Business News

Mandalay Media, Inc. Announces First Quarter of Positive Adjusted EBITDA

Thursday 16. July 2009 - Revenue growth and AMV/Twistbox operating efficiencies generate improved fourth quarter results

Mandalay Media, Inc. (OTCBB: MNDL) (the “Company” or “Mandalay Media”) announced today results for its fourth fiscal quarter and fiscal year ended March 31, 2009. The results include the operating results of AMV Holding Limited (“AMV”), a European leader in direct-to-consumer mobile Internet content and services, from October 2008, when it was acquired by the Company. The Company did not have operations prior to February, 2008. For the quarter ended March 31, 2009, the Company had quarterly revenue of approximately $9.9 million, EBITDA, excluding stock option expense, restructuring charges and foreign exchange gains/losses (“Adjusted EBITDA”), a non-GAAP measure, of $0.9 million, and a net loss from continuing operations of $32.7 million, inclusive of a goodwill impairment charge of $34.8 million. Adjusted EBITDA improved by approximately $1.0 million on a quarterly sequential basis.

For the fiscal year ended March 31, 2009, Mandalay Media had revenue of $31.3 million, Adjusted EBITDA of ($2.0) million and a net loss from continuing operations of $41.6 million, inclusive of goodwill impairment, of $31.8 million or $1.14 per share loss from continuing operations.

Q4 Operating Highlights include:

Direct to Consumer Market Expansion: Expansion of direct-to-consumer services in key markets including the United States, Russia, Spain and Brazil. Expansion of Content Services for Apple’s iPhone platform.
New Product Development: Launch of Vodafone UK Gaming Portal, monetizing WAP advertising inventory and implementation of credit card billing for direct to consumer mobile content and services.
Play-for-Prizes Expansion: Expanded play-for-prizes titles with leading publishers including Konami, GameLoft and Digital Chocolate. Executed new distribution agreements with leading mobile operators for distribution in Canada, UK and France. Current development of Play for Prizes titles to be launched with Apple’s release of its 3.0 operating system update for iPhone and iTouch platforms.
Improved Operating Efficiencies: Completion of the Company’s previously announced program to reduce head count and annualized operating expenses by $3.8 million in connection with the AMV acquisition.
Fiscal Year 2010 Outlook:

For the fiscal year ending March 31, 2010, the Company is currently on a run rate to generate revenue in excess of $40 million and Adjusted EBITDA, as defined above, in excess of $3.5 million. The Company expects organic growth, operating efficiencies and cost reductions throughout the year to deliver improved results for fiscal 2010. Some of the areas expected to contribute to the results include:

Territory Expansion: As part of the AMV acquisition, the Company will continue to expand it direct to consumer products and services in new European, North American and Latin American markets. Additional Play four Prizes distribution has already been contracted with new North American and European mobile operators for deployment in the second half of fiscal 2010.
Product Expansion: In the first half of fiscal 2010, the Company has begun to monetize advertising inventory which it has deployed within its WAP sites and applications globally. The Company has developed single player and Play for Prizes game titles that are currently being deployed on new platforms including App Stores from Apple, Blackberry and Nokia. In conjunction with Vodafone, the Company has deployed Vodafone UK’s gambling portal with third parties that include Ladbrokes, William Hill and other local gaming partners. The Company is in the process of expanding the portal to other Vodafone markets where regulations support mobile gambling.
M&A Activity: The Company is currently exploring several acquisition opportunities within its core mobile business that are focused around territory expansion, product expansion, content diversification and the extension of its products and services to on-line distribution.
“This was a transformational year for Mandalay Media on all fronts,” stated Ian Aaron, CEO of Twistbox, the Company’s wholly-owned subsidiary. “Through the combination of AMV and Twistbox, we have strengthened our position as a global leader in mobile lifestyle content and tournament based social games. For our 2009 Fiscal Year the Company more than doubled revenue, drove month over month improvements in profitability and created the necessary scale and industry positioning to attract numerous acquisition targets.”