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Shutterfly Announces Fourth Quarter and Full Year 2012 Financial Results

  Shutterfly Announces Fourth Quarter and Full Year 2012 Financial Results

  *Fourth Quarter 2012 net revenues increase 33% year-over-year to $351.8
    million
  *Full Year 2012 net revenues increase 35% year-over-year to $640.6 million
  *Record Full Year Adjusted EBITDA of $128.1 million, 53% higher than 2011
  *48^th consecutive quarter of year-over-year net revenue growth

Business Wire

REDWOOD CITY, Calif. -- February 5, 2013

Shutterfly, Inc. (NASDAQ:SFLY), the leading manufacturer and digital retailer
of high-quality personalized products and services offered through a family of
lifestyle brands, today announced financial results for the fourth quarter and
full year-ended December 31, 2012.

“Our unwavering commitment to innovation, outstanding product quality, stylish
designs, exceptional customer service and overall value, combined with our
focus on strong execution led to another year of record revenues, adjusted
EBITDA, and free cash flows,” said President and Chief Executive Officer
Jeffrey Housenbold. “Our singular focus on addressing the ever increasing
challenges that consumers face as they try to do more with their photos and
memories, has enabled Shutterfly to emerge as the market leader. We remain
confident in our strategy and in the early and large markets in which we
operate.”

Fourth Quarter 2012 Financial Highlights

  *Net revenues totaled $351.8 million, a 33% year-over-year increase, and
    the 48th consecutive quarter of year-over-year net revenue growth.
  *Consumer net revenues totaled $343.5 million, a 33% year-over-year
    increase.
  *Enterprise net revenues totaled $8.3 million, a 79% year-over-year
    increase.
  *Gross profit margin was 60.5% of net revenues, compared to 58.9% in the
    fourth quarter of 2011.
  *Operating expenses, excluding $9.4 million of stock-based compensation,
    totaled $102.0 million.
  *GAAP net income was $53.0 million, compared to $35.4 million in the fourth
    quarter of 2011.
  *GAAP net income per diluted share was $1.40, compared to $0.97 in the
    fourth quarter of 2011.
  *Adjusted EBITDA was $127.2 million, compared to $89.3 million in the
    fourth quarter of 2011.
  *At December 31, 2012, cash and cash equivalents totaled $245.1 million.

Full Year 2012 Financial Highlights

  *Net revenues totaled $640.6 million, a 35% year-over-year increase.
  *Consumer net revenues totaled $613.4 million, a 33% year-over-year
    increase.
  *Enterprise net revenues totaled $27.2 million, a 101% year-over-year
    increase.
  *Gross profit margin was 54.0% of net revenues, compared to 53.6% in 2011.
  *Operating expenses, excluding $35.6 million of stock-based compensation,
    totaled $269.4 million.
  *GAAP net income was $23.0 million, compared to $14.0 million in 2011.
  *GAAP net income per diluted share was $0.61, compared to $0.40 in 2011.
  *Adjusted EBITDA was $128.1 million, compared to $83.7 million in 2011.

Fourth Quarter 2012 Consumer Metrics

  *Transacting customers totaled 4.2 million, a 30% year-over-year increase.
  *Orders totaled 6.9 million, a 33% year-over-year increase.
  *Average order value was $49.80, flat compared to the fourth quarter 2011.

Full Year 2012 Consumer Metrics

  *Transacting customers totaled 7.1 million, a 31% year-over-year increase.
  *Orders totaled 16.3 million, a 29% year-over-year increase.
  *Average order value was $37.58, a decrease of 2% year-over-year.

Business Outlook

First Quarter 2013:

  *Net revenues to range from $107.2 million to $110.0 million, a
    year-over-year increase of 17.4% to 20.5%.
  *GAAP gross profit margin to range from 43.0% to 44.0% of net revenues.
  *Non-GAAP gross profit margin to range from 44.8% to 45.8% of net revenues.
  *GAAP operating loss to range from ($26.8) million to ($27.8) million.
  *Non-GAAP operating loss to range from ($9.4) million to ($10.4) million.
  *GAAP effective tax rate to range from 45% to 46%.
  *GAAP net loss per diluted share to range from ($0.39) to ($0.42).
  *Weighted average diluted shares of approximately 36.8 million.
  *Adjusted EBITDA loss to range from ($2.5) million to ($3.5) million.

