Stamps.com Reports First Quarter 2001 Financial Results

Company Reports 158% Growth in Revenue Over First Quarter 2000,

With 39% Gross Margin and Narrowed Losses



Apr 17, 2001, 01:00 ET from Stamps.com

    SANTA MONICA, Calif., April 17 /PRNewswire/ -- Stamps.com(TM)
 (Nasdaq:   STMP) today announced that revenue in the first quarter of 2001 was
 $5.3 million, an increase of 158% over the first quarter of 2000.  First
 quarter 2001 gross margin was 39% compared to 10% in the fourth quarter 2000.
 First quarter net loss from continuing operations was $9.1 million, which
 excludes non-cash charges, first quarter losses and a one-time gain from the
 Encryptix subsidiary, a charge related to the impairment of goodwill
 associated with the purchase of iShip.com, and restructuring and write down
 charges.  On a per share basis, the equivalent continuing operations loss for
 the first quarter 2001 was $0.18 per share based on the weighted average
 common shares outstanding of 49.1 million.  Cash and short-term investments as
 of March 31, 2001 was $213 million, or $4.34 per share, excluding any cash in
 the Encryptix subsidiary.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000322/STAMPS )
     "The initiatives we undertook in the fourth quarter of year 2000 and the
 first quarter of year 2001 have already begun to pay dividends in our improved
 gross margins and narrowed losses," said CEO Bruce Coleman.  "Moving forward,
 we plan to continue to streamline our costs while enhancing our revenue growth
 toward achieving our goal of profitability and positive cash flow."
     For fiscal year 2001, Stamps.com continues to expect total revenues of
 approximately $23 million, which represents growth of 60% over fiscal year
 2000 revenues.  In addition, the company continues to expect its total year
 2001 cash burn to be $20-25 million on a continuing operations basis; down
 over 80% from Year 2000 total cash burn.  Stamps.com has already made good
 progress toward achieving its goals in the first quarter 2001.  With its
 February 6, 2001 reduction in its work force, more focused and cost-efficient
 marketing spend, and other cost-cutting programs, Stamps.com used
 approximately $11 million in cash during the first quarter 2001 on a
 continuing operations basis and excluding one-time items; the comparable
 number in the fourth quarter 2000 was approximately $25 million.
     For the first quarter 2001, total sales and marketing was $4.3 million
 compared with $13.6 million in the fourth quarter.  Savings in sales and
 marketing have already been achieved through a focus on acquisition of higher
 revenue Power Plan customers and through renegotiation or termination of fixed
 payment partner relationships.  Starting in the second quarter of 2001, all
 partners will only be compensated on a pay-for-performance basis.
     In addition to decreasing sales and marketing costs, Stamps.com is running
 some tests around price sensitivity and plans to evaluate raising its monthly
 minimum price for all simple plan customers who are paying a $1.99 monthly
 minimum.  Stamps.com is also evaluating the use of a pay-for-support model
 during the second quarter 2001.  As a result of its planned investment in
 acquiring higher revenue customers and more cost effective support, Stamps.com
 expects gross margins for the entire fiscal year 2001 to reach 50%.  The
 company maintains its earlier estimates of becoming cash flow positive in the
 first quarter of fiscal year 2002.
     Finally, Stamps.com launched a new Web-based registration process on April
 16, 2001.  Customers now register for the Stamps.com service via the Web and
 prior to starting the software download.  Stamps.com expects this new
 registration process to improve its marketing conversion rates.  Web-based
 registration is also a key feature for telesales -- a marketing channel that
 Stamps.com plans to use, on a trial basis, during the second quarter.
 Stamps.com is also developing technology during 2001 that will enable it to
 provide its Internet Postage service to partners under a private label
 arrangement.
 
     About Stamps.com
     Stamps.com(TM) is the leading provider of Internet mailing and shipping
 services.  Stamps.com Internet Postage(TM) is an Internet mailing and shipping
 solution for small businesses and home offices that allows customers to print
 U.S. Postal Service-approved postage on envelopes or labels with just a
 computer, printer and Internet connection.  The iShip(TM) service from
 Stamps.com provides a powerful, Internet-based multi-carrier shipping solution
 that is more efficient and cost-effective than traditional paper-based or
 single-carrier solutions.  Visit www.stamps.com for more information.
 
