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SHUTTERFLY INC
FORM 10-K
(Annual Report)
Filed 02/09/10 for the Period Ending 12/31/09
Address 2800 BRIDGE PARKWAY
REDWOOD CITY, CA 94065
Telephone 650-610-5200
CIK 0001125920
Symbol SFLY
SIC Code 7384 - Photofinishing Laboratories
Industry Photography
Sector Consumer Cyclical
Fiscal Year 12/31
http://www.edgar-online.com
© Copyright 2010, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    SHUTTERFLY INC FORM 10-K (Annual Report) Filed 02/09/10 for the Period Ending 12/31/09 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 2800 BRIDGE PARKWAY REDWOOD CITY, CA 94065 650-610-5200 0001125920 SFLY 7384 - Photofinishing Laboratories Photography Consumer Cyclical 12/31 ...

  • Page 2
    ...Organization) 2800 Bridge Parkway Redwood City, California (Address of Principal Executive Offices) Registrant's telephone number, including area code (650) 610-5200 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Common Stock, $0.0001 Par Value Per Share Name of Each...

  • Page 3
    ... value per share Outstanding at February 5, 2010 25,909,738 shares DOCUMENTS INCORPORATED BY REFERENCE Portions of the documents listed below have been incorporated by reference into the indicated parts of this report, as specified in the responses to the item numbers involved: Designated portions...

  • Page 4
    ... and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information PART III Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management...

  • Page 5
    ... initial public offering and our common stock is listed on the Nasdaq Global Market under the symbol "SFLY." Our principal corporate offices are located in Redwood City, California. We are an Internet-based social expression and personal publishing service that enables consumers to share, print and...

  • Page 6
    ... for our Share Sites designed to support parents and coaches who manage team sports like soccer. We also offer the ability to upload, store, and share a limited number of video clips for free and a video subscription service that provides unlimited video storage, larger file sizes, and HD...

  • Page 7
    ... and in December 2009, we launched Wink, a new mobile service which enables customers to create, order, and mail customized photo strips using photos from their iPhone, Facebook, and Flickr accounts. Commercial Print Services In 2008, we launched our Commercial Printing business initiative. The...

  • Page 8
    ... example, this technology allows a 4x6 print to look the same as a photo printed on an enlargement or in a photo book, even if they are ordered at separate times. Production system. We operate our own production facilities in Charlotte, North Carolina and Phoenix, Arizona. Our new manufacturing and...

  • Page 9
    ... photography marketplace; photo-related software companies such as Apple, Microsoft and Corel; social media companies that host images such as MySpace, Facebook and Hi5; and specialized companies in the photo book and stationery business such as Hallmark, American Greetings, Tiny Prints, Minted...

  • Page 10
    ... be certain how existing laws will apply in the online context, including with respect to such topics as privacy, defamation, pricing, credit card fraud, advertising, taxation, sweepstakes, promotions, content regulation, net neutrality, quality of products and services and intellectual property...

  • Page 11
    ... required use of disclaimers, if adopted, could harm our business through a decrease in user registrations and revenues. Employees As of December 31, 2009, we had 519 full time employees. Below is a summary of employees by function: 2009 Cost of revenue Technology and development Sales and marketing...

  • Page 12
    ... our business in a number of ways, including lower prices for our products and services and reduced sales. In addition, the current economic conditions may lead to price increases by our suppliers or increase our operating expenses due to, among others, higher costs of labor, energy, equipment and...

  • Page 13
    ... our product offerings, promote our new products and services and sell to consumers photo-based products such as photo books, calendars and cards; â- the costs of customer acquisition; â- our ability to manage our production and fulfillment operations; â- the costs to produce our prints and photo...

  • Page 14
    ... the timing of holidays; â- volatility in our stock price, which may lead to higher stock-based compensation expense; â- consumer preferences for digital photography services; â- improvements to the quality, cost and convenience of desktop printing of digital pictures and products; and â- global...

  • Page 15
    ... to our redundant systems located at our data storage center, such disruption could result in the deletion or corruption of customer stored images. Interruptions to our website, information technology systems, print production processes or customer service operations could damage our reputation and...

