<PAGE> 1
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
OCTOBER 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)
1200 - 12TH AVENUE SOUTH, SUITE 1200, SEATTLE, WASHINGTON 98144
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(206) 266-1000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
<PAGE> 2
ITEM 5. OTHER EVENTS
On October 27, 1999, Amazon.com, Inc. ("Amazon.com") announced its
financial results for the third quarter of 1999.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.1 Press Release dated October 27, 1999 regarding
Amazon.com's third quarter financial results
<PAGE> 3
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: October 28, 1999 By: /s/ Kelyn J. Brannon
-------------------------------
Kelyn J. Brannon
Vice President of Finance,
and Chief Accounting Officer
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
99.1 Press Release dated October 27, 1999 regarding Amazon.com's
third quarter financial results
</TABLE>
<PAGE> 1
EXHIBIT 99.1
AMAZON.COM ANNOUNCES FINANCIAL RESULTS
FOR THIRD QUARTER 1999
TOYS, ELECTRONICS, AND zSHOPS MAKE AMAZON.COM
THE ONE-STOP DESTINATION FOR HOLIDAY SHOPPING
SEATTLE, WA--October 27, 1999--Having added a complete toy store, a
complete electronics store, and zShops, Amazon.com, Inc. (NASDAQ: AMZN) today
announced financial results for the third quarter of 1999. Net sales for the
third quarter were $356 million, an increase of 132 percent over net sales of
$154 million for the third quarter of 1998.
Amazon.com reported a third-quarter pro forma operating loss of $79
million, compared to a pro forma operating loss of $21 million in the third
quarter of 1998. Third-quarter pro forma net loss of $86 million, or $0.26 per
share, compared with a pro forma net loss of $24 million, or $0.08 per share, in
the third quarter of 1998. On a GAAP basis, reported third-quarter net loss was
$197 million, or $0.59 per share, and included $111 million of merger-,
acquisition-, investment-related costs, and stock-based compensation charges.
Amazon.com announced that cumulative customer accounts, including
Auctions users, increased by 2.4 million during the third quarter to 13.1
million at September 30, 1999, an increase of more than 190 percent from 4.5
million customer accounts at September 30, 1998. Repeat customer orders
represented more than 72 percent of orders during the quarter ended September
30, 1999, up from 70 percent in the previous quarter.
The growth in sales and customers accompanied the addition of a
complete toy store, a complete electronics store, and the introduction of zShops
to Amazon.com. zShops make it possible for any individual or business to sell
through Amazon.com, reaching more than 13 million experienced online shoppers.
Also, the company's new All Product Search helps shoppers find anything they
want to buy on the Net, making Amazon.com the one destination for shoppers to
find whatever they are looking for.
"In the third quarter, we announced our new Toys Store, which was
immediately recognized by both Forrester Research and MSNBC as the best toy
store on the Internet," said Jeff Bezos, Amazon.com founder and CEO. "Toys and
our other product expansions round out our rich selection and establish
Amazon.com as the one-stop holiday shopping destination."
Regarding Amazon.com's ongoing expansion, the company will be working
hard during the holiday season to deliver the great service that Amazon.com
customers have come to expect. The company has substantially increased its
customer-service capability and increased distribution square footage more than
four times compared to the 1998
<PAGE> 2
holiday season, which will help the company better serve customers during this
busy time. The company expects its combined focus on growth and customer
satisfaction will impact fourth-quarter financial performance, relative to the
third quarter, primarily in four ways: first, top-line revenues will increase
significantly; second, gross margins will decrease; third, fulfillment expenses
as a percentage of sales will slightly increase or be flat; and fourth,
marketing expenses will increase.
