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Exhibit 1
[LOGO OF BID.COM]
Bid.Com International Inc.
3rd Quarter Report
2000
6725 Airport Road, Suite 201
Mississauga, Ontario L4V 1V2
Tel: 905-672-7467 / Fax: 905-672-5705
www.bid.com
(Nasdaq: BIDS, TSE: BII)
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Dear Shareholder,
This past quarter marked an important milestone in the evolution of Bid.Com. As
evidenced by our growing customer base and improved financial position, Bid.Com
is well positioned for long-term success.
Gross revenue in the third quarter 2000 totaled $1.7 million compared to $3.0
million in the second quarter of 2000 and $8.3 million in the third quarter of
1999. The decline in revenues reflects the ongoing implementation of Bid.Com's
previously announced exit from the business-to-consumer arena. Effective October
24, 2000, a key phase of this transition was completed with the closing of
Bid.Com's online retail operations.
During the third quarter, Bid.Com entered into agreements with 14 new business
customers. These agreements typically vary in duration from one to three years.
Bid.Com expects that revenues associated with these agreements will begin to be
realized in the fourth quarter of 2000. In its business-to-business model,
Bid.Com typically recognizes revenues through implementation fees, monthly
hosting fees, and a percentage share of transactions. New customers signed in
the quarter included News International, Marine Max, Stereo Advantage, and
iVenus.
As a result of our business-to-business focus, a new metric has been introduced
to gauge Bid.Com's success in the B2B sector. The new metric, "contract value",
represents contractually committed revenues expected to be earned over the
course of the underlying agreement, subject to normal business risks.
Contractually committed revenues includes initial consulting and implementation
fees, and monthly hosting fees. Contract value does not include any share of
transactions that Bid.Com will receive as a result of its customers' on-line
sales activities.
In addition to its gross revenues of $1.7 million, Bid.Com generated $1.3
million in new contract value in the third quarter. When added to its existing
deferred revenues of $3.1 million, Bid.Com has developed a cumulative contract
value of $4.4 million.
Including all non-operational items, Bid.Com reported net income for the quarter
of $11.3 million or $0.21 per basic share. Excluding non-operational items, the
net loss was $6.0 million, or $0.11 per basic share. This compares to a net loss
of $7.1 million, or $0.13 per basic share, for the second quarter of 2000 and a
net loss of $5.0 million, or $0.10 per basic share, for the same period in 1999.
During the quarter, Bid.Com experienced a number of non-operational items that
warrant highlighting:
. We realized an accounting gain $20.7 million on the disposition of
our of investment in Quack.com. In exchange for our shares in
Quick.com, we received shares in America Online (AOL), which have
been valued with an appropriate discount factor.
. We recorded an adjustment of $573,000 2000. to reflect
the market value of AOL shares at September 30, 2000
. To reflect the volatility of recent market conditions, impairment
special provision for strategic we investments. recorded a $2.9
million
Our working capital position at the end of the quarter was $24.6 million with
$24.3 million available in cash and marketable securities. Our overall cash burn
rate improved $600,000 over the previous quarter.
The third quarter was a watershed for Bid.Com. Without any dilution to
shareholder value, we significantly improved our liquidity as a result of the
sale of our equity stake in Quack.Com. As our customer base grows and
operational performance continues to improve, we believe that Bid.Com will
become cash flow positive before the end of 2001.
Yours truly,
/s/ Jeff Lymburner
Jeff Lymburner, President and CEO
November 23, 2000
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Bid.Com International Inc.
