Goal of Maintaining Gross Profit Contribution While Eliminating Inventory Costs
Emeryville, California - June 22, 2001 - HealthCentral (Nasdaq: HCEN), a leading provider of healthcare e-commerce and content, announced today that it has entered into a royalty agreement related to the Dr. Dean Edell brand of non-prescription reading glasses. Simultaneously, the new agreement replaces HealthCentral`s previous sales and distribution agreements related to this brand of eyewear.
The Company will report revenue from the royalties received on the sale of Dr. Dean Edell Eyewear, and will no longer hold inventory or report revenue on the sale of products to its distribution partner, since HealthCentral will no longer buy and sell the products. The Company expects to incur charges in the quarter ending June 30, 2001 as a result of this restructuring.
"We have restructured this relationship with the goal of preserving the gross profits that we are targeting to receive from this line of business, while lowering our overall cost of capital related to this business. This restructuring is consistent with HealthCentral`s strategy to focus its efforts on cost reductions and gross profits from our core businesses," said C. Fred Toney, President and CEO.
HealthCentral (Nasdaq: HCEN) is a leading provider of healthcare e-commerce to consumers through WebRxSM, a network of sites representing the consolidation of Vitamins.com, HealthCentral.com, RxList.com and others. Its e-commerce site, WebRxSM (www.webrx.com), features more than 25,000 products. WebRxSM features one of the largest on-line selections of vitamins, a Vision Center and a Comfort Living department (www.comfortliving.com) with a broad range of products including maternity and baby care, ergonomic chairs, water purifiers and an extensive line of allergy control products. HealthCentral.com (www.healthcentral.com) provides health-related information and commentary by Dr. Dean Edell, MD and other experts. RxList.com (www.rxlist.com) provides both patient-focused and professional-focused prescription drug information monographs.
HealthCentral Forward Looking Statements
Except for historical information, the statements in this news release are forward-looking statements, involving risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Potential risks and uncertainties include, but are not limited to, the possible delisting of the Company`s stock from the Nasdaq market, the Company`s ability to successfully implement its operational plan, including proposed asset sales and cost-cutting measures, the Company`s limited operating history and its need to generate revenues, including royalties from the sale of the Dr. Dean Edell eyewear products, the Company`s need to raise additional cash, the substantial competition in the e-health market, possible liability related to product or content on or accessed through the Company`s web sites, the need to build a brand name quickly, the effect of substantial and changing government regulation, possible systems interruptions, a failure to integrate acquisitions or manage resources, and a failure to retain key employees. Further information regarding these and other risks is included in HealthCentral.com`s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, Annual Report on Form 10-K for the year ended December 31, 2000 and other documents filed with the SEC.
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