Bidz.com Announces Solid Financial Results for the First Quarter 2009
-
First quarter pre-tax income of $2.5 million exceeds guidance range of
$1.8-$2.0 million
-
First quarter gross margins of 32.7% exceeds guidance of 30%
-
First quarter EPS of $0.07 exceeds guidance range of $0.04-$0.05
-
Strong financial position with approximately $3.2 million in cash,
$33.4 million in positive working capital and zero debt
-
Continued share repurchase of 336,000 shares at an average price of
$3.20
CULVER CITY, Calif., May 05, 2009 (BUSINESS WIRE) -- Bidz.com (NASDAQ:BIDZ), a leading online retailer of jewelry, announced results for the first quarter ended March 31, 2009.
Net revenue for the first quarter of 2009 were $31.2 million, compared with $61.9 million reported in the first quarter of 2008, with domestic and international sales representing 69.7% and 30.3%, respectively.
In the first quarter 2009, gross profit was approximately $10.2 million, compared with $18.0 million in the first quarter of 2008. Gross margins in the first quarter of 2009 increased to 32.7%, compared with 29.1% in the same period of 2008. The increase in gross margins was due to continued careful management with respect to the amount of auctions managed, as well as an increase in brand name merchandise purchased in closeouts that the Company sold during the quarter.
"In a very weak retail economy, we were still able to increase our gross margins and maintain solid profitability through our aggressive expense management and proactive approach to managing our overall business," said Leon Kuperman, the Company's President. "Our balance sheet remains strong and liquid and we will continue to repurchase our shares, which we believe are undervalued."
"We are confident that we are doing the right things both tactically and strategically to position ourselves well for both the near-term and the long-term," continued Mr. Kuperman. "Given the current environment, and the abundance of high quality branded closeout inventory available in the market, we have reduced the need to manufacture product and are actively buying closeouts of both luxury brand name jewelry and accessories such as handbags, wallets and scarves at extremely low prices. While the macro environment remains weak, we expect to continue to profitably manage our business, leverage our proprietary auction infrastructure and take advantage of the many current opportunities to purchase brand name items. We remain focused on further increasing our awareness and relevance to our customers by providing quality goods at tremendous values."
| Auction Metrics |
|
Three Months Ended March 31, |
| |
|
|
2009 |
|
|
2008 |
|
% Change |
|
| Number of new buyers |
|
|
51,021 |
|
|
83,179 |
|
-38.7 |
% |
| Average selling price per order (gross) |
|
$ |
181 |
|
$ |
182 |
|
-0.5 |
% |
| Average orders per day |
|
|
2,043 |
|
|
3,734 |
|
-45.3 |
% |
| Average items sold per day |
|
|
6,110 |
|
|
12,186 |
|
-49.9 |
% |
| Average items sold per transaction |
|
|
3.0 |
|
|
3.3 |
|
-8.4 |
% |
| Acquisition cost per new buyer |
|
$ |
51 |
|
$ |
50 |
|
2.0 |
% |
| Gross Margin $ per average order |
|
$ |
59 |
|
$ |
53 |
|
10.7 |
% |
| |
|
|
|
|
|
|
|
|
|
Recent Key Developments:
- In the first quarter of 2009, the Company spent approximately $1.1 million to repurchase 336,000 shares at an average price of approximately $3.20
- As of March 31, 2009 the Company has spent a total of $14.5 million to cumulatively repurchase 2,190,000 shares at an average price of approximately $6.61 since the inception of its stock repurchase program in June, 2007
- Acquired an approximately $6 Million lot of jewelry from The Colibri Group bankruptcy auction
- Sold all the intellectual property and tools from The Colibri Group bankruptcy auction to The Richline Group, a Berkshire Hathaway Company
Operating expenses in the first quarter 2009 were $7.6 million compared to $10.3 million in the prior year period. The dollar decrease in expenses was primarily due to the Company's aggressive cost cutting initiatives in virtually all areas of operations, administration, sales and marketing.
The Company's pre-tax income for the first quarter of 2009 was $2.5 million, compared to $7.8 million in the prior year period. The Company's income tax expense decreased to $1.0 million in the first quarter of 2009, compared to $3.2 million in the prior year period, and the effective tax rate was 40.2% versus 40.7% in the same period of 2008.
Net income for the first quarter of 2009 was $1.5 million, or $0.07 per fully diluted share on 22.9 million weighted average shares outstanding, compared to net income of $4.6 million, or $0.18 per fully diluted share on 25.8 million weighted average shares outstanding in the same period of 2008.
