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BELLEVUE, Wash., Jan 31, 2007 (BUSINESS WIRE) -- drugstore.com, inc. (NASDAQ:DSCM), a leading online provider of health, beauty, vision, and pharmacy products, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2006. The company reported quarterly net sales of $108.6 million, driven by core over-the-counter (OTC) order growth of 19% year-over-year, and a net loss of $2.9 million, or $0.03 per share, reflecting a $1.5 million improvement from the same period of 2005. During the quarter, the company achieved its third consecutive quarter of positive adjusted EBITDA. Adjusted EBITDA of $901,000 was an improvement of approximately $2.7 million from the fourth quarter of 2005. Adjusted EBITDA is a non-GAAP financial measure defined as earnings before interest, taxes, depreciation, and amortization of intangible assets and non-cash marketing expense, adjusted to exclude the impact of stock-based compensation expense. For the year, the company reported net sales of $415.8 million, a net loss of $13.0 million or $0.14 per share, and adjusted EBITDA of $2.4 million, reflecting an adjusted EBITDA improvement of $12.0 million over the fiscal year ending 2005.
"This was a turnaround year for the company, and we executed on our goal of achieving positive adjusted EBITDA," said Dawn Lepore, chief executive officer and chairman of the board of drugstore.com, inc. "Our focus on profitability and increasing contribution margins has resulted in a significantly improved business model. Our goal now is to build on that model to drive continued adjusted EBITDA margin expansion and GAAP profitability by the fourth quarter of 2007," continued Lepore. The Company achieved record annual adjusted EBITDA of $2.4 million, which improved by $12.0 million from 2005, and generated positive operating cash flow during the second half of the year.
"Our core OTC segment continues to be the key driver of our business and, in the fourth quarter, orders grew by 19% year-over-year and 21% for the year. Importantly, we had a strong 8-week holiday season, with order growth during this period increasing by 25%. Additionally, fourth quarter contribution margin dollars increased by nearly 10% while fixed costs declined by 1%," explained Ms. Lepore.
"Building on our solid business momentum, we are now well positioned to accelerate growth and maximize our core business in 2007 by implementing key initiatives such as expanding beauty.com, executing on our "hard-to-find" strategy, and developing strategic partnerships like our new affiliation with Revolution Health and the Cystic Fibrosis Foundation. We believe these initiatives will continue to move us towards our goal of surpassing half a billion in sales in 2008," concluded Ms. Lepore.
GAAP net loss for the fourth quarter of 2006 was $2.9 million, or $0.03 per share, compared to a net loss of $4.5 million, or $0.05 per share, for the fourth quarter of 2005. This loss includes $1.7 million in non-cash share-based compensation expense associated with FAS 123R. In accordance with FAS 123R, the expense for current and comparative periods is reflected within the applicable functional operating expense lines within the statement of operations.
The Company also announced today that Robert A. Barton, Vice President and Chief Financial Officer, has decided to resign and is expected to depart the Company in mid 2007. Mr. Barton will remain in his current role while the Company conducts a search for his successor and will continue in an advisory capacity during a transition period after his successor is identified and retained. "Bob has been a great partner to me as we have turned the company around and achieved positive adjusted EBITDA. I will miss his passion and commitment," said Ms. Lepore.
Outlook for First Quarter and Fiscal Year 2007
For fiscal year 2007, the company is targeting net sales in the range of $440.0 million to $460.0 million, net loss in the range of $7.0 million to $11.0 million, and positive adjusted EBITDA in the range of $7.0 million to $11.0 million.
For the first quarter of 2007, the company is targeting net sales in the range of $108.0 million to $110.0 million, net loss in the range of $3.0 million to $4.0 million, and positive adjusted EBITDA in the range of $500,000 to $1.5 million.
Financial and Operational Highlights for the Fourth Quarter of 2006
(All comparisons are made to the fourth quarter of 2005)
Key Financial Highlights:
-- Total contribution margin dollars increased by nearly 10%, while fixed operating expenses declined by 1%. For the year, contribution margin dollars improved by 20%, while fixed costs increased by only 3%.
