BRST Burst Med Reg S

    RNS Number : 7560Z
  Burst Media Corporation
  24 July 2008
   



    24 July 2008

    Burst Media Corporation
     Trading Update
      

    Burst Media Corporation ("Burst Media" or the "Company"), the international online advertising services company, today announces an
update on trading ahead of the announcement of its results for the six months ended 30 June 2008, which is scheduled for Thursday, 25
September 2008.

    Trading update

    Total revenue for the first half of the current year was relatively flat at $13.4 million (2007: $13.3 million). 

    Revenue from the Company's two media businesses, Burst Network and Burst Direct, in the first half of 2008 was $10.7 million, a decrease
of 11% compared to the prior year (2007: $12.0 million).  This decrease was related to Burst Network where the Company has previously found
it challenging to recruit and retain experienced sales people in what is a very competitive market place.  Considerable progress has been
made addressing this issue and staff levels have stabilized. The decline in Burst Network was partially offset by growth in Burst Direct
which came from both new and existing customers.

    The number of web publishers for the Company's two media businesses increased to almost 6,800 web sites as of 30 June 2008 as compared
to 6,500 web sites at 31 December 2007. 

    Revenue from Burst AdConductor* was $2.7 million for the first half of 2008 (2007: $1.3 million), an increase of 108%. The Company had
significant wins and contract renewals, including Reed Business Information, BET Interactive Ad Network, ShortTail Media and Vehix.

    Adjusted EBITDA(1) for the first half of the year was a loss of approximately $0.2 million (2007: earnings of $1.0 million). The
decrease in adjusted EBITDA is due primarily to increased investment in sales and technology. 

    The Company's cash balance at 30 June 2008 was $11.1 million (31 December 2007: $12.5 million).

    Burst Media was ranked the 21st and the 23rd largest Internet property in the U.S. and the U.K. respectively in June 2008 by comScore
Media Metrix, compared to 21st and 19th at the same period last year.

    Based upon the Company's first half results, and with concern about broader economic uncertainties that may affect online ad spending,
the Board expects full year revenue to be between $28 million and $30 million. Adjusted EBITDA(1) for the full year is expected to be within
a range of $(0.7) million to $0.5 million. This guidance is below current market expectations. 

    Strategic review

    In December 2007 the Board announced a strategic review to explore alternative ways to maximize value for the Company's shareholders.
The Board retained Portico Capital Securities, LLC to assist it with this process. The strategic review process is ongoing and the Board
currently expects to announce its results prior to the end of the third quarter.  The Board are determined to make the decision which is in
the interests of all the shareholders and want to emphasize that all options are being reviewed by the Board including, inter alia, a return
of capital which is in excess of the Company's requirements.

    Board change

    The Company announced on 9 June 2008 that Susan Villare, the Company's then CFO, was to leave the Company to pursue another opportunity.
The Board is actively searching for a replacement CFO and expects that an announcement of an appointment will be forthcoming in the near
term.

    CEO commentary

    Commenting, Jarvis Coffin, Chief Executive, said: "We are disappointed at having to readjust expectations for the full year. However,
after a year of significant changes impacting our organization, Burst has a strategic mix of businesses today that are well-suited to an
online advertising market that is rapidly moving away from dependence on portals and towards valuable vertical niche content that the
Company has championed from the beginning. 

    "Burst Network has launched eight Burst branded vertical networks and three publisher sponsored networks so far this year.  The
immediate impact of this strategy has been average price increases of 22% for the first half of 2008 from the comparable period in 2007. 
Sales force turnover, which negatively impacted Burst Network revenue during the past year, has been significantly reduced as a result of
incremental investments in both its people and the products which they sell. Where staffing in sales regions has been stable, Burst Network
has largely seen significant growth in revenue in the first half of 2008 as compared to the same period in the prior year.  We believe other
sales regions will benefit similarly in the second half of 2008 as the quality and continuity of our sales force results in renewed customer
relationships. 

    "Also benefiting from the importance of vertical niche content online is AdConductor, which provides customers with comprehensive,
cutting-edge tools for management of complex ad networks. AdConductor revenue has grown over 100% in the first half of 2008 versus the
comparable period in 2007. During 2008, we have made a substantial investment in the AdConductor technology platform, focused on
significantly enhancing its user interfaces.

    "Burst Direct has made significant progress in the direct response, performance advertising segment of the market and has provided those
customers seeking performance with an effective channel through which to pursue their advertising campaigns.  It has experienced significant
growth through its Direct Connect product offering, the increased use of purchased inventory to fulfill campaigns and has embarked on a
strategy to expand on its cost per acquisition (CPA) product offering. 

    "Overall, we believe key measures point to the progress the Company has made with its efforts to reorganize over the last year. These
include improving the product fundamentals of Burst Network, attaining sustained, triple digit revenue growth with Burst Direct and the
capture of three significant new customers so far this year for AdConductor."


     (1)"Adjusted EBITDA" is defined as net income excluding restructuring charges and stock-based compensation before interest income,
taxes, depreciation and amortization and costs relating to the current review of strategic alternatives and is a non-U.S. GAAP financial
measure. The Company believes Adjusted EBITDA provides meaningful insight into the Company's ongoing economic performance and therefore uses
it internally to assist in evaluating and managing the Company's operations.


    Enquiries:


 Burst Media Corporation
 Jarvis Coffin, Chief Executive  +1 781-852-5271

 Hudson Sandler
 Nick Lyon / James White         +44 (0) 20 7796 4133

 Altium
 Tim Richardson / Paul Chamberlain  +44 (0) 20 7484 4040

 Portico Capital Securities
 Mark Roszkowski             +1 203-661-7692


This information is provided by RNS
The company news service from the London Stock Exchange
 
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