drugstore.com Announces Financial Results for First Quarter as Public Company.BELLEVUE Bellevue (bĕl`vy  ).1 City (1990 pop. 30,982), Sarpy co., E Nebr., a suburb of Omaha, on the Missouri River; inc. 1855. , Wash.--(BUSINESS WIRE)--Oct. 20, 1999-- -- Achieves 242% Sequential 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 for Third Quarter of 1999; -- Adds 260,000 New Customers in Third Quarter drugstore.com drugstore.com is an internet pharmacy headquartered in Bellevue, Washington. Its web operations were launched on February 24, 1999. Partnerships with other companies allow customers to pick up prescriptions at Rite Aid stores, enables drugstore. , inc.(Nasdaq: DSCM DSCM Dry Standard Cubic Meter DSCM Demand and Supply Chain Management DSCM Digital Security Countermeasures DSCM Data Standards Configuration Management Board DSCM Master Chief Data Systems Technician (US Navy Rating) ) today announced financial results for its third quarter ended October October: see month. 3, 1999. Net sales for its first fiscal quarter as a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. were $12.2 million, a sequential increase of 242% over net sales of $3.6 million for the second quarter ended July 4, 1999. Cumulative customer accounts increased by 260,000, to 428,000 at the end of third quarter 1999. This is an increase from 168,000 customer accounts at the end of second quarter 1999. Repeat customer orders represented more than 30% of total orders for the third quarter. drugstore.com(TM) reported a third quarter 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 net loss, excluding charitable contributions charitable contribution n. in taxation, a contribution to an organization which is officially created for charitable, religious, educational, scientific, artistic, literary, or other good works. and amortization of stock-based compensation, of $29.1 million, or $0.72 per share. This includes $5.3 million of expense associated with the amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , primarily related to the Rite Aid Rite Aid (NYSE: RAD) is a United States retailer and pharmacy chain, operating over 5,000 stores in 31 states and the District of Columbia. Rite Aid Corporation is one of the nation's leading drugstore chains. and GNC GNC General Nutrition Centers GNC Gas Natural Comprimido (Argentina) GNC Guidance, Navigation, and Control GNC Grand National Championship (ATV racing) GNC Global Navigation Chart transactions. Including non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. for amortization of stock-based compensation and charitable contributions, the company reported a third quarter net loss of $42.0 million, or $1.04 per share. "Our hardcore focus on delivering the best online customer experience and value is the key factor driving our financial results," said Peter Neupert, president and 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. of drugstore.com. "Our strong growth in new customers and repeat customer orders clearly demonstrates that drugstore shoppers like shopping online - with huge selection, great values, easy-to-use information and personal services personal services n. in contract law, the talents of a person which are unusual, special or unique and cannot be performed exactly the same by another. These can include the talents of an artist, an actor, a writer, or professional services. . Moreover, drugstore.com is uniquely positioned to sustain its leadership through partnerships with Amazon.com, Rite Aid, PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. and GNC." Recent Highlights Initial Public Offering. In July, drugstore.com completed its initial public offering of 5.75 million shares at a price of $18.00 per share. Simultaneously, drugstore.com privately placed an additional $10 million of common stock with Amazon.com, as part of its strategic relationship with Amazon. The net cash proceeds of over $104 million will allow drugstore.com to invest in its brand and the infrastructure necessary to support its growth. Customer Experience Enhancements. In the third quarter, drugstore.com upgraded and improved its user interface and added new products and information. Enhancements to the Web store included: -- Simplifying the online prescription ordering process. -- Upgrading the drugstore.com search tool, making it even easier to find unique health, beauty, wellness and personal care products. -- Adding over 1,000 products to the store. -- Adding substantial new information resources (1) The data and information assets of an organization, department or unit. See data administration. (2) Another name for the Information Systems (IS) or Information Technology (IT) department. See IT. for customers, including pharmacy-related Frequently Asked Questions, Buying Guides and new interactive Shopping Advisors. Rite Aid. In June, drugstore.com entered into a strategic alliance with Rite Aid Corporation, one of the nation's leading drugstore chains. Rite Aid customers can now order prescription refills online at drugstore.com for same-day pick-up at any of Rite Aid's 3,800 drugstores nationwide. As part of the agreement, Rite Aid will co-brand drugstore.com on all of its shopping bags, cash register receipts, pharmacy pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. packaging and in 25% of their advertising spending for the next 10 years. PCS. In June, drugstore.com signed a ten-year agreement