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Fatbrain.com Foresees Profits in 2002
Jim Milliot -- 6/19/00

With MightyWords now a separate subsidiary (News, June 12), Fatbrain.com expects to become profitable quicker than expected, the e-retailer said last week in announcing its first-quarter results. According to Fatbrain president Dennis Capovilla, the move to make MightyWords an independent company will allow Fatbrain to move into the black within calendar 2002 (fiscal 2003). The company is projecting revenues for the fiscal year ending January 31, 2001, to be between $70 million and $72 million, with revenues exceeding $125 million in fiscal 2002.

Without MightyWords, Fatbrain is now focusing on the business-to-business market, and during the first quarter added more than 58,000 new customers, bringing its total customer base to over 300,000. Among the corporate clients it added in the period was Wells Fargo, for which it has established two online information stores that will give Wells Fargo employees access to appropriate books, technical documents and training products.

Fatbrain.com reported total pro forma sales of $14 million for the first quarter ended April 30, 2000, up from $6.1 million in last year's first period. Revenues included $12.1 million in online sales, with the balance coming from its physical stores, trade shows and MightyWords. Net loss in the quarter was $13 million, compared to $5.2 million in the first quarter of fiscal 2000; excluding losses from MightyWords, Fatbrain's net loss was $8.5 million. With MightyWords now a separate subsidiary, Fatbrain will report its results separately.

Fatbrain also announced that it has received $8.5 million from MightyWords as reimbursement for expenses incurred on behalf of the subsidiary over the past five months. Additional payments are expected.
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