BigStar Reports 1999 Fourth Quarter and Year-End Results -- Record Revenues; Nearly Nine-Fold Increase For Quarter.Business Editors NEW YORK--(BUSINESS WIRE)--Feb. 8, 2000 BigStar Entertainment, Inc. (Nasdaq: BGST BGST Bradley Gunnery Skills Test ) today announced record revenues for its 1999 fourth quarter and year end. For the quarter ended December December: see month. 31, 1999, BigStar Entertainment reported a nearly nine-fold Adj. 1. nine-fold - having nine units or components ninefold, nonuple multiple - having or involving or consisting of more than one part or entity or individual; "multiple birth"; "multiple ownership"; "made multiple copies of the speech"; "his multiple increase in net revenues of $5,225,673, climbing from $601,082 in the fourth quarter of 1998. Sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen , revenues for the 1999 fourth quarter increased 42.3 percent from $3,671,202 reported in the preceding third quarter. Net revenues for the 1999 fourth quarter included $845,333 in advertising and promotional revenues, of which $255,000 was from barter barter: see exchange. barter Direct exchange of goods or services without the use of money or any other intervening medium of exchange. Barter is conducted either according to established rates of exchange or by bargaining. advertising. For the same period, the company reported a net loss of $7,733,462, or $0.88 per share, compared with a net loss of $2,202,337, or $0.76 per share, a year ago. &uot;Results for the fourth quarter reflect the company's expanded marketing initiatives to reach a broader customer base, as well as investments for the development of additional Web infrastructure to support our expanding Shop-A-Tainment(TM) growth strategy,&uot; said David Friedensohn, chairman and chief executive officer. &uot;BigStar's focused marketing efforts contributed significantly to increased online traffic for the quarter. Through the use of our proprietary direct marketing technology, we are able to identify and leverage consumer preferences to create greater potential sales opportunities in future quarters.&uot; For the quarter ended December 31, 1999, gross profit was $1,347,775 compared with a $49,652 gross profit for the corresponding 1998 quarter. The resulting gross margin of 25.8 percent for the 1999 fourth quarter represents a 17.5 percent increase from the 8.3 percent gross margin for the same period a year ago. For the year ended December 31, 1999, revenues were $13,352,201, which includes $1,859,120 in advertising and promotional revenues. The company reported a net loss for the same period of $20,857,856, or $3.18 per share. Revenues for the period from March 2 (inception INCEPTION. The commencement; the beginning. In making a will, for example, the writing is its inception. 3 Co. 31 b; Plowd. 343. Vide Consummation; Progression. ) through December 31, 1998 were $789,107. For the same period, the company reported a net loss of $3,247,821, or $1.25 per share. Gross profit for the year-ended December 31, 1999, was $3,128,775, with a gross margin of 23.4 percent. Gross profit for the period from March 2 (inception) through December 31, 1998 was $74,664, with a gross margin of 9.5 percent. During the quarter, the company announced several initiatives designed to further enhance the company's identity as a leading Shop-A-Tainment(TM) destination, including: - A strategic marketing agreement with ValueVision, soon to be renamed SnapTV, and its $10 million investment in BigStar - The development of BigStar Broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). Theater(TM), its new digital download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and streaming product, which provides for online distribution of filmed entertainment -- including currently available full-length movies - A strategic content and e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. agreement with StarMedia Starmedia is a well known Latin American Internet brand, founded in March 1996 by Fernando Espuelas and Jack Chen as a part of the now defunct Starmedia Network. Starmedia is now owned and operated online by France Telecom subsidiary Wanadoo SA, where it continues to serve millions of to provide filmed entertainment to the Hispanic Hispanic Multiculture A person of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race Social medicine Any of 17 major Latino subcultures, concentrated in California, Texas, Chicago, Miam, NY, and elsewhere Community across the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. Friedensohn also highlighted several other initiatives and milestones during the fourth quarter: - The release of version 2.0 of the BigStar.com Web site, adding enhanced functionality and greatly increased scalability How much a system can be expanded. See scalable. scalability - How well a solution to some problem will work when the size of the problem increases. For example, a central server of some kind with ten clients may perform adequately but with a thousand clients it - An increase of over 85,000 new customers resulting in a total customer count of over 250,000 since inception &uot;The BigStar team is very excited to announce the expansion of its Shop-A-Tainment(TM) strategy from the Web to television with the commencement of the BigStar Show on SnapTV. The BigStar Show is expected to launch early in the second quarter, and we are extremely excited about the potential revenue and profit contributions,&uot; said Friedensohn. In addition to the BigStar Show, the company is the exclusive filmed entertainment provider to SnapTV and will be developing the BigStar brand throughout the ValueVision/SnapTV audience. Equally important, the ValueVision/SnapTV Strategic Marketing Partnership provides for exclusivity on filmed entertainment downloads, supporting BigStar Broadband Theatre(TM) as it develops the future business of providing