Online diet and fitness service eDiets.com has confirmed its outlook for the FY ended 31 December 2001 of both revenues in excess of US$24m and profitability for the year.
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eDiets also announced that it prematurely recognized certain subscription revenues in the Q2 and Q3 of fiscal 2001 and, as a result, will restate its results of operations for such quarters. The restatement has no impact on revenues, earnings or cash flow for the FY. The company plans to release its year-end results later this month.
Consistent with its press release dated 28 November 2001, eDiets.com expects to report that revenue for the full year more than doubled to in excess of US$24m compared with revenue of US$11.4m in fiscal 2000. Net income for the full year should be between US$0.6 and US$0.9m or US$0.04 and US$0.06 per diluted share, compared to a net loss of US$5.5m in the prior year. Net cash flow from operations is expected to total approximately US$2m for the year. Deferred revenues from subscriptions, which will be recognized in future periods, will total approximately US$2m at 31 December 2001.
eDiets.com receives approximately 92% of its revenues from subscriptions to its personalized diet and fitness program that are paid at the time of enrollment, but recognized over the life of the subscription, which is typically several months. The company concluded that certain diet and fitness subscription payment plans launched in the latter half of its second quarter had not been incorporated into the deferred revenue calculations at 30 June and 30 September 2001. As a result, the unaudited consolidated financial statements for those periods will be restated.
Revenues for the quarter ended 30 June 2001 will be restated from US$6.1m to US$5.8m, while revenues for the quarter ended 30 September 2001 will be restated from $7m to US$6.7m. The company’s cash flow from operations of US$1.1m and US$1.5m for the six months ended 30 June and the nine months ended 30 September, respectively, remain unchanged. Net income for the quarterly period ended 30 June will be adjusted from US$155,000, or US$0.01 per diluted share, to a net loss of US$220,000, or US$0.02 per diluted share. Net income for the quarterly period ended 30 September will be adjusted from US$505,000, or US$0.03 per diluted share, to US$224,000, or US$0.02 per diluted share.
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