Company generates record revenues of $17.2 million, a 92% increase
over prior year CHICAGO, Oct. 31 /PRNewswire-FirstCall/ --
CoolSavings, Inc. (OTC Bulletin Board: CSAV), a leading interactive
marketing services provider, today reported results for the third
quarter ended September 30, 2005. The Company recorded a 92%
increase in revenue in the third quarter compared to the same
quarter of 2004, driven by the continued success of CoolSavings'
Lead Generation Network, part of the CoolSavings Marketing Network,
the Company's network for the distribution of targeted offers. Net
revenues in the third quarter were $17.2 million compared to $9.0
million in the third quarter of 2004. The Company reported 15.2
million new registering consumers across its network for the
quarter, compared to 4.2 million new registering consumers during
the same period of 2004. The increase in consumer registrations was
primarily due to the success of the Lead Generation Network, which
launched late in the second quarter of 2004. CoolSavings also
reported a 35% increase in the number of consumer responses across
its branded web properties and its marketing network during the
third quarter, as compared to the same period last year. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050203/CGTH021LOGO ) The
Company's total operating costs and expenses rose to $15.5 million
in the third quarter of 2005 from $9.0 million in the third quarter
of 2004. The increase was primarily the result of the fees paid to
partners in connection with the additional revenues from the Lead
Generation Network. In addition, in connection with the signing of
a lease agreement for a new office facility, the Company was
released from certain existing lease payment obligations which had
been previously accrued. As a result of this release, the Company
reversed a portion of a previously accrued lease liability,
resulting in a credit to lease exit expense during the quarter of
$0.9 million. Net income was $1.8 million in the third quarter of
2005 (net income was $0.9 million excluding the effect of the
one-time adjustment to the lease liability), compared to a net loss
of $0.2 million in the same quarter of 2004. Net income applicable
to common stockholders was $1.3 million in the third quarter of
2005, or $0.02 per basic share and $0.01 per diluted share, as
compared to a net loss applicable to common stockholders in the
third quarter of 2004 of $0.7 million, or $0.02 per basic and
diluted share. "These results demonstrate the market's acceptance
of the CoolSavings Marketing Network and the value of the services
we are offering to our clients," said Matthew Moog, President and
CEO of CoolSavings, Inc. "Our management team is looking forward to
working closely with Landmark to continue to serve our clients,
their agencies and our partners." Cash flows from operations for
the third quarter of 2005 were $0.7 million, compared to cash flows
from operations of $1.2 million in the same period of 2004. The
decline was primarily due to an increase in accounts receivable.
Nine Month Financial Highlights Net revenues in the nine-month
period ended September 30, 2005 were $48.2 million compared to
$26.1 million in the same period of 2004. The Company reported 39.7
million new registering consumers across its branded web properties
and the CoolSavings Marketing Network for the nine months ended
September 30, 2005, compared to 7.2 million new registering
consumers during the same period of 2004. The increase in consumer
registrations was primarily due to the success of the Lead
Generation Network. CoolSavings also reported a 28% increase in the
number of consumer responses across its branded web properties and
its marketing network during the nine-month period ended September
30, 2005, as compared to the same period last year. The Company's
total operating costs and expenses rose to $43.3 million in the
nine-month period ended September 30, 2005 from $26.6 million in
the same period of 2004. The increase was primarily the result of
the fees paid to partners in connection with the additional revenue
from the Lead Generation Network. Operating costs and expenses in
the first nine months of 2005 also reflect a credit to lease exit
expense of $0.9 million recorded in the third quarter as discussed
above. Net income was $4.8 million in the nine-month period ended
September 30, 2005 (net income was $3.9 million excluding the
effect of the one-time adjustment to the lease liability), compared
to a net loss of $0.8 million in the same period of 2004. Net
income applicable to common stockholders was $3.1 million in the
nine-month period ended September 30, 2005, or $0.07 per basic
share and $0.02 per diluted share, as compared to a net loss
applicable to common stockholders in the same period of 2004 of
$2.4 million, or $0.06 per basic and diluted share. Cash flows from
operations for the nine-month period ended September 30, 2005 were
$0.9 million, compared to $0.5 million in the same period of 2004.
Financial Condition At September 30, 2005, the Company had cash and
cash equivalents of $7.6 million, compared to $7.2 million at
December 31, 2004. Accounts receivable, net of allowances for
doubtful accounts, were $11.0 million at September 30, 2005,
compared to $6.7 million at the end of 2004. Current liabilities
totaled $7.9 million and $14.1 million at September 30, 2005 and
December 31, 2004, respectively. Working capital grew by $11.3
million from the end of 2004. The increase was partially due to
cash proceeds of $6.6 million received during the second quarter
from Landmark Communications, Inc., the Company's largest
stockholder (Landmark), as a result of Landmark's exercise of a
previously issued warrant to acquire 13.3 million shares of the
Company's common stock. The Company used the proceeds received from
Landmark's exercise of the warrant, plus other cash on hand, to
repay a loan currently due to Landmark totaling $6.9 million. The
working capital increase was also partially due to the increase in
accounts receivable resulting from the growth in revenues. Going
Private Transaction On September 13, 2005, Landmark announced the
execution of a definitive agreement for Landmark to purchase all of
the shares of common stock and Series C convertible preferred stock
of the Company held by each of Richard H. Rogel and Hugh R. Lamle
and certain of their respective family members and related persons
at a price per share of $0.80. Landmark has stated that this
privately negotiated purchase will be the first step in a series of
transactions through which Landmark, without action by the
Company's board of directors, intends to take the Company private
through a short-form merger under Delaware law, with the Company's
other stockholders to receive $0.80 per share (subject to
stockholders' rights of appraisal under Delaware law). The closing
of these transactions is subject to customary closing conditions,
including Landmark's dissemination of a Schedule 13E-3 to the
Company's stockholders. Landmark has informed the Company that
Landmark anticipates these transactions will be completed in the
fourth quarter of 2005. For further information regarding these
transactions, see the joint press release issued by Landmark and
the Company on September 13, 2005, as filed by the Company with the
SEC on Form 8-K on September 14, 2005, and the Schedule 13E-3 filed
by Landmark with the SEC on September 29, 2005, the final version
of which will be mailed by Landmark to the Company's stockholders.
About CoolSavings CoolSavings is a leading interactive marketing
services company for advertisers and publishers. The Company
provides superior lead generation, e- mail, coupon and loyalty
programs across its extensive network of company- owned Branded Web
Properties and top partner sites. The Company maximizes results
using sophisticated targeting, optimization and predictive modeling
capabilities. Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements under the caption "Going Private Transaction."
Where possible, these forward- looking statements have been
identified by use of words such as " intend," "will," "expect," and
similar expressions but such words are not the exclusive means of
identifying these statements. Known and unknown risks,
uncertainties and other factors, both general and specific to the
matters discussed in this press release, may cause the Company's
actual results, performance and transactions to differ materially
from the future results, performance and transactions expressed in,
or implied by, such forward-looking statements. These risks,
uncertainties, and other factors include, without limitation, SEC
review of the Schedule 13E-3, the consummation of the transactions
contemplated by the stock purchase agreement between Landmark and
Messrs. Rogel and Lamle, and certain of their respective family
members and related persons, and other risks associated with the
transactions referred to under "Going Private Transaction,"
CoolSavings' ability to secure financing to meet its long-term
capital needs; CoolSavings' ability to secure long-term contracts
with existing advertisers and Lead Generation Network partners, and
attract new advertisers and Lead Generation Network partners;
CoolSavings' ability to add new consumers; CoolSavings' successful
introduction of new services and features; CoolSavings' ability to
compete successfully against current and future competitors;
CoolSavings' ability to protect its patents, trademarks and
proprietary rights; CoolSavings' ability to continue to attract,
assimilate and retain highly skilled personnel; general industry,
economic and market conditions and growth rates; and the potential
for higher actual media costs, and other costs and expenses when
compared to estimated costs and projections. For a discussion of
these and other risks, uncertainties and factors which could cause
actual results to differ materially from those expressed in, or
implied by, the forward-looking statements, see "Risk Factors" in
the Company's annual report on Form 10-K for the year ended
December 31, 2004, and its Quarterly Report on Form 10-Q for the
quarter ended June 30, 2005, both as filed with the SEC. The
Company undertakes no obligation to update any of the
forward-looking statements after the date of this press release to
conform these statements to actual results or otherwise reflect new
developments or changed circumstances, unless expressly required by
applicable federal securities laws. You should not place undue
reliance on any such forward-looking statements. COOLSAVINGS, INC.