-- Gross margin expansion of 20 basis point and 110 basis point for the quarter and year, respectively, was a key contributor to our contribution margin improvement.
-- Total orders grew 8% to a record 1.4 million while contribution margin dollars per order grew by 1% to $11. For the year, total orders grew by 6%, while contribution margin dollars per order increased by 14%.
-- Core OTC(1) order volumes grew by 19% for the quarter, and 21% for the year.
-- Cash, cash equivalents and marketable securities were $40.6 million at year end.
Net Sales Summary:
-- Core OTC net sales(1) grew by 15% to $55.6 million. For the year, core OTC sales were $195.6 million and grew by 18%.
-- Mail-order pharmacy net sales were down 28% to $14.5 million reflecting a full quarter without sales through our partnership with Envision, which was terminated in the second quarter. Contribution margin dollars increased by 18%. For the year, mail-order pharmacy net sales declined by 11% to $67.4 million, while contribution margin dollars increased by 17%.
-- Local pick-up pharmacy net sales were up approximately 9% to $26.0 million. For the year, local pick-up pharmacy net sales were up 5% to $100.7 million.
-- Vision net sales grew to $12.0 million, a 6% increase. For the year, vision net sales grew by 6% to $49.8 million.
-- Average net sales per order were $75. Average net sales per order were down 4% for core OTC at $57, up by 11% to $167 for mail-order pharmacy, down 6% to $106 for local pick-up pharmacy, and up by 12% to $93 for vision. For the year, average net sales per order were down 2% for core OTC at $57, up by 12% to $164 for mail-order pharmacy, down 3% to $106 for local pick-up pharmacy, and up by 10% to $90 for vision.
-- Net sales from repeat customers represented 79% of net sales. For the year, net sales from repeat customers were 81% of net sales(2)
Key Customer Milestones:
-- Approximately 8.5 million customers have been served since inception, including 347,000 new customers in the fourth quarter.
-- The number of active customers(3) grew by 8% to more than 2.2 million.
-- The average annual spend per active customer(3) was $186.
(1) Core OTC net sales is a non-GAAP financial measure that excludes from OTC net sales the company's wholesale OTC net sales and Custom Nutrition Services ("CNS") net sales. Wholesale OTC sales were generated by the company's December 2003 agreement to provide fulfillment services to Amazon.com, Inc., which was terminated effective as of November 9, 2005. CNS sales are generated by sales of customized vitamins through the company's CNS subsidiary. Prior to December 31, 2005, all CNS sales were recognized on a gross basis, net of promotional discounts, cancellations, rebates and returns allowances. Under the terms of the company's December 31, 2005 fulfillment agreement with Weil Lifestyle, LLC (Weil), the company recognizes on a net basis the revenue associated with the fulfillment of customized vitamins sold through its fulfillment agreement with Weil (which made up the majority of CNS net sales during the quarter). A reconciliation of OTC net sales to core OTC net sales is included in the financial data accompanying this press release.
(2) Net sales from repeat customers excludes wholesale OTC and Weil-related CNS net sales and reflects only the activity of customers making purchases through the Web sites of drugstore.com and its subsidiaries.
(3) Active customer base reflects those customers who have purchased at least once within the last 12 months. Both the active customer base (a trailing 12-month number) and average annual spend per active customer exclude net sales and orders generated by the company's wholesale OTC and CNS fulfillment relationship with Weil, and reflect only the activity of customers making purchases through the Web sites of drugstore.com and its subsidiaries.
Conference Call
Investors, analysts, and other interested parties are invited to join the drugstore.com(TM) quarterly conference call on Wednesday, January 31, 2007 at 5:00 p.m. ET (2:00 p.m. PT). To participate, callers should dial 800-240-7305 (international callers should dial 303-262-2193) five minutes beforehand. Investors may also listen to the conference call live at www.drugstore.com (under Corporate Information), by clicking on the "audio" hyperlink. A replay of the call will be available through Friday, February 2, 2007 at 800-405-2236 (enter pass code 11080873#) or internationally at 303-590-3000 (enter pass code 11080873#) beginning two hours after completion of the call.