with PCS Health Systems, Inc. PCS is one of the largest pharmacy benefit managers in the 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. covering over 56 million lives. The agreement allows PCS customers to purchase prescriptions from drugstore.com and use their insurance benefit. GNC. In September, drugstore.com opened the General Nutrition Centers General Nutrition Centers or GNC is a Pittsburgh-based American commercial enterprise focusing on the retail sale of health and nutrition related products, over the counter drugs, and foods/food supplements world-wide through GNC branded stores. (GNC) "store-within-a-store" on the drugstore.com Web site. drugstore.com is the only place 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 where GNC brand products can be purchased. GNC is the largest specialty retailer of vitamins and mineral supplements in the United States. VIPPS VIPPS Verified Internet Pharmacy Practice Sites Certification. In September, drugstore.com became one of only three online drugstores to be awarded the Verified ver·i·fy tr.v. ver·i·fied, ver·i·fy·ing, ver·i·fies 1. To prove the truth of by presentation of evidence or testimony; substantiate. 2. Internet Pharmacy internet pharmacy Online A website that offers prescription drugs from the comfort of home Cons The IP or prescribing physician may not be qualified or licensed to prescribe drugs in all states. See Operation Cure-All, VIPPS. Practice Sites (VIPPS) certification by the National Association of Boards of Pharmacy (NABP NABP National Association of Boards of Pharmacy NABP Norwegian Association of the Blind and Partially Sighted ). The NABP is the only professional association that represents the state boards state boards Examinations administered by a US state board of medical examiners to license a physician in a particular state; these examinations play an ever-decreasing role in state medical licensure, as these bodies now rely on standardized national examinations of pharmacy in all 50 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . The certification means drugstore.com is a fully licensed facility exercising the best safe pharmacy practices Pharmacy practice is the discipline of pharmacy which involves developing the professional roles of pharmacists. Areas of pharmacy practice include:
NBC NBC in full National Broadcasting Co. Major U.S. commercial broadcasting company. It was formed in 1926 by RCA Corp., General Electric Co. (GE), and Westinghouse and was the first U.S. company to operate a broadcast network. . In September, drugstore.com signed a strategic partnership with MSNBC.com, which is one of the first cross-media and cross-network deals of its kind. The deal includes advertising on MSNBC.com, MSNBC MSNBC Microsoft/National Broadcasting Company Cable and NBC's 'Later Today', and also involves TV spots, health programming and sponsorship. Discovery Channel. In September, drugstore.com entered into an agreement to be the exclusive provider of health products to the discoveryhealth.com online community and a leading advertiser ad·ver·tise v. ad·ver·tised, ad·ver·tis·ing, ad·ver·tis·es v.tr. 1. To make public announcement of, especially to proclaim the qualities or advantages of (a product or business) so as to increase on the Discovery Health Channel and other Discovery networks. Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . In October, drugstore.com promoted Kal Raman, previously drugstore.com's senior vice president of operations, to the position of COO (Cell Of Origin) See mobile positioning. . Raman, who has a demonstrated track record in leading retail and operations efforts, is currently responsible for the overall customer experience through marketing, store development, information technology, operations and customer service. Distribution Expansion. In September, drugstore.com began construction on its first, wholly-owned distribution facility. The facility is a 270,000 square feet distribution center located in Bridgeport, New Jersey Bridgeport is an unincorporated area within Logan Township, located in Gloucester County, New Jersey. The area is served as United States Postal Service ZIP Code 08014. As of the United States 2000 Census, the population for ZIP Code Tabulation Area 08014 was 635. . It is expected to be operational in the first half of 2000. This investment is expected to significantly expand drugstore.com's distribution capacity, reducing shipping times and increasing customer service levels. About drugstore.com drugstore.com (http://www.drugstore.com) is a leading online drugstore and information site offering What Every Body Needs(TM) for health, beauty, wellness, personal care and pharmacy products. drugstore.com provides a convenient, private and informative shopping experience that encourages consumers to purchase products essential to healthy, everyday living. drugstore.com offers thousands of brand-name personal healthcare products at competitive prices, a full-service, licensed mail pharmacy, along with a wealth of health-related information, buying guides and other tools designed to help consumers make informed purchasing decisions. Consumers can personalize per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. their shopping experiences with shopping lists, e-mail reminders for replenishing regularly used products and private e-mail access to pharmacists This is a list of notable pharmacists.
drugstore.com and What Every Body Needs are trademarks of drugstore.com, inc. All other marks are the property of their respective owners. When used in this discussion, the words "expects," "believes," and similar expressions are intended to identify 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. In particular, comments about drugstore.com's future revenues, earnings and growth rate are forward-looking. Factors that could cause actual results to differ materially from anticipated results are detailed in our Prospectus related to our initial public offering dated July 27, 1999 filed with the Securities and Exchange Commission. -0-
DRUGSTORE.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Third Quarter Nine Months Period from
Ended Ended April 2, 1998
Oct. 3, (Inception)
to Sept. 30,
1999 1998 1999 1998
Net sales $12,158 $-- $16,360 $--
Cost of sales 14,066 -- 19,617 --
--------- -------- --------- ---------
Gross profit (loss) (1,908) -- (3,257) --
Operating expenses:
Marketing and sales 16,471 313 32,988 313
Product development 4,232 522 10,174 626
General and
administrative 3,120 511 7,037 582
Charitable
contributions 3,600 -- 3,600 --
Amortization of
intangible assets 5,300 10 5,338 18
Amortization of
stock-based
compensation 9,267 350 12,850 516
--------- -------- --------- ---------
Total operating
expenses 41,990 1,706 71,987 2,055
--------- -------- --------- ---------
Operating loss (43,898) (1,706) (75,244) (2,055)
Interest income, net 1,925 36 2,918 36
--------- -------- --------- ---------
Net loss $(41,973) $(1,670) $(72,326) $(2,019)
========== ========== ========== =========
Basic and diluted
net loss per share $(1.33) $(2.38) $(6.54) $(5.30)
========== ========== ========== =========
Pro forma basic
and diluted
net loss per share $(1.04) $(.20) $(2.66) $(.45)
========== ========== ========== =========
Weighted average shares
outstanding used to
compute
basic and diluted
net loss per share 31,512,007 700,502 11,062,231 380,746
========== ========== ========== =========
Weighted average shares
outstanding used to
compute pro forma
basic and diluted
net loss per share 40,332,521 8,444,388 27,237,976 4,535,097
========== ========== ========== =========
SUPPLEMENTAL INFORMATION (UNAUDITED): Pro forma Results Excluding
Charitable Contributions and Amortization of Stock-Based Compensation
(See Note 2 below):
Third Quarter Nine Months Period from
Ended Ended April 2, 1998
Oct. 3, (Inception)
to Sept. 30,
1999 1998 1999 1998
Pro forma net loss,
excluding charitable
contributions and
amortization of
stock-based compensation $(29,106) $(1,320) $(55,876) $(1,503)
========== ========== ========== =========
Pro forma basic and
diluted net loss per share,
excluding charitable
contributions and amortization
of stock-based compensation $(.72) $(.16) $(2.05) $(.33)
========== ========== ========== =========
Shares used in computation
of pro forma basic and
diluted net loss per share,
excluding charitable
contributions and amortization
of stock-based
compensation 40,332,521 8,444,388 27,237,976 4,535,097
========== ========== ========== =========
NOTE 1: Pro forma basic and diluted net loss per share is computed
using the weighted average number of common shares outstanding,
including the pro forma effects of the automatic conversion of
all outstanding convertible preferred stock into shares of common
stock effective upon the closing of the Company's initial public
offering as if such conversion occurred at the date of original
issuance.
NOTE 2: Supplemental information related to the Company's pro forma
results excluding charitable contributions and amortization of
stock-based compensation for the quarter and nine months ended
October 3, 1999, the quarter ended September 30, 1998 and period
from April 2, 1998 (Inception) to September 30, 1998 is presented
for informational purposes only and is not prepared in accordance
with generally accepted accounting principles. These results
present the financial results of the Company excluding the
expenses associated with the Company's contribution of 200,000
shares of its common stock to the drugstore.com foundation and
amortization of stock-based compensation.
DRUGSTORE.COM, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
October 3, December 31,
1999 1998
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $160,302 $14,408
Accounts receivable 2,266 --
Inventories 2,311 --
Prepaid marketing expenses 9,612 4,317
Other prepaid expenses
and current assets 923 520
------------------------
Total current assets 175,414 19,245
Fixed assets, net of accumulated
depreciation of $1,912 and $66 10,353 2,616
Intangible assets, net of
accumulated amortization
of $5,371 and $33 206,043 230
Prepaid marketing expenses 20,038 --
Note receivable from officer 265 250
Deposits and other assets 1,292 176
------------------------
Total assets $413,405 $22,517
========================
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $11,737 $1,254
Accrued compensation 2,425 327
Accrued marketing expenses 3,855 --
Other current liabilities 1,257 142
Current portion of capital
lease obligations 1,435 472
------------------------
Total current liabilities 20,709 2,195
Capital lease obligations,
less current portion 1,008 975
Stockholders' equity:
Preferred stock, $.0001 par value
Authorized shares--10,000,000
Series A preferred stock
Issued and outstanding
shares--none and
10,000,000 as of
October 3, 1999 and
December 31, 1998,
respectively -- 7,986
Series B preferred stock
Issued and outstanding
shares--none and
5,446,268 as of
October 3, 1999 and
December 31, 1998,
respectively -- 18,237
Common stock, $.0001 par value:
Authorized shares--250,000,000
Issued and outstanding
shares--43,366,681 and
2,323,000 as of
October 3, 1999 and
December 31, 1998,
respectively 4 --
Additional paid-in capital 485,450 5,080
Deferred stock-based compensation (13,413) (3,929)
Accumulated deficit (80,353) (8,027)
------------------------
Total stockholders' equity 391,688 19,347
------------------------
Total liabilities and
stockholders' equity $413,405 $22,517
========================
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