ONTO, March 10 /PRNewswire/ -- Bid.Com International Inc.
(Toronto: BII), one of North America's leading on-line auction companies,
today announced its results for the quarter and year ended December 31, 1998.
All figures are in Canadian dollars. As of December 31, 1998, the exchange
rate was Cdn$1.5333 to US$1.00.
Fourth Quarter Results
Revenue in the fourth quarter of 1998 was $6.4 million compared to $1.5
million in the fourth quarter of 1997 and $6.3 million in the third quarter of
1998. The net loss for the fourth quarter of 1998 was $5.8 million, or $0.18
per basic share, compared to a net loss of $3.1 million, or $0.22 per basic
share, in the comparable period of 1997 and a net loss of $4.8 million, or
$0.22 per basic share, in the third quarter of 1998.
Gross profit for the fourth quarter was $438,000, or 6.9% of revenue,
compared to gross profit of $34,000, or 2.3% of revenue, in the fourth quarter
of 1997, an increase of 1,188%. As compared to the third quarter of 1998,
gross profit increased 116% from $203,000, or 3.2% of revenue.
Marketing expenses represented $3.7 million in the current quarter
compared to $1.3 million in the fourth quarter of 1997 and $3.3 million in the
third quarter of 1998. Marketing expenses decreased to 58% of revenues in the
current quarter from 87% of revenues in the fourth quarter of last year.
Other operating expenses in the fourth quarter of 1998 were $2.6 million and
included $0.6 million of one-time charges related to retroactive sales tax
adjustments and the recognition of foreign exchange expense. This compares to
other operating expenses of $1.8 million in the fourth quarter of 1997. Net
of one-time charges, other operating costs increased a modest 11%
year-over-year relative to the 327% increase in revenues.
"Our strong revenue growth is helping us to achieve critical mass, which
is a key business objective," said Paul Godin, Chairman and CEO of Bid.Com.
"Beginning in the second half of the year, we also began to focus on
increasing gross margins at a faster rate than revenues, and in the fourth
quarter we realized that objective as well. Our business model is beginning
to mature, which resulted in a doubling in the gross profit margin in the
fourth quarter with only a 12% increase in marketing expenses, our single
largest operating expense."
During the quarter, Bid.Com also successfully completed a private
placement of 5,714,984 special warrants at a price of $1.75, raising
approximately $10.1 million. Working capital at December 31, 1998 increased
by $11.3 million to $17.9 million, an improvement of 171% from September 30,
1998. As of December 31, 1998, cash and marketable securities were $16.6
million.
Full Year Results
In 1998, revenue increased more than 600% to $20.1 million from $2.7
million in 1997. Gross profit for 1998 was $728,000 compared to a loss of
$245,000 in 1997, an increase in gross profit of 12.8 percentage points. For
the year, Bid.Com reported a net loss of $18.7 million, or $0.79 per basic
share, compared to a net loss of $6.7 million, or $0.55 per basic share, in
1997.
Marketing expenses increased to $12.6 million, or 63% of revenue, in 1998
from $2.5 million, or 98% of revenue, in 1997. Marketing expenses in 1998
included a $7.0 million payment to America Online related to an Interactive
Marketing Agreement signed between the companies in November, 1997. Other
operating expenses increased to $6.8 million, or 34% of revenue, in 1998 from
$3.9 million, or 148% of revenue, in 1997.
Operational Objectives Achieved
"During the year, we successfully delivered on our stated operational
objectives which included managing Bid.Com's momentum by increasing mind
share, market share, revenues and margins; securing adequate equity funding
through private placements with strategic and financial partners; and building
multiple revenue streams through licensing, advertising, database marketing
and international expansion. We also surpassed our $20 million annual revenue
target," said Mr. Godin.
Other highlights during the fourth quarter include:
-- The relaunch of the Canadian site in a co-venture with Rogers Media
Inc., Canada's largest multi-media company;
-- The implementation of its Group Lens affinity engine under "Bid.Com
Recommends," with the same personalized marketing software utilized by
Amazon.com and CDNow;
-- The introduction of Bid Buddy and Search Buddy, state-of-the-art
intelligent bidding and search agents;
-- The sale of on-line advertising through agreements with 24/7 in the
U.S. and Rogers in Canada; and
-- The announcement of Bid.Com's first step into the reseller marketplace
through the ASCII reseller network.
