GSI Shows First Quarter Gains Through Expansion

Non-GAAP net revenues increased 87% to $17.4 million compared to $9.3 million in 2009 and above the companys quarterly guidance of $10 million.  Non-GAAP operating margin as a percentage of net revenues was 6.4% for the quarter, an increase of 170 basis points from 4.7% in Q1 2009.

 

GSI credits year-over-year revenue growth to the inclusion of Rue La La in the companys consolidated results, comparable store momentum in e-commerce services and strong organic growth in marketing services.

 

The year got off to a strong start for GSI with better than expected top and bottom line results in the first quarter, said Michael G. Rubin, chairman and CEO of GSI. The key drivers to the upside were strong comparable store e-commerce trends and continued momentum in marketing services. In addition, Rue La La performed strongly in the quarter and we are pleased with the integration of its call center and fulfillment operations into GSIs infrastructure. While we are pleased with the financial results, we are just as excited about the meaningful strategic developments in our business since the beginning of the year.

 

Loss from operations was $14.5 million compared to a loss from operations of $12.9 million in Q1 last year, and significantly better than the companys guidance loss of 19.5 million. GSIC said its trailing 12-month income from operations was $11.9 million compared to a $5.9 million in the year earlier.

 

On a segmented basis, the companys e-commerce service segment showed promise with net revenues increasing 13% in the quarter to $201.4 million from $178.5 million last year.

 

CFO Michael Conn commented that continued transcending of our revenue model of Dick’s Sporting Goods, the mix between product sales clients and non-owned inventory clients and the completion of several client technology projects in Q1 of 2009 are the primary reason that e-commerce segment revenue growth lagged comparable store growth.