Exhibit 99.1
FOR IMMEDIATE RELEASE
Investor Contacts: Press Contact:
Patrick Barry Samantha Kain
CFO, Bluefly, Inc. Paul Wilmot Communications
212- 944-8000 ext. 239 212-206-7447 ext. 25
pat@bluefly.com skain@greatpress.com
Budd Zuckerman
Genesis Select
303-415-0200
bzuckerman@genesisselect.com
BLUEFLY REPORTS RECORD FOURTH QUARTER AND FULL YEAR 2006 REVENUE
NEW YORK - February 28, 2007 - Bluefly, Inc. (NASDAQ SmallCap:BFLY), a leading
online retailer of designer brands, fashion trends and superior value
(www.bluefly.com), today announced strong growth in revenue and continued strong
margin levels for the fourth quarter and full year 2006.
Highlights for the fourth quarter included:
o Revenue increased by approximately 28% to $27.1 million from $21.2
million in fourth quarter 2005;
o Gross margin decreased by 150 basis points to 40.3% from 41.8% in
fourth quarter 2005;
o Gross profit increased by nearly 23%;
o Operating loss increased to $3,665,000 compared to operating income of
$131,000 primarily as a result of $2.6 million of stock-based
compensation and a year-over-year incremental increase of $1.3 million
in spending related to marketing and advertising.
o Average order size increased by over 17% to $271.98 from $232.23 in
the fourth quarter of 2005.
o Net loss increased to $3.5 million from $55,000. Loss per share
decreased to $0.03 per share (based on 129.8 million weighted average
shares outstanding after preferred stock dividends) from $0.07 per
share (based on 18.0 million weighted average shares outstanding after
preferred stock dividends).
Highlights for the full year 2006 included:
o Revenue increased by approximately 31% to $77.1 million from $58.8
million in 2005;
o Gross margin increased by 100 basis points to 40.1% from 39.1% in
2005;
o Gross profit increased by approximately 34%;
o Average order size increased by nearly 17% to $257.64 from $220.17 in
the fourth quarter of 2005.
o Operating loss increased to approximately $12.1 million compared to an
operating loss of $3.1 million for 2005 primarily as a result of: $4.5
million of stock-based compensation a year-over-year incremental
increase of $6.4 million in spending related to marketing and
advertising and executive bonuses in the amount of $675,000 paid in
connection with the recent financing.
o Net loss increased to $12.2 million from $3.8 million. Loss per share
decreased to $0.23 per share (based on 80.2 million weighted average
shares outstanding after preferred stock
dividends) from $0.54 per share (based on 16.1 million weighted
average shares outstanding after preferred stock dividends).
"We are pleased by the company's record revenue for the year," said Melissa
Payner, Bluefly's CEO. "Our strong growth in the face of slow cold-weather
product sales throughout the industry is a testament to our continued progress
and to the investment we have made in growing our customer file through our
increased marketing efforts."
The company will host a conference call webcast to discuss its fourth quarter
and full year results today at 5:00 p.m. EDT. Investors can access the webcast
at www.investor.bluefly.com.
ABOUT BLUEFLY, INC.
Founded in 1998, Bluefly, Inc. (NASDAQ SmallCap: BFLY) is a leading online
retailer of designer brands, fashion trends and superior value. Bluefly is
headquartered at 42 West 39th Street in New York City, in the heart of the
Fashion District. For more information, please call 212-944-8000 or visit
www.bluefly.com.
This press release may include statements that constitute "forward-looking
statements," usually containing the words "believe," "project," "expect" or
similar expressions. These statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements inherently involve risks and uncertainties that could
cause actual results to differ materially from the forward-looking statements.
The risks and uncertainties are detailed from time to time in reports filed by
the company with the Securities and Exchange Commission, including Forms 8-K,
10-Q and 10-K. These risks and uncertainties include, but are not limited to,
the company's ability to execute on, and gain additional revenue from, its
marketing initiatives; the company's history of losses and anticipated future
losses; the potential failure to forecast revenues and/or to make adjustments to
operating plans necessary as a result of any failure to forecast accurately;
unexpected changes in fashion trends; cyclical variations in the apparel and
e-commerce market; the availability of merchandise; the need to further
establish brand name recognition; management of potential growth; and risks
associated with our ability to handle increased traffic and/or continued
improvements to its Web site.
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BLUEFLY, INC.
