BigStar Reports Record Third Quarter 1999 Financial Results
October 26, 1999 04:02 PM
NEW YORK--(BUSINESS WIRE)--Oct. 26, 1999--BigStar Entertainment Inc. BGST , which operates BigStar.com, a leading on-line superstore dedicated exclusively to filmed entertainment products, today announced record financial results for the third quarter of 1999. In August 1999, BigStar completed its Initial Public Offering of 2,500,000 shares of common stock.
For the quarter ended September 30, 1999, the Company reported net revenues of $3,671,202 compared to $173,100 for the quarter ended September 30, 1998. For the quarter ended September 30, 1999, net revenues included $730,175 in advertising and promotional revenues, including $343,787 of barter advertising. Sequentially, revenues increased 22.3% from the $3,001,546 for the quarter ended June 30, 1999, which included $283,612 in barter advertising. For the quarter ended September 30, 1999, the gross profit of $1,136,143 resulted in a gross margin of 30.9%. The gross profit increased $691,228, with the related gross margin increasing 16.1%, from the $444,915 gross profit and 14.8% gross margin for the quarter ended June 30, 1999. BigStar's net loss was $5,336,785 for the third quarter of 1999 compared to a net loss of $769,866 for the third quarter of 1998. Basic and diluted net loss per share was $0.70 for the third quarter of 1999 compared to $0.29 for the third quarter of 1998. David Friedensohn, the CEO and Chairman of the Board stated: "The strong revenue growth combined with gross margins of over 30% validate our strategy of bringing direct marketing to the Web. Our disciplined and focused marketing efforts and talented technology team have moved BigStar closer to fulfilling its promise of profitable Web based growth."
For the nine months ended September 30, 1999, revenues were $8,126,528. For the nine months ended September 30, 1999 gross profit was $1,781,000, resulting in a gross margin of 21.9%. For the nine months ended September 30, 1999, BigStar's net loss was $13,124,394 compared to a net loss of $1,045,484 for the period from March 2, 1998 (inception) to September 30, 1998. Basic and diluted net loss per share was $2.26 per share for the nine months ended September 30, 1999 compared to $0.43 per share for the period from March 2, 1998 (inception) to ended September 30, 1998.
BigStar Entertainment, Inc. is a leading online filmed entertainment superstore based on customer traffic to its websites, that is exclusively dedicated to filmed entertainment products. BigStar sells videos, digital video discs, or DVDs, and laserdiscs.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: BigStar Entertainment, Inc. has included in this press release certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 concerning BigStar's business, operations and financial condition. The words or phrases "can be", "expects", "may affect", "may depend", "believes", "estimate", "project" and similar words and phrases are intended to identify such forward-looking statements. Such forward-looking statements are subject to various known and unknown risks and uncertainties and BigStar cautions you that any forward-looking information provided by or on behalf of BigStar is not a guarantee of future performance. Actual results could differ materially from those anticipated in such forward-looking statements due to a number of factors, some of which are beyond BigStar's control, in addition to those discussed in BigStar's other press releases, public filings and statements by BigStar's management, including (i) the volatile and competitive nature of the Internet industry, (ii) changes in domestic and foreign economic and market conditions, (iii) the effect of federal, state and foreign regulation on BigStar's business, (iv) failure of BigStar, its vendors or other third parties to achieve Year 2000 compliance and (v) the effect of any future acquisitions. All such forward-looking statements are current only as of the date on which such statements were made. BigStar does not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events.