  • Page 16
    ... have difficulty managing our growth and expanding our operations successfully. We have website operations, offices and customer support centers in Redwood City, California, and production facilities in Charlotte, North Carolina and Phoenix, Arizona. Our growth has placed, and will continue to place...

  • Page 17
    ... marketplace; â- Photo-related software companies such as Apple, Microsoft and Corel; â- Social media companies that host images such as MySpace, Facebook and Hi5; and â- Specialized companies in the photo book and stationery business such as Hallmark, American Greetings, Tiny Prints, Minted...

  • Page 18
    ... website and promote our products, including paying fees to third parties who drive new customers to our website, purchasing search results from online search engines, e-mail and direct mail. We pay providers of online services, search engines, directories and other website and e-commerce businesses...

  • Page 19
    ... to the competitive nature of the digital photography products and services markets, if we are unable to successfully promote the Shutterfly brand, we may fail to substantially increase our net revenues. Customer awareness of and the perceived value of our brand will depend largely on the success of...

  • Page 20
    ... in a timely manner, we would likely fail to meet customer expectations, which could result in negative publicity, damage our reputation and brand and harm our business and results of operations. If we are unable to develop, market and sell new products and services that address additional market...

  • Page 21
    ... of our business strategy includes strengthening our competitive position and refining the customer experience on our website through internal development. However, from time to time, we may selectively pursue acquisitions of businesses, such as our 2008 acquisition of Nexo and our September 2009...

  • Page 22
    ... a state can require the collection of sales and use taxes. States are currently attempting to expand the definition of what constitutes physical presence for sales and use taxes. At the same time, the standard governing the imposition of other taxes, for instance, corporate income taxes, is less...

  • Page 23
    .... Future tax audits by taxing agencies for the open tax years could lead to fluctuations in our effective tax rate because the taxing authority may disagree with certain assumptions we have made regarding appropriate credits and deductions in filing our tax returns. Under current stock option tax...

  • Page 24
    ... of our sales are billed to our customers' credit card accounts directly, orders are shipped to a customer's address, and customers log on using their e-mail address. We rely on encryption and authentication technology licensed from third parties to effect the secure transmission of confidential...

  • Page 25
    ... printing at home. Furthermore, we may have to incur significantly higher and more sustained advertising and promotional expenditures or reduce the prices of our products and services in order to attract additional online consumers to our website and convert them into purchasing customers. Specific...

  • Page 26
    ... errors are not identified and addressed timely, our financial reporting may not be in compliance with generally accepted accounting principles. For example, since 2006 we have licensed software from a third-party to automate the administration of our employee equity programs and calculate our stock...

  • Page 27
    ... to initiate or maintain coverage of our stock; â- ratings downgrades by any securities analysts who follow our company; â- the public's response to our press releases or other public announcements, including our filings with the SEC; â- announcements by us or our competitors of significant...

  • Page 28
    ... Corporation Law, which, subject to some exceptions, prohibits "business combinations" between a Delaware corporation and an "interested stockholder," which is generally defined as a stockholder who becomes a beneficial owner of 15% or more of a Delaware corporation's voting stock, for a three-year...

  • Page 29
    ...space in certain adjacent buildings. In April 2009, we began operations in a new manufacturing and production facility in Phoenix, Arizona, totaling approximately 101,200 square feet. The lease for this facility commenced in March 2009, and will continue through 2016. We have an option to extend the...

  • Page 30
    ...the foreseeable future. In addition, our current line of credit agreement, which expires in June 2010, prohibits the payment of dividends. The following table sets forth the high and low sales price per share for Shutterfly's common stock for the periods indicated: Year Ended December 31, 2008 First...

  • Page 31
    ... and development Sales and marketing General and administrative Total operating expense Income from operations Interest expense Interest and other income, net Income before income taxes and cumulative effect of change in accounting principle (Provision) / benefit for income taxes Net income...

  • Page 32
    ...239 2,217 3,310 Years ended December 31, 2009, 2008, 2007 and 2006 include stock-based compensation expense under Accounting Standards Codification ("ASC") 718 (formerly Statement of Financial Accounting Standards No. 123(R), Share-Based Payment ), which requires stock-based compensation expense to...