     "Safe Harbor" Statement under the Private Securities Litigation Reform Act
 of 1995:  This release may contain forward-looking statements that involve
 risks and uncertainties.  Important factors, including the company's ability
 to achieve profitability, which could cause actual results to differ
 materially from those in the forward-looking statements, are detailed in
 filings with the Securities and Exchange Commission made from time to time by
 Stamps.com, including its annual report on Form 10-K for the fiscal year ended
 December 31, 2000, and its Current Reports on Form 8-K.  Stamps.com undertakes
 no obligation to release publicly any revisions to any forward-looking
 statements to reflect events or circumstances after the date hereof or to
 reflect the occurrence of unanticipated events.
     Stamps.com and iShip, and the Stamps.com and iShip logos are trademarks of
 Stamps.com Inc.  All other brands and names are property of their respective
 owners.
 
     For further information please contact media, Kathy Brush, Vice President,
 Marketing, 310-581-7275, pr@stamps.com, or investors, Ken McBride, Chief
 Financial Officer, 310-581-7552, ir@stamps.com, both of Stamps.com
 
 
                                STAMPS.COM INC.
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
 
                                              Three Months       Three Months
                                             March 31, 2001     March 31, 2000
 
     Net revenues                                $5,258,790         $2,036,000
     Cost of net revenues                         3,186,477          3,733,000
     Gross profit                                 2,072,313         (1,697,000)
     Operating expenses:
          Research and development                4,081,788          3,395,000
          Sales and marketing                     4,287,836         22,500,000
          General and administrative              6,802,051          5,839,000
          Amortization of goodwill and
           other intangibles                    172,816,599          4,625,000
          Acquired in-process research and
           development                                  --           2,000,000
          Deferred compensation expense           1,445,590          1,753,000
          Restructuring & Writedown
           Charges                               11,021,166                --
          Loss from Encryptix                     5,601,096                --
     Total operating expenses                   206,056,126         40,112,000
     Loss from operations                      (203,983,813)       (41,809,000)
     Other income (expense):
          Interest expense                          (12,055)           (46,000)
          Interest income                         4,040,829          4,967,000
          Gain From Shut Down of Encryptix       23,194,784
     Total other income and (expense), net       27,223,558          4,921,000
     Net loss before minority interest        ($176,760,255)      ($36,888,000)
     Net loss                                 ($176,760,255)      ($36,888,000)
     Basic and diluted net loss per share            ($3.60)            ($0.86)
     Weighted average shares outstanding
      used in basic and diluted per-share
      calculation                                49,117,331         43,021,000
     Cash Net Loss Per Share on Continuing
      Operations (excl. Loss from
      Encryptix)                                     ($0.18)            ($0.66)
     Cash net loss                              ($9,070,588)      ($28,510,000)
 
 
                                          CONDENSED CONSOLIDATED BALANCE SHEETS
 
                                            March 31, 2001    December 31, 2000
 
     ASSETS
     Current assets:
          Cash and cash equivalents             213,087,812       $247,939,335
          Net Accounts Receivable                 1,990,685         $2,545,380
          Note Receivable                         3,181,287         $3,181,287
          Short-term investments                        --                 --
          Prepaid advertising                         5,000          2,964,917
          Prepaid expenses and other
           current assets                         1,424,348          2,219,908
     Total current assets                       219,689,132        258,850,826
     Property and equipment, net                 29,787,649         45,585,460
     Other assets                                 8,942,073        182,501,250
     Total assets                               258,418,854       $486,937,536
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
      (DEFICIT)
     Total current liabilities                   10,499,584         24,124,104
     Capital lease obligations, less
      current portion                                   --           5,286,236
     Minority Interest                                  --          34,765,004
     Total stockholder's equity (deficit)       247,919,271        422,762,192
     Total liabilities and stockholders'
      equity (deficit)                          258,418,854       $486,937,536
 
