Alloy Announces First Quarter Financial Results; Management Affirms Guidance for Key Financial Performance Measures.Business Editors NEW YORK--(BUSINESS WIRE)--June 7, 2004 Alloy alloy (ăl`oi, əloi`) [O. Fr.,=combine], substance with metallic properties that consists of a metal fused with one or more metals or nonmetals. , Inc. (Nasdaq:ALOY), a media, marketing services, direct marketing and retail company targeting the dynamic Generation Y population, today reported revenues for the fiscal quarter ended April 30, 2004 of $87.8 million and a net loss attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to common stockholders of $9.6 million or $0.23 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. For its first fiscal quarter, Alloy registered a $4.3 million loss before interest and other income/expense, income taxes, depreciation and amortization, stock-based compensation expense, and restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. ("Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become "). For additional financial detail, including the reconciliation of Adjusted EBITDA to net income (loss) determined under GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , please refer to the financial tables provided at the end of this release. Total revenues for the first fiscal quarter increased 27% to $87.8 million, compared with $69.4 million for the first quarter of fiscal 2003. Fiscal first quarter net merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain revenues of $44.3 million were up 48% compared with $30.0 million for last year's fiscal first quarter. The increase resulted from our acquisition of dELiA The delia ['dεlja] was an item of male apparel worn over the żupan by szlachta (nobility) of the Polish-Lithuanian Commonwealth. It was usually of wool or velvet, finished with fur. *s Corp., which offset an overall decline in revenues for Alloy's catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. titles. Fiscal first quarter sponsorship and other revenues of $43.6 million were up 10% versus $39.5 million for the comparable period in our last fiscal year. The increase was primarily attributable to the revenue contribution of the OCM OCM Oracle Certified Master (database administrator certification) OCM Organization for Competitive Markets OCM Onondaga Cortland Madison (counties in New York) OCM Olympic Council of Malaysia business that we purchased at the beginning of the second quarter of fiscal 2003. First fiscal quarter gross profit increased to $41.2 million, or 46.9% of revenues, compared with $31.5 million, or 45.3% of revenues, for the comparable period last year, largely as a result of the overall increase in revenues. The increase in gross margin primarily resulted from the increased percentage of net merchandise revenues as a percentage of total revenues in the first quarter of fiscal 2004. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were $49.8 million for the first quarter of fiscal 2004 versus $32.5 million for the first quarter of fiscal 2003. The increase resulted primarily from the expenses of the acquired dELiA*s Corp. and OCM operations. Net loss for the first quarter of fiscal 2004 was $9.2 million, compared with a net loss of $0.4 million for last fiscal year's first quarter. Net loss attributable to common stockholders for the first quarter of fiscal 2004 was $9.6 million, or $0.23 per diluted share, compared with net loss attributable to common stockholders of $0.8 million, or $0.02 per diluted share, for last fiscal year's first quarter. Adjusted EBITDA transitioned from earnings of $2.2 million for the first fiscal quarter of 2003 to a loss of $4.3 million for the first fiscal quarter of 2004. Our name database now stands at over 27 million total names, of which almost 8.5 million have a buying history with us. Commenting on the quarter, Matt Diamond, Chairman and Chief Executive Officer stated, "We took significant steps in the first quarter to position Alloy for improved financial performance in the second half of the 2004 fiscal year. Our fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. and call center activities have now been fully transitioned from our third party provider to Company facilities. The merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. organization has been strengthened with a number of key hires. The benefits of the combined Alloy and dELiA*s databases should begin to emerge during the key back-to-school and holiday selling seasons. The sponsorship side of the business was generally on plan in the first quarter with a solid outlook for the remainder of the year. The recent designation DESIGNATION, wills. The expression used by a testator, instead of the name of the person or the thing he is desirous to name; for example, a legacy to. the eldest son of such a person, would be a designation of the legatee. Vide 1 Rop. Leg. ch. 2. 