The Vermont Teddy Bear Company(R) Reports Q2 Profits
SHELBURNE, Vt., Feb. 8 /PRNewswire/ -- The Vermont Teddy Bear Company(R) (Nasdaq: BEAR)
announced today net income to common shareholders of $78,000 or .02 per basic common share for the
quarter ending December 31, 1998, compared to a loss of $1,059,000 or .20 per share in the same quarter
last year. Revenues in the quarter increased 17.2% to 4.8 Million from 4.1 Million last year.
"The Vermont Teddy Bear Company(R) is in the midst of an exciting turnaround," said President Elisabeth
Robert. "Our marketing strategy to focus on our core Bear-Gram(R) delivery service is principally
responsible for driving renewed growth but other exciting sales opportunities are beginning to pay off with
measurable results. In short, we have a far better understanding of our business and are poised to take
advantage of the opportunities we have created."
Several factors contribute to the dramatic improvement to the Company's performance, including a highly
targeted and analytical radio marketing strategy complemented by the Company's Internet website, the
elimination of unprofitable offsite retail stores, and entry into new special markets. Additionally, new Teddy
Bear designs mirroring edgier consumer lifestyles are consistently selling through projected numbers,
suggesting a creative direction that more closely profiles the Company's customer.
Christmas, the first of three peak selling seasons of the fiscal year, resulted with a complete sell through of
all new Christmas product as the Company continued to expand its radio advertising campaign for the
Bear-Gram(R) delivery service into new cities across the country. This year at Christmas the Company
advertised in 50 cities versus 11 the previous year.
In the quarter, the Company recorded a three-fold gain over the prior year in on-line orders from its website
address as a result of increasing synergy between the radio advertising campaign and the Internet. Every
radio commercial is now tagged with the Company's website address (www.VermontTeddyBear.com) in
addition to its toll free telephone number (1- 800-829-BEAR). The Company has also expanded it's sales
through affiliations with other on-line marketers including FTD, iQVC, e-TOYS and Yahoo! Shopping. More
than 20% of orders for the Christmas season came from the internet.
"The internet will be a key driver of future revenue growth for the Company," said Robert. "It offers a low
cost visual complement to our radio advertising for an increasing number of our customers across the
country. Selection, convenience, personal service, and last minute delivery options, which are hallmarks of
our Bear-Gram(R) delivery service, are all marketing features that are particularly well suited to the on-line
shopping experience."
The Company's wholesale and corporate sales department, established in January 1998, also announced
several new sales partnerships forged this fiscal year. A trial partnership with Zany Brainy, a multi media
educational super toy store, brings the Vermont Teddy Bear Company's Make-A-Friend-For-Life(R) make
your own teddy bear concept process to Marlton, NJ. The Company has designed programs for customers
in the corporate affinity market including Novartis, Inc, American Cyanamid Company, Nabisco Company,
Jamaica Savings Bank, John Hancock and Mastercard International. This year The Vermont Teddy Bear
Company(R) was also named the official Teddy Bear of the Hartford and New York City Marathons. In the
next quarter, the Company plans to continue marketing the Bear-Gram(R) delivery service and pursuing
and expanding profitable sales channels which complement the core business while, keeping marketing
overhead and general and administrative expenses down.
Robert adds, "Looking ahead, we, will Continue to focus on expanding markets for our Bear-Gram(R)
delivery service through direct response radio advertising and the Internet. And as we build our brand
nationally we will seek out new opportunities in the wholesale and corporate affinity markets in order to
further leverage our advertising dollars at minimum additional expense."
In anticipation of increased demand for Teddy Bears at Valentine's Day, Mother's Day and beyond, The
Company recently added a second sewing shift to bear production, staffed by eight new full-time
employees. The Company has also begun to import quality plush fabric from China at significantly reduced
cost to supplement fur supplies purchased domestically.
The foregoing can be interpreted as including forward looking statements under the Private Securities
Litigation Reform Act of 1995. Actual future results may differ materially from those suggested by the
statements above.
The Vermont Teddy Bear Company(R) is the largest manufacturer of Teddy Bears in North America,
making more than 250,000 bears annually at its Shelburne, Vermont factory and selling them out of its
factory store or via its Bear-Gram(R) delivery service. To place a Bear-Gram(R) order, customers call
1-800-829-BEAR or log on to the Company's popular site www.VermontTeddyBear.com, choose a bear
and personalize it to suit a special life event, occasion or holiday.
Every Bear-Gram(R) delivery comes with a customized Vermont Teddy Bear(R), personalized gift card,
delicious candy treat, and safety B'Air bag filled with fresh Vermont air, all packaged in a colorful gift box
complete with Airhole. Each Vermont Teddy bear is guaranteed for life and the Company provides optional
next day delivery for all orders received by 4 pm Eastern time (3 pm on the Internet).
THE VERMONT TEDDY BEAR CO., INC.
Condensed Statements of Income
For the Three and Six Months Ended December 31, 1998 and 1997
(Unaudited)
Three Months Ended Six Months Ended
Dec 31,1998 Dec 31,1997 Dec 31,1998 Dec 31,1997
Net Revenues $4,805,029 $4,100,161 $7,851,749 $7,041,865
Cost of Goods Sold 1,868,581 1,758,523 3,128,055 2,972,564
Gross Profit 2,936,448 2,341,638 4,723,694 4,069,301
Selling, General and
Administrative Expenses:
Selling Expenses 1,937,085 2,315,841 3,035,031 3,673,113
General and
Administrative Expenses 743,856 925,496 1,397,349 1,526,859
2,680,941 3,241,337 4,432,380 5,199,972
Operating Income(Loss) 255,507 (899,699) 291,314 (1,130,671)
Interest Income 9,691 7,930 20,216 15,255
Interest Expense (154,332) (163,349) (312,185) (323,153)
Other Income 361 13,690 966 15,931
Income(Loss) Before
Income Taxes 111,227 (1,041,428) 311 (1,422,638)
Income Tax Provision 0 0 0 0
Net Income(Loss) 111,227 (1,041,428) 311 (1,422,638)
Preferred Stock Dividends(24,000) (18,000) (42,000) (36,000)
Accretion of Warrants
Issued in connection with
Series C preferred stock (9,082) 0 (9,082) 0
Net Income (Loss)
-Common Stockholders 78,145 (1,059,428) (50,771) (1,458,638)
Basic Net Income (Loss)
Per Common Share $0.02 ($0.20) ($0.01) ($0.28)
Diluted Net Income
(Loss) Per Common Share $0.01 ($0.20) ($0.01) ($0.28)
Weighted Average Number
of Common Shares
Outstanding 5,195,908 5,173,327 5,189,820 5,168,230
Weighted Average Number
of Diluted Common Shares
Outstanding 6,685,968 5,173,327 5,189,820 5,168,230
Condensed Balance Sheet Information
(Unaudited)
December 31,
1998
Cash and Cash Equivalents $1,836,851
Current Assets 5,179,707
Total Assets 14,668,157
Current Liabilities 3,020,078
Long Term Debt 5,879,300
Total Liabilities 9,132,581
Series C Preferred 342,633
Stockholder's Equity 5,192,943
SOURCE Vermont Teddy Bear Company
/CONTACT: Elisabeth Robert, President of Vermont Teddy Bear Company, 802-
985-1398/
/Web site: vtbear.com
(BEAR) |
