EX-99.1 3 dex991.htm PRESS RELEASE DATED OCTOBER 22, 2002 Press Release dated october 22, 2002
 
Exhibit 99.1
 
For Immediate Release
 
CORPORATE CONTACTS:
  
MEDIA/MARKETING CONTACT:
Robert Hamilton, CFO
  
Merilee Kern, Marketing Manager
954-360-9022
  
702-562-0064
rhamilton@eDiets.com
  
merilee@eDiets.com
Alison Tanner, CFA, Chief Strategist
    
954-360-9022
    
alison@eDiets.com
    
 
eDiets Extends Its Record of Profitable Growth
Online diet and fitness is good for the consumer…and good for business
 
DEERFIELD BEACH, FLA.—(BUSINESSWIRE)—October 22, 2002—eDiets.com, Inc. (OTCBB:EDET), the leader in personalized online diet, fitness and motivation programs, today reported that its fiscal third quarter ended September 30, 2002 marked the Company’s fifth consecutive profitable quarter. Revenues, which consist primarily of subscription fees, grew by 13 percent for the third quarter and 32 percent for the first nine months of 2002 compared to the same periods of the prior year. eDiets expects to enroll its one millionth paid subscriber during the fourth quarter of 2002.
 
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of fiscal 2002 totaled $783,000, an increase of 110 percent compared to EBITDA of $373,000 in the same period of the prior year, while EBITDA for the nine months ended September 30, 2002 totaled $2.7 million, an increase of 589 percent compared to EBITDA of $392,000 for the same period of the prior year. EBITDA improved to 10 percent of revenues of $7.6 million in the third quarter of 2002 compared to 6 percent of revenues of $6.7 million in the third quarter of 2001, and improved to 12 percent of revenues of $22.3 million for the nine months ended September 30, 2002 compared to 2 percent of revenues of $16.9 million in the prior year. The improvement in EBITDA margins was attributable primarily to more productive online advertising spending in 2002 as compared to 2001. The Company continues to actively invest in product enhancements and during the third quarter of 2002 launched both a major redesign of its flagship Website www.eDiets.com as well as significantly more robust fitness technology.
 
Cash flow from operations for the first nine months of 2002 remained strong at $2.8 million compared to $1.5 million for the first nine months of 2001. The Company’s balance sheet also remained strong; cash and restricted cash balances totaled $3.8 million as of September 30, 2002 after non-operating expenditures for the nine months ending September 30, 2002 that included net capital expenditures of $445,000 and the repayment of $1.0 million on a note payable which is outstanding in connection with the Company’s acquisition of DietSmart, Inc. in October 2001.
 
Net income for the third quarter of fiscal 2002 totaled $175,000, or $0.01 per diluted share, a decrease of 21 percent compared to $224,000, or $0.02 per diluted share, for the prior year’s third quarter. The decrease in net income resulted from an unusually high income tax provision in the most recent quarter due to limitations on the annual utilization of net operating loss

carryforwards to which the Company has now become subject. For the nine months ended September 30, 2002 net income totaled $1.5 million, or $0.09 per diluted share, compared to $30,000 or $0.00 per diluted share for the nine months ended September 30, 2001.
 
Founder, chairman and CEO David Humble noted, “Online diet and fitness programs continue to win converts. We look forward to registering our one millionth paying member later this year. Research indicates that consumers find the Web to be an attractive medium for weight loss because it is convenient, and because they have so many more fellow dieters with whom they can interact for information and support. With both Internet usage and obesity growing, and more and more individuals looking to the Web for health information and support, online diet and fitness solutions make sense for the consumer.”
 
Humble continued, “Online diet and fitness makes sense for business, too. Consumers have been paying for offline diet and fitness programs for decades, but they can get much greater value and lower prices with online programs because those programs are less expensive to operate. With an attractive cost structure and a critical mass of hundreds of thousands of members, eDiets continues to achieve sound, profitable growth.”
 
eDiets will hold a conference call for investors at 10:30 a.m. EDT on October 22, 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 12:30 p.m. EDT on October 22, 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), eFitness (http://www.eFitness.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, eFitness 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 subscribers to these services with an attractive alternative to traditional offline programs popularized by Weight Watchers International, Inc. (NYSE:WTW), Jenny Craig, Inc. and a variety of personal fitness trainers, educators and consultants. Each quarter, hundreds of thousands of consumers purchase eDiets.com membership subscriptions, and approximately 11 million opt-in subscribers currently receive the company’s leading proprietary bi-weekly health and wellness 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 September 30,
   
Nine Months Ended September 30,
    
2002
     
2001
   
2002
     
2001
INCOME STATEMENT DATA:
                                
Revenues
   
$
7,599
 
   
$
6,716
   
$
22,312
 
   
$
16,861
Cost and expenses:
                                
Cost of revenue
   
 
668
 
   
 
567
   
 
2,128
 
   
 
1,380
Product development
   
 
325
 
   
 
170
   
 
955
 
   
 
378
Sales and marketing
   
 
4,478
 
   
 
4,737
   
 
12,317
 
   
 
12,508
General and administrative
   
 
1,345
 
   
 
869
   
 
4,240
 
   
 
2,203
Depreciation and amortization
   
 
332
 
   
 
139
   
 
982
 
   
 
355
Income from operations
   
 
451
 
   
 
234
   
 
1,690
 
   
 
37
Other (expense) income, net
   
 
(12
)
   
 
—  
   
 
(64
)
   
 
7
Provision for income taxes
   
 
264
 
   
 
10
   
 
137
 
   
 
14
Net income
   
$
175
 
   
$
224
   
$
1,489
 
   
$
30
Earnings per common share
                                
Basic
   
$
0.01
 
   
$
0.02
   
$
0.09
 
   
$
0.00
Diluted
   
$
0.01
 
   
$
0.02
   
$
0.09
 
   
$
0.00
Weighted average common and common equivalent shares outstanding
                                
Basic
   
 
15,781
 
   
 
13,587
   
 
15,711
 
   
 
13,567
Diluted
   
 
16,847
 
   
 
14,633
   
 
17,268
 
   
 
14,693
Earnings before interest, taxes, depreciation and amortization (EBITDA)
   
$
783
 
   
$
373
   
$
2,672
 
   
$
392
 
    
September 30, 2002
   
December 31, 2001
BALANCE SHEET DATA:
              
Cash and cash equivalents (including restricted cash)
   
$
3,826
   
$
2,110
Total assets
   
 
12,995
   
 
11,214
Deferred revenue
   
 
3,276
   
 
2,193
Debt (excluding capital leases)
   
 
1,004
   
 
2,025
Stockholders’ equity
   
 
5,151
   
 
3,613
 
CONTACT:  Robert T. Hamilton, Chief Financial Officer, 954-360-9022, rhamilton@ediets.com