Bid.com has 1000% increase in revenues from previous fiscal year
B I I
sedar.com
Dear Shareholder [w.emphasis]
1998 Third Quarter revenue for Bid.Com International Inc., one of North America's leading online auctions, increased 12.5% to $6.3 million from $5.6 million in the second quarter of the year. Revenue for the nine months was $13.7 million, up from $1.2 million in the same period in 1997, an increase of more than 1000%. Gross profit for the quarter increased more than 250% by $0.2 million to 3.2% of sales in the third quarter, up from $51,000, or 0.9% of sales in the second quarter. Gross profit for the nine months was $0.3 million, an increase of more than 200% compared with the 1997 period.
The improvement in gross profit resulted from increased site traffic to Top-Bid auctions, the successful launch of Dutch Auctions, as well as the introduction of new products and suppliers, particularly in non-computer related categories. The company fully believes that the trend in margin improvement is sustainable now that it has achieved critical mass and is able to manage balanced growth in revenues and margins.
We're beginning to see evidence of our forecasted economic-of-scale, achieving our growth in revenues and gross profits with a reduction in marketing and operating costs. We have been able to reduce our primary operating expense of advertising and promotion, both in gross dollar terms and as a percent of sales, from 61% to 53% of sales. Other operating expenses held constant at 26% of sales. Significant reductions in expenses will occur going forward as we start driving the business to positive cashflow rather than building revenues at the expense of profits.
Net losses for the quarter declined marginally from $4.83 million to $4.79 million and were reduced as a percentage of sales from 86.4% to 76.2%. The company's balance sheet reflects the closing of three equity financings in the third quarter, with investors from Canada, the U.S. and Europe. These financings, from new distribution partner, Rogers Media Inc., from Bid.Com's supply chain, and from financial institutions, provided more than $13 million in gross proceeds to Bid.Com. The net effect is an increase in current assets from $2.6 million to $11.4 million, and an improvement in the company's working capital position by $7.7 million from the previous quarter.
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"NEWS"
ASSETS
CURRENT
Cash and short term Investments -1998-$9,090,245-1997 $396,154
Accounts receivable------------------- 283,893--------179,918
Inventory for resale-------------------- 216,100 --------34,800
Deposits and prepaid expenses--------- 1,822,552 -------424,122
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--------------------------------'98 11,412,790.. ..'97 .1,034,994
BIG NEWS
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Call your broker to place trades on Toronto's Exchange
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