Shutterfly debt leaks lower as 3Q21 EBITDA and revenue fall YoY

Shorts are leaning on Shutterfly’s bonds after the digital imaging company posted disappointing results for 3Q21, with lower revenue and EBITDA figures year-over-year, according to two sources following the company. 

Adjusted revenue excluding Spoonflower – a marketplace connecting consumers with artists in the home decor space that Shutterfly acquired last year – totaled USD 325m, compared to USD 331m in 3Q20, they said. Including Spoonflower, adjusted revenue totaled USD 343m, compared to USD 354m YoY. 

On a segment basis, consumer revenue shook out to USD 161m, compared to USD 178m in 3Q20, while sales in the Lifetouch unit totaled USD 112m, compared to USD 102m YoY. The Apollo Global Management-owned company’s Shutterfly Business Solutions (SBS) segment, meanwhile, booked USD 52m in sales, compared to USD 51m generated in the same quarter the prior year. 

Excluding Spoonflower, adjusted EBITDA came in at negative USD 40m, compared to negative USD 19m in 3Q20. Factoring in Spoonflower, adjusted EBITDA totaled negative USD 41m, compared to negative USD 13m YoY. 

On a segment basis, consumer adjusted EBITDA amounted to negative USD 2m, compared to positive USD 20m in 3Q20, while for Lifetouch adjusted EBITDA came in at negative USD 39m, compared to negative USD 45m YoY. The adjusted topline for the SBS segment totaled USD 1m, compared to USD 5m in 3Q20. 

As of 30 September, liquidity amounted to USD 162m through USD 132m of cash and USD 30m of revolver availability. 

On the 23 November earnings call, the company said that post quarter-end, Shutterfly repaid USD 100m of borrowings out of the USD 270m drawn on its revolver, leaving USD 170m outstanding on the facility and USD 130m of availability. The company on the call noted expectations to repay more under the facility.

The borrower’s USD 785m 8.5% senior secured notes due 2026 last traded at 100.75 to yield 8.19% on 1 December, compared to 103.75 to yield 7.022% prior to the earnings report and 105.25 to yield 6.488% in early November, according to MarketAxess.

Its USD 890m Libor+ 500bps term loan due 2026 is quoted 96.563/97.5 today, versus 98.156/98.656 before the earnings report, according to a trader. 

Shutterfly did not respond to a request for comment. Apollo did not respond to requests for comment. 

2021 Debtwire

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