Bigstar Entertainment
Balance Sheets as of September 30, 1999
and December 31, 1998
September 30, December 31,
1999 1998
-------------- --------------
(unaudited)
Assets:
Cash and cash equivalents $ 22,154,426 $ 363,124
Cash held in escrow - 453,000
Accounts receivable, net of allowance 563,531 61,121
Prepaids and other current assets 1,055,128 8,711
------------- -------------
Total current assets 23,773,085 885,956
------------- -------------
Property and equipment, net 1,265,037 452,134
Deferred registration costs - -
Other assets 545,901 -
-------------- ------------
Total assets $ 25,584,023 $ 1,338,090
============== ============
Liabilities:
Accounts payable $ 2,614,349 $ 380,540
Accrued expenses 2,710,674 1,197,776
Accrued payroll costs 170,000 243,240
Capital lease obligation 8,038 11,031
-------------- ------------
Total current liabilities 5,503,061 1,832,587
-------------- ------------
Stockholders' Equity (Deficit):
Preferred stock - -
Common stock 8,541 3,022
Additional paid-in capital 36,924,632 2,361,716
Subscribed stock - 453,000
Deferred compensation (479,996) (64,414)
Accumulated Deficit (16,372,215) (3,247,821)
---------------------------
Total stockholders' equity (deficit) 20,080,962 (494,497)
---------------------------
Total liabilities and stockholders'
equity (deficit) $ 25,584,023 $ 1,338,090
===========================
Bigstar Entertainment
Balance Sheets as of June 30, 1999
and December 31, 1998
June 30, December 31,
1999 1998
------------ -------------
(unaudited)
Assets:
Cash and cash equivalents $ 4,594,000 $ 363,000
Cash held in escrow - 453,000
Accounts receivable, net of allowance 296,000 61,000
Prepaids and other current assets 244,000 9,000
-------------- -----------
Total current assets 5,134,000 886,000
Property and equipment, net 911,000 452,000
Deferred registration costs 859,000 -
Other assets 27,000 -
-------------- ------------
Total assets $ 6,931,000 $ 1,338,000
============== ===========
Liabilities:
Accounts payable $ 1,345,000 $ 380,000
Accrued expenses 2,171,000 1,198,000
Accrued payroll costs 90,000 243,000
Current portion of capital lease obligation 1,000 2,000
-------------- -----------
Total current liabilities 3,607,000 1,823,000
-------------- -----------
Long term portion of Capital Lease obligation 7,000 9,000
-------------- -----------
Equity:
Preferred stock - -
Common stock 6,000 3,000
Additional paid-in capital 14,892,000 2,362,000
Subscribed stock - 453,000
Deferred compensation (546,000) (64,000)
Accumulated Deficit (11,035,000) (3,248,000)
-------------- -----------
Total stockholders' equity (deficit) 3,317,000 (494,000)
-------------- -----------
Total liabilities and stockholders'
equity (deficit) $ 6,931,000 $ 1,338,000
============== ===========
BIGSTAR ENTERTAINMENT, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three months Three Months Three months
ended June 30, ended June 30, ended March 31,
1999 1998 1999
------------- ------------ -------------
NET SALES $ 3,001,546 $ 15,000 $ 1,453,780
COST OF SALES 2,556,630 9,000 1,253,839
----------------- ------------ -------------
Gross Profit 444,915 6,000 199,941
OPERATING EXPENSES
Sales and Marketing 3,396,235 40,000 1,725,632
General and
administrative 849,440 101,000 675,202
Web site and software
development 1,074,037 112,000 782,398
---------------- ------------- ------------
Total operating
expenses 5,319,712 253,000 3,183,232
---------------- -------------- ------------
Loss from
operations (4,874,796) (247,000) (2,983,291)
INTEREST INCOME, net 52,954 - 17,524
-------------- ------------- ------------
Net Loss $ (4,821,842) $ (247,000) $ (2,965,767)
BIGSTAR ENTERTAINMENT, INC.
STATEMENTS OF OPERATIONS
Six months Three months Three months
ended June 30, ended June 30, ended March 31,
1999 1999 1999
--------------- ----------------- ------------
NET SALES $ 4,455,326 $ 3,001,546 $ 1,453,780
COST OF SALES $ 3,810,469 2,556,630 1,253,839
--------------- -------------- -------------
Gross Profit $ 644,856 444,915 199,941
OPERATING EXPENSES
Sales and Marketing $ 5,091,867 3,366,235 1,725,632
General and
administrative $ 1,542,757 867,555 675,202
Web site and
software development $ 1,868,320 1,085,922 782,398
--------------- --------------- ------------
Total operating
expenses $ 8,502,944 5,319,712 3,183,232
-------------- ---------------- -----------
Loss from
operations $ (7,858,088) (4,874,797) (2,983,291)
INTEREST INCOME, net $ 70,478 52,954 17,524
--------------- ---------------- -----------
Net Loss $ (7,787,609) $ (4,821,842) $ (2,965,767)
BIGSTAR ENTERTAINMENT, INC.
