EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Company Contact:
A. Mark Young
Chief Financial Officer
E Com Ventures, Inc.
305-889-1520
E COM VENTURES INC. REPORTS FISCAL YEAR 2002 RESULTS
MIAMI - April 25, 2003. E Com Ventures, Inc., (NASDAQ: ECMV) announced today its
results of operations for fiscal year 2002.
Net sales for fiscal 2002 were $201.5 million, a 4.2% increase over the $193.4
million reported for the prior year. Retail sales for fiscal 2002 were $199.4
million, an 8.3% increase over the $184.1 million recorded in the prior year,
despite the overall weakness in the retail industry. Average sales per store
increased from approximately $745,000 in fiscal 2001 to $824,000 in fiscal 2002
and stores exceeding the million dollar sales threshold increased to 65 for 2002
from 45 in 2001. Wholesale sales for fiscal 2002 were $2.1 million, a decrease
from $9.2 million in the prior year in accordance with management's decision to
concentrate on higher margin retail sales.
EBITDA, defined as income (loss) from operations excluding interest,
depreciation and amortization, was $5.8 million for fiscal 2002 compared to $6.5
million for the prior year. The decrease was due to a $2 million provision for
impairment of an affiliate's receivable related to a licensing agreement of our
Internet division. The licensing agreement has been terminated. Loss from
operations was reduced to $232,000 in fiscal 2002 compared to $290,000 for the
prior year.
Net loss was $2.8 million in fiscal 2002 compared to a net loss of $3.2 million
for the prior year. The reduction in net loss was partially a result of $1.3
million reduction in interest costs compared to the prior year, offset by
$711,000 realized loss on an investment in an affiliate. Excluding non-cash
charges related to the provision for the affiliate's receivable and the
write-down of the same affiliate's securities to market value, the loss for
fiscal 2002 would have been $153,000.
Ilia Lekach, Chairman and Chief Executive Officer said, "Our concentration on
retail operations resulted in increasing retail sales in a difficult economy
while improving our gross margins by over $4.3 million. Interest expense was
reduced by over $1.3 million. Excluding the impact of our receivable provision
and loss on investment in an affiliate, our net loss would have been reduced to
about $150,000. Last year was a difficult year for retailers in general;
nevertheless, we did improve our core operations, which we trust has better
prepared us for the political and economic problems faced by our industry."
3
E COM VENTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FISCAL YEARS ENDED
-------------------------------------------------------------
FEBRUARY 1, 2003 FEBRUARY 2, 2002 FEBRUARY 3, 2001
------------------ ------------------ -------------------
Net sales $ 201,513,897 $ 193,351,611 $ 206,569,581
Cost of goods sold 116,919,385 113,116,861 123,135,117
------------------ ------------------ -------------------
Gross profit 84,594,512 80,234,750 83,434,464
------------------ ------------------ -------------------
Operating expenses:
Selling, general and administrative expenses 76,177,549 72,972,938 79,938,537
Provision for impairment of receivable
from an affiliate 1,961,355 - -
Provision (recovery) for impairment of
assets and store closings 663,391 727,001 (505,587)
Depreciation and amortization 6,024,400 6,824,861 5,818,964
------------------ ------------------ -------------------
Total operating expenses 84,826,695 80,524,800 85,251,914
------------------ ------------------ -------------------
Loss from operations (232,183) (290,050) (1,817,450)
------------------ ------------------ -------------------
Other income (expense):
Interest expense:
Affiliates (43,049) (102,269) (308,545)
Other (2,029,290) (3,293,929) (8,230,910)
------------------ ------------------ -------------------
(2,072,339) (3,396,198) (8,539,455)
------------------ ------------------ -------------------
Interest income:
Affiliates 173,526 272,944 287,649
Other 16,176 28,065 73,240
------------------ ------------------ -------------------
189,702 301,009 360,889
------------------ ------------------ -------------------
Share of loss of partially-owned affiliate - - (1,388,248)
Gain on sale of affiliate's common stock - - 9,998,454
Realized loss on investments (710,880) - (4,819,441)
Miscellaneous income (expense), net - (17,716) 84,960
------------------ ------------------ -------------------
Total other income (expense) (710,880) (17,716) (4,302,841)
------------------ ------------------ -------------------
Loss before income taxes (2,825,700) (3,402,955) (6,120,291)
Benefit for income taxes - 211,298 -
------------------ ------------------ -------------------
Net loss $ (2,825,700) $ (3,191,657) $ (6,120,291)
================== ================== ===================
Basic loss per common share $ (1.12) $ (1.32) $ (2.59)
================== ================== ===================
Diluted loss per common share $ (1.12) $ (1.32) $ (2.59)
================== ================== ===================
Weighted average number of shares outstanding:
Basic 2,528,326 2,420,467 2,360,456
================== ================== ===================
Diluted 2,528,326 2,420,467 2,360,456
================== ================== ===================
4
FOR THE FISCAL YEARS ENDED
--------------------------------------------------------
February 1, 2003 February 2, 2002 February 3, 2001
--------------------------------------------------------
EBITDA RECONCILLIATION (a):
- ----------------------------
Loss from operations (232,183) (290,050) (1,817,450)
Depreciation and amortization 6,024,400 6,824,861 5,818,964
------------------- ------------------ ----------------
EBITDA 5,792,217 6,534,811 4,001,514
=================== ================== ================
(a) In order to fully assess the Company's financial operating results,
management believes that EBITDA is an appropriate measure of evaluating the
operating and liquidity performance of the Company, because it reflects the
resources available for strategic opportunities including, among others, to
invest in the business and strengthen the balance sheet. However, these measures
should be considered in addition to, not as a substitute, or superior to,
operating income, cash flows, or other measures of financial performance
prepared in accordance with generally accepted accounting principles.
E Com Ventures, Inc., is a holding company that owns and operates Perfumania
retail stores, the Internet site, perfumania.com, and a wholesale fragrance
business. Perfumania is the largest perfumery chain in the United States.
This press release may include information presented which contains
forward-looking information, including statements regarding the strategic
direction of the company. These comments constitute forward-looking statements
(within the meaning of the Private Securities Litigation Reform Act of 1995),
which involve significant risks and uncertainties. Actual results may differ
materially from the information discussed in these forward-looking statements.
Among the factors that could cause actual results, performance or achievement to
differ materially from those described or implied in the forward-looking
statements are general economic conditions, competition, potential technology
changes, changes in or the lack of anticipated changes in the regulatory
environment in various countries, the ability to secure partnership or
joint-venture relationships with other entities, the ability to raise additional
capital to finance expansion, and the risks inherent in new product and service
introductions and the entry into new geographic markets.
5