Bluefly.com Reports Second Quarter 2001 Results.Business Editors NEW YORK--(BUSINESS WIRE)--Aug. 2, 2001 Gross Profit Grows By Over 104% and 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 Increase By Nearly 16% 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. Declines By Nearly 20%, Marking The Third Consecutive Quarter of Narrowing Losses 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 for the second quarter of 2001 its gross profit increased by over 104% and its net sales grew by nearly 16%, while its operating loss narrowed for the third consecutive quarter based on year-over-year comparisons. In the second quarter of 2001, Bluefly's gross profit increased to $1,724,000 from $843,000 in the same period a year ago. The increase in gross profit was the result of both the improvement in gross margin, which increased to 32.6% in the second quarter of 2001 from approximately 18.5% in the same period a year ago, and the increase in net sales. Bluefly's net sales in the second quarter of 2001 increased to $5,285,000 from $4,560,000 in the second quarter of 2000. The growth in net sales was driven primarily by the increase in sales to repeat customers, which grew to approximately 56% of gross sales Gross Sales A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. in the second quarter of 2001 from approximately 45% of gross sales in the second quarter of 2000, as well as the increase in average order size, which grew by over 34% to approximately $140 from approximately $104 in the same period a year ago. Bluefly's operating loss for the second quarter of 2001 (before interest income and expense) decreased to $4,198,000, or $0.46 per share, from $5,238,000, or $1.06 per share, in the second quarter of 2000. The reduction in operating loss was driven by, among other things, the increase in gross profit and decrease in advertising expenses. Included in the operating loss for the second quarter of 2001 were one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. expenses of approximately $340,000 incurred in connection with the plan to streamline operations announced on June June: see month. 19, 2001. "The weak retail environment has improved our ability to acquire top designer merchandise and has enabled us to pay lower prices for this merchandise," said Ken Seiff, Chief Executive Officer of Bluefly, Inc. "In our effort to reach profitability by the end of 2002, we have shared some of these savings with our customers by offering them bigger discounts and retained the rest of the savings for ourselves, which we see reflected in the 104% increase in gross profit, 20% reduction in operating loss, and 14 percentage point increase in gross margin. Looking to the future, we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op not only because many of the benefits of the cost savings measures we initiated in the second quarter have yet to be realized but also because Bluefly has demonstrated an ability to grow in both strong and weak retail environments," 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 450 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 hit-or-miss adj. Marked by a lack of care, accuracy, or organization; random. hit or miss adv. " aspect of off-price off-price adj. 1. Of, relating to, or being a retail store that sells merchandise at prices lower than usual. 2. For sale at prices lower than usual: off-price assortments of women's clothing. shopping by allowing shoppers to see only those products that are available for sale and match their interests. The online merchant has established strategic alliances with many of the most visited Web Sites and portals including AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. and Yahoo! For more information, visit www.bluefly.com.
Bluefly, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
Three Months Ended
June 30, June 30,
2001 2000
Net sales(a) $5,285,000 $4,560,000
Cost of sales(a) 3,561,000 3,717,000
Gross profit (loss)(a) 1,724,000 843,000
Gross margin(a) 32.6% 18.5%
Selling, marketing and
fulfillment expenses 4,535,000 4,890,000
General and
administrative expenses 1,387,000 1,191,000
Operating loss (4,198,000) (5,238,000)
Interest income,
net of interest expense 30,000 (63,000)
Net loss $(4,168,000) $(5,301,000)
Preferred stock dividends (615,000) (199,000)
Net loss available to
common shareholders $(4,783,000) $(5,500,000)
Basic and diluted net
(loss) income per share
(after preferred
stock dividends) $ (0.52) $ (1.12)
Weighted average
shares outstanding 9,205,331 4,924,906
(a) In accordance with EITF 00-10, shipping and handling charges
collected from customers have been included in net sales. In
connection with that change, the Company has elected to
include outbound shipping costs as part of cost of sales.
Prior to the fourth quarter of 2000, outbound shipping costs
net of shipping and handling revenue had been presented as
part of selling, marketing and fulfillment expenses. All
periods presented have been reclassified for consistent
presentation.
SELECTED BALANCE SHEET DATA & KEY METRICS - UNAUDITED
June 30, December 31,
2001 2000
Cash $7,066,000 $5,350,000
Inventories, net 6,816,000 7,294,000
Other Current Assets 1,629,000 1,704,000
Property & Equipment, net 1,126,000 1,326,000
Total Current Liabilities 4,570,000 25,829,000
Redeemable Preferred
Stock and Shareholders'
Equity (Deficit) 12,220,000 (9,961,000)
Three Months Three Months
Ended Ended
June 30, 2001 June 30, 2000
Average Order Size
(including shipping &
handling revenue) $140.29 $104.24
Average Order Per New
Customer (including
shipping & handling
revenue) $125.92 $94.06
Average Order per
Repeat Customer(b)
(including shipping &
handling revenue) $154.02 $120.01
Registered Users 1,001,534 638,269
Registered Users
Added During Period 138,271 129,554
Total Customers 235,485 123,574
Customers Added
During Period 25,988 36,063
Revenue from Repeat
Customers as % of
Gross Sales 56% 45%
Customer Acquisition
Cost(c) $75.40 $73.21
(b) Repeat customer is defined as a person who has bought more
than once from Bluefly during their lifetime.
(c) 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.
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; recent difficulties 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, gross profit and gross margin 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 uncertainty arising from a lack of operating history with the company's new 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. center; 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. |
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