MARINA DEL REY, Calif., Aug. 20 /PRNewswire-FirstCall/ -- AdStar,
Inc. (OTC:ADST) (BULLETIN BOARD: ADST) , the leading provider of
e-commerce transaction services and payment processing software for
the digital and print advertising and publishing industries, today
reported its operating results for the three months ended June 30,
2008. Net revenues for the three months ended June 30, 2008 totaled
$1,038,000, compared with net revenues of $1,168,000 in 2007. ASP
revenues declined by $91,000, or 18%, and Customization and other
revenues declined $35,000, or 29%. The decline in ASP revenues is
generally a result of the recent declines in classified advertising
impacting the newspaper publishing industry as a whole, resulting
in the loss of several customers and reduced processing volume in
several others. The revenue reductions have been partially offset
by revenue increases from four new ASP customers in 2008. AdStar
reported a net loss applicable to common shareholders of $217,000,
or $0.01 per share, during the three months ended June 30, 2008,
versus a net loss of $630,000, or $0.03 per share, in 2007. The
loss in 2008 was primarily due to abandoned acquisition costs.
During the first fiscal quarter ended March 31, 2008, the Company
suspended incurring additional costs for its mobile advertising
development initiative, resulting in a significant reduction in
expenses reflected during the second fiscal quarter ended June 30,
2008. Excluding non-cash charges and direct abandoned acquisition
costs, the Company earned a positive margin on operations (a
non-GAAP measure) of $47,000 during the quarter ended June 30, 2008
(See table at end of this release for further non-GAAP
information). "Newspaper print advertising has undergone
unprecedented declines that are beyond analyst expectations for the
industry," stated Leslie Bernhard, president and chief executive
officer of AdStar, Inc. "This has caused our revenues to decline in
a corresponding magnitude. AdStar has responded by dramatically
reducing costs. We have postponed our mobile advertising
initiative, along with the attendant costs, as well as the
significant costs relating to our SEC reporting; which has resulted
in a level of stability in our cash flow. We are not aware of any
significant pending customer cancellations at this time, and we are
at the same time adding new customers to our payment processing
software and to our web-based ad services. We believe that there
are opportunities arising from the adversity in the industry,
whereby publishers are seeking efficiencies in their operations
that can be facilitated by AdStar. Our payment processing software
remains the premier solution in the industry for processing both
circulation and advertising costs, and we are exploring wider
applications for this sophisticated solution. We believe that
AdStar has a platform for growth as the industry reaches a new
equilibrium." As a part of the Company's current efforts to
conserve cash, AdStar has determined that it will suspend its
quarterly filings on Form 10-Q. The Company intends to continue to
report to its stockholders its quarterly and annual financial
results in press releases and to maintain the corporate governance
improvements the Company has made in recent years. About AdStar,
Inc. AdStar, Inc. is a leading provider of e-commerce transaction
services and payment processing solutions for the digital and print
advertising and publishing industries. AdStar's proprietary suite
of e-commerce services includes remote ad-entry software, web-based
ad transaction and campaign management services, and payment
processing and content processing solutions. AdStar is
headquartered in Marina del Rey, Calif. and its Edgil Associates
subsidiary is located in Billerica, Mass. For more information on
AdStar, visit http://www.adstar.com/. Forward Looking Statements
This release contains forward-looking statements concerning the
business and products of the Company. Actual results may differ
from those projected or implied by such forward-looking statements
depending on a number of risks and uncertainties including, but not
limited to, the following: historical business has already matured,
new online business is unproven and may not generate expected
revenues, and Internet security risks. Other risks inherent in the
business of the Company are described in Securities and Exchange
Commission filings, including the Company's annual report on Form
10-KSB. The Company undertakes no obligation to revise or update
any forward-looking statements to reflect events or circumstances
after the date of this release. AdStar Company Contact: Jeff Baudo,
760-308-0423, Financial Tables to Follow AdStar, Inc. and
Subsidiary Consolidated Statements of Operations For the Three and
