CoolSavings Reports First Quarter 2003 Financial Results.Business Editors CHICAGO--(BUSINESS WIRE)--April 28, 2003 CoolSavings, Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). :BB:CSAV CSAV Center for the Study of Active Volcanoes (University of Hawaii) CSAV Compañía Sud Americana de Vapores (Chilean Shipping Company) CSAV Chief of Staff Aviation ). Highlights: -- 32% revenue growth for the quarter over same quarter of prior year; -- Achieved a net increase in cash for the quarter; -- Achieved milestone of 25 million registered members to the coolsavings.com service; -- Debuted three major new products: Ethnic Marketing, Profit Select 1.0 for soft offer marketers and Buy Anywhere for cross channel retailers CoolSavings, Inc. (OTC:BB CSAV), an online direct marketing and media company that provides smarter solutions to connect marketers to their target consumers, today reported results for the first quarter ended March 31, 2003. The Company demonstrated significant revenue gain quarter over quarter - a 32% increase in revenue over the same quarter of 2002. For the first quarter, the loss applicable to common stockholders was $1.4 million, or $0.04 per share, compared to the loss of $2.7 million, or $0.07 per share, reported for the same period of 2002. In addition, the Company reduced its loss from operations in the first quarter of 2003 to $0.8 million - a 64% improvement compared to the first quarter of 2002. First Quarter Financial Highlights Net revenues in the first quarter of 2003 were $7.6 million compared to $5.8 million in the same period of 2002. Gross profit in the first quarter was $6.8 million, or 90% of net revenues, compared to $4.8 million, or 83% of net revenues, in the first quarter of the prior year. The Company's total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. in the quarter were $7.7 million, including charges for lease exit costs and asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of $0.2 million and $0.1 million, respectively, compared to total operating expenses of $7.1 million in the first quarter of the prior year. The Company's loss from operations was $0.8 million for the first quarter of 2003 compared to a loss from operations of $2.3 million in the first quarter of 2002. This improvement is largely attributable to the significant increase in revenue over the same period of 2002, reflecting an increase in new member registrations and the number of revenue-producing actions initiated by members. At March 31, 2003, the Company had cash and cash equivalents of $4.9 million compared to $4.9 million at December 31, 2002. Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying , net of allowances for doubtful accounts, were $4.7 million at March 31, 2003 compared to $4.9 million at the end of 2002. At the end of the first quarter of 2003, CoolSavings' current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. totaled $12.0 million compared to $11.9 million at the end of 2002. Membership Continues Steady Growth In the first quarter of 2003, the Company registered more than 2.1 million new members to the CoolSavings service, bringing its total membership to more than 25.8 million households. New member registrations for the first quarter of 2003 were the second largest in CoolSavings history, and representing a 7.6% increase over the same period in 2002. The Company's membership growth was fueled by continued aggressive online marketing and more attractive content from our advertisers. In the first quarter of 2003, CoolSavings was ranked as high as the #5 advertiser ad·ver·tise v. ad·ver·tised, ad·ver·tis·ing, ad·ver·tis·es v.tr. 1. To make public announcement of, especially to proclaim the qualities or advantages of (a product or business) so as to increase on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the based on consumer impressions, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Nielsen NetRatings/AdRelevance(a). The Company also reported continued growth in member activity in the first quarter of 2003, citing a Company best number of printable print·a·ble adj. 1. Capable of being printed or of producing a print: printable negatives. 2. Fit for publication: printable language. coupon clips, which increased 60% from the previous record set in the fourth quarter of 2002. Strength of Core Services The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. Affirming the strength of its core service offerings and consumer membership base, in the first quarter of 2003 CoolSavings signed a number of leading consumer packaged goods Noun 1. packaged goods - groceries that are packaged for sale foodstuff, grocery - (usually plural) consumer goods sold by a grocer plural, plural form - the form of a word that is used to denote more than one (CPG CPG central pattern generators. ) companies contracts nine months or longer in duration including Land O' Lakes, Unilever's Suave suave adj. suav·er, suav·est Smoothly agreeable and courteous. [French, agreeable, from Old French, from Latin su brand, Wyeth, GlaxoSmithKline, BlueBunny and 3M. The Company also introduced new initiatives in the first quarter to enhance its core product offerings. In response to advertiser demand, CoolSavings debuted its Ethnic Marketing program, which segments consumers indicating an interest in receiving offers and information intended for a Hispanic Hispanic Multiculture A person of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race Social medicine Any of 17 major Latino subcultures, concentrated in California, Texas, Chicago, Miam, NY, and elsewhere , African-American or Asian-American audiences. Advertisers are able to deliver targeted offers and customized creative to any of these groups through the Company's core products, such as Printable Coupons, Lead Generation and Targeted E-mail, as well as newer offerings such as Direct Mail. To increase the effectiveness of its Lead Generation product, the Company launched Lead Generation Profit Select, a new solution that uses analytic an·a·lyt·ic or an·a·lyt·i·cal adj. 1. Of or relating to analysis or analytics. 2. Expert in or using analysis, especially one who thinks in a logical manner. 