Bluefly.com Reports Strong Third Quarter Results; Online Retailer Significantly Strengthens Infrastructure for Fourth Quarter.NEW YORK--(BUSINESS WIRE)--Nov. 3, 1999-- 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 online outlet for designer fashions and home furnishings furnishings the extra type or quantity of hair on the head, tail, ears or legs, specified for a particular breed. For example, the feathers in setters, the beard in Bearded collies, the eyebrows in Schnauzers. (www.bluefly.com), announced today that its gross quarterly revenue from product sales, exclusive of shipping and handling and before returns and allowances, increased by over 17% to $1,216,000 in the third quarter of 1999, from $1,035,000 in the second quarter of 1999. During the quarter, the Company also completed a number of initiatives designed to increase its capacity during the holiday shopping season and thereafter. Initiatives completed by Bluefly during the third quarter in anticipation for the holiday shopping season include the transition to a larger, more robust 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 creation of an in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. customer service department that operates seven days a week, the implementation of real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. credit card authorization The right or permission to use a system resource; the process of granting access. See access control. and fraud screening software, the installation of additional servers to speed the Web site's response time, and the construction and installation of additional photo studio space to allow for increased speed in styling, photographing and processing new product. In addition, the Company more than doubled its inventory during the quarter and raised the number of designers whose products are offered on the Web site to over 200, with approximately 100 more designers to be added during November November: see month. . "We are extremely pleased with our third quarter results and the improvements we have made to our infrastructure and our merchandise selection over the past few months," said Ken Seiff, Chief Executive Officer of Bluefly. "Our revenues grew nicely and our number of registered users more than doubled to approximately 190,000 from approximately 85,000. All of this was accomplished despite the seasonal slow down in traffic growth on 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 during the summer months, transitional issues relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the fulfillment center which resulted in certain lost sales and our decision to reduce significantly our print advertising in the third quarter while we prepared for the upcoming holiday season," added Seiff. Commenting on Bluefly's bulked up infrastructure, Seiff said, "online shoppers have made clear that they expect much more than a flashy Web site and a novel marketing idea this Christmas -- they expect great selection, full service and prompt delivery in a convenient and professional manner. In our view, the winners in the 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. sector will be the companies that can deliver on these expectations, and we believe that all of our hard work over the past few months has significantly strengthened our position in this area." Bluefly also announced that it had ramped up marketing and advertising efforts for the holiday season. "Our first radio advertising campaign launched in 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 on Monday, and we have greatly expanded our print media placements over the past few weeks, with even more expansion to come in November and December," said Seiff. "We are extremely excited about the opportunity that we have created to capture market share and mind share during the fourth quarter," added Seiff. Bluefly is a NASDAQ SmallCap public company 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. at the intersection intersection /in·ter·sec·tion/ (-sek´shun) a site at which one structure crosses another. intersection a site at which one structure crosses another. of Fashion Avenue and the Information Superhighway (1) A generic name for the Internet. (2) A proposed high-speed communications system that was touted by the Clinton/Gore administration to enhance education in America in the 21st century. Its purpose was to help all citizens regardless of their income level. . Distinguishing itself with discounts of up to 75%, products from over 200 designers and a 90 day money back guarantee, Bluefly.com aims to be the world's first full service 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. for designer fashions. Its innovative MyCatalog feature 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. 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. , Excite, Go Network, Lycos, MSN (1) (MicroSoft Network) A family of Internet-based services from Microsoft, which includes a search engine, e-mail (Hotmail), instant messaging (Windows Live Messaging) and a general-purpose portal with news, information and shopping (MSN Directory). , Netcenter, Tripod, Women.com and Yahoo!. For more information, visit www.bluefly.com. -0-
Bluefly, Inc.
Summary Financial Highlights
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998(a) 1999 1998(a)
---- ------ ---- ------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales $873,000 $4,000 $1,909,000 $4,000
Cost of sales 656,000 $53,000 1,454,000 53,000
-------- ------- ---------- --------
Gross
profit (loss) 217,000 (49,000) 455,000 (49,000)
Selling, marketing
and fulfillment
expenses 2,674,000 203,000 6,301,000 329,000
General and
administrative
expenses 1,003,000 230,000 2,016,000 676,000
Internet start
up costs -- 224,000 -- 327,000
---------- ------- --------- -------
Operating
loss from
continuing
operations (3,460,000) (706,000) (7,862,000) (1,381,000)
Interest income 111,000 30,000 294,000 111,000
---------- -------- --------- ---------
Loss from
continuing
operations (3,349,000) (676,000) (7,568,000) (1,270,000)
----------- --------- ---------- ----------
Income (loss)
from
discontinued
operations -- 51,000 63,000 (1,149,000)
----------- --------- ---------- ----------
Net loss $(3,349,000) $(625,000) $(7,505,000) $(2,419,000)
============ ========== =========== ===========
Basic and diluted
(loss) income per share
(after preferred
stock dividends)
Continuing
operations (.71) (.25) (1.62) (.47)
Discontinued
operations -- .02 .01 (.38)
Estimated loss
on disposal -- -- -- (.04)
-------- ------- --------- ---------
Net loss
per share $ (.71) $ (.23) $ (1.61) $ (.89)
======== ======= ========= =========
Weighted average
shares
outstanding 4,901,749 2,717,788 4,763,074 2,705,994
========= ========= ========= =========
(a) Bluefly.com opened its virtual doors to the public on September
8, 1998. Prior to the launch of Bluefly.com, the Company marketed
a collection of golf sportswear. In June 1998, the Company
decided to discontinue the operations of its golf division and
devote all of its energy and resources to building Bluefly.com.
As a result, the majority of financial results for 1998 relate to
the discontinued golf division, and comparisons of 1999 amounts
to 1998 amounts should be regarded accordingly.
Note: In an effort to more appropriately reflect the results of
its operations, the Company has reclassified certain items in its
Statement of Operations, including (without limitation) gross sales
and net sales, which have been reclassified to exclude shipping and
handling revenue. It is management's opinion that these
reclassifications better reflect the economics of the Company's
business and serve to provide for easier comparison with its peers in
the industry. These changes had no impact on current or previously
reported income (loss).
SELECTED BALANCE SHEET DATA
September 30, 1999
Cash $12,847,000
Inventories 4,454,000
Other Current Assets 875,000
Property and equipment, net 892,000
Total Current Liabilities 2,942,000
Shareholders' Equity 16,149,000
KEY METRICS Third Second
Quarter Quarter
1999 1999
Average Monthly Unique Visitors
(based on Media Metrix information) 271,000 369,000
Registered Users 190,355 85,370
Average Order Size $ 100 $ 103
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-QSB, and 10-KSB. These risks and uncertainties include, but are not limited to, the following: the competitive nature of the business and the potential for competitors with greater resources to enter such business; risk 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; the Company's limited working capital and need for additional financing; recent losses and anticipated future losses; the startup nature of the Internet business; 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; the successful hiring and retaining of personnel; the dependence on continued growth of online commerce; rapid technological change; year 2000 issues; online commerce security risks; governmental regulation and legal uncertainties; management of potential growth; and unexpected changes in fashion trends. |
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