Webvan Announces 2000 Fourth-Quarter &
Year-End Results; Revised Business Plan Significantly Reduces Need for Capital to Fund 2001 Operations
FOSTER CITY, Calif.--(BUSINESS WIRE)--Jan. 25, 2001--Webvan Group, Inc. (Nasdaq:WBVN) today reported results for the fourth quarter and fiscal year which ended December 31, 2000. The company also announced a revised business plan that significantly reduces its need for additional capital to fund operations in 2001.
Net sales for the fourth quarter 2000 were $84.2 million, an
increase of 325 percent over pro forma net sales of $19.8 million for the fourth quarter of 1999. Pro forma net sales for fiscal year 2000 totaled $259.7 million, an increase of 642 percent over the pro forma $35.0 million for fiscal year 1999. These results include the full impact of HomeGrocer.com sales over these periods.
Webvan reported that its fourth-quarter pro-forma net loss was
$109.1 million, or a loss of $0.23 per share. Fiscal year 2000
pro-forma net loss was $413.2 million, or a loss of $0.91 per share.
Pro-forma net loss and net loss per share excludes the amortization of goodwill resulting from the company's September 2000 acquisition of HomeGrocer.com, and non-cash compensation and restructuring charges, and includes the operating results and sharecounts of HomeGrocer.com for the entire fiscal year.
The company's cash and marketable securities were $211.8 million
at the end of 2000. Webvan also reported combined company-wide
inventory turns of 18.1 times on an annualized basis.
The company stated that its active customer accounts in the
preceding 12 months ending December 31, 2000 exceeded 640,000, an increase of more than 22 percent from the 524,000 at the close of the third quarter of 2000. Repeat orders represented 86 percent of total orders during the fourth quarter. The average order size for the
recently completed quarter was approximately $112, an increase of 9 percent over the $103 reported for the prior quarter.
Gross profit for fourth quarter 2000 was $22.9 million, a gross
margin of 27.2 percent, up from third quarter 2000, in which pro forma gross profit was $21.2 million, or a gross margin of 25.8 percent.
Webvan today also provided guidance on its operating model for
2001, stating that it does not anticipate the need for additional
capital to fund operations during the year. In guidance provided at
the close of the third quarter 2000, the company stated that it would need to raise $80 to $100 million in the third quarter of 2001. The company's new business strategy focuses on its stand-alone
profitability targets for Webvan's 10 markets, completing the
integration of HomeGrocer.com, and a cash conservation program to
reduce annualized corporate and operating expenses. The company also stated that it has indefinitely postponed the commercial launch of webvan.com in Northern New Jersey, Baltimore, and Washington, D.C.
"Webvan is taking the necessary actions to deliver on its value
proposition to customers and conserve capital in the current economic environment," said George T. Shaheen, chairman and chief executive officer of Webvan Group, Inc. "We are aligning our business strategy with the priorities we established for 2001 and are positioning Webvan for future growth. We believe these actions will strengthen our business, conserve cash, and significantly reduce our need to raise additional capital. Under this plan, the company would need to raise an additional $40 - $60 million in capital by the end of 2001, or early 2002, to fund its 2002 operations up to the point when the company generates a positive cash flow."
Mr. Shaheen added: "In 2000, Webvan made the transition from a
start-up enterprise operating in one market to a national presence
with operations in 10 major U.S. markets. These results reflect the
progress we have made toward making Webvan a premier player in the e-commerce channel. Our September acquisition of HomeGrocer.com was central to our performance in 2000, more than doubling our market reach and making Webvan financially stronger and more competitive.
In 2000, Webvan made great strides in building its 'last mile' strategy, adding to our grocery product offerings and expanding into several non-grocery categories. In 2000, we also launched our successful B-to-B enterprise Webvan@Work. Moving forward, our long-term vision for Webvan remains unchanged -- to cost-effectively deliver customers a full and frictionless shopping experience, from the Web site, right to their homes or offices."
Mr. Shaheen noted the following significant events in the fourth
quarter:
-- Web Store Design - Introduced a fully redesigned Web store to
make shopping faster, easier, and more intuitive, including a
new softer color scheme that is more appealing, a simplified
homepage design, fast category navigation (eliminating the
need to refresh with each click), and new category tabs that
highlight the breadth of our product offering and easily
direct customers to our 11 stores.
-- Webvan's New Logo - Introduced a bold, colorful green-and-blue
image that represents Webvan's "Last Mile" strategy, as well
as signifies the merger of Webvan and HomeGrocer.com.
-- Integration - Progress continued on schedule to complete the
transition to a single brand identity and the migration to a
unified technology platform. During the period the company
continued the integration of its corporate staff,
significantly reducing corporate operating costs and improving
organizational efficiencies.
-- Operations - Conversion of the company's customer fulfillment
center in Irvine, Calif. to a "cross docking station,"
resulting in improved operating efficiencies in Webvan's
LA/Orange County markets, accelerating its profitability goals
in these markets.
-- Enhanced Search & Preferred Customer Features - Implemented a
new intuitive search engine function that makes it easier for
customers to search for products. Webvan also instituted
options for frequent customers, including preferred
delivery-time reservations and opportunities to suggest new
consumer products.
-- Customer Service - Completed the build out of a new 67,000
square-foot customer service center in North Las Vegas, Nev.
This state-of-the-art facility allows the company to centrally
fulfill customer queries from all 10 of its markets in a
real-time and cost efficient manner.
-- Webvan@Work - Continued to show solid growth, particularly
among small- and medium-sized businesses. In this period, the
Webvan@Work program accounted for approximately 6 percent of
Webvan's revenues and 15 percent of the revenue of Webvan's
Northern California market.
Conference Call
Webvan will discuss its fourth quarter and fiscal 2000 financial
results, and provide guidance for the year ahead in a conference call
available to the general public. The call, to be held today (25
January) at 9:00am EST/6:00am PST and hosted by George T. Shaheen, can
be accessed by dialing 312/470-0126, passcode: Webvan. A replay of the
call will be available through February 1, by dialing 402/998-0475.
The conference call will also be available through Webvan's Web site
at www.webvan.com or at www.StreetEvents.com.
About Webvan
Webvan Group, Inc. is setting a new standard for Internet
retailing, combining the convenience of online shopping with a
personalized courier service that delivers products into customers'
homes within a 60-minute timeframe of their choosing. Through its Web
site, webvan.com, Webvan offers a broad selection of
quality products at competitive prices. The company's relentless focus
on customer service, innovation, and value saves its customers time
and money. Webvan's corporate headquarters are located in Foster City,
Calif.
Safe Harbor Statement under Private Securities Litigation Reform
Act of 1995
The statements contained in this press release that are not
historical facts, including statements relating to the company's
revised business plan which reduces the need for additional capital to
fund operations in 2001, the focus of the company's new business
strategy, plans regarding conservation of capital, the requirement for
additional capital to fund operations in 2002, the potential to
generate positive cash flow, and the impact of our revised business
strategy on the potential for future growth and operational
profitability are forward-looking statements that involve certain
risks and uncertainties, including but not limited to: the risk that
the assumptions underlying the revised business strategy may change
and that the company will need additional cash to fund operations in
2001, the risk associated with raising additional capital and that the
company cannot be sure that additional financing will be available, |
