STAMPS.COM REPORTS FIRST QUARTER 2001 FINANCIAL RESULTS
Company reports 158% growth in revenue over first quarter 2000, with 39% gross margin and narrowed losses
SANTA MONICA, Calif. – April 17, 2001 – Stamps.com (Nasdaq: STMP) today announced that revenue in the first quarter of 2001 was $5.3 million, an increase of 158% over the first quarter of 2000. First quarter 2001 gross margin was 39% compared to 10% in the fourth quarter 2000. First quarter net loss from continuing operations was $9.1 million, which excludes non-cash charges, first quarter losses and a one-time gain from the Encryptix subsidiary, a charge related to the impairment of goodwill associated with the purchase of iShip.com, and restructuring and write down charges. On a per share basis, the equivalent continuing operations loss for the first quarter 2001 was $0.18 per share based on the weighted average common shares outstanding of 49.1 million. Cash and short-term investments as of March 31, 2001 was $213 million, or $4.34 per share, excluding any cash in the Encryptix subsidiary.
“The initiatives we undertook in the fourth quarter of year 2000 and the first quarter of year 2001 have already begun to pay dividends in our improved gross margins and narrowed losses,” said CEO Bruce Coleman. “Moving forward, we plan to continue to streamline our costs while enhancing our revenue growth toward achieving our goal of profitability and positive cash flow.”
For fiscal year 2001, Stamps.com continues to expect total revenues of approximately $23 million, which represents growth of 60% over fiscal year 2000 revenues. In addition, the company continues to expect its total year 2001 cash burn to be $20-25 million on a continuing operations basis; down over 80% from Year 2000 total cash burn. Stamps.com has already made good progress toward achieving its goals in the first quarter 2001. With its February 6, 2001 reduction in its work force, more focused and cost-efficient marketing spend, and other cost-cutting programs, Stamps.com used approximately $11 million in cash during the first quarter 2001 on a continuing operations basis and excluding one-time items; the comparable number in the fourth quarter 2000 was approximately $25 million.
For the first quarter 2001, total sales and marketing was $4.3 million compared with $13.6 million in the fourth quarter. Savings in sales and marketing have already been achieved through a focus on acquisition of higher revenue Power Plan customers and through renegotiation or termination of fixed payment partner relationships. Starting in the second quarter of 2001, all partners will only be compensated on a pay-for-performance basis.
In addition to decreasing sales and marketing costs, Stamps.com is running some tests around price sensitivity and plans to evaluate raising its monthly minimum price for all simple plan customers who are paying a $1.99 monthly minimum. Stamps.com is also evaluating the use of a pay-for-support model during the second quarter 2001. As a result of its planned investment in acquiring higher revenue customers and more cost effective support, Stamps.com expects gross margins for the entire fiscal year 2001 to reach 50%. The company maintains its earlier estimates of becoming cash flow positive in the first quarter of fiscal year 2002.
Finally, Stamps.com launched a new Web-based registration process on April 16, 2001. Customers now register for the Stamps.com service via the Web and prior to starting the software download. Stamps.com expects this new registration process to improve its marketing conversion rates. Web-based registration is also a key feature for telesales–a marketing channel that Stamps.com plans to use, on a trial basis, during the second quarter. Stamps.com is also developing technology during 2001 that will enable it to provide its Internet Postage service to partners under a private label arrangement.
Stamps.com is the leading provider of Internet mailing and shipping services. Stamps.com Internet Postage is an Internet mailing and shipping solution for small businesses and home offices that allows customers to print U.S. Postal Service-approved postage on envelopes or labels with just a computer, printer and Internet connection. The iShip service from Stamps.com provides a powerful, Internet-based multi-carrier shipping solution that is more efficient and cost-effective than traditional paper-based or single-carrier solutions. Visit sdcmainprod.wpengine.com for more information.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release may contain forward-looking statements that involve risks and uncertainties. Important factors, including the company’s ability to achieve profitability, which could cause actual results to differ materially from those in the forward-looking statements, are detailed in filings with the Securities and Exchange Commission made from time to time by Stamps.com, including its annual report on Form 10-K for the fiscal year ended December 31, 2000, and its Current Reports on Form 8-K. Stamps.com undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Stamps.com and iShip, and the Stamps.com and iShip logos are trademarks of Stamps.com Inc. All other brands and names are property of their respective owners.