Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
Q2 revenue rose 14.9%, but non-cash charges result in a loss of $34.6 million.
Revenue in the second quarter rose for eDiets.com Inc., but the company also posted a big net loss attributed in large measure to a $24 million non-cash charge for writing off debt related to converting secured notes into common stock.
For the quarter ended June 30, eDiets, No. 395 in the Internet Retailer Top 500 Guide, posted:
- An increase in sales of 14.9% to $5.4 million from $4.7 million in the second quarter of 2009.
- Net loss was $34.6 million compared with a net loss of $2.6 million in the prior year.
In addition to its non-cash charge of $24 million, eDiets also incurred another non-cash impairment charge of $6.9 million related to the goodwill and tangible assets for its corporate services business, the company says. The net loss for the second quarter before interest, taxes, depreciation, amortization and other charges was $1.9 million, compared with $500,000 in the second quarter of 2009, says eDiets.
“We are pleased with our solid execution and the continued growth of our meal delivery business," says CEO Kevin McGrath."During the first half of 2010, we realized a 55% increase in meal delivery revenue due to an approximately 64% increase in the number of meals shipped compared to the prior year. While our increased investment in advertising had a positive effect on our ability to acquire new subscribers for our meal delivery and digital plans, both the top and bottom line were affected by continued pressure on advertising rates. We remain focused on making operational improvements, including expanding our call center operations and increasing advertising efficiencies.”
For the first six months of the year, eDiets also reported:
- An increase in sales of 5% to $10.5 million from $10 million in the period of January through June of 2009.
- Net loss was $38.3 million compared with a net loss of $5.4 million in the prior year.
EDiets continues to expand its marketing program. The company yesterday signed celebrity and professional golfer Tina Miller-Lloyd as a new spokeswoman and entered into a licensing agreement with NBC Universal Television Consumer Products Group and Reveille LLC to become the new provider for The Biggest Loser-branded meals. The Biggest Loser is a popular reality TV show that challenges and encourages overweight contestants to shed pounds through diet and exercise as they compete for a grand prize of $250,000.