Full Year 2013:

  *Net revenues to range from $739.7 million to $746.0 million, a
    year-over-year increase of 15.5% to 16.5%.
  *GAAP gross profit margin to range from 52.0% to 53.0% of net revenues.
  *Non-GAAP gross profit margin to range from 53.3% to 54.3% of net revenues.
  *GAAP operating income to range from $25.0 million to $35.0 million.
  *Non-GAAP operating income to range from $91.7 million to $101.7 million.
  *GAAP effective tax rate to range from 40% to 42%.
  *GAAP net income per diluted share to range from $0.38 to $0.51.
  *Weighted average diluted shares of approximately 38.4 million.
  *Adjusted EBITDA to range from $133.1 million to $141.7 million, or 18% to
    19% of net revenues.
  *Capital expenditures to range from 9.4% to 10.4% of net revenues.

Notes to the Fourth Quarter 2012 and Full Year 2012 Financial Results and
Business Outlook

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

Free cash flow 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 category includes net revenues from stationery and greeting cards,
photo books, calendars and photo-based merchandise, photo prints, and the
related shipping revenues. Consumer also includes net revenues from
advertising and sponsorshipprograms.

Enterprise category 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
Enterprise) 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.

Fourth Quarter and Full Year 2012 Conference Call

Management will review the fourth quarter and full year 2012 financial results
and its expectations for the first quarter and full year 2013 on a conference
call on Tuesday, February 5, 2013 at 2:00 p.m. Pacific Daylight Time (5:00
p.m. Eastern Time). To listen to the call and view the accompanying slides,
please visit http://www.shutterfly.com. In the Investor Relations area, found
in the "About Us" section, click on the link provided for the webcast, or dial
970-315-0490. The webcast, as well as a podcast, will be archived and
available at http://www.shutterfly.com. A replay of the conference call will
be available through Tuesday, February 19, 2013. To hear the replay, please
dial (404) 537-3406, replay passcode 88660359.

Non-GAAP Financial Information

This press release contains certain non-GAAP financial measures. Tables are
provided at the end of this press release that reconcile the non-GAAP
financial measures to the most directly comparable financial measures prepared
in accordance with Generally Accepted Accounting Principles (GAAP). These
non-GAAP financial measures include non-GAAP gross margins, non-GAAP operating
income (loss) and the related operating income (loss) margins, adjusted EBITDA
and free cash flow. For more information, please see Shutterfly's SEC Filings.

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
net income (loss) or net income (loss) per share determined in accordance with
GAAP.

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, which involve risks and
uncertainties. These forward-looking statements include all statements
regarding the Company's financial expectations for thefirst quarter and full
year 2013 set forth under the caption "Business Outlook." The Company's actual
results may differ materially from those anticipated in these forward-looking
statements. Factors that might contribute to such differences include, among
others, economic downturns and the general state of the economy, our ability
to expand our customer base, increase sales to existing customers and meet
production requirements; our ability to successfully integrate acquired
assets; our ability to retain and hire necessary employees 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; consumer acceptance of our products and services; our
ability to develop additional adjacent lines of business; unforeseen changes
in expense levels; and competition, 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" sections of the Company's Form
10-Q for the quarter ended September 30, 2012, and the Company's other
filings, 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 manufacturer and digital retailer of
high-quality personalized products and services offered through a family of
lifestyle brands. Founded in 1999, the Shutterfly, Inc. family of brands
includes: Shutterfly, where your photos come to life in photo books, cards and
gifts; Tiny Prints, premium cards and stationery for all life’s occasions;
Wedding Paper Divas, wedding invitations and stationery for every step of the
planning process; and Treat, personalized greeting cards that really stand
out. For more information about Shutterfly, Inc. (NASDAQ:SFLY), visit
www.shutterfly-inc.com.

