Amazon. com Inc. — Consolidated Statements of Operations
Consolidated Statements of Operations
CY97 CY98 CY99 Years Ended
March June Sept Dec March June Sept Dec March June Sept Dec Dec Dec Dec Dec
1Q97A 2Q97A 3Q97A 4Q97A 1Q98A 2Q98A 3Q98A 4Q98E 1Q99E 2Q99E 3Q99E 4Q99E 1997 1998 1999 2000
Net sales $16,005 $27,855 $37,887 $66,040 $87,395 $116,010 $153,698 $177,521 $197,049 213, 797.65 $237,315 $275,286 $147,787 $534, 624 $923,447 1, 218,950.57
Cost of sales 12,484 22,641 30,717 53,127 68,062 89,794 118,823 137,401 151,136 163,341 180,834 208,667 118,969 414,080 703,979 911,775
Gross profit 3,521 5,214 7,170 12,913 19,333 26,216 34,875 40,120 45,912 50,456 56,481 66,619 28,818 120,544 219, 469 307,176
Operating expenses:
Marketing and sales 3,996 8,084 11,516 16,890 19,949 27,056 37,517 44,203 47,095 50,029 54,345 59,186 40,486 128,725 210,655 243,668
Product development 1,642 3,010 3,998 5,266 7,320 8,832 13,374 14,734 14,976 14,966 14,714 15,967 13,916 44,260 60,622 57,900
General and administrative 1,167 1,791 1,972 2,081 2,049 3,315 4,978 5,503 5,714 5,345 5,458 5,506 7,011 15,845 22,023 23,160
Amortization of goodwill 5,413 20,512 22,500 22,500 22,500 22,500 22,500 - 48,425 90,000 67,000
Total operating expenses 6,805 12,885 17,486 24,237 29,318 44,616 76,381 86,940 90,285 92,839 97,017 103,159 61,413 237,255 383,300 391,728
Loss from operations $( 3,284) $( 7,671) $( 10,316) $( 11,324) $( 9,985) $( 18,400) $( 41,506) $( 46,820) $( 44,372) $( 42,383) $( 40,536) $( 36,540) $( 32, 595) $( 116,711) $( 163,831) $( 84,553)
Excluding amortization of
goodwill
(12,987) (20,994) (24,320) (21,872) (19,883) (18,036) (14,040) (32,595) (68,286) (73,831) (17,553)
Interest income 64 366 688 783 1,645 3,390 4,754 4,300 4,124 4,061 3,999 3,936 1,901 14,089 16,120 14,746
Interest expense (40) (19) (267) (2, 029) (7, 569) (8, 419) (8, 700) (8, 900) (9, 100) (9, 300) (9, 500) (326) (26,717) (36,800) (40,000)
Net interest income
(expense)
64 326 669 516 (384) (4, 179) (3, 665) (4, 400) (4, 776) (5, 039) (5, 301) (5, 564) 1,575 (12,628) (20,680) (25,254)
Net income (loss) $( 3,220) $( 7,345) $( 9,647) $( 10,808) $( 10,369) $( 22,579) $( 45,171) $( 51,220) $( 49,148) $( 47,422) $( 45,837) $( 42,104) $( 31, 020) $( 129,339) $( 184,511) $( 109,807)
Excluding amortization of
goodwill
(17,166) (24,659) (28,720) (26,648) (24,922) (23,337) (19,604) (31,020) (80,914) (94,511) (42,807)
Basic and diluted loss per
share
$( 0.08) $( 0.17) $( 0.21) $( 0.23) $( 0.22) $( 0.46) $( 0.90) $( 1.00) $( 0.95) $( 0.90) $( 0.86) $( 0.77) $( 0.71) $( 2.62) $( 3.48) $( 1.99)
Excluding amortization of
goodwill
$( 0.35) $( 0.49) $( 0.56) $( 0.51) $( 0.47) $( 0.44) $( 0.36) $( 0.71) $( 1.64) $( 1.78) $( 0.77)
Shares used in computation
of basic
38,810 42,640 45,865 46,471 47,106 48,759 50,234 51,450 51,800 52,500 53,500 54,500 43,447 49,387 53,075 55,250
and diluted loss per share
Revenue Growth
Sequential 74.0% 36.0% 74.3% 32.3% 32.7% 32.5% 15.5% 11.0% 8.5% 11.0% 16.0%
Year- over- Year 446.0% 316.5% 305.7% 168.8% 125.5% 84.3% 54.4% 55.1% 318.3% 82.1% 40.0%
Annual run rate $64,020 $111,420 $151,548 $264,160 $349,580 $464,040 $614,792 $710,085 $788,194 $855,191 $949,262 $1,101,143
Margin Analysis
Gross margin 22.0% 18.7% 18.9% 19.6% 22.1% 22.6% 22.7% 22.6% 23.3% 23.6% 23.8% 24.2% 19.5% 22.5% 23.8% 25.2%
Operating margin -20.5% -27.5% -27.2% -17.1% -11.4% -15.9% -27.0% -26.4% -22.5% -19.8% -17.1% -13.3% -22.1% -12.8% -8. 0% -1. 4%
Percentage of Revenues
Cost of revenues 78.0% 81.3% 81.1% 80.4% 77.9% 77.4% 77.3% 77.4% 76.7% 76.4% 76.2% 75.8% 80.5% 77.5% 76.2% 74.8%
S& M 25.0% 29.0% 30.4% 25.6% 22.8% 23.3% 24.4% 24.9% 23.9% 23.4% 22.9% 21.5% 27.4% 24.1% 22.8% 20.0%
R& D 10.3% 10.8% 10.6% 8.0% 8.4% 7.6% 8.7% 8.3% 7.6% 7.0% 6.2% 5.8% 9.4% 8.3% 6.6% 4.8%
G& A 7.3% 6.4% 5.2% 3.2% 2.3% 2.9% 3.2% 3.1% 2.9% 2.5% 2.3% 2.0% 4.7% 3.0% 2.4% 1.9%
Source: Amazon. com and Merrill Lynch estimates
Amazon.com Inc – 9 November 1998
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