Stamps.com 2007 Annual Report Download - page 41

Download and view the complete annual report

Please find page 41 of the 2007 Stamps.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 70

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70

The accompanying notes are an integral part of these financial statements.
Net cash provided (used in) by investing activities
46,942
(12,912
)
(9,914
)
Financing activities:
Proceeds from exercise of stock options
933
7,620
6,425
Issuance of common stock under ESPP
477
538
381
Repurchase of common stock
(33,308
)
(26,692
)
(2,326
)
Net cash (used in) provided by financing activities
(31,898
)
(18,534
)
4,480
Net increase (decrease) in cash and cash equivalents
31,927
(9,028
)
9,570
Cash and cash equivalents at beginning of period
11,740
20,768
11,198
Cash and cash equivalents at end of period
$
43,667
$
11,740
$
20,768
Supplemental cash flow information:
Income taxes paid during the period
$
354
$
192
$
189
F-39
TABLE OF CONTENTS
STAMPS.COM INC.
NOTES TO FINANCIAL STATEMENTS
1. Description of Business
Our core service allows customers to buy and print USPS approved postage using any PC, an ordinary inkjet or laser printer,
and an internet connection. Customers use our service to mail and ship a variety of mail pieces including postcards, envelopes,
flats and packages, using a wide range of USPS mail classes including First Class Mail®, Priority Mail®, Express Mail®, Media
Mail®, Parcel Post®, and others. Our customers include home businesses, small businesses, corporations and individuals. In
1999, we became the first ever USPS-licensed vendor to offer PC Postage in a software-only business model. On August 10,
2004, we publicly launched a market test of PhotoStamps®, which allows consumers to turn digital photos, designs or images
into valid US postage. We are currently under the fourth phase of the market test with authorization from the USPS through May
16, 2008.
2. Summary of Significant Accounting Policies
Use of Estimates and Risk Management
The preparation of financial statements in conformity with US generally accepted accounting principles requires us to make
estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual
results could differ from those estimates and such differences may be material to the financial statements. Examples include
estimates of loss contingencies, promotional coupon redemptions and estimates regarding the useful lives of patents and other
amortizable intangibles.
Contingencies and Litigation
We are involved in various litigation matters as a claimant and a defendant. We record any amounts recovered in these
matters when received. We record liabilities for claims against us when the loss is probable and estimable. Amounts recorded are
based on reviews by outside counsel, in-house counsel and management. Actual results could differ from estimates.
Cash Equivalents and Investments
We consider all highly liquid investments with an original or remaining maturity of three months or less at the date of
purchase to be cash equivalents.
Our cash equivalents and investments are comprised of money market, U.S. government obligations, asset-backed securities