GSI Commerce announced operating results for the fourth GSI Commerce reported net revenues for the fourth quarter of fiscal 2003 increased 26% to $95.2 million compared to net revenues of $75.3 million for the Q4 2002.
Net merchandise sales, a non-GAAP financial measure, were $120.3 million for the fourth quarter of fiscal 2003, a 46% increase compared to net merchandise sales of $82.2 million for the fourth quarter of fiscal 2002. Net
merchandise sales represents the retail value of all sales transactions, inclusive of freight charges and net of allowances for returns and discounts, which flow through the GSI Commerce platform, whether or not GSI Commerce is
the seller of the merchandise or records the full amount of such sales on its financial statements.
Excluding sales attributable to the Ashford.com business, which GSI Commerce sold in December 2002, net revenues increased 44% in the fourth quarter of fiscal 2003 and net merchandise sales increased 65% in the fourth quarter of fiscal 2003. These financial measures as adjusted may be
considered non-GAAP financial measures.
Net merchandise sales from the sporting goods category increased 54% in
the fourth quarter of fiscal 2003 to $52.1 million compared to $33.9 million
in the fourth quarter of fiscal 2002.
Net merchandise sales attributable to Ashford.com were less than
$0.1 million in the fourth quarter of fiscal 2003, a decline of almost 100%
compared to $9.3 million in the fourth quarter of fiscal 2002.
Net merchandise sales from Other categories increased 75% in the fourth
quarter of fiscal 2003 to $68.1 million from $39.0 million in the fourth
quarter of fiscal 2002.
Net income was $2.7 million for the fourth quarter of fiscal 2003, an
improvement of $17.5 million compared to a net loss of $14.8 million for the
fourth quarter of fiscal 2002.
Net income per share was $0.07 for the fourth quarter of fiscal 2003
compared to net loss per share of $0.38 in the fourth quarter of fiscal 2002,
an improvement of $0.45 per share.
EBITDA, a non-GAAP financial measure, was $5.9 million for the fourth
quarter of fiscal 2003, an improvement of $16.3 million compared to an EBITDA
loss of $10.4 million for the fourth quarter of fiscal 2002. EBITDA
represents earnings (or losses) before interest income/expense, taxes,
depreciation and amortization and stock-based compensation.
Gross profit was $36.4 million in the fourth quarter of fiscal 2003, an
increase of 65% compared to gross profit of $22.1 million in the fourth
quarter of fiscal 2002. Gross margin was 38.2% for the fourth quarter of
fiscal 2003 compared to gross margin of 29.3% for the fourth quarter of fiscal
2002, an increase of 890 basis points.
Operating expenses were $33.9 million for the fourth quarter of fiscal
2003, a decline of 8% compared to $36.8 million for the fourth quarter of
fiscal 2002. Excluding restructuring costs related to Ashford.com and net
loss on the sale of Ashford.com assets, operating expenses, which as adjusted
may be considered a non-GAAP financial measure, increased 5% in the fourth
quarter of fiscal 2003. As a percentage of net revenues, operating expenses
were 35.6% in the fourth quarter of fiscal 2003 compared to 48.8% in the
fourth quarter of fiscal 2002. Excluding restructuring costs related to
Ashford.com and net loss on the sale of Ashford.com assets, operating
expenses, which as adjusted may be considered a non-GAAP financial measure, as
a percentage of net revenues were 42.7% in the fourth quarter of fiscal 2002.
Net revenues were $241.9 million for fiscal 2003, a 40% increase compared
to net revenues of $172.6 million for fiscal 2002.
Net merchandise sales were $282.0 million for fiscal 2003, a 58% increase
compared to net merchandise sales of $178.3 million for fiscal 2002.
Excluding sales attributable to the Ashford.com business, net revenues
increased 60% in fiscal 2003 and net merchandise sales increased 79% in fiscal
2003. These financial measures as adjusted may be considered non-GAAP
financial measures.
Net merchandise sales from the sporting goods category increased 33% in
fiscal 2003 to $128.5 million compared to $96.7 million in fiscal 2002.
Net merchandise sales attributable to Ashford.com were $1.0 million in
fiscal 2003, a decline of 95% compared to $21.6 million in fiscal 2002.
Net merchandise sales from Other categories increased 154% in fiscal 2003
to $152.5 million from $60.0 million in fiscal 2002.
Net loss was $12.1 million for fiscal 2003, an improvement of
$21.7 million compared to a net loss of $33.8 million for fiscal 2002.
