Garden.com loss 7 cents less than expected. Estimate was for(.48)
Garden.com Announces Financial Results for Its First Quarter as a Public Company
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Company Reports Significant Increases in Revenue, Page Views and Membership
Base
AUSTIN, Texas, Nov. 2 /PRNewswire/ -- Garden.com (NASDAQ:GDEN), a leading
online retailer of gardening products, information and services, today
announced financial results for its first quarter ended September 30, 1999;
marking its first quarterly earnings release as a public company. Total
revenue for the quarter topped $1.4 million, an increase of 294 percent over
total revenue of $358,000 for the same quarter in fiscal year 1999. Strong
revenue growth was fueled by a substantial repeat buying trend, a significant
increase in advertiser base, and an expanded content and product offering.
The company reported a first quarter net loss of $5.6 million or $0.41 per
share, compared to a net loss of $3.3 million, or $0.26 per share, for the
same period in the prior year.
"We believe that the company's nearly triple revenue growth represents a
strong demand for the unique and distinct value proposition Garden.com offers
its customers in the form of an unsurpassed selection of high-quality
products, expert driven content, and superior customer service," commented
Cliff Sharples, chief executive officer and president for Garden.com, Inc.
"By leveraging the Internet and information technology, we're not only
building the first national one-stop-shop gardening resource, but we're
ultimately building the first efficient channel of distribution in the
$47 billion gardening industry."
In addition, Garden.com saw a sharp rise in its customer base of
110,000 -- a 254 percent increase over the prior year's first quarter
cumulative base -- while its membership base increased 125 percent to
755,000 as of September 30, 1999 compared to 337,000 as of September 30, 1998.
This growth was also evident in a 96 percent increase in page views for
the company's flagship web site (www.garden.com) of 23.9 million compared to
12.2 million for the same quarter a year ago.
Garden.com Surges Ahead
Establishes Major Marketing Relationships: Garden.com continues to build
its strategic marketing relationships with on- and offline industry leaders:
-- I-Village: The company has signed on as an exclusive partner of the
leading online network for women to develop a gardening area within
the iVillage Network. Garden.com will leverage its content,
interactive services and product line to provide iVillage users with a
co-branded gardening resource. The company will also participate as
one of a handful of premier merchant partners in iVillage's recently
launched Shopping Solutions program.
-- Excite@Home: Garden.com has entered into a premier content license
and co-branded area agreement with Excite@Home, a global media company
and leading provider of broadband Internet services. With this
agreement, Garden.com establishes itself as the premier provider of
gardening content on the Excite portal, and along with Excite@Home
will co-brand and co-promote the area.
-- Southern Living: The company's strategic relationship with Southern
Living, a leading publishing brand that reaches 13 million consumers
through its magazine alone, will leverage joint promotional efforts
online and in its print publication to drive traffic and product sales
through Garden.com.
Expands Product Line: Garden.com continues to augment its "virtual
warehousing" model with the addition of a new product category, Fresh Stems.
Set to launch late this November, Fresh Stems, will provide customers the
opportunity to access fresh cut flowers that are traditionally not available
to consumers, and better yet, days fresher than those available through most
florists. The company has partnered with top national growers and wholesalers
of the San Francisco Flower Mart to enable overnight fulfillment direct from
more than 350 growers around the world. "Garden.com's approach to the cut
flower market is another good example of our commitment to providing consumers
unique value by creating major efficiencies in existing supply chains and
offering a depth and breadth of fresh product not previously accessible,"
continued Sharples.
Garden.com also announced an expanded holiday gift product offering, more
than double last year's line-up. Garden.com this year brings a comprehensive
holiday list of products and ideas for decorating, entertaining and gift
giving, including the company's new interactive "Design-a-Wreath" program.
Create Media Business Development Group: Garden.com strengthens its
experienced executive team with the addition of Joel Toner who will continue
to develop the company's cross-media opportunities through a newly created
group, Media Business Development. Mr. Toner, a former group publisher for
PRIMEDIA, brings over 20 years of experience in the publishing industry to
further build the company's content and services business, including the
expansion of Garden Escape into a subscription-based magazine. During his
tenure with PRIMEDIA, the largest publisher of enthusiast magazines in the
country, Joel managed eight titles representing over 20 million in revenue,
including Horticulture Magazine, Garden Style and Garden Escape.
Notable Highlights
-- Initial public offering: In September, Garden.com completed its
initial public offering of 4.65 million shares at a price of
$12.00 per share. The proceeds will enable Garden.com to
substantially grow their investment in brand development, strategic
partnerships, expanded product and service offerings, and their
proprietary supplier extranet infrastructure.
-- Technology Infrastructure Upgrade: Garden.com recently completed a
technology upgrade that increased its production hardware capacity by
a factor of eight when the company replaced its web servers and
database architecture -changing to an all Solaris platform and
upgrading to Oracle 8i. The move gave the company access to increased
bandwidth through all major telecommunications backbones, as well as
improved 24x7 monitoring of its servers and systems. "The upgrade
will provide a stable, scaleable technology platform designed to carry
us into the next year of heavy growth, and further enable us to
develop innovative and highly personalized, interactive experiences
for our visitors and customers," said Sharples.