  • Page 33
    ... photo books, personalized calendars, greeting cards and stationery, other photo-based merchandise and high-quality prints ranging in size from wallet-sized to jumbo-sized 20x30 enlargements. We currently manufacture these items in our Charlotte, North Carolina and Phoenix, Arizona manufacturing...

  • Page 34
    ... products and services revenues are derived from the sale of photo-based products, such as photo books, greeting and stationery cards, calendars and other photo-based merchandise and ancillary products and services, and the related shipping revenues. Revenue from advertising displayed on our website...

  • Page 35
    ... shipped within two business days after a customer places an order. Total number of orders has increased on an annual basis for each year since 2000, and while we anticipate this trend to continue in the future, the number of orders is dependent on whether we are successful in executing our strategy...

  • Page 36
    ...prints and other photo-based products, advertising services and commercial print services. We generally recognize revenues from product sales upon shipment when persuasive evidence of an arrangement exists (typically through the use of a credit card or receipt of a check), the selling price is fixed...

  • Page 37
    ... on its enterprise value. This reporting unit was not at risk of failing step one of the annual goodwill impairment test for years ended December 31, 2009 and 2008. Software and Website Development Costs. We capitalize eligible costs associated with software developed or obtained for internal use in...

  • Page 38
    ... length of time an employee will retain vested stock options before exercising them, the estimated volatility of our common stock price and the number of options that will be forfeited prior to vesting. The fair value is then amortized on a straight-line basis over the requisite service periods of...

  • Page 39
    ... revenues: Year Ended December 31, 2008 2007 2009 Net revenues Cost of revenues Gross profit Operating expenses: Technology and development Sales and marketing General and administrative Income from operations Interest expense Interest and other income, net Income before income taxes Provision for...

  • Page 40
    ... personalized products and services revenues and revenue from our commercial print initiative, offset by a decrease in print revenue. PPS revenues increased $32.1 million, or 25%, to $161.7 million in 2009 compared to 2008. The increase in PPS is primarily a result of increased sales of photo books...

  • Page 41
    ... website infrastructure support teams increased by $2.2 million. In 2009, we capitalized $5.4 million in eligible costs, which includes $1.6 million of stock based compensation, associated with software developed or obtained for internal use, compared to $4.8 million capitalized in 2008. Our sales...

  • Page 42
    ...2008. In 2009, we recorded a $2.7 million mark-to-market gain on our auction-rate securities that have been classified as trading securities which was entirely offset by a $2.7 million loss on the UBS Right. Year Ended December 31, 2009 2008 (In thousands) $ (3,514 ) $ (1,571 ) 38 % 30 % Income tax...

  • Page 43
    ... of a continued mix shift from prints to higher value personalized products, particularly photo books. Year Ended December 31, 2007 Change % Change (In thousands, except AOV amounts) 2,789 2,357 432 18 % 7,569 7,062 507 7% 28.20 $ 26.44 $ 1.76 7% 2008 Customers Orders Average value order $ 41

  • Page 44
    ... expansion to a new colocation hosting site which resulted in higher networking, power and storage costs during fiscal year 2008. And, in 2008, we capitalized $4.8 million in eligible website development costs compared to $3.1 million in 2007. Our sales and marketing expense increased $8.7 million...

  • Page 45
    ... and 2014 for federal and state tax purposes, respectively. Year Ended December 31, 2007 $ Change (In thousands) 5,231 $ 15,712 $ (10,481 ) 3,660 $ 9,578 $ (5,918 ) 2% 5% - 2008 Income before income taxes Net income Percentage of net revenues $ $ % Change (67 )% (62 )% - Net income decreased by...

  • Page 46
    ... is successful or a buyer is found outside of the auction process. In November 2008, we accepted an offer from UBS AG ("UBS"), one of our investment providers, entitling us to sell at par value ARS purchased from UBS at anytime during a two-year period from June 30, 2010 through July 2, 2012 (the...

  • Page 47
    ... measures. We define adjusted EBITDA as earnings before interest, taxes, depreciation, amortization and stock-based compensation. Free cash flow is defined as adjusted EBITDA less purchases of property and equipment and capitalization of software and website development costs. Management believes...

