130M revenues in 2002 sounds good to me!!!!
Fatbrain.com Reports Results for the First Quarter of Fiscal 2001
Pro Forma Record Online Revenue Increases 170 Percent to $12.1 Million; MightyWords Independence Clarifies B2B Focus, Shortens Path to Profitability
SANTA CLARA, Calif., June 13 /PRNewswire/ -- Fatbrain.com(TM), Inc. (Nasdaq: FATB), a leader in Web-based information management for businesses, today announced financial results for the first quarter ended April 30, 2000.
On June 6, 2000, the Company announced the closing of $36 million in venture capital investments in its MightyWords(TM) subsidiary and the separation of the subsidiary as an independent, privately-held company. The investments include $20 million from Barnes & Noble.com, $10 million from Vulcan Ventures Inc. and an additional $6 million form other investors, including Millennium Technology Ventures, Highland Capital Partners and APV Technology Partners. As part of the arrangement, Fatbrain.com has received approximately $8.5 million from MightyWords as reimbursement for expenses incurred on behalf of the subsidiary over the past five months and will continue to receive additional reimbursements. Fatbrain.com will retain an approximately 23 percent ownership in MightyWords. The financial results of MightyWords will be reflected in future Fatbrain.com financial statements in accordance with APB Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock. The pro forma results discussed today exclude MightyWords revenue and expenses.
Pro forma online revenue for Fatbrain.com reached $12.1 million, an increase of 170 percent from pro forma online sales of $4.5 million for the same quarter of the prior year and an increase of 19 percent from pro forma online sales of $10.2 million for the preceding quarter. Total pro forma revenue, which includes sales generated by physical retail stores and trade shows, was $14.0 million for the quarter, compared to $6.1 million for the same period last year and $11.8 million for the preceding quarter.
The Company reported a pro forma net loss for the first quarter of $8.5 million, or $0.65 per share. These results compare to a pro forma net loss of $5.2 million, or $0.46 per share, in the same quarter of the prior year and $7.7 million, or $0.61 per share, for the preceding quarter.
Combined total revenue for Fatbrain.com and the MightyWords subsidiary for the first quarter reached $14.0 million and combined total net loss was $13.0 million, or $1.00 per share. In accordance with generally accepted accounting principles, future Fatbrain.com financial statements will include the appropriate share of earnings in MightyWords.
Fatbrain.com added more than 300 companies to its corporate roster during the quarter. The Company also added more than 58,000 new customers, increasing its total customer base to over 300,000. Online customer accounts increased 24 percent from the previous quarter, and repeat customer business represented 61 percent of order dollars placed.
Dennis Capovilla, president and chief executive officer of Fatbrain.com, said, "We believe the move to make MightyWords an independent operation is very positive for Fatbrain.com. We have eliminated the expenses associated with building the MightyWords brand while retaining our ability to capitalize on the mass-market digital publishing opportunity as a minority owner of the company. Most importantly, Fatbrain.com now has a clear opportunity to execute on our mission to serve the business-to-business market, an improved cash position and a shortened path to profitability.
"We are extremely pleased with our progress during the first quarter," Capovilla said. "Our record results demonstrate our continued success in serving corporations seeking to streamline the management and fulfillment of their information resources, including new customers Wells Fargo and Vignette. We are also extremely encouraged with the results of a soft-launch of our first full-fledged Information Exchange implementation to 10,000 of the 65,000 employees of a major customer in the professional services business. In addition, we anticipate our recently-announced partnership with IKON Office Solutions to broaden our potential market reach."
Additionally, Fatbrain.com provided the following guidance regarding its current expected financial outlook for fiscal 2001 and 2002:
-- The Company anticipates achieving profitability within calendar year
2002.
-- Total pro forma revenue for fiscal year 2001, excluding sales from the
former MightyWords subsidiary, is currently projected to be in the
range of $70 million to $72 million. For fiscal year 2002, total
revenue is expected to be in the range of $125 million to $130 million.
Increasing Corporate Reach Through Business-to-Business Platform
Fatbrain.com continued to successfully leverage its business-to-business platform during the first quarter to expand its reach within corporations, including new clients Wells Fargo and Vignette. For Wells Fargo, Fatbrain.com has provided two online information stores for its approximately 70,000 employees worldwide to acquire knowledge resources, including books, technical documents and training solutions. Vignette is using Fatbrain.com to provide its customers and partners with a one-stop shop for finding and purchasing professional books and information. In addition, Fatbrain.com created a seventh online custom bookstore for Microsoft, providing the latest books and training materials for Windows 2000 developers, users and IT professionals worldwide, and implemented print-on-demand services to manage the delivery of hard copies of developer and software documentation for Adobe Systems. In May, the Company announced that Agilent Technologies, Apple, Hewlett-Packard Company and Ford Motor Company have selected Fatbrain.com's online information management solutions.
Partnership with IKON Expands Distribution Network
During the first quarter, Fatbrain.com announced a partnership with IKON Office Solutions, to deliver the most comprehensive, Web-based enterprise solution available to businesses for managing information. The end-to-end solution combines Fatbrain.com's expertise in Web-based solutions for corporate information management and IKON's global capabilities for print-on-demand production and fulfillment. The IKON/Fatbrain.com solution targets Fatbrain.com's existing Fortune 1000 clients and IKON's extensive customer base, including its 1,500 facilities management sites. Both companies will train their sales forces to sell and service the joint solution.
"Joining forces with IKON is part of our strategy to deliver the best corporate information management solution available in a cost-effective manner that leverages our respective strengths and resources," Capovilla said. "By tapping into IKON's extensive printing infrastructure and 400 strong domestic sales distribution channel, we hope to accelerate our ability to capitalize on this tremendous untapped market opportunity."
About Fatbrain.com
Fatbrain.com is the leader in managing, marketing and distributing information for businesses. Today, the company's Web-based services reach more than 2.25 million employee desktops at more than 350 of the Fortune 1000 corporations worldwide. Fatbrain.com's easy-to-use, comprehensive solutions deliver valuable corporate information in print and/or digital form. Last year, the company was named the second fastest-growing public company in Silicon Valley. Visit Fatbrain.com at fatbrain.com .
This announcement may contain forward-looking statements that involve risks and uncertainties including, among others, Fatbrain.com's limited operating history, anticipated losses, the unpredictability of its future revenues, competition, risks associated with system development and operation risks, management of potential growth, and risks of new business areas, international expansion, business combinations, and strategic alliances. Actual results could differ materially from those discussed. More information about factors that potentially could affect Fatbrain.com's financial results is included in the Company's filings on Form 10-KSB and Forms 10-QSB with the Securities and Exchange Commission. All forward-looking statements are based on information available to the Company on the date hereof, and the Company assumes no obligation to update such statements.
NOTE: Fatbrain.com and eMatter are trademarks of Fatbrain.com, Inc. All company and product names may be trademarks of the respective companies with which they are associated.
Fatbrain.com, Inc. and MightyWords
Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except per share data)
(unaudited)
Quarter ended April 30,
2000 1999
Revenues:
Online $12,176 $4,491
Retail and other 1,865 1,652
Total revenues 14,041 6,143
Cost of revenues:
Online 9,888 3,643
Retail and other 1,219 1,071
Total cost of revenues 11,107 4,714
Gross profit 2,934 1,429
Operating expenses:
Sales and marketing 10,495 4,670
Development and engineering 2,387 1,120
General and administrative 3,289 1,178
Total operating expenses 16,171 6,968
Loss from operations (13,237) (5,539)
Interest, net 200 329
Net loss (13,037) (5,210)
Other comprehensive income (loss)
-- unrealized gain (loss) on investments 3 (4)
Comprehensive loss $(13,034) $(5,214)
Basic and diluted net loss per share $(1.00) $(0.46)
Shares used in calculating basic
and diluted net loss per share 12,983 11,225
Fatbrain.com, Inc. and MightyWords
Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)
April 30, January 31,
2000 2000
Assets
Current assets:
Cash and cash equivalents $8,082 $15,367
Short-term investments 2,515 5,475
Accounts receivable 4,054 3,027
Inventories 6,645 5,798
Prepaid expenses and other 4,771 3,471
Total current assets 26,067 33,138
Property and equipment, net 12,988 11,224
Investments -- 1,274
Goodwill, net 2,493 2,545
Other assets 407 284
Total assets $41,955 $48,465
Liabilities and Stockholders' equity
Current liabilities:
Accounts payable $11,761 $8,350
Accrued liabilities 3,545 2,964
Current portion of capital lease obligations 19 22
Current portion of deferred revenue 162 --
Total current liabilities 15,487 11,336
Borrowings on Line of Credit 2,080 --
Capital lease obligations 9 12
Deferred revenue 310 --
Total liabilities 17,886 11,348
Stockholders' equity:
Preferred stock, $0.001 par value,
5,000 shares authorized,
none issued and outstanding -- --
Common stock, $0.001 par value,
50,000 shares authorized,
13,008 and 12,951 shares issued
and outstanding at April 30, 2000
and January 31, 2000, respectively 13 13
Additional paid-in capital 75,971 75,909
Warrants 5,185 5,261
Accumulated loss on investments (22) (25)
Accumulated deficit (57,078) (44,041)
Total stockholders' equity 24,069 37,117
Total liabilities and stockholders' equity $41,955 $48,465
SOURCE Fatbrain.com, Inc.
CO: Fatbrain.com, Inc.; MightyWords
ST: California
IN: CPR MLM
SU: ERN
06/13/2000 16:05 EDT prnewswire.com |