CONDENSED STATEMENTS OF OPERATIONS - UNAUDITED
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------------------------- -------------------------------------------------
2006 2005 2004 2006 2005 2004
------------- ------------- ------------- ------------- ------------- -------------
Net sales $ 27,071,000 $ 21,235,000 $ 14,515,000 $ 77,062,000 $ 58,811,000 $ 43,799,000
Cost of sales 16,158,000 12,351,000 8,664,000 46,153,000 35,816,000 27,393,000
------------- ------------- ------------- ------------- ------------- -------------
Gross profit 10,913,000 8,884,000 5,851,000 30,909,000 22,995,000 16,406,000
Gross margin 40.3% 41.8% 40.3% 40.1% 39.1% 37.5%
Selling and fulfillment
expenses 4,656,000 3,747,000 3,455,000 15,808,000 12,880,000 11,783,000
Marketing expenses 4,940,000 3,423,000 730,000 14,196,000 6,961,000 2,120,000
General and administrative
expenses 4,982,000 1,583,000 1,526,000 13,001,000 6,299,000 6,408,000
------------- ------------- ------------- ------------- ------------- -------------
Operating income (loss) (3,665,000) 131,000 140,000 (12,096,000) (3,145,000) (3,905,000)
Interest (expense), net and
other income 122,000 (186,000) (133,000) (97,000) (675,000) 114,000
Net income (loss) $ (3,543,000) $ (55,000) $ 7,000 $ (12,193,000) $ (3,820,000) $ (3,791,000)
============= ============= ============= ============= ============= =============
Deemed dividend related to
beneficial conversion
feature on Series F
Preferred Stock -- -- -- (3,857,000) -- --
Preferred Stock Dividends (15,000) (1,287,000) (1,099,000) (2,252,000) (4,958,000) (4,275,000)
============= ============= ============= ============= ============= =============
Basic and diluted net loss
per share (which includes
preferred stock dividends) $ (0.03) $ (0.07) $ (0.07) $ (0.23) $ (0.54) $ (0.55)
============= ============= ============= ============= ============= =============
Weighted average shares
outstanding 129,755,334 18,041,960 14,819,235 80,170,532 16,153,020 14,586,752
============= ============= ============= ============= ============= =============
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SELECTED BALANCE SHEET DATA & KEY METRICS (Unaudited)
DECEMBER 31, DECEMBER 31,
2006 2005
------------- -------------
Cash $ 20,188,000 $ 9,408,000
Inventories, net 24,189,000 16,893,000
Other Current Assets 4,229,000 3,536,000
Property & Equipment, net 3,573,000 2,895,000
Current Liabilities 14,603,000 11,936,000
Notes Payable to Related Party Shareholders
(including interest payable) -- 5,217,000
Shareholders' Equity 37,827,000 15,865,000
THREE MONTHS THREE MONTHS
ENDED ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2006 2005 2006 2005
------------- ------------- ------------- -------------
Gross Average Order Size
(including shipping & handling) $ 271.98 $ 232.23 $ 257.64 $ 220.17
Customers Added During Period 64,756 53,887 177,213 148,975
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CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
THREE MONTHS THREE MONTHS
ENDED ENDED
DECEMBER 31, 2006 DECEMBER 31, 2005
----------------- -----------------
Cash flows from operating activities:
Net income $ (3,543,000) $ (55,000)
Adjustments to reconcile net income
to net cash (used in) provided by operating activities:
Depreciation and amortization 407,000 328,000
Reserve for inventory obsolescence 110,000 36,000
Non-cash expense related to warrants issued to supplier 6,000 132,000
Provisions for returns 1,480,000 924,000
Allowance for doubtful accounts 110,000 71,000
Stock-based compensation 2,634,000 7,000
Changes in operating assets and liabilities:
(Increase) decrease in:
Inventories 2,472,000 155,000
Accounts receivable 60,000 155,000
Other current assets (201,000) 120,000
Prepaid expenses 2,447,000 328,000
(Decrease) increase in:
Accounts payable (1,803,000) 1,198,000
Accrued expenses and other current liabilities (67,000) 113,000
Interest payable to related party -- 150,000
Deferred revenue 336,000 (179,000)
----------------- -----------------
Net cash (used in) provided by operating activities 4,448,000 3,483,000
Cash flows from investing activities:
Purchase of property and equipment (1,301,000) (183,000)
----------------- -----------------
Net cash (used in) investing activities (1,301,000) (183,000)
----------------- -----------------
Cash flows from financing activities:
Proceeds from exercise of Employee Stock Options -- 1,001,000
Repayment of capital lease obligation (14,000) (13,000)
----------------- -----------------
Net cash provided by financing activities (14,000) 988,000
----------------- -----------------
Net increase (decrease) in cash and cash equivalents 3,133,000 4,288,000
Cash and cash equivalents - beginning of period 17,055,000 5,120,000
----------------- -----------------
Cash and cash equivalents - end of period $ 20,188,000 $ 9,408,000
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