<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
APRIL 26, 2000
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 OF 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 April 26, 2000, Amazon.com, Inc. ("Amazon.com") announced its
financial results for the first quarter of 2000.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.1 Press Release dated April 26, 2000 regarding
Amazon.com's first 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: April 26, 2000 By: /s/ MARK S. PEEK
----------------------------------
Mark S. Peek
Chief Accounting Officer and
Vice President, Finance
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
99.1 Press Release dated April 26, 2000 regarding Amazon.com's
first quarter financial results.
</TABLE>
<PAGE> 1
Amazon.com Surpasses 20 Million Cumulative Customer Accounts and
Announces Financial Results for First Quarter 2000
3.1 Million New Customers Added;
Cumulative Customer Total Now Over 20 Million;
First Quarter Revenues Up 95% Year-Over-Year; Now More Than 12 Stores
SEATTLE--(BUSINESS WIRE)--April 26, 2000--
Amazon.com, Inc. (NASDAQ:AMZN) today announced that net sales for the first
quarter of 2000 were $574 million, an increase of 95 percent over net sales of
$294 million for the first quarter of 1999.
Pro forma operating loss in the first quarter of 2000 was $99 million,
compared to a pro forma operating loss of $31 million in the first quarter of
1999. First-quarter pro forma net loss in 2000 was $122 million, or $0.35 per
share, compared with a pro forma net loss of $36 million, or $0.12 per share, in
the first quarter of 1999.
Amazon.com announced that cumulative customer accounts increased by 3.1
million during the first quarter to 20 million as of March 31, 2000.
Repeat-customer orders represented 76 percent of orders in the first quarter of
2000, up from 66 percent in the first quarter of 1999. Customer accounts exclude
users of the Amazon Commerce Network (an expanding set of product and service
offerings powered by partners) but include users of Amazon marketplace services.
"Our platform has allowed us to expand the products and services we offer
customers and demonstrate operating leverage in our results at the same time,"
said Jeff Bezos, Amazon.com founder and CEO. "We expect that the rest of the
year will yield a similar balance of global growth and expansion while driving
toward profitability in every business."
"Our vision remains being the best place for customers to find and discover
anything they want to buy online," said Joe Galli, Amazon.com president and COO.
"We made terrific progress in the first quarter against our key goals for 2000:
customer growth, product and service expansion, operational excellence, global
focus, extending the Amazon Commerce Network, and driving toward profitability."
"We are pleased to report substantial growth and gross profit and operating
margin improvement this quarter," said Warren Jenson, Amazon.com CFO. "Looking
ahead, we expect our U.S. Books, Music and DVD/Video segment to be profitable on
a pro forma operating basis for the full year 2000. In addition, we believe that
over the next three quarters combined, Amazon.com will be operating cash flow
positive -- enough, we expect, to more than cover our planned capital
expenditures. With the leading platform in online commerce, a global brand and
scale, and $1 billion in cash, we are well positioned to deliver on our 2000
plans."
For the quarter, trailing 12-month sales per customer who purchased during
the past 12 months was $121, up from $107 for the first quarter of 1999. The
company also reported that its overall fulfillment expenses were $99 million or
17 percent of sales this quarter.
A live Webcast of the company's first quarter 2000 financial results
conference call can be heard today at 2:00 p.m. PST / 5:00 p.m. EST at
www.amazon.com/ir. The call will also be archived and available until May 31,
2000.
<PAGE> 2
Growth in Earth's Biggest Selection
Within its Tools & Hardware store, Amazon.com launched
www.toolcrib.amazon.com, a new professional tools and equipment store targeted
at its professional-contractor business customers (also located on the home page
of the Tools & Hardware tab). The new store includes full line listings from
well-known tool manufacturers such as DeWalt, Delta, Makita, Porter Cable,
Bosch, and Hitachi. Professionals can browse products in over 20 categories and
get useful product information from sources such as Tools of the Trade magazine
and Amazon.com customer reviews.
