An informed source told Al-Ra'y al-Amm yesterday that the abduction, whose motives were yet to be known, had taken place in Qaysan area. The source added that those who carried out the abduction were unidentified.

The source further said that the NCP had reported the case to Qaysan police station under article 44. The source said he had contacted the JDF command but it had denied awareness of the abduction, pledging to act immediately to find out the motives and those behind the abduction.

Source: Al-Ra'y al-Amm, Khartoum, in Arabic 21 Nov 09

BBC Mon ME1 MEEau 211109/mo/hh

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About Blue Nile, Inc.

Blue Nile, Inc. is the leading online retailer of diamonds and fine jewelry. The Company delivers the ultimate customer experience, providing consumers with a superior way to buy engagement rings, wedding rings and fine jewelry. Blue Nile offers in-depth educational materials and unique online tools that place consumers in control of the jewelry shopping process. The Company has some of the highest quality standards in the industry and offers thousands of independently certified diamonds and fine jewelry at prices significantly below traditional retail. Blue Nile can be found online at www.bluenile.com, www.bluenile.ca and www.bluenile.co.uk. Blue Nile's shares are traded on the Nasdaq Stock Market LLC under the symbol NILE.

SOURCE: Blue Nile, Inc.

Blue Nile, Inc. 
Eileen Askew, 206-336-6745 (Investors) 
bluenileir@bluenile.com 
or 
John Baird, 206-336-6805 (Media) 
johnb@bluenile.com

--Company Raises Financial Guidance

Blue Nile, Inc. (Nasdaq:NILE), the leading online retailer of diamonds and fine jewelry, today reported financial results for its third quarter ended October 4, 2009.

Net sales of $66.9 million increased 2.4% compared to the third quarter of 2008 on strength in bridal jewelry sales and growth in international markets. Operating income for the quarter grew 17.6% to $3.9 million compared to $3.3 million in the third quarter last year. Operating margin expanded 80 basis points to 5.8% of net sales compared to 5.0% of net sales in the third quarter of 2008. Net income improved 10.3% to $2.6 million, or $0.17 per diluted share compared to $2.3 million, or $0.15 per diluted share in the third quarter of 2008.

Non-GAAP adjusted EBITDA for the third quarter totaled $6.3 million, an increase of 17.4% over the same quarter in 2008 and a record level for any third quarter in the Company's history. As a percent of sales, non-GAAP adjusted EBITDA improved to 9.5% compared to 8.3% in the third quarter of 2008. Net cash provided by operating activities totaled $23.4 million for the trailing twelve month period ended October 4, 2009. Non-GAAP free cash flow for the trailing twelve month period ended October 4, 2009 increased to $20.9 million from $20.1 million a year ago.

"Our third quarter results were excellent and reflect continued positive momentum in the business. We returned to top line growth and delivered strong profitability," said Diane Irvine, Chief Executive Officer. "The Blue Nile brand is resonating with consumers in the current environment, and we are gaining market share. As we look toward the important holiday season, we are well positioned with a broad selection of diamond engagement rings and fine jewelry and a newly redesigned website to showcase these products."

Selected Financial Highlights

-- International sales grew 27.5% in the quarter to a record level $8.8 million compared to $6.9 million in the third quarter of 2008. Excluding the impact from changes in foreign exchange rates, international sales increased 34.8%.

-- Gross profit for the quarter totaled $14.8 million. As a percent of sales, gross profit improved 180 basis points to 22.1% compared to 20.3% for the third quarter of 2008. The Company continued to achieve year over year gross margin improvement due largely to improved product sourcing in both diamonds and jewelry.

-- Selling, general and administrative expenses for the quarter were $10.9 million, compared to $10.0 million in the third quarter of 2008. The increase was due to lower expenses in the third quarter of 2008 related to forfeited options and a reduction in incentive accruals. In addition, 2009 includes expenses related to technology investments in support of key initiatives such as the website redesign. Selling, general and administrative expenses include stock-based compensation expense of $1.8 million in the third quarter of 2009, compared to $1.6 million in the third quarter last year.

-- Net income per diluted share for the quarter includes stock-based compensation expense of $0.08 compared to $0.07 for the third quarter of 2008.

-- Cash and cash equivalents plus short-term investments at the end of the third quarter totaled $47.5 million compared to $26.6 million at the end of the third quarter last year.

Financial Guidance

"The trends in the business during the third quarter improved sequentially, and we project that trend to continue in the fourth quarter. Based on our third quarter results and our expectations for the fourth quarter, we are raising our guidance," said Marc Stolzman, Chief Financial Officer. "We are projecting fourth quarter net sales between $100 million and $109 million, and diluted earnings per share in the range of $0.35 to $0.39."

