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uBid.com Reports Fourth Quarter and Full Year 2005 Financial Results
Company Reports 58% Growth in Fourth Quarter Gross Profit
Completion of $45 Million Private Placement on December 29, 2005
Chicago, IL, March 28, 2006 - uBid.com Holdings, Inc. (OTCBB: UBHI) whose uBid, Inc. subsidiary is one of the leading online auction companies in the U.S., today announced results for the fourth quarter and the full year ended December 31, 2005.
Highlights for the fourth quarter included:
- On December 29th, the Company completed a $45 Million private placement involving the sale of 10,000,000 shares of uBid.com Holdings, Inc. (formerly known as Cape Coastal Trading Corporation) common stock to a group of institutional and accredited investors at $4.50 per share
- Cash and Marketable Securities increased to $28.2 million
- Fourth quarter Gross Profit totaled $3.0 Million, compared to Gross Profit of $1.9 Million in 2004, an increase of 58%
- Loss from Operations improved 53% to approximately $1.5 Million from $3.3 Million
- Web site traffic increased to 10.1 Million Visitors, compared to 7.2 million in 2004, an increase of 40%
- Customer orders totaled approximately 136,000, an increase of 49% compared to the 91,000 orders in fourth quarter 2004.
Commenting on the results for the period, Robert H. Tomlinson Jr., CEO of uBid.com Holdings, Inc. stated, "As we continue to build on our message of a trusted, fraud-free online marketplace, the fourth quarter results validate the importance of the issue to our customers." Tomlinson added, "Now that our balance sheet has improved dramatically, we will leverage this strong foundation to improve top and bottom line growth in both the Certified Merchant Program (UCM) and uBid.com Direct channels."
Additional Highlights for the full year 2005 included:
- Gross profit increased 3.2% to $11.5 Million in 2005, compared to $11.1 Million in 2004
- Overall Customer order growth was 29% or 100,000 orders to approximately 444,000 orders for full year 2005
- uBid.com Certified Merchant Program (UCM) grew participating merchants by almost 800% to 630 merchants
- Loss from operations in 2005 was $6.5 Million, compared to $5.2 Million in 2004. A significant portion of the increase was related to the private placement that was charged to operations including $0.5 million for termination of the Phantom Stock Plan.
About uBid.com Holdings, Inc.
On December 29th, 2005, uBid, Inc. merged with a subsidiary of Cape Coastal Trading Corporation (OTC BB: CCSR) and survived the merger as a wholly-owned subsidiary of Cape Coastal Trading Corporation. Cape Coastal Trading Corporation changed its name to uBid.com Holdings, Inc. (OTC BB: UBHI) on February 10, 2006 and continues uBid.com's business as its sole business operation. uBid.com Holdings, Inc. operates an online marketplace located at www.uBid.com offering new, close-out, overstock and refurbished merchandise to both consumers and businesses through a trusted auction style and fixed price format. uBid.com provides consumers the opportunity to bid on or buy a wide variety of popular, brand name products at significant discounts. uBid.com's unique platform enables only certified suppliers and manufacturers a more efficient and economical channel for maximizing revenue of their surplus merchandise. Furthermore, uBid.com offers consumers a trusted buying environment, eliminating potential fraud by certifying all its merchants and processing 100% of all transactions between buyers and sellers.
Founded in 1997, uBid.com's predecessor completed an initial public offering in December 1998 and was subsequently acquired by CMGI, Inc. (Nasdaq: CMGI) in April 2000. In April 2003, uBid.com became a majority-owned subsidiary of the Petters Group Worldwide, LLC. Both CMGI and Petters Group Worldwide are shareholders in the surviving public entity.
uBid.com Holdings, Inc.