Shutterfly, Inc.                                              
Consolidated Statement
of Income
(In thousands, except
per share amounts)
(Unaudited)
                         Three Months Ended          Twelve Months Ended
                         December 31,                December 31,
                         2012          2011          2012          2011
                                                                   
Net revenues             $ 351,777     $ 263,754     $ 640,624     $ 473,270
Cost of net revenues      138,965     108,468     294,857     219,542 
Gross profit              212,812     155,286     345,767     253,728 
Operating expenses:
Technology and             24,770        17,485        85,746        65,675
development
Sales and marketing        62,191        49,505        148,806       113,952
General and               24,527      15,687      70,502      58,710  
administrative
Total operating           111,488     82,677      305,054     238,337 
expenses
Income from operations     101,324       72,609        40,713        15,391
Interest expense           (141    )     (64     )     (597    )     (64     )
Interest and other        12          10          42          35      
income, net
Income before income       101,195       72,555        40,158        15,362
taxes
Provision for income      (48,168 )    (37,144 )    (17,160 )    (1,314  )
taxes
Net income               $ 53,027     $ 35,411     $ 22,998     $ 14,048  
                                                                   
                                                                   
Net income per share
Basic                    $ 1.46       $ 1.02       $ 0.64       $ 0.43    
Diluted                  $ 1.40       $ 0.97       $ 0.61       $ 0.40    
                                                                   
Weighted-average
shares outstanding:
Basic                     36,232      34,743      35,826      32,788  
Diluted                   37,764      36,490      37,432      35,007  
                                                                   
Stock-based
compensation is
allocated as follows:
                                                                   
Cost of net revenues     $ 367         $ 625         $ 1,696       $ 2,138
Technology and             2,170         2,182         8,635         8,201
development
Sales and marketing        3,051         2,574         11,559        11,350
General and               4,226       1,333       15,432      12,181  
administrative
                         $ 9,814      $ 6,714      $ 37,322     $ 33,870  
                                                                             

Shutterfly, Inc.                                               
Consolidated Balance Sheet
(In thousands, except par value amounts)
(Unaudited)
                                                                  
                                                   December 31,   December 31,
                                                   2012           2011
                                                                  
ASSETS
Current assets:
Cash and cash equivalents                          $   245,088    $   179,915
Accounts receivable, net                               13,574         12,997
Inventories                                            5,032          3,726
Deferred tax asset, current portion                    7,713          598
Prepaid expenses and other current assets             15,044        13,870
Total current assets                                   286,451        211,106
Property and equipment, net                            92,667         54,123
Intangible assets, net                                 122,269        95,016
Goodwill                                               358,349        340,408
Deferred tax asset, net of current portion             854            3,785
Other assets                                          4,534         5,448
Total assets                                       $   865,124    $   709,886
                                                                  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable                                   $   31,503     $   9,470
Accrued liabilities                                    88,472         59,271
Deferred revenue                                      17,845        12,106
Total current liabilities                              137,820        80,847
Deferred tax liability                                 24,298         13,948
Other liabilities                                     11,720        6,094
Total liabilities                                     173,838       100,889
                                                                  
Stockholders' equity
Common stock, $0.0001 par value; 100,000 shares
authorized; 36,358 and 34,839 shares issued and        4              4
outstanding at December 31, 2012 and December
31, 2011, respectively
Additional paid-in-capital                             652,110        589,067
Accumulated earnings                                  39,172        19,926
Total stockholders' equity                            691,286       608,997
Total liabilities and stockholders' equity         $   865,124    $   709,886
                                                                      

Shutterfly, Inc.                                               
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
                                                   Twelve Months Ended
                                                   December 31,
                                                   2012           2011
                                                                  
Cash flows from operating activities:
Net income                                         $ 22,998       $ 14,048
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization                        29,424         22,316
Amortization of intangible assets                    20,685         12,136
Stock-based compensation, net of forfeitures         37,322         33,870
Gain on disposal of property and equipment           (861     )     (301     )
Deferred income taxes                                54             (5,766   )
Tax benefit from stock-based compensation            14,619         8,391
Excess tax benefits from stock-based                 (16,622  )     (8,380   )
compensation
Changes in operating assets and liabilities:
Accounts receivable, net                             (577     )     (7,205   )
Inventories                                          (1,306   )     766
Prepaid expenses and other current assets            (1,155   )     (5,667   )
Other assets                                         (32      )     (1,402   )
Accounts payable                                     15,230         (16,458  )
Accrued and other liabilities                        26,610         12,255
Deferred revenue                                     5,739          1,870
Other non-current liabilities                       (747     )    2,775    
Net cash provided by operating activities           151,381      63,248   
                                                                  
