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AdStar Reports Third Quarter Operating Results
Nov 15, 2007 (08:11 AM EST)


MARINA DEL REY, Calif., Nov. 15 /PRNewswire-FirstCall/ -- AdStar, Inc. , the leading provider of e-commerce transaction software and services for the advertising and publishing industries, today announced operating results for the third quarter and first nine months of 2007.

For the three months ended September 30, 2007, AdStar reported net revenues of $1,176,000, compared with net revenues of $1,396,000 in the third quarter of 2006. ASP revenues increased $14,000 to $510,000 in the third quarter of 2007 from $496,000 in the third quarter of 2006. Licensing and software revenues totaled $551,000 in the third quarter of 2007, compared with $657,000 in the 2006 quarter, while customization and other revenues declined to $115,000 in the third quarter of 2007 from $243,000 in the third quarter of 2006.

For the third quarter of 2007, AdStar reported a net loss applicable to common shareholders of $663,000, or $0.03 per share, versus a net loss of $113,000, or $0.01 per share, in the third quarter of 2006. On an EBITDA basis, the loss totaled $457,000 in the most recent quarter, compared with a positive EBITDA of $111,000 during the third quarter of 2006. (See EBITDA table at end of this release for further Non-GAAP information)

"During the quarter, we completed the first version of our Mobile Advertising Dashboard designed to process and monitor ad campaigns placed on mobile devices, such as cell phones," stated Leslie Bernhard, president and chief executive officer of AdStar, Inc. "Our software represents the user interface and engine that allows advertisers to create, price, schedule and submit their ads directly to publishers in the required end-user device format for delivery to mobile devices. AdStar developed the Dashboard in conjunction with a major international mobile phone manufacturer, and we believe that there will be significant demand for these services from a broad range of publishers as the emergence of mobile advertising accelerates."

Bernhard added, "Our existing business has been negatively impacted by the major challenges faced by newspaper publishers during the past few quarters. The decline in our revenues is a direct result of the significant decrease in newspaper classified advertising in general, which has been accelerated by a steep decline in real estate advertising. While AdStar continues to offer cost-reducing solutions to a growing number of newspaper publishers using its web-based ad services, we believe that the company's future growth must come from the expansion of our core competencies and technologies into revenue- generating opportunities beyond our traditional market. Our quarterly results reflect our investments to develop and introduce our digital ad distribution technology, and to pursue revenue-generating opportunities for this service. We look forward to playing a key role in the future of digital advertising distribution."

AdStar also reported that prepaid advertising transactions processed during the quarter using AdStar's ASP technology infrastructure decreased by 14 percent to 94,600, compared with 110,000 transactions in the prior-year period. Total ASP transactions, including large contract accounts, decreased by 11 percent to 126,000 in the third quarter of 2007, versus 143,000 in the third quarter of 2006.

Net revenues for the nine months ended September 30, 2007 totaled $3,709,000, compared with $3,912,000 in the first nine months of 2006, a decrease of 5 percent. The decline in net revenues was comprised of a 7 percent reduction in licensing and software revenues and a 13 percent decrease in customization and other revenues. ASP revenues for the first nine months of 2007 were relatively unchanged from the 2006 period. AdStar reported a net loss of $2,291,000, or $0.11 per share, in the nine months ended September 30, 2007, compared with a net loss of $767,000, or $0.04 per share, in the nine months ended September 30, 2006.

The Company will host an investor conference call to discuss third quarter operating results and the outlook for the balance of the year today, November 15, 2007, at 4:15 p.m. EST.

Shareholders and other interested parties may participate in the conference call by dialing 800-657-1263 (international/local participants dial 973-633-8200) and referencing the ID code 9447849, a few minutes before 4:15 p.m. EST on November 15, 2007. The call will also be broadcast live on the Internet at http://www.adstar.com http://www.adstar.com . A replay of the conference call will be available two hours after the completion of the conference call from November 15, 2007 until November 22, 2007 by dialing 877-519-4471 (international/local participants dial 973-341-3080) and entering the conference ID 9447849. The replay of the call will be archived on the company's website at until February 13, 2008.

About AdStar, Inc.

