Bluefly Grows Third Quarter Revenue by Approximately 39%; Gross Profit Increases by More Than 54%.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Bluefly Bluefly, Inc.. (NASDAQ: bfly) is an American electronic commerce company based in New York, New York. As one of the leading fashion and lifestyle e-commerce website, Bluefly Inc, has grown rapidly since it’s inception. , Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on SmallCap: BFLY BFLY Bluefly Inc. (stock symbol) ), a leading 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 retailer of designer brands, fashion trends and superior value (www.bluefly.com), today announced that its net revenue for the third quarter increased by 38.8%, to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $12,045,000, from approximately $8,675,000 in the third quarter of 2004. Gross profit increased by 54.2% for the third quarter of 2005, to approximately $4,575,000 from $2,966,000 in the third quarter of 2004. "We are pleased with our quarterly performance," said Bluefly CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and President, Melissa melissa: see bee balm. Payner-Gregor. "We continue to see the success of the implementation of the merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. strategy and are excited about the initial reaction to our national marketing campaign. We believe that the two coupled together will allow us to achieve sustained growth throughout the fourth quarter and expand awareness of Bluefly." Other financial results for the third quarter of 2005 were as follows: --Net loss for the third quarter decreased by 13.1% to $1,703,000 (or $0.20 per share) from $1,960,000 (or $0.21 per share) in the third quarter of 2004.(1) --Operating loss for the third quarter decreased by 16.8% to $1,521,000 from $1,829,000 in the third quarter of 2004. --Gross margin percentage for the third quarter increased to 38.0% from 34.2% in the third quarter of 2004. --Marketing expenses for the third quarter increased by 339% compared with the third quarter of 2004. This increase is primarily attributed to the additional $900,000 in the quarter associated with our national marketing campaign. --New customers acquired during the third quarter increased by 11.5% to 28,762 from 25,792 in the third quarter of 2004. --Gross average order size for the third quarter increased by 27.4% to $228.72 from $179.48 in the third quarter of 2004. About Bluefly, Inc. Founded in 1998, Bluefly, Inc. (NASDAQ SmallCap: BFLY) is a leading online retailer of designer brands, fashion trends and superior value. Bluefly is headquartered at 42 West 39th Street in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , in the heart of the Fashion District. For more information, please call 212-944-8000 or visit www.bluefly.com. This press release may include statements that constitute "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. ," usually containing the words "believe," "project," "expect" or similar expressions. These statements are made pursuant to the 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. provisions of 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. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. The risks and uncertainties are detailed from time to time in reports filed by the company with the Securities and Exchange Commission, including Forms 8-K, 10-Q and 10-K. These risks and uncertainties include, but are not limited to, the company's ability to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution on, and gain additional revenue from, its consumer public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most and other marketing initiatives; the company's history of losses and anticipated future losses; need for additional capital and potential inability to raise such capital; the potential failure to forecast revenues and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. to make adjustments to operating plans necessary as a result of any failure to forecast accurately; unexpected changes in fashion trends; cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. variations in the apparel 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. market; the availability of merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain ; the need to further establish brand name recognition; management of potential growth; and risks associated with our ability to handle increased traffic and/or continued improvements to its Web site.
(1) Net loss per share for the third quarter of 2005 is based on a
weighted average of 15,823,602 shares outstanding, while net loss
per share for the third quarter of 2004 is based on a weighted
average of 14,634,625 shares outstanding.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
Three Months Ended
September 30, September 30,
2005 2004
------------- -------------
Net sales $ 12,045,000 $ 8,675,000
Cost of sales 7,470,000 5,709,000
------------ ------------
Gross profit 4,575,000 2,966,000
Gross profit percentage 38.0% 34.2%
Selling, marketing and fulfillment
expenses 4,568,000 3,059,000
General and administrative expenses 1,528,000 1,736,000
------------ ------------
Operating loss (1,521,000) (1,829,000)
Interest and other income 65,000 30,000
Interest expense (247,000) (161,000)
------------ ------------
Net loss $ (1,703,000) $ (1,960,000)
Preferred stock dividends (1,387,000) (1,090,000)
Net loss available to common shareholders $ (3,090,000) $ (3,050,000)
Basic and diluted net loss per share
(after preferred stock dividends) $ (0.20) $ (0.21)
============ ============
Weighted average shares outstanding 15,823,602 14,634,625
============ ============
SELECTED BALANCE SHEET DATA & KEY METRICS-
UNAUDITED
September 30, December 31,
2005 2004
-------------- --------------
Cash, including Restricted Cash of
$1,253,000 at December 31, 2004 $ 5,120,000 $ 7,938,000
Inventories, net 17,216,000 12,958,000
Prepaid Inventory 436,000 84,000
Other Current Assets 3,774,000 2,475,000
Property & Equipment, net 3,024,000 1,933,000
Current Liabilities--excluding related
party liabilities below 9,880,000 9,413,000
Notes Payable to Related Party
Shareholders (including interest
payable) 5,067,000 4,658,000
Shareholders' Equity 14,912,000 11,389,000
Three Months Three Months
Ended Ended
September 30, September 30,
2005 2004
-------------- --------------
Average Order Size (including shipping &
handling revenue) $ 228.72 $ 179.48
Customers Added During Period 28,762 25,792
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Three Months
Ended Ended
September 30, September 30,
2005 2004
Cash flows from operating activities:
Loss from operations $ (1,703,000) $ (1,960,000)
Adjustments to reconcile loss from
operations to net cash used in operating
activities:
Depreciation and amortization 291,000 379,000
Change in value of warrants -- --
Non-cash expense related to warrants
issued to supplier 80,000 99,000
Provisions for returns 916,000 29,000
Allowance for doubtful accounts 57,000 64,000
Stock options expense 8,000 121,000
Reserve for inventory obsolescence 170,000 (100,000)
Changes in operating assets and
liabilities:
(Increase) decrease in:
Inventories (2,786,000) (1,014,000)
Accounts receivable (288,000) 20,000
Prepaid inventory (286,000) (82,000)
Prepaid expenses (1,172,000) 78,000
Other current assets (109,000) (231,000)
Other assets (187,000) --
(Decrease) increase in:
Accounts payable 565,000 847,000
Accrued expenses and other current
liabilities 220,000 138,000
Interest payable to related party
shareholders 142,000 131,000
Deferred revenue 63,000 84,000
------------ ------------
Net cash used in operating activities (4,019,000) (1,397,000)
Cash flows from investing activities:
Cash collateral in connection with
Rosenthal Pledge Agreement 1,250,000 (6,000)
Purchase of property and equipment (403,000) (292,000)
------------ ------------
Net cash used in investing activities 847,000 (298,000)
------------ ------------
Cash flows from financing activities:
Net proceeds from June 2005 financing -- --
Net proceeds from exercise of Stock
Options 92,000 70,000
Payment of capital lease obligation (15,000) (107,000)
------------ ------------
Net cash (used in) provided by
financing activities 77,000 (37,000)
------------ ------------
Net increase (decrease) in cash and cash
equivalents (3,095,000) (1,732,000)
Cash and cash equivalents - beginning of
period 8,215,000 9,102,000
------------ ------------
Cash and cash equivalents - end of
period $ 5,120,000 $ 7,370,000
------------ ------------
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