Amazon.com has also added a new Lawn & Patio store, with thousands of
popular and hard-to-find products for lawn and patio decoration, care and
enjoyment. The store (www.amazon.com/lawnandpatio) features an extensive
selection of outdoor grills, patio furniture, birdfeeders, lawn mowers, garden
tools and decorative ornaments (and even pink flamingos) from more than 50
leading brands, including Weber, Fiskars, Rubbermaid, Rain Bird, Melnor/Gardena,
Gilmour, Ryobi, Echo, Weed Eater, Corona and Miracle-Gro.
Amazon.com launched a Health & Beauty store, providing a direct gateway to
drugstore.com's health, beauty and wellness products and information from the
Amazon.com site at www.amazon.com/healthandbeauty. Now when shoppers go to the
Amazon.com home page, they can click the Health & Beauty tab and enter the
drugstore.com online storefront. This one-stop shopping means convenient access
to drugstore.com's more than 20,000 health and beauty products, useful content
and buying guides and full-service pharmacy. Amazon.com shoppers can navigate
throughout the drugstore.com site with an ever-present "Return to Amazon.com"
link to send them rapidly and easily back to the Amazon.com home page.
drugstore.com is the first Amazon Commerce Network partner to be featured as an
integrated part of Amazon.com's navigational structure.
In its pursuit of being the best place to find and discover anything
customers want to buy online, Amazon.com works not only to open new stores but
also to extend the products in our existing stores. For example, Stephen King's
Riding the Bullet, his first-ever story published exclusively as an e-book, was
made available for download by Amazon.com customers.
Amazon.com's Electronics store was selected by Ceiva to be the exclusive
retailer -- online or off -- of its revolutionary Internet appliance product.
Ceiva is the first-ever Internet-connected digital picture frame, which enables
people to receive photos to a picture frame directly over a phone line.
Global Growth
In Europe, Amazon.co.uk and Amazon.de both added a DVD/Video store. The new
U.K. DVD/Video store (www.amazon.co.uk/video), for example, provides the most
comprehensive selection of DVDs and videos in the U.K. The store offers more
than 22,000 VHS titles (almost every video available in the U.K.), plus all of
the DVDs currently available in the U.K.
Amazon.com announced the opening of a customer service center in The Hague,
to offer multi-lingual support from a pan-European call center. Amazon.com also
named Diego Piacentini, Apple Europe's former vice president and general
manager, as senior vice president and general manager international.
<PAGE> 3
According to recent Media Metrix ratings for Europe, the Amazon.co.uk,
Amazon.de and Amazon.com sites are ranked the No. 1, No. 2 and No. 3 online
retail sites in Europe based on reach. Total first-quarter sales outside the
U.S., including exports from the U.S., were 24 percent of sales.
Service Expansion
Amazon Payments is an integrated payment system that allows businesses and
individuals to both make and receive online payments via credit cards. This
service allows payment from a buyer to be automatically transferred to a seller,
and is now accepted by over 50 percent of zShops and Auctions listings.
The Amazon Anywhere program, Amazon.com's wireless initiative, was extended
to provide easy access to Amazon.com anytime, anywhere. Amazon Anywhere added
new features and functionality for Personal Digital Assistant (PDA) customers
like users of the Palm VII. As a result of Amazon.com's over 11 partnerships
with handheld wireless Internet device manufacturers such as Nokia and Motorola,
and several wireless carriers, including Sprint PCS, Nextel and Airtouch,
customers can now access Amazon.com using the Hand Device Mark-up Language
(HDML) format. Additionally, customers can now shop at Amazon.com via the new
Pocket PC through Pocket Internet Explorer. Amazon Anywhere has created several
new Web addresses for mobile e-commerce (amazon.com/phone) and Pocket PC
customers (www.amazon.com/pocketpc). Customers can buy or place pre-orders while
supplies last on Pocket PC devices from Casio, Compaq and Hewlett-Packard at the
Amazon.com Electronics store.
