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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
APRIL 28, 1999
DATE OF REPORT
(DATE OF EARLIEST EVENT REPORTED)
AMAZON.COM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 000-22513 91-1646860
(STATE OR OTHER (COMMISSION FILE NO.) (IRS EMPLOYER
JURISDICTION IDENTIFICATION NO.)
OF INCORPORATION)
1516 SECOND AVENUE, SEATTLE, WASHINGTON 98101
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(206) 622-2335
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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ITEM 5. OTHER EVENTS
On April 28, 1999, Amazon.com, Inc. ("Amazon.com") announced its
financial results for the first quarter of 1999.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.1 Press Release dated April 28, 1999 regarding Amazon.com's
first quarter financial results
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMAZON.COM, INC.
(REGISTRANT)
Dated: April 28, 1999 By: /s/ Joy D. Covey
------------------------------------------
Joy D. Covey
Chief Financial Officer and Vice
President of Finance and Administration
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
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<S> <C>
99.1 Press Release dated April 28, 1999 regarding
Amazon.com's first quarter financial results
</TABLE>
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EXHIBIT 99.1
AMAZON.COM ANNOUNCES FINANCIAL RESULTS
FOR FIRST QUARTER 1999
AMAZON.COM'S COMMUNITY OF ONLINE SHOPPERS GROWS TO OVER 8.4 MILLION
SEATTLE, WA--April 28, 1999--Amazon.com, Inc. (NASDAQ: AMZN) today
announced financial results for the first quarter of 1999. Net sales for the
first quarter were $293.6 million, an increase of 236 percent over net sales of
$87.4 million for the first quarter of 1998.
Amazon.com reported a first-quarter pro forma operating loss of $30.6
million, or 10 percent of net sales, compared to an operating loss of $10.0
million, or 11 percent of net sales, in the first quarter of 1998. First-quarter
pro forma net loss of $36.4 million, or $0.23 per share, compared with a net
loss of $10.4 million, or $0.07 per share, in the first quarter of 1998. On a
GAAP basis, reported first-quarter net loss was $61.7 million, or $0.39 per
share, and included $25.3 million of merger- and acquisition-related costs.
Amazon.com announced that cumulative customer accounts increased by more
than 2.2 million during the first quarter to more than 8.4 million at March 31,
1999, an increase of more than 250 percent from the 2.3 million customer
accounts at March 31, 1998. Repeat customer orders represented more than 66
percent of orders during the quarter ended March 31, 1999.
"Everyone here is working hard to provide the best possible customer
experience, and we're extremely grateful to our customers," said Jeff Bezos,
Amazon.com founder and CEO. "We're particularly pleased with Amazon.com
Auctions, which is off to a very fast start--we had more participants during our
first month then even with music."
The company's focus on customers enabled Amazon.com to extend its
leadership position on a number of fronts:
- - Amazon.com was ranked in the top 10 Web properties during March, as
measured by Media Metrix, making it not only the leading online retail
site but also one of the leading Web sites of any kind.
- - In March, Amazon.com was the only company to win more than one Webby
award--and it won three. The Webbies, considered by many to be the
Oscars(R) of the Internet, are awarded by the International Academy of
Digital Arts & Sciences. Amazon.com won awards for Web-site excellence as
a commerce site, for technical achievement, and the company's Internet
Movie Database (http://www.imdb.com/) for best film site. IMDb also
received a People's Choice Award (voted for by Web users) in the film
category.
- - More than 1 million Amazon.com customers have now signed up for the
company's innovative Delivers program, which provides periodic e-mail
updates of new book, music, and video titles. More information on
Delivers is available at www.amazon.com/delivers.
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- - More than 260,000 Web-site operators have now enrolled in the company's
industry-leading Associates program, which allows Web-site operators to
earn lucrative referral fees over a range of products. More information
on Associates is available at www.amazon.com/associates.
Regarding Amazon.com's announced 1999 expansion plans, Bezos added, "We
have begun and will continue to build out a significant distribution
infrastructure. This will give customers greater availability, faster shipping
times, and even better service. We will also continue to invest in systems,
people, and product expansion, each of which helps us better serve customers.
For the rest of 1999, we expect to invest more heavily than we have in the past.
Our goal remains to build the world's most customer-centric company."
RECENT HIGHLIGHTS
AMAZON.COM AUCTIONS
In March, Amazon.com launched Amazon.com Auctions to help people find,
discover, buy--and now sell--virtually anything online. With the launch of
Amazon.com Auctions, Amazon.com's more than 8.4 million customers have been
preregistered to begin buying and selling immediately in more than 800
categories. The new service is easy to use, with innovative and time-saving
features such as Bid-Click (SM) for hassle-free bidding. To enhance customer
safety, the Amazon.com Auctions Guarantee covers purchases of up to $250 in the
event that a buyer does not receive what a seller promised.
