GSI Commerce's first fiscal quarter net revenues increased 38% to $91.4 million and reported a net loss of $1.7 million, or 4 cents per share, compared to net revenues of $66.3 million and a net loss of $4.0 million, or 10 cents per share for 2004's first fiscal quarter. For the same comparable quarterly periods, the company recorded adjusted EBITDA of $1.1 million, which was a $2.2 million improvement from 2004's fiscal first quarter adjusted EBITDA loss of $1.1 million. The company's merchandise sales rose 59 percent to $136.2 million.
Net revenues were $91.4 million for the first quarter of fiscal 2005, which was a 38 percent increase compared to net revenues of $66.3 million for the first quarter of fiscal 2004.
Merchandise sales were $136.2 million for the first quarter of fiscal 2005, a 59 percent increase compared to merchandise sales of $85.9 million for the first quarter of fiscal 2004.
Net revenues from product sales generated by the company's sporting goods category were $39.8 million for the first quarter of fiscal 2005, which was a 19 percent increase compared to $33.5 million for the first quarter of fiscal 2004. Merchandise sales from the sporting goods category increased 35 percent in the first quarter of fiscal 2005 to $47.5 million compared to $35.1 million in the first quarter of fiscal 2004.
Net revenues from product sales generated by the company's other merchandise categories were $36.9 million for the first quarter of fiscal 2005, which was a 58 percent increase compared to $23.4 million for the first quarter of fiscal 2004. Merchandise sales from the company's other merchandise categories increased 75 percent in the first quarter of fiscal 2005 to $88.7 million from $50.8 million in the first quarter of fiscal 2004.
Service fee revenues increased 57 percent to $14.7 million in the first quarter of fiscal 2005 compared to $9.4 million in the first quarter of fiscal 2004.
The company had a net loss of $1.7 million for the first quarter of fiscal 2005, which was a 58 percent improvement compared to a net loss of $4.0 million for the first quarter of fiscal 2004. The company showed a $0.06 per share improvement with a net loss per share of $0.04 for the first quarter of fiscal 2005 compared to net loss per share of $0.10 for the first quarter of fiscal 2004.
The company recorded adjusted EBITDA of $1.1 million for the first quarter of fiscal 2005, which was a $2.2 million improvement from an adjusted EBITDA loss of $1.1 million in the first quarter of fiscal 2004.
The company's gross profit improved 36 percent to $33.7 million in the first quarter of fiscal 2005 compared to a gross profit of $24.8 million in the first quarter of fiscal 2004. Gross margin was 36.9 percent for the first quarter of fiscal 2005 compared to 37.4 percent in the first quarter of fiscal 2004, a decrease of 50 basis points. The decline in gross margin was largely driven by greater than planned product sales in the other category, which is primarily electronics, and which carry a lower gross margin than product sales of sporting goods.
Total operating expenses were $35.6 million for the first quarter of fiscal 2005, an increase of 23 percent compared to $29.1 million for the first quarter of fiscal 2004. Total operating expenses, as a percentage of net revenues, decreased to 39.0 percent in the first quarter of fiscal 2005 compared to 43.9 percent in the first quarter of fiscal 2004.
Total operating expenses of $35.6 million, as a percentage of merchandise sales of $136.2 million, were 26.1 percent in the first quarter of fiscal 2005. This compared to total operating expenses of $29.1 million in the first quarter of fiscal 2004, which as a percentage of merchandise sales of $85.9 million, was 33.9 percent.
The company's cash, cash equivalents, short-term investments and marketable securities at the end of the first fiscal quarter of 2005 were $43.2 million compared to $75.4 million at the end of fiscal year 2004, and $51.9 million at the end of first fiscal quarter of 2004. The decline in cash is consistent with the company's typical seasonal working capital pattern. The year-over-year decline in cash principally reflects the purchase and build out of the company's new headquarters in fiscal 2004.
Key Events Since Feb. 16, 2005:
- The San Francisco 49ers signed a multi-year agreement with GSI
Commerce to provide its National Football League franchise with an e-
commerce solution for its licensed merchandise and other sporting
goods. The new store launched on April 22, in time for the NFL draft
in which the 49ers had the number one pick. - Tweeter Home Entertainment Group, a national specialty consumer
electronics retailer, signed a multi-year extension to its agreement
with GSI Commerce and will expand its multichannel retailing
capabilities to include “buy online and pick up in store” and the
installation of in-store Web kiosks, which will be used to order out-
of-stock merchandise and extend the inventory of the stores.
“We are pleased to have exceeded our financial guidance for the first fiscal quarter and we are raising our revenue, net income, merchandise sales and adjusted EBITDA guidance for the fiscal year,” said Michael G. Rubin, chairman and CEO of GSI Commerce. “With an excellent first quarter, solid merchandise sales trends in April, and a healthy pipeline of prospects, we remain enthusiastic that 2005 is shaping up to be a strong year for GSI Commerce.”
The company provides the following guidance for the fiscal 2005 second quarter:
- Net revenues are expected to be in the range of $84.0 million to
$89.0 million. - Merchandise sales are expected to be in the range of $123.0 million
to $133.0 million. - Net loss is expected to be in the range of $2.5 million to $3.0
million. - Adjusted EBITDA is expected to be in the range of $1.0 million to
$1.5 million.The company provides the following updated guidance for fiscal year 2005:
- Net revenues are expected to be in the range of $405.0 million to
$420.0 million. - Merchandise sales are expected to be in the range of $638.0 million
to $658.0 million. - Net income is expected to be in the range of $10.5 million to $12.5
million. - Adjusted EBITDA is expected to be in the range of $27.0 million to
$29.0 million.
GSI COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)Three Months Ended
April 3, April 2,
2004 2005Revenues:
Net revenues from product sales $56,878 $76,652
Service fee revenues 9,390 14,706Net revenues 66,268 91,358
Cost of revenues from product sales 41,508 57,626Gross profit 24,760 33,732
Operating expenses:
Sales and marketing, exclusive
of $494 and $189 reported
below as stock-based
compensation, respectively 17,449 20,911
Product development, exclusive
of $49 and ($30) reported below
as stock-based compensation,
respectively 4,483 6,589
General and administrative,
exclusive of $84 and ($389)
reported below as stock-based
compensation, respectively 3,920 5,225
Stock-based compensation 627 (230)
Depreciation and amortization 2,599 3,122Total operating expenses 29,078 35,617
Other (income) expense:
Other (income) expense - (99)
Interest expense - 233
Interest income (290) (343)Total other (income) expense (290) (209)
Net income (loss) $(4,028) $(1,676)
Earnings (loss) per share - basic and
diluted:
Net income (loss) - basic $(0.10) $(0.04)
Net income (loss) - diluted $(0.10) $(0.04)Weighted average shares outstanding:
basic 40,868 41,661
diluted 40,868 41,661
