Internet couponer coolsavings.com has warned that its revenue for first quarter 2001 would be about half of what Wall Street had expected.
Revenue for the quarter ending March 31 was expected to be about $6 million, less than the $8.1 million in revenue that coolsavings had reported for the first quarter last year. Analysts had predicted coolsavings would pull in about $12 million for the first quarter this year.
As a cost-cutting move, coolsavings last month cut 67 jobs, about 25 percent of its staff.
“Like most others operating in this environment, we are experiencing lower top-line revenue,” said Steven M. Golden, chairman/CEO of coolsavings.com, Chicago.
Coolsavings said its “auditors' report will contain a 'going concern' explanatory paragraph stating that additional capital is required to complete the current year.”
The company had about $7 million in cash at the end of last year, and Golden said, “Based on our current revenue projections and planned cost-cutting measures, we believe that our cash position coupled with the anticipated proceeds from our private offering will be sufficient to give us adequate liquidity for the year.”
Coolsavings lost $9.4 million in fourth quarter 2000, compared with a loss of $7.1 million in the year-ago period. The company reported a loss of $32.8 million last year and $11 million in 1999. It expects to turn a profit in the second half of this year.
Fourth-quarter revenue was up 73 percent to $11.5 million last year from about $6.7 million in 1999. Yearly revenue tripled from $12.9 million in 1999 to $39.9 million last year.
Sales and marketing operating expenses were way up, from $17.8 million in 1999 to $41.6 million last year. Total operating expenses last year came to $72.2 million, compared with $28.2 million in 1999.
On Dec. 18, coolsavings purchased the intellectual property assets of comparison-shopping technology provider Surfari Inc. Coolsavings said it would use the technology to build CoolShopper, a comparison-shopping search tool that was expected to launch early this year.
A week before that purchase, the company announced the settlement of a patent infringement lawsuit against iQ.COM.
That lawsuit was one of eight that coolsavings filed in U.S. District Court in Chicago pertaining to its ownership of patents for coupon distribution over the Web. The company late last year settled patent litigation with iQ.COM, planetU, eCentives, couponsSurfer, Xadvantage and emaildirect.