Statements of Income
(Unaudited)
(in thousands, except per share data)
|
uBid.com Holdings, Inc. |
| Statements of Income |
|
(Unaudited)
|
|
(in thousands, except per share data)
|
| |
|
|
|
|
|
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31,
|
| |
2005 |
2004 |
|
2005 |
2004 |
| |
|
|
|
|
|
| Net Revenues |
$19,295 |
$20,038 |
|
$84,592 |
$87,002 |
| |
|
|
|
|
|
| Cost
of Revenues |
16,306 |
18,112 |
|
73,062 |
75,837 |
| |
|
|
|
|
|
| Gross Profit |
2,989 |
1,926 |
|
11,530 |
11,165 |
| |
|
|
|
|
|
| Operating
Expenses |
|
|
|
|
|
| General and Administrative |
3,186 |
3,652 |
|
13,045 |
12,112 |
| Sales
and Marketing |
1,339 |
1,526 |
|
4,996 |
4,260 |
| Total operating expenses |
4,525 |
5,178 |
|
18,041 |
16,372 |
| |
|
|
|
|
|
| Loss From operations |
(1,536) |
(3,252) |
|
(6,511) |
(5,207) |
| |
|
|
|
|
|
| Other
Expense - Interest Expense, Net |
1,041 |
209 |
|
2,538 |
1,102 |
| |
|
|
|
|
|
| Net Loss |
(2,577) |
(3,461) |
|
(9,049) |
(6,309) |
| Preferred
Stock Dividend |
(15) |
(15) |
|
(60) |
(60) |
| Net Loss Available to Common Shareholders |
$(2,592) |
$(3,476) |
|
$(9,109) |
$(6,369)
|
| |
|
|
|
|
|
| Net
Loss) per share: |
$(0.83) |
$(1.40) |
|
$(3.45) |
$(2.56) |
| |
|
|
|
|
|
| Weighted average shares |
3,122,892 |
2,487,107 |
|
2,643,936 |
2,487,107 |
| uBid.com Holdings, Inc. |
| Summary Balance Sheets |
| (Unaudited)(In thousands) |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
Year Ended |
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|
|
|
|
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December 31, |
| |
|
|
|
|
|
2005 |
2004 |
| Assets |
|
|
|
|
|
|
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| Current Assets |
|
|
|
|
|
|
| |
Cash and Cash Equivalents |
|
|
21,176 |
$1,734 |
| |
Restricted
Investments |
|
|
7,003 |
1,659 |
| |
Accounts Receivable, less allowance for doubtful accounts |
1,306 |
646 |
| |
Merchandise inventories |
|
|
5,989 |
7,206 |
| |
Prepaid expenses and other current assets |
646 |
572 |
| Total Current Assets |
|
|
|
36,120 |
11,817 |
| |
|
|
|
|
|
|
|
| Property
and Equipment, net |
|
|
|
524 |
329 |
| |
|
|
|
|
|
|
|
| Total Assets |
|
|
|
|
36,644 |
12,146 |
| |
|
|
|
|
|
|
|
| Liabilities
and Shareholders' (Deficit) Equity |
|
|
|
| Current
Liabilities |
|
|
|
|
|
|
| |
Flooring facility |
|
|
|
1,612 |
89 |
| |
Accounts payable |
|
|
|
4,456 |
4,469 |
| |
Accrued
expenses |
|
|
|
|
|
| |
Advertising
|
|
|
|
397 |
1,006 |
| |
Merger and Offering Costs |
|
|
|
|
2,000 |
- |
| |
Other |
|
|
|
|
1,187 |
1,466 |
| |
Current
maturities of long-term debt |
|
410 |
1,910 |
| |
|
|
|
|
|
|
|
| Total
Current Liabilities |
|
|
|
10,062 |
8,940 |
| |
|
|
|
|
|
|
|
| Long Term Debt, less current maturities |
|
|
- |
9,410 |
| |
|
|
|
|
|
|
|
| Total
Liabilities |
|
|
|
|
10,062 |
18,350 |
| Common
Stock Redeemable |
|
|
12,000 |
- |
| Shareholders'
(Deficit) Equity |
|
|
|
|
| |
Preferred Stock |
|
|
|
- |
1,120 |
| |
Common Stock |
|
|
|
17 |
- |
|
|
Stock Warrants |
|
|
|
6,322 |
- |
| |
Additional paid in capital |
|
|
24,751 |
75 |
| |
Retained Deficit |
|
|
|
(16,508) |
(7,399) |
| |
|
|
|
|
|
|
|
| Total
Shareholders' (Deficit) Equity |
|
|
14,582 |
(6,204) |
| |
|
|
|
|
|
|
|
| Total
Liabilities and Shareholders' (Deficit) Equity |
$36,644 |
$12,146 |
SEC Filings and Forward-Looking Statements
Additional information regarding uBid.com's private placement, the merger with Cape Coastal Trading Corporation, the disposition of Cape Coastal Trading Corporation's prior operating business, uBid.com's business and uBid.com's officers and directors is contained in a Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2006 by Cape Coastal Trading Corporation, and in the company's annual report on Form 10-K, filed with the Securities and Exchange Commission.
Certain statements made in this release are forward-looking statements, including the following statement, "Now that our balance sheet has improved dramatically, we will leverage this strong foundation to improve top and bottom line growth in both the Certified Merchant Program (UCM) and uBid.com Direct channels." Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business of uBid.com Holdings, Inc. and the industries and markets in which uBid.com Holdings,Inc. operates. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. Factors which may affect the forward looking statement identified above and uBid.com Holdings, Inc.'s business, financial condition and operating results generally include the effects of adverse changes in the economy, reductions in consumer spending, declines in the financial markets and the industries in which uBid.com Holdings,Inc. and its partners operate, adverse changes affecting the Internet and e-commerce, the ability of uBid.com Holdings,Inc. to develop and maintain relationships with strategic partners and suppliers and the timing of its establishment or extension of its relationships with strategic partners, the ability of uBid.com Holdings, Inc. to timely and successfully develop, maintain and protect its technology and product and service offerings and execute operationally, the ability of uBid.com Holdings, Inc. to attract and retain qualified personnel, the ability of uBid.com Holdings, Inc. to successfully integrate its acquisitions of other businesses, if any, and the performance of acquired businesses. uBid.com Holdings, Inc. and Cape Coastal Trading Corporation expressly disclaim any intent or obligation to update these forward-looking statements, except as otherwise specifically stated by uBid,com Holdings, Inc. or Cape Coastal Trading Corporation.
Contact:
Anthony Priore
Chief Marketing Officer
Tel: 773-272- 4446
Fax: 773-272-4055
tpriore@ubid.com
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of uBid.com's securities.
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