RECENT HIGHLIGHTS
CUSTOMER EXPERIENCE
Heads-down focus on customers helped Amazon.com continue to improve
customer experience and grow brand and reach. Recent highlights include
Amazon.com rated as:
o The most widely recognized e-commerce brand in the United States, as
rated by online shoppers in a nationwide survey by Opinion Research
Corp. Some 117.8 million adults, or 60 percent of the adult
population in the U.S., recognize the Amazon.com brand, according to
the survey;
o The 57th most valuable brand worldwide, just above Hilton, Guinness,
and Marriott, and just below Pampers, in a June study of global
brands by Interbrand Newell and Sorrell;
o The No 1. Toys store, Books, Music, and Video stores, and General
Merchandise store in Forrester Research's recently released
PowerRankings(TM);
o The best online toy store in an MSNBC survey, barely one month after
the launch of the Amazon.com Toys Store, beating out
longer-established players;
o The No. 1 place to save money on the Internet, as rated by online
shoppers in a nationwide survey by Opinion Research Corp.;
o The No. 1 online shopping site and the No. 7 Web property during
September, according to Media Metrix;
o The No. 1 Video store, the No.1 Music store, and the No. 1 Bookstore
by Gomez Advisors in their most recent scorecards of online stores
in these categories;
o The most-visited music store online, according to Greenfield
Online's study of more than 5,000 consumers who have shopped for
music online.
WISH LIST
In early October, Amazon.com introduced Wish List, an advanced and
extensive online gift registry for the coming holiday season
(http://www.amazon.com/wishlist). Designed to take the stress and hassle out of
finding the perfect gift, Wish List was the No. 1 customer request during last
year's holiday shopping season. Since its introduction, Wish List has seen
faster adoption than almost any other feature Amazon.com has offered its
customers.
<PAGE> 3
zSHOPS
In late September, Amazon.com introduced zShops, which enable anyone to
offer merchandise for sale at Amazon.com, whether they are micro-manufacturers
or major manufacturers, small businesses or global corporations, or specialized
retailers. With zShops, anyone can now offer a vast array of popular or
hard-to-find items to Amazon.com's more than 13 million customers.
AMAZON.COM PAYMENTS
With the launch of zShops, Amazon.com introduced Amazon.com Payments,
which allows individuals to pay for zShops purchases with credit cards using
Amazon.com's 1-Click payment feature, thus eliminating what is considered the
greatest inconvenience of online transactions between individuals: the delays,
hassles, and risks of sending checks and money orders through regular mail.
ALL PRODUCTS SEARCH
All Products Search, located in the search box on the upper-left of the
Amazon.com Welcome page, helps shoppers find anything for sale on the Net,
providing customers with a convenient, easy-to-use guide for finding and
discovering exactly what they want among the Net's millions of offerings. This
customized and specialized Web search engine is dedicated solely to shopping and
makes Amazon.com the place to start online shopping.
AMAZON.COM ANYWHERE
In early October, Amazon.com launched Amazon.com Anywhere, an
initiative in wireless e-commerce that allows customers to shop and check the
status of auction items at Amazon.com securely when they are away from their
desktop computers. With the national launch of the new Palm VII(TM) organizer,
Amazon.com's vast selection of merchandise is now accessible to customers
anywhere, anytime.
MANAGEMENT TEAM EXPANSION
The company continued to build on its management strength, naming
Warren C. Jenson as its senior vice president and chief financial officer.
Jenson had been executive vice president and CFO at Delta Airlines, the largest
domestic airline. Prior to Delta, Jenson was CFO of NBC, a division of General
Electric. Jenson came to Amazon.com with a strong record of achievement in
financial management, innovative transactions, and Web-based initiatives.
Jeffrey A. Wilke was named vice president-general manager of
operations. Wilke was formerly vice president and general manager of
AlliedSignal's Pharmaceutical Fine Chemicals unit. Wilke was directly
responsible for 15 plants/distribution centers in the U.S., Europe, and Asia.
INVESTMENTS
<PAGE> 4
Amazon.com made a significant minority investment in Della & James, the
first company to bring together wedding registries from a broad selection of
premier national retailers and local stores, creating the best way to register
for and purchase wedding gifts. As part of the strategic relationship with
Amazon.com, Della & James' wedding-gift registry will be available through
Amazon.com, enabling Amazon.com's 13 million customers to find wedding
registries and purchase wedding gifts through Della & James.