Consolidated Statement of Operations
(expressed in thousands of Canadian dollars, except per share amounts)
(Canadian GAAP, Unaudited)
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<CAPTION>
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Three Months Ended Nine Months Ended
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September 30 September 30
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2000 *2000 1999 2000 *2000 1999
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(in US$) (in US$)
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<S> <C> <C> <C> <C> <C> <C>
Gross revenue $ 1,669 $ 1,107 $ 8,330 $ 11,275 $ 7,482 $ 19,595
Customer acquisition costs/(A)/ - - - (157) (104) -
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Net revenue 1,669 1,107 8,330 11,118 7,378 19,595
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Direct expenses $ 1,392 $ 924 $ 6,377 $ 11,164 $ 7,407 $ 15,886
General and administrative/(B)/ 5,436 3,607 3,205 14,067 9,334 8,481
Advertising and promotion/(B)/ 367 244 3,408 4,936 3,275 6,681
Software development
and technology expense/(B)/ 260 173 273 985 654 750
Depreciation and amortization 270 179 245 760 504 425
Interest income (77) (51) (168) (382) (253) (531)
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7,648 5,076 13,340 31,530 20,921 31,692
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Loss from Operations $ (5,979) $ (3,969) $(5,010) $(20,412) $(13,543) $(12,097)
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Gain on disposal of
strategic investments $ 20,697 $ 13,734 $ 20,697 $ 13,734
Provison for impaired
strategic investments (2,865) (1,901) (3,295) (2,186)
Revaluation of marketable
securities (573) (380) (573) (380)
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$ 17,259 $ 11,453 - $ 16,829 $ 11,168 $ -
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Net Income/(Loss) $ 11,280 $ 7,484 $(5,010) $ (3,583) $ (2,375) $(12,097)
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Earnings/(Loss) per
basic share $ 0.21 $ 0.14 $ (0.10) $ (0.07) $ (0.04) $ (0.25)
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Weighted average
common shares 54,360 54,360 50,111 53,493 53,493 48,066
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<CAPTION>
September September December 31
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Balance Sheet Data 2000 *2000 1999
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(unaudited) (unaudited) (unaudited)
(in US$)
<S> <C> <C> <C>
Cash $ 2,638 $ 1,750 $ 5,019
Marketable securities 21,634 14,356 16,478
Other current assets 3,822 2,536 6,495
Other assets 7,259 4,817 8,751
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Total assets $35,353 $ 23,459 $ 36,743
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Current Liabilities $ 1,983 $ 1,316 $ 5,504
Short term and long term
deferred revenue 3,121 2,071 2,254
Long Term Debt 72 48
Total shareholders' equity 30,177 20,024 28,985
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Total liabilities and
shareholders' equity $35,353 $ 23,459 $36,743
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</TABLE>
* Translated into US$ at = Cdn$ 1.5070 for convenience.
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Bid.Com International Inc.
Consolidated Statements of Cash Flows
(expressed in thousands of Canadian dollars, except per share amounts)
(Canadian GAAP, Unaudited)
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<CAPTION>
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NET INFLOW (OUTFLOW) OF CASH Three Months Ended Nine Months Ended
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RELATED TO THE FOLLOWING ACTIVITIES September 30 September 30
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2000 *2000 1999 2000 *2000 1999
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(in US$) (in US$)
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<S> <C> <C> <C> <C> <C> <C>
OPERATING
Net loss for the period 11,280 7,484 (5,010) (3,583) (2,375) (12,097)
Item not affecting cash:
Non-cash customer acquisition costs/(A)/ 594 394 - 751 499 -
Depreciation and amortization 270 179 245 760 504 425
Gain on Disposal of Strategic Investments (20,697) (13,734) - (20,697) (13,734) -
Provision for Impaired Investments 2,865 1,901 - 3,295 2,186 -
Revaluation of Marketable Securities 573 380 - 573 380 -
Other non-cash - - - 173 115 -
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(5,115) (3,396) (4,765) (18,728) (12,425) (11,672)
Change in long term deferred revenue (345) (229) 361 319 212 361
Change in non-cash operating working
capital items/(B)/ 321 213 80 (361) (240) (3,918)
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(5,139) (3,412) (4,324) (18,770) (12,453) (15,229)
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INVESTING
Purchase of capital assets (618) (410) (100) (932) (619) (454)
Purchase of strategic investments (218) (145) - (2,546) (1,690) -
Acquisition of intangible assets (255) (169) (528) (562) (373) (574)
Marketable securities/(B)/ (100) (65) 5,025 16,189 10,742 (3,113)
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(1,191) (789) 4,397 12,149 8,060 (4,141)
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FINANCING
Capital Lease Obligation 133 88 - 133 88 -
Issuance of common shares (net of expenses) (58) (38) 1,165 4,107 2,725 12,293
Issuance of special warrants (net of expenses) - - 16,047 - - 16,047
Special warrants receivable - - - - - 2,311
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75 50 17,212 4,240 2,813 30,651
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Net cash inflow (outflow) during the period (6,255) (4,151) 17,285 (2,381) (1,580) 11,281
CASH, BEGINNING OF PERIOD 8,893 5,901 3,788 5,019 3,330 9,792
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CASH, END OF PERIOD 2,638 1,750 21,073 2,638 1,750 21,073
==================================================================================================================
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(A) These costs reflect non-cash expenses incurred by Bid.Com in association
with the attainment of certain B2B contracts.