  • Page 48
    ... Year Ended December 31, 2009 2008 2007 $ 50,177 $ (13,764) (3,891) 32,522 $ 38,394 $ (18,220) (4,527) 15,647 $ 32,858 (31,881) (3,112) (2,135) Non-GAAP Adjusted EBITDA Less: Purchases of property and equipment, including accrual amounts Less: Capitalized technology & development costs Free cash...

  • Page 49
    ... purchase technology and equipment to support the growth in our business and to increase our production capacity and help enable us to respond more quickly and efficiently to customer demand. Our expenditures also include costs associated with capitalized software and website development. This range...

  • Page 50
    ..., capital expenditures for production equipment for our manufacturing and production operations at our California and North Carolina facilities, and $4.5 million of capitalized software and website development. An additional $52.3 million was used to purchase auction rate securities, offset by...

  • Page 51
    ... require any adjustment to be recognized through the purchase price. This accounting standard update applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The adoption...

  • Page 52
    ... accounting. It also requires a consistent approach between the useful life of a recognized intangible asset under prior business combination accounting and the period of expected cash flows used to measure the fair value of an asset under the new business combinations accounting (as currently...

  • Page 53
    ... is successful or a buyer is found outside of the auction process. In November 2008, we accepted an offer from UBS AG ("UBS"), one of our investment providers, entitling us to sell at par value ARS purchased from UBS at anytime during a two-year period from June 30, 2010 through July 2, 2012 (the...

  • Page 54
    ... SUPPLEMENTARY DATA. SHUTTERFLY, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm Consolidated Balance...Statements of Cash Flows Notes to Consolidated Financial Statements Schedule II - Valuation and Qualifying Accounts 53 54 55 56 57 58 59 81 52

  • Page 55
    ... audits provide a reasonable basis for our opinions. The Company adopted new fair value measurement and disclosure accounting principles during the year ended December 31, 2008. A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the...

  • Page 56
    SHUTTERFLY, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) December 31, 2009 2008 ASSETS Current assets: Cash and cash equivalents Short-term investments Accounts receivable, net Inventories Deferred tax asset, current portion Prepaid expenses and other current assets ...

  • Page 57
    SHUTTERFLY, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) Year Ended December 31, 2008 2007 2009 Net revenues Cost of net revenues Gross profit Operating expenses: Technology and development Sales and marketing General and administrative Income from operations ...

  • Page 58
    ... loss Balance, beginning of year Change in unrealized loss in investments, net of tax Balance, end of year Total stockholders' equity Number of shares Common stock Balance, beginning of year Issuance of common stock upon exercise of options and vesting of restricted stock units Issuance of common...

  • Page 59
    ... INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Year Ended December 31, 2009 2008 2007 Net Income Unrealized gain on investments, net of tax Unrealized gain (loss) arising during period Less: reclassification adjustment for gain realized in net income Total comprehensive income...

  • Page 60
    ... of property and equipment Deferred income taxes Tax benefit from stock-based compensation Excess tax benefits from stock-based compensation Loss/(gain) on auction rate securities Rights Loss/(gain) on auction rate securities Changes in operating assets and liabilities: Accounts receivable, net...

  • Page 61
    58

  • Page 62
    ... processes. The Company provides customers a full range of products and services to organize and archive digital images; share pictures; order prints and create an assortment of personalized items such as cards and stationery, calendars and photo books. The Company is headquartered in Redwood City...

  • Page 63
    ...accounts receivable are derived primarily from sales to customers located in the United States who make payments through credit cards, sales of the Company's products in retail stores, sales of commercial print sources, and revenue generated from online advertisements posted on the Company's website...

  • Page 64
    ...stock based compensation incurred in the development phase are capitalized and amortized over the product's estimated useful life, generally three years. Costs associated with minor enhancements and maintenance for the Company's website are expensed as incurred. Long-Lived Assets The Company reviews...