As of March 31, 2009, the Company had approximately $3.2 million in cash. Additionally, the Company had $33.4 million in positive working capital, no long-term debt and a zero balance on its $25 million line of credit. The Company believes that its positive cash flow, strong liquidity and untapped revolving line of credit are among its core financial strengths. The Company continues to improve its financial position and has the balance sheet strength, liquidity and free cash flow it needs to make further progress on its core strategies, as the Company navigates the current economic downturn.
Additionally, in the first quarter 2009 the Company announced that its Board of Directors authorized a significant increase in its share buyback program leaving $20 million of authorized capacity available for repurchases at the Company's discretion at the time of the authorization. At March 31, 2009 there was approximately $19.0 million remaining on the Company's approved share repurchase plan and the Company expects to continue to make additional share repurchases in the second quarter of 2009.
Business Outlook/Guidance
The Company anticipates that net revenue will be lower for the second and third quarters of 2009 compared to the first quarter as the second and third quarters are seasonally the weakest periods for jewelry sales.
The Company is introducing new revenue guidance for the second quarter of 2009 of $28-$30 million, gross profit margin of approximately 28-30%, pre-tax income of approximately $1.2-$1.9 million and, fully taxed GAAP EPS of $0.03-$0.05.
Investor Conference Call
Bidz.com's quarterly earnings conference call is scheduled to begin later today (May 5, 2009) at 1:30 p.m., Pacific Time. The call will be open to all interested investors through a live audio Web broadcast via the Internet on the investor relations section of the Company's website at http://investors.bidz.com/.
For those unable to participate during the live broadcast, the webcast will be archived for 90 days and a replay will be available beginning Tuesday, May 5, 2009 at 7:30 p.m. ET, through May 19, 2009 at 12:00 a.m. ET. To access the replay, dial 800-406-7325 (U.S.) or 303-590-3030 (International), and use passcode: 4060726.
About Bidz.com
Bidz.com, founded in 1998, is a leading online retailer of jewelry. Bidz offers its products through at live auction format as well as a fixed price online retail store, Buyz.com. Bidz.com's auctions are also available in Arabic, German and Spanish. To learn more about Bidz.com visit its website at www.bidz.com.
Safe Harbor Statement
This press release includes forward looking statements about the Company's estimated revenue and earnings within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this release, including statements regarding the Company's future financial position, business strategy and plans and objectives of management for future operations, are forward looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions, as they relate to the Company, are intended to identify forward looking statements. We have based these forward-looking statements largely on current expectations and projections about future events and financial trends that we believe may affect the Company's financial condition, results of operations, business strategy and financial needs. Risks and uncertainties include that our common stock is subject to short selling and trading, and prices of our stock may be volatile; that we are subject to "prank" bidding; that we may face increasing costs to acquire new customers; the ability of the Company to attract customers to its website and offer attractive products; the ability to maintain profit levels while expanding international sales; the ability to detect fraud if we fail to maintain an effective system of internal controls; the ability to maintain our website, electronic data processing systems, and systems hardware; the ability to forecast accurately net revenue and plan for expenses; that we do not have a guaranteed supply of jewelry products and that we have a heavy concentration of inventory purchase from our top two suppliers; the ability to protect our intellectual property rights; and potential litigation and government enforcement actions that may result from our prior securities offerings. Please refer to Bidz.com's reports and filings with the Securities and Exchange Commission for a further discussion of these risks and uncertainties. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. Bidz.com undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made or to reflect the occurrence of unanticipated events.
|
Bidz.com, Inc.