2. of Alloy's AMP Agency as the 2003 Promotional Agency of the Year by PROMO pro·mo n. pl. pro·mos Informal A promotional presentation, such as a television spot, radio announcement, or personal appearance. Magazine recognizes and validates the outstanding work we are doing for our advertising clients." Looking ahead, Mr. Diamond concluded, "Following our first quarter financial performance, we remain comfortable with our established fiscal 2004 financial expectations. We affirm our fiscal 2004 merchandise revenue range of $220 million to $230 million, together with a sponsorship revenue range of $210 million to $220 million, a diluted net loss attributable to common stockholders per share range of ($0.25) to ($0.40) and an Adjusted EBITDA range of $11 million to $16 million." About Alloy Alloy, Inc. is a media, marketing services, direct marketing and retail company targeting Generation Y, a key demographic See demographics. segment comprising the more than 60 million boys and girls boys and girls mercurialisannua. in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. between the ages of 10 and 24. Alloy's convergent con·ver·gence n. 1. The act, condition, quality, or fact of converging. 2. Mathematics The property or manner of approaching a limit, such as a point, line, function, or value. 3. media model uses a wide range of media assets to reach more than 25 million Generation Y consumers each month. Through Alloy's 360 Youth media and marketing services unit, marketers can connect with the Generation Y audience through a host of advertising and marketing programs incorporating Alloy's media and marketing assets such as direct mail catalogs, college and high school newspapers, Web sites, school-based media boards, college guides, and sponsored on- and off-campus events. Alloy generates revenue from its broad reach in the Generation Y community by providing marketers advertising and marketing services through 360 Youth and by selling apparel, accessories, footwear Footwear consists of garments worn on the feet. It is worn for a variety of reasons, including protection against the environment, hygiene and adornment. Usually, socks and other hosiery are worn between the feet and the footwear, except for sandals and flip flops (thongs). , room furnishings furnishings the extra type or quantity of hair on the head, tail, ears or legs, specified for a particular breed. For example, the feathers in setters, the beard in Bearded collies, the eyebrows in Schnauzers. and action sports equipment directly to the youth market through catalogs, Web sites and retail stores. For further information regarding Alloy, please visit our Web site (www.alloyinc.com) and click on "Investor Relations Investor relations The process by which the corporation communicates with its investors. ". Information on 360 Youth's marketing services can be found at www.360youth.com. This announcement may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding our expectations and beliefs regarding our future results or performance. Because these statements apply to future events, they are subject to risks and uncertainties. When used in this announcement, the words "anticipate", "believe", "estimate", "expect", "expectation", "project" and "intend" and similar expressions are intended to identify such forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements. Additionally, you should not consider past results to be an indication of our future performance. Factors that might cause or contribute to such differences include, among others, our ability to: increase revenues, generate high margin sponsorship and multiple revenue streams, increase visitors to our Web sites (www.alloy.com, www.ccs.com, and www.danscomp.com) and build customer loyalty; develop our sales and marketing teams and capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. these efforts, develop commercial relationships with advertisers and the continued resilience resilience (r  ·zilˑ·yens),n in advertising spending to reach the teen market; manage the risks and challenges associated with integrating newly acquired businesses; and identify and take advantage of strategic, synergistic synergistic /syn·er·gis·tic/ (sin?er-jis´tik) 1. acting together. 2. enhancing the effect of another force or agent. syn·er·gis·tic adj. 1. acquisitions and other revenue opportunities. Other relevant factors include, without limitation: our competition; seasonal sales fluctuations; the uncertain economic and political climate in the United States and throughout the rest of the world and the potential that such climate may deteriorate de·te·ri·o·rate v. 1. To grow worse in function or condition. 