Bluefly.com Reports Record First Quarter 2002 Results.Business Editors NEW YORK--(BUSINESS WIRE)--April 23, 2002 Operating Loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. Narrows By 75% To $998,000 For 6th Consecutive Quarter Of Improvement 65% Increase In Net Sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight and 94% Increase In Gross Profit Drive Decrease in Operating Loss 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 fashions at outlet store An outlet store or factory outlet is a retail store in which manufacturers sell their stock directly to the public through their own branded stores. The stores can be can be brick and mortar or online. prices (www.bluefly.com), announced today that its operating loss narrowed for the sixth consecutive quarter (based on year-over-year comparisons) to $998,000 in the first quarter of 2002 from $3,909,000 in the first quarter of 2001. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Bluefly, the 75% improvement in operating loss was primarily the result of: (i) a 65% increase in net sales, which grew to $7,646,000 in the first quarter of 2002 from $4,646,000 in the first quarter of 2001; (ii) a 94% increase in gross profit, which grew to $2,500,000 in the first quarter of 2002 from $1,283,000 in the first quarter of 2001; and (iii) a 33% reduction in selling, general and administrative expenses, which fell to $3,498,000 in the first quarter of 2002 from $5,192,000 in the first quarter of 2001. Other financial results for the first quarter of 2002 announced by Bluefly were as follows (all comparisons are to the first quarter of 2001): - Gross margin increased to its highest level ever, 32.7%, from 27.6%; - New customer acquisition cost decreased by 77% to an all-time low of $9.40 from $40.84; - Despite spending 76% less on advertising, Bluefly acquired 24,873 new customers, which was slightly more than the number of new customers it acquired in the first quarter of 2001; - Repeat customers contributed a record share of revenues, accounting for 67% of gross sales, up from about 56%; - Average order size increased 25% to an all-time high of $161.76 from $129.11; - Cash flow from operations (i.e. excluding any financing) improved to negative $1,312,000 from negative $4,417,000; and - Net loss decreased to $1,065,000, or $0.18 per share (based on 9,205,331 weighted average shares outstanding) from $17,031,000, or $3.57 per share (based on 5,067,587 weighted average shares outstanding). The net loss figure for the first quarter of 2001 included a one-time, non-cash charge of $13,007,000 related to the conversion of debt and redeemable preferred equity into permanent equity. "This was a banner quarter for Bluefly in several ways," said Ken Seiff, Chief Executive Officer of Bluefly, Inc. "First, we achieved record levels of gross margin, average order size, and revenue from repeat customers, and we cut our operating loss for a sixth consecutive quarter to the lowest level since we launched the Web site. Second, we took what I believe is a significant step towards further improving our business by licensing two important pieces of software, one of which will allow us to build the next generation of our Web site and the other of which will allow customers to zoom To change from a distant view to a more close-up view (zoom in) and vice versa (zoom out). An application may provide fixed or variable levels of zoom. A display adapter may also have built-in zoom capability. in on product images so, for example, customers will be able to clearly see the cable knit on a cashmere cashmere Animal-hair fibre forming the downy undercoat of the Kashmir goat. The fibre became known for its use in beautiful shawls and other handmade items produced in Kashmir, India. The fibres have diameters finer than those of the best wools. sweater or the subtle pinstripe pin·stripe also pin stripe n. 1. A very thin stripe, especially on a fabric. 2. a. A fabric with very thin stripes, often used for suits. b. A suit made of such fabric. Often used in the plural. on a designer suit. Third, we improved our financial position this quarter by entering into a standby commitment Standby commitment An agreement between a corporation and investment firm that the firm will purchase whatever part of a stock issue that is offered in a rights offering that is not subscribed to in the two- to four- week standby period. agreement pursuant to which Soros, our largest shareholder, has agreed to provide us with up to four million dollars of additional capital if and when we need it this year," Seiff added. About Bluefly, Inc. Bluefly is headquartered 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. Distinguishing itself with discounts of up to 75%, products from over 300 designers and a 90-day money back guarantee, Bluefly.com aims to be the world's first full service outlet store for designer fashions. Its innovative Web site is designed to eliminate the "hit-or-miss" aspect of off-price shopping by allowing shoppers to see only those products that are available for sale and match their interests. For more information, visit www.bluefly.com. This press release may include statements that constitute "forward-looking" statements, 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 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. 