CoolSavings Reports First Quarter 2002 Financial Results
CHICAGO, April 23 -- CoolSavings, Inc. (OTC Bulletin Board: CSAV), an online direct marketing and media company that provides smarter solutions to connect marketers to their target consumers using industry-leading analytics and incentive technology, today reported results for the first quarter ended March 31, 2002. As anticipated, results of operations were consistent with the fourth quarter of 2001.
At the same time, the company has recognized a shift since the first quarter of 2001 by leading consumer packaged goods manufacturers (CPGs) to incorporate online marketing into their overall brand marketing efforts. Such initiatives with CoolSavings include targeted Print-at-Home coupons and request-based product sampling and consumer acquisition programs. CPGs remain among the largest advertisers in traditional media, particularly through coupons and newspaper free-standing inserts (FSIs), and until recently were more cautious in using the Internet to complement their offline efforts to achieve their strategic marketing objectives. Like no other advertising medium, the Internet helps CPGs to identify their most valuable consumer and tailor their marketing messages to optimize category consumption and brand loyalty.
Reflecting this trend, during the first quarter of 2002, CoolSavings increased the number of CPG advertisers utilizing its services by 62% over the same period in 2001. Hershey`s Reese`s and Jolly Rancher, Gorton`s, Unilever`s Dove, L`Oreal Cosmetics, Wyeth`s Centrum, Sargento Shredded Cheese and Reckitt Benckiser`s Lysol are among the leading brands that have participated in CoolSavings programs during the first quarter.
``More and more, CPG and traditional advertisers are recognizing the value of Internet marketing, and CoolSavings as an important piece in their overall brand marketing mix,`` commented Matthew Moog, president and CEO of CoolSavings, Inc. ``Over the past year we`ve witnessed a growing acceptance of online incentives by leading brands. They`re finding that the Internet is a secure and cost-efficient marketing tool to interact with a growing online consumer base. Two highly effective incentive tools -- targeted coupons and qualified product samples -- are excellent ways to demonstrate the Internet`s impact on sales and loyalty.``
Moog went on to say, ``And, advertisers are also taking advantage of online incentive marketing`s unprecedented ability to collect real-time consumer data to gain insight into their most valuable consumers, improve campaign response and increase brand loyalty.``
CoolSavings` First Quarter Results:
Net revenues in the first quarter were $5.8 million compared to $6.3 million in the same period of 2001. Gross profit in the first quarter was $4.8 million, or 83% of net revenues, compared to $4.4 million, or 70% of net revenues in the first quarter of 2001. Total operating expenses in the quarter were $7.1 million compared to $12.9 million reported in the same period of 2001, a decrease of 45% over last year. For the first quarter the loss applicable to common shareholders was $2.7 million, or a loss of $0.07 per share, compared to the loss of $8.4 million, or $0.22 per share, reported in the same period of 2001.
At March 31, 2002, CoolSavings had cash and cash equivalents of $4.8 million and total assets of $15.7 million. Accounts receivable, net of allowances, at the end of the first quarter were $2.9 million. Current liabilities totaled $20.7 million and total liabilities were $21.3 million. Shareholder deficit at March 31, 2002 was $17.8 million.
Commenting on the Company`s financial results, Mr. Moog said, ``The first quarter is traditionally a slow period for media sales -- with revenue typically falling dramatically from the strong fourth quarter holiday buying season. The shift from fourth to first quarter this year was no exception. Nonetheless, CoolSavings was able to stay consistent with our fourth quarter results.``
Added Moog, ``CoolSavings remains focused on its mission to be the leading provider of promotional offers to consumers while most effectively connecting marketers to their best customers. We are confident in our long-term strategy, and are gratified by our continued success with major customers. As we forge ahead into 2002, we will continue to place strong attention on controlling costs and building the business by delivering superior products and service that help our advertisers achieve their strategic marketing objectives.``
Business Outlook
The following statements are based on current expectations, are forward-looking and actual results may differ materially. Although accurate forecasting of quarterly results is especially difficult in the current period, where visibility is low; the company expects a slight improvement in net revenues and EBITDA (Earnings before Interest Expense, Taxes, Depreciation and Amortization) for the quarter ending June 30, 2002 from the first quarter of 2002.
About CoolSavings
CoolSavings is an online direct marketing and media company that provides smarter solutions to connect marketers to their target consumers. Combining industry-leading analytics and incentive technology with superior customer service that emphasizes a consultative approach, we enable a wide variety of advertisers to identify their best customers among our nearly 20 million registered members and drive more effective campaign performance. CoolSavings` popular media property, coolsavings.com, is ranked the #1 coupon site on the Internet according to recent Jupiter Media Metrix reports.*
Jupiter Media Metrix March 2002 report
CoolSavings is a registered trademark of CoolSavings, Inc. Other product and company names herein may be trademarks of their respective owners. Statements in this press release regarding CoolSavings` business which are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company`s expectations, beliefs, hopes, intentions or strategies. Forward-looking statements involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this press release. These and other important factors, including those mentioned in various Securities and Exchange Commission filings made periodically by CoolSavings, may cause CoolSavings` actual results and performance to differ materially from the future results and performance expressed in or implied by such forward-looking statements. For a discussion of some of the risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see ``Risk Factors`` in CoolSavings` Form 10-K for the year ended December 31, 2001, filed with the SEC.
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