enhanced promotion channel

  • Improve the customer experience

    • Improve software usability to improve initial customer experience

  • Market our new Premier version

    • Added Multi-user capability

    • Market Premier as an up sell to existing customers

  • Market our corporate enterprise solution

    • Continue scaling enterprise sales and marketing efforts

    • Add product features to the enterprise version of our service


Agenda17 l.jpg
Agenda

  • PC Postage Service Overview

  • PC Postage Marketing

  • PhotoStamps

  • Financials


Photostamps offering l.jpg
PhotoStamps Offering

  • PhotoStamps allows customers to order valid US postage with customized photos or images from a simple web site

    • Customer uploads photo or graphic and customizes look & feel

    • Customer places order online

    • Stamps.com approves the image and prints the PhotoStamps sheets

    • Customers receive PhotoStamps via mail in a few days

    • Pricing is ~$5 to $10 per sheet plus the cost of postage1

1 Actual pricing depends on the number of sheets ordered and postage value per sheet; quotes for higher volume discounts available.


Slide19 l.jpg

PhotoStamps Industry Overview

  • Customized postage program is regulated by the USPS

    • Currently in the 4th market test with authorization through May 2009

    • Only approved PC Postage vendors can provide the postage for customized postage products

  • Stamps.com is the category leader in customized postage

    • 3 approved vendors: Stamps, Endicia, Pitney Bowes (w/ Zazzle, Fuji)

  • Market opportunity exists in consumer and business

    • Consumer to Consumer First Class market is 6.1B pieces per year 1

    • Business to Consumer First Class market is 17B pieces per year 1

1 Source: USPS 2006 Household Diary study


Slide20 l.jpg

2008 PhotoStamps Plan

  • Focus on improving profitability in PhotoStamps

    • Reduce PhotoStamps consumer marketing spend by eliminating under performing marketing programs

    • Expect lower revenue but improved profitability

  • Focus on growing business PhotoStamps

    • Target high volume business usage of PhotoStamps through direct selling efforts

  • Continue pursuing partnerships

    • Target cost-effective partnerships to drive consumer PhotoStamps awareness and sales

    • Current partners include Apple, Google/Picassa, HP/Snapfish, Adobe, Costco, American Idol


Agenda21 l.jpg
Agenda

  • PC Postage Service Overview

  • PC Postage Marketing

  • PhotoStamps

  • Financials


Financial overview l.jpg
Financial Overview

  • Stamps.com has several revenue components:

    • Recurring monthly service fees (PC Postage)

    • Online store sales of consumables and peripherals (PC Postage)

    • Stamps.com branded package insurance (PC Postage)

    • PhotoStamps market test sales

  • Stamps.com has an attractive financial model:

    • High gross margins

    • Leverageable fixed costs

    • Low working capital investment

    • Low capital expenditure requirements


Financial overview23 l.jpg
Financial Overview

  • Stamps.com has strong free cash flow generation

    • $15.7M Free Cash Flow1 in 2007

    • $67M of stock repurchased from Jul-06 to Sep-08

  • Stamps.com has a strong balance sheet

    • $94M cash and investments with no debt (as of 09-30-08)

    • ~$240M in Federal NOL’s and $150M in State NOL’s (as of 09-30-08) representing ~$95M Deferred Tax Asset

    • To preserve full use of the NOL’s, the “NOL Protective Measures” were passed by shareholder vote that restrict purchases of Stamps.com’s stock that would create a new 5% shareholder without first obtaining a waiver from the Company’s Board of Directors2

    • The Company strongly urges investors interested in owning 725K shares or more contact the Company first

1Non-GAAP measure calculated as Net Income + 123R Expense + D&A – Capital Expenditures

2 For full details on the “NOL Protective Measures” see the Company’s definitive Proxy filed on 4-2-08


Slide24 l.jpg

Service Fee Revenue

Licensing, other

Store, Insurance

PhotoStamps

Revenue Trend (millions)

$85.8

$84.6

$25.0

$24.1

$21.4

$21.4

$21.1

$20.3

$20.2

$20.0

$18.9

$61.9

$38.1

$21.2


Slide25 l.jpg

PC Postage Revenue

Subscriber Related Revenue 1

(Excluding Enhanced Promotion Channel)

($ Millions)

Subscriber Related Revenue 2

(Enhanced Promotion Channel)

($ Millions)

1 Subscriber related revenue includes Service Fee, Store and insurance revenue – estimate excluding the enhanced promotion channel

2Subscriber related revenue includes Service Fee, Store and insurance revenue – estimate for the enhanced promotion channel


Slide26 l.jpg

PC Postage Customer Metrics

Paid Customers 1

(Excluding Enhanced Promotion Channel)

(Thousands)

Avg. Monthly Subscriber Revenue per Paid Customer 2

(Excluding Enhanced Promotion Channel)

2 Calculated as [ (Quarterly Service Fee Revenue + Store Revenue + Insurance Revenue) / (Current Quarter Paid Customers)] / 3 Months excluding customers acquired through the enhanced promotion channel

1 Unique customers successfully billed at least once during the quarter excluding customers acquired through the enhanced promotional channel


Slide27 l.jpg

PC Postage Customer Metrics

Cost per Gross New Registered Customers1

(Excluding Enhanced Promotion Channel)

Paid Customer Cancel Rate 2

(Excluding Enhanced Promotion Channel)

2 Calculated as [ (Lost Paid Customers) / (Prior Quarter Paid Customers + Current Quarter New Paid Customers) ] / 3 months excluding customers acquired through the enhanced promotion channel

1 Estimated PC Postage small business sales and marketing expense (excluding 123R) plus promotional expenses / gross new registered small business customers excluding customers acquired through the enhanced promotional channel and excluding enterprise marketing spend


Slide28 l.jpg

Gross Margin Trend

PC Postage Gross Margin

(excluding 123R expense) 1, 3

PhotoStamps Gross Margin

(excluding 123R expense) 2,3

1 PC Postage gross margins do not include the Postage Face Value in either revenue or cost of sales

2 PhotoStamps gross margins include the Postage Face Value in both revenue and cost of sales

3 Non-GAAP measure that excludes stock-based compensation (FASB Statement 123R expenses); for reconciliation to GAAP see the Company’s prior 8-K filings


Slide29 l.jpg

Net Income & PC Postage Spend

PC Postage Customer Acquisition Spend2

Non-GAAP

Net Income & EPS1

EPS

$0.22

$0.16

$0.16

$0.16

$0.16

$0.14

$0.15

$0.17

2 Non-GAAP measure includes both sales and marketing spend on the PC Postage business as well as promotional expenses which are included in COS; excluding 123R expenses

1 Excludes stock-based compensation (123R expenses), $3.6M non-cash tax benefit (Q1-08) and $445K asset write-off (Q1-08); for reconciliation to GAAP see the Company’s prior 8-K filings


Key investment takeaways l.jpg
Key Investment Takeaways

  • Large market opportunity ($51B US postage, 22M SOHOs)

  • Significant barriers to entry (USPS approval process)

  • Superior customer benefits at prices up to 75% less than meters

  • Category leader in PC Postage and Customized Postage

  • Attractive expected return on PC Postage marketing spend

  • Accelerating PC Postage revenue growth with high gross margins

  • Strong cash flow and balance sheet


ad