GSI Commerce Inc. reported a 16% increase in third quarter net revenues to $137.3 million from $118.5 million last year. Merchandise sales increased 36% to $315.8 million from $233.0 million in the year-ago quarter. The company saw a net loss of $6.1 million or 13 cents per share compared to a net loss of $6.2 million or 14 cents per share. Sporting goods sales increased 15% in the quarter to $89.9 million, while net revenues on those sales increased 16% to $65.0 million.
“I am pleased with our third quarter financial performance. We achieved or exceeded our guidance on all of our key financial metrics. Since our last report, we launched five additional online stores, signed multiyear renewals with three of our league partners, signed two new partner deals for a total of eight year-to-date, and completed a strategic acquisition that increases our partner base and adds scale to our infrastructure,” said Michael G. Rubin, chairman, president and CEO of GSI. “As we approach the holiday shopping season, we see continued strength in e-commerce trends and I am confident in our ability to execute against our plans in the fourth quarter and beyond.”
During the quarter, GSI announced it had signed multiyear contract extensions with the National Football League until fiscal year 2012, Major League Baseball until fiscal year 2016 and the National Hockey League until fiscal year 2014.
For the fourth quarter, GSIC expects net revenue to range between $320.0 million and $340.0 million on merchandise sales of $707.0 million to $757.0 million. Net income should amount to $52.5 million to $54.0 million.
For the fiscal year 2007, GSIC expects net revenue to range between $737.0 million and $757.0 million on merchandise sales of $1.66 billion to $1.71 billion. Net income should amount to $38.5 million to $40.0 million.
GSI COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 29, Sept. 30, Sept. 29,
2006 2007 2006 2007
Revenues:
Net revenues from
product sales $84,673 $91,299 $270,856 $289,053
Service fee revenues 33,802 45,987 81,490 125,780
Net revenues 118,475 137,286 352,346 414,833
Cost of revenues from
product sales 60,811 65,259 200,914 207,843
Gross profit 57,664 72,027 151,432 206,990
Operating expenses:
Sales and marketing,
inclusive of $668, $774,
$3,046 and $2,084 of
stock-based compensation 34,824 47,321 94,398 132,802
Product development,
inclusive of $215, $395,
$635 and $1,026 of
stock-based compensation 13,944 15,925 31,111 44,737
General and administrative,
inclusive of $1,232, $1,006,
$2,205 and $2,708 of
stock-based compensation 9,465 11,198 24,827 31,014
Depreciation and amortization 5,535 9,129 14,912 23,744
Total operating expenses 63,768 83,573 165,248 232,297
Loss from operations (6,104) (11,546) (13,816) (25,307)
Other (income) expense:
Interest expense 776 2,075 2,332 3,842
Interest income (1,445) (3,342) (4,428) (7,025)
Other expense 194 28 101 51
Impairment on investment 737 – 2,763 –
Total other (income) expense 262 (1,239) 768 (3,132)
Loss before income taxes (6,366) (10,307) (14,584) (22,175)
Benefit for income taxes (151) (4,221) (149) (8,711)
Net loss before cumulative effect
of change in accounting principle (6,215) (6,086) (14,435) (13,464)
Cumulative effect of change in
accounting principle – – 268 –
Net loss $(6,215) $(6,086) $(14,167) $(13,464)
Basic and diluted loss per share:
Prior to cumulative effect of
change in accounting principle $(0.14) $(0.13) $(0.32) $(0.29)
Cumulative effect of change in
accounting principle $ – $ – $0.01 $ –
Net loss $(0.14) $(0.13) $(0.31) $(0.29)
Weighted average shares outstanding
– basic and diluted 45,344 46,567 45,005 46,320
