Exhibit 99.1
FOR IMMEDIATE RELEASE
Investor Contacts: Press Contacts:
Patrick Barry Cathy Halgas Nevins
CFO, Bluefly, Inc. Dir. P.R., Bluefly, Inc.
212- 944-8000 ext. 239 212-944-8000 ext. 388
pat@bluefly.com cathy.nevins@bluefly.com
BLUEFLY.COM REPORTS SECOND QUARTER 2003 RESULTS
Net Sales Increase By More Than 9%
NEW YORK, Aug. 8, 2003 -- Bluefly, Inc. (NASDAQ SmallCap: BFLY), a leading
Internet retailer of designer brands at discount prices (www.bluefly.com),
announced today that its net sales increased by more than 9% to $7,468,000 in
the second quarter of 2003 from $6,799,000 in the same period a year ago.
Other financial results for the second quarter of 2003 announced by Bluefly were
as follows (all comparisons are to the second quarter of 2002):
. Gross margin decreased to 31.0% from 35.4%;
. Net loss increased to $2,123,000, or $0.27 per share (based on
11,024,568 weighted average shares outstanding), from $1,519,000
or $1.27 per share (based on 9,700,823 weighted average shares
outstanding). The net loss per share for the second quarter of
2002 includes a non-cash charge of $10,226,000 resulting from the
deemed dividend related to the beneficial conversion of Series B
Convertible Preferred Stock;
. New customers acquired increased to 22,581 from 21,057;
. New customer acquisition cost decreased to $15.16 from $16.92;
. Revenue from repeat customers as a percentage of total revenue
decreased to 68% of gross sales from 70%; and
. Average order size increased to $176.70 from $161.65.
"I am pleased that we achieved 9% growth in what was an extremely difficult
retail period," said Ken Seiff, Chief Executive Officer of Bluefly, Inc. "Going
forward, we hope to be able to accelerate this growth rate and at the same time
improve on many of the other performance metrics by which we measure ourselves,"
Seiff added.
ABOUT BLUEFLY, INC.
Bluefly, Inc. (NASDAQ SmallCap: BFLY) operates the world's first full service
outlet store for designer fashion, offering products from more than 350
designers at discounts of up to 75% off. With 24/7 access, a 90-day money back
guarantee, and technology that displays real-time inventory, Bluefly makes
off-price shopping easy and convenient. 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-A,
8-K, 10-Q, and 10-K.
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Exhibit 99.1
These risks and uncertainties include, but are not limited to, the following:
the Company's limited working capital, need for additional capital and potential
inability to raise such capital; recent losses and anticipated future losses;
the risk that favorable trends in sales, average order size, and customer
acquisition costs will not continue; risks that the Company will be unable to
reduce the levels of losses; potential adverse effects on gross margin and gross
profit resulting from mark downs and allowances for returns and credit card
chargebacks; potential dilution arising from future equity financings, including
potential dilution as a result of the anti-dilution provisions contained in the
Company's Series B Convertible Preferred Stock, the Series C Convertible
Preferred Stock, the Series D Convertible Preferred Stock and the Series E
Convertible Preferred Stock; the competitive nature of the business and the
potential for competitors with greater resources to enter such business; adverse
trends in the retail apparel market; risks and uncertainties associated with the
Company's recent launch of a new version of its web site, including new internal
procedures that need to be developed to operate the new web site, site
instability and download performance issues; risks of litigation for sale of
unauthentic or damaged goods and litigation risks related to sales in foreign
countries; the dependence on third parties and certain relationships for certain
services, including the Company's dependence on U.P.S. (and the risks of a mail
slowdown due to terrorist activity) and the Company's dependence on its
third-party web hosting and fulfillment centers; risks related to consumer
acceptance of the Internet as a medium for purchasing apparel; the successful
hiring and retaining of personnel; the dependence on continued growth of online
commerce; rapid technological change; online commerce security risks; the
startup nature of the Internet business; governmental regulation and legal
uncertainties; management of potential growth; and unexpected changes in fashion
trends.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
THREE MONTHS ENDED
JUNE 30, 2003 JUNE 30, 2002
------------- -------------
Net sales $ 7,468,000 $ 6,799,000
Cost of sales 5,153,000 4,392,000
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Gross profit 2,315,000 2,407,000
Gross profit percentage 31.0% 35.4%
Selling, marketing and fulfillment expenses 3,012,000 2,659,000
General and administrative expenses 1,376,000 1,207,000
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Operating loss (2,073,000) (1,459,000)
Interest (expense) income, net (50,000) (60,000)
------------- -------------
Net loss $ (2,123,000) $ (1,519,000)
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Deemed dividend related to beneficial conversion feature
on Series B Convertible Preferred Stock -- (10,226,000)
Preferred stock dividends (845,000) (615,000)
------------- -------------
Net loss applicable to common shareholders $ (2,968,000) $ (12,360,000)
============= =============
Basic and diluted net loss per share $ (0.27) $ (1.27)
============= =============
Weighted average common shares outstanding (basic and
diluted) 11,024,568 9,700,823
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Exhibit 99.1
SELECTED BALANCE SHEET DATA & KEY METRICS-UNAUDITED
JUNE 30, DECEMBER 31,
2003 2002
------------- -------------
Cash and cash equivalents $ 1,170,000 $ 1,749,000
Inventories, net 11,355,000 10,868,000
Other Current Assets 1,411,000 1,473,000
Property & Equipment, net 2,137,000 2,604,000
Current Liabilities 6,591,000 7,386,000
Notes payable to Shareholders 182,000 2,182,000
Shareholders' Equity 9,216,000 7,084,000
THREE MONTHS THREE MONTHS
ENDED ENDED
JUNE 30, 2003 JUNE 30, 2002
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Average Order Size (including shipping & handling revenue) $ 176.70 $ 161.65
Average Order Per New Customer (including shipping &
handling revenue) $ 165.15 $ 149.01
Average Order per Repeat Customer (including shipping &
handling revenue) $ 182.78 $ 167.80
Customers Added During Period 22,581 21,057
Revenue from Repeat Customers as % of Total Revenue* 68% 70%
Customer Acquisition Cost ** $ 15.16 $ 16.92
* Repeat customer is defined as a person who has bought more than once from
Bluefly during their lifetime.
** Customer Acquisition Cost is calculated by dividing total advertising
expenditures (excluding staff and related costs) by total new customers added.
Customer numbers are based on unique email addresses.
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