Bidz.com, Inc. Announces Financial Results for the First Quarter 2008 and Exceeds Guidance

Business Wire,  May 6, 2008  

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* First Quarter Revenues Increase 38.5% Year-Over-Year to $61.9 Million

* First Quarter Gross Margins Increase to 29.1% From 24.9% Year-Over-Year

* First Quarter Pre-Tax Income Increases 120.1% Year-Over-Year to $7.8 Million

* First Quarter Diluted EPS Increases 28.6% to $0.18 From $0.14 in Prior Year

* First Quarter Generated $11.7 Million Cash Flow From Operations Compared to a Deficit of $3.7 Million in the Prior Year

* First Quarter Inventory Reduced by $22 Million From Previous Quarter

LOS ANGELES -- Bidz.com, Inc. (NASDAQ: BIDZ), a leading online auctioneer of jewelry, today reported exceptional financial results for the three months ended March 31, 2008, significantly exceeding its previous guidance.

Net revenues for the first quarter of 2008 were $61.9 million, a 38.5% increase compared with $44.7 million reported in the first quarter of 2007. The substantial increase was due to the continued demand for the Company's jewelry products, increased customer traffic, increased participation in its dynamic and unique auction format and an increase in the average sales amount per order. The Company also opportunistically sold wholesale merchandise in the first quarter of 2008, which accounted for $4.2 million in revenue for the first quarter of 2008.

"We continued to experience strong revenue growth and better than expected profitability in the first quarter, despite a difficult economic climate, which impacted the business of many other retailers," said David Zinberg, President and Chief Executive Officer of Bidz.com. "We believe our success in this environment is a testament to the broad appeal of our business model, which features jewelry offered at prices significantly below other jewelry retailers; a fun and easy to use auction format; a vast selection of merchandise, with constant newness; and excellent customer service."

David Zinberg continued, "The first quarter of 2008 marked our 17th consecutive quarter of profitability and we expect the trend to continue. We remain focused on continuing to deliver great value, quality, service, and choice to our new and loyal customers, and remain confident in our strong financial outlook for the balance of the year. We believe this performance will reward long-term shareholders of Bidz.com."

2008 Key Developments:

* Significantly reduced first quarter inventory by 38.6% to $34.8 million compared to $56.7 million at the end of fiscal year 2007

* Increased first quarter international sales by 59.6% to $14.6 million compared to $9.2 million in the prior year period

* Repurchased approximately 869,000 shares at an average price of $8.45 per share through April 30,

* Continue to increase vendor diversification; top 5 vendors represent 26.8% of total purchases in the first quarter 2008, compared to 33.9% in the prior year period

* Announced the initial launch of Buyz.com

* Continued to climb in internet rankings, Bidz is now ranked the number three site in the shopping/auction category, following eBay.com and eBayUK according to Ranking.com

* Significant improvements in all its key revenue, margin and customer metrics;

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The Company's pre-tax income for the first quarter of 2008 was $7.8 million, significantly exceeding its revised guidance of $6.5-$7.3 million, and compared to $3.5 million in the prior year period in 2007. Net income for the first quarter of 2008 increased to $4.6 million, or $0.18 per fully diluted share on 25.8 million weighted average shares outstanding, compared to net income of $3.4 million, or $0.14 per fully diluted share on 23.7 million weighted average shares outstanding in the same period of 2007.

In the first quarter, gross profit increased 62.1% to $18.0 million from $11.1 million in the first quarter of 2007. Gross margins in the first quarter of 2008 were 29.1%, compared with 24.9% in the same period of 2007.

Operating expenses in the first quarter 2008 increased to $10.3 million compared to $7.5 million in the prior year period. Operating expenses as a percentage of sales decreased slightly to 16.6% compared with 16.8% in the prior year period. The absolute dollar increases were primarily due to the overall growth of the company and includes increases in marketing campaigns, as well as payroll related expenses.

As of March 31, 2008, the Company had $6.6 million in cash. The Company has working capital of $31.0 million and no long-term debt. The Company has no outstanding balance on its $25 million revolving line of credit.

The Company also said that it will continue to repurchase shares of its Common Stock in the open market under the stock repurchase program. Under this program, approximately $12.6 million is still available for additional share repurchase at prevailing prices in open market transactions, subject to market conditions, share price, and other considerations. Funds for the repurchase of shares are being provided by available cash from operations.

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