24/7 Real Media Reports Record Results for Fourth Quarter and Full Year 2006

  
    
  
  
    
      Fourth Quarter Highlights:
    
    
      
        Revenue of $60.0 million, an increase of 44% year-over-year;
      
      
        Pro forma operating income of $6.5 million, or $0.12 per share, 
        compared with $4.0 million, or $0.08 per share, in Q4 of 2005; GAAP 
        net loss of $0.2 million, or $0.00 per share, versus GAAP net income 
        of $1.4 million, or $0.03 per share, in Q4 of 2005;
      
      
        Robust international performance, including year-over-year revenue 
        growth in Korea and the United Kingdom of 72% and 42%, respectively.
      
    
    
      24/7 Real Media, Inc. (Nasdaq: TFSM), a leading global digital marketing 
      company, today announced financial results for the fourth quarter and 
      full year ended December 31, 2006. Revenue for the fourth quarter of 
      2006 was $60.0 million, an increase of 44% over the $41.7 million 
      reported for the fourth quarter of 2005. Revenue contribution from 
      international operations was 61% for the quarter, driven in part by 
      strong year-over-year growth in Korea and the U.K. of 72% and 42%, 
      respectively.
    
    
      Pro forma operating income1 for the fourth 
      quarter of 2006 was $6.5 million, or $0.12 per share. This compares with 
      pro forma operating income of $4.0 million, or $0.08 per share, for the 
      fourth quarter of 2005.
    
    
      Under generally accepted accounting principles (GAAP), net loss for the 
      fourth quarter of 2006 was $0.2 million, or $0.00 per share. This 
      compared to a GAAP net income of $1.4 million, or $0.03 per share, for 
      the fourth quarter of 2005. Due to the differing treatment of certain 
      expenses in 2006 under the recent adoption of Statement of Financial 
      Accounting Standards (SFAS) No. 123(R), Stock Based Compensation, 
      results between these periods are not directly comparable. The 
      comparable figure for the fourth quarter of 2005, as disclosed under 
      SFAS No. 123(R), is a GAAP net loss of $0.4 million, or $0.01 per share.
    
    
      For the year ended December 31, 2006, revenue was $200.2 million, an 
      increase of 43% from the $139.8 million reported for the year ended 
      December 31, 2005. Pro forma operating income for 2006 was $19.6 
      million, or $0.36 per share, an increase of 98% over the pro forma 
      operating income of $9.9 million, or $0.20 per share, in the prior year. 
      GAAP net loss for 2006 was $8.6 million, or $0.18 per share, as compared 
      with a GAAP net income of $0.0 million, or $0.00 per share, in 2005. The 
      figure for the full year 2005, as disclosed under SFAS No. 123(R), that 
      is comparable to the 2006 data, is a net loss of $6.0 million, or $0.13 
      per share for 2005.
    
    
      Cash flow from operations for the 2006 fiscal year totaled a record 
      $15.1 million and the Company reported a cash balance of $59.4 million 
      as of December 31, 2006.
    
    
      During the fourth quarter 24/7 Real Media announced the expansion of its 
      existing search engine marketing partnership with Dentsu to address 
      strategic Asian markets outside of Japan. This new venture will 
      establish operations to service advertising markets throughout Asia, 
      including China, India, Korea, Thailand, and Taiwan.
    
    
      “It was a strong fourth quarter across the 
      board for the digital marketing sector, as well as for 24/7 Real Media,” 
      said David J. Moore, chairman and chief executive officer of 24/7 Real 
      Media. “Significant revenue growth, 
      operational leverage and outstanding execution in each of our business 
      segments allowed the Company to outperform expectations, and we are 
      enjoying the healthy pace that the sector continues to experience around 
      the globe.”
    
    
      “Through our expanded partnerships with 
      Dentsu, we are positioning 24/7 Real Media to be a significant 
      beneficiary of the incredible expansion that is projected over the 
      upcoming decade for many markets throughout Asia and the Pacific Rim. As 
      the most internationally-diversified company in the digital marketing 
      arena, 24/7 Real Media is well positioned for sustained, strong growth 
      over the upcoming years.”
    
