May '11
Melissa Payner, Bluefly's Chief Executive Officer stated: “We began the year solidly, delivering increased sales and an improved operating loss as compared to the prior year. Our sales were driven by strong growth within our luxury business, which operates at a lower gross margin versus other areas of our business. As we look ahead, we expect to continue our positive sales performance and improve gross margin as we seek to accelerate the growth of our higher margin apparel categories. We look forward to the launch of Eyefly, our prescription eyewear business, as it will represent our ability to leverage the existing Bluefly operating structure to pursue new growth opportunities.”
Results for the first quarter of 2011 included the following highlights:
• Net sales increased by approximately 7.2% to $21.7 million, from $20.2 million in the first quarter of 2010, as a result of a 6% increase in average order size to $296.60 in the first quarter of 2011, compared to $279.94 in the fourth quarter of 2010.
• Gross profit margin percentage decreased to 37.8%, from 41.2% in the first quarter of 2010 primarily as a result of a shift in merchandise mix towards luxury designer merchandise, which historically has lower gross margins compared to contemporary merchandise but creates a higher average order size.
• Total operating expenses decreased by approximately 3.5% to $9.4 million, from $9.8 million in the first quarter of 2010. This includes $148,000 of costs related to Eyefly, which has not yet launched.
• Operating loss decreased by approximately 13.8% to $1.2 million, from $1.4 million in the first quarter of 2010.
• Net loss attributable to stockholders decreased by approximately 14.9% to $1.3 million, from $1.5 million in the first quarter of 2010. Loss per share attributable to stockholders decreased to $0.05 per share (based on 24.6 million weighted average shares outstanding), from a net loss of $0.07 per share (based on 20.9 million weighted average shares outstanding) in the first quarter of 2010.
• Adjusted negative EBITDA decreased to $298,000, from an adjusted negative EBITDA of $716,000 in the first quarter of 2010.
• Cash and cash equivalents decreased to $7.8 million at March 31, 2011, compared to $10.4 million at December 31, 2010.
• Inventory increased to $27.1 million at March 31, 2011, compared to $25.1 million at December 31, 2010.
To supplement the consolidated financial results for the first quarter of 2011 presented in accordance with generally accepted accounting principles (GAAP), the Company is also reporting adjusted EBITDA as a non-GAAP financial measure that the Company believes allows for a better understanding of its operating performance.
The Company defines adjusted EBITDA as net loss attributable to Bluefly, Inc. stockholders excluding interest income, interest expense, income tax provision, depreciation and amortization expenses adjusted for non-cash stock-based compensation expenses. The Company believes that this non-GAAP financial measure, when shown in conjunction with the corresponding GAAP measures, enhances the investor's and management's overall understanding of the Company's current operating performance and provides greater transparency with respect to key operating metrics used by management in its financial and operational decision making process.
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