Outpost.com Beats Street, Mulls Cost Cutting

Consumer electronics e-tailer Outpost.com (Nasdaq: COOL) reported a fourth quarter 2001 loss Thursday and said that it is considering a number of cost-cutting measures, as well as strategic alternatives.

Outpost’s stock lost more than 40 percent of its value Thursday, trading down 13 cents to 19 cents.

The Kent, Connecticut-based company had warned in February that a softening economic climate and slowing personal computer sales would hurt its fourth quarter fiscal results.

“Given the current economic environment, we were pleased to have met our lowered estimates for the quarter,” Outpost chairman Darryl Peck said. “Current market conditions have made it difficult to secure the required equity and working capital financing we need. Therefore, we intend to meet with our creditors to discuss payment options.”

Revenue Up

Outpost reported net sales for the fiscal quarter ended February 28th of US$120.9 million, up 58 percent from the $76.5 million reported for the fourth quarter of 2000.

The pro forma net loss for the quarter, excluding goodwill amortization, was $9.5 million or 30 cents per share, beating analyst estimates of 32 to 34 cents per share.

Including goodwill amortization, Outpost’s loss for the quarter was $10.1 million or 32 cents per share, compared to the loss in the year-earlier quarter of $9.8 million, or 41 cents per share.

Looking for Fat

Outpost has already taken the cost-cutting measure of eliminating its free overnight shipping offer. The company said that its average order had dropped to $200 during December and January, but rose to $280 in February after the policy change was implemented on February 1st.

More recent figures on order size were not available, according to Outpost spokesperson Janice Simoncelli. She also had no comment on when the company would be announcing its additional cost-cutting measures.

On the upside, Outpost said that it added approximately 293,000 customers during the fourth quarter, bringing its total customer base to an estimated 1.3 million. Additionally, 57 percent of its sales came from repeat buyers, the company said.

No Estimates

Outpost declined to give guidance for the current fiscal year, saying that “market conditions and the unpredictable economic environment preclude the company from making meaningful estimates for fiscal 2002 at this time.”

Morningstar.com analyst George Nichols told the E-Commerce Times that due to the shaky economic climate for dot-coms, it was not uncommon for companies to decline to make earnings estimates.

Numbers Game

For the fiscal year 2001, Outpost had net sales of $355.2 million, up 86.6 percent from the $120.3 million in the prior fiscal year. Pro forma net loss for the year, excluding amortization of goodwill, was $29.3 million, or 97 cents per share.

Including goodwill amortization, the net loss for the year was $30.3 million, or $1.01 per year. During the prior year, the company lost $35.6 million, or $1.52 per share.