Bidz.com (Nasdaq:BIDZ), a leading online retailer of jewelry,
announced results for the fourth quarter and full year ended
December 31, 2011.
Net revenues for the fourth quarter of 2011 were $21.2 million,
a decrease of 27.1% from the $29.0 million reported in the fourth
quarter of 2010. During the fourth quarter Bidz.com represented
$16.5 million of the total net revenue, and Modnique.com
represented $4.7 million, compared with $27.2 million, and $1.8
million, respectively, in the same periods last year. The
significant 158% year-over-year increase in net revenues for
Modnique.com indicates the overall growth in demand for its
affordable brand name merchandise including apparel, home, beauty,
accessories and footwear products. Bidz.com revenues declined as a
result of lower demand for discretionary items, specifically
jewelry.
The percentages of the Company's domestic and international
sales for the fourth quarter 2011 were 52.6% and 47.4%,
respectively. Canada and Australia were the Company's top two
international markets representing 20.0% and 15.3%,
respectively.
Gross profit for the fourth quarter was approximately $6.4
million, compared with $7.2 million in the fourth quarter of 2010.
Gross margin increased to 30.4% compared to 24.6% in the fourth
quarter of 2010, representing an increase of approximately 580
basis points. The significant increase in gross margin percentage
was due to several factors including improved quality of the
inventory, higher margin product mix and reduced free shipping
promotions.
"Fiscal 2011 continued to be a challenging year for the Company,
and in particular, for Bidz.com," said David Zinberg, the Company's
Chief Executive Officer. "The Modnique.com website continued to
grow significantly and gain both awareness and popularity,
particularly through social media and viral force. The Modnique
business showed strong momentum and we see many opportunities to
further grow this business."
Mr. Zinberg, continued, "Over the past year, we've been working
hard to manage expenses and improve margins, and during the quarter
we started to see the positive impact of these efforts. Operating
results improved significantly due to improved higher gross profit
margin and lower operating expenses resulting in net income of
approximately $98,000, our first profitable quarter in 2011. We
remain focused on gaining momentum for our Modnique.com website,
and are working on improving our product assortment with current
demand, enhancing our customer service and overall shopping
experience, as well as concentrating on all the initiatives we have
in place to ensure growth in 2012 and beyond."
Sales Metrics (1) |
Three Months Ended
December 31, |
|
2011 |
2010 |
% Change |
Average selling price per order
(gross) |
$170 |
$180 |
-5.6% |
Gross Margin $ per average order |
$52 |
$44 |
16.7% |
Number of new buyers |
37,607 |
54,271 |
-30.7% |
Average orders per day |
1,539 |
1,883 |
-18.2% |
Average items sold per day |
4,782 |
6,899 |
-30.7% |
Average items sold per transaction |
3.1 |
3.7 |
-16.2% |
Acquisition cost per new buyer |
$45 |
$32 |
40.6% |
(1) Wholesale merchandise sales and Modnique.com sales
are included in the sales metrics |
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|
|
General and administrative expenses for the fourth
quarter 2011 decreased 8.7% to $4.5 million compared with $5.0
million in the fourth quarter of 2010. Sales and marketing expense
for the fourth quarter 2011 were relatively flat at $1.7 million
compared with the fourth quarter of 2010. Total operating expenses
in the fourth quarter 2011 decreased 7.5% to $6.3 million compared
with $6.9 million in the prior year period.
Net income for the fourth quarter of 2011 was
$98,000, or $0.01 per fully diluted share, on 19.0 million weighted
average diluted shares outstanding. This is compared to net
income of $15,000, or break-even per fully diluted share, on 19.5
million weighted average diluted shares outstanding in the same
period of 2010.
Subsequent Events:
The Company also recently announced that it received notice from
the United States Securities and Exchange Commission ("SEC") that
the investigation of the Company has been completed. The SEC does
not intend to recommend any enforcement action against the
Company.
The Company also announced that on February 9, 2012, it
received a letter from The NASDAQ Stock Market LLC that the Company
is eligible for an additional 180 calendar day period, or until
August 6, 2012, to regain compliance with NASDAQ's minimum $1
bid price per share requirement for continued listing. The
staff's determination was based on the Company meeting the
continued listing requirement for market value of publicly held
shares and all other applicable requirements for initial listing on
the Capital Market, with the exception of the bid price
requirement, and the Company's written notice of its intention to
cure the deficiency during the second compliance period by
effecting a reverse stock split, if necessary.
Mr. Zinberg continued, "We are pleased to share that after four
years, the SEC has concluded its investigation and we are happy to
put this chapter behind us. Additionally, NASDAQ has also extended
our eligibility to regain compliance until August 6,
2012. We intend to actively monitor the bid price and will
consider all available options to resolve the deficiency and regain
compliance."
Full-Year Results
The Company's revenues for the twelve months ended December 31,
2011 decreased 17.6% to $86.4 million, compared with $104.8 million
reported for the twelve months ended December 31, 2010. The overall
decrease in net revenues was primarily a result of declines in
consumer spending for discretionary products caused by the ongoing
weak economic climate, which affected jewelry spending. The
Company's domestic and international sales in 2011 represented
54.9% and 45.1%, respectively, versus 2010 domestic and
international sales of 59.1% and 40.9%, respectively.
Gross profit for the full year ended December 31, 2011 was $22.7
million, compared with $26.1 million in the prior year period.
Gross margin for the full year ended December 31, 2011 improved to
26.3% compared with 24.9% for the same period last year.
Net loss for the full year 2011 was $7.0 million, or ($0.36) per
fully diluted share, on 19.3 million weighted average shares
outstanding. This is compared to net loss of $(1.4) million,
or $(0.07) per fully diluted share, on 20.8 million weighted
average shares outstanding in the same period of 2010.
The Company ended the fourth quarter 2011 with $1.2 million in
cash and $22.2 million in working capital with a zero debt balance.
The Company believes that cash currently on hand and cash flows
from operations will be sufficient sources of capital to continue
funding its operations for the foreseeable future.
Investor Conference Call
Bidz.com will not conduct an earnings conference call for the
fourth quarter ending December 31, 2011. For further questions,
please contact Andrew Greenebaum at
andrewg@addocommunications.com.
About Bidz.com
Bidz.com, founded in 1998, is a leading online retailer of
jewelry. Bidz offers its products through a live auction format as
well as a fixed price online retail store, Buyz.com. Bidz also
operates Modnique.com, a division of Bidz.com, a flash sale
shopping website, offering authentic premium brand name
merchandise. Modnique offers its members exclusive access to 24-72
hour sales events on designer apparel, accessories, shoes, and
housewares and much more at price points up to 85% below
traditional retail prices.
Safe Harbor Statement
This press release includes forward-looking statements about the
Company's estimated revenue and earnings within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements
other than statements of historical facts contained in this
release, including statements regarding the Company's future
financial position, business strategy and plans and objectives of
management for future operations, are forward-looking statements.
The words "believe," "may," "will," "estimate," "continue,"
"anticipate," "intend," "expect," and similar expressions, as they
relate to the Company, are intended to identify forward-looking
statements. We have based these forward-looking statements largely
on current expectations and projections about future events and
financial trends that we believe may affect the Company's financial
condition, results of operations, business strategy and financial
needs. Risks and uncertainties include that our common stock is
subject to short-selling and trading, and prices of our stock may
be volatile; that we are subject to "prank" bidding; that we may
face increasing costs to acquire new customers; the ability of the
Company to attract customers to its website and offer attractive
products; the ability to maintain profit levels while expanding
international sales; the ability to detect fraud if we fail to
maintain an effective system of internal controls; the ability to
maintain our website, electronic data processing systems, and
systems hardware; the ability to forecast accurately net revenue
and plan for expenses; that we do not have a guaranteed supply of
jewelry products and that we have a heavy concentration of
inventory purchased from our top two suppliers; the ability to
protect our intellectual property rights; and potential litigation
and government enforcement actions that may result from our prior
securities offerings. Please refer to Bidz.com's reports and
filings with the Securities and Exchange Commission for a further
discussion of these risks and uncertainties. Readers are cautioned
not to place undue reliance on forward-looking statements, which
speak only as of the date they are made. Bidz.com undertakes no
obligation to update publicly any forward-looking statements to
reflect new information, events or circumstances after the date
they were made or to reflect the occurrence of unanticipated
events.
Tables to follow
Bidz.com, Inc. and
Subsidiary |
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|
|
|
|
Consolidated Statements of Income
(Operations) |
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except share and per share
data) |
|
|
|
|
|
|
Years Ended
December 31, |
Three Months
Ended December 31, |
|
2009 |
2010 |
2011 |
2010 |
2011 |
|
|
|
|
|
|
Net revenue: |
|
|
|
|
|
Merchandise sales |
$ 106,043 |
$ 98,112 |
$ 79,064 |
$ 27,259 |
$ 21,017 |
Wholesale merchandise sales
(includes related party amounts of $2,403, $4,827 and
$3,968 for the years ended December 31, 2009, 2010 and 2011,
respectively) |
4,009 |
6,267 |
6,805 |
1,616 |
29 |
Other revenue |
342 |
393 |
498 |
170 |
119 |
|
110,394 |
104,772 |
86,367 |
29,045 |
21,165 |
Cost of revenue |
76,667 |
78,659 |
63,675 |
21,888 |
14,732 |
Gross Profit |
33,727 |
26,113 |
22,692 |
7,157 |
6,433 |
Operating expenses: |
|
|
|
|
|
General and administrative |
19,165 |
20,824 |
20,294 |
4,978 |
4,549 |
Sales and marketing |
9,140 |
6,241 |
7,938 |
1,729 |
1,679 |
Depreciation and
amortization |
795 |
685 |
487 |
144 |
110 |
Total operating expenses |
29,100 |
27,750 |
28,719 |
6,851 |
6,338 |
Income (loss) from operations |
4,627 |
(1,637) |
(6,027) |
306 |
95 |
Other expense - interest income |
1 |
1 |
-- |
-- |
-- |
Other expense - interest (expense) |
(74) |
(11) |
-- |
-- |
-- |
Income (loss) before income tax benefit
(expense ) |
4,554 |
(1,647) |
(6,027) |
306 |
95 |
Income tax benefit (expense) |
(2,026) |
284 |
(1,022) |
(291) |
3 |
Net income (loss ) |
$ 2,528 |
$ (1,363) |
$ (7,049) |
$ 15 |
$ 98 |
|
|
|
|
|
|
Net income (loss) per share available to
common shareholders - basic and diluted |
$ 0.11 |
$ (0.07) |
$ (0.36) |
$0.00 |
$ 0.01 |
Weighted average number of shares outstanding
- basic and diluted |
22,363,367 |
20,829,419 |
19,334,374 |
19,522,036 |
19,013,026 |
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Bidz.com, Inc. and
Subsidiary |
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Consolidated Balance
Sheets |
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|
(in thousands, except share and per share
data) |
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|
|
December 31, |
December 31, |
|
2010 |
2011 |
|
|
|
Assets |
|
|
Current assets: |
|
|
Cash |
$ 8,074 |
$ 1,192 |
Accounts receivable |
682 |
2,746 |
Inventories, net of reserves of
$1,694 and $1,112 at December 31, 2010 and December 31, 2011,
respectively |
32,136 |
29,714 |
Other receivables (includes
related party amounts of $363 and $186 at December 31, 2010 and
December 31, 2011, respectively) |
1,824 |
796 |
Current deferred tax
assets |
2,516 |
-- |
Other current assets |
673 |
2,487 |
Total current assets |
45,905 |
36,935 |
Long term deferred tax assets |
662 |
-- |
Property and equipment, net |
637 |
369 |
Intangible assets, net |
235 |
319 |
Deposits |
157 |
-- |
Total assets |
$ 47,596 |
$ 37,623 |
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|
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Liabilities and Stockholders'
Equity |
|
|
Current liabilities: |
|
|
Accounts payable (includes
related party amounts of $3,119 and $2,884 at December 31, 2010 and
December 31, 2011, respectively) |
$ 14,188 |
$ 11,013 |
Accrued expenses |
2,494 |
2,273 |
Deferred revenue |
1,521 |
1,457 |
Total current liabilities |
18,203 |
14,743 |
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|
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Commitments and Contingencies |
-- |
-- |
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|
Stockholders' equity: |
|
|
Preferred stock: par value
$0.001; authorized 4,000,000 shares; none issued and
outstanding at December 31, 2010 and December 31, 2011,
respectively |
-- |
-- |
Common stock: par value $0.001;
authorized 100,000,000 shares; issued 19,708,991
and 18,379,045 and outstanding 19,379,177 and 18,379,045 at
December 31, 2010 and December 31, 2011, respectively |
20 |
18 |
Additional paid in capital |
18,202 |
18,528 |
Shares held in treasury, at
cost; 175,814 and 0 shares at December 31, 2010 and December 31,
2011, respectively |
(212) |
-- |
Retained earnings |
11,383 |
4,334 |
Total stockholders'
equity |
29,393 |
22,880 |
|
$ 47,596 |
$ 37,623 |
Bidz.com, Inc. and
Subsidiary |
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Consolidated Statements of Cash
Flows |
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|
(in thousands) |
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|
Years Ended December
31, |
|
2009 |
2010 |
2011 |
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|
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Cash flows provided by
(used for) operating activities: |
|
|
Net income (loss) |
$ 2,528 |
$ (1,363) |
$ (7,049) |
|
|
|
|
Adjustments to
reconcile net loss to net cash provided by (used for) operating
activities: |
|
|
|
Depreciation and
amortization |
795 |
685 |
487 |
Stock-based
compensation |
965 |
1,027 |
758 |
Loss on disposal of property
and equipment |
-- |
38 |
-- |
Deferred taxes |
(29) |
(1,115) |
3,178 |
Changes in assets and
liabilities: |
|
|
|
(Increase) decrease in
assets: |
|
|
|
Accounts receivable |
251 |
(235) |
(2,064) |
Inventories |
(3,304) |
8,825 |
2,422 |
Other receivable |
(520) |
(370) |
1,404 |
Other current assets |
(2,554) |
2,287 |
(1,814) |
Deposits |
(53) |
-- |
157 |
Increase (decrease) in
liabilities: |
|
|
|
Accounts payable |
2,523 |
2,028 |
(3,175) |
Accrued expenses |
(1,119) |
203 |
(221) |
Deferred revenue |
(240) |
889 |
(64) |
Net cash provided by (used for)
operating activities |
(757) |
12,899 |
(5,981) |
|
|
|
|
Cash flows (used for) investing
activities: |
|
|
|
Capital expenditures |
(404) |
(152) |
(303) |
Net cash (used for) investing
activities |
(404) |
(152) |
(303) |
Cash flows (used for) financing
activities: |
|
|
|
Revolving credit line |
2,898 |
(2,898) |
-- |
Repurchase of common stock from
net vesting of restricted shares |
(8) |
(135) |
(91) |
Tax benefit from stock based
compensation |
(70) |
-- |
(8) |
Purchase of treasury
shares |
(4,994) |
(2,761) |
(499) |
Net cash (used for) financing
activities |
(2,174) |
(5,794) |
(598) |
|
|
|
|
Net increase (decrease) in
cash |
(3,335) |
6,953 |
(6,882) |
Cash, beginning of
period |
4,456 |
1,121 |
8,074 |
Cash, end of period |
$ 1,121 |
$ 8,074 |
$ 1,192 |
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Supplemental disclosure of cash flow
information: |
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|
Interest paid |
$ 74 |
$ 11 |
$ -- |
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|
Income taxes paid |
$ 2,550 |
$ -- |
$ -- |
Supplemental disclosure
of non-cash investing and financing activities: |
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Retirement of treasury
shares |
$ 4,994 |
$ 2,549 |
$ 212 |
CONTACT: IR Contact:
Addo Communications, Inc.
Andrew Greenebaum, (310) 829-5400
andrewg@addocommunications.com
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