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 FIRST QUARTER 2007 RESULTS
NEW YORK - May 9, 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 first quarter 2007.
Highlights for the first quarter included:
o Revenue increased by approximately 31% to $22.1 million from $16.9
million in first quarter 2006;
o Gross margin decreased to 37.9% from 40.5% in first quarter 2006,
primarily as a result of increased third party-shipping costs as well
as a weaker dollar compared to the euro;
o Gross profit increased by 22%;
o Operating loss increased to $3,222,000 compared to operating loss of
$3,052,000, primarily as a result of $1.0 million incremental
stock-based compensation expense incurred in connection with stock
based compensation awards made in the fourth quarter of 2006 and in
the first quarter of 2007 in connection with the Company's recent
Offer to Exchange. This increase was partially offset by a reduction
of $466,000 in spending related to marketing and advertising.
o Average order size increased by over 10% to $269.21 from $243.92 in
the first quarter of 2006.
o Net loss decreased to $3.1 million from $3.3 million. Loss per share
decreased to $0.02 per share (based on 129.6 million weighted average
shares outstanding after preferred stock dividends) from $0.22 per
share (based on 20.4 million weighted average shares outstanding after
preferred stock dividends).
"We're especially pleased with the 31% growth in revenue for the first quarter,
especially given the marketing spend is down 13% year over year" said Melissa
Payner, Bluefly's Chief Executive Officer. "The decrease in the marketing spend
is due to the shifting the launch of television advertising, from mid-February
to mid-March, to better coordinate with our Spring product launch. Despite the
four week delay in marketing spend, new customers are up over 27% compared to
the same period last year. Even more encouraging is that our operating loss
excluding stock-based compensation decreased by almost $1.0 million quarter over
quarter."
The company will host a conference call webcast to discuss its first quarter
results today at 5:00 p.m. Investors can access the webcast at
www.investor.bluefly.com.
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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.
CONDENSED STATEMENTS OF OPERATIONS - UNAUDITED
THREE MONTHS ENDED
-----------------------------
MARCH 31, MARCH 31,
2007 2006
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Net sales $ 22,108,000 $ 16,876,000
Cost of sales 13,734,000 10,037,000
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Gross profit 8,374,000 6,839,000
Gross profit percentage 37.9% 40.5%
Selling and fulfillment expenses 4,399,000 3,433,000
Marketing expenses 3,611,000 4,031,000
General and administrative expenses 3,586,000 2,427,000
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Operating loss (3,222,000) (3,052,000)
Interest and other income 195,000 45,000
Interest expense (76,000) (257,000)
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Net loss $ (3,103,000) $ (3,264,000)
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Preferred stock dividends (11,000) (1,231,000)
Net loss available to common shareholders $ (3,114,000) $ (4,495,000)
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Basic and diluted net loss per share
(after preferred stock dividends) $ (0.02) $ (0.22)
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Weighted average shares outstanding 129,629,498 20,367,508
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SELECTED BALANCE SHEET DATA & KEY METRICS - UNAUDITED
MARCH 31, DECEMBER 31,
2007 2006
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Cash $ 14,254,000 $ 20,188,000
Inventories, net 26,133,000 24,189,000
Prepaid Inventory 378,000 616,000
Other Current Assets 5,076,000 3,613,000
Property & Equipment, net 4,015,000 3,573,000
Current Liabilities 13,801,000 14,603,000
Shareholders' Equity 36,291,000 37,827,000
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
2007 2006
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Average Order Size
(including shipping & handling revenue) $ 269.21 $ 243.92
Customers Added During Period 49,385 38,688
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CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
2007 2006
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Cash flows from operating activities:
Loss from operations $ (3,103,000) $ (3,264,000)
Adjustments to reconcile loss from operations
to net cash used in operating activities:
Depreciation and amortization 423,000 353,000
Warrant issued to consultant -- 67,000
Non-cash expense related to warrants issued to supplier -- 92,000
Provisions for returns (663,000) (629,000)
Allowance for doubtful accounts 155,000 43,000
Stock options expense 1,721,000 612,000
Reserve for inventory obsolescence 302,000 240,000
Changes in operating assets and liabilities:
(Increase) decrease in:
Inventories (2,246,000) (4,787,000)
Accounts receivable (1,060,000) (1,274,000)
Prepaid inventory 238,000 326,000
Prepaid expenses (625,000) 634,000
Other current assets (93,000) 34,000
(Decrease) increase in:
Accounts payable 509,000 2,063,000
Accrued expenses and other current liabilities (224,000) (186,000)
Interest payable to related party shareholders -- 149,000
Deferred revenue (250,000) 672,000
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Net cash used in operating activities (4,916,000) (4,855,000)
Cash flows from investing activities:
Purchase of property and equipment (850,000) (110,000)
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Net cash used in investing activities (850,000) (110,000)
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Cash flows from financing activities:
Employee taxes settled with stock (160,000) --
Net proceeds from exercise of Stock Options 6,000 --
Payment of capital lease obligation (14,000) (14,000)
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Net cash (used in) provided by financing activities (168,000) (14,000)
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Net increase (decrease) in cash and cash equivalents (5,934,000) (4,979,000)
Cash and cash equivalents - beginning of period 20,188,000 9,408,000
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Cash and cash equivalents - end of period $ 14,254,000 $ 4,429,000
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