|
|
|
|
|
|
| Balance Sheets |
|
|
|
|
|
| |
|
|
|
|
|
| (in thousands, except share data and per share) |
|
|
|
|
|
| |
|
December 31, |
|
|
March 31, |
| |
|
2008 |
|
|
2009 |
| |
|
|
|
|
(Unaudited) |
| Assets |
|
|
|
|
|
| Current assets: |
|
|
|
|
|
| Cash |
$ |
4,456 |
|
|
$ |
3,160 |
|
| Accounts receivable |
|
591 |
|
|
|
677 |
|
| Inventories, net of reserves of $820 and $1,350 at December 31, 2008 and March 31, 2009, respectively |
|
|
|
|
|
| |
37,657 |
|
|
|
38,947 |
|
| Other receivable (includes related party amounts of $102 and $127 at December 31, 2008 and March 31, 2009, respectively) |
|
|
|
|
|
| |
1,041 |
|
|
|
1,052 |
|
| Current deferred tax assets |
|
1,950 |
|
|
|
2,053 |
|
| Other current assets |
|
689 |
|
|
|
758 |
|
| Total current assets |
|
46,384 |
|
|
|
46,647 |
|
| Long term deferred tax asset |
|
84 |
|
|
|
169 |
|
| Property and equipment, net |
|
1,672 |
|
|
|
1,627 |
|
| Intangible asset |
|
161 |
|
|
|
161 |
|
| Deposits |
|
104 |
|
|
|
104 |
|
| Total assets |
$ |
48,405 |
|
|
$ |
48,708 |
|
| |
|
|
|
|
|
| Liabilities and Stockholders' Equity |
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
| Revolving credit line |
$ |
- |
|
|
$ |
- |
|
| Accounts payable (includes related party amounts of $1,364 and $442 at December 31, 2008 and March 31, 2009, respectively) |
|
|
|
|
|
| |
9,636 |
|
|
|
8,893 |
|
| Accrued expenses |
|
3,091 |
|
|
|
3,205 |
|
| Deferred revenue |
|
872 |
|
|
|
1,189 |
|
| Total current liabilities |
|
13,599 |
|
|
|
13,287 |
|
| |
|
|
|
|
|
| Long term deferred tax liability |
|
- |
|
|
|
162 |
|
| |
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
| |
|
|
|
|
|
| Stockholders' equity: |
|
|
|
|
|
| Preferred stock: par value $0.001; authorized 4,000,000 shares; none issued and outstanding at December 31, 2008 and March 31, 2009, respectively |
|
|
|
|
|
| |
- |
|
|
|
- |
|
| Common stock: par value $0.001; authorized 100,000,000 shares; issued and outstanding 22,917,918 and 22,839,499 at December 31, 2008 and March 31, 2009, respectively |
|
|
|
|
|
| |
|
|
|
|
| |
23 |
|
|
|
23 |
|
| Additional paid in capital |
|
24,520 |
|
|
|
24,240 |
|
| Shares held in treasury, at cost; 0 and 266,735 shares at December 31, 2008 and March 31, 2009, respectively |
|
|
|
|
|
| |
- |
|
|
|
(871 |
) |
| Employees share purchase receivable |
|
(708 |
) |
|
|
(619 |
) |
| Accumulated earnings |
|
10,971 |
|
|
|
12,486 |
|
| Total stockholders' equity |
|
34,806 |
|
|
|
35,259 |
|
| |
$ |
48,405 |
|
|
$ |
48,708 |
|
| |
|
|
|
|
|
|
|
| Bidz.com, Inc. |
|
|
|
|
|
|
| Statements of Income |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| (in thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
| |
|
|
2008 |
|
|
2009 |
| |
|
|
|
|
|
|
| Net revenue: |
|
|
|
|
|
|
| Merchandise sales |
|
$ |
57,609 |
|
|
$ |
30,891 |
|
| Wholesale merchandise sales |
|
|
4,202 |
|
|
|
206 |
|
| Other revenue |
|
|
118 |
|
|
|
80 |
|
| |
|
|
61,929 |
|
|
|
31,177 |
|
| Cost of revenue |
|
|
43,893 |
|
|
|
20,991 |
|
| Gross Profit |
|
|
18,036 |
|
|
|
10,186 |
|
| Operating expenses: |
|
|
|
|
|
|
| General and administrative |
|
|
5,907 |
|
|
|
4,861 |
|
| Sales and marketing |
|
|
4,199 |
|
|
|
2,605 |
|
| Depreciation and amortization |
|
|
162 |
|
|
|
180 |
|
| Total operating expenses |
|
|
10,268 |
|
|
|
7,646 |
|
| Income from operations |
|
|
7,768 |
|
|
|
2,540 |
|
| Other income - interest income |
|
|
13 |
|
|
|
2 |
|
| Other expense - interest (expense) |
|
|
(11 |
) |
|
|