    
      Segment Overview
    
    
      Revenue in the Media Solutions segment climbed 39% to $26.2 
      million in the fourth quarter of 2006 from $18.9 million in the fourth 
      quarter of 2005. Gross margins were 32.2% in the fourth quarter of 2006.
    
    
      Search Solutions revenue advanced 59% to $26.0 million in the 
      fourth quarter of 2006 from $16.4 million in the fourth quarter of 2005. 
      Gross margins for the segment were 21.6% in the fourth quarter of 2006.
    
    
      Technology Solutions revenue grew 21% to $7.8 million in the 
      fourth quarter of 2006 from $6.5 million in the fourth quarter of 2005. 
      Technology gross margins, excluding stock based compensation expenses, 
      were 80.7% in the fourth quarter of 2006.
    
    
      Financial Guidance and Business Outlook
    
    
      The Company expects first quarter revenue for 2007 to be between $58 
      million and $59 million, the mid-point of which represents an increase 
      of 36% from first quarter 2006 revenue of $42.9 million. The Company 
      expects diluted pro forma operating income per share in the first 
      quarter of 2007 to be between $0.09 and $0.10 per share.
    
    
      The Company is raising guidance for full year 2007 revenue to be in the 
      range of $255 million to $265 million, the mid-point of which represents 
      an increase of 30% from full year revenue of $200.2 million in 2006. The 
      Company expects diluted pro forma operating income per share for the 
      full year to be between $0.52 and $0.55 per share.
    
    
      Revenue guidance includes the projected financial performance of K.K. 
      24-7 Search, the Japanese venture with Dentsu in which 24/7 Real Media 
      holds a majority interest and reports on a consolidated basis. Pro forma 
      operating income guidance is provided net of Dentsu's 49% minority 
      interest in the projected pro forma operating income or loss generated 
      by K.K. 24-7 Search.
    
    
      Neither revenue guidance nor pro forma operating income guidance 
      includes the projected financial performance of the expanded partnership 
      with Dentsu to address markets beyond Japan, as 24/7 Real Media will not 
      be reporting these operations on a consolidated basis.
    
    
      The Company is not providing GAAP net income per share guidance for the 
      first quarter of 2007 or the full year 2007 at this time, as certain 
      items that would be included in that figure are dependent on future 
      events and accounting determinations.2
    
    
      In conjunction with this release, a conference call will be held at 8:30 
      a.m. EST on Thursday, March 1, to discuss these results. The call will 
      be broadcast live over the Internet at www.247realmedia.com/about/investor. 
      Please allow extra time to visit our Web site prior to the call and 
      download the streaming media software required to listen to the Internet 
      broadcast. The online replay of the broadcast should be available within 
      two hours following the live call and will be available for three weeks.
    
    
      About 24/7 Real Media, Inc.
    
    
      24/7 Real Media, Inc. is a leading global digital marketing company, 
      empowering advertisers and publishers to engage their target audiences 
      with greater precision, transparency and ROI. Using its award winning ad 
      serving, targeting, tracking and analytics platform, powerful search 
      marketing capabilities and global network of specialized Web sites, the 
      company has turned the art of reaching audiences across virtually any 
      digital medium into a measurable science. The company is headquartered 
      in New York, with 20 offices in 12 countries throughout North America, 
      Europe and the Asia Pacific region. For more information, please visit www.247realmedia.com.
    
    
      24/7 Real Media: The Science of Digital Marketing.
    
    
      24/7 Real Media is a member of the NAI and adheres to the NAI privacy 
      principles that have been applauded by the FTC. These principles are 
      designed to help ensure Internet user privacy. For more information 
      about online data collection associated with ad serving, including 
      online preference marketing and an opportunity to opt-out of 24/7 Real 
      Media cookies, go to: www.networkadvertising.org.
    
    
      Caution concerning forward-looking statements:
    
    
      Certain statements in this news release are "forward-looking statements" 
      within the meaning of the Private Securities Litigation Reform Act of 
      1995. For instance, words such as "expects," "anticipates," "predicts," 
      "guidance" and similar expressions identify forward-looking statements. 
      Forward-looking statements also include any other passages that relate 
      to expected future events or trends that can only be evaluated by events 
      or trends that will occur in the future. Some of the forward-looking 
      statements in this news release include, without limitation, statements 
      regarding the expected financial performance for the first quarter of 
      2007 and for the full year 2007. Investors are cautioned not to place 
      undue reliance upon these forward-looking statements, which speak only 
      as of the date of this release. Except as required by law, 24/7 Real 
      Media undertakes no obligation to update any forward-looking or other 
      statements in this news release, whether as a result of new information, 
      future events or otherwise. Management may reiterate these 
      forward-looking statements subsequent to the date hereof, but such 
      reiterations should not be considered an update or reaffirmation of 
      these statements unless expressly so stated. The forward-looking 
      statements are based on the subjective opinions and estimates of 
      management at the time the statements were made and are subject to 
      substantial risks and uncertainties that could cause actual results to 
      differ materially from those anticipated in the forward-looking 
      statements. These substantial risks and uncertainties include, among 
      others, geopolitical, tax, exchange rate and other risks associated with 
      international operations, which currently comprise a majority portion of 
      the Company's revenue; the potential for enhanced competition, including 
      with competitors that have substantially greater resources than those of 
      the Company; potential issues that may arise in the Company’s 
      Search segment, which is a less seasoned business than the Company’s 
      other segments and which is in an ultra competitive and rapidly evolving 
      industry, in which the Company’s business is 
      somewhat dependent on its ability to maintain good relations with two 
      major search engines; due to these factors, the Company’s 
      Search business may not be able to expand as rapidly as projected, nor 
      maintain its existing customer base or profitability structure; the 
      potential loss of key employees and inability to attract qualified new 
      employees, especially in our Search business, due to a very competitive 
      and tightening job market; risks that the Company's technology will be 
      insufficient to meet increased business levels; risk that the Company's 
      technology services will be disrupted by terrorist attack, disasters or 
      malicious intrusion, and that the Company's back-up facilities and 
      disaster recovery plans will not be adequate; customer concentration or 
      customer loss risks; potential deterioration or slower-than-expected 
      growth in the Internet advertising market; the uncertainties, costs and 
      business impacts of potential new legislation; accounting risks and the 
      risk of litigation or regulatory investigation involving the Company. In 
      particular, guidance on results in accordance with GAAP do not include 
      (i) the potential impact of any mergers, acquisitions or other business 
      combinations that may be completed after the date of this release, (ii) 
      any unanticipated non-recurring gains, charges or write-offs, or (iii) 
      unexpected changes in the Company’s effective 
      tax rate, which may be caused by, among other things, the geographical 
      location in which operating income is generated and the availability of 
      tax-loss carryforwards. Actual stock-based compensation expense impact 
      may differ from these estimates based on the timing and amount of 
      restricted stock and options granted, the assumptions used in option 
      valuation and other factors.
    
    
      More information about factors that could cause actual results to differ 
      materially from those predicted in the Company's forward-looking 
      statements, as well as additional information regarding the Company's 
      business and financial results and condition, is set out in its annual 
      report on Form 10-K for the year ended December 31, 2006, which the 
      Company expects to file with the Securities and Exchange Commission on 
      or before March 16, 2007. Investors are strongly encouraged to read the 
      Company's Form 10-K, Forms 10-Q and other filings with the Securities 
      and Exchange Commission in their entirety.
    
    
      1 Pro forma operating income is a non-GAAP 
      financial measure. 24/7 Real Media believes pro forma reporting provides 
      meaningful insight into the Company’s ongoing 
      economic performance and therefore uses pro forma reporting internally 
      to assist in evaluating and managing the Company’s 
      operations. A full reconciliation of GAAP net income to pro forma 
      operating income for the three months and year ended December 31, 2006 
      and 2005 appears in the financial statement portion of this release.
    