Earlier this month, Amazon.com announced it had agreed to purchase
LiveBid.com, the sole provider of live-event auctions on the Internet. Adding
LiveBid's technology and services to Amazon.com Auctions expands the breadth and
types of items customers will find and gives local and regional auction houses
full access to a vast Internet auction community.
DRUGSTORE.COM AND PETS.COM
During the quarter, Amazon.com announced strategic investments in
drugstore.com and Pets.com. drugstore.com (www.drugstore.com) is an online
source for thousands of brand-name health, beauty, and wellness products.
Pets.com (www.pets.com/) is the leading pet-oriented company on the Internet,
specializing in popular and rare pet accessories, products, and food for all
types of animals. These companies share Amazon.com's passion for bringing
customers value through selection, service, convenience, and community.
AMAZON.COM'S FREE GREETING CARD SERVICE
On April 27 the company launched Amazon.com Cards, a free electronic
greeting-card service. Cards can be sent by visiting www.amazon.com and clicking
on the e-cards tab. The new site offers diverse styles of electronic greeting
cards and a unique selection, with hundreds of illustrations, pictures, animated
cards, and messages to choose from. Card senders also have the ability to
customize their messages.
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DISTRIBUTION CENTER EXPANSION
Continuing its expansion, Amazon.com leased a distribution facility in
Coffeyville, Kansas, which will enable faster delivery to Amazon.com customers
across the Midwest and Southeast United States. Plans for the existing
460,000-square-foot facility include expansion to over 750,000 square feet and
the addition of automation, allowing the company to significantly increase the
number of products kept on hand for immediate shipment to customers. The result
is that customers in such places as Chicago, St. Louis, Dallas, and Minneapolis
will receive their orders much faster, thanks to deeper inventory, faster
processing, and shorter delivery times. The Coffeyville facility is expected to
begin operations during the second half of 1999.
Amazon.com also announced that its 323,000-square-foot facility in
Fernley, Nevada began shipping on a limited basis, increasing availability and
improving delivery times for customers in the Western U.S.
In March, Amazon.de leased a new distribution center in Bad Hersfeld,
Germany. The facility is expected to begin operations during the second half of
1999.
ACQUISITION OF BIBLIOFIND.COM AND MUSICFILE.COM
Earlier this week, the company agreed to acquire Exchange.com, the
premier online marketplace for hard-to-find, antiquarian, and used books at
www.bibliofind.com and hard-to-find recordings and music memorabilia at
www.musicfile.com. The acquisition will vastly enlarge and enrich Amazon.com's
core book- and music-store offerings while providing Exchange.com's thousands of
independent dealers and retailers the opportunity to sell and auction their
hard-to-find books, recordings, and memorabilia to Amazon.com's growing base of
8.4 million experienced online shoppers. At the same time, the company also
announced it had agreed to acquire two other e-commerce companies, Alexa.com and
Access.com.
FINANCING
Early in the quarter, Amazon.com completed a $1.25 billion 4.75%
convertible debt offering, which substantially strengthened its cash position
and increased its strategic flexibility. Also in the quarter, Amazon.com
repurchased $84 million in accreted value of its senior discount notes.
ABOUT AMAZON.COM
Amazon.com, Inc. (NASDAQ: AMZN), the Internet's No. 1 music, No. 1 video,
and No. 1 book retailer, opened its virtual doors on the World Wide Web in July
1995. Today, the Amazon.com store has expanded to offer online auctions and more
than 4.7 million book, music-CD, video, DVD, computer-game, and other titles,
plus secure credit-card payment, personalized recommendations, and streamlined
ordering through 1-Click(SM) technology and hassle-free auction bidding with
Bid-Click(SM).
Amazon.com operates two international Web sites: www.amazon.co.uk in the
United Kingdom and www.amazon.de in Germany. Amazon.com also operates PlanetAll
(www.planetall.com), a Web-based address book, calendar, and reminder service.
It also operates the Internet Movie Database (www.imdb.com), the Web's
comprehensive and
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authoritative source of information on more than 150,000 movies and
entertainment programs and 500,000 cast and crew members dating from the birth
of film in 1892 to the present.
This announcement contains forward-looking statements that involve risks
and uncertainties that include, among others, Amazon.com's limited operating
history, anticipated losses, unpredictability of future revenues, potential
fluctuations in quarterly operating results, seasonality, consumer trends,
competition, risks of system interruption, management of potential growth, risks
related to auction services, and risks of new business areas, international
expansion, business combinations, and strategic alliances. More information
about factors that potentially could affect Amazon.com's financial results is
included in Amazon.com's filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the year ended December 31, 1998.
Amazon.com, Amazon.com Auctions, Amazon.co.uk, Amazon.de, Internet Movie
Database, PlanetAll, 1-Click, and Bid-Click are either registered trademarks or
trademarks of Amazon.com, Inc., or its affiliates. All other names mentioned
herein may be trademarks of their respective owners.
