NEW YORK, Aug. 8, 2007 (PRIME NEWSWIRE) -- Bluefly, Inc. (Nasdaq:BFLY), a leading online retailer of designer brands, fashion trends and superior value (www.bluefly.com), today announced strong growth in revenue and continued strong gross profit for the second quarter 2007.
Highlights for the second quarter included:
* Revenue increased by approximately 29% to $21.6 million from $16.8 million in second quarter 2006. * Gross profit increased by approximately 20%. * Gross margin decreased to 39.2% from 42.0% in second quarter 2006, however the gross margin dollars per order increased to $66.53 in the second quarter of 2007 compared to $61.85 in the second quarter of 2006. * Operating loss increased to $2,249,000 compared to operating loss of $1,754,000, primarily as a result of (i) an increase of $1.1 million in spending related to marketing and advertising and (ii) $899,000 incremental stock-based compensation expense incurred in connection with existing stock based compensation awards. * Net loss increased to $2.1 million from $1.9 million. Loss per share decreased to $0.02 per share (based on 130.5 million weighted average shares outstanding after preferred stock dividends) from $0.17 per share (based on 40.3 million weighted average shares outstanding after preferred stock dividends). * Inventory declined by $1.1 million since December 2006.
"We are pleased with the continued growth in revenue and gross profit improvement and believe these kinds of improvements demonstrate that we are on a path toward profitability," said Melissa Payner, Bluefly's Chief Executive Officer. "The operating loss, excluding the non-cash charges related to stock based compensation, decreased compared to the prior year. In fact, when we exclude these amounts from both this quarter and last year, the operating loss is 35% lower comparatively."
The company will host a conference call webcast to discuss its second quarter today at 5:00 p.m. Investors can access the webcast at www.investor.bluefly.com.
About Bluefly, Inc.
Founded in 1998, Bluefly, Inc. (Nasdaq:BFLY) is a leading online retailer of designer brands, fashion trends and superior value. Bluefly is headquartered at 42 West 39th Street in New York City, in the heart of the Fashion District. For more information, please call 212-944-8000 or visit www.bluefly.com.
This press release may include statements that constitute "forward-looking statements," usually containing the words "believe," "project," "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. The risks and uncertainties are detailed from time to time in reports filed by the Company with the Securities and Exchange Commission, including Forms 8-K, 10-Q and 10-K. These risks and uncertainties include, but are not limited to, the Company's ability to execute on, and gain additional revenue from, its marketing initiatives; the Company's history of losses and anticipated future losses; the potential failure to forecast revenues and/or to make adjustments to operating plans necessary as a result of any failure to forecast accurately; unexpected changes in fashion trends; cyclical variations in the apparel and e-commerce market; the availability of merchandise; the Company's dependence on one supplier for a material portion of its inventory; risks associated with the acquisition of inventory from foreign markets, including currency fluctuations; These risks are not disclosed in the 10-Q. If these are new risk factors, the Company will need to disclose these risks under Item 1A in the 10-Q, and add these risks to the forward looking statements in the 10-Q; the need to further establish brand name recognition; management of potential growth; and risks associated with the Company's ability to handle increased traffic and/or continued improvements to its Web site.
CONDENSED STATEMENTS OF OPERATIONS - UNAUDITED
Three Months Ended
June 30, June 30,
2007 2006
---- ----
Net sales $ 21,608,000 $ 16,793,000
Cost of sales 13,145,000 9,747,000
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Gross profit 8,463,000 7,046,000
Gross profit percentage 39.2% 42.0%
Selling and fulfillment expenses 4,546,000 3,848,000
Marketing expenses 2,712,000 1,729,000
General and administrative expenses 3,454,000 3,223,000
------------ ------------
Total operating expenses 10,712,000 8,800,000
Operating loss (2,249,000) (1,754,000)
Interest and other income 169,000 67,000
Interest expense (62,000) (214,000)
----------- ------------
Net loss $ (2,142,000) $ (1,901,000)
------------ ------------
Preferred stock dividends (11,000) (990,000)
Deemed dividends related to beneficial
conversion feature on Series F Preferred
Stock -- (3,857,000)
------------ ------------
Net loss available to common
shareholders $ (2,153,000) $ (6,748,000)
------------ ------------
Basic and diluted net loss per share
(after preferred stock dividends) $ (0.02) $ (0.17)
============ ============
Weighted average shares outstanding 130,508,897 40,267,334
============ ============
SELECTED BALANCE SHEET DATA & KEY METRICS- UNAUDITED
June 30, December 31,
2007 2006
----------- -----------
Cash $14,626,000 $20,188,000
Inventories, net 23,081,000 24,189,000
Prepaid Inventory 569,000 616,000
Other Current Assets 3,782,000 3,613,000
Property & Equipment, net 4,939,000 3,573,000
Current Liabilities 11,415,000 14,603,000
Other Long-term Liabilities 131,000 --
Shareholders' Equity 35,671,000 37,827,000
Three Months Three Months
------------ ------------
Ended Ended
----- -----
June 30, 2007 June 30, 2006
------------- -------------
Average Order Size (including
shipping & handling revenue) $284.01 $248.32
Customers Added During Period 45,102 37,799
CONDENSED STATEMENTS OF CASH FLOWS
Three Months Three Months
Ended Ended
June 30, 2007 June 30, 2006
------------- -------------
(Unaudited) (Unaudited)
Cash flows from operating activities:
Loss from operations $ (2,142,000) $ (1,901,000)
Adjustments to reconcile loss from
operations to net cash used in
operating activities:
Depreciation and amortization 413,000 376,000
Non-cash expense related to warrants
issued to supplier -- 41,000
Provisions for returns (1,128,000) 147,000
Bad debt expense 143,000 405,000
Stock options expense 1,506,000 611,000
Reserve for inventory obsolescence 100,000 375,000
Changes in operating assets and
liabilities:
(Increase) decrease in:
Inventories 2,952,000 (198,000)
Accounts receivable 1,131,000 424,000
Prepaid inventory (191,000) (456,000)
Prepaid expenses 120,000 (183,000)
Other current assets (100,000) (143,000)
(Decrease) increase in:
Accounts payable (892,000) (4,194,000)
Accrued expenses and other current
liabilities (187,000) 1,827,000
Interest payable to related party
shareholders -- 122,000
Deferred revenue (48,000) (192,000)
------------ ------------
Net cash provided by (used in)
operating activities 1,677,000 (2,939,000)
Cash flows from investing activities:
Purchase of property and equipment (1,321,000) (482,000)
------------ ------------
Net cash (used in) investing
activities (1,321,000) (482,000)
------------ ------------
Cash flows from financing activities:
Net proceeds from June 2006 Financing -- 48,002,000
Repayment of related party loan -- (5,488,000)
Preferred Stock Dividends paid -- (19,512,000)
Net proceeds from June 2005 Financing -- --
Net proceeds from exercise of Stock
Options 16,000 --
Payment of capital lease obligation -- (13,000)
------------ ------------
Net cash provided by provided by
financing activities 16,000 22,989,000
------------ ------------
Net increase in cash and cash equivalents 372,000 19,568,000
Cash and cash equivalents - beginning of
period 14,254,000 4,429,000
------------ ------------
Cash and cash equivalents - end of
period $ 14,626,000 $ 23,997,000
------------ ------------