Blue Nile Inc. (NILE, Financial) filed Quarterly Report for the period ended 2009-10-04.
Blue Nile Inc is the leading online retailer of diamonds and fine jewelry. It has built a well respected brand by providing consumers with a better way to buy diamonds and fine jewelry. Blue Nile has established some of the highest quality standards in the industry and provides consumers with in-depth educational materials and unique online tools that place consumers in control of the jewelry shopping process. The Blue Nile websites showcase thousands of independently certified diamonds and fine jewelry at prices significantly below traditional retail. Blue Nile Inc. has a market cap of $840.2 million; its shares were traded at around $57.83 with a P/E ratio of 79.3 and P/S ratio of 2.9.
Selling, general and administrative expenses increased 9.6% to $10.9 million in the third quarter of 2009 compared to $10.0 million in the third quarter of 2008 due to several factors. Stock compensation expense increased $0.3 million in the third quarter of 2009 compared to 2008 primarily due to lower expenses in the third quarter of 2008 related to forfeited options of former employees. Incentive compensation expense increased $0.3 million primarily due to a reduction in incentive accruals in the third quarter of 2008. Payroll and general expenses related to technology investments in support of key initiatives such as the website redesign increased by $0.3 million. Depreciation expense related to additional capitalized assets increased by $0.1 million. These increases, as well as increases in other categories that were not individually material for disclosure, were partially offset by a $0.1 million decrease in legal costs in the third quarter of 2009 due to lower spending on intellectual property and other corporate matters compared to the third quarter of 2008. Marketing and advertising costs decreased approximately $0.1 million in the third quarter of 2009, primarily due to decreased spending in online marketing vehicles. As a percentage of net sales, selling, general and administrative expenses increased to 16.3% in the third quarter of 2009, as compared to 15.3% in the third quarter of 2008.
forfeited options of former employees. Payroll and general expenses related to technology investments in support of key initiatives such as the website redesign increased by $0.5 million. An additional $0.2 million increase in payroll expense was attributable to general staffing levels. Depreciation expense related to additional capitalized assets increased $0.3 million in the year to date ended October 4, 2009. These increases were partially offset by a $1.1 million decrease in marketing and advertising costs in the year to date ended October 4, 2009, primarily due to decreased spending in online marketing vehicles. Legal expenses also declined by $0.4 million in the year to date ended October 4, 2009 due to a decrease in the number of legal and corporate matters. As a percentage of net sales, selling, general and administrative expenses increased to 16.0% in the year to date ended October 4, 2009, as compared to 15.1% in the year to date ended September 28, 2008. The increase is due to fixed costs that did not decline as quickly as our volume-driven costs in the first half of the year as well as higher incentive accruals in 2009 compared to 2008, and lower stock compensation expenses in the third quarter of 2008 resulting from forfeited options.
As of October 4, 2009, working capital totaled $20.4 million, including cash, cash equivalents and short-term investments of $47.5 million and inventory of $17.8 million, partially offset by accounts payable of $42.3 million. We believe that our current cash and cash equivalents will be sufficient to continue our operations and meet our capital needs for at least the next 12 months.
Net cash of $6.2 million was used in operating activities for the year to date ended October 4, 2009, compared to net cash used in operating activities of $32.5 million for the year to date ended September 28, 2008. Net payment of payables totaled $20.0 million for the year to date ended October 4, 2009 and $45.4 million for the year to date ended September 28, 2008. In the first quarter, we generally have a significant pay down of our accounts payable balance built up during the fourth quarter holiday season. The volume of sales in the quarter ended January 4, 2009 was lower than the volume of sales in the quarter ended December 30, 2007, resulting in a lower net payment of payables in the year to date ended October 4, 2009 compared to the year to date ended September 28, 2008. Net
Net cash of $17.1 million was used in investing activities for the year to date ended October 4, 2009 related to purchases of $15.0 million of short-term investments and $2.1 million of property and equipment. Net cash of $1.5 million was used in investing activities for the year to date ended September 28, 2008 related to purchases of property and equipment to support our operations.
Read the The complete ReportNILE is in the portfolios of Ron Baron of Baron Funds.
Blue Nile Inc is the leading online retailer of diamonds and fine jewelry. It has built a well respected brand by providing consumers with a better way to buy diamonds and fine jewelry. Blue Nile has established some of the highest quality standards in the industry and provides consumers with in-depth educational materials and unique online tools that place consumers in control of the jewelry shopping process. The Blue Nile websites showcase thousands of independently certified diamonds and fine jewelry at prices significantly below traditional retail. Blue Nile Inc. has a market cap of $840.2 million; its shares were traded at around $57.83 with a P/E ratio of 79.3 and P/S ratio of 2.9.
