Cross Media Doubles 2001 Revenue

Cross Media, facing the same business conditions as every other direct marketer, doubled its revenue last year to over $100 million–at least $2 million better than it predicted 14 months ago.

It also boosted its net income to $8.8 million, compared with a net loss of $4.9 million in 2000.

And the growth accelerated in the fourth quarter when sales hit the $30.9 million mark, more than twice that of the $13.5 million generated during the same period the year before. Net income totaled $4.1 million, making the firm profitable for three quarters in a row.

And now Cross Media, which markets magazine subscriptions and memberships online and by phone, is predicting another doubling of revenue in 2002.

According to CEO Ron Altbach, the firm now sends over 200 million personalized e-mails per month, reaches 62.5 million households through newspaper ads every week, and speaks with 2 million consumers a month through its call-centers. Half of the calls are inbound.

At least part of that multi-channel capability is due to two recent acquisitions: Lifeminders, Inc., and National Syndications, Inc. (NSI).

NSI, whose purchase was announced in January, sells products through the pages of Parade magazine, USA Today Weekend and American Profile. It generated $55 million in revenue last year.

Acquired late last year, Lifeminders provides customized online content. However, Cross Media has turned away from the firm’s ad-driven model, and now is offering several membership programs via e-mail, executives said. There are 20 million names on the Lifeminders database.

Speaking during an investor conference call, Altbach added that Cross Media plans to use Lifeminders’ customization skills offline as well as online. It is also about to relaunch the Lifeminders Web site.

Magazine subscriptions brought in almost 100% of the firm’s sales in 2000, but dropped to around 80% in 2001. This year, they are expected to drop to 55%. The second-biggest category will be NSI’s products.

The company also revealed today that it:

*Has no long-term debt.

*Feels that it will sustain 15% to 20% growth for the indefinite future.

*Wishes its stock price reflected its growth rate.

*Paid little in taxes in 2001, thanks to a tax loss carried forward and additional benefits from the acquisition of Lifeminders. However, it expects to pay more this year.

Commenting on the firm’s success, Altbach said, “The answer in this business is to be predictable and reliable.”

Despite a chargeback rate of only .6%, Altbach added he worries about the firm’s processes, customer service and general business. “All these things keep me up at night,” he joked. “‘I’m 55, but I look like I’m 97.”