European customers can access the U.K. and German sites using the Wireless
Applications Protocol (WAP) format. This global Amazon Anywhere initiative
emphasizes Amazon.com's commitment to enhancing the customer buying experience
with the convenience, safety and speed of state-of-the-art wireless commerce.
Community and Personalization
Amazon.com also launched Amazon Friends & Favorites, an area accessible
from the Amazon.com home page that gives its community of millions of customers
the opportunity to help each other find, discover and buy great products and
services. Amazon Friends & Favorites further customizes the shopping experience
for customers, making it easy for customers to manage their wish list, their
reviews and other information that they want to share. Customers choose the
friends with whom they want to share their opinions, past purchases and
wish-list items. In exchange, they gain insight from a growing circle of
friends, family and favorite reviewers they trust the most. Reviews,
recommendations and wishes from a customer's selection of favorite people
personalize their shopping experience, helping them to make an even more
informed buying decision. Other features of Amazon Friends & Favorites include
About You pages, discussion boards, purchase circles and refer-a-friend, all
examples of Amazon.com's customer-centric approach to individualizing the
shopping experience for, and relationship with, its customers.
<PAGE> 4
About Amazon.com
Amazon.com (Amazon.com, Inc., and its subsidiaries) is the Internet's No. 1
music, No. 1 DVD and video, and No. 1 book retailer. Amazon.com (NASDAQ:AMZN)
opened its virtual doors on the World Wide Web in July 1995 and today offers
Earth's Biggest Selection, along with online auctions and free electronic
greeting cards. Amazon.com lists more than 18 million unique items in categories
including books, CDs, toys, electronics, videos, DVDs, home improvement
products, software, and video games. Through Amazon zShops, any business or
individual can sell virtually anything to Amazon.com's more than 20 million
customers, and with Amazon Payments, any seller can accept credit card
transactions, avoiding the hassles of offline payments. The company also
participates in sothebys.amazon.com, the leading auction site for guaranteed
art, jewelry, and collectibles, at www.sothebys.amazon.com.
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 Auctions, or Amazon
zShops, making Amazon.com the shopping destination to find anything. Amazon
Anywhere is the leader in mobile e-commerce, providing access from anywhere in
the world to Amazon.com through hand-held wireless Internet devices that use the
Wireless Application Protocol (www.amazon.com/phone/) and on personal digital
assistants (PDAs).
Amazon.com operates two international Web sites: www.amazon.co.uk and
www.amazon.de. It also operates the Internet Movie Database (www.imdb.com), the
Web's comprehensive and authoritative source of information on more than 220,000
movies and entertainment programs and 800,000 cast and crew members dating from
the birth of film in 1892 to 2003.
Amazon.com has invested in leading Internet retailers that are improving
the lives of customers by making shopping easier and more convenient:
Greenlight.com, the only company that offers car buyers the control of auto
purchasing online with ongoing service and support from local dealerships, at
www.greenlight.com; living.com, the leading online home products and services
retailer, at www.living.com; 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;
Gear.com, which offers brand-name sporting goods at prices from 20 to 90 percent
off retail, at www.gear.com; Ashford.com, the leading Internet retailer of
luxury and premium products and the Web's No. 1 retailer of watches and jewelry,
at www.ashford.com; Audible, Inc., the leader in Internet-delivered spoken audio
for PC-based listening or playback on AudibleReady portable digital audio
devices, at www.audible.com; eZiba.com, a leading online retailer of handcrafted
products from around the world, at www.eziba.com; and WineShopper.com, the San
Francisco- and Napa-based Internet start-up that will ultimately offer consumers
online access to the largest selection of wines available anywhere, at
www.wineshopper.com.