(11 |
) |
| Income before income tax expense |
|
|
7,770 |
|
|
|
2,531 |
|
| Income tax expense |
|
|
3,165 |
|
|
|
1,016 |
|
| Net income |
|
$ |
4,605 |
|
|
$ |
1,515 |
|
| |
|
|
|
|
|
|
| Net income per share available to common shareholders - basic |
|
$ |
0.19 |
|
|
$ |
0.07 |
|
| Net income per share available to common shareholders - diluted |
|
$ |
0.18 |
|
|
$ |
0.07 |
|
| Weighted average number of shares outstanding - basic |
|
|
24,538,263 |
|
|
|
22,898,532 |
|
| Weighted average number of shares outstanding - diluted |
|
|
25,828,507 |
|
|
|
22,898,532 |
|
| |
|
|
|
|
|
|
|
|
| Bidz.com, Inc. |
|
|
|
|
|
|
| Statements of Cash Flows |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| (in thousands) |
|
|
|
|
|
|
| |
|
|
Three Months Ended March 31, |
| |
|
|
2008 |
|
|
2009 |
| |
|
|
|
|
|
|
|
| Cash flows provided by (used for) operating activities: |
|
|
|
|
|
|
| |
Net income |
|
$ |
4,605 |
|
|
$ |
1,515 |
|
| |
|
|
|
|
|
|
|
| |
Adjustments to reconcile net income to net cash |
|
|
|
|
|
|
| |
provided by operating activities: |
|
|
|
|
|
|
| |
Depreciation and amortization |
|
|
162 |
|
|
|
180 |
|
| |
Change in inventory reserve |
|
|
(156 |
) |
|
|
530 |
|
| |
Impairment in employees share purchase receivable |
|
|
- |
|
|
|
89 |
|
| |
Stock-based compensation |
|
|
267 |
|
|
|
81 |
|
| |
Changes in assets and liabilities: |
|
|
|
|
|
|
| |
(Increase) decrease in assets: |
|
|
|
|
|
|
| |
Accounts receivable |
|
|
(2,638 |
) |
|
|
(86 |
) |
| |
Inventories |
|
|
22,047 |
|
|
|
(1,820 |
) |
| |
Other receivable |
|
|
- |
|
|
|
(11 |
) |
| |
Current deferred tax assets |
|
|
- |
|
|
|
(103 |
) |
| |
Other current assets |
|
|
1,918 |
|
|
|
421 |
|
| |
Increase (decrease) in liabilities: |
|
|
|
|
|
|
| |
Accounts payable |
|
|
(14,390 |
) |
|
|
(743 |
) |
| |
Accrued expenses |
|
|
1,167 |
|
|
|
114 |
|
| |
Deferred revenue |
|
|
(1,265 |
) |
|
|
317 |
|
| |
Net cash provided by operating activities |
|
|
11,717 |
|
|
|
484 |
|
| |
|
|
|
|
|
|
|
| Cash flows used for investing activities: |
|
|
|
|
|
|
| |
Prepayment for intangible asset |
|
|
- |
|
|
|
(490 |
) |
| |
Capital expenditures |
|
|
(203 |
) |
|
|
(135 |
) |
| |
Net cash used for investing activities |
|
|
(203 |
) |
|
|
(625 |
) |
| Cash flows provided by (used for) financing activities: |
|
|
|
|
|
|
| |
Long term deferred tax asset |
|
|
- |
|
|
|
(85 |
) |
| |
Long term deferred tax liability |
|
|
- |
|
|
|
162 |
|
| |
Revolving credit line |
|
|
(5,924 |
) |
|
|
- |
|
| |
Proceeds from exercise of stock options |
|
|
3 |
|
|
|
- |
|
| |
Adjustment to tax benefit from stock based compensation |
|
|
- |
|
|
|
(158 |
) |
| |
Purchase of treasury stock |
|
|
(3,808 |
) |
|
|
(1,074 |
) |
| |
Net cash used for financing activities |
|
|
(9,729 |
) |
|
|
(1,155 |
) |
| |
|
|
|
|
|
|
|
| Net increase (decrease) in cash |
|
|
1,785 |
|
|
|
(1,296 |
) |
| Cash, beginning of period |
|
|
4,808 |
|
|
|
4,456 |
|
| Cash, end of period |
|
$ |
6,593 |
|
|
$ |
3,160 |
|
| |
|
|
|
|
|
|
|
| Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
| |
Interest paid |
|
$ |
11 |
|
|
$ |
11 |
|
| |
Income taxes paid |
|
$ |
1,332 |
|
|
$ |
- |
|
| Supplemental disclosure of non-cash investing and |
|
|
|
|
|
|
| |
financing activities: |
|
|
|
|
|
|
| |
Retirement of treasury shares |
|
$ |
1,176 |
|
|
$ |
203 |
|
SOURCE: Bidz.com
IR Contact:
Addo Communications, Inc.
Andrew Greenebaum, 310-829-5400
andrewg@addocommunications.com
Copyright Business Wire 2009
|
