GSIC continues to expand its presence in the on-line retail world by expanding outside of its core sporting goods category and into consumer electronics, toys, and virtually any product that can be sold on-line. The company has also been expanding the services it offers, perhaps in an effort to play catch-up with many of the integrated multi-channel retailers who have been boasting success.
Net revenues increased 38% to $91.4 million in the first quarter of 2005. Service fee revenues increased 57% to $14.7 million, while net revenues from product sales generated by the company's sporting goods category grew 19% to $39.8 million for the period. Total Merchandise sales, which includes sales of all products through the GSIC platform, increased 59% to $136.2 million for Q1, while merchandise sales from the sporting goods category increased 35% to $47.5 million, compared to $35.1 million in the year-ago quarter.
Gross margin was 36.9%, a decrease of 50 basis points compared to 37.4% in 2004. The decline in gross margin was largely driven by greater product sales in the other category, which is primarily electronics, and which carry a lower gross margin than product sales of sporting goods. Gross margins for sporting goods increased 120 basis points due to increased inventor efficiency and buying power.
GSIC recorded EBITDA of $1.1 million for the first quarter of 2005, which was up $2.2 million over the EBITDA loss of $1.1 million posted in the first quarter of 2004. This was the first time the company posted a positive EBITDA in any quarter other than the fourth. The improved profitability cut GSICs Q1 net loss by 58% to $1.7 million compared to a net loss of $4.0 million LY.