Industry Recognition:
-- As discussed in Fortune Magazine and CNBC Power Lunch, Resource
Marketing conducted an in-depth e-commerce shopping study that
included more than 200 metrics. The study reviewed 45 of the top
e-commerce web sites including Amazon.com, The Gap, Martha Stewart
Living and 1-800-Flowers, and reported Garden.com as the highest
ranked Internet retail site overall.
-- According to the August 1999 Media Metrix Online Shopping Report,
Garden.com was the most popular Internet site in its category
(Flowers/Gifts/Greetings).
-- In a cover story, Fast Company discusses the importance of customer
service in successful e-commerce offerings, reviews several top Web
sites and rates Garden.com and Amazon.com as the two leading
e-commerce sites in customer service.
-- Retail Systems Alert Group awards Garden.com 1999 Best in Retail
Internet Award.
About Garden.com
Founded in September of 1995, Garden.com is a leading online destination
for home gardeners. Through three Web sites, garden.com, virtualgarden.com
and hortmag.com, Garden.com provides consumers a one-stop-shop resource
through which they can access a wide variety of gardening information and
services, purchase gardening and garden-related products, and interact with an
online gardening community. The company's core online property,
www.garden.com, offers gardeners an unsurpassed collection of more than
20,000 high-quality gardening supplies and garden-inspired gifts, seasonally
inspired magazine content, professional advice, and garden design software.
Headquartered in Austin, Texas, Garden.com has offices in California and Iowa.
Forward Looking Statements
Statements made in this document that are forward-looking involve risks
and uncertainties that could cause results to differ materially from those
expressed. Such risks and uncertainties include, but are not limited to, the
company's expectation of operating losses and negative cash flow for the
foreseeable future, its reliance on relationships with online services, search
engine and other third parties (including Southern Living, Excite and
iVillage) to attract new customers and its reliance on third party and
internally developed technology to operate the web site and network
infrastructure and accommodate expected traffic increases. Other risk factors
include the company's limited operating history, unpredictability of operating
results, seasonality, inventory risk, reliance on key vendors and
distributors, market acceptance of new product offerings as well as the
competitive marketplace. Other risks are set forth in the company's Form
424B4 Prospectus dated September 15, 1999, under the heading "Risk Factors"
and in the company's other filings with the Securities and Exchange
Commission.
Garden.com and Garden Escape are trademarks of Garden.com, Inc. All other
product and service trademarks are trademarks of their respective companies.
Garden.com, Inc.
Condensed Balance Sheets
(in thousands) For the period ended
September 30, June 30,
1999 1999
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 43,302 $ 15,340
Investments 18,534 3,710
Prepaid advertising 1,529 988
Other prepaid expenses and
current assets 1,616 1,086
Inventory 904 522
Total current assets 65,885 21,646
Property and
equipment, net 4,026 2,659
Other assets, net 1,067 917
Total Assets $ 70,978 $ 25,222
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 1,999 $ 2,052
Accrued expenses and
other liabilities 1,603 956
Unearned revenue 426 188
Current portion of
long-term debt 104 127
Total current liabilities 4,132 3,323
Long-term debt, less
current portion --- 20
Commitments and contingencies:
Redeemable convertible
preferred stock --- 48,215
Warrants to purchase
redeemable convertible
preferred stock 24 24
Stockholders' deficit
Common stock 175 12
Additional paid-in capital 103,980 5,768
Deferred stock compensation (1,931) (2,305)
Retained deficit (35,402) (29,835)
Total stockholders'
deficit 66,822 (26,360)
Total liabilities and
stockholders' deficit $ 70,978 $ 25,222
Garden.com, Inc.
Statements of Operations
(in thousands, except per share data)
First Quarter Ended
September 30, September 30,
1999 1998
(unaudited)
REVENUES:
Products $ 1,159 $ 333
Advertising 253 25
Total Revenues 1,412 358
COST OF REVENUES:
Products 1,049 359
Advertising 44 13
Total Cost of Revenues 1,093 372
GROSS PROFIT 319 (14)
OPERATING EXPENSES:
Marketing and Sales 2,699 2,133
Content and Product Development 1,408 640
General and Administrative 1,308 504
Depreciation and Amortization 347 217
Amortization of Deferred
Compensation 374 ---
Total Operating Expenses 6,136 3,494
OPERATING INCOME (LOSS) (5,817) (3,508)
Other Income and Expense 249 248
NET (LOSS) $ (5,568) $ (3,260)
Basic and diluted net loss
per share $ (0.41) $ (0.26)
Shares used in computing
basic and diluted loss
per share 13,593 12,648
CONTACT: media, Eileen M. Caetano-Isola, 512-532-4181, or email,
eileen.isola@garden.com, or investor relations, Jana Wilson, 512-532-GDEN, or
email, ir@garden.com, both of Garden.com.
SOURCE Garden.com
-0- 11/02/1999
/CONTACT: media, Eileen M. Caetano-Isola, 512-532-4181, or email,
eileen.isola@garden.com, or investor relations, Jana Wilson, 512-532-GDEN, or
email, ir@garden.com, both of Garden.com/
/Web site: garden.com |
