STYLECLICK LOWERS QUARTERLY LOSSES

NEW YORK — Styleclick Inc. said Monday it narrowed its losses in the third quarter and began to reap the benefits of the infrastructure of its parent firm, USA Networks.
The pro-forma combined net loss for the third quarter, including merger-related goodwill, narrowed to $24.5 million compared to a net loss of $31.1 million in the second quarter.
The results pro-rate Styleclick.com’s second quarter results from the July merger to the beginning of the period and combines them with those of the Internet Shopping Network, a division of USA Networks Inc.
Styleclick reported pro-forma combined sales for the third quarter ended Sept. 30 of $5.3 million compared to $6.3 million in the 2000 second quarter, a decrease of 15.8 percent. The company said the drop was due primarily to a shift in its focus to business-to-business operations and away from business-to-consumer and a deemphasis on the promotion of FirstAuction.com, which it plans to reposition during the fourth quarter.
Losses before interest, taxes, depreciation and amortization for the quarter improved to $8.7 million against $15.2 million in the second quarter. Barry Hall, executive vice president and chief financial officer, told analysts on a conference call Monday that the firm is “on plan with our new company. Our goal is to achieve a positive EBITDA (earnings before interest, taxes, depreciation and amortization) as soon as possible.”
Maurizio Vechione, chief executive, noted in a statement: “This is the first quarter that we have reported as a merged company and we are beginning to realize efficiencies from combining the two companies. We expect to continue to realize these efficiencies through strict cost controls combined with a scalable business model.”
He also noted that the company’s “cash position is adequate for executing our business plan at this time.”
The company ended the quarter with approximately $27.3 million in cash.
Due to the timing of the merger, the results required to be reported to the Securities and Exchange Commission include ISN for the entire quarter and Styleclick.com from the date of acquisition. Results for the second quarter ended June 30 would then only contain the ISN figures.
Using these figures, losses widened to $18.2 million, or 65 cents a share, against $11.4 million, or 55 cents a share, in the prior quarter.
Sales fell 11.1 percent in the quarter to $5.1 million against $5.8 million in the 2000 second quarter.
Styleclick recently struck an alliance with About Inc. as exclusive provider of merchandise, fulfillment and customer care on About’s network of 700 topic sites. On the call Vechione noted the infrastructure provided by the USA Networks is bringing in “a much larger type of e-tailer and retailer.”
He also said that one of Styleclick’s edges over its competitors is its in-house customer service. “With few exceptions, most of our competitors outsource their customer care,” Vechione stated.
Styleclick shares closed at $6.75, up $1.25, in Nasdaq trading Monday.

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