Exhibit 99.1
Investor Contact: Press Contact:
Patrick Barry Cathy Halgas Nevins
CFO, Bluefly, Inc. Director of PR
212- 944-8000 ext. 239 212-944-8000 ext. 388
pat@bluefly.com cathy.nevins@bluefly.com
BLUEFLY.COM FIRST QUARTER REVENUES GROW 34% WHILE GROSS PROFIT GROWS OVER 100%
New York, NY April 28, 2004 -- 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 over 34% to $11,114,000 during
the first quarter of 2004, from $8,257,000 during the same period a year ago.
Gross margins increased to 34.0% in the first quarter of 2004, from 22.5% in the
first quarter of 2003. The company's revenue and gross margin growth resulted in
a gross profit increase of over 103%.
Other financial results for the first quarter of 2004 were as follows (all
comparisons are to the first quarter of 2003):
. Net loss decreased by over 38% to $1,130,000 (or $0.15 per share),
from $1,840,000 (or $0.25 per share). Net loss per share for the first
quarter of 2004 is based on a weighted average of 14,314,722 shares
outstanding, while the net loss per share for the first quarter of
2003 is based on a weighted average of 10,982,390 shares outstanding.
The reduction in net loss was partly the result of $169,000 of other
income recognized as a result of the partial collection of damages
awarded to the company in connection with a litigation and $261,000 of
non-cash other income recognized as a result of the decrease in value
of certain warrants issued by the company that are treated as
derivative securities for accounting purposes.
. Cash flow used in operations improved over 99% to $18,000, from
$2,182,000.
. New customers acquired increased by over 23% to 33,335, from 27,031.
. New customer acquisition cost increased by approximately 104% to
$10.72, from $5.26, as the company began a strategy of more
aggressively acquiring customers.
. Gross average order size increased over 13% to $189.56, from $167.20.
"This quarter represents a very significant step forward for us," said Ken
Seiff, Bluefly's CEO. "Our gross profit for the quarter more than doubled as a
result of our exceptionally strong revenue and gross margin growth, and we are
extremely excited about the prospects for continued growth on both these fronts
in the future."
"We have begun the process of upgrading our merchandise assortment to offer our
customers the same trends they see at the finest stores at prices that no
traditional department store, specialty store or boutique can come close to
matching," added Melissa Payner, Bluefly's President. "The fact that we were
able to increase both revenue and gross margin so significantly with a lower
inventory investment than we had last year illustrates the impact that this
strategy can have throughout our business."
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. These risks and uncertainties include, but are not limited
to, the company's history of losses and anticipated future losses; need for
additional capital and potential inability to raise such capital; the risk of
default by the company under the Rosenthal financing agreement and the
consequences that might arise from the company having granted a lien on
substantially all of its assets under that agreement; the potential failure to
forecast revenues and/or to make adjustments to our 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 markets; 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 its dependence on its third-party web hosting and
fulfillment centers; online commerce security risks; management of potential
growth; the availability of merchandise; the need to further establish brand
name recognition; risks associated with our ability to handle increased traffic
and/or continued improvements to its Web site; rising return rates; dependence
upon executive personnel; the successful hiring and retaining of new personnel;
risks associated with expanding our operations; and uncertainties relating to
the imposition of sales tax on Internet sales.
-more-
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
THREE MONTHS ENDED
----------------------------
MARCH 31, MARCH 31,
2004 2003
------------ ------------
Net sales $ 11,114,000 $ 8,257,000
Cost of sales 7,332,000 6,400,000
------------ ------------
Gross profit 3,782,000 1,857,000
Gross profit percentage 34.0% 22.5%
Selling, marketing and fulfillment expenses 3,449,000 2,412,000
General and administrative expenses 1,759,000 1,203,000
------------ ------------
Operating loss (1,426,000) (1,758,000)
Interest and other income 456,000 6,000
Interest expense (160,000) (88,000)
------------ ------------
Net loss $ (1,130,000) $ (1,840,000)
============ ============
Deemed dividend related to beneficial conversion
feature on Series C Preferred Stock -- (225,000)
Preferred stock dividends (1,024,000) (638,000)
Net loss available to common shareholders $ (2,154,000) $ (2,703,000)
============ ============
Basic and diluted net (loss) income per share
(after preferred stock dividends) $ (0.15) $ (0.25)
============ ============
Weighted average shares outstanding 14,314,722 10,982,390
============ ============
-more-
SELECTED BALANCE SHEET DATA & KEY METRICS - UNAUDITED
MARCH 31, DECEMBER 31,
2004 2003
------------ ------------
Cash $ 12,081,000 $ 7,721,000
Inventories, net 10,482,000 11,340,000
Other Current Assets 2,168,000 1,863,000
Property & Equipment, net 1,525,000 1,659,000
Current Liabilities 9,643,000 8,459,000
Notes Payable to Related Party Shareholders 4,000,000 4,000,000
Shareholders' Equity 12,726,000 10,279,000
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
2004 2003
------------ ------------
Average Order Size (including shipping & handling revenue) $ 189.56 $ 167.20
Average Order Per New Customer (including shipping & handling revenue) $ 166.90 $ 153.01
Average Order per Repeat Customer (including shipping & handling revenue) $ 202.67 $ 175.18
Customers Added During Period 33,335 27,031
Revenue from Repeat Customers as % of Total Revenue* 68% 67%
Customer Acquisition Cost ** $ 10.72 $ 5.26
* 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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