uBid.com Holdings, Inc. Reports Second Quarter 2006 Results

(Chicago, IL) August 14, 2006 - uBid.com Holdings, Inc. (OTCBB: UBHI) whose uBid, Inc. subsidiary is one of the leading business-to-consumer and business-to-business online marketplaces in the U.S., today announced results for the second quarter ended June 30, 2006. Highlights for the second quarter of 2006 included:

  • Gross Merchandise Sales (GMS), a key business metric, were $30.3 million compared to $28.0 million one year ago, a 8.2% increase.(1)
  • Gross profit of $2.1 million, compared to $2.7 million in the second quarter of fiscal 2005.
  • Customer orders increased 21% to approximately 125,000 from 103,000 in the second quarter of last year.
  • uBid.com Certified Merchant Program (UCM) grew participating members by 38% sequentially to 1,307 from 949 merchants reported at March 31, 2006.
  • Active Auction Participants totaled 335,000, while the number of Auction Events increased 89% to approximately 478,000.
  • Customer Registrations totaled approximately 38,000 in the second quarter of 2006 compared to approximately 37,000 a year ago.

Robert H. Tomlinson Jr., CEO of uBid.com Holdings, Inc. commented, "The second quarter represented another step in the transformation of uBid.com. While our financial performance was similar to first quarter results, we made strides strategically, through partnerships and an asset acquisition in July, 2006. Specifically, we were able to align our business with established entities that share our passion for a secure customer experience. We also grew our Certified Merchant program significantly while cost effectively acquiring 900,000 potential customers via our purchase of certain assets of Bidville. In combination with our recent capital infusion, uBid.com is now far stronger than anytime in recent memory. In fact, we are optimistic that our financial performance in the back half of the year will exceed our first half performance, and over the long run, we'll be able to drive value for shareholders, particularly from these levels."

Recent events include:

On May 22, 2006 uBid and SmartShopper.com announced the launch of the first ever privatelabel comparison shopping tool, uBidShopper. This free, downloadable comparison shopping software is designed to increase value and enhance relationships with uBid customers.

On May 25, 2006 uBid announced a partnership with SkyAuction.com to provide new travel auction deals to its customers. The new partnership will offer "Bid On" or "Buy Now" airline tickets, room nights, tours, cruises, and all- inclusive vacations.

On June 28, 2006 uBid announced its participation in Google's new Checkout program. uBid expects to benefit significantly from Google's vast consumer presence and commitment to building a safe and secure checkout process for online shoppers.

On July 24, 2006 uBid announced that its Registration Statement on Form S-1 filed on February 10, 2006 was declared effective on Friday, July 21, 2006 by the Securities and Exchange Commission.

On July 27, 2006 uBid announced the acquisition of certain auction assets of Bidville, Inc., a Nevada corporation founded in 1999 as an Internet auction alternative to eBay. Bidville, Inc. is well known for its innovative auction site user features, such as Storefronts, Watch Lists, Image Gallery, and fixed price listing options.

On August 3, 2006 uBid announced that Paul Traub was elected to the Board of Directors. Mr. Traub is a founding partner of Traub, Bonacquist & Fox, LLP, a New York based law firm, focusing on strategic asset acquisitions and disposition, insolvency and corporate restructuring, distressed financings, and litigation. In addition, Mr. Traub is an advisor to Petters Group Worldwide, LLC, a principal shareholder of uBid.com.

(1) This news release contains the non-GAAP financial measure gross merchandise sales ("GMS"). GMS represents the retail value of all sales transactions, inclusive of freight, which flow through the uBid.com platform, whether or not uBid.com is the seller of the merchandise, or records the full amount of such sales on its financial statements. We use GMS as a metric for operating our business. We believe that investors will have a more thorough understanding of our historical revenue trends if they have visibility to GAAP net revenue as well as the non- GAAP financial measure gross merchandise sales. We believe that certain non-GAAP performance measures and ratios, which our management uses in managing our business, may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported operating results or cash flow from operations or any other measure of performance prepared in accordance with GAAP. In addition, our presentation of these measures may not be comparable to similarly titled measures other companies use.

The table below is a reconciliation of GMS to the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles.

Reconciliation of GMS to Generally Accepted Accounting Standards (GAAP) (Unaudited)

  
                   
   

Q2

 

Q2

          
   

2006

 

2005

          
   

 

 

 

          

GMS

  

30.3

  

28.0

          
   

 

  

 

          

Cancellations

  

(2.2)

  

(1.8)

          
   

 

  

 

          

Backlog

  

(0.8)

  

(0.4)

          
   

 

  

 

          

GAAP Entry

  

(7.6)

  

(5.5)

          
   

 

  

 

          

Returns

  

(0.6)

  

(0.4)

          

Net Sales

  

19.1

  

19.9

          

GMS

  

Total Revenue in auctions closed and B-to-B transactions

      

Cancellations

  

Auctions that fail credit and fraud checks

        