AdStar, Inc. www.adstar.com is the leading provider of e-commerce transaction software and services for the advertising and publishing industries. AdStar's proprietary suite of e-commerce services includes remote ad entry software and web-based ad transaction services, as well as payment processing and content processing solutions that are provided through its Edgil Associates subsidiary, the industry's largest supplier of automated payment processing services. AdStar's ad transaction infrastructure powers classified ad sales for more than 40 of the largest newspapers in the United States, CareerBuilder, and a growing number of other online and print media companies. EdgCapture, Edgil's automated payment process solution, is currently employed by call centers at more than 100 of the nation's leading newspaper and magazines. AdStar is headquartered in Marina del Rey, Calif., and its Edgil office is located in Billerica, Mass. For additional information on AdStar, Inc., visit .

Forward Looking Statements

This release contains forward-looking statements concerning the business and products of the Company. Actual results may differ from those projected or implied by such forward-looking statements depending on a number of risks and uncertainties including, but not limited to, the following: historical business has already matured, new online business is unproven and may not generate expected revenues, and Internet security risks. Other risks inherent in the business of the Company are described in Securities and Exchange Commission filings, including the Company's annual report on Form 10-KSB. The Company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.

(Financial Tables to Follow) AdStar, Inc. and Subsidiary Consolidated Statements of Operations For the Three and Nine Months Ended September 30, 2007 and 2006 (unaudited) Three months ended Nine months ended September 30, September 30, 2007 2006 2007 2006 ASP, net $510,000 $496,000 $1,461,000 $1,463,000 Licensing and software 551,000 657,000 1,739,000 1,861,000 Customization and other 115,000 243,000 509,000 588,000 Net revenues 1,176,000 1,396,000 3,709,000 3,912,000 Total cost of revenues 499,000 535,000 1,606,000 1,616,000 Gross profit 677,000 861,000 2,103,000 2,296,000 General and administrative expense 597,000 440,000 1,678,000 1,296,000 Product maintenance and development costs 309,000 212,000 914,000 631,000 Selling and marketing expense 433,000 300,000 1,786,000 1,068,000 Amortization of customer list 22,000 22,000 66,000 66,000 Loss from operations (684,000) (113,000) (2,341,000) (765,000) Interest income 25,000 3,000 63,000 10,000 Interest expense (1,000) (1,000) (4,000) (3,000) Loss before income taxes (660,000) (111,000) (2,282,000) (758,000) Provision for income taxes 3,000 2,000 9,000 9,000 Net loss applicable to common stockholders $(663,000) $(113,000) $(2,291,000) $(767,000) Loss per share - basic and diluted $(0.03) $(0.01) $(0.11) $(0.04) Weighted average number of shares - basic and diluted 20,141,852 19,471,435 20,115,329 19,199,047 AdStar, Inc. and Subsidiary Calculation EBITDA For the Three and Nine Months Ended September 30, 2007 and 2006 (unaudited) Three months ended Nine months ended September 30, September 30, 2007 2006 2007 2006 Net Loss $(663,000) $(113,000) $(2,291,000) $(767,000) Provision for Income Taxes 3,000 2,000 9,000 9,000 Interest Expense (Income), net (24,000) (2,000) (59,000) (7,000) Depreciation and Amortization 126,000 148,000 384,000 459,000 Stock Compensation 101,000 76,000 735,000 210,000 EBITDA, before share-based expenses $(457,000) $111,000 $(1,222,000) $(96,000)

The Company defines EBITDA as net loss before interest, taxes, depreciation and amortization, and non-cash expense for securities. Other companies may calculate EBITDA differently. Management believes that the presentation of EBITDA provides a meaningful measure of performance that approximates cash flow before interest expense, and is meaningful to investors.

AdStar, Inc. and Subsidiary Selected Consolidated Balance Sheet Data (unaudited) September 30, December 31, 2007 2006 Cash and cash equivalents $1,929,000 $2,545,000 Total current assets $2,668,000 $3,236,000 Total assets $6,937,000 $7,560,000 Total current liabilities $2,716,000 $2,136,000 Total liabilities $2,763,000 $2,189,000 Total stockholders' equity $4,174,000 $5,371,000 AdStar Company Contact: Jeff Baudo, 310-577-8255, jbaudo@adstar.com AdStar Media Contact: Kevin Wilson, 513-898-1008,

CONTACT: Jeff Baudo of AdStar, +1-310-577-8255, jbaudo@adstar.com; orMedia, Kevin Wilson, +1-513-898-1008, , for AdStar

Web site: http://www.adstar.com//