Streamline.com Announces Second Quarter 1999 Results
Company Experiences 131% Revenue Growth for First Half 1999 and 119% Growth for Second Quarter Ended June 30, 1999, as Compared to Similar Periods in 1998
WESTWOOD, Mass.--(BUSINESS WIRE)--July 29, 1999-- Streamline.com, Inc. (NASDAQ: SLNE - news), a pioneer in the consumer direct market place, today reported its financial results for the second quarter and six months ended June 30, 1999.
Net revenue was $3.63 million, an increase of 119% for second quarter 1999, compared to $1.66 million a year ago. Net loss was $4.05 million, compared to $2.65 million a year ago.
Product and service revenue increased 123%, subscription fees increased 149% and advertising, research and marketing fees increased 75%, for second quarter 1999, compared to the same period in 1998. The increase in product and service revenues and subscription fees is directly attributable to increases in total orders, average order size, and customers. Customer orders increased 115% to slightly over 30,000 orders for second quarter 1999, compared to the same period in 1998, while average order size increased to $104 from $101.
Revenue from advertising, research and marketing fees includes Consumer Learning Center membership fees paid by consumer packaged goods (''CPG'') companies for the opportunity to participate in research and marketing programs. The growth in advertising, research and marketing fees was attributable to an increased number of CPG companies that became members of our Consumer Learning Center. At June 30, 1999, there were 12 CPG companies participating in our Consumer Learning Center, compared with five in the same period in 1998.
Streamline provides busy suburban families (BSFs) with time-saving lifestyle solutions. The company provides these BSFs with Internet-based ordering of a wide range of quality goods such as brand name groceries, fresh baked goods, quality meats and seafood, freshly prepared meals, fresh produce, specialty pet food and supplies and organic foods; and services such as Blockbuster videos, dry cleaning pick-up and delivery, package pick-up and delivery, clothing alteration and repair, shoe repair, film processing and supplies, bottled water and food and clothing drives. These goods and services are aggregated at the company's consumer resource center, a dedicated fulfillment center, and delivered directly to the customers' homes through a weekly, unattended delivery.
''As a result of the recent trend towards greater awareness and wider acceptance of online consumer direct services, we are seeing increased customer demand for services offered by Streamline. To meet this need and prepare for increased competition in the marketplace, we have accelerated our national expansion plan. We now anticipate adding 50 consumer resource centers through the year 2004,'' said Timothy A. DeMello, Chairman and CEO of Streamline.com, Inc. ''Since founding Streamline in 1993, we have been developing and fine-tuning our business model. We are confident that it is the right model for national success and are currently preparing to enter the Washington, D.C. market this fall.''
Total operating expenses were $7.68 million, an increase of 85% for second quarter 1999, compared to $4.16 million for the same period in 1998. The cost of revenue increased 103% during second quarter 1999, over the same period in 1998; however, the cost of revenue as a percentage of revenues decreased to 67.5% in second quarter 1999 from 72.9% for the same period in 1998. The improvement in the cost of revenue as a percentage of revenues was primarily attributable to both a higher proportional growth of subscription fees (compared to the other two revenue streams), and a higher average order size. The increases in other operating expense categories were primarily related to growth in customer related activity (both in terms of the number of orders and the number of customers), as well as the necessary infrastructure to support continued corporate growth and planned expansion.
Pro forma basic and fully diluted loss per share were $(0.29) for second quarter 1999, compared to $(0.37) for second quarter 1998.
Results of operations for the six months ended June 30, 1999
Net revenue was $6.62 million, an increase of 131% for the six months ended June 30, 1999, compared to $2.86 million a year ago. Net loss was $7.31 million for second quarter 1999, compared to $5.14 million a year ago.
Product and service revenue increased 130%, subscription fees increased 146% and advertising, research and marketing fees increased 141%, for the six months ended June 30, 1999, compared to the same period in 1998. Customer orders increased by 119% to slightly over 54,000 orders for the six months ended June 30, 1999, compared to the same period in 1998, while average order size increased to $105 from $100.
Total operating expenses were $14.03 million, an increase of 78% for the six months ended June 30, 1999, compared to $7.88 million for the same period in 1998. The cost of revenue increased 113% for the six months ended June 30, 1999, over the same period in 1998; however, the cost of revenue as a percentage of revenues decreased to 67.6% for the six months ended June 30, 1999, from 73.6% for the same period in 1998. The improvement in cost of revenue as a percentage of revenues was primarily attributable to both a higher proportional growth of advertising, research and marketing fees and subscription fees compared to the growth in product and service revenues, and a higher average order size.
Pro forma basic and fully diluted loss per share were $(0.54) for the six months ended June 30, 1999, compared to $(0.71) for the same period in 1998.