Cash flows from investing activities:
Acquisition of business and intangibles, net of      (57,212  )     (133,705 )
cash acquired
Purchases of property and equipment                  (40,535  )     (23,149  )
Capitalization of software and website               (12,528  )     (10,050  )
development costs
Proceeds from sale of equipment                     986          676      
Net cash used in investing activities               (109,289 )    (166,228 )
                                                                  
Cash flows from financing activities:
Principal payments of capital lease obligations      -              (6       )
Proceeds from issuance of common stock upon          10,211         22,277
exercise of stock options
Repurchases of common stock                          (3,752   )     -
Excess tax benefits from stock-based                16,622       8,380    
compensation
Net cash provided by financing activities           23,081       30,651   
                                                                  
Net increase/(decrease) in cash and cash             65,173         (72,329  )
equivalents
Cash and cash equivalents, beginning of period      179,915      252,244  
Cash and cash equivalents, end of period           $ 245,088     $ 179,915  
                                                                  
Supplemental schedule of non-cash activities
Net change in accrued purchases of property and    $ 7,694        $ 412
equipment
Fair market value of building under                  6,372          -
build-to-suit lease
Amount due for acquisition of business               963            -
                                                                             

Shutterfly, Inc.                                               
User Metrics Disclosure
                                                                    
                               Three Months Ended      Twelve Months Ended
                               December 31,            December 31,
                               2012        2011        2012         2011
                                                                    
User Metrics
                                                                    
Customers                      4,227,247   3,246,117   7,062,001    5,388,402
year-over-year growth          30%                     31%
                                                                    
Orders                         6,897,969   5,189,943   16,321,828   12,676,455
year-over-year growth          33%                     29%
                                                                    
Average order value*           $49.80      $49.93      $37.58       $38.30
year-over-year growth          0%                      -2%
                                                                    
Average orders per customer    1.6x        1.6x        2.3x         2.4x
                                                                    
* Average order value
excludes Enterprise revenue.
                                                                    

Shutterfly, Inc.
Reconciliation of Forward-Looking Guidance for Non-GAAP Financial Measures to
GAAP Measures
(In millions, except per share amounts)
                                                                
                                                                        
                   Forward-Looking Guidance
                   GAAP                                      Non-GAAP
                   Range of Estimate   Adjustments           Range of Estimate
                   From      To        From    To            From       To
                                                                        
Three Months
Ending March 31,
2013
                                                                        
Net revenues       $107.2    $110.0    -       -             $107.2     $110.0
Gross profit       43.0%     44.0%     1.8%    1.8%    [a]   44.8%      45.8%
margin
Operating loss     ($27.8)   ($26.8)   $17.4   $17.4   [b]   ($10.4)    ($9.4)
Operating margin   (26%)     (24%)     16%     15%     [b]   (10%)      (9%)
                                                                        
Stock-based        $10.8     $10.8     $10.8   $10.8         -          -
compensation
Amortization of
intangible         $6.5      $6.5      $6.5    $6.5          -          -
assets
                                                                        
Adjusted EBITDA*                                             ($3.5)     ($2.5)
                                                                        
Diluted loss per   ($0.42)   ($0.39)
share
Diluted shares     36.8      36.8
Effective tax      45%       46%
rate
                                                                        
                                                                        
Twelve Months
Ending December
31, 2013
                                                                        
Net revenues       $739.7    $746.0    -       -             $739.7     $746.0
Gross profit       52.0%     53.0%     1.3%    1.3%    [c]   53.3%      54.3%
margin
Operating income   $25.0     $35.0     $66.7   $66.7   [d]   $91.7      $101.7
Operating margin   3%        5%        9%      9%      [d]   12%        14%
                                                                        
