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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (32713)	1/5/1999 6:24:00 PM
From: Mark Fowler	Read Replies (3) \| Respond to of 164684

The company's chief financial officer, Joy Covey, said "aggressive product pricing" and other factors held down profit margins. Moreover, according to Amazon, order fulfillment costs were higher. cbs.marketwatch.com I covered on this Friday if you remember however Amzn looks like it push to 150 next.

To: Glenn D. Rudolph who wrote (32713)	1/5/1999 9:09:00 PM
From: Glenn D. Rudolph	Respond to of 164684

Continued 5 "Page 13 Merger and Acquisition Related Costs Quarter Ended September 30, Nine Months Ended September 30, ----------------------------------------------- ---------------------------------------------- 1998 1997 % Change 1998 1997 % Change ------------ ------------ ------------ ------------ ------------ ------------ Merger and acquisition (in thousands) (in thousands) related costs.............. $ 20,512 - N/A $ 25,925 - N/A Percentage of net sales.... 13.3% - 7.3% - Merger and acquisition related costs primarily consist of amortization of goodwill and other purchased intangibles incurred in connection with the Company's April 1998 acquisitions of Bookpages, Telebook and IMDB and the August 1998 acquisition of Junglee. See " - Recent Events." Each of these acquisitions was accounted for under the purchase method of accounting. The Company anticipates that future amortization associated with these four acquisitions will increase net loss by approximately $22 million per quarter until March 2000 and approximately $15 million thereafter until the related goodwill and other purchased intangibles are fully amortized. Any subsequent acquisitions or impairment of goodwill and other purchased intangibles could result in additional merger and acquisition related costs. Interest Income and Expense Quarter Ended September 30, Nine Months Ended September 30, ----------------------------------------------- ---------------------------------------------- 1998 1997 % Change 1998 1997 % Change ------------ ------------ ------------ ------------ ------------ ------------ (in thousands) (in thousands) Interest income............ $ 4,754 $ 688 591% $ 9,789 $ 1,118 776% Interest expense........... (8,419) (19) N/A (18,017) (59) N/A Interest income on cash and marketable securities increased due to higher balances resulting from the Company's financing activities. Interest expense for the period May 1998 to September 1998 includes interest and amortization of deferred charges related to the Company's Senior Discount Notes (as defined below). Interest expense for the nine months ended September 30, 1998 also includes the write-off of $2.0 million of unamortized loan fees following prepayment of the Company's three-year senior secured term loan (the "Senior Loan"), as well as interest on the Senior Loan and asset acquisitions financed through loans and capital leases. The Company expects interest expense to increase in the future as a result of the Senior Discount Notes (as defined below) and potentially increased financing of asset acquisitions through loans and capital leases. Income Taxes The Company has not generated any taxable income to date and therefore has not paid any federal income taxes since inception. Utilization of the Company's net operating loss carryforwards, which begin to expire in 2011, may be subject to certain limitations under Section 382 of the Internal Revenue Code of 1986, as amended. The Company has provided a full valuation allowance on the deferred tax asset, consisting primarily of net operating loss carryforwards, because of uncertainty regarding its realizability. LIQUIDITY AND CAPITAL RESOURCES At September 30, 1998, the Company's cash was $14.9 million, compared to $1.9 million at December 31, 1997. Marketable securities balances, which include highly liquid investments with maturities of three months or less, were $322.4 million and $123.5 million at September 30, 1998 and December 31, 1997, respectively. Net cash used in operating activities of $7.7 million for the nine months ended September 30, 1998 was primarily attributable to the net loss and increases in inventories and prepaid expenses and other, largely offset by noncash expenses and increases in accounts payable, accrued advertising and other liabilities and accrued expenses. For the nine months ended September 30, 1997, cash used in operating activities was $5.5 million and resulted primarily from the net loss and increases in Page 14 inventories and prepaid expenses and other, largely offset by increases in accounts payable and other liabilities and accrued expenses, as well as noncash expenses. "