Alloy Online Announces Record First Quarter Financial Results.Business Editors/High Tech Writers NEW YORK--(BUSINESS WIRE)--May 25, 2000 First Quarter Revenues Increase 200% to $7.7 Million Sponsorship and Other Revenues of $2.2 Million Drive 61% Gross Margin First Quarter Results Exceed Analysts' Expectations 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) ( http://www.alloy.com ), a leading Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the destination for the boys and girls boys and girls mercurialisannua. of Generation Y, today announced record financial results for the first quarter ended April 30, 2000 that exceeded analysts' expectations for revenues, gross margin and net loss per share. Total revenues for the first quarter rose 200% to $7.7 million compared to $2.5 million in the first quarter of 1999. Gross profit increased to $4.7 million, or 61% of revenues, up substantially from $1.3 million, or 51% of revenues in the comparable period last year. The strong gross profit and gross margin performance for the first quarter was driven by $2.2 million of sponsorship and other revenues, a 14 fold increase over the first quarter of 1999 and a 10% increase over the fourth quarter of 1999. 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. for the first quarter were $10.6 million versus $3.5 million in the first quarter of 1999. The net loss before goodwill amortization for the quarter was $5.5 million, or $0.36 per basic share, compared to a net loss of $2.3 million, or $0.27 per basic share, last year. After goodwill amortization, the net loss for the first quarter of 2000 was $6.3 million, or $0.41 per basic share. Matthew Matthew one of the twelve disciples. [N.T.: Matthew] See : Evangelism C. Diamond, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. stated, "Our first quarter revenues continued to outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, analysts' expectations and demonstrate substantial quarter over quarter growth. We have repeatedly exceeded our top-line targets by leveraging our Web-centric Having to do with the Web. A Web-centric view of something means that the application or system has been designed for the Web. See Webified. multi-channel See multichannel. merchandise distribution model and monetizing the revenue opportunities in our community and content business, while continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. reinforcing the Alloy brand. Particularly noteworthy is the revenue momentum in our sales of sponsorship and advertising programs to blue chip advertising clients. In the first quarter we were able to increase our high margin sponsorship and other revenues from the strong fourth quarter level, driving our gross margin to a record 61%. The strength in this area is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to both expanding our programs with established clients such as Johnson & Johnson, Kodak (company) Kodak - The photographic company responsible for Photo CD. http://kodak.com/. , and Warner Lambert Lambert may refer to
fast-food restaurant chain throughout the world; recognized by golden arches. [Am. Culture: Misc.] See : Ubiquity , Clairol Clairol is a personal care products division of Procter & Gamble and was formerly the largest independent hair products company in the world. P&G-Clairol makes hair coloring, hair spray, shampoo, hair conditioner, and styling consumables. and Ford." As of April 30, 2000, Alloy's database of Generation Y names reached approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 3.6 million, of which approximately 590,000 were established buyers. Alloy's registered online user base grew to 2.1 million registrants versus 600,000 as of April 30, 1999. Mr. Diamond concluded, "We believe our operating strategies will enable us to maintain the excellent growth trends of the past several quarters and keep us on track to meet analysts' targets of breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations financial performance in the fourth quarter. Going forward, we see significant potential in the marketplace to further leverage and monetize Monetize 1. To convert into money. 2. To convert from securities into currency that can be used to purchase goods and services. Notes: For example, you'll often hear Internet marketers talk about "monetizing website visitors. our assets and develop high margin revenue streams. We believe that the combination of our multiple access points to the Generation Y market, purchasing relationship with our vibrant and growing database, and financial resources positions us to take full advantage of the opportunities we face." About Alloy Online Alloy Online is a leading Web-centric direct marketer providing community, content, commerce, and entertainment to Generation Y, one of the fastest growing segments of the Internet population. Its convergent media model - which is centered around its Web site ( http://www.alloy.com ), and is complemented by its Alloy Online e-zine and its 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. , Alloy - has a total reach of more than 10 million individuals per month. Together, these components offer a unique blend of services through which teens can interact, 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). , cosmetics cosmetics, preparations externally applied to change or enhance the beauty of skin, hair, nails, lips, and eyes. The use of body paint for ornamental and religious purposes has been common among primitive peoples from prehistoric times (see body-marking). and 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. . For further information regarding Alloy Online, please visit the company's Web site ( http://www.alloy.com ) and click on 'Investor Info' or call the investor information line at 877-ALLOY-IR. 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 maintenance of growth trends, leveraging our multi-channel distribution model, monetizing the revenue opportunities in our community and content business, continuing to develop and reinforce the Alloy brand, developing multiple and high margin revenue streams, maintaining multiple access points to the Generation Y market, continuing to grow our database and utilizing our financial resources. 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 expected future losses; our planned sales and marketing campaigns may not broaden the appeal of our Web site or attract sufficient additional visitors to our Web site; our planned sales and marketing campaigns may not increase our revenues or generate additional revenue streams; we lack experienced management and personnel; we may fail to further develop our internal sales and marketing organization to attract promotions, sponsorship, advertising and other revenues; increased competition in the online commerce market would reduce our revenues; and we may not be able to adapt as Internet technologies and customer demands continue to evolve.
CONDENSED STATEMENT OF OPERATIONS
(In thousands, except per share data)
Three Months Three Months
Ended Ended
04/30/1999 04/30/2000
(unaudited) (unaudited)
Net merchandise revenues $2,391 $ 5,451
Sponsorship and other revenues 163 2,209
-------------------------------
Total revenues 2,554 7,660
Cost of goods sold 1,249 3,001
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Gross profit 1,305 4,659
Selling and marketing expenses 2,610 8,497
General and administrative expenses 919 2,089
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Total operating expenses 3,529 10,586
Loss from operations (2,224) (5,927)
Interest income (expense), net (78) 433
-------------------------------
Net loss before goodwill amortization ($2,302) ($5,494)
Goodwill amortization 0 (811)
Net loss after goodwill amortization ($2,302) ($6,305)
Basic net loss per common
share before goodwill amortization ($0.27) ($0.36)
Goodwill amortization $0.00 ($0.05)
Basic net loss per common
share after goodwill amortization ($0.27) ($0.41)
Diluted net loss per common
share before goodwill amortization ($0.26) ($0.36)
Goodwill amortization $0.00 ($0.05)
Diluted net loss per common
share after goodwill amortization ($0.26) ($0.41)
Weighted average common shares
outstanding:
Basic 8,711,878 15,245,159
Diluted 8,953,880 15,245,159
SELECTED BALANCE SHEET DATA
(In thousands)
January 31, 2000 April 30, 2000
(audited) (unaudited)
Assets
Current Assets
Cash and cash equivalents $12,702 $18,024
Marketable securities 20,971 41,275
Accounts receivable, net 2,693 2,629
Inventories, net 3,981 4,457
Prepaid catalog costs 1,011 1,009
Other current assets 1,281 1,373
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Total current assets 42,639 68,767
Property and equipment, net 2,187 2,540
Goodwill, net of amortization 12,349 11,539
Other assets 493 1,492
-------------------------------
Total assets $57,668 $84,338
Liabilities and Stockholders' Deficit
Current Liabilities
Accounts payable and accrued
expenses $12,401 $ 9,311
Other current liabilities 56 32
-------------------------------
Total current liabilties 12,457 9,343
Capital lease obligation, less current
portion 3 0
Stockholders' (Deficit) Equity 45,208 74,995
-------------------------------
Total liabilities and
stockholders' (deficit) equity $57,668 $84,338
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