STATEMENTS OF OPERATIONS
Six months Three months Three months
ended June 30, ended June 30, ended March 31,
1999 1998 1998
-------------- --------------- ---------------
NET SALES $ 15,000 $ 15,000 $ -
COST OF SALES $ 9,000 9,000 -
---------------- --------------- ---------------
Gross Profit $ 6,000 6,000 -
OPERATING EXPENSES
Sales and Marketing $ 40,000 40,000 -
General and
administrative $ 114,281 101,000 13,281
Web site and software
development $ 127,202 112,000 15,202
--------------- -----------------
Total operating
expenses $ 281,483 253,000 28,483
--------------- -----------------
Loss from operations $ (275,483) (247,000) (28,483)
INTEREST INCOME, net $ - - -
--------------- --------------- -----------------
Net Loss $ (275,483) $ (247,000) $ (28,483)
BIGSTAR ENTERTAINMENT, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Six months Three months Six months Three Months
ended June30, ended June 30, ended June 30, ended June 30,
1999 1999 1998 1998
-------------- ------------- ----------- --------------
NET SALES $ 4,456,000 $ 3,002,000 $ 15,000 $ 15,000
COST OF SALES 3,811,000 2,557,000 9,000 9,000
------------- ------------ ------------- -----------
Gross profit 645,000 445,000 6,000 6,000
OPERATING EXPENSES
Sales and
marketing 5,092,000 3,366,000 40,000 40,000
General and
administrative 1,543,000 868,000 114,000 101,000
Web site and
software
development 1,868,000 1,086,000 127,000 112,000
------------ ------------- ----------- ----------
Total operating
expense 8,503,000 5,320,000 281,000 253,000
------------ ------------ ------------ -------------
Loss from
operations (7,858,000) (4,875,000) (275,000) (247,000)
INTEREST INCOME,
net 71,000 53,000 - -
------------ ------------- -------------- ---------
Net Loss $ (7,787,000) $ (4,822,000) $ (275,000) $ (247,000)
============== ============ ============ =========
PER SHARE INFORMATION:
Net loss per share -
Basic and
diluted $ (1.60) $ (0.82) $ (0.12) $ (0.10)
============== ============ ============ ===========
Weighted average
common shares
outstanding -
Basic and
diluted 4,862,962 5,851,330 2,290,224 2,360,463
============= ============ ============= =============
BIGSTAR ENTERTAINMENT, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
March 2, 1998
Nine Months (INCEPTION) Three months Three months
ended to ended ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
-------------- ------------- ------------ -------------
NET SALES $ 8,126,528 $ 188,025 $ 3,671,202 $ 173,100
COST OF SALES 6,345,528 163,013 2,535,059 154,050
-------------- ------------- ------------ -------------
Gross profit 1,781,000 25,012 1,136,143 19,050
OPERATING EXPENSES
Sales and
marketing 9,486,175 292,173 4,394,308 252,087
General and
administrative 2,431,932 321,847 889,175 207,553
Web site and
software
development 3,239,581 454,140 1,371,261 326,940
------------- ----------- ----------- -------------
Total operating
expenses 15,157,688 1,068,160 6,654,744 786,580
------------- ------------ ------------ ------------
Loss from
operations (13,376,688) (1,043,148) (5,518,601) (767,530)
INVESTMENT
INCOME (EXPENSE),
net 252,294 (2,336) 181,816 (2,336)
-------------- ------------ ------------- -------------
Net Loss $ (13,124,394) $(1,045,484) $(5,336,785) $(769,866)
============= =========== ============= ===============
PER SHARE INFORMATION:
Net loss per
share -
Basic and
diluted $ (2.26) $ (0.43) $ (0.70) $ (0.29)
============== ============= ============= ===========
Weighted average
common shares
outstanding -
Basic and
diluted 5,805,801 2,451,106 7,645,572 2,662,700
============= ============ ============== =============
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