NOTE ON FINANCIAL PRESENTATION
Financial results are prepared in accordance with U.S. generally accepted
accounting principles. All of the charges associated with Amazon.com's merger,
acquisition, and investment activities have been included in "merger- and
acquisition-related costs" in the accompanying financial statements in order to
enhance their informational value and to present the most comparable
classifications in the other line items. Among items included in merger- and
acquisition-related costs are amortization of goodwill and other purchased
intangibles, equity in loss of investees, and certain non-recurring merger- and
acquisition-related costs. Pro forma financial results exclude these merger- and
acquisition-related costs.
CONTACTS:
Karen Cho Bill Curry
Investor Relations Public Relations
Amazon.com, Inc. Amazon.com, Inc.
(206) 694-2171 (206) 834-7180
[email protected]
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AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31,
---------------------------
1999 1998
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(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Net sales $ 293,643 $ 87,361
Cost of sales 228,852 68,063
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Gross profit 64,791 19,298
Operating expenses:
Marketing and sales 60,744 19,914
Product development 23,477 7,320
General and administrative 11,165 2,049
Merger and acquisition related costs, including amortization
of goodwill and other purchased intangibles 25,309
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Total operating expenses 120,695 29,283
Loss from operations (55,904) (9,985)
Interest income 10,925 1,645
Interest expense (16,688) (2,029)
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Net interest expense (5,763) (384)
Net loss $ (61,667) $ (10,369)
========= =========
Basic and diluted loss per share $ (0.39) $ (0.07)
========= =========
Shares used in computation of basic and diluted loss per share 156,897 141,318
========= =========
PRO FORMA RESULTS EXCLUDING MERGER AND ACQUISITION RELATED COSTS (SEE NOTE 2
BELOW)
Pro forma loss from operations, excluding merger and
acquisition related costs $ (30,595) $ (9,985)
========= =========
Pro forma net loss, excluding merger and acquisition
related costs $ (36,358) $ (10,369)
========= =========
Pro forma basic and diluted loss per share, excluding
merger and acquisition related costs $ (0.23) $ (0.07)
========= =========
Shares used in computation of pro forma basic and diluted loss per share 156,897 141,318
========= =========
</TABLE>
NOTE 1: On January 4, 1999, the company effected a three-for-one stock split in
the form of a stock dividend to stockholders of record on December 18, 1998.
Accordingly, the accompanying consolidated balance sheets and statements of
operations have been restated to reflect the split.
NOTE 2: Pro forma results for the quarter ended March 31, 1999 and 1998 are
presented for informational purposes only and are not prepared in accordance
with generally accepted accounting principles. These results present the
operating results of Amazon.com, excluding charges of $25.3 million and $0 for
the quarter ended March 31, 1999 and 1998, respectively, for merger and
acquisition related costs arising from Amazon.com's April 1998 acquisitions of
Bookpages, Telebook and Internet Movie Database, and the August 1998 acquisition
of Junglee and the merger with PlanetAll. Among items included in merger and
acquisition related costs are amortization of goodwill and other purchased
intangibles, equity in loss of investees, and certain non-recurring merger and
acquisition related costs.
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AMAZON.COM, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
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(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 5,248 $ 25,561
Marketable securities 1,437,717 347,884
Inventories 45,236 29,501
Prepaid expenses and other 37,077 21,308
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Total current assets 1,525,278 424,254
Fixed assets, net 60,600 29,791
Goodwill and other, net 187,194 187,003
Deferred charges 39,912 7,412
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Total assets $ 1,812,984 $ 648,460
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 133,018 $ 113,273
Accrued advertising 16,187 13,071
Other liabilities and accrued expenses 45,194 34,423
Current portion of long-term debt and capital lease obligation 7,186 808
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Total current liabilities 201,585 161,575
Long-term debt and capital lease obligation 1,533,862 348,140
Stockholders' equity:
Preferred stock, $0.01 par value:
Authorized shares -- 10,000
Issued and outstanding shares -- none - -
Common stock, $0.01 par value:
Authorized shares -- 300,000
Issued and outstanding shares -- 161,371 and
159,267 shares at March 31, 1999 and
December 31, 1998, respectively 1,614 1,593
Additional paid-in capital 306,414 300,130
Note receivable from officer for common stock (1,099) (1,099)
Deferred compensation (1,275) (1,625)
Accumulated other comprehensive income (4,390) 1,806
Accumulated deficit (223,727) (162,060)
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Total stockholders' equity 77,537 138,745
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Total liabilities and stockholders' equity $ 1,812,984 $ 648,460
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</TABLE>
NOTE 1: On January 4, 1999, the company effected a three-for-one stock split in
the form of a stock dividend to stockholders of record on December 18, 1998.
Accordingly, the accompanying consolidated balance sheets and statements of
operations have been restated to reflect the split.
