SOURCE: Idle Media, Inc.

August 24, 2010 08:30 ET

Idle Media, Inc. Announces Second Quarter 2010 Financial Results

Revenues and Net Income Increase Substantially Versus 2009

LEESPORT, PA--(Marketwire - August 24, 2010) - Idle Media, Inc. (OTCBB: IDLM) today announced its second quarter 2010 financial results.

--  Q2 2010 revenues increased 166.3% from Q1 2010 to $469,773, versus
    $176,387 in the comparable period in 2009. Revenues increased 137.3%
    during the nine month period ending June 30, 2010 to $1,004,673 versus
    $423,294;

--  Net income was $338,103 in Q2 2010, an increase of 425% compared to the
    same period in 2009. Net income was $637,375 during the nine month
    period ending June 30, 2010, an increase of 373.6% compared to the same
    period in 2009;

--  Q2 2010 Net profit margin was 72% versus 36.5% in the comparable period
    in 2009;

--  Third party advertising revenue increased 207.5% from Q1 2010 to
    $459,499;

--  Q2 2010 unique visitors increased 60.9% from Q1 2010 to 8,132,488;

--  Q2 2010 page views increased 42.7% from the comparable period in 2009;

--  Subscription revenue declined approximately 92% as the Company
    refocused its business model on advertising revenues.

Second Quarter 2010 Financial Results

Revenues

Q2 2010 revenues increased 166.3% from Q1 2010 to $469,773, versus $176,387 in the comparable period in 2009. Revenues increased 137.3% during the nine month period ending June 30, 2010 to $1,004,673 versus $423,294.

During 2010 management made the decision to focus its business model towards increasing revenue through third-party and sponsored advertising. As a result, subscription revenues declined nearly 92% from the three month period ended June 30, 2009 to 2010. Management believes this is a direct result of its implementation of the new revenue strategy. As a result, the Company experienced a dramatic 207.5% increase in third-party advertising revenue and a 22.7% increase in sponsorship revenues during the three months ended June 30, 2010 compared to the three months ended June 30, 2009, as it added new advertising providers during the current fiscal year to date ended June 30, 2010.

"We are pleased that our decision to grow revenues through third-party advertising versus subscription memberships has proven viable," stated Mr. Marcus Frasier, President and CEO of Idle Media, Inc. "As we continue to add to our stable of online properties we believe this strategy will serve our Company and its shareholders well."

Expenses

Overall expenses increased by 17.6% from the three months ended June 30, 2009 to the comparable period ended June 30, 2010. The majority of the increase is attributable to a material increase in general and administrative expenses, primarily related to professional and consulting fees.

During the three months ended June 30, 2010, approximately 46.4% of aggregate expenses are attributable to server costs. Server costs are directly related to the hosting of Company websites, storage of content and archival of data. These costs are integral to the Company's business and are correlated with the number of users and amount of content available on Idle Media's web sites. Therefore, management believes that it will be required to scale server capacity, and thereby, server costs, in accordance with increases and decreases in website traffic.

Net Income

In the three months ended June 30, 2010, the Company realized net income of $338,103, which was a $273,698 (or 425.0%) increase compared to the three month period ended June 30, 2009, when net income was $64,405. Net profit margin during the three months ended June 30, 2010 was 72.0%, compared to 36.5% in the year ago three months ended June 30, 2009.

During the nine months ended June 30, 2010, net income was $637,375, which grew $502,807, or 373.6%, over the comparable period ended June 30, 2009, during which the Company recorded net income of $134,568.

Liquidity and Capital Resources

As of June 30, 2010, the Company had $248,926 of cash on hand compared to a June 30, 2009 balance of $55,857 of cash on hand. This increase in cash was generated organically, primarily through operating activities. During the nine months ended June 30, 2010, the Company generated cash from operating activities of $400,852, compared to generating cash from operating activities of $132,463 in the nine months ended June 30, 2009.

Cash utilized in investing activities was $61,899 for the nine months ended June 30, 2010 compared to no cash used during the same period in 2009. Cash used was primarily for software development and software purchases, during the nine months ended June 30, 2010, necessary for the pursuit of the Company's business objectives and growth strategy.

Cash used by financing activities was $160,721 for the nine months ended June 30, 2010 compared to cash used of $76,605 in 2009. The reduction in donated capital of $160,824 during the nine month period ended June 30, 2010 and $76,605 in the nine month period ended June 30, 2009 is attributable to distributions made to Idle Media, LLC, which was the sole equity member of DatPiff, LLC prior to the acquisition by us of DatPiff, LLC.

Mr. Frasier added, "Given what we believe to be a competitive edge in the advertising sales market, we are confident our strengths will allow us to achieve our planned objectives, and generate adequate levels of working capital for us to continue self-funding accretive acquisitions. This is important for our shareholders, as it does not dilute their holdings by using our equity to make acquisitions."