Forward-Looking Statements

This press release contains forward-looking statements that include risks and uncertainties, including, without limitation, all statements related to future financial and business performance, market opportunity and plans to grow our business. Words such as "expect," "anticipate," "believe," "project," "will" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon our current expectations. Forward-looking statements involve risks and uncertainties. Our actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to general economic conditions, our fluctuating operating results, seasonality in our business, our ability to acquire products on reasonable terms, our online business model, demand for our products, our ability to attract customers in a cost effective manner, the strength of our brand, competition, fraud, system interruptions, our ability to fulfill orders and other risks detailed in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended January 4, 2009. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended October 4, 2009, which we expect to file with the Securities and Exchange Commission on or before November 13, 2009. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and Blue Nile undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof.

Conference Call

The Company will host a conference call to discuss its third quarter financial results today at 2:00 p.m. PT/5:00 p.m. ET. A live webcast of the conference call may be accessed at http://investor.bluenile.com. Following the completion of the call, a recorded replay of the webcast will be available for 30 days at the same Internet address. This call will contain forward-looking statements and other material information regarding the Company's financial and operating results. In the event that any non-GAAP financial measure is discussed on the conference call that is not described in this release, related complementary information will be made available at http://investor.bluenile.com as soon as practicable after the conclusion of the conference call.

Non-GAAP Financial Measures

To supplement Blue Nile's consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), Blue Nile uses non-GAAP adjusted EBITDA and non-GAAP free cash flow as measures of certain components of financial performance. Blue Nile defines non-GAAP adjusted EBITDA as earnings before interest and other income, taxes, depreciation and amortization, adjusted to exclude the effects of stock-based compensation expense. Blue Nile defines non-GAAP free cash flow as net cash provided by (used in) operating activities less cash outflows for purchases of fixed assets, including internal use software and website development. The Company reports sales information in accordance with GAAP. Internally, management monitors its sales performance on a non-GAAP basis that eliminates the positive or negative effects that result from translating international sales into U.S. dollars (the "constant exchange rate basis"). Blue Nile's management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors should also note that the non-GAAP financial measures used by Blue Nile may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as that of other companies. Whenever Blue Nile uses such non-GAAP financial measures, it provides a reconciliation of non-GAAP financial measures to the most closely applicable GAAP financial measures. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

Blue Nile's management believes that non-GAAP adjusted EBITDA and non-GAAP free cash flow, as defined, as well as international sales on a constant exchange rate basis provide meaningful supplemental information to the company and to investors. Blue Nile believes that both management and investors benefit from referring to these non-GAAP measures in assessing the performance of Blue Nile and when planning and forecasting future periods. Further, management believes that the inclusion of the non-GAAP adjusted EBITDA and non-GAAP free cash flow calculations provide consistency in Blue Nile's financial reporting and comparability with similar companies in Blue Nile's industry. Management believes the constant exchange rate measurement provides a more representative assessment of the sales performance and provides better comparability between reporting periods.

A reconciliation of non-GAAP adjusted EBITDA to net income is as follows (in thousands):

                               Quarter ended    Quarter ended
                               October 4, 2009  September 28, 2008
Net income                     $     2,575      $      2,335
Income tax expense                   1,386             1,226
Other income, net                    (100  )           (279   )
Depreciation and amortization        655               559
Stock-based compensation             1,827             1,560
Adjusted EBITDA                $     6,343      $      5,401

                               Year to date ended  Year to date ended
                               October 4, 2009     September 28, 2008
Net income                     $      7,359        $      8,111
Income tax expense                    3,962               4,332
Other income, net                     (218   )            (1,770 )
Depreciation and amortization         1,868               1,512
Stock-based compensation              5,495               5,208
Adjusted EBITDA                $      18,466       $      17,393

A reconciliation of differences of non-GAAP free cash flow from the comparable GAAP measure of net cash provided by (used in) operating activities is as follows (in thousands):

                                                     Quarter ended   Quarter ended
                                                     October 4, 2009 September 28, 2008
Net cash (used in) provided by operating activities  $     (263   )  $      1,454
Purchases of fixed assets, including internal-             (855   )         (673   )
use software and
website development
Non-GAAP free cash flow                              $     (1,118 )  $      781

                                                Twelve months ended  Twelve months ended
                                                October 4, 2009      September 28, 2008
Net cash provided by operating activities       $      23,381        $      23,003
Purchases of fixed assets, including internal-         (2,520 )             (2,873 )
use software and
website development
Non-GAAP free cash flow                         $      20,861        $      20,130

The following table reconciles year-over-year international sales percentage increases (decreases) from the GAAP sales measures to the non-GAAP constant exchange rate basis:

Quarter ended       Year over year growth Effect of foreign exchange movements Year over year growth on constant exchange rate basis
October 4, 2009
International Sales 27.5%                 (7.3%)                               34.8%

About Blue Nile, Inc.