Highlight of Business Operations:
During the third quarter, our year over year net sales increased 2.4% to $66.9 million from $65.4 million in the quarter ended September 28, 2008. While the overall jewelry retail environment continues to be weak, we reported our first quarterly increase in year over year net sales since the second quarter of 2008. Our gross profit as a percentage of net sales increased 180 basis points to 22.1% in the third quarter of 2009, compared with 20.3% for the third quarter of 2008. Our net income rose 10.3% to $2.6 million or $0.17 diluted net income per share for the third quarter of 2009, compared to $2.3 million or $0.15 diluted net income per share for the third quarter of 2008. As of October 4, 2009 we had cash, cash equivalents and short-term investments of $47.5 million and no debt.Selling, general and administrative expenses increased 9.6% to $10.9 million in the third quarter of 2009 compared to $10.0 million in the third quarter of 2008 due to several factors. Stock compensation expense increased $0.3 million in the third quarter of 2009 compared to 2008 primarily due to lower expenses in the third quarter of 2008 related to forfeited options of former employees. Incentive compensation expense increased $0.3 million primarily due to a reduction in incentive accruals in the third quarter of 2008. Payroll and general expenses related to technology investments in support of key initiatives such as the website redesign increased by $0.3 million. Depreciation expense related to additional capitalized assets increased by $0.1 million. These increases, as well as increases in other categories that were not individually material for disclosure, were partially offset by a $0.1 million decrease in legal costs in the third quarter of 2009 due to lower spending on intellectual property and other corporate matters compared to the third quarter of 2008. Marketing and advertising costs decreased approximately $0.1 million in the third quarter of 2009, primarily due to decreased spending in online marketing vehicles. As a percentage of net sales, selling, general and administrative expenses increased to 16.3% in the third quarter of 2009, as compared to 15.3% in the third quarter of 2008.
forfeited options of former employees. Payroll and general expenses related to technology investments in support of key initiatives such as the website redesign increased by $0.5 million. An additional $0.2 million increase in payroll expense was attributable to general staffing levels. Depreciation expense related to additional capitalized assets increased $0.3 million in the year to date ended October 4, 2009. These increases were partially offset by a $1.1 million decrease in marketing and advertising costs in the year to date ended October 4, 2009, primarily due to decreased spending in online marketing vehicles. Legal expenses also declined by $0.4 million in the year to date ended October 4, 2009 due to a decrease in the number of legal and corporate matters. As a percentage of net sales, selling, general and administrative expenses increased to 16.0% in the year to date ended October 4, 2009, as compared to 15.1% in the year to date ended September 28, 2008. The increase is due to fixed costs that did not decline as quickly as our volume-driven costs in the first half of the year as well as higher incentive accruals in 2009 compared to 2008, and lower stock compensation expenses in the third quarter of 2008 resulting from forfeited options.
As of October 4, 2009, working capital totaled $20.4 million, including cash, cash equivalents and short-term investments of $47.5 million and inventory of $17.8 million, partially offset by accounts payable of $42.3 million. We believe that our current cash and cash equivalents will be sufficient to continue our operations and meet our capital needs for at least the next 12 months.
Net cash of $6.2 million was used in operating activities for the year to date ended October 4, 2009, compared to net cash used in operating activities of $32.5 million for the year to date ended September 28, 2008. Net payment of payables totaled $20.0 million for the year to date ended October 4, 2009 and $45.4 million for the year to date ended September 28, 2008. In the first quarter, we generally have a significant pay down of our accounts payable balance built up during the fourth quarter holiday season. The volume of sales in the quarter ended January 4, 2009 was lower than the volume of sales in the quarter ended December 30, 2007, resulting in a lower net payment of payables in the year to date ended October 4, 2009 compared to the year to date ended September 28, 2008. Net
Net cash of $17.1 million was used in investing activities for the year to date ended October 4, 2009 related to purchases of $15.0 million of short-term investments and $2.1 million of property and equipment. Net cash of $1.5 million was used in investing activities for the year to date ended September 28, 2008 related to purchases of property and equipment to support our operations.
Read the The complete ReportNILE is in the portfolios of Ron Baron of Baron Funds.
