Stamps.com 2015 Annual Report Download - page 35
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Please find page 35 of the 2015 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.TABLE OF CONTENTS
OnAugust29,2014,weacquired100%oftheoutstandingequityofInterapptive,Inc.,whichoperatesShipWorks,inacash
transaction.ShipWorks,basedinSt.Louis,Missouri,offersmonthlysubscriptionbasede-commerceshippingsoftwarethatprovides
simple,powerfulandeasytousesolutionsforonlinesellers.ShipWorkssolutionsintegratewithover65popularonlinesalesand
marketplacessystemsincludingeBay,PayPal,Amazon,Yahoo!andothers.ShipWorksoffersmulti-carriershippingoptionsand
featuresincludingsendingemailnotificationstobuyers,updatingonlineorderstatus,generatingreportsandmanymore.
OnMarch22,2015weenteredintoaStockPurchaseAgreement(“StockPurchaseAgreement”)withPSISystems,Inc.,a
Californiacorporationd/b/aEndicia(“Endicia”),andNewellRubbermaidInc.,aDelawarecorporation(“Newell”).Endicia,basedin
PaloAlto,California,isaleadingproviderofhighvolumeshippingtechnologiesandsolutionsforshippingwiththeUSPS.TheStock
PurchaseAgreementprovidesforourpurchaseofalloftheissuedandoutstandingsharesofcommonstockofEndiciafromawholly-
ownedindirectsubsidiaryofNewell(“Transaction”)foranaggregatepurchasepriceof$215millionincash.Thepurchasepricewas
subjecttoadjustmentforchangesinEndicia’snetworkingcapitalasofthedateoftheclosingoftheTransactionandcertain
transactionexpensesandclosingcashadjustments.Afterreceivingregulatoryclearance,theTransactionwasclosedonNovember18,
2015.
AspartofthefundingofouracquisitionofEndicia,weenteredintoacreditagreementwithagroupofbanksonNovember18,
2015,whichprovidedforatermloanof$82.5millionandarevolvingcreditfacilitywithamaximumborrowingof$82.5million
(collectively,the“CreditAgreement”).TheCreditAgreementissecuredbysubstantiallyallofourassets.Wefundedouracquisition
withcashof$56.5millionanddebtfromourCreditAgreementtotaling$164.5million,totalingapproximately$221.0million.The
$221.0millionconsistsofthefollowing:1)thepurchasepriceof$214.2million,2)$1.5millionofdebtissuancecosts,and3)the
transferofEndicia’sendingcashbalanceonNovember17,2015of$5.3million.Totaldebtissuancecostsof$1.8million,which
includes$300thousandofcostsincurredpriortoclosing,wererecordedasdebtdiscountandarebeingaccretedasinterestexpense
overthelifeoftheCreditAgreement.OurCreditAgreementmaturesonNovember18,2020.AsofDecember31,2015our
outstandingdebtundertheCreditAgreement,grossofdebtissuancecosts,wasapproximately$81.5millionunderthetermloanand
approximately$82.0millionundertherevolvingcreditfacility.Becausewehavealetterofcreditofapproximately$500,000relating
toafacilitylease,wedonothaveanyavailableorunusedborrowingsundertherevolvingcreditfacility.
TheacquisitionsofShipStation,ShipWorksandEndiciarepresentasignificantstrategicinvestmentinourhighvolumeande-
commerceshippingbusiness.PleaseseeNote 3 – “Acquisitions” and Note 7 – “Debt” inourNotestoConsolidatedFinancial
Statementsforfurtherdescription.
Results of Operations
TheresultsofouroperationsduringtheyearendedDecember31,2015includesoperationsofEndiciafortheperiodfrom
November18,2015throughDecember31,2015andtheoperationsofShipStationandShipWorksforthefullfiscalyear2015.The
resultsofouroperationsduringtheyearendedDecember31,2014includesoperationsofShipStationfortheperiodfromJune10,
2014throughDecember31,2014andShipWorksfortheperiodfromAugust29,2014throughDecember31,2014.PleaseseeNote3
–“Acquisitions”inourNotestoConsolidatedFinancialStatementsforfurtherdescription.
Years Ended December 31, 2015 and 2014
Totalrevenueincreased45%to$214.0millionin2015from$147.3millionin2014.Mailingandshippingrevenue,which
includesservicerevenue,productrevenueandinsurancerevenue,was$206.7millionin2015,anincreaseof46%from$141.8million
in2014.CustomizedPostagerevenueincreased33%to$7.2millionin2015from$5.4millionin2014.
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