Blue Nile, Inc. is the leading online retailer of diamonds and fine jewelry. The Company delivers the ultimate customer experience, providing consumers with a superior way to buy engagement rings, wedding rings and fine jewelry. Blue Nile offers in-depth educational materials and unique online tools that place consumers in control of the jewelry shopping process. The Company has some of the highest quality standards in the industry and offers thousands of independently certified diamonds and fine jewelry at prices significantly below traditional retail. Blue Nile can be found online at www.bluenile.com, www.bluenile.ca and www.bluenile.co.uk. Blue Nile's shares are traded on the Nasdaq Stock Market LLC under the symbol NILE.

BLUE NILE, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
                                                     October 4,          January 4,
                                                     2009                2009
ASSETS
Current assets:
Cash and cash equivalents                            $    32,494         $    54,451
Short-term investments                                    15,000              -
Trade accounts receivable                                 1,236               984
Other accounts receivable                                 142                 725
Inventories                                               17,846              18,834
Deferred income taxes                                     223                 670
Prepaids and other current assets                         1,078               1,069
Total current assets                                      68,019              76,733
Property and equipment, net                               7,711               7,558
Intangible assets, net                                    338                 271
Deferred income taxes                                     6,228               5,014
Other assets                                              144                 89
Total assets                                         $    82,440         $    89,665
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                     $    42,334         $    62,291
Accrued liabilities                                       4,976               6,607
Current portion of long-term financing obligation         43                  41
Current portion of deferred rent                          205                 205
Total current liabilities                                 47,558              69,144
Long-term financing obligation, less current portion      807                 839
Deferred rent, less current portion                       226                 374
Stockholders' equity:
Common stock                                              20                  20
Additional paid-in capital                                152,017             144,913
Accumulated other comprehensive income                    95                  17
Retained earnings                                         43,558              36,199
Treasury stock                                            (161,841 )          (161,841 )
Total stockholders' equity                                33,849              19,308
Total liabilities and stockholders' equity           $    82,440         $    89,665

BLUE NILE, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share data)
                             Quarter ended                Year to date ended
                             October 4,    September 28,  October 4,     September 28,
                             2009          2008           2009           2008
Net sales                    $     66,943  $      65,376  $     199,198  $      209,542
Cost of sales                      52,146         52,114        156,168         167,233
Gross profit                       14,797         13,262        43,030          42,309
Selling, general and
administrative expenses            10,936         9,980         31,927          31,636
Operating income                   3,861          3,282         11,103          10,673
Other income, net:
Interest income, net               23             184           101             1,299
Other income, net                  77             95            117             471
Total other income, net            100            279           218             1,770
Income before income taxes         3,961          3,561         11,321          12,443
Income tax expense                 1,386          1,226         3,962           4,332
Net income                   $     2,575   $      2,335   $     7,359    $      8,111
Basic net income per share   $     0.18    $      0.16    $     0.51     $      0.54
Diluted net income per share $     0.17    $      0.15    $     0.49     $      0.52
Shares used for computation:
Basic                              14,538         14,621        14,515          15,080
Diluted                            15,377         15,200        15,152          15,723

BLUE NILE, INC.
Condensed Consolidated Statements of Cash Flow
(Unaudited)
(in thousands)
                                                             Year to date ended
                                                             October 4,       September 28,
                                                             2009             2008
Operating activities:
Net income                                                   $     7,359      $     8,111
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization                                      1,868            1,512
Loss on disposal of property and equipment                         62               20
Stock-based compensation                                           5,615            5,298
Deferred income taxes                                              (767    )        (981    )
Tax benefit from exercise of stock options                         214              511
Excess tax benefit from exercise of stock options                  (47     )        (141    )
Changes in assets and liabilities:
Receivables                                                        331              1,195
Inventories                                                        988              2,944
Prepaid federal income taxes                                       -                (440    )
Prepaid expenses and other assets                                  (64     )        30
Accounts payable                                                   (19,964 )        (45,380 )
Accrued liabilities                                                (1,632  )        (5,093  )
Deferred rent and other                                            (147    )        (78     )
Net cash used in operating activities                              (6,184  )        (32,492 )
Investing activities:
Purchases of property and equipment                                (2,063  )        (1,553  )
Proceeds from the sale of property and equipment                   -                10
Purchase of short-term investments                                 (15,000 )        -
Net cash used in investing activities                              (17,063 )        (1,543  )
Financing activities:
Repurchase of common stock                                         -                (65,273 )
Proceeds from stock option exercises                               1,195            2,984
Excess tax benefit from exercise of stock options                  47               141
Principal payments under long-term financing obligation            (30     )        (28     )
Net cash provided by (used in) financing activities                1,212            (62,176 )
Effect of exchange rate changes on cash and cash equivalents       78               9
Net decrease in cash and cash equivalents                          (21,957 )        (96,202 )
Cash and cash equivalents, beginning of period                     54,451           122,793
Cash and cash equivalents, end of period                     $     32,494     $     26,591

SOURCE: Blue Nile, Inc.

Blue Nile, Inc. 
Eileen Askew, 206.336.6745 (Investors) 
bluenileir@bluenile.com 
or 
John Baird, 206.336.6805 (Media) 
johnb@bluenile.com