Stamps.com Inc (STMP)

[Drugdoctor]

Share Repurchase and Debt Repayment

During the first quarter of 2019, the Company repurchased approximately 235 thousand shares at a total cost of approximately $32 million.

On March 8, 2019, our Board of Directors approved a $60 million share repurchase plan which is scheduled to expire in September 2019. As of May 8, 2019, we have repurchased approximately $24 million under this plan. On May 1, 2019, the Board of Directors adjusted the repurchase parameters of the plan which is now expected to repurchase a further $9 million, in addition to the approximately $24 million already purchased, between May 9, 2019 and the plan’s expiration in September 2019.

During the first quarter of 2019, the Company made a required principal repayment of $2.6 million against the borrowings under the Company’s existing credit agreement related to the Endicia acquisition. As of March 31, 2019, total debt under the credit agreement, excluding debt issuance costs, was $58.8 million.

Summary of our Updated Business Outlook

For fiscal year 2019, the Company currently expects its GAAP financial outlook to be as follows:

We expect total revenue to be in a range of approximately $510 million to $560 million; this compares to previous guidance of $540 million to $570 million.
We expect GAAP net income to be in a range of approximately $21 million to $45 million; this compares to previous guidance of $55 million to $69 million.
We expect GAAP net income per fully diluted share to be in a range of approximately $1.15 to $2.56; this compares to previous guidance of $2.86 to $3.76.
We expect our 2019 effective tax rate to be 40.0%; this compares to previous guidance of 30.0%.
The revision to our guidance is principally the result of potential short and long term adverse amendments, renegotiations, changes, or termination of certain contracts between the USPS and certain of our strategic partners who are part of the USPS’s reseller program, that we have recently become aware of, and which will be discussed further on our conference call later today. See also below under "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995.

The above GAAP amounts, adjusted as detailed below, result in the following non-GAAP financial outlook:

We expect non-GAAP adjusted EBITDA to be in a range of approximately $110 million to $150 million; this compares to previous guidance of $145 million to $165 million.
We expect non-GAAP adjusted income per fully diluted share to be in a range of $3.35 to $4.85; this compares to previous guidance of $5.15 to $6.15.
The Company plans to discuss certain strategic items during its conference call that impact our business outlook for 2019.

Detailed Discussion of our Business Outlook

As noted above, for 2019, the Company currently expects total revenue to be in a range of approximately $510 million to $560 million; this compares to previous guidance of $540 million to $570 million.

Also, for 2019, the Company currently expects GAAP net income to be in a range of approximately $21 million to $45 million; this compares to previous guidance of $55 million to $69 million.

The expected GAAP net income range includes depreciation and amortization expense of approximately $28 million, stock-based compensation expense of approximately $45 million, interest and other expense, net of approximately $2 million, and income tax expense of approximately $14 million to $30 million. Excluding the depreciation and amortization expense, stock-based compensation expense, interest and other expense, net and income tax expense, we expect non-GAAP adjusted EBITDA to be in a range of approximately $110 million to $150 million; this compares to previous guidance of $145 million to $165 million.