Press Release

<< Back Announces Financial Results for Second Quarter 1997

SEATTLE, WA (July 10, 1997)--, 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. 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 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," said Jeff Bezos, president and chief executive officer of

"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."

About, 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. 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,'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. and Earth's Biggest Bookstore are service marks of Inc. All other names are trademarks of their respective owners.

Statements of Operations*

(in thousands, except per share amounts)


                    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    

(in thousands)

                                  June 30,         December 31,
                                    1997               1996

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.

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