eDiets.com, Inc. (NASDAQ: DIET), a leading
provider of convenient at-home diet, fitness and healthy lifestyle
solutions, today announced results for the first quarter ended
March 31, 2011.
Revenues for the first quarter of 2011 were $6.9 million, an
increase of approximately 38% from $5.0 million in the first
quarter of 2010. The net loss for the first quarter of 2011 was
$(0.4) million, or $(0.01) per diluted share on approximately 59.6
million shares outstanding, compared to a net loss of $(3.8)
million, or $(0.13) per diluted share on approximately 29.0 million
shares outstanding, in the first quarter of 2010.
Adjusted EBITDA*, defined as net profit/loss before interest,
taxes, depreciation, amortization, stock-based compensation,
severance charges, and bad debt recovery or expense, for the
quarter ended March 31, 2011 was $0.2 million, compared to $(1.7)
million in the first quarter of 2010.
First Quarter and Recent Operating
Highlights:
- Grew meal delivery revenue 85% in the first quarter of 2011
compared to the first quarter of 2010
- Expanded the adjusted meal delivery gross margin (excluding
depreciation) to 46% from 40% in Q1 2010
- Achieved first quarter of positive adjusted EBITDA since the
fourth quarter of 2007
- Appointed Thomas Connerty, Chief Marketing Officer at
Nutrisystem during the period 2003 - 2008, to Board of
Directors
"We are pleased to have achieved positive EBITDA for the March
quarter," said Kevin McGrath, President and Chief Executive Officer
of eDiets.com. "We achieved these results by continued growth in
our meal delivery customer base and focusing on the fundamentals of
cost control, in particular expense rationalization of our ad
spend. As a result, our weekly meal delivery shipments were up 83%
from the prior year while we lowered our cost per customer
acquisition to $135. Going forward, we are focused on developing
the optimal marketing strategy, including television, print and
online media, to increase our revenues and leverage our business
model in a profitable way. In addition, we are strengthening our
balance sheet through a rights offering that we expect to close on
May 13, 2011."
Mr. McGrath continued, "As we look to the remainder of the year,
we believe that we are on track to grow revenue on a year-over-year
basis. Given the seasonality of the business and our planned
marketing initiatives, including a new television commercial
scheduled to launch in August, we anticipate slightly negative
EBITDA in the second and third quarters and achieving sustainable
positive EBITDA in the fourth quarter of 2011."
Conference Call The company will host a
conference call to discuss the first quarter 2011 results at 5:00
p.m. Eastern Time on Thursday, May 12, 2011. Participants may
access the call by dialing 800-591-6944 (domestic) or 617-614-4910
(international), passcode 98029025. In addition, the call will be
webcast via the Investor Relations section of the company's web
site at http://www.eDiets.com, where it will also be archived. A
telephone replay will be available through Thursday, May 19, 2011.
To access the replay, please dial 888-286-8010 (domestic) or
617-801-6888 (international), passcode 94498763.
About eDiets eDiets.com, Inc. is a leading
provider of personalized nutrition, fitness and weight-loss
programs. eDiets features its award-winning, fresh-prepared diet
meal delivery service as one of the more than 20 popular diet plans
sold directly to members on its flagship site, www.eDiets.com. The
company also provides a broad range of customized wellness and
weight management solutions for Fortune 500 clients. eDiets.com's
unique infrastructure offers businesses, as well as individuals, an
end-to-end solution strategically tailored to meet its customers'
specific goals of achieving a healthy lifestyle. For more
information, please call 310-954-1105 or visit www.eDiets.com.
eDiets has filed a registration statement (including a
prospectus dated April 21, 2011) with respect to its previously
announced rights offering. Before you invest in the rights
offering, you should read the prospectus in that registration
statement and other documents eDiets has filed with the SEC for
more complete information about eDiets and the rights offering. You
may get these documents for free by visiting EDGAR on the SEC Web
site at www.sec.gov. Alternatively, eDiets will arrange to send you
the prospectus if you request by calling the information agent,
Phoenix Advisory Partners, toll-free at (877) 478-5038.
* Use of Non-GAAP Financial Measures
In its earnings releases, conference calls, slide presentations
or webcasts, the Company may use or discuss adjusted EBITDA, which
is a non-GAAP financial measure as defined by SEC Regulation G.
Management regularly reviews adjusted EBITDA as an analytical
indicator of the Company's financial performance and believes that
it is useful to investors in evaluating operating performance. In
addition, the Company uses adjusted EBITDA as a measure of
performance for its business segments and for incentive
compensation purposes. The Company does not intend for adjusted
EBITDA to be considered in isolation or as a substitute for any
GAAP measure. Adjusted EBITDA and Adjusted Meal Delivery Gross
Margin, as presented, may not be comparable to similarly titled
measures of other companies.