Significant Events
Accelerated Expansion Plan
In response to increased interest in the consumer direct marketplace and the changing competitive environment, the management of Streamline intends to accelerate its national expansion plan. The new expansion plan calls for the opening of three to four new consumer resource centers (''CRCs'') in 2000, six to eight new CRCs in 2001, and operating in 20 markets out of a total of 50 CRCs by the end of 2004. The company's original plan had been to operate 36 CRCs in 13 markets by the end of 2004.
IPO Completed in June
On June 18, 1999, the company raised net proceeds of $41.85 million through its initial public offering, with the sale of 4,500,000 common shares at $10.00 per share. The underwriters exercised their over-allotment option, on July 21, 1999, purchasing an additional 498,482 common shares from the company. The net proceeds to the company of the over-allotment was approximately $4.6 million. The aggregate net proceeds to the company will be used to finance the expansion of its business and for general corporate purposes, including working capital and capital expenditures. Upon completion of the offering and the underwriters' over-allotment exercise, approximately 18.4 million common shares were outstanding.
Genco I Hired in May
In May 1999, the company entered into an agreement with Genco I, Inc., a national warehouse operations company, to perform the merchandise processing and picking function at the company's Westwood, MA consumer resource center. The company outsourced this function to lower certain costs associated with fulfillment center operations. The warehouse operations arrangement with Genco allows the company to focus on enhancing direct customer relationships, through uniformed Streamline delivery personnel and telephone customer service representatives. Additionally, Genco's ability to provide comparable services in multiple markets is expected to strengthen the company's ability to expand more rapidly in new markets while maintaining the customer point-of-contact.
Note: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from those projected or suggested due to certain risks and uncertainties, including, without limitation, those associated with our limited operating history and history of losses, inexperience in implementing our expansion strategy, need to raise additional capital, reliance on the growth of e-commerce and the infrastructure of the Internet, increased competition, and dependence on customer acceptance of direct, unattended delivery of goods and services. Additional information concerning these and certain other risks and uncertainties that could cause actual results to differ materially from those projected or suggested, is contained in the Company's public filings with the Securities and Exchange Commission (SEC), copies of which are available from the SEC's website at sec.gov or from the Company upon request. The forward-looking statements contained herein represent the Company's judgment as of the date of this release, and the Company cautions readers not to place undue reliance on such statements.
Streamline.com, Inc.
Statement of Operations Data
(in thousands, except per share data)
(unaudited)
For the six month
Quarter Ended period ending
June 30, June 30,
------------------ ------------------
1998 1999 1998 1999
======== ======== ======== ========
Revenue
Product and service
revenues, net $1,401 $3,119 $2,473 $5,687
Subscription fees 94 234 171 421
Advertising, research
and marketing fees 159 278 212 510
------------------ ------------------
Total Revenue 1,654 3,631 2,856 6,618
Operating Expenses
Cost of revenue 1,206 2,452 2,102 4,473
Fulfillment center operations 1,009 1,852 1,955 3,237
Sales and marketing 328 843 613 1,458
Technology systems
and development 664 975 1,300 1,804
General and administrative 951 1,553 1,914 3,059
------------------ ------------------
Total operating expenses 4,158 7,675 7,884 14,031
Operating loss (2,504) (4,044) (5,028) (7,413)
Other income (expense), net (209) (5) (249) 102
------------------ ------------------
Loss before minority interest (2,713) (4,049) (5,277) (7,311)
Minority interest in net loss
of consolidated subsidiary 67 0 138 0
------------------ ------------------
Net loss (2,646) (4,049) (5,139) (7,311)
================== ==================
Dividends on preferred stock 0 263 0 549
Net loss attributable
to common stockholders (2,646) (4,312) (5,139) (7,860)
================== ==================
Pro forma basic and diluted
loss per common share: (1)
Basic and diluted net loss
per common share - pro forma $ (0.37) $ (0.29) $ (0.71) $ (0.54)
Shares used in computing
unaudited pro forma basic and
diluted net loss per share 7,238 13,950 7,238 13,596
Historical basic and diluted
loss per common share:
Basic and diluted net loss
per common share - historical $ (0.76) $ (0.76) $ (1.47) $ (1.68)
Shares used in computing
unaudited historical basic and
diluted net loss per share 3,497 5,694 3,497 4,685
(1) The pro forma basic and diluted net loss per share calculation
assumes the conversion of all outstanding shares of preferred
stock and accrued preferred stock dividends into common shares,
as if the shares had been converted immediately upon their
issuance.
Streamline.com, Inc.
Balance Sheet
(in thousands)
(unaudited)
Quarter Ended
June 30,
1998 1999
Cash and cash equivalents 3,143 45,048
Working capital (deficit) (5,038) 43,183
Total assets 10,107 56,248
Capital lease obligations, net of
current portion 372 765
Redeemable convertible preferred
stock 14,000 -
Stockholders' equity (deficit) (13,006) 51,948
--------------------------------------------------------------------------------
Contact |
