Alloy Online Reports Record Fourth Quarter and Fiscal 1999 Financial Results.Business Editors NEW YORK--(BUSINESS WIRE)--March 16, 2000 Fourth Quarter Revenues Increase 346%; Gross Margin Approaches 59% Fourth Quarter Results Exceed Analysts' Expectations Annual Revenues More Than Triple To $31.2 Million 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) (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 fourth quarter and fiscal year ended January January: see month. 31, 2000, which exceeded analysts' expectations for revenues, gross margin and net loss per share. Total revenues for the fourth quarter rose 346% to $15.7 million compared to $3.5 million in the fourth quarter of 1998, and 71% on a sequential One after the other in some consecutive order such as by name or number. basis compared to $9.1 million in the third quarter of 1999. Gross profit for the fourth quarter reached $9.2 million, or 58.5% of revenues, up substantially from $1.8 million, or 51.1% of revenues in the comparable period last year. 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 fourth quarter were $13.7 million versus $2.7 million in the fourth quarter of 1998. The net loss before goodwill amortization for the quarter was $4.0 million, or $0.28 per basic share, compared to a net loss of $1.0 million, or $0.12 per basic share, last year. After goodwill amortization, the net loss for the quarter was $4.4 million, or $0.30 per basic share. Total revenues for fiscal year 1999 increased 205% to $31.2 million compared to $10.2 million last year. Gross profit improved to $17.4 million, or 55.8% of revenues, versus $4.7 million, or 46.3% of revenues in fiscal 1998. Operating expenses were $33.2 million compared to $10.8 million last year. The net loss in fiscal 1999 before goodwill amortization and a non-recurring charge related to the early retirement of debt was $14.3 million, or $1.12 per basic share. This compares to a net loss of $6.4 million, or $0.75 per basic share in the prior year. After goodwill amortization and the extraordinary item, the net loss for the year was $14.9 million or $1.17 per basic share. "We are very pleased to conclude our first year as a public company with strong financial performance across the board, a leading market position, and ongoing momentum within each of our Generation Y properties, stated Matthew Matthew one of the twelve disciples. [N.T.: Matthew] See : Evangelism C. Diamond, Chairman and Chief Executive Officer. "Our successful initial public offering last May provided us with the capital and resources to execute our strategies for growth and expansion on all fronts. Indeed, the year was highlighted by numerous important accomplishments. We developed strategic marketing alliances with premier partners such as Yahoo!, Excite and Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. Hotmail A Web-based e-mail service from Microsoft that is available free or paid, based on message storage and attachment capacity, security and other features. Originally developed by Hotmail Corporation and acquired by Microsoft in 1998, Hotmail became the fastest growing e-mail service on the ; enhanced our operating team operating team Surgery The participants–surgeons, nurses, etc–in a sterile surgical procedure performed under general–less commonly, local anesthesia with the addition of experienced marketing, 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. and sales executives while increasing overall headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. from 25 to 120; built an impressive list of blue chip advertising clients including Procter
http://kodak.com/. and Johnson & Johnson; launched the first teen-focused auction Web site; entered into a wide-ranging wide-rang·ing adj. Covering a wide area; including much: a pianist's wide-ranging repertoire; a wide-ranging interview. consumer marketing venture with Bounty/SCA; and made two strategic acquisitions that significantly extend Alloy's multi-media platform. The recent strategic investment Alloy received from Liberty Digital, Inc. further validates the success of our efforts thus far and highlights the opportunity for additional value creation that lies ahead." Mr. Diamond continued, "As we previously announced, we had a record holiday season, which was marked by continued customer migration toward Internet shopping, fueling a dramatic increase in our fourth quarter sales. Merchandise revenue during the period increased four-fold Adj. 1. four-fold - having four units or components; "quadruple rhythm has four beats per measure"; "quadruplex wire" quadruple, quadruplex, quadruplicate, fourfold compared to last year's fourth quarter. Our sponsorship and other revenues increased sharply, reaching $2 million from a base of virtually zero in the fourth quarter of 1998. We are particularly enthusiastic about this growth, which demonstrates our success in building an in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. sales team that will significantly expand its marketing efforts going forward. Importantly, our broad-based broad-based Of or relating to an index or average that provides a good representation of the overall market. The S&P 500 and NYSE Composite are generally regarded as broad-based stock indexes, while the popular Dow Jones Industrial Average is biased growth in revenues was complemented by a robust gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. of 58.5%." As of January 31, 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. 3.2 million, of which over 500,000 were established buyers. This compares to a total database of 1.4 million names and 160,000 buyers at the beginning of the year. Mr. Diamond concluded, "We are very pleased with the explosive growth Alloy demonstrated in 1999. We tripled our revenues to more than $30 million, increased our gross margins from 46% and sustained them well above 50%, and firmly established the Alloy brand as a primary community, content and commerce resource for teens. Looking ahead, we plan to leverage our strong market and financial position and strategic relationship with Liberty Digital to pursue additional marketing partners, commercial alliances and acquisitions that will deliver continued high margin revenue growth and Web site traffic." About Alloy Online Alloy Online is a leading 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. 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 (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 (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 continued customer reception to our merchandise offerings; strength of our gross margins; the success of our new marketing programs with blue chip companies; the successful implementation of our operating and growth strategies, generating increased traffic flows to our Web site; our ability to leverage our Web site, direct marketing and e-mail magazine properties; our ability to maintain and sell a deeper selection of high margin merchandise; and our ability to leverage and grow our database. 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 operating and growth strategies may not generate increased traffic flows to our Web site, broaden the appeal of our Web site, or attract additional or repeat traffic to our Web site; we lack experienced management and personnel; we may not be able to adapt as Internet technologies and customer demands continue to evolve Evolve may refer to several terms:
adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. .
