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AMAZON.COM ANNOUNCES FINANCIAL RESULTS FOR FIRST QUARTER 1998
Cumulative Customer Accounts Increased 50% Quarter-to-Quarter to
2,260,000.
Amazon.com Now 3rd Largest Bookseller in the US
SEATTLE April 27 /PRNewswire/ -- Amazon.com, Inc. (Nasdaq: AMZN) today
announced financial results for the first quarter of 1998. ----
Net sales for the first quarter ended March 31, 1998 were $87.4 million,
a 32 percent increase over net sales of $66.0 million reported for the fourth
quarter ended December 31, 1997. Net sales increased 446 percent over net sales
of $16.0 million reported for the first quarter of 1997. Net loss for the first
quarter ended March 31, 1998 was $9.26 million, or $0.40 per share, compared
with a net loss in the quarter ended December 31, 1997 of $9.33 million, or
$0.41 per share. The company reported a net loss of $3.04 million or $0.16 per
share in the quarter ended March 31, 1997.
Amazon.com also announced that cumulative customer accounts grew to over
2,260,000 at March 31, 1998, an increase of 50 percent from 1,510,000 customer
accounts at December 31, 1997 and 564 percent from 340,000 customer accounts at
March 31, 1997. Repeat customer orders represented more than 60 percent of
orders placed during the quarter ended March 31, 1998.
The Web measurement services continued to highlight Amazon.com's growing
reach among Internet users and strengthening market leadership: in March,
Amazon.com was ranked in the top 20 across all Internet sites in all major
market surveys (Media Metrix and Relevant Knowledge). In addition, not only was
Amazon.com the leading online bookseller in these surveys, it was the leading
online shopping site.
"We are very pleased with our acceleration in new customer acquisition:
it took us 27 months to serve our first million customers, and less than 6
months to serve our second million," said Jeff Bezos, Amazon.com president and
chief executive officer. "Our strong revenue growth has now made us the third
largest bookseller in the US, online or offline. We believe that our leadership
position in the online market allows us to offer our customers the benefits of
Amazon.com selection, convenience, price
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and personalized services for an expanded range of products, such as music. And
we are now inviting our customers to come help build the best music store on the
Web."
Separately, Amazon.com today announced that it has acquired three
leading Internet companies: Bookpages Limited, Telebook, Inc. and Internet Movie
Database Limited. Online retailers Bookpages and Telebook are fundamental
components of Amazon.com's expansion into the European marketplace, and Internet
Movie Database is a key underpinning for Amazon.com's eventual entry into online
video sales.
"With these acquisitions, we have accelerated our expansion into
European e-commerce and acquired a foundation for a best-of-breed video store.
These acquisitions will enable Amazon.com to offer a new set of consumers the
same combination of selection, service and value that we now provide our US book
customers. We remain committed to moving quickly to solidify and extend our
current market leadership position in books while pursuing these new
opportunities. This will require aggressive future investment in building our
business and brand, expanding our product offerings, launching international
operations and integrating our recent acquisitions."
Bookpages (http://www.bookpages.co.uk) is one of the largest online
bookstores in the United Kingdom, providing access to all 1.2 million UK books
in print. Telebook (http://www.telebuch.de), operating through its ABC
Bucherdienst subsidiary, is Germany's number one online bookstore, with a
catalog of nearly 400,000 German language titles. Originally launched in 1990,
Internet Movie Database (http://www.imdb.com) is a comprehensive repository
for movie and television information on the Internet, and is an excellent
example of genuine community on the Internet.
Each of the acquisitions will be accounted for under the purchase method
of accounting. The company will incur total charges of approximately $55 million
in connection with all three transactions. Consideration was comprised of cash
and common stock, and the company anticipates issuing an aggregate of
approximately 540,000 shares of common stock as a result of these transactions.
Last week, Amazon.com invited music enthusiasts everywhere to contribute
to developing the music store of their dreams and launched a pilot version of
its online music area (accessible from the Amazon.com home page). Customers,
artists, music industry professionals, and other music lovers can put their
personal stamp on the music store Amazon.com is now building by contributing
their ideas and music reviews.
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In February, Amazon.com launched Amazon.com Advantage, an innovative new
program designed to increase the visibility and sales of titles from independent
publishers and authors. It will help level the playing field for smaller
publishers and authors by providing the tools and framework to ensure their
books appear more often, more prominently, and with 24-hour availability
throughout Amazon.com's catalog of 3 million book, music, and other titles.
In March, Amazon.com launched Amazon.com Kids, a comprehensive resource
for children's and young adult books. Amazon.com Kids features a catalog of more
than 100,000 books for children, teens, and parents.
Separately, Amazon.com today announced that its Board of Directors
approved a 2-for-1 split of its common stock. Shareholders will receive an
additional share of common stock for every share held on the record date of May
20, 1998. The additional shares will be payable on June 1, 1998.
Amazon.com, Inc., Earth's Biggest Bookstore, is the largest online
retailer of books. Amazon.com offers a catalog of more than 3 million book,
music, and other titles, plus easy-to-use search and browse features, e-mail
services, personalized shopping services, secure Web-based credit card payment,
and direct shipping to customers. Amazon.com has virtually unlimited online
shelf space and offers customers a vast selection through an efficient
search-and-retrieval interface, as well as streamlined ordering through
1-Click(SM) technology. Amazon.com pioneered the concept of syndicated selling
on the Internet and has more than 40,000 members in its Associates Program
including AOL.com, Yahoo!, Netscape, Excite, the AltaVista Search Service, the
@Home Network, the Prodigy Shopping Network, and iVillage.
This announcement contains forward-looking statements that involve risks
and uncertainties that include, among others, Amazon.com's limited operating
history, the unpredictability of its future revenues, and risks associated with
capacity constraints, management of growth, and new business opportunities. More
information about factors that potentially could affect Amazon.com's financial
results is included in the company's Annual Report on Form 10-K for the year
ended December 31, 1997, both filed with the Securities and Exchange Commission.
NOTE: Amazon.com, Earth's Biggest Bookstore, and 1-Click are service
marks of Amazon.com, Inc. All other names are trademarks of their respective
owners.
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AMAZON.COM, INC.
Statements of Operations
(in thousands, except per share amount)
Quarter Ended March 31,
-----------------------
1998 1997
-------- --------
(Unaudited)
Net sales $87,375 $16,005
Cost of sales 68,054 12,484
-------- --------
Gross profit 19,321 3,521
Operating expenses:
Marketing and sales 19,503 3,906
Product development 6,729 1,575
General and administrative 1,963 1,142
-------- --------
Total operating expenses 28,195 6,623
Loss from operations (8,874) (3,102)
Interest income 1,640 64
Interest expense (2,025) --
-------- --------
Net loss $(9,259) $(3,038)
======== ========
Pro forma basic and diuted loss per share $ (0.40) $ (0.16)
======== ========
Shares used in computation of pro forma basic
and diluted loss per share 23,311 19,402
======== ========
On April 27, 1998, the Company announced a two-for-one stock split, effective
June 1, 1998. The share and per share data have not been restated to reflect
this split.
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AMAZON.COM, INC.
Balance Sheets
(in thousands except per share data)
March 31, December 31,
1998 1997
--------- ---------
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $ 98,600 $109,810
Short-term investments 18,220 15,256
Inventories 11,674 8,971
Prepaid expenses and other 4,399 3,298
--------- ---------
Total current assets 132,893 137,335
Fixed assets, net 9,773 9,265
Deposits 293 166
Deferred charges 2,048 2,240
========= =========
Total assets $145,007 $149,006
========= =========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 34,374 $ 32,697
Accrued advertising 5,349 3,454
Accrued product development -- --
Other liabilities and accrued expenses 8,071 6,167
Current portion of debt 684 1,500
--------- ---------
Total current liabilities 48,478 43,818
Long-term debt 76,521 76,521
Long-term lease obligations 181 181
Stockholders' equity:
Preferred stock, $0.01 par value -
Authorized, 10,000,000 shares
Issued and outstanding - none -- --
Common stock, $0.01 par value -
Authorized, 100,000,000 shares
Issued and outstanding, 24,162,932
and 23,937,169 shares, respectively 242 239
Additional paid-in capital 63,952 63,792
Deferred compensation (1,493) (1,930)
Accumulated deficit (42,874) (33,615)
--------- ---------
Total stockholders' equity 19,827 28,486
========= =========
Total liabilities and stockholders' equity $145,007 $149,006
========= =========
On April 27, 1998, the Company announced a two-for-one stock split, effective
June 1, 1998. The share and per share data have not been restated to reflect
this split.