|Amazon.com Announces Financial Results for Second Quarter 1997|
SEATTLE, WA (July 10, 1997)-- Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for the second quarter of 1997. Net sales for the second quarter were $27.9 million, a 74 percent increase over net sales of $16.0 million reported for the first quarter ended March 31, 1997. Net sales increased 1,168 percent over net sales of $2.2 million reported for the second quarter of 1996. Net loss for the second quarter ended June 30, 1997 was $6.7 million, or a loss of $0.31 per share, compared with a net loss in the quarter ended March 31, 1997 of $3.0 million, or a loss of $0.16 per share. The company reported a net loss of $767,000 or a loss of $0.04 per share in the quarter ended June 30, 1996.
Amazon.com also announced that cumulative customer accounts grew to more than 610,000 customer accounts at June 30, 1997, an increase of 79 percent from 340,000 customer accounts at the end of March 1997. Repeat customers represented more than 50 percent of orders placed during the quarter ended June 30, 1997.
"The second quarter of 1997 marked several milestones for Amazon.com and its stockholders. We raised net proceeds of nearly $50 million in our initial public offering in May. These proceeds will enable us to invest aggressively in building our business, brand and customer base, and in enhancing our product and service offerings. We also invested in extensive promotional relationships with three of the most important aggregators of Internet traffic, Yahoo!, AOL and Excite. We believe these relationships will reinforce our momentum as the leading online bookseller by generating substantial additional brand awareness and customer flow for Amazon.com," said Jeff Bezos, president and chief executive officer of Amazon.com.
"Our customers responded very well to our price reduction in June, which resulted in immediate increases in unit sales and conversion rates. It appears that this pricing has encouraged our customers to do more of their book buying online. We're happy to be able to focus exclusively on the success of online commerce, and believe that the combination of this pricing and our new presence with the aggregators will accelerate the adoption of online book buying by a broad range of consumers," continued Mr. Bezos.
"We also continued to enhance our product and service offerings during the quarter and are eager to roll out the innovative services associated with our promotional relationships during the third and fourth quarters of 1997."
Amazon.com, Earth's Biggest Bookstore, is the leading online retailer of books, offering a catalog of 2.5 million titles, easy-to-use search and browse features, email services, Web-based credit card payment and direct shipping to customers. Amazon.com has virtually unlimited online shelf space and can offer customers a vast selection through an efficient search and retrieval interface.
This announcement contains forward looking statements that involve risks and uncertainties. Actual results may differ materially from the results predicted and reported results should not be considered an indication of future performance. Potential risks and uncertainties include, among others, Amazon.com's limited operating history, the evolving nature of its business model, the increasingly competitive online commerce environment, dependence on continuing growth of online commerce and risks associated with capacity constraints and the management of growth. More information about potential factors that could affect the company's financial results is included in the company's final prospectus dated May 15, 1997, as filed with the Securities and Exchange Commission.
Amazon.com and Earth's Biggest Bookstore are service marks of Amazon.com Inc. All other names are trademarks of their respective owners.
Second Quarter Ended June 30, 1997 1996 Net sales $ 27,855 $ 2,230 Cost of sales 22,633 1,753 Gross profit 5,222 477 Operating expenses: Marketing and sales 7,773 696 Product development 2,808 394 General and administrative 1,708 163 Total operating expenses 12,289 1,253 Loss from operations (7,067) (776) Interest income 362 9 Net loss $(6,705) $(767) Net loss per share $(0.31) $(0.04) Shares used in computation of net loss per share 21,317 18,339
June 30, December 31, 1997 1996 Assets Cash, cash equivalents and short-term investments $56,392 $6,248 Inventories 1,652 571 Prepaid expenses and other 1,162 321 Equipment, net 3,564 985 Deposits 328 146 Total assets $63,098 $8,271 Liabilities and Stockholders' Equity Accounts payable 10,327 2,852 Accrued expenses and other liabilities 7,211 2,018 Total liabilities 17,538 4,870 Preferred stock -- 7,970 Common stock and paid-in-capital 61,328 1,456 Accumulated deficit (15,768) (6,025) Total stockholders' equity 45,560 3,401 Total liabilities and stockholders' equity $63,098 $8,271
* Because of new requirements issued in 1998 by the Securities and Exchange Commission for companies that recently completed an initial public offering and new interpretation by the Financial Accounting Standards Board of the initial application of the Statement of Financial Accounting Standard No. 128, Earnings per Share, the number of shares used to calculate net loss per share was revised as of March 30, 1998 when the company filed its Annual Report on Form 10-K. Share counts and net loss per share shown are revised figures.