Stock-based        $41.7     $41.7     $41.7   $41.7         -          -
compensation
Amortization of
intangible         $25.0     $25.0     $25.0   $25.0         -          -
assets
                                                                        
Adjusted EBITDA*                                             $133.1     $141.7
Adjusted EBITDA*                                             18.0%      19.0%
margin
                                                                        
Diluted earnings   $0.38     $0.51
per share
Diluted shares     38.4      38.4
Effective tax      40%       42%
rate
                                                                        
Capital
expenditures - %   9.4%      10.4%
of net revenues
                                                                        

      Adjusted EBITDA is a non-GAAP financial measure defined as earnings
*    before interest, taxes, depreciation, amortization and stock-based
      compensation.
      Reflects estimated adjustments for stock-based compensation expense of
[a]   approximately $500K and amortization of purchased intangible assets of
      approximately $1.5 million.
      Reflects estimated adjustments for stock-based compensation expense of
[b]   approximately $10.8 million and amortization of purchased intangible
      assets of approximately $6.5 million
      Reflects estimated adjustments for stock-based compensation expense of
[c]   approximately $1.8 million and amortization of purchased intangible
      assets of approximately $7.8 million.
      Reflects estimated adjustments for stock-based compensation expense of
[d]   approximately $41.7 million and amortization of purchased intangible
      assets of approximately $25.0 million.
      

Shutterfly, Inc.
Reconciliation of GAAP Gross Profit Margin to Non-GAAP Gross Profit Margin
(In                                                                                                                                      
thousands)
(Unaudited)
               Three Months Ended                                                                                                     Year Ended
               Mar. 31,       Jun. 30,       Sep. 30,       Dec. 31,      Mar. 31,       Jun. 30,       Sep. 30        Dec. 31,       Dec. 31,      Dec. 31,
               2011           2011           2011           2011          2012           2012           2012           2012           2011          2012
                                                                                                                                                    
GAAP gross     $ 27,683       $ 35,883       $ 34,876       $ 155,286     $ 41,238       $ 48,310       $ 43,407       $ 212,812      $ 253,728     $ 345,767
profit
Stock-based      175            754            584            625           462            443            424            367            2,138         1,696
compensation
Amortization
of               611            1,345          1,417          1,425         1,454          1,516          1,570          1,856          4,798         6,396
intangible
assets
                                                                                                                                           
Non-GAAP       $ 28,469      $ 37,982      $ 36,877      $ 157,336    $ 43,154      $ 50,269      $ 45,401      $ 215,035     $ 260,664    $ 353,859 
gross profit
                                                                                                                                                    
Non-GAAP
gross profit    50      %     50      %     48      %     60      %    47      %     51      %     46      %     61       %    55      %    55      %
margin
                                                                                                                                                    
Shutterfly,
Inc.
Reconciliation of GAAP Operating Margin to Non-GAAP Operating Margin
(In
thousands)
(Unaudited)
               Three Months Ended                                                                                                     Year Ended
               Mar. 31,       Jun. 30,       Sep. 30,       Dec. 31,      Mar. 31,       Jun. 30,       Sep. 30        Dec. 31,       Dec. 31,      Dec. 31,
               2011           2011           2011           2011          2012           2012           2012           2012           2011          2012
                                                                                                                                                    
GAAP
operating      $ (12,986 )    $ (21,540 )    $ (22,692 )    $ 72,609      $ (19,080 )    $ (17,786 )    $ (23,745 )    $ 101,324      $ 15,391      $ 40,713
income
(loss)
Stock-based      5,235          12,099         9,822          6,714         9,617          9,526          8,365          9,814          33,870      $ 37,322
compensation
Amortization
of               719            3,487          3,961          3,969         4,013          5,090          5,658          5,924          12,136      $ 20,685
intangible
assets
                                                                                                                                           
Non-GAAP
operating      $ (7,032  )    $ (5,954  )    $ (8,909  )    $ 83,292     $ (5,450  )    $ (3,170  )    $ (9,722  )    $ 117,062     $ 61,397     $ 98,720  
income
(loss)
                                                                                                                                                    
