Genesis Direct Announces Fourth Quarter and Fiscal 1998 Results; Results in Line with Analysts' Expectations.

SECAUCUS, N.J.--(BUSINESS WIRE)--June 9, 1998--Genesis Direct, Inc. (Nasdaq:GEND) today announced financial results for the fourth quarter and fiscal year ended March 28, 1998.

Net sales for the fourth quarter more than doubled to $25.7 million compared to $12.0 million in the fourth quarter of last year. The net loss in the fourth quarter of 1998 was $19.4 million compared to $7.8 million in the same period of last year. The basic net loss per share in the fourth quarter was $2.32 per share compared to a basic net loss per share of $1.43 in the fourth quarter of last year. The supplemental diluted net loss per share was $0.96 compared to a loss of $1.17 per share a year ago. Supplemental diluted net loss per share figures exclude from the net loss dividends accruing on Series A Preferred Stock and reflects in the diluted weighted average number of shares, the conversion of outstanding convertible securities on an if converted basis from the date of issuance.

Net sales for the year grew significantly to $107.2 million versus $18.5 million last year. The net loss for the year was $76.2 million compared to $13.5 million in 1997. The basic net loss per share for the year was $8.89 versus a basic net loss per share of $4.60 for the prior year. The supplemental diluted net loss per share was $5.04 versus a net loss of $3.88 per share last year.

Commenting on the results, Warren Struhl, President and Chief Executive Officer stated, "We are very pleased with Genesis Direct's many accomplishments in 1997, which are reflected in our strong revenue growth. Last year was a period of important development for the Company, during which time we acquired fifteen catalog businesses and successfully integrated them into our existing portfolio of brands. We also focused on building our infrastructure in order to position Genesis Direct for significant future growth. The ongoing expansion of our customer database contributed to our progress as well, as we effectively developed new lists through key strategic alliances."

Mr. Struhl continued, "Looking ahead, we remain focused on aggressively pursuing opportunities to acquire brands that complement our existing Core Business Units and operating strategies. There is a strong pipeline of acquisition candidates, and we are confident that we have the people, systems and facilities in place to meet our operating and financial goals. Importantly, we believe that our ability to further leverage our existing infrastructure will translate into substantial operating efficiencies going forward."

Mr. Struhl continued, "We believe that the actions we have taken over the course of the past year leave us well positioned to benefit from the rapid growth of the highly fragmented non- store shopping industry. As we look ahead to the next phase of our growth, we remain focused on our plans to grow Genesis Direct's existing brands, make additional acquisitions and launch new brands."

Genesis Direct is a leading database-driven specialty retailer in the rapidly growing universe of non-store shopping. With a current portfolio of 31 Company-owned brands, the Company offers products directly to consumers in targeted niche markets primarily through a variety of distinctive information-rich catalogs, as well as Internet websites and electronic media, including television and radio.

This press release may contain statements that are forward- looking within the meaning of applicable federal securities laws and are based on Genesis Direct's current expectations and assumptions, which are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. Factors that could cause actual results to differ from those anticipated are detailed in Genesis Direct's filings with the Securities and Exchange Commission. -0-

                         GENESIS DIRECT, INC.
                 CONSOLIDATED STATEMENTS OF OPERATIONS
            (In thousands, except share and per share data)

                            Three Months Ended   Twelve Months Ended
                             3/28/98    3/29/97   3/28/98    3/29/97
                                (unaudited)

Net sales                 $   25,704  $  12,036 $ 107,209 $   18,537
Cost of goods sold            19,464      6,580    81,607     10,448
Gross profit                   6,240      5,456    25,602      8,089
Selling, general and
  administrative expenses     24,785     12,465    97,838     20,711
Loss from operations         (18,545)    (7,009)  (72,236)   (12,622)
     Interest expense
       (income) - net            812        776     3,975        888
Net loss                     (19,357)    (7,785)  (76,211)   (13,510)
Dividends accruing on
  Series A Preferred Stock    1,407          --     2,439         --
Net loss attributable to
  common stockholders      $(20,764)    $(7,785) $(78,650)  $(13,510)
Basic net loss per share     $(2.32)     $(1.43)  $( 8.89)   $( 4.60)
Supplemental diluted net
  loss per share (1)         $(0.96)     $(1.17)   $(5.04)    $(3.88)

Weighted average
  shares - basic           8,938,300  5,455,300  8,842,200  2,933,700
Weighted average
  shares-
  supplemental diluted    20,179,600  6,669,600 15,127,700  3,480,100

(1) A supplemental diluted net loss per share is included to
present results on a basis comparable to the Company's per share
information subsequent to its recently concluded Initial Public
Offering. Therefore, the diluted net loss per share excludes from the
net loss dividends accruing on Series A Preferred Stock and reflects
in the supplemental diluted weighted average number of shares the
conversion of outstanding convertible securities on an if converted
basis from the date of issuance. The dilutive impact of outstanding
stock options during the periods presented is also included. The
Series A Preferred Stock was converted to common stock immediately
prior to the Company's Initial Public Offering completed on May 7,
1998 and under the terms of the convertible securities, all accrued
dividends have been forgiven.
-0-
                         GENESIS DIRECT, INC.
                      CONSOLIDATED BALANCE SHEETS
            (In thousands, except share and per share data)


                                        March 28, 1998  March 29, 1997
Assets
Current assets:
Cash and cash equivalents                 $     2,722  $    8,184
Accounts receivable                             5,594       1,042
Merchandise inventory, net                     27,350       7,017
Other current assets                           12,157       2,726
Total current assets                           47,823      18,969

Property, equipment and leasehold
  improvements, net                            25,639       3,536
Other assets                                   65,364      34,361
Total assets                                $ 138,826   $  56,866

Liabilities and common stockholders'
 equity (deficiency)
Total current liabilities                      60,505      19,022
Notes payable and long-term debt,
  less current portion                         41,154      27,418
Other liabilities                               2,717       2,051

Series A Preferred Stock                       96,739          --
Total common stockholders'
  equity (deficiency)                         (62,289)      8,375
     Total liabilities and
       common stockholders' equity           $ 138,826    $56,866


   CONTACT:  Genesis Direct, Inc.
              Ronald Benanto
              Chief Financial Officer
              [phone]
                      or
              Media:
              Morgen-Walke Associates
              Christine DiSanto/Caroline Babbitt/Amanda Mullin
              Stacy Berns/Jeff Siegel
              [phone]