Non-GAAP Measures
To supplement the consolidated financial statements presented in accordance with GAAP, drugstore.com, inc. uses the non-GAAP measure of adjusted EBITDA, defined as earnings before interest, taxes, depreciation, and amortization of intangible assets and non-cash marketing expenses, adjusted to exclude the impact of stock-based compensation expense. This non-GAAP measure is provided to enhance the user's overall understanding of the company's current financial performance. Management believes that adjusted EBITDA, as defined, provides useful information to the company and to investors by excluding certain items that may not be indicative of the company's core operating results. In addition, because drugstore.com, inc. has historically provided adjusted EBITDA measures to investors, management believes that including adjusted EBITDA measures provides consistency in the company's financial reporting. However, adjusted EBITDA should not be considered in isolation, or as a substitute for, or as superior to, net income/loss, cash flows, or other consolidated loss or cash flow data prepared in accordance with GAAP, or as a measure of the company's profitability or liquidity. Although adjusted EBITDA is frequently used as a measure of operating performance, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. Net income/loss is the closest financial measure prepared by the company in accordance with GAAP in terms of comparability to adjusted EBITDA.
drugstore.com, inc. also uses non-GAAP measures in which wholesale OTC and CNS sales are excluded from OTC segment sales data. These non-GAAP measures are provided to enhance the user's overall understanding of the company's financial performance in the OTC segment. Management believes that these reporting metrics provide useful information to the company and to investors by excluding certain items that may not be indicative of the company's core operating results in the OTC segment. By excluding wholesale OTC and CNS sales from OTC sales data, the company can more effectively assess the buying behavior of, and the company's financial performance with respect to, its own core OTC customers (those customers making nonprescription purchases through Web sites owned by drugstore.com, inc. and its subsidiaries). However, these non-GAAP measures should not be considered in isolation, or as a substitute for, or as superior to, OTC segment sales data prepared in accordance with GAAP, or as a measure of the company's overall performance in the OTC segment. OTC segment sales measures are the closest financial measures prepared by the company in accordance with GAAP in terms of comparability to OTC segment sales measures that exclude wholesale OTC and CNS sales.
About drugstore.com, inc.
drugstore.com, inc. (NASDAQ: DSCM) is a leading online provider of health, beauty, vision, and pharmacy products. The drugstore.com(TM) online store provides a convenient, private, and informative shopping experience that encourages consumers to purchase products essential to healthy, everyday living. The online store offers thousands of brand-name personal health care products at competitive prices; a full-service, licensed retail pharmacy; and a wealth of health-related information, buying guides, and other tools designed to help consumers make informed purchasing decisions. Consumers can personalize their shopping experiences with shopping lists, e-mail reminders for replenishing regularly used products, and private e-mail access to pharmacists and beauty experts for questions.
drugstore.com, inc. has been awarded the Verified Internet Pharmacy Practice Sites (VIPPS) certification by the National Association of Boards of Pharmacy (NABP) as a fully licensed facility exercising competent, safe pharmacy practices in compliance with federal and state laws and regulations.
