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Alloy Posts Net Loss on Revenue Rise

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NEW YORK Alloy, an online and offline Gen Y marketing company, today reported revenue of $80.5 million for the second fiscal quarter, up 55 percent from the year-ago period.

Revenue from merchandise sales fell 5 percent to $30 million, while sponsorship and other revenue rose 147 percent to $50.5 million. The New York-based company attributed the significant growth in sponsorship and other revenue to a larger advertising sales force and client base, as well as a broader media-services offering resulting from internal development and strategic acquisitions.

Alloy recorded a net loss for the second fiscal quarter ending July 31 of $300,000, versus a net income of $500,000 for the same time a year ago. Net loss attributable to common stockholders for the fiscal quarter was $1 million, or 2 cents per diluted share, compared with last year's net income attributable to common stockholders of $100,000 or 0 cents per diluted share.

For its second fiscal quarter, Alloy generated $1.6 million in earnings before income taxes and acquired intangible asset amortization, excluding stock-based compensation expenses of $300,000.

Earlier this month, Alloy unveiled its plans to buy one of its chief competitors, Delia's, in a deal valued at about $50 million [IQ Daily Briefing, Aug. 1]. If the acquisition closes as expected in early September, Alloy said it anticipates fiscal third-quarter merchandise revenue of $50-55 million, sponsorship revenue of $66-69 million and diluted earnings per share of 1-7 cents.

For the full fiscal year, Alloy projected merchandise revenue of $210-220 million, sponsorship and other revenue of $200-210 million and diluted earnings per share of 1-8 cents.

Alloy stock (ALOY) was trading midday on the Nasdaq at $6.75, down 30 cents or 4.3 percent. Its 52-week high is $14.75 and 52-week low is $4.15.