Backlog

  

Auctions & orders pending review in credit & approved orders at warehouse pending shipment

GAAP Entry

  

Entry required to eliminate sales under revenue sharing and commission arrangements

  

Returns

  

Credits issued to customers for returned products and customer satisfaction

    

About uBid.com Holdings, Inc.
uBid.com Holdings, Inc. and subsidiaries (the "Company") operate a leading on- line Business to Consumer and Business to Business marketplace that enables itself, certified merchants, manufacturers, retailers, distributors and small businesses to offer high quality excess, new, overstock, close-out, refurbished and limited supply brand name merchandise to consumer and business customers primarily located in the United States. Through the Company's website, located at www.ubid.com, the Company offers merchandise across a wide range of product categories including but not limited to computer products, consumer electronics, apparel, housewares, watches, jewelry, travel, sporting goods, home improvement products and collectibles. The Company's marketplace employs a combination of auction style and fixed price formats. uBid.com Holdings, Inc. is publicly traded on the NASD OTC bulletin board (UBHI).

SEC Filings and Forward-Looking Statements
Additional information about uBid.com is available in the company's annual report on Form 10- K as amended, filed with the Securities and Exchange Commission. Certain statements made in this release are forward-looking statements. Forward- looking statements are based on the thencurrent 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. expressly disclaims any intent or obligation to update these forwardlooking statements, except as otherwise specifically stated by uBid.com Holdings, Inc.

uBid.com Holdings, Inc

Consolidated Balance Sheets

(Dollars in Thousands)

 

 

 

 

 

 

 

June 30,

December 31,

 

 

 

 

 

 

 

2006

2005

 

 

 

 

 

 

 

(Unaudited)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

13,564

21,176

 

Restricted investments

 

 

 

 

212

7,003

 

Accounts receivable, net

 

 

 

 

3,010

1,306

 

Merchandise inventories

 

 

 

 

9,460

5,989

 

Prepaid expenses and other current assets

 

 

926

646

Total Current Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Note Payable Bank

 

 

 

 

500

-

 

Flooring facility

 

 

 

 

481

1,612

 

Accounts payable

 

 

 

 

2,607

4,456

 

Accrued expenses

 

 

 

 

 

 

 

Advertising

 

 

 

 

362

397

 

 

Merger and offering costs

 

 

 

72

2,000

 

 

 

 

 

 

 

 

Common stock, $.001 par value (200,000,000 shares authorized;

 

 

 

 

20,333,333 and 16,732,666 issued and outstanding, respectively)

 

20

17

 

Stock warrants

 

 

 

 

8,086

6,322

 

Additional paid-in-capital

 

 

 

 

48,601

25,907

 

Treasury stock, at cost (2,666,668 shares issued)

 

 

(12,000)

-

 

Retained deficit

 

 

 

 

(22,388)

(17,664)

Total Shareholders' Equity

 

 

 

 

22,319

14,582

 

 

 

 

 

 

 

 

 

Total Liabilities and Shareholders' Equity

 

 

 

27,650

36,444

 

 

 

 


uBid.com Holdings, Inc.

Condensed Consolidated Statements of Operations

(Dollars in Thousands, except for per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2006

 

2005

 

2006

 

 

2005

Net Revenues

$

19,097

 

$

19,885

$

39,185

 

$

46,703

 

 

 

 

 

 

 

 

 

 

 

Cost of Revenues

 

16,980

 

 

17,095

 

34,159

 

 

41,259

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

2,117

 

 

2,790

 

5,026

 

 

5,444

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

General and administrative

 

3,451

 

 

3,602

 

6,984

 

 

6,749

Sales and marketing

 

 

 

1,127

 

2,961

 

 

2,410

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

4,887

 

 

4,729

 

9,945

 

 

9,159

 

 

 

 

 

 

 

 

 

 

 

Loss From Operations

 

(2,770)

 

 

(1,939)

 

(4,919)

 

(3,715)

 

 

 

 

 

 

 

 

 

 

 

Interest Income (Expense), net

 

49

 

 

(507)

 

195

 

 

(924)

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

(2,721)

 

 

(2,446)

 

(4,724)

 

(4,639)

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock Dividends

 

-

 

 

(15)

 

-

 

 

(30)

 

 

 

 

 

 

 

 

 

 

 

Net Loss Available to Common Shareholders

$

(2,721)

 

$

(2,461)

$

(4,724)

$

(4,669)

 

 

 

 

 

 

 

 

 

 

 

Net Loss per share - Basic and Diluted

$

(0.13)

 

$

(0.99)

$

(0.23)

$

(1.88)

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares - Basic and Diluted

 

20,333,333

 

 

2,487,107

 

20,156,911

 

 

2,487,107

 

 

 

 

 

 

 

 

 

 

 

#

uBid Contact:
Anthony Priore
Chief Marketing Officer
Tel: 773-272- 4446
Fax: 773-272-4055
tpriore@ubid.com