  • Page 65
    ... returns is included in accrued expenses. The Company periodically provides incentive offers to its customers in exchange for setting up an account and to encourage purchases. Such offers include free products and percentage discounts on current purchases. Discounts, when accepted by customers...

  • Page 66
    ... and are often ambiguous. The Company is required to make subjective assumptions and judgments regarding its income tax exposures. Interpretations and guidance surrounding income tax laws and regulations change over time. As such, changes in the Company's subjective assumptions and judgments can...

  • Page 67
    ... require any adjustment to be recognized through the purchase price. This accounting standard update applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The adoption...

  • Page 68
    ... accounting. It also requires a consistent approach between the useful life of a recognized intangible asset under prior business combination accounting and the period of expected cash flows used to measure the fair value of an asset under the new business combinations accounting (as currently...

  • Page 69
    ...2008, the Company accepted an offer (the "Right") from UBS entitling the Company to sell at par value ARS purchased from UBS (approximately $47.9 million, par value at December 31, 2009) at anytime during a two-year period from June 30, 2010 through July 2, 2012. Although the Company expects to sell...

  • Page 70
    ... In 2009, the Company entered into patent license agreements with various third parties. The Company has accounted for these agreements as prepaid royalties that are amortized over the remaining life of the patents. Amortization expense is recorded as a component of cost of revenue. The current...

  • Page 71
    ...the years ended December 31, 2009, 2008 and 2007, respectively. During the year ended December 31, 2009, the Company retired $8,910,000 of fully depreciated property and equipment, primarily building leasehold improvements and equipment associated with the closure of the Company's Hayward production...

  • Page 72
    ... December 31: Weighted Average Useful Life December 31, 2009 2008 In thousands 8,578...years ended December 31, 2009, 2008 and 2007 was $1,838,000, $1,827,000 and $412,000, respectively. Amortization of existing intangible assets is estimated to be as follows (in thousands): Year Ending: 2010 2011 2012...

  • Page 73
    ... Note 5 - Restructuring In July 2008, the Company announced that effective in early 2009, it would close its Hayward production facility and begin operations at a new manufacturing facility to be located in Phoenix, Arizona. At the time of the decision, the Company recorded approximately $80,000 in...

  • Page 74
    ... the purchase price, $0.1 million was allocated to in-process research and development having an indefinite life and $51,000 was allocated to core technology and user base which will be amortized over their estimated useful lives of one to three years. The Company also recorded a deferred tax asset...

  • Page 75
    ...aggregate cash purchase price of $10.1 million, including $0.1 million in fees; and $4.0 million in restricted stock. Nexo had developed and launched an internet-based platform, whereby groups can create customized, content-rich personal and group websites. The acquisition was accounted for as a non...

  • Page 76
    ... of non-cancelable marketing agreements, co-location services and printing equipment rental that expire at various dates through the year 2013. As of December 31, 2009, the Company's purchase obligations totaled $16,878,000. Indemnifications In the normal course of business, the Company enters into...

  • Page 77
    ... Board and Company's management at the time of the grant. Following the IPO, the fair value of the Company's common stock is determined by the last sale price of such stock on the Nasdaq Global Market. Options issued under the 2006 Plan typically vest with respect to 25% of the shares one year after...

  • Page 78
    ... over the following three years. Option holders under the 2006 Plan are allowed to exercise options prior to vesting. At the time of adoption of the 2006 Plan, there were 1,358,352 shares of common stock authorized for issuance under the 2006 Plan, plus 92,999 shares of common stock from the 1999...

  • Page 79
    ... summary of the status of the Company's stock option plans at December 31, 2009 and changes during the period are presented in the table below (share numbers and aggregate intrinsic value in thousands): Weighted Average Weighted Contractual Average Term Exercise (Years) Price $ 13.41 - 13.80 6.10 15...

  • Page 80
    ...the time of grant. The assumptions used to value options granted during the twelve months ended December 31, 2009, 2008, and 2007, were as follows: Year Ended December 31, 2008 2007 - - - 2.3 % 2.5 % 4.1 % 54.1 % 51.7 % 45.0 % 4.6 4.4 4.4 2009 Dividend yield Annual risk free rate of return Expected...

