CyberShop.com Reports Fourth Quarter and Year End 1999 Results; Results Include Effect of Change in Strategy - Exit From Two Online Retailing Operations
Business Wire - February 29, 2000 16:21
JERSEY CITY, N.J.--(BUSINESS WIRE)--Feb. 29, 2000--CyberShop.com(R), Inc. (NASDAQ: CYSP), one of the first publicly traded Internet incubators, today announced financial results reflecting its exit from two of its online retailing operations as part of its new Internet incubator strategy, Grove Street Ventures, Inc. The Company reported net losses for the fourth quarter of 1999 of $4.4 million which included a $0.4 million charge to earnings for estimated losses associated with the closing of its discontinued online retailing unit, cybershop.com, and $1.7 million in operating losses incurred during the quarter for the closed unit. Losses from continuing operations for the fourth quarter were $2.2 million, or $1.5 million before goodwill and other merger and acquisition related costs.
Net loss per share applicable to common shareholders for the fourth quarter of 1999 was ($0.50) per share as compared to ($0.59) in 1998. Net loss per share from continuing operations before goodwill and other merger and acquisition related costs was ($0.16) per share for the fourth quarter of 1999 as compared to ($0.13) in 1998. After goodwill and other merger and acquisition related costs net loss per share from continuing operations was ($0.23) per share for the fourth quarter of 1999 as compared to ($0.13) in 1998.
The Company will continue to operate its Tools for Living division, which in the fourth quarter of 1999 generated $2.1 million of total revenues and $5.3 million for the seven-month period beginning on the date of acquisition, June 1, 1999. Tools for Living's website is located at www.toolsforliving.com. During the fourth quarter of 1999 total revenues generated from the Company's cybershop.com and electronics.net website operations were $1.3 million and $.6 million, respectively, and for the year were $2.9 million and $1.7 million, respectively.
As previously announced, the Company recently signed a letter of intent to sell substantially all of the assets of electronics.net to Electronics Online, Inc., a company formed by two former Cybershop.com, Inc. executives. Under the terms of the agreement the Company would receive a convertible note and 19.9% of the equity of Electronics Online, Inc.. The Company is also in negotiations for the sale of the majority of the operating assets associated with its cybershop.com online retailing unit.
"Our decision to exit from unprofitable operations and to shift our focus to our new Internet incubator strategy is indicative of our commitment to creating long term shareholder value," said Jeff Tauber, CEO and Chairman of the Board. "By exiting unprofitable operations and reducing overhead, we have positioned ourselves to leverage our existing assets and pursue our larger vision of identifying and creating a portfolio of exceptional early stage Internet companies. We are excited about the vast potential that exists for our new incubator strategy, are confident we are uniquely positioned to succeed in this sector, and are extremely encouraged by the progress we have made to date both with respect to building our infrastructure and attracting exceptional companies."
"In just the few weeks since we announced the launch of our new Internet incubator strategy and I joined Grove Street, we have made substantial progress," added Kevin Miller, newly appointed President of Grove Street Ventures. "Some of the things we are working on include:
- Closing the sale of electronics.net to two former executives of
Cybershop.com in exchange for 19.9% of the equity of the new
company and a convertible note. We are also presently negotiating
the sale of additional non-core retail assets.
- Establishing a top flight Advisory Board comprised of outstanding
Internet and business executives who will help in locating and
analyzing proposed ventures. A number of members have agreed to
join the Advisory Board and we expect to finalize the board
shortly.
- Retaining additional key Internet and investment banking talent
to join the Grove Street team. We are currently in later stage
discussions with a number of potential key additions and hope to
finalize these discussions in the near future.
- Analyzing and conducting due diligence on potential portfolio
companies. Since announcing the launch of our Internet incubator,
we have received business plans and/or executive summaries from
more than 40 companies seeking our incubator services. We have
proceeded to later stage due diligence and discussions with a
select few of these companies and expect to finalize our analysis
of these companies in the next few weeks. We continue to review
all of the business plans that we receive and expect to proceed
to later stage due diligence and discussions with additional
companies.
- We are presently in discussions with numerous law firms,
accounting firms, web-site design firms, p.r. firms, and other
similar companies regarding potential affiliations for the
benefit of our portfolio companies.
- We are presently in discussions with a number of other Internet
incubators and Internet investment companies regarding forming
strategic alliances and/or investing in individual transactions.
We are presently conducting due diligence on a number of these
opportunities and expect to complete this process in the next few
weeks. We continue to pursue and consider similar opportunities
as they arise.
These are just a few of the key developments over the past few weeks. We look forward to announcing further details of these and other developments as they are finalized. We are extremely encouraged by the extraordinary opportunities that have been presented to us in this short time frame further validating our new incubator strategy."
About Cybershop.com
Cybershop.com, Inc., through Grove Street Ventures, is one of the first publicly traded Internet incubators. Its mission is to identify and develop attractive early stage Internet companies. Grove Street will provide these companies management, marketing, financing (including early stage seed capital), human resources, accounting resources, use of its facilities and its extensive expertise in business development. In return, Grove Street will receive substantial equity positions. Grove Street Ventures also operates its online and direct response company, Tools for Living. Tools for Living's website is located at www.toolsforliving.com. In order to reflect its new focus, CyberShop.com, Inc anticipates changing its name and Nasdaq trading symbol in the near future. Grove Street Ventures' web site will be located at www.grovestreetventures.com.
Safe Harbor
This announcement contains forward-looking statements that involve risks and uncertainties that include, among others, the Company's limited operating history, anticipated losses, unpredictability of future revenues, potential fluctuation in quarterly operating results, seasonality, competition, risks associated with system development and operation risks, management of potential growth and risks of new business areas, and strategic alliances.
Retail not its cup of tea.
Jack
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