Alloy Announces First Quarter Results Above Expectations.Business Editors NEW YORK--(BUSINESS WIRE)--May 30, 2001 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. Online, Inc. (Nasdaq:ALOY) -- Pro Forma EPS of ($0.20) Exceeds Analysts' Consensus by $0.02 -- -- First Quarter Revenues of $28.2 million Up 238% Year over Year -- -- Company Reiterates Pro Forma Profitability Expectation for Fiscal 2001 -- Alloy Online, Inc. (Nasdaq:ALOY) (www.alloy.com), a leading Generation Y-focused media company and direct marketer, today announced record first quarter financial results for the fiscal quarter ended April 30, 2001. This marked the ninth consecutive quarter of above-consensus financial performance since Alloy's initial public offering in May of 1999. Total revenues for the first quarter of fiscal 2001 increased 238% to $28.2 million compared to $8.4 million in the first quarter of fiscal 2000. 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 $23.7 million were up 286% versus the prior year quarter due to strong sales performances in both the Alloy and CCS (1) (Common Channel Signaling) A communications system in which one channel is used for signaling and different channels are used for voice/data transmission. Signaling System 7 (SS7) is a CCS system, also known as CCS7. See SS7. direct marketing operations, and the inclusion of CCS' results in this year's first quarter. First quarter sponsorship and other revenues of $4.5 million were up 104% compared to last year's first quarter reflecting both a broader client base and larger marketing programs developed by Alloy's sales force. First quarter gross profit in fiscal 2001 increased to $15.9 million, or 56.2% of revenues compared to $5.4 million, or 64.1% of revenues in the comparable period last year, as a result of the substantial increase in revenues. The decline in gross margin was due to the larger percentage of net merchandise revenues to total revenues in the first quarter of fiscal 2001 compared to fiscal 2000, and the inclusion of CCS' lower margin merchandise revenues in this year's first quarter. 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. excluding goodwill amortization and stock-based compensation were $20.4 million in the first quarter of fiscal 2001 versus $11.2 million in the first quarter of fiscal 2000. The net loss before goodwill amortization, stock-based compensation and non-cash, non-operating items (the "pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss") in the first quarter of fiscal 2001 was $4.3 million, or $0.20 per share, compared to a pro forma net loss of $5.4 million, or $0.36 per share for the same period last year. After goodwill amortization, stock-based compensation and non-cash, non-operating items, the net loss available to common shareholders for the first quarter of fiscal 2001 was $10.3 million, or $0.49 per share compared to a net loss available to common shareholders of $6.3 million, or $0.42 per share in last year's first quarter. Matt Diamond, Chairman and Chief Executive Officer said, "We are off to an excellent start to fiscal 2001, reinforcing re·in·force also re-en·force or re·en·force tr.v. re·in·forced, re·in·forc·ing, re·in·forc·es 1. To give more force or effectiveness to; strengthen: The news reinforced her hopes. our expectation that we will achieve full year cash profitability this fiscal year. Our net merchandise revenues in this year's first quarter were strong and ahead of plan. Additionally, our first quarter sponsorship and other revenues more than doubled compared to last fiscal year's first quarter, reflecting the growth momentum in our media business and the resilience resilience (r  ·zilˑ·yens),n in advertising spending to reach the teen market through our media channels. "We further expanded our portfolio of media properties during our first quarter, enhancing our position as a primary conduit conduit /con·du·it/ (kon´doo-it) channel. ileal conduit the surgical anastomosis of the ureters to one end of a detached segment of ileum, the other end being used to form a stoma on the to reach the Generation Y market. During the quarter, we acquired Carnegie Carnegie (kärnĕg`ē, kär`nəgē), borough (1990 pop. 9,278), Allegheny co., SW Pa., an industrial suburb of Pittsburgh; inc. 1894. A steel town, it has coal mines and plants that make chemicals and electrical equipment. Communications, a leading marketing and recruiting resource for colleges and universities across the country, and added Strength Magazine, a lifestyle magazine for teenage boys, to our growing stable of media assets. We believe that by combining aggressive internal development with 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, Alloy will be able to continue exhibiting strong growth in high-margin sponsorship and other revenues. We believe that our ability to offer a range of marketing services and solutions, including print advertisements, online interactive programs, research, consulting, specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. publishing, editorial and creative, and technology, positions Alloy as a leading integrated media company for entities interested in accessing the Generation Y market." As of April 30, 2001, Alloy's consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: database of Generation Y girls and boys grew to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 7.1 million names, of which approximately 1.7 million were established buyers, versus approximately 4.1 million total names and 590,000 established buyers as of that date last year. Alloy's registered online user base grew to approximately 4.1 million registrants as of April 30, 2001 from approximately 2.1 million as of April 30, 2000. Mr. Diamond concluded, "We believe the outstanding operating performances generated throughout Alloy's businesses in the first quarter of this fiscal year further validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data the success of our efforts in building a database-driven media and marketing organization serving the Generation Y market. The teen market remains vibrant and we must continue to develop the business to take maximum advantage of the revenue opportunities available. With the strong first quarter under our belt, we are comfortable in revising our full 2001 fiscal year total revenue guidance up to $145 million, at the top end of the range we announced in March, with a split of approximately $115 million of net merchandise revenues and $30 million of sponsorship and other revenues. We also reiterate re·it·er·ate tr.v. re·it·er·at·ed, re·it·er·at·ing, re·it·er·ates To say or do again or repeatedly. See Synonyms at repeat. re·it our expectation of full year cash profitability, with pro forma annual profit in the range of $500,000 - $700,000. For the second quarter of this fiscal year, we anticipate total revenues in the range of $23 to $24 million, with net merchandise revenues of $16 to $17 million and sponsorship and other revenues of $6 to $7 million. We expect the second quarter pro forma loss to be in the $2.4 to $2.6 million range." About Alloy Online Alloy Online, Inc. is a leading teen-focused media company and direct marketer providing community, content, commerce and entertainment to Generation Y, one of the fastest growing segments of the U.S. population. 