The financial results contained in this press release are preliminary and unaudited. In addition, this press release contains forward-looking statements regarding future events or the future financial and operational performance of drugstore.com, inc. Words such as "targets," "expects," "believes," "anticipates," "intends," "may," "will," "plan," "continue," "forecast," "remains," "would," "should," and similar expressions, are intended to identify forward-looking statements. Forward-looking statements are based on current expectations, are not guarantees of future performance and involve assumptions, risks, and uncertainties. Actual performance may differ materially from those contained or implied in such forward-looking statements. Risks and uncertainties that could lead to such differences could include, among other things: effects of changes in the economy, changes in consumer spending, fluctuations in the stock market, changes affecting the Internet, online retailing and advertising, difficulties establishing our brand, and building a critical mass of customers, the unpredictability of future revenues and expenses and potential fluctuations in revenues and operating results, risks related to business combinations and strategic alliances, possible tax liabilities relating to the collection of sales tax, consumer trends, the level of competition, seasonality, the timing and success of expansion efforts, changes in senior management, risks related to systems interruptions, possible governmental regulation and the ability to manage a growing business. Additional information regarding factors that potentially could affect the business, financial condition and operating results of drugstore.com, inc. is included in the company's periodic filings with the SEC on Forms 10-K, 10-Q and 8-K. drugstore.com, inc. expressly disclaims any intent or obligation to update any forward-looking statement, except as otherwise specifically stated by it.
drugstore.com, inc.
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
Three Months Ended Twelve Months Ended
------------------------- -------------------------
Dec. 31, Jan. 1, Dec. 31, Jan. 1,
2006 2006 2006 2006
------------ ------------ ------------ ------------
Net sales $ 108,598 $ 106,369 $ 415,777 $ 399,430
Costs and
expenses: (1)(2)
Cost of sales 85,190 83,575 326,036 317,366
Fulfillment and
order
processing 10,704 10,430 41,099 39,855
Marketing and
sales 7,919 10,006 29,735 32,810
Technology and
content 4,199 3,545 16,190 12,773
General and
administrative 3,503 2,966 15,413 15,791
Amortization of
intangible
assets 468 706 2,060 3,004
------------ ------------ ------------ ------------
Total costs
and expenses 111,983 111,228 430,533 421,599
------------ ------------ ------------ ------------
Operating loss (3,385) (4,859) (14,756) (22,169)
Interest income,
net 438 367 1,730 1,270
------------ ------------ ------------ ------------
Net loss $ (2,947) $ (4,492) $ (13,026) $ (20,899)
------------ ------------ ------------ ------------
Basic and diluted
net loss per
share $ (0.03) $ (0.05) $ (0.14) $ (0.23)
============ ============ ============ ============
Weighted average
shares
outstanding used
to compute basic
and diluted net
loss per share 94,027,508 92,877,328 93,405,405 90,808,817
============ ============ ============ ============
(1) Set forth below are the amounts of stock-based compensation by
operating function recorded in the Statements of Operations:
Fulfillment and
order
processing $ 196 $ - $ 835 $ 2
Marketing and
sales 233 59 1,058 218
Technology and
content 225 - 1,071 5
General and
administrative 1,051 278 3,757 1,743
------------ ------------ ------------ ------------
$ 1,705 $ 337 $ 6,721 $ 1,968
============ ============ ============ ============
(2) Set forth below are the amounts of depreciation by operating
function recorded in the Statements of Operations:
Fulfillment and
order
processing $ 368 $ 455 $ 1,476 $ 2,288
Marketing and
sales 1 - 2 -
Technology and
content 1,064 855 4,119 2,514
General and
administrative 107 99 443 478
------------ ------------ ------------ ------------
$ 1,540 $ 1,409 $ 6,040 $ 5,280
============ ============ ============ ============
SUPPLEMENTAL INFORMATION: Gross Profit and Gross Margin Information:
Three Months Ended Twelve Months Ended
-------------------- ---------------------
(In thousands, unless Dec. 31, Jan. 1, Dec. 31, Jan. 1,
otherwise indicated) 2006 2006 2006 2006
--------- --------- --------- ---------
Net sales $108,598 $106,369 $415,777 $399,430
Cost of sales 85,190 83,575 326,036 317,366
--------- --------- --------- ---------
Gross profit $ 23,408 $ 22,794 $ 89,741 $ 82,064
========= ========= ========= =========
Gross margin 21.6% 21.4% 21.6% 20.5%
========= ========= ========= =========
SUPPLEMENTAL INFORMATION: Reconciliation of OTC net sales, cost of
sales, gross profit, and gross margin to Core OTC net sales, cost of
sales, gross profit and gross margin (See Note 3 below):
Three Months Ended Twelve Months Ended
------------------ -------------------
Dec. 31, Jan. 1, Dec. 31, Jan. 1,
2006 2006 2006 2006
--------- -------- --------- ---------
(In thousands)
Over-the-Counter (OTC):
Net sales $56,099 $51,226 $197,964 $180,566
CNS 522 2,328 2,376 8,037
Wholesale OTC - 468 - 6,292
--------- -------- --------- ---------
Core OTC net sales $55,577 $48,430 $195,588 $166,237
Cost of sales $40,530 $36,382 $139,674 $130,346
CNS 46 936 112 3,519
Wholesale OTC - 350 - 5,421
--------- -------- --------- ---------
Core OTC cost of sales $40,484 $35,096 $139,562 $121,406
Gross profit 15,569 14,844 58,290 50,220
CNS 476 1,392 2,264 4,518
Wholesale OTC - 118 - 871
--------- -------- --------- ---------
Core OTC gross profit $15,093 $13,334 $ 56,026 $ 44,831
========= ======== ========= =========
Gross margin 27.8% 29.0% 29.4% 27.8%
CNS 91.2% 59.8% 95.3% 56.2%
Wholesale OTC 0.0% 25.2% 0.0% 13.8%
--------- -------- --------- ---------
Core OTC gross margin 27.2% 27.5% 28.6% 27.0%
========= ======== ========= =========
NOTE 3: Supplemental information related to the company's Core OTC net
sales, cost of sales, gross profit, and gross margin for the three
months ended December 31, 2006 and January 1, 2006 is presented for
informational purposes only and is not prepared in accordance with
generally accepted accounting principles. Effective November 9, 2005,
the company terminated its wholesale OTC fulfillment agreement with
Amazon.com, Inc. without any material obligations for either party
following the termination. On December 31, 2005, we entered into a
fulfillment agreement with Weil Lifestyles, LLC, resulting in Weil-
related CNS net sales (which make up the substantial majority of CNS
net sales) being recorded on a net basis after that date. All CNS
sales were previously recorded on a gross basis.
SUPPLEMENTAL INFORMATION: Segment Information:
Three Months Ended Twelve Months Ended
------------------- -------------------
Dec. 31, Jan. 1, Dec. 31, Jan. 1,
2006 2006 2006 2006
--------- --------- --------- ---------
Net sales:
Over-the-Counter (OTC) $ 56,099 $ 51,226 $197,964 $180,566
Mail-order pharmacy 14,496 19,994 67,379 75,612
Local pick-up pharmacy 25,962 23,834 100,654 96,126
Vision 12,041 11,315 49,780 47,126
--------- --------- --------- ---------
