March 30, 2001, 12:00 AM

Internet sales at SkyMall grow 18% in 2000, companywide revenue is up 4%

Internet sales in 2000 for SkyMall Inc., the multi-channel specialty retailer, reached $15.5 million or 30% of b2c merchandise sales in 2000, up from $13.1 million, or 25% of b2c sales in 1999. Company expects flat to moderate growth in sales in 2001.

Internet sales in 2000 for SkyMall Inc., the multi-channel specialty retailer, reached $15.5 million or 30% of business-to-consumer net merchandise sales in 2000, up from $13.1 million, or 25% of business-to-consumer net merchandise sales in 1999, SkyMall reported today. SkyMall’s total revenue was $82.1 million, up 4% from the year earlier; merchandise sales accounted for $62.5 million, up 3% from the previous year.

SkyMall`s business-to-consumer merchandise sales for the year were $52.1 million compared to $52 million for the prior year. Loyalty sales accounted for $10.4 million.

The company`s net loss for 2000 was $16 million, $1.11 per share, vs. $24.1 million, $2.60 per share, in 1999. SkyMall`s operating expenses in 2000 were $49.5 million, a 14% decrease from 1999 operating expenses of $57.3 million.

"Much of our focus in the latter part of the year was on markedly reducing costs in the business and improving our gross margins," said Robert M. Worsley, founder and CEO. "We have made significant progress in both of these areas and are well under way to deliver further improvement in fiscal 2001. Our focus in the coming months will be on aggressively executing our profitability plan and strengthening our partner relationships and marketing efforts to drive profitable revenue growth."

SkyMall said its expects 2001 consolidated net revenue to be $78 million to $86 million. It also expects to achieve breakeven earnings before interest, taxes, depreciation and amortization as well as breakeven cash flow in 2001. This would represent an improvement over 2000 EBITDA of approximately $11 million. "We have conservatively planned our 2001 sales based on the assumption that consumer spending and confidence, due to economic uncertainty, will be restrained," said Cary Deacon, president and chief operating officer. "However, we are continuing to execute our gross margin improvement and expense control initiatives that helped deliver our strong fourth quarter EBITDA improvement. We expect to see similar improvement each quarter on a year-to-year basis with renewed expense reduction strategies to ameliorate profit pressure in a cautious sales environment."

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