![]() CONFIDENTIAL Investor Presentation October 2011 It all starts here with a promise for a future that can be healthier, better and stronger than today. Copyright 2011 eDiets.com, Inc. All Rights Reserved Exhibit 99.1 |
![]() CONFIDENTIAL 2 Forward-Looking Statements Forward-Looking Statements Copyright 2011 eDiets.com, Inc. All Rights Reserved This presentation contains “forward-looking statements” within the meaning of the federal securities laws and is intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995, including statements and assumptions regarding (i) the size and outlook of the market for our products, (ii) our need for additional financial support, (iii) our expectation that our total gross margins and our advertising efficiency will improve in the future, (iv) our assumption that we will acquire new customers at an acceptable cost, (v) our expectation regarding the effectiveness of our advertising and our call center conversion strategies, (vi) our assumption that we are well-positioned to compete and capture market share, (vii) our expectation regarding our ability to comply with regulatory requirements, (viii) our assumptions regarding market size, projected results and the demand for our products and services. These statements and assumptions are based on management’s estimates and projections with respect to future events and financial performance and are believed to be reasonable, although they are inherently uncertain and difficult to predict. Actual results could differ materially from those projected as a result of certain factors, including (i) our ability to raise additional capital, (ii) our ability to maintain compliance with regulatory requirements, (iii) our ability to maintain our listing on The Nasdaq Capital Market, (iv) our ability to maintain or improve meal delivery margins and their effect on total gross margins, (v) our ability to improve advertising efficiency, (vi) our ability to manage fluctuations in advertising costs, (vii) our ability to sufficiently increase revenues and maintain expenses and cash capital expenditures at appropriate levels, (viii) the state of the credit and capital markets, including the level of volatility, illiquidity and interest rates and (ix) our ability to rapidly secure alternate technology infrastructure vendors if we experience call center or Web site service interruption. A discussion of factors that could cause results to vary is included in the Company’s filings with the Securities and Exchange Commission. All forward-looking statements in this presentation speak only as of the date of this presentation. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements. This presentation also contains non-GAAP financial measures. For a reconciliation of the non-GAAP measures to the most comparable GAAP measure, please refer to the eDiets.com website at www.ediets.com, under the Events and Presentation section of the Investor Relations page. |
![]() CONFIDENTIAL 3 Company Overview Company Overview $1.0 billion market annually for home delivery of diet food 1 across all price segments Up to $350 million market in our price segment 2 fragmented market with approximately 850 competitors 1 we’re number two in the market with less than 10% market share opportunity to consolidate our segment through aggressive advertising • State of the art, online diet membership program including menus, recipes, shopping lists and tools Estimated market size: $250 million annually 2 • Website hosting for white label corporate wellness sites focused on diets and diet-related tools Estimated market size: $50-$100 million annually 2 Copyright 2011 eDiets.com, Inc. All Rights Reserved 1. Market size and competitor estimates made by eDiets management based on data from MarketData January 2011 Survey 2. Market size estimates made by eDiets management HOME MEAL DELIVERY BUSINESS Other Businesses |