  • Page 81
    ... over a weighted-average period of approximately two years. Note 9 - Income Taxes The components of the provision for income taxes are as follows (in thousands): December 31, 2008 2009 Federal: Current Deferred State: Current Deferred Total income tax expense (benefit): Current Deferred $ 2007...

  • Page 82
    ...million. The Company will begin accruing current cash taxes payable for federal purposes in 2010. The Tax Reform Act of 1986 limits the use of net operating loss and tax credit carryforwards in the case of an "ownership change" of a corporation or separate return loss year limitations. Any ownership...

  • Page 83
    ... of prior years Additions for tax positions related to current year Reductions for tax positions of prior years Settlement of franchise tax audit Balance of unrecognized tax benefits at December 31 $ $ $ Although timing of the resolution or closure on audits is highly uncertain, the Company does...

  • Page 84
    SHUTTERFLY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 11 - Quarterly Financial Data (Unaudited) Summarized quarterly financial data for the years ended December 31, 2009 and 2008, are as follows (in thousands, except per share amounts): Year Ended December 31, 2009 First Second Third ...

  • Page 85
    Schedule II Valuation and Qualifying Accounts Additions Charged to Charged to Costs and Other Expenses Accounts In thousands - - 23 - - - Balance at Beginning of Period Allowance for Doubtful Accounts Receivable Year ended December 31, 2007 Year ended December 31, 2008 Year ended December 31, 2009...

  • Page 86
    ... Rules 13a-15 (f) and 15(d)-15(f) under the Securities Exchange Act of 1934. The Company's internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and...

  • Page 87
    ... generally accepted accounting principles. In October 2009, the Company became aware of a recent alert from its third party software provider which noted that prior versions of its software did not properly calculate stock-based compensation when users selected the option to use a weighted average...

  • Page 88
    ... ended December 31, 2009, management tested the design and operating effectiveness of the newly implemented controls and concluded that the material weakness described above has been remediated as of December 31, 2009. Changes in Internal Control Over Financial Reporting As described above under...

  • Page 89
    ITEM 9B. OTHER INFORMATION. None. 85

  • Page 90
    ... Ownership Reporting Compliance." We have adopted a written code of ethics for financial employees that applies to our principal executive officer, principal financial officer, principal accounting officer, controller and other employees of the finance department designated by the Company's Chief...

  • Page 91
    ... of Selection of Independent Registered Public Accounting Firm." PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES . (a) The following documents are filed as part of this annual report: 1. Financial Statements . The consolidated financial statements of Shutterfly, Inc. are incorporated by...

  • Page 92
    SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SHUTTERFLY, INC. (Registrant) Dated: February 8, 2010 By: /s/ Mark J. Rubash Mark...

  • Page 93
    ... between Liberty Cotton Center LLC and the Registrant, dated August 22, 2008, as amended on October 29, 2008. Amendment to Offer Letter dated December 26, 2008 for Mark J. Rubash.* Amendment to Offer Letter dated December 23, 2008 for Dwayne Black.* Form S-1 S-1 S-1 S-1 Exhibit Number 3.03 3.05...

  • Page 94
    ... Peter Elarde.* Offer Letter between Company and Neil Day, dated April 17, 2009.* Subsidiaries of the Registrant. Consent of Independent Registered Public Accounting Firm. Power of Attorney. (See page 107 of this Form 10-K) Certification of Chief Executive Officer Pursuant to Securities Exchange Act...

  • Page 95
    ..., 333-137676) of Shutterfly, Inc. of our report dated February 8, 2010 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP San Jose, CA February 8, 2010

  • Page 96
    ...covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has...

  • Page 97
    ...covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has...

  • Page 98
    ... Officer of Shutterfly, Inc. (the "Company"), pursuant to 18 U.S.C. §1350, hereby certifies that: (i) the Annual Report on Form 10-K for the period ended December 31, 2009 of the Company (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange...

  • Page 99
    ... Financial Officer of Shutterfly, Inc. (the "Company"), pursuant to 18 U.S.C. §1350, hereby certifies: (i) the Annual Report on Form 10-K for the period ended December 31, 2009 of the Company (the "Report") fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange...