CoolSavings Reports Second Quarter and Six Month Financial Results; Company Narrows Loss Applicable to Common Stockholders for Second Quarter by 31% and EBITDA Loss by 80%.

Business Editors

CHICAGO--(BUSINESS WIRE)--July 30, 2002

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 second quarter and six month period ended June 30, 2002.

In the first half of 2002, CoolSavings introduced several new products that leverage the strength of its core online direct marketing and media business. In the second quarter, 1.4 million new consumers registered with CoolSavings, bringing the service's total membership to nearly 20 million registered U.S. households, each having detailed profiles made up of more than 250 data points of self-reported, behavioral and transactional information.

Direct Mail Business - Postal List Rental & Cooperative Direct Mail

Among CoolSavings recent product introductions is an offline direct mail program that allows advertisers for the first time to access CoolSavings' online consumer base through offline postal communications while leveraging the online property for enhanced data collection and e-mail programs that boost postal campaign performance. To date, more than 35 leading advertisers have taken advantage of the wide variety of data that CoolSavings collects to reach their target audience through the program. Additionally, the company is set to launch a Co-Op Direct Mail program through which advertisers will reach highly active CoolSavings shoppers by purchasing inserts in a CoolSavings-branded envelope.

CoolSavings Coupon Technology - ASP Technology License

The second quarter also saw significant growth of the CoolSavings Coupon Technology Solution, another of the company's recently developed offerings. Through the service, companies are able to take advantage of an ASP product called CoolSavings Coupon Technology to deliver printable incentives to consumers from their own Web site, e-mail and banner advertisements. A number of key accounts have been added to the growing list of advertisers utilizing the service, including GlaxoSmithKline, Kal Kan Foods, Inc. and Hollywood Video.

Select Response - Enhanced Data Collection

Another CoolSavings initiative that has experienced strong advertiser adoption and which reinforces the Company's leadership position in online direct marketing is a recently launched product, Select Response. Select Response is a cost-efficient consumer survey tool that asks consumers specific questions and then micro-targets customized e-mail and postal offers based on each consumer's answers. Advertisers learn a host of invaluable information, such as consumer purchase intent, category consumption and brand loyalty. Select Response questions can be asked during the CoolSavings registration process, on the site, in targeted e-mail or category newsletters and can increase consumer response and conversion by as much as 50%.

"The growth of our services, both in- and outside of the CoolSavings online media property and e-mail programs, stems from the need to provide a complete solution to our advertisers," commented Matthew Moog, president and chief executive officer of CoolSavings. "Today's consumers have more choices than ever, and we want to enable our advertisers to reach their target audience at the right time and place, with the right incentives."

Added Moog, "By leveraging our proprietary technology and expertise in the collection and use of consumer data to develop new services, we have created important new revenue opportunities that complement our core business."

CoolSavings' Second Quarter and Six Month Results:

Net revenues in the second quarter were $5.1 million compared to $5.3 million in the same period of 2001. Gross profit in the second quarter was $4.2 million, or 82% of net revenues, compared to $3.7 million, or 71% of net revenues in the second quarter of 2001. EBITDA for the second quarter was a loss of $0.2 million compared to an EBITDA loss of $8.7 million in the second quarter of 2001. Total operating expenses in the quarter were $5.6 million compared to $13.6 million reported in the same period of 2001, a decrease of 59% over last year. For the second quarter the loss applicable to common shareholders was $1.9 million, or a loss of $0.05 per share, compared to the loss of $10.2 million, or $0.26 per share, reported in the same period of 2001.

Net revenues in the six month period were $10.9 million compared to $11.6 million in the same period of 2001. Gross profit in the first half of 2002 was $9.0 million, or 83% of net revenues, compared to $8.1 million, or 70% of net revenues in the first half of 2001. EBITDA for the six month period was a loss of $1.3 million compared to an EBITDA loss of $15.9 million in the comparable period of 2001. Total operating expenses in the six month period were $12.7 million compared to $26.5 million reported in the same period of 2001, a decrease of 52% over last year. For the six month period the loss applicable to common shareholders was $4.7 million, or a loss of $0.12 per share, compared to the loss of $18.6 million, or $0.48 per share, reported in the same period of 2001.

