LifeMinders Makes Deep Cuts, Seeking Buyer

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Online direct marketing agency LifeMinders Inc., Herndon, VA, has drastically scaled back its operations to concentrate on its e-mail business and is seeking either a buyer or a merger partner, the agency said yesterday.

The company might close if it fails to find a buyer or partner, said Chairman/CEO Jonathan Bulkeley.

The company, which provides outsourcing services that allow companies to deliver personalized, targeted e-mail marketing and reminder messages, said it reduced its work force to a skeleton team of about 35 people, from 127 a week ago. At the end of fourth quarter 2000, LifeMinders employed 203 people.

The cutback comes after the company announced a 52 percent decrease in net revenue for the first quarter. The company's revenue fell to $5.5 million in the first quarter, from $11.6 million in fourth quarter 2000. LifeMinders reported revenue of just more than $11 million in first quarter 2000.

Direct marketing advertising revenue fell in the first quarter to $5.2 million from $7.8 million a year earlier, and its opt-in e-mail revenue dwindled to $299,000 in the first quarter from $3.2 million a year ago. The company noted a decrease in its number of clients and said the average contract size for both online and offline clients fell in the quarter.

For the first quarter, LifeMinders reported a net loss of just more than $13 million, or 50 cents per share, compared with a net loss of $17.5 million in first quarter 2000, or 80 cents per share.

LifeMinders said it sent 668 million e-mails in the first quarter, down from 695 million a year ago. Its membership in the first quarter stood at 21.3 million, down from 21.6 million a year ago.

Even though the company concentrated on streamlining its business in the first quarter to focus on its core e-mail products, its revenue continued to decline, Bulkeley said.

"While we maintain strong core assets -- a large membership base, a scalable infrastructure, and approximately $60 million in cash and cash equivalents -- we have concluded that our prospects for growth and profitability as a stand-alone company are not strong," he said. "For that reason, we have been evaluating, and will continue to evaluate, possible sales of the company and possible mergers."

Bulkeley would not name with whom, if anyone, the company is talking to regarding a possible sale or merger.


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