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 - which is centered around our Web site (www.alloy.com), and is complemented by the Alloy e-zine and 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. and the CCS Web site (www.ccs.com) and catalog - has a total reach of more than 10 million individuals per month. Together, these components offer a unique blend “Blending” redirects here. For alpha blending, see Alpha compositing. In linguistics, a blend is a word formed from parts of two other words. These parts are sometimes, but not always, morphemes. of services through which teens can interact Interact can refer to:
Fall of Interact While the Game Boy device was first released, Interact acquired the rights to sell Datel's Action Replay , share information, explore compelling and relevant content and shop for 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. For further information regarding Alloy, please visit our Web site (www.alloy.com) and click on "Investor Info INFO Information INFO Information (logging abbreviation) INFO Inform(ed/ation) INFO Ionic Difluoroamino Oxidizer ". 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. that involve risks and uncertainties, including statements regarding our expectations and beliefs regarding our future results or performance that involve a number of substantial risks and uncertainties. When used in this announcement, the words "anticipate", "believe", "estimate", "expect", "expectation" and "intend" and similar expressions as they relate to us or our management are intended to identify such forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements and reported results should not be considered an indication of our future performance. Factors that might cause or contribute to such differences include, among others: our ability to achieve full year pro forma profitability this fiscal year; our ability to increase revenues, generate high margin sponsorship and multiple revenue streams, increase visitors to our and CCS' Web sites and build customer loyalty; our ability to manage all aspects of our convergent business model; our ability to develop our sales and marketing teams; our ability to 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>. our sales and marketing efforts; our ability to develop commercial relationships with advertisers and the continued resilience in advertising spending to reach the teen market; our ability to manage the risks and challenges associated with integrating newly acquired businesses; our ability to identify and take advantage of strategic, synergistic acquisitions and other revenue opportunities; competition; seasonal sales fluctuations and general economic conditions. For a discussion of these and other risk factors see the Risk Factors section of 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, 2001 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 press release to conform these statements to actual results or to changes in management's expectations, except as required by law.
Alloy Online, Inc.
SELECTED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (1)
(In thousands, except shares and per share data)
(Unaudited)
Three Months Three Months
Ended Ended
04/30/2000 04/30/2001
Net merchandise revenues $6,141 $23,733
Sponsorship and other revenues 2,210 4,508
----------------------------------
Total revenues 8,351 28,241
Cost of goods sold 3,001 12,363
----------------------------------
Gross profit 5,350 15,878
Selling and marketing expenses 9,253 17,415
General and administrative expenses 1,937 2,941
Goodwill amortization 811 3,741
Stock-based compensation 87 76
---------------------------------
Total operating expenses 12,088 24,173
Loss from operations (6,738) (8,295)
Interest income, net 433 203
Gain on sales of marketable
securities, net (2) 0 658
---------------------------------
Net loss ($6,305) ($7,434)
Charge for beneficial conversion
feature of preferred stock issued 0 2,769
Preferred stock dividend and accretion 0 125
----------------------------------
Net loss available to
common stockholders ($6,305) ($10,328)
Pro forma net loss (3) ($5,407) ($4,275)
Net loss per share ($0.42) ($0.35)
Net loss available to common
stockholders per share ($0.42) ($0.49)
Pro forma net loss per share ($0.36) ($0.20)
Weighted average basic and diluted
common shares outstanding: 15,160,546 21,044,563
(1) Prior periods have been reclassified pursuant to EITF 00-10
"Accounting for Shipping and Handling Fees and Costs" which
stipulates that all amounts billed to a customer in a sale
transaction related to shipping and handling, if any,
represent revenues earned for the goods provided and should be
classified as revenue. Shipping and handling costs are
included in selling and marketing expenses.
(2) Includes the impact of the adoption of SFAS No. 133
"Accounting for Derivative Instruments and Hedging Activities"
as of February 1, 2001.
(3) Pro forma net loss is defined as Net loss before goodwill
amortization, stock-based compensation and gain on sales of
marketable securities.
Alloy Online, Inc.
SELECTED CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
January 31, 2001 April 30, 2001
(audited) (unaudited)
Assets
Current Assets
Cash and cash equivalents $9,338 $22,751
Marketable securities 16,064 25
Accounts receivable, net 3,416 3,166
Inventories, net 13,200 12,397
Prepaid catalog costs 1,330 349
Other current assets 575 2,442
-------------------------------------
Total current assets 43,923 41,130
Property and equipment, net 5,841 6,501
Goodwill, net of amortization 55,963 74,474
Other assets 1,181 1,047
-------------------------------------
Total assets $106,908 $123,152
Liabilities and Stockholders' Deficit
Current Liabilities
Accounts payable and accrued
expenses $18,523 $21,929
-------------------------------------
Total current liabilties 18,523 21,929
Long-Term Liabilities 103 87
Series A Preferred Stock 0 8,620
Stockholders' Equity 88,282 92,516
-------------------------------------
Total liabilities and
stockholders' equity $106,908 $123,152
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