$108,598 $106,369 $415,777 $399,430
Cost of sales:
Over-the-Counter (OTC) $ 40,530 $ 36,382 $139,674 $130,346
Mail-order pharmacy 12,383 17,264 58,026 65,352
Local pick-up pharmacy 22,943 20,958 89,654 84,660
Vision 9,334 8,971 38,682 37,008
--------- --------- --------- ---------
$ 85,190 $ 83,575 $326,036 $317,366
Gross profit:
Over-the-Counter (OTC) 15,569 14,844 58,290 50,220
Mail-order pharmacy 2,113 2,730 9,353 10,260
Local pick-up pharmacy 3,019 2,876 11,000 11,466
Vision 2,707 2,344 11,098 10,118
--------- --------- --------- ---------
$ 23,408 $ 22,794 $ 89,741 $ 82,064
========= ========= ========= =========
Gross margin:
Over-the-Counter (OTC) 27.8% 29.0% 29.4% 27.8%
Mail-order pharmacy 14.6% 13.7% 13.9% 13.6%
Local pick-up pharmacy 11.6% 12.1% 10.9% 11.9%
Vision 22.5% 20.7% 22.3% 21.5%
--------- --------- --------- ---------
21.6% 21.4% 21.6% 20.5%
========= ========= ========= =========
Variable order costs:
Over-the-Counter (OTC) $ 5,456 $ 5,358 $ 18,650 $ 19,069
Mail-order pharmacy 1,055 1,832 5,501 6,959
Local pick-up pharmacy 1,064 986 4,128 4,030
Vision 561 666 2,478 2,858
--------- --------- --------- ---------
8,136 8,842 30,757 32,916
Contribution margin:
Over-the-Counter (OTC) $ 10,113 $ 9,486 $ 39,640 $ 31,151
Mail-order pharmacy 1,058 898 3,852 3,301
Local pick-up pharmacy 1,955 1,890 6,872 7,436
Vision 2,146 1,678 8,620 7,260
--------- --------- --------- ---------
$ 15,272 $ 13,952 $ 58,984 $ 49,148
========= ========= ========= =========
SUPPLEMENTAL INFORMATION: Reconciliation of Net Loss to Adjusted
EBITDA Income (Loss) (See Note 4 below):
Three Months Ended Twelve Months Ended
-------------------- --------------------
(In thousands, unless Dec. 31, Jan. 1, Dec. 31, Jan. 1,
otherwise indicated) 2006 2006 2006 2006
---------- --------- ---------- ---------
Net loss $ (2,947) $ (4,492) $(13,026) $(20,899)
Amortization of intangible
assets 468 706 2,060 3,004
Amortization of non-cash
marketing 573 572 2,290 2,290
Stock-based compensation 1,705 337 6,721 1,968
Depreciation 1,540 1,409 6,040 5,280
Interest income, net (438) (367) (1,730) (1,270)
---------- --------- ---------- ---------
Adjusted EBITDA income
(loss) $ 901 $ (1,835) $ 2,355 $ (9,627)
========== ========= ========== =========
NOTE 4: Supplemental information related to the company's adjusted
EBITDA income (loss) for the three and twelve months ended December
31, 2006 and January 1, 2006 is presented for informational purposes
only and is not prepared in accordance with generally accepted
accounting principles. Adjusted EBITDA income (loss) is defined as
loss before taxes, depreciation, and amortization of intangible
assets and non-cash marketing expense, adjusted to exclude the impact
of stock-based compensation expense.
SUPPLEMENTAL INFORMATION: Reconciliation of Forecasted Q1 2007 and FY
2007 Net Loss Range to Forecasted Q1 2007 and FY 2007 Adjusted EBITDA
Income Range
Range Calculated As: Three Months Ended Twelve Months Ended
April 1, 2007 December 30, 2007
-------------------- --------------------
(In thousands, unless
otherwise indicated) Range High Range Low Range High Range Low
---------- --------- ---------- ---------
Net loss $ (3,000) $ (4,000) $ (7,000) $(11,000)
Amortization of intangible
assets 445 445 1,225 1,225
Amortization of non-cash
marketing 575 575 2,300 2,300
Stock-based compensation 2,200 2,200 8,200 8,200
Depreciation 1,730 1,730 8,050 8,050
Interest income, net (450) (450) (1,775) (1,775)
---------- --------- ---------- ---------
Adjusted EBITDA Income $ 1,500 $ 500 $ 11,000 $ 7,000
========== ========= ========== =========
drugstore.com, inc.
Consolidated Balance Sheets
(in thousands, except share data)
December 31, January 1,
2006 2006 (5)
------------ -------------
(unaudited) (audited)
------------ -------------
ASSETS
Current assets:
Cash and cash equivalents $ 13,393 $ 20,291
Marketable securities 27,246 26,172
Accounts receivable, net of allowances 36,688 34,214
Inventories 26,469 23,468
Prepaid marketing expenses 2,290 2,387
Other current assets 2,615 2,583
------------ -------------
Total current assets 108,701 109,115
Fixed assets, net 18,293 15,839
Other intangible assets, net 5,376 7,427
Goodwill 32,202 32,202
Prepaid marketing expenses and other 3,750 5,980
------------ -------------
Total assets $ 168,322 $ 170,563
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 57,507 $ 58,177
Accrued compensation 4,841 3,426
Accrued marketing expenses 3,661 3,382
Other current liabilities 1,292 1,751
Current portion of long-term debt 3,949 2,029
------------ -------------
Total current liabilities 71,250 68,765
Long-term debt, less current portion 1,839 2,685
Deferred income taxes 945 945
Other long-term liabilities 1,610 1,897
Stockholders' equity:
Common stock, $.0001 par value, stated at
amounts paid in:
Authorized shares - 250,000,000
Issued and outstanding shares -
94,335,027 and 92,904,652 as of December
31, 2006 and January 1, 2006,
respectively 843,026 833,589
Accumulated other comprehensive loss (7) (3)
Accumulated deficit (750,341) (737,315)
------------ -------------
Total stockholders' equity 92,678 96,271
------------ -------------
Total liabilities and stockholders'
equity $ 168,322 $ 170,563
============ =============
NOTE 5: Certain prior year amounts have been reclassified to conform
to the current year presentation.
drugstore.com, inc.
Consolidated Statements of Cash Flows
(in thousands)
Three Months Twelve Months
Ended Ended
----------------- ---------------------
Dec. 31, Jan. 1, Dec. 31, Jan. 1,
2006 2006 2006 2006
-------- -------- ----------- ---------
(unaudited) (unaudited) (audited)
Operating activities:
Net loss $(2,947) $(4,492) $(13,026) $(20,899)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Depreciation 1,540 1,409 6,040 5,280
Amortization of marketing
and sales agreements 573 572 2,290 2,290
Amortization of intangible
assets 468 706 2,060 3,004
Stock-based compensation 1,705 337 6,721 1,968
Loss on disposal of assets - 674 - 674
Other, net - (66) 24 34
Changes in:
Accounts receivable (1,178) (1,407) (2,474) 1,130
Inventories (4,513) (3,098) (3,001) (4,181)
Prepaid marketing
expenses and other (483) 1,197 5 162
Accounts payable, accrued
expenses and other
liabilities 4,731 4,941 278 735
-------- -------- ----------- ---------
Net cash provided by (used
in) operating activities (104) 773 (1,083) (9,803)
-------- -------- ----------- ---------
Investing activities:
Purchases of marketable
securities (4,822) (1,301) (22,853) (37,872)
Sales and maturities of
marketable securities 4,700 5,550 21,775 30,425
Purchases of fixed assets (2,020) (856) (7,564) (6,034)
-------- -------- ----------- ---------
Net cash provided by (used
in) investing activities (2,142) 3,393 (8,642) (13,481)
-------- -------- ----------- ---------
Financing activities:
Proceeds from exercise of
stock options and employee
stock purchase plan 1,319 94 2,716 2,091
Proceeds from private
placement, net - (9) - 25,952
Proceeds from term loan,
line of credit and asset
financings 1,325 662 2,325 1,662
Principal payments on
capital lease and term loan
obligations (497) (426) (2,214) (1,621)
-------- -------- ----------- ---------
Net cash provided by
financing activities 2,147 321 2,827 28,084
-------- -------- ----------- ---------
Net increase (decrease)
in cash and cash
equivalents (99) 4,487 (6,898) 4,800
Cash and cash
equivalents, beginning
of period 13,492 15,804 20,291 15,491
-------- -------- ----------- ---------
Cash and cash
equivalents, end of
period $13,393 $20,291 $ 13,393 $ 20,291
======== ======== =========== =========
SOURCE: drugstore.com, inc.
For drugstore.com, inc. Investor Relations: Brinlea Johnson or Chris Danne, 415-489-2189 brinlea@blueshirtgroup.com or chris@blueshirtgroup.com
Copyright Business Wire 2007
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