At June 30, 2002, CoolSavings had cash and cash equivalents of $2.2 million and total assets of $12.7 million. Accounts receivable, net of allowances, at the end of the second quarter were $3.1 million. Current liabilities totaled $19.6 million and total liabilities were $20.0 million. Stockholders' deficit at June 30, 2002 was $19.7 million.

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 third quarter and year-end improvements in revenue and net income over the same periods in 2001.

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 U.S. households and drive more effective campaign performance. CoolSavings' popular media property, coolsavings.com, is ranked the No.1 coupon site on the Internet according to recent Jupiter Media Metrix reports.(1)

(1) Jupiter Media Metrix May 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.

                      (financial tables attached)

                           COOLSAVINGS, INC.
                       STATEMENTS OF OPERATIONS
                              (Unaudited)
           (in thousands, except share and per share data)

                    Three Months  Three Months  Six Months  Six Months
                       Ended         Ended        Ended       Ended
                      June 30,      June 30,     June 30,    June 30,
                       2002          2001         2002        2001
                    ------------  ------------  ----------  ----------
Revenue:
  e-marketing
   services          $    5,052    $    5,197    $ 10,749    $ 11,430
  License royalties          74            66         140         167
                    ------------  ------------  ----------  ----------
Net revenues              5,126         5,263      10,889      11,597
Cost of revenues            914         1,529       1,898       3,462
                    ------------  ------------  ----------  ----------
Gross profit              4,212         3,734       8,991       8,135
                    ------------  ------------  ----------  ----------

Operating expenses:
  Sales and
   marketing              2,632         4,144       6,127      11,138
  Product
   development              923         1,870       1,995       3,892
  General and
   administrative         2,065         7,598       4,551      11,454
                    ------------  ------------  ----------  ----------
Total operating
 expenses                 5,620        13,612      12,673      26,484
                    ------------  ------------  ----------  ----------

Loss from operations     (1,408)       (9,878)     (3,682)    (18,349)

Other income
 (expense):
  Interest and other
   income                    11            55          25         226
  Interest expense         (299)         (112)       (584)       (238)
  Amortization of
   debt discount              -           (20)          -         (26)
  Other expense-
   settlement                 -          (219)          -        (219)
                    ------------  ------------  ----------  ----------
Total other income
 (expense)                 (288)         (296)       (559)       (257)
                    ------------  ------------  ----------  ----------

Loss before income
 taxes                   (1,696)      (10,174)     (4,241)    (18,606)
Income taxes                  -             -           -           -
                    ------------  ------------  ----------  ----------
Net loss                 (1,696)      (10,174)     (4,241)    (18,606)

Cumulative dividend
 on Series B
 Preferred Stock           (209)            -        (413)          -
                    ------------  ------------  ----------  ----------
Loss applicable to
 common shareholders $   (1,905)   $  (10,174)   $ (4,654)   $(18,606)
                    ============  ============  ==========  ==========

Basic and diluted net
 loss per share      $    (0.05)   $    (0.26)   $  (0.12)   $  (0.48)
                    ============  ============  ==========  ==========

Weighted average
 shares used in the
 calculation of basic
 and diluted net
 loss per share      39,093,660    39,093,660  39,093,660  39,093,660
                    ============  ============ =========== ===========

Net loss             $   (1,696)   $  (10,174)   $ (4,241)   $(18,606)
Plus: depreciation
 and amortization         1,188         1,367       2,398       2,432
Plus: interest
 expense and
 amortization of
 debt discount              299           132         584         264
                    ------------  ------------  ----------  ----------
EBITDA:              $     (209)   $   (8,675)   $ (1,259)  $ (15,910)
                    ============  ============  ==========  ==========