This afternoon, Bidz.com (NASDAQ:BIDZ) CEO Dave Zinberg and CFO Lawrence Kong gave a presentation at the Wedbush Morgan California Dreamin’ conference in Santa Monica. No big news; they briefly discussed plans for a non-auction retail site, and also plans for a Spanish version of the site. There was no announcement of a deal with Blue Nile (NASDAQ:NILE), something which has been rumored in the last few days. And there was no discussion of the issues raised in the Citron Research report.
I listened to the presentation on the Web. It will be archived on the BIDZ investor relations page. Here are some bullet points from the call:
- Zinberg began the presentation after a short introductory video. They sell 9,000 items a day. Had 295,000 unique buyers in 2006.
- Started selling online on eBay in 1998.
- In top 100 ranking for online retailers, and number two in jewelery.
- Hard for anyone to catch up to us. Profitable for 15 quarters. Should be profitable against this quarter, making 16 quarters.
- Product comes from manufacturers, wholesalers, liquidators.
- Typical buyers: female, 55 years old, living in west and southwest.
- New initiatives next year. Launching retail store under name Buyz.com. Will have customization, full online retail store. Will allow traffic from comparison sites.
- Also plans to grow international sites, with translate to Spanish in first quarter 2008.
- Kong then gave financial overview. Very pleased with 2007 performance to date.
- Expect 10%-12% long-term pre-tax margins.
- Inventory has grown in line with revenues.
- Only recognize revenue after payment made, merchandise sent out.
- Inventory recorded at cost.
- Asked ISS to review governance standards; given provisional rating in 86th percentile.
- Enhanced legal team recently. FTC counsel for trade and ad practice review. Another who had worked on enforcement department of Nasdaq to advise us.
- Sold over 8 million item, versus 241 BBB complaints. (This is a reference to their F rating from the Better Business Bureau.)
- Employees are not allowed to bid. They can buy inventory at 10% above costs.
- We monitor to prevent pranksters bidding on our site.
- Revenue in Q4 at high end of $56 million to $58 million in the quarter. (Repeat of previous guidance.) For the year $180 million to $182 million. Gross margin 27% to 28%. EBITDA $18 to $18.5 million. Again, not new.
- Now the Q&A.
- On inventory, Zinberg says “we barely have enough.” This is in response to question on relatively low inventory turnover. He says they produce about 30% of their own jewelry today, with cycle of 10-12 weeks.
- Someone is asking about growing the customer base. He says they are growing customers at a very fast rate. Also he says number of items now 3.2 items per order. In 2006 customers came about 4 times per year.
And that was it.
Clearly, the only thing really newsy here was the discussion of the coming Buyz.com site, which is actually not new information, and the plans for a Spanish language site, which I had not heard before. There was no discussion of any deal with Blue Nile, or the Citron Research report, or shill bidding, or litigation against short sellers, or any of a variety of other topics that have been discussed extensively on this blog.
After hours, the stock is down 7 cents at $11.42. In the regular session Wednesday, BIDZ was up $1.44, or 14.3%, to $11.49.