August 19, 2009, 12:00 AM sees Q2 sales fall 27%, but trims net loss by 16%

Q2 revenue drops 27% to $4.7 million at The company raised $500,000 in capital and successfully forestalled its delisting from the NASDAQ exchange.

For the fiscal second quarter ended June 30, Inc. reports:

  • Web sales of $4.7 million, a 27% drop from $6.5 million a year ago.
  • A net loss of $2.6 million, trimming last year’s net loss of $3.1 million by 16%.
“The second quarter marked continued progress toward achieving our strategic goals,” says Kevin McGrath, CEO of the online diet, fitness and healthy lifestyle products retailer. During the quarter, eDiets expanded its margins on meal delivery to 36%, excluding revenue share and promotional costs, and extended average customer retention on meal delivery to more than eight weeks, he says.

For the first six months of fiscal 2009,, No. 322 in the Internet Retailer Top 500 Guide to Retail Web Sites, reports:

  • Revenue of $10 million, down 35% from $15.3 million in last year’s first half.
  • Net loss narrowed by 34% to $5.5 million from $8.3 million.
McGrath says the company also developed more effective advertising and promotions to reduce its use of cash during the quarter. “We anticipate modest cash usage in the third quarter as we accelerate our ad spend and invest marketing dollars into a soft relaunch of our fresh meal delivery in the fall, including a new TV commercial,” he adds. received $500,000 in a private placement stock sale to members of its management team and board of directors, the company says. The company had earlier been notified by NASDAQ that it faced delisting because its market value does not meet the minimum $35 million to qualify for continued listing on the exchange, but it was granted listing through Dec. 29 following an Aug. 6 appeal.

By year-end the company must meet NASDAQ’s requirements, either by demonstrating a market value of $35 million or by having stockholder equity of $2.5 million, or face removal from NASDAQ.

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