![]() CONFIDENTIAL 4 Management Team Management Team Copyright 2011 eDiets.com, Inc. All Rights Reserved Name Title Previous Experience Kevin McGrath CEO DIRECTV, Co-Founder DIRECTV Latin America, Chairman & CEO Digital Angel, President & CEO General Motors/Electronic Data Systems/Hughes Comm. Dartmouth, MBA Princeton, BA Thomas Hoyer CFO Digital Angel, CFO Nationsrent Companies, CFO GLOBEquip, CFO Fluor Corporation Clemson, MBA, BS Joseph Leonardo VP, Meal Delivery EPI Breads, VP Operations Meyers Bakeries, VP Operations & Logistics Schwan’s Bakery, VP Group Operations Quaker Oats Cornell, BS Jennifer Hartnett CMO Parisian Slim, VP Marketing Nutrisystem, Creative Director Bon-Ton Stores, David’s Bridal, Macy’s Bucknell, BA |
![]() CONFIDENTIAL Key Facts Key Facts Copyright 2011 eDiets.com, Inc. All Rights Reserved Symbol DIET Stock Price 11/11/11 || 52-week Range $1.01 || $1.01 - $3.95 Shares Outstanding 11/04/11 13,274,751 Market Capitalization 11/04/11 $13,407,499 Volume (daily 30 day average at 11/04/11) 9,000 Insider Ownership 10.7% 1. The stock split 1-for-5 on June 1, 2011 5 |
![]() CONFIDENTIAL 6 Copyright 2011 eDiets.com, Inc. All Rights Reserved Meal Delivery - Meal Delivery - Overview Overview • Healthy, delicious meals delivered to your door • Offers both 5-day ($23.60/day) and 7-day plans ($21.14/day) • Over 100 different meals freshly prepared by our chefs Meal Delivery TTM 6/30/11 Revenue $20.0 Million Shipments Per Week 3,000 Gross Margin 1,2 43% ¹ Excludes depreciation and revenue share ² The reconciliation for these non-GAAP measures are on our website Est. $350M Meal Delivery Market at our Price Level Significant Market Opportunity |
![]() CONFIDENTIAL 7 Meal Delivery Model Illustration Meal Delivery Model Illustration Target Average Weekly Selling Price $131 Average Length of Stay - # of Weeks 6.9 Average Revenue per Customer $904 Cost of Goods Sold $470 Gross Margin $434 Gross Margin % 48% Customer Acquisition Cost $154 Advertising Efficiency (CAC/Revenue) 17% Call Center Cost $68 Cash Contribution to Overhead & Profit $212 Copyright 2010 eDiets.com, Inc. All Rights Reserved Four Key Factors To Success Key Comparative Metrics Meal Delivery Gross Margin 9-Months 2011: 44% Meal Delivery Advertising Efficiency 9-Months 2011: 29% |
![]() CONFIDENTIAL 8 Major 2011/2012 Meal Delivery Initiatives Major 2011/2012 Meal Delivery Initiatives • Upgrading direct marketing and call center capabilities – Hired creative director from highly successful competitor to be our chief marketing officer (February 2011) – Added the ex-chief marketing officer from a highly successful competitor to our Board of Directors (May 2011) – Hired call center director from highly successful competitor to be our call center director (August 2011) – Hired media buyer with experience in direct response, including a tenure at a highly successful competitor (November 2011) • Improving call center efficiency: – Implemented commission-only compensation structure for sales associates (September 2011) – Continually modifying call scripts to be more insistent on getting to “yes” (Aug-Nov 2011) – Upgraded training to include more situational training (Aug-Nov 2011) – Changed hiring criteria for sales associates to incorporate a focus on finding staff that can successfully confront the answer “no” Copyright 2011 eDiets.com, Inc. All Rights Reserved |
![]() CONFIDENTIAL 9 Major 2011/2012 Meal Delivery Initiatives Major 2011/2012 Meal Delivery Initiatives • Improving advertising content: – Re-energized testimonial campaign with a casting call for overweight actresses and models (September 2011) – Continually testing television, print and online advertising channels and content to find optimal mix for driving customers to the call center economically – Refreshed existing television commercials (September/October 2011) • Improving meal delivery margins – Increased price to allow for stronger promotions while maintaining margin (Oct 2011) – Expect to achieve large volume discounts as business grows – Expect to initiate bi-coastal production, which will reduce shipping costs, as business grows Copyright 2011 eDiets.com, Inc. All Rights Reserved 9 |
