|Amazon.com Announces Financial Results for First Quarter 1999|
SEATTLE, WA-(April 28, 1999)-Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for the first quarter of 1999. Net sales for the first quarter were $293.6 million, an increase of 236 percent over net sales of $87.4 million for the first quarter of 1998.
Amazon.com reported a first-quarter pro forma operating loss of $30.6 million, or 10 percent of net sales, compared to an operating loss of $10.0 million, or 11 percent of net sales, in the first quarter of 1998. First-quarter pro forma net loss of $36.4 million, or $0.23 per share, compared with a net loss of $10.4 million, or $0.07 per share, in the first quarter of 1998. On a GAAP basis, reported first-quarter net loss was $61.7 million, or $0.39 per share, and included $25.3 million of merger- and acquisition-related costs.
Amazon.com announced that cumulative customer accounts increased by more than 2.2 million during the first quarter to more than 8.4 million at March 31, 1999, an increase of more than 250 percent from the 2.3 million customer accounts at March 31, 1998. Repeat customer orders represented more than 66 percent of orders during the quarter ended March 31, 1999.
"Everyone here is working hard to provide the best possible customer experience, and we're extremely grateful to our customers," said Jeff Bezos, Amazon.com founder and CEO. "We're particularly pleased with Amazon.com Auctions, which is off to a very fast start-we had more participants during our first month than even with music."
The company's focus on customers enabled Amazon.com to extend its leadership position on a number of fronts:
Regarding Amazon.com's announced 1999 expansion plans, Bezos added, "We have begun and will continue to build out a significant distribution infrastructure. This will give customers greater availability, faster shipping times, and even better service. We will also continue to invest in systems, people, and product expansion, each of which helps us better serve customers. For the rest of 1999, we expect to invest more heavily than we have in the past. Our goal remains to build the world's most customer-centric company."
Earlier this month, Amazon.com announced it had agreed to purchase LiveBid.com, the sole provider of live-event auctions on the Internet. Adding LiveBid's technology and services to Amazon.com Auctions expands the breadth and types of items customers will find and gives local and regional auction houses full access to a vast Internet auction community.
drugstore.com and Pets.com
Amazon.com's Free Greeting Card Service
Distribution Center Expansion
Amazon.com also announced that its 323,000-square-foot facility in Fernley, Nevada began shipping on a limited basis, increasing availability and improving delivery times for customers in the Western U.S.
In March, Amazon.de leased a new distribution center in Bad Hersfeld, Germany. The facility is expected to begin operations during the second half of 1999.
Acquisition of Bibliofind.com and MusicFile.com
Note on Financial Presentation
Consolidated Statements of Operations
(in thousands, except per share amounts)
Quarter Ended March 31, 1999 1998 (Unaudited) (Unaudited) Net sales $293,643 $87,361 Cost of sales 228,852 68,063 Gross profit 64,791 19,298 Operating expenses: Marketing and sales 60,744 19,914 Product development 23,477 7,320 General and administrative 11,165 2,049 Merger and acquisition related costs, including amortization of goodwill and other purchased intangibles 25,309 - Total operating expenses 120,695 29,283 Loss from operations (55,904) (9,985) Interest income 10,925 1,645 Interest expense (16,688) (2,029) Net interest expense (5,763) (384) Net loss $(61,667) $(10,369) Basic and diluted loss per share $(0.39) $(0.07) Shares used in computation of basic and diluted loss per share 156,897 141,318 Pro Forma Results Excluding Merger and Acquisition Related Costs (see Note 2 below) Pro forma loss from operations, excluding merger and acquisition related costs $(30,595) $(9,985) Pro forma net loss, excluding merger and acquisition related costs $(36,358) $(10,369) Pro forma basic and diluted loss per share, excluding merger and acquisition related costs $(0.23) $(0.07) Shares used in computation of pro forma basic and diluted loss per 156,897 141,318 share Note 1: On January 4, 1999, the Company effected a three-for-one stock split in the form of a stock dividend to stockholders of record on December 18, 1998. Accordingly, the accompanying consolidated balance sheets and statements of operations have been restated to reflect the split. Note 2: Pro forma results for the quarter ended March 31, 1999 and 1998 are presented for informational purposes only and are not prepared in accordance with generally accepted accounting principles. These results present the operating results of Amazon.com, excluding charges of $25.3 million and $0 for the quarter ended March 31, 1999 and 1998, respectively, for merger and acquisition related costs arising from Amazon.com's April 1998 acquisitions of Bookpages, Telebook and Internet Movie Database, and the August 1998 acquisition of Junglee and the merger with PlanetAll. Among items included in merger and acquisition related costs are amortization of goodwill and other purchased intangibles, equity in loss of investees, and certain non-recurring merger and acquisition related costs. AMAZON.COM, INC. Consolidated Balance Sheets (in thousands, except per share data) March 31, December 31, 1999 1998 (Unaudited) ASSETS Current assets: Cash $5,248 $25,561 Marketable securities 1,437,717 347,884 Inventories 45,236 29,501 Prepaid expenses and other 37,077 21,308 Total current assets 1,525,278 424,254 Fixed assets, net 60,600 29,791 Goodwill and other, net 187,194 187,003 Deferred charges 39,912 7,412 Total assets $1,812,984 $648,460 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $133,018 $113,273 Accrued advertising 16,187 13,071 Other liabilities and accrued expenses 45,194 34,423 Current portion of long-term debt and capital lease obligation 7,186 808 Total current liabilities 201,585 161,575 Long-term debt and capital lease obligation 1,533,862 348,140 Stockholders' equity: Preferred stock, $0.01 par value: Authorized shares -- 10,000 Issued and outstanding shares -- none - - Common stock, $0.01 par value: Authorized shares -- 300,000 Issued and outstanding shares -- 161,371 and 159,267 shares at March 31, 1999 and December 31, 1998, respectively 1,614 1,593 Additional paid-in capital 306,414 300,130 Note receivable from officer for common stock (1,099) (1,099) Deferred compensation (1,275) (1,625) Accumulated other comprehensive income (4,390) 1,806 Accumulated deficit (223,727) (162,060) Total stockholders' equity 77,537 138,745 Total liabilities and stockholders' equity $1,812,984 $648,460 Note 1: On January 4, 1999, the Company effected a three-for-one stock split in the form of a stock dividend to stockholders of record on December 18, 1998. Accordingly, the accompanying consolidated balance sheets and statements of operations have been restated to reflect the split.