(B) Certain prior period amounts have been reclassified to conform to the
current period presentation.
(C) As of September 30, 2000 stockholders equity included (i) 54,568,468 common
shares, (ii) 4,273,197 options to Directors, Officers and Employees
convertible into 4,273,197 common shares, and (iii) 3,425,462 share
purchase warrants exercisable into 3,425,462 common shares.
* Translated into US$ at = Cdn$ 1.5070 for convenience
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<CAPTION>
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<S> <C> <C>
DIRECTORS OFFICERS Registrar & Transfer Agent
CIBC Mellon Trust Company
Pat Bourke (2) Jeffrey Lymburner PO Box 70390
Chairman CEO and President Toronto Station A
Toronto, Ontario,
Canada M5W 2X5
Jeffrey Lymburner Mark Wallace
CEO and President, Chief Operating Officer
Bid.Com International Inc. Auditors
Deloitte & Touche LLP
Jim Moskos Chartered Accountants
T. Christopher Bulger/(1)(2)/ President, Toronto, Ontario, Canada
President and CEO, Bid.Com Technologies Group
eLab Technology Ventures
Peter Sprukulis Lawyers
Duncan Copeland/(3)/ Senior Vice President, Sales, Gowling Lafleur Henderson LLP
President, Marketing and Business Toronto, Ontario, Canada
Copeland and Company Development
Baer Marks & Upham LLP
New York, New York USA
Paul Godin/(2)/ Rob Joynt
Chairman, Vice President,
The Art Vault Consumer Sales and Marketing Stock Exchange Listings
Toronto Stock Exchange
Symbol BII
Jim Moskos John Mackie Nasdaq
President, Vice President, General Counsel Symbol BIDS
Bid.Com Technologies Group and Corporate Secretary
Bid.Com International Inc.
David Kirkconnell Web Sites
David Pamenter/(3)/ Vice-President, www.bid.com
Partner, Human Resources www.internetliquidators.com
Gowling Lafleur Henderson LLP www.dutchauction.com
David Pamenter
Charles Walker/(1)/ Assistant Secretary Shares Outstanding
CEO and President, (September 30, 2000)
Walker Group Inc. Issued 54,568,468
Aidan Rowsome, Fully Diluted 62,267,127
Managing Director, Europe
Ken Sexton/(1)/
Sr. Vice President and CFO, Hamish Sutherland
Merant plc Managing Director,
Australia and Asia Pacific
Howard Koenig/(3)/
Chief Executive Officer
Employeelife.com
(1) Member of Audit Committee
(2) Member of the Management
Resources and Compensation
Committee
(3) Member of the Corporate
Governance Committee
OFFICES
Bid.Com International Inc. Bid.Com USA, Inc. Bid.Com International Limited
6725 Airport Road 980 Ninth Street, 16th Floor 125 Lower Baggot Street
Suite 201 Sacramento, California Dublin 2, Ireland
Mississauga, Ontario 95814 USA Tel: 353-1-639-1135
Canada L4V 1V2 Tel: 916-449-9531
Tel: 905-672-7467
Bid.Com International Pty. Ltd.
Bid.Com USA, Inc. Level 50, 101 Collins Street
Bid.Com USA, Inc. 11 Penn Plaza, Suite 5029 Melbourne, Australia 3000
North Rocky Point Drive New York, New York Tel: 61 (03) 9653-9181
Suite 930 10001 U.S.A.
Tampa Florida Tel: 212-946-2895
33607 USA
Tel: 813-636-8205
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Full copies of Bid.Com's Press Releases are available on the Investor
Information Section of its website www.bid.com.
This quarterly report may include comments that do not refer strictly to
historical results or actions and may be deemed to be forward-looking within the
meaning of the Safe Harbor provisions of the U.S. federal securities laws. These
include, among others, statements about expectations of future revenues, cash
flows, and cash requirements. Forward-looking statements are subject to risks
and uncertainties that may cause the Company's results to differ materially from
expectations. These risks include the Company's ability to further develop its
business-to-business and licensing businesses, the Company's ability to develop
appropriate strategic alliances and successful development and implementation of
technology, acceptance of the Company's products and services, competitive
factors, new products and technological changes, and other such risks as the
Company may identify and discuss from time to time, including those risks
disclosed in the Company's Form 20-F filed with the Securities and Exchange
Commission. Accordingly, there is no certainty that the Company's plans will be
achieved.
