Business News

Medialink Reports Third Quarter 2008 Results

Monday 17. November 2008 - Medialink Worldwide Incorporated (NASDAQ:MDLK), a leading provider of diversified media services for professional communicators and marketers, today reported financial results for the third quarter ended September 30, 2008.

As previously announced, on August 29, 2008, the Company transferred its ownership interests in its Teletrax subsidiaries to Koninklijke Philips Electronics N.V. and its affiliates. Accordingly, prior period results of operations and financial position have been reclassified to reflect Teletrax as a discontinued operation.

Also, as previously announced on October 1, 2008, the Company sold the client list of Medialink UK Limited, its UK-based media communications services subsidiary, to World Television Group plc. The results of operations and financial position include Medialink UK Limited as a component of continuing operations.

Revenues for the three months ended September 30, 2008, of $5.3 million decreased by 28.4% from revenues of $7.3 million in the comparable 2007 period. Revenues from the Company’s US-based media communications services business increased $90,000, or 1.8%, and included $466,000 and $631,000 in 2008 and 2007, respectively, of revenue recognized under a minimum commitment arrangement for which no services were provided. Exclusive of such minimum commitment arrangement, US-based media communications services revenues increased $255,000 or 6.0%. Revenues from the Company’s UK-based media communications services business decreased $2.2 million as a result of winding down this operation during the period.

The Company incurred an operating loss of $948,000 and an operating loss before impairments and other charges of $897,000 in the third quarter of 2008, as compared to an operating loss of $1.2 million in the comparable 2007 quarter. Exclusive of the results of operations of Medialink UK Limited, which incurred an operating loss of $450,000 in the 2008 period and had operating income of $60,000 in the 2007 period, the operating loss before impairments and other charges was $447,000 in the third quarter of 2008 as compared to a loss of $1.2 million in the comparable 2007 quarter. The operating loss in the third quarter of 2008 includes a charge of $51,000 related to previously completed exit activities.

For the three months ended September 30, 2008, the Company reported a net loss of $1.0 million, or $0.15 per share, consisting of a loss from continuing operations of $1.1 million, or $0.17 per share, and income from discontinued operations of $113,000, or $0.02 per share. Income from discontinued operations in the 2008 quarter included a loss from operations for Teletrax of $299,000 and a gain on disposal of Teletrax of $412,000. For the comparable period in 2007, the Company reported a net loss of $1.6 million, or $0.25 per share, which consisted of a loss from continuing operations of $862,000, or $0.13 per share, and a loss from discontinued operations of $731,000, or $0.12 per share, which represented a loss from operations for Teletrax. The Company had cash and working capital totaling $7.1 million and $7.2 million, respectively, at September 30, 2008.

“Revenues in the third quarter increased in our US-based business amid rough economic times and a broadcast media environment that was saturated with election coverage,” said Laurence Moskowitz, President and Chief Executive Officer of Medialink. “Deteriorating economic conditions continue to pose a significant challenge to us and others in media and marketing communications, in particular, and businesses in general on a worldwide basis. In light of these difficult economic conditions, we are currently forecasting a $1.4 million decline in revenues for our US-based business in the fourth quarter as compared to the comparable 2007 quarter.

“Following the dispositions of Teletrax and our UK-based media communications services business we have re-focused our efforts on our US- based business, developing and promoting the range of Internet-based video and audio services we have introduced during the past 18 months. We also continue to adjust our cost base to be properly aligned with changing client needs and are instituting even stricter cost controls,” concluded Moskowitz.

Revenues for the nine months ended September 30, 2008, of $16.9 million decreased by 23.7% from revenues of $22.2 million in the comparable 2007 period. Revenues from the Company’s US-based media communications services business decreased $1.0 million, or 6.2%, and included $466,000 and $631,000 in 2008 and 2007, respectively, of revenue recognized under a minimum commitment arrangement for which no services were provided. Exclusive of such minimum commitment arrangement, revenues decreased $804,000 or 5.4%. Revenues from the Company’s UK-based media communications services business decreased $4.3 million as a result of a decline in business and winding down the operation during the period.

The Company incurred an operating loss of $8.0 million and an operating loss before impairments and other charges of $3.8 million in the first nine months of 2008, as compared to an operating loss of $3.9 million in the comparable 2007 period. Exclusive of the results of operations of Medialink UK Limited, which incurred operating losses of $1.0 million and $243,000 in the 2008 and 2007 periods, respectively, the operating loss before impairments and other charges was $2.8 million in the first nine months of 2008 as compared to a loss of $3.6 million in the comparable 2007 period. The operating loss in the first nine months of 2008 includes a goodwill impairment charge of $3.4 million related to the Company’s media communications services business, an impairment charge of $605,000 related to long-lived assets of Medialink UK Limited, and a charge of $170,000 related to exit activities.

For the nine months ended September 30, 2008, the Company reported a net loss of $11.6 million, or $1.80 per share, consisting of a loss from continuing operations of $8.2 million, or $1.28 per share, and a loss from discontinued operations of $3.3 million, or $0.52 per share. The loss from discontinued operations in the 2008 period included a loss from operations for Teletrax of $3.7 million and a gain on disposal of Teletrax of $412,000. For the comparable period in 2007, the Company reported a net loss of $2.4 million, or $0.38 per share, which consisted of a loss from continuing operations of $2.9 million, or $0.45 per share, and income from discontinued operations of $441,000, or $0.07 per share. Income from discontinued operations in the 2007 period included a loss from operations for Teletrax of $2.2 million and a gain on sale of the Company’s U.S. Newswire division of $2.6 million.