GSV Reports First Quarter 2000 Results.Business Editors JERSEY CITY, N.J.--(BUSINESS WIRE)--May 15, 2000 GSV GSV Greater Saphenous Vein GSV Genealogical Society of Victoria (Australia) GSV Garnisonen I Sør-Varanger (Norway military Garrison of Sør-Varanger) GSV General Systems Vehicle GSV Gross Standard Volume (R), 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 :GSVI), also known as Grove Strategic Ventures, a publicly traded Internet incubator incubator, apparatus for the maintenance of controlled conditions in which eggs can be hatched artificially. Incubator houses with double walls of mud, a fireroom, and several compartments each holding about 6,000 hens' eggs were developed in ancient times; the and investment company, today announced financial results for the first quarter of 2000 ending March 31, 2000. The Company reported that net losses (including amortization of goodwill) for the first quarter decreased $0.2 million, or 13%, to $1.6 million from $1.8 million. Net losses include a net gain from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $0.1 million in the first quarter of 2000, and a loss from discontinued operations of $1.3 million in the first quarter of 1999. Basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. net loss per common share for the first quarter of 2000 was ($0.16) before the effect of adjustable common stock warrants (and ($0.46) after the effect of adjustable common stock warrants), as compared to ($0.25) in 1999. Total sales in the first quarter of 2000 totaled $1.8 million, which were primarily attributable to the Company's Tools for Living operation acquired in June of 1999. We have terminated the letter of intent to sell electronics.net and are presently in discussions with other potential purchasers of these assets. "The first quarter was a transitional period for the Company and, accordingly the results reflect the costs associated with the closing of the Company's online retailing operations, the transition to our new Internet See Web 2.0 and Internet2. incubator and investment strategy and disappointing results at our Tools for Living division, " said Jeff Tauber, 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 Chairman of the Board. "We believe the costs of operating our ongoing operations should be reduced in the second quarter and, accordingly believe our results should improve. More importantly, we continue to make progress in our new Internet incubator and investment strategy including: -- In March the Company made its initial investment (through the sale of the Cybershop.com URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. ) in e-Commerce Solutions LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , a developer and operator of customized online marketplaces for merchants, major Internet portals and destination sites. -- Analyzing and conducting due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. on a number of potential portfolio companies. -- Analyzing and reviewing the hundreds of business plans the Company has received in the past couple of months. -- Engaging Stephen Del Vecchia, a former Barnes & Noble financial executive, as the Company's new Chief Financial Officer. We also continue to work to form a top flight Advisory Board, seek strategic alliances with other Internet incubators and investment companies and form affiliations with investment firms, accounting firms and similar companies for the benefit of our portfolio companies. The progress has, however, been hampered by inaccurate press reports and the resulting legal actions filed against the Company which, while meritless, have been both a distraction Distraction Divination (See OMEN.) Porlock a “person from Porlock” interrupted Coleridge while he was recollecting the dream on which he based “Kubla Khan”. [Br. Lit.: Poems of Coleridge in Magill IV, 756] to the Company and its management and an impediment A disability or obstruction that prevents an individual from entering into a contract. Infancy, for example, is an impediment in making certain contracts. Impediments to marriage include such factors as consanguinity between the parties or an earlier marriage that is still valid. to potential transactions. This subject is addressed in detail in the Chairman's letter included with the Company's 1999 Annual Report. Notwithstanding the foregoing, we remain confident that we will continue to make progress in our new business and further develop the Company to maximize shareholder value." About GSV, Inc. GSV, Inc. identifies and develops attractive early stage Internet companies. GSV will provide these companies, as needed as needed prn. See prn order. , with management, marketing, financing (including early stage seed capital), human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. , accounting resources, use of its facilities and its extensive expertise in business development. GSV will receive equity positions in these companies commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with the level of services provided and the stage of their development. The Company also operates its online and direct response company, Tools for Living. Tools for Living's website is located at www.toolsforliving.com. GSV's web site is located at www.gsv.com. 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. This announcement contains 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. that involve risks and uncertainties that include, among others, the Company's limited operating history, anticipated losses, unpredictability of future revenues, potential fluctuation Fluctuation A price or interest rate change. in quarterly operating results, seasonality, competition, risks associated with system development and operation risks, management of potential growth, as well as the inherent risks and uncertainties 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. , and risks of new business areas and strategic alliances, as well as such risks (or others) that exist as to any portfolio company in which the Company invests.
GSV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (1)
(UNAUDITED)
Three Months Ended March 31,
----------------------------
2000 1999
--------------- ----------
Sales $ 1,825,000 $ --
Cost of sales 734,000 --
------------ ----------
Gross profit 1,091,000
Operating expenses:
Sales and marketing 1,283,000 --
General and administrative 868,000 648,000
Amortization of goodwill
and other merger and
acquisition related costs 744,000 --
--------- -------
Total operating expenses 2,895,000 648,000
--------- -------
Loss from continuing operations
before interest income (1,804,000) (648,000)
Interest income, net 79,000 122,000
--------- -------
Loss from continuing operations (1,725,000) (526,000)
Discontinued operations:
Loss from operations (83,000) (1,312,000)
Estimated gain on disposal 215,000 --
--------- ----------
Total discontinued operations 132,000 (1,312,000)
--------- ----------
Net loss $ (1,593,000) $ (1,838,000)
========= ==========
Basic and diluted net loss per
common share:
loss per common share from
continuing operations $ (0.17) $ (0.07)
effect of adjustable common
stock warrants (2) (0.30) --
--------- ----------
loss per common share from
continuing operations including
effect of adjustable common
stock warrants (0.47) (0.07)
loss per common share from
discontinued operations (0.01) (0.18)
loss per common share from
estimated gain on disposal of
discontinued operations 0.02 --
--------- ----------
Net loss per common share
including effect of adjustable
common stock warrants $ (0.46) $ (0.25)
========= ==========
Weighted average common shares
outstanding, basic and diluted 10,312,000 7,493,000
Pro Forma Results From Continuing
Operations : (3)
Pro forma net loss $(981,000) $ (526,000)
Pro forma net loss per share,
basic and diluted, before
effect of adjustable warrants $ (0.10) $ (0.07)
Cash and Accounts Receivable, net:
As of March 31, 2000 $6,813,000
(1) The consolidated statements of operations reflect as continuing operations, the results of its Tools for Living division and its start up Internet incubator operations, Grove Strategic Ventures, as well as general corporate overhead. Tools for Living began operations on June 1, 1999 through the acquisition of the Magellan Group, Inc. Cybershop.com, the Company's off-price Internet retailing operation ceased operations in February of 2000. Electronics.net, the Company's electronics and appliance Internet retailing operation ceased operations in May of 2000. The Company's Internet incubator operations started in February 2000. (2) Effect of adjustable common stock warrants reflects the exercise of common stock warrants issued as part of a private placement of the Company's common stock on December 8, 1999, in exchange for 613,486 common shares. The resulting dollar amount of the common shares issued upon exercise, multiplied by the closing price of the Company's common stock at the end of a predetermined pre·de·ter·mine v. pre·de·ter·mined, pre·de·ter·min·ing, pre·de·ter·mines v.tr. 1. To determine, decide, or establish in advance: period, is divided by the weighted average number of common shares outstanding during the period. (3) Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma results present the continuing operating results of the Company, excluding goodwill and other merger and acquisition related costs related to business acquisitions which are primarily composed of the amortization of goodwill associated with the purchase of Tools for Living. These pro forma results are presented for informational purposes only and are not presented in accordance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . |
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