ABOUT AMAZON.COM, INC.
Amazon.com (Amazon.com, Inc. and its subsidiaries) is the Internet's
No. 1 music, No. 1 video, and No. 1 book retailer. Amazon.com opened its virtual
doors on the World Wide Web in July 1995 and today offers Earth's Biggest
Selection with online auctions, toys, electronics, and free electronic greeting
cards. Amazon.com lists more than 18 million unique items in categories
including books, CDs, toys, electronics, videos, DVDs, and computer games.
Through Amazon.com zShops, any business or individual can sell virtually
anything to Amazon.com's more than 13 million customers, and with Amazon.com
Payments, any seller can accept credit-card transactions, avoiding the hassles
of offline payments.
Amazon.com seeks to be the world's most customer-centric company, where
customers can find and discover anything they may want to buy online.
Amazon.com's All Product Search scours the Web to help customers find
merchandise that is not available at Amazon.com, Amazon.com Auctions, or
Amazon.com zShops, making Amazon.com the shopping destination to find anything.
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 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. Amazon.com also operates Amazon.com
LiveBid Auctions (http://livebid.amazon.com), the leading provider of live-event
auctions on the Internet.
Amazon.com has invested in leading Internet retailers that are
improving the lives of customers by making shopping easier and more convenient:
drugstore.com, an online retail and information source for health, beauty,
wellness, personal care and pharmacy, at www.drugstore.com; Pets.com, the online
leader for pet products, expert information, and services, at www.pets.com;
HomeGrocer.com, the first fully integrated Internet grocery-shopping and
home-delivery service, with operations in Seattle, Portland, Oregon, and
Southern California, at www.homegrocer.com; and Gear.com, which offers
brand-name sporting goods at prices from 20 to 90 percent off retail, at
www.gear.com. Amazon.com also has a minority interest in Della & James, the
leading online wedding-gift registry, at www.dellajames.com.
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.
<PAGE> 5
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 and Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1999 and June 30, 1999.
Amazon.com, Amazon.com Auctions, Amazon.co.uk, Amazon.de, Internet
Movie Database, PlanetAll, Earth's Biggest Selection, zShops, Bid-Click, and
1-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-,
acquisition-, and investment-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-, acquisition-, and investment-related costs are amortization of goodwill
and other purchased intangibles, equity in loss of investees, and certain
nonrecurring merger-, acquisition-, and investment-related costs. Pro forma
financial results exclude these merger-, acquisition-, and investment-related
costs and stock-based compensation.
Amazon.com will conduct a conference call with analysts today at 2:00
p.m. PST. The conference call will be Webcast live via Yahoo's broadcast.com,
and will be archived on that site for one week following the call at the
following URL:
http://webevents.broadcast.com/earnings/AMZN/Q31999/index.asp?eventid=85.
CONTACTS:
Amanda Lawrence Bill Curry
Investor Relations Public Relations
Amazon.com, Inc. Amazon.com, Inc.
