CHICAGO--July 24, 2003--CoolSavings, Inc. (OTCBB:CSAV):
-- Achieves net income profitability for first time in Company history;
-- 69% revenue growth for the quarter over same quarter of prior year;
-- Net increase in cash for the third consecutive quarter;
-- Significant growth in revenue from key consumer packaged goods brands;
-- Continued momentum for core and new service offerings
CoolSavings, Inc. (OTCBB:CSAV), an online direct marketing and media company that provides smarter solutions to connect marketers to their target consumers, today reported results for the second quarter and six months ended June 30, 2003. The Company posted a 69% increase in revenues in the second quarter compared to the same quarter of 2002, reflecting an increase in the number of new member registrations and revenue-producing actions taken by members. Net revenues in the second quarter of 2003 were $8.6 million compared to $5.1 million in the same period of 2002. For the second quarter, net income was $0.1 million, compared to a net loss of $1.7 million reported for the same period of 2002. Net income for the second quarter of 2003 included charges for stock option compensation and lease exit costs of $0.3 million and $0.1 million, respectively. There were no similar charges in the second quarter of 2002.
Gross profit in the second quarter was $8.0 million, or 93% of net revenues, compared to $4.2 million, or 82% of net revenues in the second quarter of the prior year. The Company`s total operating expenses in the quarter were $7.8 million, compared to total operating expenses of $5.6 million in the second quarter of the prior year. The Company`s income from operations was $0.2 million for the second quarter of 2003 compared to a loss from operations of $1.4 million in the second quarter of 2002. Net loss applicable to common stockholders was $0.4 million, or $0.01 per share, compared to a net loss of $1.9 million, or $0.05 per share, reported for the same period of 2002. This improvement in profitability is largely attributable to the 69% increase in revenue over the same period of 2002.
"Achieving net income profitability in the second quarter of 2003 is a milestone for CoolSavings," commented Matthew Moog, President and Chief Executive Officer of CoolSavings, Inc. "In the second half of the year, we will continue to focus on the areas that helped us realize this important accomplishment: growth of our core and new services, strong member acquisition and activation, building relationships in key industries such as consumer packaged goods, and delivering a compelling experience to consumers."
Six Month Financial Highlights
Net revenues in the six month period ended June 30, 2003 were $16.3 million compared to $10.9 million during the same period of 2002. Gross profit in the six months was $14.9 million, or 91% of net revenues, compared to $9.0 million, or 83% of net revenues, in the six months of the prior year. The Company`s total operating expenses for the first six months were $15.5 million, compared to total operating expenses of $12.7 million during the six months of the prior year. The Company`s loss from operations was $0.6 million for the first six months of 2003 compared to $3.7 million during the same period of 2002. The net loss for the first six months was $0.9 million, compared to a net loss of $4.2 million reported for the same period of 2002. Net loss applicable to common stockholders was $1.8 million, or $0.05 per share, compared to a net loss of $4.7 million, or $0.12 per share, reported for the same period of 2002. Results for the first six months of 2003 included charges for lease exit costs, stock option compensation, and asset impairment of $0.4 million, $0.3 million, and $0.1 million, respectively. There were no similar charges in the same period of 2002.
At June 30, 2003, the Company had cash and cash equivalents of $5.9 million compared to $4.9 million at December 31, 2002. Accounts receivable, net of allowances for doubtful accounts, were $5.1 million at June 30, 2003 compared to $4.9 million at the end of 2002. Current liabilities totaled $12.3 million at June 30, 2003 compared to $11.9 million at the end of 2002.
Revenue from Consumer Packaged Goods Advertisers Soars
Consumer packaged goods (CPG) brands significantly increased their use of CoolSavings` solutions in the first half of 2003, demonstrating the growing acceptance of both the CoolSavings` service and the effectiveness of the Internet in achieving strategic marketing objectives. CoolSavings grew its CPG-based revenue in the second quarter of 2003 by nearly 200% compared to the same period of the prior year. In addition, in the second quarter the Company surpassed its record for printable coupon clips by more than 32% over the previous high established in the first quarter of 2003. Comparing the second quarters of 2003 and 2002, printable coupon clips increased by 201%.
In addition to printable couponing, CPG manufacturers utilized CoolSavings` Lead Generation, Product Sampling, Category Newsletters and Targeted E-mail services to reach interested consumers and achieve a wide variety of marketing objectives. Leading CPG brands using the CoolSavings service in the first half of 2003 include Pampers, Keebler, Campbell`s, Nestle Toll House, Maybelline, Lean Cuisine, Crest, Oil of Olay, Kraft, SC Johnson, Blue Bunny, Centrum and Advil among others.
Member activity showed continued momentum during the second quarter of 2003. CoolSavings registered nearly 2 million new members to its opt-in consumer database, driven by an expansive online marketing campaign that placed the Company among the top ten advertisers on the Internet according to Nielsen NetRatings(i). Further, CoolSavings recorded more than 18.5 million member visits in the second quarter - an increase of 9% from the same period in 2002. Of the 27 million unique households who have registered with CoolSavings since February 1997, nearly 12 million were active during the twelve-month period ended June 30, 2003.