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Joseph D. Frehe
Chief Financial Officer
(212) 329 - 8347
For immediate release:
ALLOY REPORTS FULL YEAR AND FOURTH QUARTER FISCAL 2007 RESULTS
Reports 2007 Full Year EBITDA of $10.4 million
Reaffirms 2008 Full Year:
Revenue guidance of $225.0 - $240.0 million
EBITDA guidance of $20.0 - $24.0 million
New York, NY March 26, 2008 - Alloy, Inc. (the Company) (NASDAQ: ALOY), one of the countrys largest providers of media and marketing programs reaching targeted consumer segments, today reported financial results for its full fiscal year ended and fourth quarter ended January 31, 2008.
Results for Fiscal 2007
Revenue in the fiscal year ended January 31, 2008 (fiscal 2007) increased $3.0 million, or 2%, to $199.1 million from $196.1 million in the fiscal year ended January 31, 2007 (fiscal 2006).
Adjusted EBITDA, defined as operating income (loss) plus depreciation and amortization, special charges and non-cash stock-based compensation, for fiscal 2007 was $10.4 million, compared with $19.0 million for fiscal 2006, a decrease of $8.6 million. The decrease was primarily due to lower profitability in the Media segment related to the Channel One acquisition and reduced display board business.
Commenting on Alloys performance and outlook, Matt Diamond, the Companys Chairman and Chief Executive Officer stated, Alloy took critical steps in fiscal 2007 to drive growth of our high margin Media segment. Specifically, we acquired and integrated Channel One and Frontline, expanded our Teen.com interactive advertising network and raised the creative presence of our Alloy Entertainment business. These strategic initiatives, together with a strong book of contracted business with AMP Agency, which is part of our Promotions segment, support our expectation of substantial revenue and earnings growth in fiscal 2008.
Fiscal 2007 free cash flow, defined as net income (loss) before extraordinary items plus depreciation and amortization, special charges, stock-based compensation, debt conversion expense and amortization of deferred financing costs less capital expenditures, decreased approximately $21.6 million to $(6.7) million, or $(0.50) per diluted share, compared with $14.9 million, or $1.19 per diluted share, in fiscal 2006. The decrease was primarily due to higher capital expenditures for upgrades to Channel Ones infrastructure as discussed in previous earnings releases and net cash used in operating assets and liabilities.
Operating income decreased approximately $82.8 million to a loss of $70.1 million in fiscal 2007, from income of $12.7 million in fiscal 2006. This decrease is primarily due to a non-cash goodwill and a long-lived asset impairment charge of $71.6 million in the Companys Media ($48.8 million) and Placement ($22.8 million) segments and lower Adjusted EBITDA. The Company is required to evaluate, at least annually, its goodwill and other long-lived assets for impairments. These impairments are included as part of special charges.
In fiscal 2006, the Company recorded a $17.9 million expense related to the conversion of $67.9 million of its convertible debentures. There was no debt conversion expense recorded in fiscal 2007.
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The following information was filed by Alloy Inc on Wednesday, March 26, 2008 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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