(206) 266-2171 (206) 266-7180
[email protected]
<PAGE> 6
AMAZON.COM, INC.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ----------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 355,777 $ 153,648 $ 963,797 $ 356,992
Cost of sales 285,300 118,823 760,998 276,680
--------- --------- --------- ---------
Gross profit 70,477 34,825 202,799 80,312
Operating expenses:
Marketing and sales 86,555 37,454 233,222 84,325
Product development 44,608 13,227 102,298 29,168
General and administrative 18,512 4,951 44,301 10,220
Merger, acquisition and investment related costs, including
amortization of intangibles and equity in earnings of affiliates 99,481 19,486 175,255 24,901
Stock-based compensation 11,789 1,214 16,570 1,591
--------- --------- --------- ---------
Total operating expenses 260,945 76,332 571,646 150,205
Loss from operations (190,468) (41,507) (368,847) (69,893)
Interest income 12,699 4,755 36,479 9,790
Interest expense (21,470) (8,419) (66,424) (18,017)
Other income (expense) 2,159 -- 2,037 --
--------- --------- --------- ---------
Net interest expense (6,612) (3,664) (27,908) (8,227)
Net loss $(197,080) $ (45,171) $(396,755) $ (78,120)
========= ========= ========= =========
Basic and diluted loss per share $ (0.59) $ (0.15) $ (1.23) $ (0.27)
========= ========= ========= =========
Shares used in computation of basic
and diluted loss per share 332,488 301,405 323,064 292,206
========= ========= ========= =========
PRO FORMA RESULTS EXCLUDING MERGER AND ACQUISITION, INVESTMENT AND STOCK-BASED COMPENSATION COSTS (SEE NOTE 2 BELOW)
Pro forma loss from operations, excluding merger and
acquisition, investment and stock-based compensation costs $ (79,198) $ (20,807) $(177,022) $ (43,401)
========= ========= ========= =========
Pro forma net loss, excluding merger and acquisition, investment
and stock-based compensation costs $ (85,810) $ (24,471) $(204,930) $ (51,628)
========= ========= ========= =========
Pro forma basic and diluted loss per share, excluding merger and
acquisition, investment and stock-based compensation costs $ (0.26) $ (0.08) $ (0.63) $ (0.18)
========= ========= ========= =========
Shares used in computation of pro forma basic
and diluted loss per share 332,488 301,405 323,064 292,206
========= ========= ========= =========
</TABLE>
NOTE 1: The Company effected a three-for-one stock split and two-for-one stock
split on January 4, 1999 and September 1, 1999, respectively. Each stock split
was in the form of a stock dividend to stockholders of record on December 18,
1998 and August 12, 1999, respectively. Accordingly, the accompanying
consolidated balance sheets and statements of operations have been restated to
reflect the splits.
NOTE 2: Pro forma results for the quarter and 9-month periods ended September
30, 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 $111.3
million and $20.7 million for the 3-month periods ended September 30, 1999 and
1998, and $191.8 million and $26.5 million for the 9-month periods ended
September 30, 1999 and 1998, respectively, related to stock-based compensation
and arising from Amazon.com's merger, acquisition and investment activities.
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.
<PAGE> 7
AMAZON.COM, INC.
Consolidated Balance Sheets
(in thousands, except per share data)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 43,149 $ 25,561
Marketable securities 862,536 347,884
Inventories 118,793 29,501
Prepaid expenses and other 55,590 21,308
----------- ---------
Total current assets 1,080,068 424,254
Fixed assets, net 221,243 29,791
Other investments 196,317 7,740
Intangibles and other, net 705,932 179,263
Deferred charges 36,239 7,412
----------- ---------
Total assets $ 2,239,799 $ 648,460
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 236,711 $ 113,273
Accrued advertising 24,567 13,071
Interest payable 10,045 10
Other liabilities and accrued expenses 73,572 34,413
Current portion of long-term debt and other 12,776 808
----------- ---------
Total current liabilities 357,671 161,575
Long-term debt and other 1,462,203 348,140
Stockholders' equity:
Preferred stock, $0.01 par value:
Authorized shares -- 150,000
Issued and outstanding shares -- none -- --
Common stock, $0.01 par value:
Authorized shares -- 3,000,000
Issued and outstanding shares -- 339,235 and 318,534
shares at September 30, 1999 and December 31, 1998, respectively 3,393 3,186
Additional paid-in capital 1,027,655 298,537
Note receivable from officer for common stock (1,171) (1,099)
Stock-based compensation (32,180) (1,625)
Accumulated other comprehensive income (18,957) 1,806
Accumulated deficit (558,815) (162,060)
----------- ---------
Total stockholders' equity 419,925 138,745
----------- ---------
Total liabilities and stockholders' equity $ 2,239,799 $ 648,460
=========== =========
</TABLE>
NOTE 1: The Company effected a three-for-one stock split and two-for-one stock
split on January 4, 1999 and September 1, 1999, respectively. Each stock split
was in the form of a stock dividend to stockholders of record on December 18,
1998 and August 12, 1999, respectively. Accordingly, the accompanying
consolidated balance sheets and statements of operations have been restated to
reflect the splits.
