updated 11/8/2010 4:16:27 PM ET 2010-11-08T21:16:27

  • Approximately $5.5 million in cash, $26.6 million in positive working capital and zero debt
  • Reduced customer acquisition costs by 29% to $46 per new buyer, and average selling price per order increased to $190

CULVER CITY, Calif., Nov. 8, 2010 (GLOBE NEWSWIRE) -- Bidz.com (Nasdaq:BIDZ), a leading online retailer of jewelry, announced results for the third quarter ended September 30, 2010.

Net revenues for the third quarter of 2010 were $21.8 million, compared with $24.8 million reported in the third quarter of 2009. During the quarter, the Company reported B2B sales of $1.1 million, compared with $917 thousand in the prior year period. The Company's business continues to be impacted by the ongoing weakened economy, as well as by an overall slowdown in consumer demand for jewelry.

The percentage of the Company's domestic and international sales for the third quarter 2010 represented 56.7% and 43.3%, respectively, compared with 62.2% and 37.8%, respectively, in 2009.

"We remain committed on positioning ourselves to return to growth both in the near-term and on an ongoing basis," stated, Leon Kuperman, President & Chief Technology Officer. "We will continue to focus on expanding our product offering as we approach the holiday season and 2011. Internationally, we continue to see healthy demand for our brands, particularly in Canada, Australia, Saudi Arabia and Spain, and we are confident we are taking the necessary steps to meet our goals."

In the third quarter, the average selling price per order increased by approximately 2% to $190 from $187 in the prior year period, and the Company's acquisition costs per new buyer decreased by approximately 29% to $46 from $65 in the prior year period. The Company believes this is an important statistic and is reflective of its increased focus on managing the ROI on its marketing spend.

In the third quarter of 2010, gross profit was approximately $5.6 million, compared with $7.2 million in the third quarter of 2009. Gross margin in the third quarter of 2010 was 25.7% compared with 28.9% in the same period of 2009. The year-over-year decrease in gross profit as a percentage of sales was primarily due to lower gross product margin on both our B2C and B2B revenues throughout the third quarter.

General and administrative expense totaled $5.0 million in the third quarter, compared to $4.8 million in the prior year period. The increase in general and administrative expense can be attributed to costs incurred from operating Modnique.com. Sales and marketing expense for the third quarter 2010 was $1.5 million, compared with $2.2 million, in the prior year period. The decrease in sales and marketing expense was due to the reduction in marketing efforts in order to limit operating expenses. Sales and marketing expense as a percentage of net revenue decreased to 6.8% from 9.0% in the prior year period in order to keep marketing return on investment in-line with the Company's internal ROI goals.

Total operating expenses in the third quarter 2010 were $6.6 million versus $7.2 million in the prior year period. Loss from operations for the third quarter of 2010 was ($997) thousand, compared to a loss from operations of approximately ($47) thousand in the third quarter of 2009.

Net loss for the third quarter of 2010 amounted to ($614) thousand, or ($0.03) per fully diluted share, on 20.0 million weighted average diluted shares outstanding. This is compared to a net loss of approximately ($58) thousand, or a breakeven per fully diluted share, on 22.2 million weighted average diluted shares outstanding in the same period of 2009.

The Company's balance sheet had approximately $5.5 million in cash and $26.6 million in positive working capital with a zero debt balance. The Company believes that cash currently on hand and cash flows from operations will be sufficient sources of capital to continue funding its operations and to pursue its growth strategy for the foreseeable future.

Under the existing share repurchase program implemented in June 2007, a total of $33.5 million had been authorized for repurchases, and to date, a total of 5.6 million shares have been repurchased for $21.0 million. Following the recently announced completion of a $2.3 million share repurchase and open market purchases of $123,000 in the third quarter, the Company has approximately $12.5 million authorized and remaining for additional share repurchases in open market transactions, subject to market conditions, share price and other considerations.

Business Outlook / Guidance

The Company is introducing new revenue guidance for the fourth quarter of 2010 in the range of $27 - $29 million, representing top-line growth for the first time in about 2 years, and a gross profit margin in the range of 25% - 27%. The Company expects EPS of approximately breakeven in the fourth quarter.

Investor Conference Call

Bidz.com's quarterly earnings conference call is scheduled to begin later today (November 8, 2010) at 1:30 p.m., PT (4:30 p.m. ET). The call will be open to all interested investors through a live audio Web broadcast via the Internet on the investor relations section of the Company's website at http://investors.bidz.com/ .

For those unable to participate during the live broadcast, the webcast will be archived for 90 days and a replay will be available beginning Monday, November 8, 2010 at 7:30 p.m. ET through November 22, 2010 at 12:00 a.m. ET. To access the replay, dial 877-870-5176 (U.S.) or 858-384-5517 (International), and use passcode: 4374839.

About Bidz.com

Bidz.com, founded in 1998, is a leading online retailer of jewelry. Bidz offers its products through a live auction format as well as a fixed price online retail store, Buyz.com. Bidz.com's auctions are also available in Arabic, German and Spanish. To learn more about Bidz.com, visit its website at www.bidz.com . Bidz also operates Modnique, a division of Bidz.com, and an exclusive private sale shopping site for members-only, offering authentic premium brand name merchandise. Modnique offers its members exclusive access to 24-72 hour sales events on designer apparel, accessories, shoes housewares and much more at price points up to 85% below traditional retail prices. To learn more about Modnique visit its website at www.modnique.com .

Safe Harbor Statement

This press release includes forward looking statements about the Company's estimated revenue and earnings within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this release, including statements regarding the Company's future financial position, business strategy and plans and objectives of management for future operations, are forward looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions, as they relate to the Company, are intended to identify forward looking statements. We have based these forward-looking statements largely on current expectations and projections about future events and financial trends that we believe may affect the Company's financial condition, results of operations, business strategy and financial needs. Risks and uncertainties include that our common stock is subject to short selling and trading, and prices of our stock may be volatile; that we are subject to "prank" bidding; that we may face increasing costs to acquire new customers; the ability of the Company to attract customers to its website and offer attractive products; the ability to maintain profit levels while expanding international sales; the ability to detect fraud if we fail to maintain an effective system of internal controls; the ability to maintain our website, electronic data processing systems, and systems hardware; the ability to forecast accurately net revenue and plan for expenses; that we do not have a guaranteed supply of jewelry products and that we have a heavy concentration of inventory purchased from our top two suppliers; the ability to protect our intellectual property rights; and potential litigation and government enforcement actions that may result from our prior securities offerings. Please refer to Bidz.com's reports and filings with the Securities and Exchange Commission for a further discussion of these risks and uncertainties. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. Bidz.com undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made or to reflect the occurrence of unanticipated events.

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved


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