Net loss per share was $0.30 for fiscal 2003 compared to net loss per
share of $0.88 in fiscal 2002, an improvement of $0.58 per share.
EBITDA, a non-GAAP financial measure, was $0.1 million for fiscal 2003, an
improvement of $23.6 million compared to an EBITDA loss of $23.5 million for
fiscal 2002.
Gross profit was $87.2 million in fiscal 2003, an increase of 49% compared
to gross profit of $58.4 million in fiscal 2002. Gross margin was 36.0% for
fiscal 2003 compared to gross margin of 33.8% for fiscal 2002, an increase of
220 basis points.
Operating expenses were $100.4 million for fiscal 2003, an increase of 8%
compared to $92.8 million for fiscal 2002. Excluding restructuring costs
related to Ashford.com and net loss on the sale of Ashford.com assets,
operating expenses, which as adjusted may be considered a non-GAAP financial
measure, increased 13% in fiscal 2003. As a percentage of net revenues,
operating expenses were 41.5% in fiscal 2003 compared to 53.8% in fiscal 2002.
Excluding restructuring costs related to Ashford.com and net loss on the sale
of Ashford.com assets, operating expenses, which as adjusted may be considered
a non-GAAP financial measure, as a percentage of net revenues were 51.3% in
fiscal 2002.
Cash, cash equivalents, short-term investments and marketable securities
were $69.5 million at the end of fiscal 2003, a decrease of $5.3 million from
$74.8 million at the end of fiscal 2002. Inventory was 6% lower at the end of
fiscal 2003 and net property and equipment were 8% lower at the end of fiscal
2003 compared to the end of fiscal 2002. GSI Commerce had no debt at the end
of fiscal 2003 or the end of fiscal 2002. Accounts payable, accrued expenses
and other declined 3% at the end of fiscal 2003 compared to the end of fiscal
2002.
Michael Rubin, Chairman and CEO of GSI Commerce, commented, “Fiscal 2003
represented an inflection point for GSI Commerce, as we delivered strong
results highlighted by our first full year EBITDA profit since launching our
initial web sites in fiscal 1999. Our proven track record, expertise, and
infrastructure also contributed to a successful expansion of our partner base
in fiscal 2003 with the addition of Ace Hardware, Linens 'n Things, Liz
Claiborne, Major League Baseball, NASCAR, Public Broadcasting Service,
Polo.com, Rockport and Timberland.”
Mr. Rubin, continued, “A critical aspect of our success has been ongoing
investments to continually enhance our scale and capabilities. Our guidance
for fiscal 2004, which includes our expectation for our first full year GAAP
net income, reflects a continuation of significant investment spending, while
only containing projected revenue from agreements that have already been
signed.”
GSI COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Fiscal Year Ended
Dec. 28, Jan. 3, Dec. 28, Jan. 3,
2002 2004 2002 2004
Revenues:
Net revenues from product
sales $69,098 $84,094 $154,819 $216,510
Service fee revenues 6,223 11,115 17,819 25,409
Net revenues 75,321 95,209 172,638 241,919
Cost of revenues from product sales 53,247 58,793 114,258 154,731
Gross profit 22,074 36,416 58,380 87,188
Operating expenses:
Sales and marketing, exclusive
of $377, $600, $532 and $1,527
reported below as stock-based
compensation, respectively 19,460 22,891 49,757 58,226
Product development, exclusive
of $0, $4, $(44) and $42
reported below as stock-based
compensation, respectively 4,213 3,861 12,933 15,414
General and administrative,
exclusive of $61, $11,
$(87) and $366 reported
below as stock-based
compensation, respectively 4,214 3,679 14,971 13,392
Restructuring costs related to
Ashford.com 1,680 55 1,680 74
Net loss on sale of
Ashford.com assets 2,945 - 2,566 -
Stock-based compensation 438 615 401 1,935
Depreciation and amortization 3,817 2,835 10,509 11,386
Total operating expenses 36,767 33,936 92,817 100,427
Other (income) expense:
Interest expense 360 - 749 -
Interest income (281) (263) (1,377) (1,177)
Total other (income)
expense 79 (263) (628) (1,177)
Net income (loss) $(14,772) $2,743 $(33,809) $(12,062)
Earnings (losses) per share - basic
and diluted:
Net income (loss) $(0.38) $0.07 $(0.88) $(0.30)
Weighted average shares
outstanding:
basic 38,771 40,737 38,566 39,638
diluted 38,771 42,180 38,566 39,638
