CoolSavings Reports Fourth Quarter and Year End 2001 Financial Results

CHICAGO, Feb. 22 -- CoolSavings, Inc. (OTC Bulletin Board: CSAV), a comprehensive e-marketing solution that delivers targeted advertising and promotional incentives to help offline and online advertisers identify, acquire and retain active shoppers, today reported results for the fourth quarter and year ended December 31, 2001.

CoolSavings business highlights in the fourth quarter included:

-- Raised $9.0 million (a total of $21.5 million for the year) from Landmark Communications during one of the most difficult fundraising environments;

-- Significant growth in member registrations -- up 53% over the third quarter from 1.07 million to 1.64 million, a trend that has continued into 2002. In January, Media Metrix ranked CoolSavings as the #21 most visited Web property with 15.7 million unique visitors to the site -- a 66% increase over December 2001;

-- As a result of significant increases in marketing spending and an overall more compelling member experience, revenue producing actions for the quarter were 11.1 million, a 45% increase over the third quarter. Overall, CoolSavings had 3.97 million unique members use the service during the quarter and 17.7 million total member visits;

-- CoolSavings` resurgence as the leader in online direct marketing led to major customer wins including Hershey`s, The Gap, Kohl`s, Old Navy, and Georgia Pacific, among others. Additionally the renewal rate among the Company`s top 50 customers was nearly 80%;

-- In the quarter, CoolSavings introduced Coupon Technology, an ASP offering to help advertisers market to their own consumers by providing printable coupons directly through their Web site, e-mail and banners.

Fourth Quarter Highlights:

Net revenues in the fourth quarter were $6.3 million compared to $11.5 million in the same period of 2000. Gross profit in the fourth quarter was $5.4 million, or 85% of net revenues, compared to $9.1 million, or 79% of net revenues in the fourth quarter of 2000. The Company`s total operating expenses in the quarter were $7.7 million compared to $19.6 million reported in the same period of 2000, a decrease of 61% over last year. For the fourth quarter the loss applicable to common shareholders was $3.8 million, or a loss of $0.10 per share, compared to the loss of $10.4 million, or $0.27 per share, reported in the same period of 2000.

Year-end Highlights:

Net revenues for the year were $22.2 million, compared to $39.9 million reported in 2000. Gross profit for 2001 was $16.5 million, or 74% of total revenues, compared to $32.8 million, or 82% of total revenues, reported in 2000. Total operating expenses for the year were $42.2 million compared to $72.2 million reported in 2000. The loss applicable to common shareholders for the full year of 2001 was $30.7 million, or a loss of $0.78 per share, compared to a loss of $59.1 million, or $1.63 per share in 2000.

At December 31, 2001, the Company had cash and cash equivalents of $5.1 million and total assets of $18.0 million. Accounts receivable, net of allowances for doubtful accounts, at the end of the fourth quarter were $3.6 million. At the close of 2001, CoolSavings` current liabilities totaled $20.2 million and total liabilities were $20.9 million. Shareholder deficit at December 31, 2001 was $15.0 million. The Company`s days sales outstanding (DSO) was 60 for the three months ending December 31, 2001, compared to 81 for the three months ending September 30, 2001.

Matthew Moog, president and chief executive officer, stated, "We are pleased with our progress during the fourth quarter not only when considering the improvements in revenue and expense controls, but also in our ability to attract $21.5 million in new funding during the year, one of the most difficult periods for raising capital. Because of the additional capital, we were able to resume our aggressive online marketing program resulting in 53% higher registrations in the fourth quarter over the third quarter. This growth trend has continued into 2002, with nearly 725,000 new registrations in January alone."

Mr. Moog continued, "CoolSavings not only survived, but emerges as the leading online direct marketing company in 2002. We enter the new year more customer-focused with an established infrastructure and the finest solutions to meet all of our advertisers` online marketing needs."

Business Outlook

The following statements are based on current expectations, are forward- looking and actual results may differ materially. Accurate forecasting of quarterly results is especially difficult in the current period where overall advertising expenditures are falling and visibility is low. CoolSavings expects results for the quarter ending March 31, 2002 to be consistent with the fourth quarter of 2001. And while the Company is optimistic about the remainder of 2002, it is too early to predict.

About CoolSavings

Launched in February 1997, CoolSavings is a comprehensive e-marketing solution that delivers targeted advertising and promotional incentives to help offline and online companies identify, acquire and retain active shoppers. The Company`s extensive e-marketing infrastructure combines multiple incentive and promotional solutions -- such as targeted coupons and e-mail, category newsletters, rebates, savings notices, samples, gift certificates and trial offers -- with sophisticated database technology to enable advertisers to efficiently build personal relationships with consumers. Today, with more than 18 million registered members and 16 million registered households,* CoolSavings is ranked the #1 coupon Web site and the #1 incentive Web site according to the Jupiter Media Metrix January 2002 report. The Company`s advertisers include national and local brick-and-mortar retailers, online merchants, consumer packaged goods manufacturers and leading service providers.

*More than one person in a household can be registered as a CoolSavings member. CoolSavings is a registered trademark of CoolSavings, Inc. Other product and company names herein may be trademarks of their respective owners.