Six Months Ended June 30, 2008 and 2007 Three months ended Six
months ended June 30, June 30, 2008 2007 2008 2007 ASP, net
$401,000 $492,000 $822,000 $951,000 Licensing and software 550,000
554,000 1,101,000 1,188,000 Customization and other 87,000 122,000
167,000 394,000 Net revenues 1,038,000 1,168,000 2,090,000
2,533,000 Total cost of revenues 322,000 528,000 757,000 1,107,000
Gross profit 716,000 640,000 1,333,000 1,426,000 General and
administrative expense 481,000 518,000 1,126,000 1,082,000 Product
maintenance and development costs 249,000 286,000 636,000 604,000
Selling and marketing expense 181,000 468,000 523,000 1,353,000
Amortization of customer list 22,000 22,000 44,000 44,000 Loss from
operations (217,000) (654,000) (996,000) (1,657,000) Interest
income 4,000 28,000 10,000 38,000 Interest expense (2,000) (1,000)
(3,000) (3,000) Loss before income taxes (215,000) (627,000)
(989,000) (1,622,000) Provision for income taxes 2,000 3,000 5,000
6,000 Net loss applicable to common stockholders $(217,000)
$(630,000) $(994,000) $(1,628,000) Loss per share - basic and
diluted $(0.01) $(0.03) $(0.05) $(0.08) Weighted average number of
shares - basic and diluted 20,468,882 20,208,714 20,377,726
20,169,644 AdStar, Inc. and Subsidiary Calculation of Margin on
Operations Six Months Quarter ended Quarter ended ended March 30,
2008 June 30, 2008 June 30, 2008 ASP, net $421,000 $401,000
$822,000 Licensing and software 551,000 550,000 1,101,000
Customization and other 80,000 87,000 167,000 Net revenues
1,052,000 1,038,000 2,090,000 Total Cost of Revenues * 345,000
272,000 617,000 General and administrative expense * 463,000
336,000 799,000 Development and maintenance costs * 377,000 247,000
624,000 Selling and marketing expense * 201,000 136,000 337,000
Total Direct Costs * 1,386,000 991,000 2,377,000 Margin on
operations (334,000) 47,000 (287,000) Depreciation &
amortization 101,000 72,000 173,000 Stock based charges 279,000
56,000 335,000 Abandoned acquisition costs 65,000 136,000 201,000
Income (loss) from operations (779,000) (217,000) (996,000)
Interest income 6,000 4,000 10,000 Interest expense (1,000) (2,000)
(3,000) Net income (loss) before taxes (774,000) (215,000)
(989,000) Provision for income taxes 3,000 2,000 5,000 Net income
(loss) $(777,000) $(217,000) $(994,000) * non-GAAP presentation
excluding depreciation, amortization, stock-based charges, and
abandoned acquisition costs; shown separately The Company defines
margin on operations as net loss before interest, taxes,
depreciation and amortization, non-cash expense for securities, and
direct abandoned acquisition costs. Other companies may calculate
margin on operations differently. Management believes that the
presentation of margin on operations provides a meaningful measure
of performance that approximates cash flow before interest expense
and one-time costs, and is meaningful to investors. AdStar, Inc.
and Subsidiary Consolidated Balance Sheets June 30, December 31,
2008 2007 Assets Current assets: Cash and cash equivalents $357,000
$717,000 Accounts receivable, net of allowance for doubtful
accounts of $71,000 for both periods 467,000 571,000 Notes
receivable from officers - current portion 10,000 9,000 Prepaid and
other current assets 94,000 126,000 Total current assets 928,000
1,423,000 Notes receivable from officers, net of current portion
193,000 197,000 Property and equipment, net 84,000 109,000
Capitalized and purchased software, net 130,000 261,000 Intangible
assets, net 1,088,000 1,133,000 Goodwill 2,132,000 2,132,000 Other
assets 35,000 40,000 Total assets $4,590,000 $5,295,000 Liabilities
and Stockholders' Equity Current liabilities: Due to publications
$1,192,000 $1,223,000 Accounts payable and accrued expenses 586,000
630,000 Deferred revenue and customer deposits - current portion
145,000 113,000 Capital lease obligations - current portion 7,000
6,000 Total current liabilities 1,930,000 1,972,000 Deferred
revenues, net of current portion 23,000 24,000 Capital lease
obligations, net of current portion 17,000 20,000 Total liabilities
1,970,000 2,016,000 Commitments and contingencies Stockholders'
equity: Preferred Stock, par value $0.0001; authorized 5,000,000
shares; 0 issued and outstanding - - Common Stock, par value
$0.0001; authorized 40,000,000 shares; 20,543,675 and 20,209,648
issued and outstanding, respectively 2,000 2,000 Additional paid-in
capital 27,386,000 27,051,000 Treasury stock; 67,796 shares, at
cost, respectively (68,000) (68,000) Accumulated deficit
(24,700,000) (23,706,000) Total stockholders' equity 2,620,000
3,279,000 Total liabilities and stockholders' equity $4,590,000
$5,295,000 DATASOURCE: AdStar, Inc. CONTACT: Jeff Baudo of AdStar,
Inc., +1-760-308-0423, Web site: http://www.adstar.com/
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