 

SOURCE Stamps.com
    SANTA MONICA, Calif., April 17 /PRNewswire/ -- Stamps.com(TM)
 (Nasdaq:   STMP) today announced that revenue in the first quarter of 2001 was
 $5.3 million, an increase of 158% over the first quarter of 2000.  First
 quarter 2001 gross margin was 39% compared to 10% in the fourth quarter 2000.
 First quarter net loss from continuing operations was $9.1 million, which
 excludes non-cash charges, first quarter losses and a one-time gain from the
 Encryptix subsidiary, a charge related to the impairment of goodwill
 associated with the purchase of iShip.com, and restructuring and write down
 charges.  On a per share basis, the equivalent continuing operations loss for
 the first quarter 2001 was $0.18 per share based on the weighted average
 common shares outstanding of 49.1 million.  Cash and short-term investments as
 of March 31, 2001 was $213 million, or $4.34 per share, excluding any cash in
 the Encryptix subsidiary.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000322/STAMPS )
     "The initiatives we undertook in the fourth quarter of year 2000 and the
 first quarter of year 2001 have already begun to pay dividends in our improved
 gross margins and narrowed losses," said CEO Bruce Coleman.  "Moving forward,
 we plan to continue to streamline our costs while enhancing our revenue growth
 toward achieving our goal of profitability and positive cash flow."
     For fiscal year 2001, Stamps.com continues to expect total revenues of
 approximately $23 million, which represents growth of 60% over fiscal year
 2000 revenues.  In addition, the company continues to expect its total year
 2001 cash burn to be $20-25 million on a continuing operations basis; down
 over 80% from Year 2000 total cash burn.  Stamps.com has already made good
 progress toward achieving its goals in the first quarter 2001.  With its
 February 6, 2001 reduction in its work force, more focused and cost-efficient
 marketing spend, and other cost-cutting programs, Stamps.com used
 approximately $11 million in cash during the first quarter 2001 on a
 continuing operations basis and excluding one-time items; the comparable
 number in the fourth quarter 2000 was approximately $25 million.
     For the first quarter 2001, total sales and marketing was $4.3 million
 compared with $13.6 million in the fourth quarter.  Savings in sales and
 marketing have already been achieved through a focus on acquisition of higher
 revenue Power Plan customers and through renegotiation or termination of fixed
 payment partner relationships.  Starting in the second quarter of 2001, all
 partners will only be compensated on a pay-for-performance basis.
     In addition to decreasing sales and marketing costs, Stamps.com is running
 some tests around price sensitivity and plans to evaluate raising its monthly
 minimum price for all simple plan customers who are paying a $1.99 monthly
 minimum.  Stamps.com is also evaluating the use of a pay-for-support model
 during the second quarter 2001.  As a result of its planned investment in
 acquiring higher revenue customers and more cost effective support, Stamps.com
 expects gross margins for the entire fiscal year 2001 to reach 50%.  The
 company maintains its earlier estimates of becoming cash flow positive in the
 first quarter of fiscal year 2002.
     Finally, Stamps.com launched a new Web-based registration process on April
 16, 2001.  Customers now register for the Stamps.com service via the Web and
 prior to starting the software download.  Stamps.com expects this new
 registration process to improve its marketing conversion rates.  Web-based
 registration is also a key feature for telesales -- a marketing channel that
 Stamps.com plans to use, on a trial basis, during the second quarter.
 Stamps.com is also developing technology during 2001 that will enable it to
 provide its Internet Postage service to partners under a private label
 arrangement.
 
     About Stamps.com
     Stamps.com(TM) is the leading provider of Internet mailing and shipping
 services.  Stamps.com Internet Postage(TM) is an Internet mailing and shipping
 solution for small businesses and home offices that allows customers to print
 U.S. Postal Service-approved postage on envelopes or labels with just a
 computer, printer and Internet connection.  The iShip(TM) service from
 Stamps.com provides a powerful, Internet-based multi-carrier shipping solution
 that is more efficient and cost-effective than traditional paper-based or
 single-carrier solutions.  Visit www.stamps.com for more information.
 