<PAGE> 5
Amazon.com also has a minority interest in Della.com, which brings together
leading retailers with gift registry, expert advice, and personalized gift
suggestions to help everyone give better gifts, at www.della.com; NextCard,
Inc., considered the industry's leading issuer of consumer credit on the
Internet, at www.nextcard.com; and Kozmo.com, the world's leading "e-mmediate"
Internet-to-door delivery service, at www.kozmo.com.
Historical results of operations are preliminary and unaudited. This press
release also contains forward-looking statements, including statements regarding
expectations of future pro-forma operating profitability in the U.S. Books,
Music and DVD/Video segment and positive cash flow from operations, all of which
are inherently difficult to predict. Actual results could differ materially for
a variety of reasons, including the rate of growth of the Internet and online
commerce, the amount that Amazon.com invests in new business opportunities and
the timing of those investments, customer spending patterns, the mix of products
sold to customers, the mix of revenues derived from products sales as compared
to services, risks of inventory management, and risks of distribution and
fulfillment throughput and productivity. Other risks and uncertainties include
Amazon.com's limited operating history, anticipated losses, potential
fluctuations in quarterly operating results, seasonality, consumer trends,
competition, risks associated with distribution center expansion, adverse
consequences arising from system interruptions, risks associated with management
of potential growth, risks related to auction and zShops services, risks related
to fraud and Amazon.com Payments, 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, 1999.
Note on Financial Presentation
Financial results are prepared in accordance with U.S. generally accepted
accounting principles. Pro forma financial results exclude amortization of
goodwill and other intangibles, equity in losses of equity-method investees,
stock-based compensation costs and merger, acquisition and investment-related
costs.
Organizations responsible for promulgating accounting standards are
currently reviewing the financial statement classification of, and accounting
for, fulfillment and order processing costs by a number of retailers, online and
offline, including Amazon.com. Fulfillment costs included in marketing and sales
expenses represent net credit card fees and those costs incurred in operating
and staffing distribution and customer service centers, including costs
attributable to receiving, inspecting and warehousing inventories; picking,
packing and preparing customers' orders for shipment; and responding to
inquiries from customers. The review by these accounting organizations may lead
to new accounting standards that could require that some or all of our
fulfillment and order processing costs be classified as cost of sales. These new
standards could also require us to capitalize certain of our fulfillment and
order processing costs in inventory. We currently expense these costs as
incurred. We will adjust our accounting and classification of fulfillment and
order processing costs if required by accounting organizations or by the SEC.
- -0-
<PAGE> 6
AMAZON.COM, INC.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
2000 1999
--------- ---------
<S> <C> <C>
Net sales $ 573,889 $ 293,643
Cost of sales 445,755 228,852
Gross profit 128,134 64,791
Operating expenses:
Marketing and sales 140,111 60,717
Technology and content 61,244 23,402
General and administrative 26,045 11,243
Stock-based compensation 13,652 111
Amortization of goodwill and
other intangibles 82,955 20,900
Merger, acquisition and
investment-related costs 2,019 399
Total operating expenses 326,026 116,772
Loss from operations (197,892) (51,981)
Interest income 10,126 10,920
Interest expense (27,621) (16,634)
Other expense (4,774) (49)
Net interest expense and other (22,269) (5,763)
Loss before equity in losses of
equity-method investees (220,161) (57,744)
Equity in losses of equity-method
investees (88,264) (3,923)
Net loss $(308,425) $ (61,667)
Basic and diluted loss per share $ (0.90) $ (0.20)
Shares used in computation of basic
and diluted loss per share (Note 1) 343,884 313,794
Pro Forma Results (Note 2)
Pro forma loss from operations,
excluding amortization of goodwill
and other intangibles, stock-based
compensation costs and merger,
acquisition and investment-
related costs $ (99,266) $ (30,571)
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
2000 1999
--------- ---------
<S> <C> <C>
Pro forma net loss, excluding
amortization of goodwill and
other intangibles, equity in
losses of equity-method investees,
stock-based compensation costs and
merger, acquisition and investment-
related costs $(121,535) $ (36,334)
Pro forma basic and diluted loss per
share, excluding amortization of
goodwill and other intangibles,
equity in losses of equity-
method investees, stock-based
compensation costs and merger,
acquisition and investment-
related costs $ (0.35) $ (0.12)
Shares used in computation of pro
forma basic and diluted loss per
share (Note 1) 343,884 313,794
</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 3-month periods ended March 31, 2000 and 1999
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 $186.9 million and $25.3
million for the 3-month periods ended March 31, 2000 and 1999, respectively,
related to amortization of goodwill and other intangible assets, equity in
losses of equity-method investees, stock-based compensation and merger,
acquisition and investment-related costs.
