LifeMinders Tops Quarterly Estimates

Direct email and wireless marketer LifeMinders today announced that it beat analyst expectations for the quarter, posting a $0.17 per-share loss and $16.7 million in revenue.

The $0.17 per-share loss, or $4 million, is up 63 percent from second quarter’s $0.46 per-share, or $10.8 million, loss. Wall Street estimated a per-share loss of $0.23.

LifeMinders said it is comfortable with analyst recommendations for a fourth quarter loss of $0.13 per share.

Quarterly revenues totaled $16.7 million, an increase of 14 percent from second quarter’s $14.7 million and beating estimates of $15.7 million. The company also finished the quarter with approximately $78 million in cash and marketable securities, and reiterated that it estimates attaining profitability in second quarter of 2001.

As in second quarter, LifeMinders has about 200 clients, with about 70 percent renewing from the previous quarter.

About 34 percent of LifeMinders’ client roster are offline marketers, and account for 32.5 percent of LifeMinders’ revenue. These include DoubleDay, Schering-Plough, and Nestle. Among dot-com clients, the company said less than one percent are on the Barron’s list of the 100 fastest cash-burning dot-coms.

“The $176 billion offline direct marketing industry is coming online and is the perfect match for our suite of direct marketing products,” said LifeMinders chief executive Stephen Chapin, Jr.

The company said its consumer membership has grown to 19.5 million members, a 15 percent increase from last quarter, and a 179 percent increase since the beginning of the year. Consumer growth and retention, which remains at about 98 percent, similarly to previous quarters.

LifeMinders president Allison Abraham attributed its consumer base growth to its targeted content, which includes local promotional offers by zip code, updates on banking account balances and automobile maintenance reminders, based on make and model. Some two-thirds of LifeMinders’ income from consumer clients is based on a cost-per-performance model.

“All in all, the consumer unit had strong growth this quarter and is leading the company to profitability,” Abraham said. “The online and offline advertising world is gravitating to highly targeted, performance-based direct marketing programs and LifeMinders is perfectly positioned to meet this demand.”

Revenue-per-customer grew to $0.92, up from $0.88 last quarter, while cost of customer acquisition rose to $4.25 per customer.

LifeMinders execs also reported undisclosed but expectation-meeting growth in its outsourced email technology unit, which services clients including Netscape, Johnson & Johnson and online auction uBid. Though it did not specify the unit’s performance, executives said the company’s technology unit is estimated to hit $20 million in annual revenue by the end of 2001.

LifeMinders’ wireless division has yet to generate “significant” returns, having been created from the August acquisition of technology firm smartRay Networks, Chapin said. As with its outsourced technology unit, the company declined to break out specific third quarter performance for its wireless division.

With the earnings announcement, LifeMinders also said it has signed a partnership deal with online database and personalization company Net Perceptions.

According to terms of the arrangement, Net Perceptions will offer LifeMinders’ outsourced wireless and email platforms to its client base of 250 companies, which include Procter & Gamble and JP Morgan.

In turn, LifeMinders will offer Net Perceptions’ personalization products to its current and future clients.

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