Alloy Online, Inc.
CONDENSED STATEMENT OF OPERATIONS
(In thousands, except per share data)
Three Months Three Months Fiscal Year Fiscal Year
Ended Ended Ended Ended
01/31/1999 01/31/2000 01/31/1999 01/31/2000
(unaudited) (unaudited) (audited) (audited)
Net merchandise
revenues $ 3,436 $ 13,656 $ 10,085 $ 28,254
Sponsorship and
other revenues 73 2,005 125 2,912
-------- --------- --------- ---------
Total revenues 3,509 15,661 10,210 31,166
Cost of goods sold 1,715 6,492 5,486 13,765
-------- --------- --------- ---------
Gross profit 1,794 9,169 4,724 17,401
Selling and
marketing expenses 2,287 11,787 9,166 27,822
General and
administrative
expenses 392 1,958 1,683 5,423
-------- --------- --------- ---------
Total operating
expenses 2,679 13,745 10,849 33,245
Loss from
operations (885) (4,576) (6,125) (15,844)
Interest income
(expense), net (100) 549 (239) 1,542
-------- --------- --------- ---------
Net loss before
goodwill
amortization
and extraordinary
item ($ 985) ($ 4,027) ($ 6,364) ($ 14,302)
Goodwill amortization 0 (332) 0 (332)
Charge for early
retirement of debt 0 0 0 (235)
-------- --------- --------- ---------
Net loss after
goodwill
amortization
and extraordinary
item ($ 985) ($ 4,359) ($ 6,364) ($ 14,869)
-------- --------- --------- ---------
Basic net loss
per common share
before goodwill
amortization
and extraordinary
item ($ 0.12) ($ 0.28) ($ 0.75) ($ 1.12)
Goodwill
amortization $ 0.00 ($ 0.02) $ 0.00 ($ 0.03)
Extraordinary
loss from
early retirement
of debt $ 0.00 $ 0.00 $ 0.00 ($ 0.02)
Basic net loss
per common share
after goodwill
amortization and
extraordinary
item ($ 0.12) ($ 0.30) ($ 0.75) ($ 1.17)
Diluted net
loss per
common share
before goodwill
amortization
and extraordinary
item ($ 0.11) ($ 0.28) ($ 0.71) ($ 1.12)
Goodwill
amortization $ 0.00 ($ 0.02) $ 0.00 ($ 0.03)
Extraordinary
loss from early
retirement
of debt $ 0.00 $ 0.00 $ 0.00 ($ 0.02)
Diluted net loss
per common share
after goodwill
amortization and
extraordinary
item ($ 0.11) ($ 0.30) ($ 0.71) ($ 1.17)
Weighted average
common shares
outstanding:
Basic 8,479,727 14,404,591 8,479,727 12,722,676
Diluted 8,953,880 14,404,591 8,953,880 12,722,676
Alloy Online, Inc.
SELECTED BALANCE SHEET DATA
(In thousands)
January 31, 1999 January 31, 2000
(audited) (audited)
Assets
Current Assets
Cash and cash equivalents $ 2,983 $12,702
Marketable securities 0 20,971
Accounts receivable, net 145 2,693
Stock subscription receivable 2,500 0
Inventories, net 810 3,981
Prepaid catalog costs 426 1,011
Other current assets 34 1,281
------- -------
Total current assets 6,898 42,639
Property and equipment, net 178 2,187
Goodwill, net of amortization 0 12,349
Other assets 331 493
------- -------
Total assets $ 7,407 $57,668
Liabilities and Stockholders' Deficit
Current Liabilities
Accounts payable and accrued
expenses $ 1,558 $12,401
Other current liabilities 74 56
------- -------
Total current liabilities 1,632 12,457
Promissory notes, net of unamortized
discount 3,945 0
Capital lease obligation, less
current portion 40 3
Series A convertible redeemable
preferred stock 4,836 0
Stockholders' (Deficit) Equity (3,046) 45,208
------- -------
Total liabilities and
stockholders' (deficit)
equity $ 7,407 $57,668
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