Reconciliation of Non-GAAP Financial Measures
(Unaudited; in thousands)
Three Months Ended March 31,
-----------------------------
2011 2010
------------- -------------
Net loss $ (383) $ (3,759)
Interest expense (income), includes capital
lease interest expense 1 1
Interest expense on related party notes 12 815
Amortization of related party notes - 724
Depreciation 265 361
Amortization of intangibles 4 12
Stock-based compensation 282 178
Bad debt expense (1) 10
Non-cash severance charges 55 -
------------- -------------
Adjusted EBITDA $ 235 $ (1,658)
============= =============
Adjusted Meal Delivery Gross Margin
(Unaudited; in thousands)
Three Months Ended March 31,
-----------------------------
2011 2010
------------- -------------
Revenue - meal delivery $ 5,546 $ 2,997
Cost of revenues - meal delivery 3,151 2,012
Less: cost of revenue adjustments for meal
delivery
Depreciation (142) (196)
Revenue sharing (1) (6)
------------- -------------
Cost of revenues - adjusted 3,008 1,810
------------- -------------
Adjusted meal delivery gross profit $ 2,538 $ 1,187
============= =============
Adjusted meal delivery gross margin
percentage 45.8% 39.6%
============= =============
Forward-Looking Statements In accordance
with the Private Securities Litigation Reform Act of 1995, we
caution you that, whether or not expressly stated, certain
statements made in this report that reflect management's
expectations regarding future events and economic performance are
forward-looking in nature and, accordingly, are subject to risks
and uncertainties. This news release contains forward-looking
statements about the Company including (i) expectations regarding
our ability to continue the positive trend of growing meal delivery
business, (ii) expectations regarding our ability to manage our
advertising expenditures in a manner that enables us to acquire new
meal delivery customers in a profitable manner, (iii) expectations
that our new and re-designed advertising programs and practices
will enable us to acquire new meal delivery customers in a
profitable manner, (iv) expectations regarding operational and
financial performance in the second quarter of 2011, including
revenue, marketing expenses, meal delivery margins, adjusted EBITDA
and EBITDA, (v) expectations regarding our ability to manage the
impact of headcount reductions on our business, (vi) expectations
regarding the impact of seasonal factors on our meal delivery
business during the second quarter of 2011, and (vii) expectations
that the steps we are taking and the investments we have made have
positioned us to achieve year-over-year revenue growth in 2011 and
sustained profitability in 2012 and beyond. We also caution you
that this news release contains additional forward-looking
statements about the Company's revenues and EBITDA for the quarter
ending June 30, 2011. These results are preliminary and reflect our
expected financial results as of the date of this news release.
Actual reported results for the quarter ending June 30, 2011 may
vary significantly from those expectations because of a number of
factors, including additional or revised information, revisions
arising from internal and external review procedures that we
conduct during the closing of our books for the quarter and changes
in accounting standards or policies or in how those standards are
applied.
These forward-looking statements reflect our current views about
future events and are subject to risks, uncertainties and
assumptions. We wish to caution readers that certain important
factors may have affected and could in the future affect our actual
results and could cause actual results to differ significantly from
those expressed in any forward-looking statement. These factors
include those risk factors set forth in filings with the Securities
and Exchange Commission, including our annual and quarterly
reports, and the following:
- our ability to raise additional capital;
- our ability to maintain compliance with applicable regulatory
requirements;
- our ability to maintain our listing of our common stock under
The Nasdaq Capital Market;
- our ability to attract and retain customers in a profitable
manner through advertising, and our ability to secure advertising
commitments;
- our ability to accurately assess market demand for our
products;
- our ability to improve our meal delivery margin and its effect
on total gross margins;
- our ability to sufficiently increase our revenues and maintain
expenses and cash capital expenditures at appropriate levels;
and
- the state of the credit markets and capital markets, including
the level of volatility, illiquidity and interest rates.
These risks are not exhaustive and may not include factors that
could adversely impact our business and financial performance.
Moreover, we operate in a very competitive and rapidly changing
environment. New risk factors emerge from time to time and it is
not possible for our management to predict all risk factors, nor
can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements.
We cannot guarantee future results, level of activity,
performance or achievements. Moreover, neither we nor any other
person assumes responsibility for the accuracy or completeness of
any of these forward-looking statements. You should not rely upon
forward-looking statements as predictions of future events. We do
not undertake any responsibility to update any of these
forward-looking statements to conform our prior statements to
actual results or revised expectations.
eDiets.com, Inc.
Summary of Consolidated Financial Information
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended March 31,
-----------------------------
2011 2010
------------- -------------
Revenues:
Digital plans $ 771 $ 1,040
Meal delivery 5,546 2,997
Business-to-business 394 716
Other 219 265
------------- -------------
Total revenues 6,930 5,018
Cost and expenses:
Cost of revenue
Digital plans 87 165
Meal delivery 3,151 2,012
Business-to-business 33 32
Other 50 43
------------- -------------
Total cost of revenue 3,321 2,252
Technology and development 317 852
Sales, marketing and support 2,760 2,977
General and administrative 898 1,142
Amortization of Intangibles 4 12
------------- -------------
Total cost and expenses 7,300 7,235
------------- -------------
Loss from operations (370) (2,217)
Interest income - 1
Interest expense (13) (1,543)
------------- -------------
Loss before income tax provision (383) (3,759)
Income tax benefit (provision) - -
------------- -------------
Net loss $ (383) $ (3,759)
============= =============
Loss per common share:
Basic and diluted $ (0.01) $ (0.13)
============= =============
Weighted average common and common
equivalent shares outstanding:
Basic and diluted 59,625 29,049
============= =============
Three Months Ended March 31,
-----------------------------
2011 2010
------------- -------------
STATEMENT OF CASH FLOW DATA:
Net cash provided by (used in):
Operations $ 134 $ (1,178)
Investing (85) (20)
Financing 1,383 493
March 31, December 31,
2011 2010
------------- -------------
BALANCE SHEET DATA:
Cash and cash equivalents $ 1,850 $ 468
Total assets 4,514 3,596
Deferred revenue 1,223 1,428
Debt (excluding capital leases) 1,000 1,000
Stockholders' deficit (677) (1,970)
Investor Relations Contact: John Mills ICR, Inc. 310-954-1105
John.Mills@icrinc.com
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