| Subscriber Profitability Drives Positive 2005 Outlook DEERFIELD BEACH, FL, Feb. 24, 2005 (MARKET WIRE via COMTEX) -- eDiets.com, Inc. (NASDAQ: DIET), a leading online diet and healthy
living destination, today announced fiscal fourth quarter and full
year results for the period ended December 31, 2004.
2004 Financial Highlights
- Revenue increased 18% versus 2003
- Sales and marketing expense dropped from 103% of revenues in the first
half of 2004 to 71% in Q4; cost per newly acquired subscriber dropped 14%
over the same period
- Profit margin on the average newly acquired subscriber turned positive
in Q4
- Losses narrowed dramatically in the second half of 2004, reaching a
near-breakeven level in Q4
"Higher online ad rates significantly impacted our first half results
in 2004, and we responded with tactical changes to the business that
increased revenue per subscriber and decreased our cost to acquire a
subscriber," commented David Humble, CEO of eDiets.com. "Our outlook
for 2005 is positive as subscribers acquired in the latter half of Q4
are tracking to be profitable over the terms of their subscriptions,
and that trend has continued into this year."
Revenue for the fourth quarter of fiscal 2004 and the full year
totaled $11.1 million and $45.4 million, increases of 2.8% and 18.5%,
respectively, versus the comparable prior year periods. Growth in the
average subscriber base contributed to revenue growth in all
quarters.
Net loss totaled $59,000, or $0.00 per share, for the fourth quarter
of fiscal 2004 compared to net income of $1.1 million, or $0.06 per
share, in the fourth quarter of fiscal 2003. For the full year,
eDiets.com reported a net loss of $9.9 million, or $0.49 per share,
compared to a net loss of $1.7 million, or $0.10 per share for 2003.
87% of company's net loss in fiscal 2004 occurred during the first
half of the year.
Total expenses, including advertising, totaled $11.2 million for the
fourth quarter of fiscal 2004 compared to $9.7 million in the
comparable prior year period. The increase was due to modest growth
in sales and marketing investments as well as the consolidation of
eDiets Europe Ltd. beginning in July 2004. For the full year
expenses totaled $55.5 million compared to $40.3 million for 2003,
with the increase primarily related to the successful launch of a
television advertising program in the second quarter. 2004 marked
the company's first extensive use of television as part of its media
mix.
Cash used in operations for fiscal 2004 totaled $7.7 million compared
to cash flow from operations of $2.9 million for 2003. The change in
cash flow from operations relates primarily to the net losses
recognized in 2004.
2004 Operating Highlights
- Launched six additional branded diet plans as part of the company's
"diet destination" strategy
- Extended the "destination" strategy into fitness with the launch of
Bob Greene's Get with the Program! fitness plan
- Launched the eDiets.com|Solutionssm subscription service and the
Online/Anytime Meetingsm
- Licensed rights to eDiets.com's technology for the U.K. and Ireland to
Tesco.com, resulting in a new, ongoing high-margin royalty revenue stream
- Expanded the board of directors and appointed a president and chief
operating officer
Outlook
Ciaran McCourt, president and chief operating officer of
eDiets.com, noted, "We are determined to improve our financial
results in 2005 through a combination of subscriber growth, new
products and cost containment. We will be measuring our financial
progress this year based upon the following variables: year-over-year
revenue growth, net income, cash from operations, sales and marketing
efficiency, overhead control, the strength of our balance sheet and,
as a leading indicator, the profitability of newly acquired
subscribers."
McCourt continued, "During the first quarter of 2005 we continue to
increase our estimated margin on newly acquired subscribers and we
forecast revenue growth of approximately 10% for the quarter.
However, we plan to make the majority of our 2005 advertising
investments in the first half of the year, consistent with the
seasonality of the diet business, and as a result we expect to report
a loss in Q1. Our full year budget calls for 12 to 15% revenue
growth and positive net income before any recognition of stock option
expense as we reap the benefits of the sales and marketing
investments we are making today. I am firmly of the view that by
improving our customer experience and the efficacy of our programs we
will enhance customer satisfaction, leading to higher revenues and
profits."
Conference Call Information
The company will host a conference call for investors beginning at
10:30 a.m. Eastern Time on Thursday, February 24th. Participants may
access the call by dialing 888-282-0172, passcode 'eDiets.'
International participants may access the call by dialing
773-756-4712, passcode 'eDiets.' Alternatively, participants may
access the webcast via the company's Web site at
www.eDiets.com/investors.
An audio replay will be available through Friday, March 11, 2005. To
access the replay, please dial 203-369-1741. The webcast will also
remain accessible via the company's Web site at
www.eDiets.com/investors.