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (in thousands,
except share and per share data) For the Three Months For the Nine
Months Ended Ended September September September September 30, 2005
30, 2004 30, 2005 30, 2004 Net revenues $17,231 $8,964 $48,179
$26,136 Operating costs and expenses: Cost of revenues 7,539 1,624
18,164 3,552 Sales and marketing 6,123 5,121 17,646 15,476 Product
development 1,068 837 2,981 2,677 General and administrative 1,633
1,421 5,376 4,748 Lease exit costs (890) 32 (832) 146 Total
operating costs and expenses 15,473 9,035 43,335 26,599 Income
(loss) from operations 1,758 (71) 4,844 (463) Other income
(expense): Interest and other income 86 12 141 27 Interest expense
- (130) (204) (381) Total other income (expense) 86 (118) (63)
(354) Income (loss) before income taxes 1,844 (189) 4,781 (817)
Income taxes (6) (3) (24) (9) Net income (loss) 1,838 (192) 4,757
(826) Cumulative dividend on Series B Preferred Stock (570) (526)
(1,676) (1,548) Income (loss) applicable to common stockholders
$1,268 $(718) $3,081 $(2,374) Basic and diluted net income (loss)
per share $0.02 $(0.02) $0.07 $(0.06) Weighted average shares used
in the calculation of basic net income (loss) per share 54,167,247
39,239,689 46,918,740 39,230,522 Diluted net income (loss) per
share $0.01 $(0.02) $0.02 $(0.06) Weighted average shares used in
the calculation of diluted net income (loss) per share 253,244,437
39,239,689 244,280,019 39,230,522 COOLSAVINGS, INC. CONDENSED
BALANCE SHEETS (Unaudited) (in thousands) September 30, 2005
December 31, 2004 Assets Current assets: Cash and cash equivalents
$7,588 $7,162 Accounts receivable, net 10,956 6,681 Prepaid and
other assets 683 258 Total current assets 19,227 14,101 Property
and equipment, net 2,291 2,634 Intangible assets, patents and
licenses, net 17 18 Goodwill - TMS 569 569 Total assets $22,104
$17,322 Liabilities, Convertible Preferred Stock &
Stockholders' Deficit Current liabilities: Accounts payable $86
$655 Accrued expenses and other current liabilities 7,527 6,365
Lease exit cost liability 122 210 Deferred revenue 192 312 Senior
secured note payable due to related party - 6,567 Total current
liabilities 7,927 14,109 Long-term liabilities: Deferred revenue
229 260 Lease exit cost liability - 980 Deferred income tax
liability 24 13 Other long-term liabilities - 4 Total long-term
liabilities 253 1,257 Convertible redeemable cumulative Series B
Preferred Stock 28,493 26,850 Convertible redeemable Series C
Preferred Stock 1,913 1,950 Total stockholders' deficit (16,482)
(26,844) Total liabilities, convertible redeemable preferred stock
stockholders' deficit $22,104 $17,322
http://www.newscom.com/cgi-bin/prnh/20050203/CGTH021LOGO
http://photoarchive.ap.org/ DATASOURCE: CoolSavings, Inc. CONTACT:
Melissa Lederer of CoolSavings, Inc., +1-312-224-5153, ; or Mary
Scholz Barber of Kupper Parker Communications, +1-314-290-2013, ,
for CoolSavings Web site: http://www.coolsavings.com/
Copyright