FOR IMMEDIATE RELEASE
Company Contact:
Ilia Lekach
Chairman and CEO
E Com Ventures, Inc.
954-335-9160
E COM VENTURES INC. REPORTS SECOND QUARTER FISCAL 2003 RESULTS
MIAMI - September 15, 2003--E Com Ventures, Inc., (NASDAQ: ECMV) announced today
the results of its operations for the second quarter of fiscal 2003.
Net sales were $50.7 million, which was $2.7 million or 5.5% higher than $48.1
million for the comparable quarter of the prior year. The change was due
primarily to an increase in wholesale sales from $1.6 million to $4.8 million.
Gross profit increased by 2.9% to $20.6 million from $20.0 million over the same
period of the prior year. Gross margin was 40.6% of net sales compared to 41.6%
for the comparable period of the prior year; the overall reduced margin was
attributable to the higher proportion of wholesale sales despite 1.2% improved
margin on retail sales.
Loss from operations was $515,000, compared to $146,000 for the same period of
the prior year. The added loss was due primarily to a 1% decrease in store sales
as a result of the contracted retail environment and a 5% increase in selling,
general and administrative expenses due to increased compensation and occupancy
costs at stores plus the expenses related to the relocation of our corporate and
distribution facility.
Interest expense was $409,000 compared to $540,000 in the prior year. The
improvement was due to lower interest rates and lower average amounts borrowed
compared to the same period of the prior year.
Net loss for the quarter was $0.9 million compared to a loss of $0.7 million in
the second quarter of the prior year.
EBITDA (a) defined as net income (loss) less depreciation, amortization and
interest expense was $954,000 compared to $1,310,000 for the second quarter of
the prior year.
Ilia Lekach, Chairman and Chief Executive Officer of E Com Ventures, Inc., said,
"We invested more than $4 million on renovating and building new stores for the
1st half of the year compared to approximately $500,000 in the prior year's
similar period. For the remainder of the current year we expect to build 6 new
stores in very favorable locations and continue to renovate stores. In addition,
the relocation of our corporate and distribution facility has given us a solid
foundation for our expected growth and we intend to undergo a steady increase in
stores over the next several years."
- more -
E COM VENTURES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
THIRTEEN WEEKS THIRTEEN WEEKS TWENTY-SIX WEEKS TWENTY-SIX WEEKS
ENDED ENDED ENDED ENDED
AUGUST 2, 2003 AUGUST 3, 2002 AUGUST 2, 2003 AUGUST 3, 2002
------------------ ------------------ ------------------- ------------------
Net sales $ 50,747,969 $ 48,089,158 $ 87,635,798 $ 88,257,840
Cost of goods sold 30,175,240 28,090,185 50,247,576 50,929,609
------------------ ------------------ ------------------- ------------------
Gross profit 20,572,729 19,998,973 37,388,222 37,328,231
------------------ ------------------ ------------------- ------------------
Operating expenses:
Selling, general and administrative 19,618,635 18,689,104 37,457,751 35,923,203
Depreciation and amortization 1,469,397 1,455,435 2,924,138 2,947,080
------------------ ------------------ ------------------- ------------------
Total operating expenses 21,088,032 20,144,539 40,381,889 38,870,283
------------------ ------------------ ------------------- ------------------
Loss from operations (515,303) (145,566) (2,993,667) (1,542,052)
------------------ ------------------ ------------------- ------------------
Interest expense, net (408,537) (540,356) (860,320) (1,084,202)
------------------ ------------------ ------------------- ------------------
Net loss $ (923,840) $ (685,922) $ (3,853,987) $ (2,626,254)
================== ================== =================== ==================
Net loss per common share:
Basic $ (0.37) $ (0.28) $ (1.56) $ (1.07)
================== ================== =================== ==================
Diluted $ (0.37) $ (0.28) $ (1.56) $ (1.07)
================== ================== =================== ==================
Weighted average number of common
shares outstanding:
Basic 2,493,562 2,482,780 2,476,307 2,452,094
================== ================== =================== ==================
Diluted 2,493,562 2,482,780 2,476,307 2,452,094
================== ================== =================== ==================
THIRTEEN WEEKS ENDED
------------------------------------------
EBITDA Reconciliation (a): AUGUST 2, 2003 AUGUST 3, 2002
- -------------------------------- ------------------------------------------
Net loss $ (923,840) $ (685,922)
Interest expense 408,537 540,356
Depreciation and amortization 1,469,397 1,455,435
------------------- ------------------
EBITDA $ 954,094 $ 1,309,869
=================== ==================
(a) In order to fully assess our financial operating results, management
believes that EBITDA is an appropriate measure of evaluating our operating
performance because it is an indicator of the profitability and performance of
our core operations and reflects the changes in our operating results. However,
these measures should be considered in addition to, not as a substitute, or
superior to, net income, cash flows, or other measures of financial performance
prepared in accordance with generally accepted accounting principles. EBITDA
should not be considered as an alternative to, or more meaningful than, net
income as determined in accordance with GAAP, or as a measure of liquidity.
Because EBITDA is not calculated in the same manner by all companies, the
representation herein may not be comparable to other similarly titled measures.
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 renovating and
building of new stores and expected growth. 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, the
risks inherent in new product and service introductions and the entry into new
geographic markets and other factors included in our filings with the Securities
and Exchange Commission (the "SEC"). Copies of our SEC filings are available
from the SEC or may be obtained upon request from us. We do not undertake any
obligation to update the information contained herein, which speaks only as of
this date.