3. Psychoanalytic. testing and modeling to enable companies to target online trial offers only to those consumers who have a high propensity to later purchase the advertiser's product or service. Profit Select is intended for membership clubs, publishers, subscription services and other companies that rely heavily on marketing through the use of free trial offers. Available for use with a variety of its services, the Company's new Buy Anywhere marketing platform is designed specifically for cross-channel retailers to cater to today's consumer trend of purchasing across a company's stores, Web site, catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. and call center. With Buy Anywhere, consumers can easily redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. their promotion across various channels because the CoolSavings offer includes pertinent PERTINENT, evidence. Those facts which tend to prove the allegations of the party offering them, are called pertinent; those which have no such tendency are called impertinent, 8 Toull. n. 22. By pertinent is also meant that which belongs. Willes, 319. information such as store locations, a Web site link, or an 800-number to make a purchase or request a catalog. Such offers will be singled out to CoolSavings consumers through the colorful Buy Anywhere logo, which denotes the ability to take advantage of the offer at numerous retail channels. "We are very pleased with our progress in the first quarter of the year," commented Matthew Moog, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of CoolSavings, Inc. "With our significant revenue growth and reduction of loss from operations, as well as the addition of quality, long-term advertisers, compelling membership growth and the strengthening of our core services, we are continuing the strong momentum we built in 2002." Business Outlook The following statements are based on current expectations, are forward-looking and actual results may differ materially. See "Cautionary Note Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " below. Although accurate forecasting of results is especially difficult in the current period, the Company expects 2003 revenue growth to exceed the 19% increase it experienced in 2002 and is targeting breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations from its operations for 2003. Although there are many factors that are outside of the Company's control that may negatively impact its ability to achieve these forecasts, the Company believes they are reasonable if the economy remains consistent or improves. About CoolSavings CoolSavings is an online direct marketing and media company that provides smarter solutions to help marketers reach their target consumers. Combining a broad distribution network, sophisticated analytics and proprietary technology with superior customer service, CoolSavings enables a wide variety of advertisers to identify and engage their best customers among its more than 25 million registered households. (a) As reported by the Nielson NetRatings/AdRelevance January 2003 report. The Company ranked #7 in the February 2003 report; data is not yet available for March 2003. CoolSavings is a registered trademark of CoolSavings, Inc. Other product and company names herein may be trademarks of their respective owners. Cautionary Note Regarding Forward-Looking Statements Statements in this press release regarding CoolSavings' business that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including the statements under "Business Outlook" and other statements regarding the Company's expectations, beliefs, hopes, intentions or strategies. Where possible, such forward-looking statements have been identified by use of words such as "target," "forecast," "believe," "expects," and similar expressions. Known and unknown risks, uncertainties and other factors, both general and specific to the matters discussed in this press release, 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. These risks, uncertainties, and other factors include, without limitation, the Company's ability to obtain additional debt and/or equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. , the uncertainties related to CoolSavings' unproven unproven Dubious, nonscientific, not proven, quack, questionable, unscientific adjective Relating to that which has not been validated by reproducible experiments or other scientific methods for determining effect or efficacy business model in a rapidly evolving marketplace, and CoolSavings' ability to protect its patents, trademarks and propriety pro·pri·e·ty n. pl. pro·pri·e·ties 1. The quality of being proper; appropriateness. 2. Conformity to prevailing customs and usages. 3. proprieties The usages and customs of polite society. rights. For further discussion of some of the risks, uncertainties and other factors which could cause actual results and performance to differ from those expressed in, or implied by, the forward-looking statements, see "Risk Factors" in CoolSavings' Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2002, as filed with the SEC. Except as expressly required by the federal securities laws, CoolSavings undertakes no obligation to update or revise any forward-looking statements as a result of new information, future events or developments, changed circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , or any other reason.
COOLSAVINGS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except share and per share data)
For the Three Months Ended
------------------------
March 31, March 31,
2003 2002
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Revenue:
e-marketing services $7,549 $5,697
License royalties 75 66
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Net revenues 7,624 5,763
Cost of revenues 788 984
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Gross profit 6,836 4,779
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Operating expenses:
Sales and marketing 4,395 3,495
Product development 754 1,072
General and administrative 2,227 2,486
Lease exit costs 209 -
Loss on asset impairment 81 -
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Total operating expenses 7,666 7,053
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Loss from operations (830) (2,274)
Other income (expense):
Interest and other income 19 14
Interest expense (139) (285)
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Total other income (expense) (120) (271)
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Loss before income taxes (950) (2,545)
Income taxes - -
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Net loss (950) (2,545)
Cumulative dividend on Series B Preferred
Stock (468) (204)
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Loss applicable to common stockholders $(1,418) $(2,749)
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Basic and diluted net loss per share $(0.04) $(0.07)
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Weighted average shares used in the
calculation of basic and diluted net
loss per share 39,093,660 39,093,660
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