Mr. Godin added, "The year ended on a particularly high note when Bid.Com
won three Canadian Information Productivity Awards ("CIPA") for its on-line
auction technology, including top honors with the Best of Show Award.
Bid.Com's development work was recognized within a group of award-winning IT
solutions that included such organizations as GE Capital, IBM Canada,
Scotiabank, Air Canada and Royal Bank of Canada."
Momentum continues in 1999, with Bid.Com announcing:
-- The license of its technology to a co-venture with American
Interactive Media to accelerate entry into the emerging broadband
sector;
-- Increased merchandising in non-computer product categories such as
jewelry and database marketing, with exclusive distribution of the
Michael Jordan collector sound card;
-- The filing of Form 20F in support of an application to Nasdaq; and
-- The re-negotiation of its marketing agreement with America Online
Inc., which extends the terms into the year 2000 and significantly
reduces marketing expenses for 1999.
Mr. Godin concluded, "Our business is now well supported by three strong
divisions, increasing transactional revenues and margins through the
business-to-consumer company store; establishing co-ventures within the
business-to-business segment; and licensing the technology platform on an
international scale. With a very strong balance sheet and no long-term debt,
we are extremely well positioned to execute our business plan in 1999. In
March 1998, we debuted the Bid.Com name and initial brand building is now
behind us. We believe that Bid.Com has the technological lead within the
on-line auction sector, a competitive advantage that should prove increasingly
important during 1999 and 2000."
Bid.Com, founded in 1995, is one of the Internet's leading on-line auction
sales organizations, with offices in Toronto and Tampa, Fla. The company
offers a compelling, entertaining and cost-effective method of selling a wide
array of goods and services over electronic distribution channels. Bid.Com is
strategically positioned to leverage its business-to-consumer technological
leadership by offering the pre-eminent on-line auction platform for
co-ventures into business-to-business markets, licensing custom branded
E-commerce solutions and for distribution through broadband/cable media.
The company's shares have traded on The Toronto Stock Exchange since February
1998.
This news release may include comments that do not refer strictly to
historical results or actions and may be deemed to be forward-looking within
the meaning of the Safe Harbor provisions of the U.S. federal securities laws.
Forward-looking statements involve risks and uncertainties including
successful development and implementation of technology, acceptance of the
company's products and services, competitive factors, news products and
technological changes, and other such risks as the company may identify and
discuss from time to time. Accordingly, there is no certainty that the
company's plans will be achieved.
Bid.Com International Inc.
Financial Highlights
(expressed in thousands of Canadian dollars)
Three Months Ended Year Ended
Dec. 31, Dec. 31,
1998 1997 1998 1997
(unaudited) (unaudited) (audited) (audited)
Revenue $6,376 $1,495 $20,089 $2,671
Direct expenses 5,938 1,461 19,361 2,916
Advertising and
promotion 3,693 1,288 12,594 2,521
General and
administrative 2,289 1,340 5,734 3,157
Software development
and expense 210 409 889 661
Depreciation and
amortization 66 38 201 122
12,196 4,536 38,779 9,377
Interest expense 11 11 17 19
Net loss $(5,831) $(3,052) $(18,707) $(6,725)
Loss per basic share $(0.18) $(0.22) $(0.79) $(0.55)
Weighted average common
shares outstanding,
basic 32,609 14,153 23,819 12,297
Dec. 31, Dec. 31,
1998 1997
Balance Sheet Data: (audited) (audited)
Current assets $20,354 $6,411
Total assets $21,047 $6,886
Total current liabilities $2,425 $1,323
Total stockholders' equity $18,622 $5,563
Total liabilities and stockholders' equity $21,047 $6,886
SOURCE Bid.Com International, Inc.
-0- 03/10/99
/CONTACT: Paul Godin, Chairman and CEO, ext. 226, or email
pgodin@bid.com, Paul Hart, Chief Financial Officer, ext 291, or email
paulhart@bid.com, or Tim Richardson, Manager Investor Relations, ext. 356, or
email, trichardson@bid.com, all of Bid.Com International Inc., 905-672-7467;
or General Info., Alison Ziegler, Analyst Info., Christina Howard, or Media
Info., Claudine Cornelis, all of the Financial Relations Board, 212-661-8030/
/Web site: bid.com
(BII.)
CO: Bid.Com International, Inc.
ST: Ontario, Florida
IN: MLM
SU: ERN
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