    
      2 Diluted pro forma operating income per share 
      guidance for the first quarter and full year 2007 excludes the following 
      items that are required to be included under GAAP: depreciation expense 
      of $1.2 million and $5.5 million; amortization expense of $0.7 million 
      and $3.0 million; stock based compensation expense related to equity 
      instruments already granted of $3.2 million and $14.0 million; and 
      interest income of $0.5 million and $2.0 million. Also excluded is 
      income tax expense, as the Company is still determining the overall 
      effective tax rate, which is dependent on the amount of revenue and 
      income recognized for tax purposes in each jurisdiction in which the 
      Company operates, and stock based compensation expense related to grants 
      in future periods, which are as yet undermined.
    
    
      
        
          
            24/7 REAL MEDIA, INC.
          
        
      
      
        
          
            CONSOLIDATED STATEMENTS OF OPERATIONS
          
        
      
      
        
          
            (in thousands, except share and per share data)
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
          
            Three months ended
          
        
        
          
            Twelve months ended
          
        
      
      
        
        
        
        
        
        
        
          
            December 31,
          
        
        
        
        
          December 31,
        
      
      
        
        
        
        
        
        
        
          
            2006 
          
        
        
        
        
          2005 
        
        
        
        
          2006 
        
        
        
        
          2005 
        
      
      
        
        
        
        
        
        
        
          
            (unaudited)
          
        
        
        
        
          (unaudited)
        
      
      
        
          Revenues:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Media
        
        
          $ 26,205 
        
        
        
        
          $ 18,903 
        
        
        
        
          $ 84,851 
        
        
        
        
          $ 65,363 
        
      
      
        
        
        
          Search
        
        
          25,955 
        
        
        
        
          16,367 
        
        
        
        
          86,202 
        
        
        
        
          51,430 
        
      
      
        
        
        
          Technology
        
        
          7,823 
        
        
        
        
          6,451 
        
        
        
        
          29,190 
        
        
        
        
          23,001 
        
      
      
        
        
        
        
        
          Total revenues
        
        
          59,983 
        
        
        
        
          41,721 
        
        
        
        
          200,243 
        
        
        
        
          139,794 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cost of revenues:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Media
        
        
          17,777 
        
        
        
        
          13,092 
        
        
        
        
          57,531 
        
        
        
        
          44,562 
        
      
      
        
        
        
          Search
        
        
          20,347 
        
        
        
        
          12,085 
        
        
        
        
          65,590 
        
        
        
        
          36,490 
        
      
      
        
        
        
          Technology (inclusive of $126, $18, $510 and $41 in stock-based 
          compensation, respectively)
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          1,632 
        
        
        
        
          1,099 
        
        
        
        
          6,293 
        
        
        
        
          4,289 
        
      
      
        
        
        
        
        
          Total cost of revenues
        
        
          39,756 
        
        
        
        
          26,276 
        
        
        
        
          129,414 
        
        
        
        
          85,341 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          Gross profit
        
        
          20,227 
        
        
        
        
          15,445 
        
        
        
        
          70,829 
        
        
        
        
          54,453 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating expenses:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Sales and marketing (inclusive of $1,352, $219, $4,621 and $541 of 
          stock-based compensation, respectively)
        
        
        
        
        
        
        
      
      
        
        
        
          8,540 
        
        
        
        
          6,170 
        
        
        
        
          31,629 
        
        
        
        
          23,120 
        
      
      
        
        
        
          General and administrative (inclusive of $2,291, $440, $13,104 and 
          $1,391 of stock-based compensation, respectively)
        
        
        
      
      
        
        
        
          7,915 
        
        
        
        
          5,191 
        
        
        
        
          33,897 
        
        
        
        
          20,598 
        
      
      
        
        
        
          Product development (inclusive of $477, $103, $2,212 and $254 of 
          stock-based compensation, respectively)
        
        
        
        
        
        
        
      
      
        
        
        
          2,720 
        
        
        
        
          1,765 
        
        
        
        
          10,047 
        
        
        
        
          6,087 
        
      
      
        
        
        
          Other expenses:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
          Amortization of intangible assets and deferred financing costs
        
        
          742 
        
        
        
        
          972 
        
        
        
        
          3,403 
        
        
        
        
          4,391 
        
      
      
        
        
        
        
        
          Provision for capital assessment
        
        
          - 
        
        
        
        
          387 
        
        
        
        
          - 
        
        
        
        
          387 
        
      
      
        
        
        
        
        
          Restructuring costs
        
        
          - 
        
        
        
        
          - 
        
        
        
        
          - 
        
        
        
        
          973 
        
      
      
        
        
        
        
        
          Total operating expenses
        
        
          19,917 
        
        
        
        
          14,485 
        
        
        
        
          78,976 
        
        
        
        
          55,556 
        
      
      
        
        
        
        
        
          Operating income (loss)
        
        
          310 
        
        
        
        
          960 
        
        
        
        
          (8,147)
        
        
        
        
          (1,103)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Interest income (expense), net
        
        
          344 
        
        
        
        
          (23)
        
        
        
        
          772 
        
        
        
        
          (213)
        
      
      
        
          Change in fair value of warrant liability
        
        
          (79)
        
        
        
        
          (37)
        
        
        
        
          (176)
        
        
        
        
          (381)
        
      
      
        
          Recovery of investment
        
        
          - 
        
        
        
        
          240 
        
        
        
        
          - 
        
        
        
        
          2,340 
        
      
      
        
          Impairment of marketable securities
        
        
          - 
        
        
        
        
          - 
        
        
        
        
          - 
        
        
        
        
          (588)
        
      
      
        
          Gain on sale of marketable securities
        
        
          - 
        
        
        
        
          34 
        
        
        
        
          - 
        
        
        
        
          16 
        
      
      
        
          Other income (expense), net
        
        
          (340)
        
        
        
        
          248 
        
        
        
        
          (243)
        
        
        
        
          153 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income (loss) before income taxes and minority interest in 
          operations of consolidated subsidiary
        
        
        
        
        
        
        
      
      
        
          235 
        
        
        
        
          1,422 
        
        
        
        
          (7,794)
        
        
        
        
          224 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Provision for income taxes
        
        
          (424)
        
        
        
        
          (130)
        
        
        
        
          (692)
        
        
        
        
          (314)
        
      
      
        
          Minority interest in operations of consolidated subsidiary
        
        
          (38)
        
        
        
        
          107 
        
        
        
        
          (136)
        
        
        
        
          128 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income (loss)
        
        
          (227)
        
        
        
        
          1,399 
        
        
        
        
          (8,622)
        
        
        
        
          38 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Dividends on preferred stock
        
        
          - 
        
        
        
        
          - 
        
        
        
        
          - 
        
        
        
        
          (25)
        
      
      
        
          Net income (loss) attributable to common stockholders
        
        
          $ (227)
        
        
        
        
          $ 1,399 
        
        
        
        
          $ (8,622)
        
        
        
        
          $ 13 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Basic net income (loss) attributable to common stockholders per share
        
        
          $ 0.00 
        
        
        
        
          $ 0.03 
        
        
        
        
          $ (0.18)
        
        
        
        
          $ 0.00 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Shares used in per share calculation - basic
        
        
          49,498,214 
        
        
        
        
          46,100,532 
        
        
        
        
          48,508,739 
        
        
        
        
          45,350,466 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Diluted net income (loss) attributable to common stockholders per 
          share
        
        
          $ 0.00 
        
        
        
        
          $ 0.03 
        
        
        
        
          $ (0.18)
        
        
        
        
          $ 0.00 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Shares used in per share calculation - diluted
        
        
          49,498,214 
        
        
        
        
          51,694,510 
        
        
        
        
          48,508,739 
        
        
        
        
          47,694,027 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            24/7 REAL MEDIA, INC.
          
        
      
      
        
          
            CONSOLIDATED STATEMENTS OF OPERATIONS
          
        
      
      
        
          
            (in thousands, except share and per share data)
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
          
            Three months ended
          
        
        
           
        
        
          
            Twelve months ended
          
        
      
      
        
        
        
        
        
        
        
          
            December 31,
          
        
        
        
        
          
            December 31,
          
        
      
      
        
        
        
        
        
        
        
          
            2006 
          
        
        
        
        
          
            2005 
          
        
        
        
        
          
            2006 
          
        
        
        
        
          
            2005 
          
        
      
      
        
        
        
          
            (unaudited)
          
        
        
        
        
          
            (unaudited)
          
        
      
      
        
          Pro forma:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating income (a)
        
        
          $ 6,525 
        
        
        
        
          $ 3,988 
        
        
        
        
          $ 19,582 
        
        
        
        
          $ 9,866 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Diluted operating income per share
        
        
          $ 0.12 
        
        
        
        
          $ 0.08 
        
        
        
        
          $ 0.36 
        
        
        
        
          $ 0.20 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Shares used in pro forma per share calculation
        
        
          56,282,745 
        
        
        
        
          51,694,510 
        
        
        
        
          54,649,189 
        
        
        
        
          49,783,253 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          (a)
        
        
          Pro forma operating income excludes certain other expenses computed 
          as follows:
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Operating income (loss)
        
        
          $ 310 
        
        
        
        
          $ 960 
        
        
        
        
          $ (8,147)
        
        
        
        
          $ (1,103)
        
      
      
        
        
        
          Excluding:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
          Transaction costs
        
        
          294 
        
        
        
        
          - 
        
        
        
        
          294 
        
        
        
        
          - 
        
      
      
        
        
        
        
        
          Amortization of intangible assets and deferred financing costs
        
        
          742 
        
        
        
        
          972 
        
        
        
        
          3,403 
        
        
        
        
          4,391 
        
      
      
        
        
        
        
        
          Stock-based compensation
        
        
          4,246 
        
        
        
        
          780 
        
        
        
        
          20,447 
        
        
        
        
          2,227 
        
      
      
        
        
        
        
        
          Provision for capital assessment
        
        
          - 
        
        
        
        
          387 
        
        
        
        
          - 
        
        
        
        
          387 
        
      
      
        
        
        
        
        
          Restructuring costs
        
        
          - 
        
        
        
        
          - 
        
        
        
        
          - 
        
        
        
        
          973 
        
      
      
        
        
        
        
        
          
            Minority interest in pro forma operations loss of consolidated 
            subsidiary
          
        
        
          (94)
        
        
        
        
          100 
        
        
        
        
          (214)
        
        
        
        
          122 
        
      
      
        
        
        
        
        
          Depreciation
        
        
          1,027 
        
        
        
        
          789 
        
        
        
        
          3,799 
        
        
        
        
          2,869 
        
      
      
        
        
        
          Pro forma operating income
        
        
          $ 6,525 
        
        
        
        
          $ 3,988 
        
        
        
        
          $ 19,582 
        
        
        
        
          $ 9,866 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
          
             
          
        
        
        
        
        
        
        
        
        
      
    
    
      
        
          24/7 REAL MEDIA, INC.
        
      
      
        
          CONDENSED CONSOLIDATED BALANCE SHEET
        
      
      
        
          (in thousands)
        
      
      
        
           
        
      
      
        
        
        
          December 31,
        
        
        
        
          December 31,
        
      
      
        
        
        
          2006 
        
        
        
        
          2005 
        
      
      
        
        
        
          (unaudited)
        
        
        
        
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Cash
        
        
          $ 59,390 
        
        
        
        
          $ 40,009 
        
      
      
        
          Accounts receivable
        
        
          55,490 
        
        
        
        
          38,316 
        
      
      
        
          Total current assets
        
        
          117,567 
        
        
        
        
          80,694 
        
      
      
        
          Total assets
        
        
          176,658 
        
        
        
        
          142,804 
        
      
      
        
          Accounts payable and accrued liabilities
        
        
          51,942 
        
        
        
        
          43,383 
        
      
      
        
          Deferred revenue
        
        
          3,609 
        
        
        
        
          3,218 
        
      
      
        
          Short-term debt
        
        
          7,500 
        
        
        
        
          14,542 
        
      
      
        
          Total current liabilities
        
        
          63,051 
        
        
        
        
          61,143 
        
      
      
        
          Long-term debt
        
        
          7,500 
        
        
        
        
          - 
        
      
      
        
          Total liabilities
        
        
          71,327 
        
        
        
        
          62,529 
        
      
      
        
          Minority interests
        
        
          1,673 
        
        
        
        
          1,556 
        
      
      
        
          Total stockholders' equity
        
        
          103,658 
        
        
        
        
          78,719