<PAGE> 8
AMAZON.COM, INC.
Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 84,087 $ 116,962
Marketable securities 924,794 589,226
Inventories 172,257 220,646
Prepaid expenses and other
current assets 89,811 85,344
Total current assets 1,270,949 1,012,178
Fixed assets, net 334,396 317,613
Goodwill, net 471,748 534,699
Other purchased intangibles, net 175,444 195,445
Investments in equity-method
investees 271,542 226,727
Other investments 212,782 144,735
Deferred charges and other 54,882 40,154
Total assets $ 2,791,743 $2,471,551
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 255,797 $ 463,026
Accrued expenses and other
current liabilities 115,811 126,017
Accrued advertising 29,004 55,892
Deferred revenue 196,758 54,790
Interest payable 15,812 24,888
Current portion of long-term
debt and other 15,983 14,322
Total current liabilities 629,165 738,935
Long-term debt and other 2,136,961 1,466,338
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 -- 1,500,000
Issued and outstanding shares
-- 349,959 and 345,155 shares
at March 31, 2000
and December 31, 1999,
respectively 3,500 3,452
Additional paid-in capital 1,294,932 1,195,540
Note receivable for common
stock (1,171) (1,171)
Stock-based compensation (34,889) (47,806)
Accumulated other comprehensive
loss (46,302) (1,709)
Accumulated deficit (1,190,453) (882,028)
Total stockholders' equity 25,617 266,278
Total liabilities and
stockholders' equity $ 2,791,743 $ 2,471,551
</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.
<PAGE> 9
AMAZON.COM, INC.
Segment Information
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended US Books, Early-Stage
March 31, 2000 Music and Businesses
DVD/Video Intl. And Other Consolidated
--------- -------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues from external
customers $ 401,415 $ 75,132 $ 97,342 $ 573,889
Gross profit 82,855 16,036 29,243 128,134
Segment loss (2,425) (27,448) (69,393) (99,266)
Other operating expenses - - - (98,626)
Net interest expense and other - - - (22,269)
Equity in losses of equity-method
investees - - - (88,264)
Net loss - - - $(308,425)
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended US Books, Early-Stage
March 31, 1999 Music and Businesses
DVD/Video Intl. And Other Consolidated
--------- -------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues from external
customers $ 267,522 $ 25,719 $ 402 $ 293,643
Gross profit 59,266 5,157 368 64,791
Segment loss (3,117) (14,253) (13,201) (30,571)
Other operating expenses - - - (21,410)
Net interest expense and other - - - (5,763)
Equity in losses of equity-method
investees - - - (3,923)
Net loss - - - $ (61,667)
</TABLE>
- ----------
Note 1: The Company identifies operating segments based on product line
information, considering line maturity, within the United States and separately
identifies its international operations as an operating segment. The results for
US Books, Music and DVD/video have been aggregated into one reportable segment
due to the similarity of their economic characteristics.
# # #
CONTACT: Amazon.com, Inc. (Investor Relations)
Amanda Lawrence, 206/266-2171
[email protected]
or
Amazon.com, Inc. (Public Relations)
Bill Curry, 206/266-7180
