HouseHold Direct CEO Address To Shareholders
NEW YORK--(BUSINESS WIRE)--Jan. 18, 2001--HouseHold Direct.com, Inc. (OTCBB: BYIT - news)
HouseHold Direct CEO Address To
Shareholders
``In view of the projected timeframe for the upgraded Web Site and national launch of business operations, I feel it is imperative to personally address our shareholders to provide an update on progress made to this end, and adjustments to the Business Plan necessitated by both the changing business and funding landscape in the E-commerce dot com arena.
``After carefully considering the options at our disposal to both the Business Plan and funding models, we have decided it is crucial at this juncture to refocus our immediate attention upon those elements of the Business Plan centered within the consolidation strategy of the exiting private buying network. This will produce the necessary cash flow, at the lowest acquisition cost per member, and provide dollars to the bottom line as a means to ensure financial stability and a realistic path to profitability.
``It is our expectation that successes in this strategy will further create measurable valuation criteria to support an increasing share price, which is of equal concern to insiders and investors alike.
``Before expanding upon the shift in corporate strategy I feel it is warranted to address two important realities: First, shareholders should understand that our goal has remained unchanged. We fully intend to create an enterprise which will consolidate the existing fragmented wholesale buying club industry and merge this population with web-generated memberships, into a centralized operation defined by diverse product offerings, and further incentives for enrollment through excellence of service and a compelling member benefits program. Second, is a recognition that there has been a fundamental shift away from the pure e-tailing sector, which has left many once powerful dot coms, dependent solely upon the Internet for advertising revenues, in the throws of bankruptcy, or scrambling to merge with symbiotic existing land based companies. The desirable business plan is now represented by such land based operations supported by recurrent revenue streams and other traditional income sources, such as transactional fees, service fees, franchise fees and the like. Through it all, HouseHold Direct has survived, and now stands on the threshold of forging its operational business defined by just such a plan.
``Our strategy at this juncture has been to consider all financing options at our disposal, and to move upon initial club acquisitions under the option with the most favorable terms with the least possible effect to dilution.
``I have most recently been traveling extensively in this endeavor and am able to report that we have just concluded negotiations leading to a significant equity placement. I am confident that prudent timed draw downs against this placement will enable us meet operational obligations, move rapidly through the stages of pending club acquisitions, and fulfill ongoing financial commitments inherent to the AHBC (America's Hometown Brand Center) acquisition.
``Shareholders should expect the details of financing and club acquisitions by follow-up press releases shortly. It is important to remember that the members of these clubs, once converted, will form the central initial base of subscribers and trigger sufficient recurring revenue streams and transactional fees to officially move us into the operational phase in a forward going manner.
``We intend to direct our initial marketing and web-based effort to accommodate the existing private club membership base, estimated at 2.5 million collectively, already accepting of the club concept and the benefits inherent to membership.
``Affinity relationships for products and services continue to be established, and these will be tested within this base of existing and active membership prior to national rollout, as these clubs become part of the HouseHold Direct model.
``The advantages to this strategy in terms of lower cost per member acquisition and the ability to generate a rapid recurrent revenue stream from each existing member will become obvious as the process unfolds, and announcements are made accordingly.
``We fully intend to develop a web-based public marketing initiative, coupled with traditional media market support, but this has been temporarily scaled down with our refocus upon the consolidation of existing club members. As success is achieved within this refocused strategy, or as larger capital financing opportunities develop, we fully intend to rapidly deploy this public initiative to the vast pool of mainstream consumers, including an estimated 60 million already accepting of the public discount club concept. We firmly believe HouseHold Direct will be able to reach a respectable portion of this population through its anticipated upcoming marketing initiatives.
``We have been making steady progress with respect to obtaining a national celebrity spokesperson to spearhead these initiatives, and anticipate releasing positive news very shortly.
``I am extremely confident in the future prospects for HouseHold Direct, and remain committed to delivering a profitable business with an increasing share value for both management and shareholders. I intend to announce and hold a teleconference in the near future, following several pivotal news releases, to keep shareholders up to date on our accomplishments and to address any questions at that time.''
John Folger, CEO, HouseHold Direct
Safe Harbor for Forward-Looking Statements: Except for historical information contained herein, the statements in this press release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product price volatility, product demand, market competition, risk inherent in the company's domestic and international operations, imprecision in estimating product reserves and the company's ability to replace and expand its holdings.
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