Exhibit 99.2
For Immediate Release
CORPORATE CONTACTS: MEDIA/MARKETING CONTACT:
Robert T. Hamilton, CFO Merilee Kern, Marketing Manager
954-360-9022 x115 702-562-0064
rhamilton@eDiets.com merilee@eDiets.com
Alison Tanner, CFA, Chief Strategist
954-360-9022 x140
alison@eDiets.com
eDiets ... Record Revenues, Profits, and Cash Flow
Online Subscription Model Gains Ground Against Offline Competitors
DEERFIELD BEACH, Fla., July 23, 2002 - eDiets.com, Inc. (OTCBB:EDET), the leader
in personalized online diet programs and an emerging leader in personalized
online fitness and motivation programs, today announced that revenues, earnings
before interest, taxes, depreciation and amortization (EBITDA), cash flow from
operations and net income for its second fiscal quarter ended June 30, 2002 all
reached their highest levels in the Company's history. Revenues for the quarter
grew to $7.7 million, profit margins expanded significantly, earnings reached
$0.05 per share and the Company's total cash balances rose to more than $5
million.
Founder, chairman and CEO David Humble noted, "Obesity can have a dramatic
impact on one's lifespan. Our mission is delivering online solutions that help
people realize life's full potential. Towards that goal we will sell our
millionth online diet subscription this year, clearly validating the strength of
the online diet center model compared to offline centers such as Weight
Watchers(R), Jenny Craig(TM) and others. The Internet is the ideal platform for
services such as ours, and this year we will continue to build on its strengths
as we introduce additional services that offer the benefits of convenience,
privacy, and interaction between members."
Revenues totaled $7.7 million for the three months ended June 30, 2002 and $14.7
million for the six months ended June 30, 2002, increases of 34% and 45%,
respectively, compared to the comparable periods of 2001. eDiets generates
approximately 90% of its revenues from the sale of online diet and fitness
subscriptions. Unlike competing offline diet programs, eDiets heavily promotes
physical fitness, with customized workouts and instruction, and offers the
support of both licensed experts and hundreds of thousands of fellow members,
available at any time of the day or night.
In addition to reporting record revenues, the Company also reported that
deferred subscription revenues, which represent cash that has already been
received for subscriptions but that will be recognized in future quarters, grew
to a record level of $3.4 million. Adjusted EBITDA, which the Company defines as
cash receipts for subscriptions less expenses incurred, totaled $1.8 million, or
24% of cash revenues, for the second quarter of fiscal 2002 compared to
breakeven adjusted EBITDA in the second quarter of fiscal 2001. For the first
half of
fiscal 2002, adjusted EBITDA reached $2.9 million, or 20% of cash revenues,
compared to $1.2 million, or 12% of cash revenues, for the first half of fiscal
2001.
Net income for the second quarter of fiscal 2002 was $842,000, or $0.05 per
diluted share, compared to a loss of $220,000, or $0.02 per diluted share, for
the second quarter of fiscal 2001. Net income for the first half of fiscal 2002
was $1.3 million, or $0.08 per diluted share, compared to a net loss of
$194,000, or $0.01 per diluted share, for the first half of fiscal 2001.
eDiets reported cash flow from operations of $2.8 million for the second quarter
of fiscal 2002 and $3.9 million for the first half of 2002, compared to negative
cash flow from operations of $82,000 for the second quarter of 2001 and $1.1
million for the first half of 2001. As of June 30, 2002 eDiets had cash and cash
equivalents of $5.7 million.
The Company will hold a conference call for investors at 10:00 a.m. EDT on July
23, 2002, which will also be broadcast live via CCBN Webcast at the Company's
Investor Relations Website located at www.eDiets.com/investors. A replay of the
conference call Webcast will be available beginning at 12:00 p.m. EDT on July
23, 2002. Those interested in pre-registering for the Webcast can do so at
www.eDiets.com/investors.
About eDiets.com, Inc.
eDiets.com, Inc. (OTCBB:EDET), the online diet services category leader through
its brands eDiets (http://www.eDiets.com) and DietSmart
(http://www.DietSmart.com), has been providing customized diet, fitness and
motivational programs, products and services on a subscription basis since 1996.
eDiets and DietSmart members benefit from an array of comprehensive online
support services that are available 24/7/365, including professionally moderated
online meetings, support groups, chats and teleconferences. This combination of
convenience, personalization, privacy, support and value provides eDiets members
with an attractive alternative to traditional offline programs popularized by
Weight Watchers International, Inc. (NYSE:WTW), Jenny Craig, Inc. and others.
During the second quarter of 2002, eDiets.com had approximately 300,000 unique
paying members and currently has approximately 10 million opt-in subscribers to
its bi-weekly e-mail newsletter, eDiets Diet & Fitness News. Among other honors
received, www.eDiets.com was named a Forbes Magazine "Best of the Web" fitness
and nutrition Web site in both 2000 and 2001. eDiets.com, Inc. maintains its
corporate office in Deerfield Beach, Florida.
Statements in the release, which are not historical in nature, are forward -
looking statements. Forward-looking statements involve known and unknown risks
and uncertainties which could cause the actual results, performance or
achievements of the Company to be materially different from those which may be
expressed or implied by such statements. These risks and uncertainties include,
among others, changes in general economic and business conditions, changes in
product acceptance by consumers, effectiveness of sales and marketing efforts,
loss of market share and pressure on prices resulting from competition, and
inability to obtain sufficient financing. For additional information regarding
these and other risks and uncertainties associated with eDiets.com business,
reference is made to the Company's Annual Report on Form 10-KSB for the year
ended December 31, 2001, and other reports filed from time to time with the
Securities and Exchange Commission. All forward-looking statements are current
only as of the date on which such statements are made. The Company does not
undertake any obligation to publicly update any forward-looking statements.
###
eDiets.com, Inc.
Summary of Consolidated Financial Information
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
----------------------------- -----------------------------
2002 2001 2002 2001
-------- -------- --------- --------
INCOME STATEMENT DATA:
Revenues $ 7,715 $ 5,774 $ 14,713 $ 10,144
Cost and expenses:
Cost of revenue 738 412 1,460 879
Product development 269 127 630 208
Sales and marketing 4,169 4,586 7,840 7,705
General and administrative 1,425 750 2,894 1,333
Depreciation and amortization 327 118 651 216
-------- -------- --------- --------
Income (loss) from operations 787 (219) 1,238 (197)
-------- -------- --------- --------
Other income (expense), net (19) 3 (51) 7
Income tax benefit (expense) 74 (4) 127 (4)
-------- -------- --------- --------
Net income (loss) $ 842 $ (220) $ 1,314 $ (194)
======== ======== ========= ========
Earnings (loss) per common share
Basic $ 0.05 $ (0.02) $ 0.08 $ (0.01)
Diluted $ 0.05 $ (0.02) $ 0.08 $ (0.01)
Weighted average common and common
equivalent shares outstanding
Basic 15,742 13,562 15,734 13,557
Diluted 17,191 13,562 17,491 13,557
June 30, December 31,
2002 2001
----------- ------------
BALANCE SHEET DATA:
Cash and cash equivalents
(including restricted cash) $ 5,651 $ 2,111
Total assets 14,017 11,214
Deferred revenue 3,421 2,193
Long-term debt (excluding capital leases) 1,504 2,025
Stockholders' equity 4,957 3,613
CONTACT: Robert T. Hamilton, Chief Financial Officer, 954-360-9022,
rhamilton@eDiets.com