![]() CONFIDENTIAL 10 Meal Delivery Advertising Efficiency Meal Delivery Advertising Efficiency Advertising efficiency = meal delivery advertising expense ÷ meal delivery revenue Copyright 2011 eDiets.com, Inc. All Rights Reserved Advertising efficiency has been improving (percentage declining) due to better cost per call and call center conversion |
![]() CONFIDENTIAL 11 Customer Retention Customer Retention Meal Delivery Average Number of Shipments For Active Pool of Customers Measures changes in current customer base Meal Delivery Average Number of Shipments For Active & Canceled Pool of Customers Measures changes for all customers on a rolling 12-month period Copyright 2011 eDiets.com, Inc. All Rights Reserved |
![]() CONFIDENTIAL 12 Meal Delivery Gross Margin Before Depreciation and CAC (Excludes Revenue Share) Improved Gross Margins Improved Gross Margins • Raised price of meal delivery service • Moved to lower-cost manufacturer • Negotiated lower shipping rates Copyright 2011 eDiets.com, Inc. All Rights Reserved 30% 35% 37% 35% 40% 39% 41% 40% 46% 44% 42% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 2 0 1 2 T a r g e t 46.5% |
![]() CONFIDENTIAL 13 Financial Overview |
![]() CONFIDENTIAL 14 Capitalization Capitalization Copyright 2011 eDiets.com, Inc. All Rights Reserved The Company completed a 1-for-5 reverse stock split on June 1, 2011 30-Sep-11 Equity (50,000,000 authorized) Issued Shares Weighted Avg Strike Price Fully Diluted Common Stock 13,310,534 13,310,534 Warrants $3.76 719,058 Options $8.21 1,344,000 Restricted Stock Units 99,800 Total 15,473,392 Debt Promissory Notes - Related Party $ 1,000,000 |
![]() CONFIDENTIAL 15 Quarterly Revenue and EBITDA Quarterly Revenue and EBITDA Copyright 2010 eDiets.com, Inc. All Rights Reserved |
![]() CONFIDENTIAL 16 Revenue By Segment Revenue By Segment Copyright 2011 eDiets.com, Inc. All Rights Reserved Online Diet Plans 28% Home Meal Delivery 43% Corporate Services 22% Other 7% 2010 Actual 2009 Actual Focus is on growing home meal delivery business |
![]() CONFIDENTIAL 17 Meal Delivery Revenue By Quarter Meal Delivery Revenue By Quarter Copyright 2011 eDiets.com, Inc. All Rights Reserved Meal delivery revenue declining as a function of less ad spend as we focus on maintaining customer acquisition costs at levels that generate positive EBITDA |
![]() CONFIDENTIAL 18 $3.0 Million Investment in Advertising $3.0 Million Investment in Advertising (assume advertising investment turns 8X annually) (assume advertising investment turns 8X annually) Copyright 2011 eDiets.com, Inc. All Rights Reserved Meal Delivery Business Model Illustration $ Millions Cash Investment in Advertising $3.0 $3.0 $3.0 $3.0 Ad Spend Turns (recover cash spent on advertising in 6.5 weeks) 8X/Year 8X/Year 8X/Year 8X/Year Leveraged Ad Spend $24.0 $24.0 $24.0 $24.0 Revenue/Ad Spend Ratio (revenue / advertising) 2.50 3.00 4.00 5.00 Implied Revenue 60.0 72.0 96.0 120.0 Variable Cost of Food and Fulfillment 52.0% (31.2) (37.4) (49.9) (62.4) Variable Cost of Acquisition Call Center, Promotions 7.5% (4.5) (5.4) (7.2) (9.0) Advertising Expense (24.0) (24.0) (24.0) (24.0) Advertising Efficiency 40.0% 33.3% 25.0% 20.0% Fixed Cost of Staff and Other Expense (0.6) (0.6) (0.6) (0.6) EBITDA ($0.3) $4.6 $14.3 $24.0 EBITDA Margin -0.5% 6.3% 14.9% 20.0% |
![]() CONFIDENTIAL 19 Investment Highlights Investment Highlights • Large target market – $60 billion weight loss market 1 – eDiets targeting $350 million of that total • Focus on meal delivery – Low capital requirements and a relatively quick cash conversion cycle equals positive ROIC • Biggest Loser licensing deal provides exposure • Continued improvement in operations will enhance returns – Expect meal delivery gross margin to continue increasing due to volume discounts and shipping cost reductions – Expect improved advertising efficiency Copyright 2011 eDiets.com, Inc. All Rights Reserved 1. Source: MarketData January 2011 Survey |
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