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Technology Stocks : BAMM - BOOKs A Million (BAMM) .. the next Amazon.com ???? -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth M. Koff, CPCU who wrote (867)	3/18/1999 10:58:00 AM
From: Rajiv	Read Replies (1) \| Respond to of 1196

From briefing.com - BOOKS-A-MILLION INC. (BAMM) 11 5/16. Running on empty - and a lot of dreams. After the close Wednesday, bookstore retailer and Amazon wannabe Books-A-Million (BAMM) reported fully diluted fiscal fourth quarter (Jan) profits of $0.36 per share. That was a penny below Wall Street expectations, based on the three analysts surveyed by First Call, and down from the year-ago $0.37 as well. Equally unimpressive was the meager 3.1% revenue increase from the prior year fourth quarter, as well as the dismal 0.9% drop in same store sales. This disappointing data is even more significant considering that the fourth quarter is so important to retailers, BAMM included. The fourth quarter, which includes the December holidays, contributed 33% of BAMM's revenues in the fiscal year just ended, and more than 100% of profit. That is, the rest of the year was a net loss, and the full year profits came in at only $0.26 per share. That puts the traditional price/earnings multiple at 44. Very high for a company with little revenue growth and falling profits. But this is not your ordinary company. BAMM was a sleepy book store company until last November. Then, it made an initiative on the Internet. The stock went from the 2 to 3 range to 47 almost overnight. The poor man's Amazon.com was born. Or so went the story line for the day traders that jumped into this hot stock. But not much actually happened apparently, at least in terms of business on the Internet. The press release from the company makes no mention of Internet sales. BAMM knows the power of a good press release, and Briefing.com is sure they would have mentioned Internet sales if the news was good. Given the overall lackluster sales performance for BAMM during a good economy, it is hard to imagine that the Internet contributed much at all. Yet, if you go read the chat rooms (yes, we check them out every now and then) the bulls are not discouraged. They are talking up the stock on the basis of 1) the stock was actually priced for earnings of only $0.32 per share, 2) the CEO will appear on CNBC on Thursday and will undoubtedly pump the idea of future growth based on Internet sales, and 3) the fact that BAMM has much lower price-to-sales and other valuation measures when compared to Amazon.com. Who knows, maybe BAMM will get a pop in the stock? Yet, the bottom line is still this: the dreams of another Amazon.com persist, but the reality is the numbers stink right now. There is no indication yet that BAMM can pull of a successful (including profitable) Internet strategy. Insiders seem to know this. In early December, the family members of the CEO filed to sell about 1,400,000 shares, worth as much as $25 million. Not bad considering that the market cap of the company was about $35 million prior to the big Internet splash. But maybe the insiders sold too soon. Perhaps BAMM can start selling CD's on their web site as well. Look what that did for Amazon's stock price. The dreams live on.