Tuesday February 16, 7:06 pm Eastern Time
Company Press Release
REPEATING/CyberShop Reports Fourth Quarter Results
Revenues Increased More Than 300% in Fourth Quarter
Operating Results
JERSEY CITY, N.J.--Feb. 16, 1999-- CyberShop® International, Inc. (Nasdaq: CYSP - news), a leading online retailer, today announced that total revenues for the fourth quarter ended December 31, 1998 increased 303% to $3,414,000 from $848,000 for the fourth quarter ended December 31, 1997.
Total revenues for fiscal 1998 were $4,814,000 compared with total revenue for fiscal 1997 of $1,495,000, an increase of 222%. Though the Company's strategy continues to focus on top line revenue growth, it aggressively pursues high margin business opportunities in order to maintain a standard that differentiates it from other online retailers.
''We are pleased to have completed our first fiscal year as a publicly traded company with such strong results,'' said Jeff Tauber, CEO and founder. ''In this rapidly evolving market, we believe that the successful online retailers will be the ones that can grow the top line while not sacrificing too much in margin.''
CyberShop successfully demonstrated its ability to attract new customers in 1998. The Company launched two new online stores and signed distribution agreements with Excite, MSN and other targeted content sites. During the fourth quarter, CyberShop continued to develop new distribution agreements, signing deals with Amazon.com's ''Shop the Web'' and with E*Trade and renewed its distribution agreement for 1999 with America Online. The Company will continue to focus on customer acquisition as other distribution deals are developed and new stores are opened.
Early results from both of the new online stores are encouraging and support CyberShop's framework to pursue additional growth by opening other niche-oriented sites and further maximize the marketing, distribution and back office infrastructure already in place. CyberShop successfully launched in the fourth quarter electronics.net (http://www.electronics.net), a joint venture with Tops Appliance City (Nasdaq: TOPS - news), an online consumer electronics super store. The joint venture marries the front-end merchandising, online marketing and selling expertise of CyberShop, with the distribution, buying power and aggressive pricing of Tops. CyberShop's other new online store egift.com (http://www.egift.com), the ultimate gift giving site, was also launched in the fourth quarter for the holiday rush. The Company contracted with Federal Express to establish a new warehousing facility in Memphis and provide customers with the opportunity to order a gift by 9pm and have it delivered the next morning. The fulfillment center picks the merchandise, gift packages the item, encloses a gift card and enters it into the FedEx system, providing the customer with the ultimate in convenience.
''Looking ahead, as online commerce continues to explode, CyberShop will continue to expand its core business and seek new growth opportunities, expanding to new product categories,'' continues Tauber. ''We will leverage our traditional merchandising roots combined with our four years of online marketing and selling to expand our product and service offerings and attract new customers.''
Financial Results
The Company's total revenues for the fourth quarter ended December 31, 1998 increased 303% to $3,414,000 from $848,000 for the fourth quarter ended December 31, 1997. The Company reported a net loss before a one-time write-off of $3,625,000, or ($0.50) per share on both a basic and diluted basis, versus a net loss of $790,000, or ($0.20) per share on both a basic and diluted basis, for the same period last year. After the one-time write-off, the fourth quarter of 1998 net loss was $4,375,000, or ($0.61). Weighted average basic and diluted common shares outstanding were 7,227,868 for the fourth quarter ended December 31, 1998 versus 4,000,000 for the fourth quarter ended December 31, 1997.
The Company reported that total revenues for fiscal 1998 rose 222% to $4,814,000 from $1,495,000 for fiscal 1997. The net loss before a one-time write-off was $7,138,000, or ($1.10) per share on both a basic and diluted basis, versus a net loss of $1,806,000, or ($0.48) per share on both a basic and diluted basis, for the same period last year. After the one-time write-off, the fiscal 1998 net loss was $7,888,000, or ($1.22). Weighted average basic and diluted common shares outstanding were 6,461,689 for the fourth quarter ended December 31, 1998 versus 3,780,662 for fiscal 1997. CyberShop closed its Initial Public Offering in March 1998 and currently has 7,243,350 shares of common stock outstanding.
In the fourth quarter of 1998, the Company took a one-time write-off of approximately $750,000 representing previously capitalized costs incurred in connection with the development of an expanded front-end order entry system. Based on the growth of its existing business and the projected growth of planned business acquisitions, it had been determined that these requirements would be more effectively handled through the combined use of an expansion of pre-existing front-end systems offered by third parties supplemented by in-house systems. The Company does not anticipate further write-offs with regard to this change and does not anticipate any further substantial capital expenditures in the integration of its back end processing capability.
Cash balances as of December 31, 1998 were $12,285,000 compared with an ending balance at December 31, 1997 of $787,000. The Company successfully raised $18.7 million in its initial public offering in March 1998, which has been deployed in part, to build its e-commerce infrastructure and sign new distribution deals.
''Since our IPO, we have begun to invest the capital we raised back into the business, building our financial systems, and customer service and fulfillment infrastructure to handle greater volumes of online customers,'' explains Tauber. ''We also solidified a number of important distribution deals which contributed to our traffic and revenue growth and will continue to deploy capital toward our marketing objectives.''
About CyberShop
CyberShop, a leading online retailer operates three online stores. Cybershop.com can be found on the World Wide Web at and on America Online in their Shopping channel or by using keyword 'cybershop.' egift can be found on the World Wide Web at and electronics.net, CyberShop's joint venture with Tops Appliance City (NASDAQ: TOPS - news) can be found on the World Wide Web at
This announcement contains forward-looking statements that involve risks and uncertainties that include, among others, CyberShop's limited operating history, anticipated losses, unpredictability of future revenues, potential fluctuations 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.
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