streamed and downloadable content to its end-users. The partnership takes full advantage of the convergence convergence Mathematical property of infinite series, integrals on unbounded regions, and certain sequences of numbers. An infinite series is convergent if the sum of its terms is finite. of the Web and TV to deliver our digital products in a digitized format. BigStar Entertainment, Inc. (http://www.bigstar.com) is a leading online-filmed entertainment superstore su·per·store n. A very large retail store that stocks highly diversified merchandise, such as groceries, toys, and camera equipment, or a wide variety of mechandise in a specific product line, such as computers or sporting goods. , based on customer traffic to its Web sites, that is exclusively dedicated to filmed entertainment products. BigStar sells videos and digital video discs See DVD. Digital Video Disc - Digital Versatile Disc (DVDs). Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: BigStar Entertainment, Inc. has included in this press release certain &uot;forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. statements&uot; within the meaning of the Private Securities Litigation Reform Act of 1995 concerning BigStar's business, operations and financial condition. The words or phrases &uot;can be&uot;, &uot;expects&uot;, &uot;may affect&uot;, &uot;may depend&uot;, &uot;believes&uot;, &uot;estimate&uot;, &uot;project&uot; and similar words and phrases Words and Phrases® A multivolume set of law books published by West Group containing thousands of judicial definitions of words and phrases, arranged alphabetically, from 1658 to the present. are intended to identify such forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Such forward-looking statements are subject to various known and unknown risks and uncertainties and BigStar cautions you that any forward-looking information provided by or on behalf of BigStar is not a guarantee of future performance. Actual results could differ materially from those anticipated in such forward-looking statements due to a number of factors, some of which are beyond BigStar's control, in addition to those discussed in BigStar's other press releases, public filings and statements by BigStar's management, including (i) the volatile With regard to computer memory, it means "temporary" and not "highly changeable," which is the usual meaning of the word. See volatile memory. 1. (programming) volatile - volatile variable. 2. (storage) volatile - See non-volatile storage. and competitive nature of the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the industry, (ii) changes in domestic and foreign economic and market conditions, (iii) the effect of federal, state and foreign regulation on BigStar's business, (iv) failure of BigStar, its vendors or other third parties to achieve Year 2000 compliance and (v) the effect of any future acquisitions. All such forward-looking statements are current only as of the date on which such statements were made. BigStar does not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date on which any such statement is made or to reflect the occurrence of unanticipated events.
BigStar Entertainment, Inc.
Statements Of Operations
March 2, 1998
Three months Three months Twelve Months (INCEPTION)
ended ended ended to
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
(unaudited) (unaudited) (unaudited)
Net sales $ 5,225,673 $ 601,082 $13,352,201 $ 789,107
Cost of sales 3,877,898 551,430 10,223,426 714,443
----------- ----------- ----------- -----------
Gross profit 1,347,775 49,652 3,128,775 74,664
Operating expenses
Sales and
marketing 6,106,936 1,174,902 15,593,111 1,467,075
General and
administrative 1,523,075 570,123 3,955,007 891,970
Web site and
software
development 1,729,259 516,454 4,968,840 970,594
----------- ----------- ----------- -----------
Total operating
expenses 9,359,270 2,261,479 24,516,958 3,329,639
----------- ----------- ----------- -----------
Loss from
operations (8,011,495) (2,211,827) (21,388,183) (3,254,975)
Investment
income, net 278,033 9,490 530,327 7,154
----------- ----------- ----------- -----------
Net Loss $(7,733,462) $(2,202,337)$(20,857,856) $(3,247,821)
=========== =========== =========== ===========
Per share information:
Net loss per
share - basic
and diluted $ (0.88) $ (0.76) $ (3.18) $ (1.25)
=========== =========== =========== ===========
Weighted average
common shares
outstanding
- basic and
diluted 8,827,777 2,901,437 6,567,504 2,602,784
=========== =========== =========== ===========
BigStar Entertainment, Inc.
Balance Sheets
December 31, December 31,
1999 1998
------------ ------------
(unaudited)
Assets:
Cash and cash equivalents $ 17,422,817 $ 363,124
Cash held in escrow - 453,000
Accounts receivable, net of allowance 1,129,454 61,121
Short term investments 6,902,234 -
Prepaids and other current assets 874,844 8,711
------------ ------------
Total current assets 26,329,349 885,956
------------ ------------
Property and equipment, net 1,688,304 452,134
Other assets 1,033,264 -
------------ ------------
Total assets $ 29,050,917 $ 1,338,090
============ ============
Liabilities:
Accounts payable $ 3,729,806 $ 830,088
Accrued expenses 2,138,625 748,228
Accrued payroll costs 695,000 243,240
Capital lease obligation 7,927 11,031
------------ ------------
Total current liabilities 6,571,358 1,832,587
------------ ------------
Stockholders' Equity (Deficit):
Preferred stock - -
Common stock 10,031 3,022
Additional paid-in capital 47,001,954 2,361,716
Subscribed stock - 453,000
Deferred compensation (426,749) (64,414)
Accumulated deficit (24,105,677) (3,247,821)
------------ ------------
Total stockholders' equity (deficit) 22,479,559 (494,497)
------------ ------------
Total liabilities and
stockholders' equity (deficit) $ 29,050,917 $ 1,338,090
============ ============
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