Non-GAAP
operating       (12     %)    (8      %)    (12     %)    32      %    (6      %)    (3      %)    (10     %)    33       %    13      %    15      %
margin
                                                                                                                                                    
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,       Dec. 31,      Dec. 31,
               2011           2011           2011           2011          2012           2012           2012           2012           2011          2012
                                                                                                                                                    
GAAP net
income         $ (7,760  )    $ (3,650  )    $ (9,953  )    $ 35,411      $ (10,040 )    $ (9,511  )    $ (10,478 )    $ 53,027       $ 14,048      $ 22,998
(loss)
Interest         -              -              -              64            152            156            148            141            64            597
expense
Interest and
other            (14     )      (6      )      (5      )      (10     )     (7      )      (9      )      (14     )      (12      )     (35     )     (42     )
income, net
Tax benefit      (5,212  )      (17,884 )      (12,734 )      37,144        (9,185  )      (8,422  )      (13,401 )      48,168         1,314         17,160
(provision)
Depreciation
and              5,833          9,159          9,534          9,926         10,024         11,820         12,244         16,021         34,452        50,109
amortization
Stock-based      5,235          12,099         9,822          6,714         9,617          9,526          8,365          9,814          33,870        37,322
compensation
                                                                                                                                           
Non-GAAP
Adjusted       $ (1,918  )    $ (282    )    $ (3,336  )    $ 89,249     $ 561         $ 3,560       $ (3,136  )    $ 127,159     $ 83,713     $ 128,144 
EBITDA
                                                                                                                                                    
Shutterfly,
Inc.
Reconciliation of Cash Flow from Operating Activities to Non-GAAP Adjusted EBITDA and Free Cash Flow
(In
thousands)
(Unaudited)
               Three Months Ended                                                                                                     Year Ended
               Mar. 31,       Jun. 30,       Sep. 30,       Dec. 31,      Mar. 31,       Jun. 30,       Sep. 30,       Dec. 31,       Dec. 31,      Dec. 31,
               2011           2011           2011           2011          2012           2012           2012           2012           2011          2012
                                                                                                                                                    
Net cash
provided by
(used in)      $ (52,849 )    $ (5,165  )    $ (1,577  )    $ 122,839     $ (47,961 )    $ 9,339        $ (3,568  )    $ 193,571      $ 63,248      $ 151,381
operating
activities
Interest         -              -              -              64            152            156            148            141            64            597
expense
Interest and
other            (14     )      (6      )      (5      )      (10     )     (7      )      (9      )      (14     )      (12      )     (35     )     (42     )
income, net
Tax benefit      (5,212  )      (17,884 )      (12,734 )      37,144        (9,185  )      (8,422  )      (13,401 )      48,168         1,314         17,160
(provision)
Changes in
operating        55,702         23,217         8,962          (74,815 )     55,912         739            11,482         (111,895 )     13,066        (43,762 )
assets and
liabilities
Other           455          (444    )     2,018        4,027       1,650        1,757        2,217        (2,814   )    6,056       2,810   
adjustments
Non-GAAP
Adjusted        (1,918  )     (282    )     (3,336  )     89,249      561          3,560        (3,136  )     127,159      83,713      128,144 
EBITDA
Less:
Purchases of     (5,446  )      (3,811  )      (9,310  )      (4,994  )     (6,499  )      (12,264 )      (16,628 )      (12,838  )     (23,561 )     (48,229 )
property and
equipment
Less:
Capitalized
technology &     (2,318  )      (2,726  )      (2,833  )      (2,173  )     (3,072  )      (2,801  )      (3,730  )      (2,925   )     (10,050 )     (12,528 )
development
costs
                                                                                                                                           
Free cash      $ (9,682  )    $ (6,819  )    $ (15,479 )    $ 82,082     $ (9,010  )    $ (11,505 )    $ (23,494 )    $ 111,396     $ 50,102     $ 67,387  
flow

Contact:

Media Relations:
Gretchen Sloan, 650-610-5276
gsloan@shutterfly.com
Investor Relations:
Michael Look, 650-610-5910
mlook@shutterfly.com
 
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