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-A, 8-K, 10-Q, and 10-K. These risks and uncertainties include, but are not limited to, the following: the Company's limited working capital, need for additional capital and potential inability to raise such capital; the competitive nature of the business and the potential for competitors with greater resources to enter such business; adverse trends in the retail apparel market; risks of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. for sale of unauthentic or damaged goods DAMAGED GOODS. In the language of the customs, are goods subject to duties, which have received some injury either in the voyage home, or while bonded in warehouses. See Abatement, merc. law. and litigation risks related to sales in foreign countries; consumer acceptance of the Internet as a medium for purchasing apparel; recent losses and anticipated future losses; the risk that favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. trends in sales, repeat customer sales, gross profit, gross margin and reduced selling, marketing and fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. expenses and reductions in operating losses will not continue; risks that the Company will be unable to reduce the levels of losses; potential adverse effects on gross margin resulting from mark downs and allowances; the capital intensive nature of such business (taking into account the need for advertising to promote such business); the dependence on third parties and certain relationships for certain services, including the Company's dependence on 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. Postal Service postal service, arrangements made by a government for the transmission of letters, packages, and periodicals, and for related services. Early courier systems for government use were organized in the Persian Empire under Cyrus, in the Roman Empire, and in medieval and U.P.S. (and the risks of a mail slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. due to terrorist activity) and the Company's dependence on its third-party web hosting Making a Web site available on the Internet. Many ISPs host a few personal Web pages for an individual at no additional cost above the monthly service fee, but the address is subordinate to the ISP; for example, www.friendlyisp.com/pat_smith. and fulfillment centers; the successful hiring and retaining of personnel; the dependence on continued growth of online commerce; rapid technological change; online commerce security risks; the startup nature of the Internet business; governmental regulation and legal uncertainties; management of potential growth; and unexpected changes in fashion trends.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
Three Months Ended
March 31, March 31,
---------- ----------
2002 2001
---------- ----------
Net sales $ 7,646,000 $4,646,000
Cost of sales 5,146,000 $3,363,000
--------- ----------
Gross profit 2,500,000 1,283,000
Gross profit percentage 32.7% 27.6%
Selling, marketing and
fulfillment expenses 2,421,000 3,541,000
General and administrative
expenses 1,077,000 1,651,000
--------- ---------
Operating loss (998,000) (3,909,000)
Interest income 32,000 63,000
Interest expense (the three
months ended March 31, 2001
includes $13,007,000 one-time,
non-cash charge in connection
with the conversion of debt and
redeemable preferred equity to
permanent equity) (99,000) (13,185,000)
------- ------------
Net loss $(1,065,000) $(17,031,000)
------------ =============
Preferred stock dividends (609,000) (1,066,000)
Net loss available to
common shareholders $(1,674,000) $(18,097,000)
============= =============
Basic and diluted net (loss)
income per share (after
preferred stock dividends) $(0.18) $ (3.57)
======== =========
Weighted average
shares outstanding 9,205,331 5,067,587
========= ==========
SELECTED BALANCE SHEET DATA & KEY METRICS-
UNAUDITED
March 31, December 31,
2002 2001
Cash $3,763,000 $5,419,000
Inventories, net 6,247,000 6,388,000
Other Current Assets 1,621,000 1,726,000
Property & Equipment, net 1,354,000 1,155,000
Current Liabilities 5,663,000 6,297,000
Shareholders' Equity 7,672,000 8,402,000
Three Months Three Months
Ended Ended
March 31, March 31,
2002 2001
------------ ------------
Average Order Size
(including shipping & handling revenue) $161.76 $129.11
Average Order Per New Customer
(including shipping & handling revenue) $144.73 $114.79
Average Order per Repeat Customer
(including shipping & handling revenue) $171.53 $143.05
Registered Users 1,193,888 926,385
Registered Users Added During Period 68,597 63,122
Total Customers 312,510 209,497
Customers Added During Period 24,873 24,257
Revenue from Repeat Customers
as % of Total Revenue(a) 67% 56%
Customer Acquisition Cost (aa) $9.40 $40.84
(a) Repeat customer is defined as a person who has bought more than
once from Bluefly during their lifetime.
(aa) Customer Acquisition Cost is calculated by dividing total
advertising expenditures (excluding staff and related costs) by total
new customers added. Customer numbers are based on unique email
addresses.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion