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EXHIBIT 99.1
VARSITYBOOKS.COM REPORTS FOURTH QUARTER AND YEAR-END RESULTS
Washington, D.C., February 28, 2000-VarsityBooks.com (NASDAQ: VSTY),
a leading online retailer and marketing channel to college students,
today reported its results for the fourth quarter and year ended
December 31, 1999. Revenues for the quarter were $1.7 million
compared to less than $0.1 million in the fourth quarter of 1998.
Net loss for the quarter was $12.4 million compared to a net loss of
$1.4 million in the fourth quarter of 1998. Pro-forma net loss per
share was $1.07 in the fourth quarter (on 11.5 million shares, basic
and diluted) compared to a pro-forma net loss of $0.46 per share (on
3.0 million shares, basic and diluted) in the fourth quarter of
1998.
Revenues for the year were $10.6 million, compared to $0.1 million
for the prior year. Net loss for the year was $31.5 million compared
to a net loss of $2.7 million for the prior year. Pro-forma net loss
per share was $4.09 for the year (on 7.7 million shares, basic and
diluted) compared to a pro-forma net loss of $1.27 per share (on 2.1
million shares, basic and diluted) for the prior year.
"We are very pleased with the growth that we have experienced in
revenue and other operating metrics over a short period of time,"
said Eric Kuhn, VarsityBooks.com's President and Chief Executive
Officer. "Our fourth quarter and full year operating results were in
accordance with our expectations."
Due to quiet period restrictions, the company will not be conducting
an investor conference call related to this quarter's release of
financial results.
About VarsityBooks.com
VarsityBooks.com (NASDAQ: VSTY), based in Washington, DC, is a
leading online retailer and marketing channel to the nation's 15
million college students. Founded in
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1997, VarsityBooks.com pioneered selling discounted new college
textbooks over the Internet. Building on its online textbook
business, VarsityBooks.com provides a range of products and services
on its Web site, all designed to bring value directly to college
students. In addition, VarsityBooks.com operates one of the nation's
largest networks of student representatives to promote its products
and services - as well as those of other companies - on college
campuses nationwide.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Statements in this press release regarding
VarsityBooks.com's business that are not historical facts are
"Forward-looking statements" that involve risks and uncertainties.
For a discussion of such risks and uncertainties, which could cause
actual results to differ from those contained in the forward-looking
statements, see "Risk Factors" in the company's prospectus.
VARSITYBOOKS.COM INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
QUARTERS ENDED YEARS ENDED
DECEMBER 31, DECEMBER 31,
---------------------------- ----------------------------
1998 1999 1998 1999
------------ ------------ ------------ ------------
Net sales:
Product .............................. $ 33 $ 1,560 $ 122 $ 9,885
Shipping ............................. 3 133 10 674
------------ ------------ ------------ ------------
Total net sales ................... 36 1,693 132 10,559
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Operating expenses:
Cost of product -- related party ..... 36 1,409 115 9,119
Cost of shipping -- related party .... 3 186 10 909
Equity transactions -- related party.. 90 - 798 169
Marketing and sales .................. 402 7,169 536 20,021
Product development .................. 425 2,044 627 4,505
General and administrative ........... 380 2,339 593 5,117
Non-cash compensation ................ 61 1,092 146 2,578
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Total operating expenses .......... 1,397 14,239 2,825 42,418
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Loss from operations ....................... (1,361) (12,546) (2,693) (31,859)
Other income (expense), net ................ (2) 195 4 351
------------ ------------ ------------ ------------
Net loss ................................... (1,363) (12,351) (2,689) (31,508)
Preferred stock dividends .................. - 805 - 1,487
------------ ------------ ------------ ------------
Net loss applicable to common stockholders.. $ (1,363) $ (13,156) $ (2,689) $ (32,995)
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NET LOSS PER SHARE:
Basic and diluted .................... $ (0.67) $ (5.13) $ (1.53) $ (14.82)
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Pro-forma basic and diluted (1) ...... $ (0.46) $ (1.07) $ (1.27) $ (4.09)
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WEIGHTED AVERAGE SHARES:
Basic and diluted .................. 2,035,714 2,566,300 1,755,536 2,226,225
============ ============ ============ ============
Pro-forma basic and diluted (1) .... 2,972,046 11,533,179 2,125,397 7,702,441
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(1) Pro-forma basic and diluted net loss per share is computed using the
weighted average number of common shares outstanding, including the pro-forma
effects of the conversion of the Company's Series A, Series B and Series C
convertible preferred stock into shares of the Company's common stock on a
one-to-one basis effective upon the closing of the Company's initial public
offering as if such conversion occurred on January 1, 1998 or at the date of
original issuance, if later, as well as the impact of the Company's one-for-two
stock split in December 1999.
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