2. To weaken or disintegrate. further; and general economic conditions. For a discussion of certain of the foregoing factors and other risk factors see the "Risk Factors That May Affect Future Results" section included in our annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended January January: see month. 31, 2004, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , which is on file with the Securities and Exchange Commission. We do not intend to update any of the forward-looking statements after the date of this announcement to conform these statements to actual results or to changes in management's expectations, except as may be required by law. (tables to follow)
Alloy, Inc.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Three
Months Months
Ended Ended
4/30/2003 4/30/2004
Net merchandise revenues $29,971 $44,281
Sponsorship and other revenues 39,473 43,566
----------------------
Total revenues 69,444 87,847
Cost of goods sold 37,975 46,627
----------------------
Gross profit 31,469 41,220
Selling and marketing expenses 25,379 36,003
General and administrative expenses 4,958 11,765
Acquired intangible asset amortization 1,785 1,522
Stock-based compensation 0 351
Restructuring charge 380 126
----------------------
Total operating expenses 32,502 49,767
Income (loss) income from operations (1,033) (8,547)
Interest and other income (expense), net 287 (686)
----------------------
Income (loss) before income taxes (746) (9,233)
Income tax (benefit) expense (358) 10
----------------------
Net income (loss) (388) (9,243)
Preferred stock dividend and accretion 453 394
----------------------
Net income (loss) attributable to common
stockholders ($841) ($9,637)
Net income (loss) attributable to common
stockholders per basic share ($0.02) ($0.23)
Net income (loss) attributable to common
stockholders per diluted share ($0.02) ($0.23)
Weighted average basic common shares
outstanding: 40,149,100 42,457,030
Diluted shares outstanding per GAAP: 40,149,100 42,457,030
Reconciliation of EBTA and Adjusted EBITDA to GAAP Results (1):
--------------------------------------------------------------
Net income (loss) ($388) ($9,243)
Income tax expense (358) 10
Acquired intangible asset amortization 1,785 1,522
Stock-based compensation 0 351
Restructuring charge 380 126
----------------------------------------------------------------------
EBTA excluding stock-based compensation and
restructuring charges $1,419 ($7,234)
Interest and other income (expense), net 287 (686)
Depreciation and amortization 1,043 2,268
----------------------------------------------------------------------
Adjusted EBITDA $2,175 ($4,280)
(1) This press release contains the non-GAAP financial measures
EBTA and Adjusted EBITDA. Alloy uses EBTA and Adjusted EBITDA to
evaluate its performance period to period without taking into account
certain expenses which, in the opinion of Alloy management, do not
reflect Alloy's results from its core business activities. These
non-GAAP financial measures should be considered in addition to, and
not as a substitute for, or superior to, other measures of financial
performance prepared in accordance with GAAP. These non-GAAP measures
included in this press release have been reconciled to the nearest
GAAP measure as is now required under new SEC rules regarding the use
of non-GAAP financial measures. As used herein, "GAAP" refers to
accounting principles generally accepted in the United States of
America.
Alloy, Inc.
SELECTED CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
January 31, April 30,
2004 2004
(audited) (unaudited)
Assets
Current Assets
Cash and cash equivalents $30,543 $22,867
Marketable securities 19,014 15,684
Accounts receivable, net 31,492 34,907
Inventories, net 29,021 25,980
Prepaid catalog costs 2,028 1,420
Other current assets 3,813 6,158
----------------------
Total current assets 115,911 107,016
Marketable securities 5,585 4,160
Property and equipment, net 27,234 27,176
Goodwill, net 274,796 280,721
Intangible and other assets, net 25,865 25,985
----------------------
Total assets $449,391 $445,058
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $28,740 $27,216
Deferred revenues 15,124 17,630
Accrued expenses and other current
liabilities 39,755 38,837
----------------------
Total current liabilties 83,619 83,683
Long-term liabilities 743 1,852
Convertible debt 69,300 69,300
Series B Preferred Stock 14,434 14,828
Stockholders' Equity 281,295 275,395
----------------------
Total liabilities and stockholders'
equity $449,391 $445,058
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion