Stamps.com Reports Second Quarter 2002 Financial Results
Company Delivers on Promised Product Innovation; Receives Positive Initial Customer Feedback
SANTA MONICA, Calif. – July 24, 2002 – Stamps.com(TM) (Nasdaq: STMP) today announced financial results for the second fiscal quarter 2002. In line with first quarter 2002 projections, the company successfully launched its latest product innovation, NetStamps(TM), on July 17, 2002. NetStamps(TM), a new form of PC Postage(TM), allows customers to print sheets of generic postage that are not tied to a destination address and have no expiration date, using special labels and any ordinary inkjet or laser printer. Initial customer interest has been strong, with nearly 97,000 NetStamps(TM) label sheets sold in the first week following launch.
Second quarter financial highlights are as follows:
- Cash and cash equivalents, including restricted cash and long-term investments, ended the quarter at $194.9 million, or $3.85 per weighted average share, an increase from $192.1 million in the first quarter 2002.
- Service fee revenue was $3.6 million compared to $3.9 million in the first quarter of 2002.
- Total revenue was $3.7 million and gross margin was 67%.
- Total operating expenses, excluding non-cash deferred compensation, was $6.3 million.
- Cash net loss from continuing operations, as defined below, was $2.3 million, or a loss of $0.04 on a per share basis.
“The approval of NetStamps(TM) last week was the result of our extensive effort in the first and second quarter, and it represented the most significant step of our 2002 product overhaul,” said president and CEO, Ken McBride. “In addition, we continue to keep a tight rein on costs, and this quarter was the first since 1999 when our cash balance was higher exiting the quarter than it was at the beginning of the quarter.”
For the second quarter of 2002, cash net loss from continuing operations, which excludes amortization of goodwill, deferred compensation, restructuring and write down charges, loss from the sale of iShip, and losses or gains from EncrypTix, was $2.3 million. This compares to a loss of $0.7 million in the first quarter of 2002 and a loss of $5.2 million in the second quarter of 2001, measured on the same basis. On a per share basis, the cash net loss from continuing operations for the second quarter 2002 was $0.04 per share based on the weighted average common shares outstanding of 50.6 million. This compares to a loss of $0.01 in the first quarter of 2002 and a loss of $0.10 in the second quarter of 2001, measured on the same basis.
Stamps.com also reported net loss on a GAAP (Generally Accepted Accounting Principles) basis of $2.5 million for the second quarter of 2002, compared to a loss of $30.8 million in the second quarter of 2001. On a per share basis, the GAAP net loss was $0.05 in the second quarter of 2002 compared to a loss of $0.62 in the second quarter of 2001. For the second quarter of 2002, Stamps.com acquired 19 thousand gross customers and ended the quarter at 277 thousand customers.
The company expects revenue to be up slightly from second quarter levels in the third and fourth quarter of 2002 as it begins to market its new NetStamps(TM) feature as well as to ramp up its investment in sales & marketing following the release of its completely web-based product, expected early in the fourth quarter. Gross margins are expected to be in the mid to high 60%-range for the third and fourth quarters. Third quarter total operating expenses are expected to be down slightly from second quarter levels. On a per share basis, cash net loss from continuing operations is expected to be a loss of approximately four cents in the third quarter.
Stamps.com (Nasdaq: STMP) is a leading provider of Internet-based postage services. Stamps.com enables customers to print U.S. Postal Service-approved postage with just a PC, printer and Internet connection. The company targets its services to small businesses, home offices, and individuals, and currently has partnerships with companies including Microsoft, Office Depot, NCR, Comp USA, Earthlink, HP, Auctionwatch and the U.S. Postal Service.
“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 control costs and successfully market its products, 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, 2001, 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, the Stamps.com logo and NetStamps are trademarks of Stamps.com Inc. All other brands and names are property of their respective owners.