uSell.com Announces Second Quarter 2015 Results

Dramatically Improved Cash Flow; Forged Relationships with Several Large Wholesalers; Launched Wholesale Auctions Platform

NEW YORK, NY / ACCESSWIRE / August 14, 2015 / uSell.com (USEL), the leading US-based reCommerce marketplace that instantly finds cash offers for used smartphones and electronics, today announced results for the second quarter ended June 30, 2015.

Q2 Highlights:

– Improved cash used in operations by 79%, from $1,114,000 for the three months ended March 31, 2015 to $234,000 for the three months ended June 30, 2015
– Reduced loss from operations by 59% from $1,306,000 for the three months ended June 30, 2014 to $535,000 for the three months ended June 30, 2015
– Both cash used in operations and net loss from operations were significantly better in June 2015 than in April or May due to headcount reduction costs incurred in the first two months of the quarter
– Processed $3,170,000 in Gross Merchandise Value (GMV), despite reduced marketing spend of 79%; compared to $2,822,000 in the first quarter 2015 and $5,780,877 in the second quarter 2014
– Launched our wholesale auctions platform, uSell Auctions, and ran four wholesale auctions, processing $731,000 in additional transaction value through this platform in addition to the $3,170,000 in GMV from the consumer business (note that we recognize revenues under our uSell Auctions platform on a net basis)

Nik Raman, Chief Executive Officer, stated, “In response to changing industry dynamics, in March 2015, we decided to expand our strategy to include the wholesale acquisition of smartphones. This decision was made to take advantage of what we see as our largest opportunity: using our unique technology platform to capture a piece of the rapidly expanding carrier and retail trade-in business. We believe that the wholesale flow of phones will continue to grow exponentially in the coming quarters and years. During the first six months of 2015, we made significant strides in forging strategic partnerships to unlock this opportunity. In support of our strategy, we scaled back our consumer marketing spend, reduced our marketing staff headcount, and shifted the bulk of our investment from consumer marketing to technology. These decisions have dramatically improved our cash flow.”

In the coming quarters, uSell plans to capitalize on its unique platform to maximize the value of used devices through its combination of triage and marketplace technology. With the announcement by Verizon Wireless on August 7, 2015 to discontinue all smartphone subsidies for new customers, it has become clear that the future financial burden of smartphone purchases will be placed on consumers. This will make trade-in an increasingly important aspect of carrier and retailer marketing and retention strategies.

uSell believes that the downstream chain for trade-in is still highly inefficient. In order to capture the maximum value from used devices, it is vitally important that the carriers, retailers, processors, and wholesalers find a more efficient means of processing and selling devices. uSell believes that it is the only company in the industry with the technology to distribute devices to a diverse base of small merchants in a scalable manner that unlocks the maximum value in these devices.

While uSell will continue to manage and optimize its consumer business, it has eliminated the bulk of its consumer marketing spend. Despite eliminating this spend, the consumer brand that uSell has built over the last three years continues to drive a large number of users to the uSell.com website each month, resulting in a dramatic improvement to uSell’s cash flows. uSell will continue to leverage the technology from its consumer platform to take advantage of the wholesale opportunity.

“We have now laid the groundwork for important strategic relationships with top tier wholesalers and have validated a model for future growth,” says Raman. “These strategic relationships will drive substantial value in the coming quarters that will outweigh the value of the consumer business alone.”

Financial Results:

Second Quarter 2015 Compared to Second Quarter 2014

For the second quarter ended June 30, 2015, revenues were $2.7 million, a 59% increase from $1.7 million for the quarter ended June 30, 2014. Net loss for the quarter ended June 30, 2015 decreased by $0.8 million, from a loss of $1.3 million for the quarter ended June 30, 2014 to a loss of $0.5 million. The resulting EPS is ($0.07), compared to ($0.22) in the year-ago quarter.

For the quarter ended June 30, 2015, there were $0.6 million of non-cash expenses, resulting from stock-based compensation and depreciation and amortization. As of June 30, 2015, the Company had $755,000 in cash, compared to $1.1 million at March 31, 2015.

Year-to-Date 2015 Compared to Year-to-Date 2014

For the six months ended June 30, 2015, revenues were $4.9 million, a 79% increase from $2.7 million for the six months ended June 30, 2014. Net loss for the six months ended June 30, 2015 was $2.0 million, a decrease of $2.1 million from $4.2 million in the six months ended June 30, 2014. The resulting EPS is ($0.27), compared to ($0.75) a year earlier.

About uSell.com, Inc.

uSell.com is a reCommerce marketplace that helps individuals turn unused items into cash. uSell ensures that customers get the highest payouts with the least amount of hassle by facilitating risk-free transactions with professional buyers. For uSell’s buyers, uSell offers a scalable technology, marketing, logistics, and analytics solution that provides a high volume of inventory at a low acquisition cost. Visit www.uSell.com

Forward-Looking Statements

This press release includes forward-looking statements including statements regarding maximizing the value of used devices, taking advantage of the wholesale opportunity, and future growth. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. The results anticipated by any or all of these forward-looking statements might not occur. Important factors that could cause actual results to differ from those in the forward-looking statements include competition from large retail stores and wireless operators, the success of our auction platform and our ability to monetize it and our ability to further our relationships with large wholesalers. Further information on our risk factors is contained in our filings with the SEC, including our Annual Report on Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.

SOURCE: uSell.com, Inc.

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