Website Traffic

During the three months ended June 30, 2010, there were 8,132,488 unique visitors to www.datpiff.com, which was 60.9% greater than the comparable period ended June 30, 2009, when it had 5,053,551 unique visitors. For the individuals who came to the site in the three months ended June 30, 2009, we recorded 125,984,906 page views across 18,705,424 visits, for an average of 6.74 page views per visit. In comparison, during the three months ended June 30, 2010 we accounted for 26,690,104 visits (an increase of 42.7% from the comparable three month period ended June 30, 2009) and 214,375,591 page views (an increase of 70.2%) for an average of 8.03 page views per visit (an increase of 19.3%).

Management's Growth Strategy

"Over the coming year we will continue to execute on our plan to acquire synergistic websites, and roll-out new online products, including Facebook games and other applications related to online gaming," continued Mr. Frasier. "We believe that we have the online platform and necessary expertise to continue driving organic, high-margin, top-line growth for our shareholders."

Management continues to focus on the following initiatives to expand the Company's operations over the next 6-12 months:

1.  Live Concert Series. The Company began to launch a series of live
    concerts throughout the United States and expects to continue to do
    so periodically. Concerts feature the most popular DJs and Artists
    and bring them from the web direct to fans, live and in person. The
    first DatPiff Live Concert was held on June 10, 2010 at the Brooklyn
    Masonic Temple and featured talent from the New York city area.

2.  Strategic Partnerships. The Company has and will continue to seek
    to enter into strategic partnerships with the goal of delivering the
    best experience for users and increase opportunities for companies to
    advertise on its Internet properties. Strategic partnerships allow
    the Company to enhance, expand upon and complement its product
    offerings and increase market penetration by joining with companies
    that have significantly greater resources and complementary expertise
    to its own.

3.  Continue to Innovate by Investing in New Services and Technologies.
    Idle Media plans to continue to innovate by investing in product
    development to improve its services, expand the breadth of service
    offerings, and maintain compatibility with popular technology
    standards.

    On June 16, 2010, the Company introduced its first application
    specifically for smartphone devices: DatPiff Mobile. Currently,
    DatPiff Mobile is available for the Apple® iPhone® and iPod
    touch™, as well as the Palm Pre™ and Pixi™. The Company also
    plans to release new versions of DatPiff Mobile for Android™ and
    BlackBerry® devices. Development is also underway for Microsoft's
    upcoming Windows Phone 7 platform.

    Idle Media's gaming revenue model will incorporate both pay-to-play as
    well as free-to-play with in-app purchases. Facebook Credits, a virtual
    currency platform used for gaming apps, gives users a fast and easy way
    to buy virtual goods including items from the Facebook Gift Shop.
    Facebook Credit is currently being tested and once made available to
    all developers, Idle Media will incorporate into its Facebook game
    application(s).

4.  Expand through acquisitions of strategic technologies or properties.
    Prior to becoming a public company, the focus was primarily on internal
    development of websites and services. In the recent quarter ended
    June 30, 2010, management has made a distinct effort to expand the
    Company's business by strategically acquiring websites and source code
    that could provide it with technology and knowledge it can use to
    develop additional revenue generating properties.

    To that end, on June 28, 2010, Idle Media, Inc. acquired Backyard
    Buddies, a popular gaming application on the social media website
    www.Facebook.com. Via this foray into online gaming, management plans
    to incorporate both pay-to-play as well as free-to-play with in-app
    purchases. Furthermore, having the source code for Backyard Buddies
    will allow the Company's development team to more easily and readily
    develop additional applications for Facebook's more than 400,000,000
    registered members.

    On July 20, 2010, the Company entered into a letter of intent to
    acquire three more websites:  www.prisonblock.com, www.chixr.us, and
    www.tweetvibe.com. These websites will provide instant access to
    markets the Company had previously not targeted. Prison Block is an
    online gaming application that provides access to a demographic of
    young male users, while Chix R Us taps into the female niche.
    Tweetvibe provides access to 'themes' for Twitter user profiles.

    Most recently, on August 17, 2010, the Company announced that it had
    acquired www.HipHopEarly.com, an online music destination for the
    latest in Hip Hop single pre-releases. This acquisition fits
    synergistically with DatPiff.com's current audience and customer base.

For more information on the Company's financial results, please view the second quarter 2010 filing at: http://www.sec.gov

About Idle Media, Inc.

Idle Media, Inc. is a publicly traded new media technology company that delivers cutting-edge content and online gaming through its wholly-owned operating companies, including Dat Piff (www.datpiff.com), a leading provider of online mix tapes and user-generated content.

Learn more about Idle Media, Inc. at: http://www.idlemedia.com. Follow Idle Media on Facebook and Twitter.

Information in this press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects" and similar expressions are intended to identify forward-looking statements. The forward-looking statements may include our future operations, financial condition and prospects and business strategies. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this press release or in other documents including those filed with the SEC. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Contact Information

  • Contact:

    Investor Relations
    Email Contact
    Mark Moline
    760-208-1894