     "Safe Harbor" Statement under the Private Securities Litigation Reform Act
 of 1995:  This release may contain forward-looking statements that involve
 risks and uncertainties.  Important factors, including the company's ability
 to achieve profitability, which could cause actual results to differ
 materially from those in the forward-looking statements, are detailed in
 filings with the Securities and Exchange Commission made from time to time by
 Stamps.com, including its annual report on Form 10-K for the fiscal year ended
 December 31, 2000, and its Current Reports on Form 8-K.  Stamps.com undertakes
 no obligation to release publicly any revisions to any forward-looking
 statements to reflect events or circumstances after the date hereof or to
 reflect the occurrence of unanticipated events.
     Stamps.com and iShip, and the Stamps.com and iShip logos are trademarks of
 Stamps.com Inc.  All other brands and names are property of their respective
 owners.
 
     For further information please contact media, Kathy Brush, Vice President,
 Marketing, 310-581-7275, pr@stamps.com, or investors, Ken McBride, Chief
 Financial Officer, 310-581-7552, ir@stamps.com, both of Stamps.com
 
 
                                STAMPS.COM INC.
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
 
                                              Three Months       Three Months
                                             March 31, 2001     March 31, 2000
 
     Net revenues                                $5,258,790         $2,036,000
     Cost of net revenues                         3,186,477          3,733,000
     Gross profit                                 2,072,313         (1,697,000)
     Operating expenses:
          Research and development                4,081,788          3,395,000
          Sales and marketing                     4,287,836         22,500,000
          General and administrative              6,802,051          5,839,000
          Amortization of goodwill and
           other intangibles                    172,816,599          4,625,000
          Acquired in-process research and
           development                                  --           2,000,000
          Deferred compensation expense           1,445,590          1,753,000
          Restructuring & Writedown
           Charges                               11,021,166                --
          Loss from Encryptix                     5,601,096                --
     Total operating expenses                   206,056,126         40,112,000
     Loss from operations                      (203,983,813)       (41,809,000)
     Other income (expense):
          Interest expense                          (12,055)           (46,000)
          Interest income                         4,040,829          4,967,000
          Gain From Shut Down of Encryptix       23,194,784
     Total other income and (expense), net       27,223,558          4,921,000
     Net loss before minority interest        ($176,760,255)      ($36,888,000)
     Net loss                                 ($176,760,255)      ($36,888,000)
     Basic and diluted net loss per share            ($3.60)            ($0.86)
     Weighted average shares outstanding
      used in basic and diluted per-share
      calculation                                49,117,331         43,021,000
     Cash Net Loss Per Share on Continuing
      Operations (excl. Loss from
      Encryptix)                                     ($0.18)            ($0.66)
     Cash net loss                              ($9,070,588)      ($28,510,000)
 
 
                                          CONDENSED CONSOLIDATED BALANCE SHEETS
 
                                            March 31, 2001    December 31, 2000
 
     ASSETS
     Current assets:
          Cash and cash equivalents             213,087,812       $247,939,335
          Net Accounts Receivable                 1,990,685         $2,545,380
          Note Receivable                         3,181,287         $3,181,287
          Short-term investments                        --                 --
          Prepaid advertising                         5,000          2,964,917
          Prepaid expenses and other
           current assets                         1,424,348          2,219,908
     Total current assets                       219,689,132        258,850,826
     Property and equipment, net                 29,787,649         45,585,460
     Other assets                                 8,942,073        182,501,250
     Total assets                               258,418,854       $486,937,536
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
      (DEFICIT)
     Total current liabilities                   10,499,584         24,124,104
     Capital lease obligations, less
      current portion                                   --           5,286,236
     Minority Interest                                  --          34,765,004
     Total stockholder's equity (deficit)       247,919,271        422,762,192
     Total liabilities and stockholders'
      equity (deficit)                          258,418,854       $486,937,536
 
 SOURCE  Stamps.com