About eDiets.com
eDiets.com, Inc. (NASDAQ: DIET) is a premier online diet, fitness,
and healthy living destination offering professional advice,
information, products and services to those seeking to improve their
health and longevity. Since 1997 and as of December 31, 2004, more
than 1.9 million consumers worldwide have become eDiets.com members.
Among other honors, the site has been named a Forbes Magazine spring
2004 "Best of the Web" in the diet and nutrition category, and a PC
Magazine "Editors' Choice" in May 2004. eDiets.com offers more than
20 personalized online nutrition and fitness programs, as well as
access to a wide range of expert and peer-based online support
services that are all conveniently available 24/7. Founded in 1996
and headquartered in Deerfield Beach, FL, eDiets.com operates Web
sites at www.eDiets.com and www.eFitness.com. The company also
publishes eDiets "Watching Your Weight," a personalized online
interactive magazine, along with a family of industry-leading
electronic newsletters that have an opt-in circulation base of over 13
million.
Safe Harbor Statement
Statements 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, that the Company
will not be able to obtain sufficient outside financing, when and if
required, on acceptable terms, changes in general economic and
business conditions, changes in product acceptance by consumers, a
decline in the effectiveness of sales and marketing efforts, loss of
market share and pressure on prices resulting from competition,
volatility in the advertising markets targeted by the Company, the
termination of contractual relationships with the Company's brand
partners which license certain brand components and other proprietary
information to the Company in the creation and branding of the
Company's subscription programs, and the outcome of litigation pending
against the Company. For additional information regarding these and
other risks and uncertainties associated with eDiets.com's business,
reference is made to the Company's Annual Report on Form 10-KSB for
the year ended December 31, 2003, 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 Twelve Months Ended
Dec. Sept. Dec. Dec. Dec.
31, 30, 31, 31, 31,
2004 2004 2003 2004 2003
-------- -------- ------- ------- -------
INCOME STATEMENT DATA:
Revenues:
Membership $ 9,762 $ 10,316 $ 9,674 $39,196 $32,935
Other revenue 1,374 1,494 1,159 6,211 5,397
-------- -------- ------- ------- -------
Total revenues 11,136 11,810 10,833 45,407 38,332
Cost and expenses:
Cost of revenue 1,792 1,526 1,437 6,437 4,701
Product development 755 657 425 2,507 1,581
Sales and marketing 7,202 9,411 6,326 39,936 28,199
General and
administrative 1,255 1,392 1,358 5,645 4,476
Depreciation and
amortization 238 223 190 879 1,171
Impairment of
intangible assets - - - 54 183
-------- -------- ------- ------- -------
(Loss) Income from
operations (106) (1,399) 1,097 (10,051) (1,979)
Other income, net 44 33 - 115 13
Income tax benefit 3 3 18 33 258
-------- -------- ------- ------- -------
Net (loss) Income $ (59) $ (1,363)$ 1,115 $(9,903) $(1,708)
======== ======== ======= ======= =======
Earnings (loss)
per common share
Basic $ (0.00) $ (0.07)$ 0.06 $ (0.49) $ (0.10)
======== ======== ======= ======= =======
Diluted $ (0.00) $ (0.07)$ 0.06 $ (0.49) $ (0.10)
======== ======== ======= ======= =======
Weighted average common
and common equivalent
shares outstanding
Basic 21,076 20,633 18,017 20,091 16,675
======== ======== ======= ======= =======
Diluted 21,076 20,633 19,796 20,091 16,675
======== ======== ======= ======= =======
Three Months Ended Twelve Months Ended
Dec. Sept. Dec. Dec. Dec.
31, 30, 31, 31, 31,
2004 2004 2003 2004 2003
-------- -------- ------- ------- -------
STATEMENT OF
CASH FLOW DATA:
Net cash provided
by (used in):
Operations $(3,225) $ (758)$ (233) $(7,690) $ 2,917
Investing $ (538) $ 3,065 $ (200) $ 2,066 (677)
Financing $ 746 $ 431 $ 498 $ 8,348 1,679
Three Months Ended
Dec. Sept. Dec.
31, 30, 31,
2004 2004 2003
------- ------- -------
BALANCE SHEET DATA:
Cash and cash equivalents
(including restricted cash)$ 8,787 $12,012 $ 6,265
Total assets 20,140 22,841 14,143
Deferred revenue 5,844 5,957 3,945
Long-term debt
(excluding capital leases) - - -
Stockholders' equity 5,296 4,558 5,950
SOURCE: eDiets.com
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