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Revenues for the third quarter of 2008 were $4.8 million, compared to $6.8million in the prior year period. Net loss for the quarter was $(3.2)million, or $(0.13) per diluted share, for the third quarter of 2008, comparedto $(2.5) million, or $(0.10) per diluted share, for the third quarter of2007.
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Adjusted EBITDA*, defined as net income (loss) before interest, taxes,depreciation, amortization, stock-based compensation, severance charges, baddebt expense and loss on disposition of assets, for the quarter endedSeptember 30, 2008 was $(1.4) million compared to ($1.1) million in the prioryear period.
For the nine months ended September 30, 2008, the Company recordedrevenues of $20.0 million, compared to $22.8 million for the same period lastyear. Net loss for the nine months ended September 30, 2008 was $(11.5)million, or $(0.46) per share, compared to $(5.2) million, or $(0.21) pershare, for the first nine months of 2007. Adjusted EBITDA for the first ninemonths of 2008 totaled $(6.2) million, compared to $(1.9) million in thecomparable year period.
Third Quarter 2008 and Subsequent Highlights:
-- Implemented restructured meal delivery program with significantlyhigher margins
-- Initiated corporate restructuring to reduce overhead by $2.4 millionannually
-- Achieved over 37% increase in Q3 2008 meal delivery revenues from prioryear
-- Signed 5 channel partner contracts and 7 corporate services licenseagreements year-to-date
-- Launched 2 channel partner programs and 3 corporate services licenseprograms year-to-date
-- Appointed Linda Kohler as VP, General Manager of Meal Delivery inOctober 2008
"While the current economic environment is challenging, we remain firmlycommitted to our strategic direction and are confident that we are positioningour company for a successful 2009 and beyond," stated President and ChiefExecutive Officer, Steve Rattner. "We continue to make progress in several keyareas of our core businesses, including our payment, billing and fulfillmentfunctionality and meal delivery and food supply chain. With the recentimplementation of a new restructured meal delivery program with inventorycontrol methodology and SKU optimization features, we are now able to extendthe product shelf-life, have longer production runs and more overallflexibility. This progress reinforces our confidence in our ability to executethe long term strategy of building an integrated health and wellness platformin both consumer and B2B markets."
Mr. Ratter continued, "Despite our progress, we remain focused onmitigating the impact of the economic environment and continue to take actionsto rationalize and optimize the operating and cost structure of the companyand our core digital, meal delivery and B2B businesses."
Conference Call
The company will host a conference call to discuss the third quarter 2008results at 8:30 a.m. Eastern Time on Friday, November 14, 2008. Participantsmay access the call by dialing 866-383-7998 (domestic) or 617-597-5329(international), passcode 78829183. In addition, the call will be webcast viathe Investor Relations section of the company's web site athttp://www.eDiets.com , where it will also be archived. A telephone replaywill be available through Friday, November 28, 2008. To access the replay,please dial 888-286-8010 (domestic) or 617-801-6888 (international), passcode76889991.
About eDiets
eDiets.com, Inc. is a leading provider of personalized nutrition, fitnessand weight-loss programs. eDiets currently features its award-winning,fresh-prepared diet meal delivery service as one of the more than 20 populardiet plans sold directly to members on its flagship site, www.eDiets.com . Thecompany also provides a broad range of customized wellness and weightmanagement solutions for Fortune 500 clients. eDiets.com's uniqueinfrastructure offers businesses, as well as individuals, an end-to-endsolution strategically tailored to meet its customers' specific goals ofachieving a healthy lifestyle. For more information, please call 310-954-1105or visit www.eDiets.com .
* Use of Non-GAAP Financial Measures
In its earnings releases, conference calls, slide presentations orwebcasts, the Company may use or discuss adjusted EBITDA, which is a non-GAAPfinancial measure as defined by SEC Regulation G. Management regularly reviewsadjusted EBITDA as an analytical indicator of the Company's financialperformance and believes that it is useful to investors in evaluatingoperating performance. In addition, the Company uses adjusted EBITDA as ameasure of performance for its business segments and for incentivecompensation purposes. The Company does not intend for adjusted EBITDA to beconsidered in isolation or as a substitute for any GAAP measure. AdjustedEBITDA, as presented, may not be comparable to similarly titled measures ofother companies.
Safe Harbor Statement
Statements which are not historical in nature are forward-lookingstatements. Forward-looking statements involve known and unknown risks anduncertainties which could cause the actual results, performance orachievements to be materially different from those which may be expressed orimplied by such statements. These risks and uncertainties include, amongothers, that we will not be able to obtain sufficient and/or acceptableoutside financing (when and if required); changes in general economic andbusiness conditions; changes in product acceptance by consumers; a decline inthe effectiveness of sales and marketing efforts; loss of market share andpressure on prices resulting from competition; significant investments in ourtechnology platform, marketing plans, and product development to remaincompetitive with other online providers of healthy living and weight lossplans, many of which may be found to offer superior and more varied featuresthan our plans and may also be offered for free; volatility in the advertisingmarkets; any delay, disruption, or suspension of our supply of prepared mealsfrom our vendor; changes in consumer preferences and discretionary spending;product liability and other risks from the sale of ingested products;regulatory actions affecting our marketing activities; and the outcome oflitigation pending against us. For additional information regarding these andother risks and uncertainties associated with eDiets.com's business, referenceis made to our Annual Report on Form 10-K for the year ended December 31,2007, and other reports filed from time to time with the Securities andExchange Commission. All forward-looking statements are current only as of thedate on which such statements are made. We do not undertake any obligation topublicly update any forward- looking statements.Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 Net loss $(3,199) $(2,495) $(11,453) $(5,197) Interest income, net 63 (63) 11 (148) Interest expense on secured notes 542 126 1,382 126 Amortization of secured notes 321 62 836 62 Income tax provision 19 55 20 197 Depreciation 437 312 1,127 759 Amortization of intangibles 176 303 705 908 Stock-based compensation 288 463 1,046 1,167 Loss on disposition of fixed assets - 154 1 176 Bad debt expense (7) (1) 82 11 Severance charges 4 (12) 39 74 Adjusted EBITDA $(1,356) $(1,096) $(6,204) $(1,865)
SOURCE eDiets.com, Inc.
