FOR IMMEDIATE RELEASE
CORPORATE CONTACT: MEDIA/MARKETING CONTACT:
- ----------------- -----------------------
Robert T. Hamilton, CFO Merilee Kern, Marcomm Manager
eDiets.com, Inc. eDiets.com, Inc.
954-360-9022 702-562-0064
rhamilton@eDiets.com merilee@eDiets.com
____________________
eDiets First Quarter Revenues Rise 60%, Driven by Higher Subscriber Spending
Cash Flow from Operations Tops $1 Million
DEERFIELD BEACH, FLA., April 23, 2002 - eDiets.com, Inc. (OTCBB:EDET), the
leader in personalized online diet and fitness programs, today announced that
revenues for its first fiscal quarter ended March 31, 2002 increased by 60.2%
compared to revenues for the prior year's first quarter. The increase was a
result of both an increase in the average number of paid subscribers to the
Company's programs and a 34.2% increase in average revenues recognized per
member. Strong revenue growth, combined with significantly lower advertising
expenses as a percentage of revenues, contributed to the Company's cash flow
from operations of $1.1 million and net income of $0.03 per diluted share for
the quarter ended March 31, 2002.
The Company reported revenues for the first quarter of fiscal 2002 of $7.0
million, an increase of 60.2% compared with revenues of $4.4 million for the
first quarter of fiscal 2001. eDiets sold 89,000 new memberships during the
quarter, and average revenues recognized per member increased as a result of
both subscription rate increases and the introduction of a premium diet and
fitness combination program. The Company continues to sell its programs at a
fraction of the cost of similar classroom-based programs such as Weight
Watchers.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the
first quarter of fiscal 2002 were approximately $800,000 compared to $100,000 in
the first quarter of fiscal 2001. The increase in EBITDA was due to a decrease
in sales and marketing costs as a percentage of revenues as the Company both
realized greater efficiencies in its online advertising purchases and
experienced a longer membership cycle per average subscriber. The Company
typically incurs significantly lower expenses in the later months of a
membership cycle. Sales and marketing costs for the quarter ended March 31,
2002 totaled $3.6 million, or 50.8% of revenues, compared to $3.1 million, or
71.3% of revenues, in the prior year period. As a result of the improvement in
EBITDA, net income for the first quarter of fiscal 2002 totaled $472,000, or
$0.03 per diluted share, compared to net income of $26,000, or $0.00 per diluted
share, for the first quarter of fiscal 2001.
David Humble, founder and CEO of eDiets, noted, "We validated our basic online
diet program during 2000 and 2001 and are now beginning to introduce
complementary products and services. Our premium diet and fitness combination
offering, launched during 2001, was the first example. We think that with new
offerings such as this we can accelerate our membership growth while at the same
time continuing to improve our average revenue yield and profitability per
member."
"We are beginning to support our growing array of products and services through
additional marketing channels. While pricing trends for online advertising, a
key source of new members for us, continues to be favorable, we have also
introduced the first in a series of planned offline marketing initiatives, all
of which are designed to drive additional members to our Web sites. For
instance, our first television commercial debuted on cable channels across the
nation last week. Now that we have proven our basic approach and started to
generate meaningful levels of cash, we are beginning judiciously to expand our
product offerings and marketing activities in accordance with our long-term
plan."
The Company will hold a conference call for investors at 10:00 a.m. EDT on April
23, which will also be broadcast live via CCBN Webcast at the Company's Investor
Relations Web site located at www.eDiets.com/investors. A replay of the
------------------------
conference call Web cast will be available beginning at 12:00 p.m. EDT on April
23. Those interested in pre-registering for the Web cast 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. (OTCBB:JCGI)
and others. During the first quarter of 2002, eDiets.com had approximately
300,000 unique paying members and currently has over 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 March 31,
--------------------------------------
2002 2001
--------------- ----------------
INCOME STATEMENT DATA:
Revenues $ 6,998 $ 4,370
Cost and expenses:
Cost of revenue 820 467
Product development 361 81
Sales and marketing 3,572 3,119
General and administrative 1,470 583
Depreciation and amortization 324 98
Income from operations 451 22
Other income (expense), net (32) 4
Benefit for income taxes 53 -
Net income $ 472 $ 26
Earnings per common share
Basic $ 0.03 $ 0.00
Diluted $ 0.03 $ 0.00
Weighted average common and common
equivalent shares outstanding
Basic 15,609 13,553
Diluted 17,706 14,659
March 31, December 31,
--------------- ---------------
2002 2001
BALANCE SHEET DATA:
Cash and cash equivalents
(including restricted cash) $ 3,105 $ 2,110
Total assets 12,051 11,214
Deferred revenue 2,668 2,193
Long-term debt (excluding capital leases 2,003 2,025
Stockholders' equity 4,170 3,613
CONTACT: Robert Hamilton, Chief Financial Officer, 954-360-9022,
rhamilton@eDiets.com
3