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TABLE OF CONTENTS
OnAugust29,2014,weacquired100%oftheoutstandingequityofInterapptive,Inc.,whichoperatesShipWorks,inacash
transaction.ShipWorks,basedinSt.Louis,Missouri,offersmonthlysubscriptionbasede-commerceshippingsoftwarethatprovides
simple,powerfulandeasytousesolutionsforonlinesellers.ShipWorkssolutionsintegratewithover65popularonlinesalesand
marketplacessystemsincludingeBay,PayPal,Amazon,Yahoo!andothers.ShipWorksoffersmulti-carriershippingoptionsand
featuresincludingsendingemailnotificationstobuyers,updatingonlineorderstatus,generatingreportsandmanymore.
OnMarch22,2015weenteredintoaStockPurchaseAgreement(“StockPurchaseAgreement”)withPSISystems,Inc.,a
Californiacorporationd/b/aEndicia(“Endicia”),andNewellRubbermaidInc.,aDelawarecorporation(“Newell”).Endicia,basedin
PaloAlto,California,isaleadingproviderofhighvolumeshippingtechnologiesandsolutionsforshippingwiththeUSPS.TheStock
PurchaseAgreementprovidesforourpurchaseofalloftheissuedandoutstandingsharesofcommonstockofEndiciafromawholly-
ownedindirectsubsidiaryofNewell(“Transaction”)foranaggregatepurchasepriceof$215millionincash.Thepurchasepricewas
subjecttoadjustmentforchangesinEndicia’snetworkingcapitalasofthedateoftheclosingoftheTransactionandcertain
transactionexpensesandclosingcashadjustments.Afterreceivingregulatoryclearance,theTransactionwasclosedonNovember18,
2015.
AspartofthefundingofouracquisitionofEndicia,weenteredintoacreditagreementwithagroupofbanksonNovember18,
2015,whichprovidedforatermloanof$82.5millionandarevolvingcreditfacilitywithamaximumborrowingof$82.5million
(collectively,the“CreditAgreement”).TheCreditAgreementissecuredbysubstantiallyallofourassets.Wefundedouracquisition
withcashof$56.5millionanddebtfromourCreditAgreementtotaling$164.5million,totalingapproximately$221.0million.The
$221.0millionconsistsofthefollowing:1)thepurchasepriceof$214.2million,2)$1.5millionofdebtissuancecosts,and3)the
transferofEndicia’sendingcashbalanceonNovember17,2015of$5.3million.Totaldebtissuancecostsof$1.8million,which
includes$300thousandofcostsincurredpriortoclosing,wererecordedasdebtdiscountandarebeingaccretedasinterestexpense
overthelifeoftheCreditAgreement.OurCreditAgreementmaturesonNovember18,2020.AsofDecember31,2015our
outstandingdebtundertheCreditAgreement,grossofdebtissuancecosts,wasapproximately$81.5millionunderthetermloanand
approximately$82.0millionundertherevolvingcreditfacility.Becausewehavealetterofcreditofapproximately$500,000relating
toafacilitylease,wedonothaveanyavailableorunusedborrowingsundertherevolvingcreditfacility.
TheacquisitionsofShipStation,ShipWorksandEndiciarepresentasignificantstrategicinvestmentinourhighvolumeande-
commerceshippingbusiness.PleaseseeNote 3 – “Acquisitions” and Note 7 – “Debt” inourNotestoConsolidatedFinancial
Statementsforfurtherdescription.
Results of Operations
TheresultsofouroperationsduringtheyearendedDecember31,2015includesoperationsofEndiciafortheperiodfrom
November18,2015throughDecember31,2015andtheoperationsofShipStationandShipWorksforthefullfiscalyear2015.The
resultsofouroperationsduringtheyearendedDecember31,2014includesoperationsofShipStationfortheperiodfromJune10,
2014throughDecember31,2014andShipWorksfortheperiodfromAugust29,2014throughDecember31,2014.PleaseseeNote3
–“Acquisitions”inourNotestoConsolidatedFinancialStatementsforfurtherdescription.
Years Ended December 31, 2015 and 2014
Totalrevenueincreased45%to$214.0millionin2015from$147.3millionin2014.Mailingandshippingrevenue,which
includesservicerevenue,productrevenueandinsurancerevenue,was$206.7millionin2015,anincreaseof46%from$141.8million
in2014.CustomizedPostagerevenueincreased33%to$7.2millionin2015from$5.4millionin2014.
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