AdStar Reports Operating Results for 2007

MARINA DEL REY, Calif., March 31  /PRNewswire-FirstCall/ -- AdStar, Inc. (OTC:ADST) (BULLETIN BOARD: ADST) , the leading provider of e-commerce transaction services and payment processing software for the digital and print advertising and publishing industries, today reported its operating results for the year ended December 31, 2007.

Net revenues for the year ended December 31, 2007 totaled $4,760,000, compared with net revenues of $5,114,000 in 2006.  ASP revenues remained constant at $1,910,000 in 2007 as a result of the addition of seven new publications since 2006, offset by the loss of two publications during the same period and decreases in the volume of transactions from several customers. Fewer non-recurring projects undertaken during 2007 resulted in a decrease in customization revenues of $161,000, to $568,000 in 2007. Licensing and software revenues declined by $195,000, or 8 percent, to $2,282,000 in 2007.  Gross profit of $2,693,000 represented a 56.6 percent gross margin on revenues in the year ended December 31, 2007, compared with a gross margin of 58.7% in 2006.

Prepaid ads processed during 2007 using AdStar's ASP technology infrastructure decreased by nine percent to approximately 353,000 transactions. Total ads processed, including large contract accounts, decreased by seven percent to approximately 480,000 transactions in 2007.

AdStar reported a net loss applicable to common shareholders of $3,310,000, or $0.16 per share, in 2007, versus a net loss of $1,393,000, or $0.07 per share, in 2006. The loss in 2007 was attributed to the decrease in net revenues as well as an increase in operations costs of $1,678,000, of which $690,000 represented increased stock option expense.  Increases in selling and marketing expenses, as well as product maintenance and development costs, were primarily due to the planning and development of AdStar's new software applications related to mobile advertising.

EBITDA (a non-GAAP measure), or earnings before interest, taxes, depreciation and amortization; before stock option expense, totaled a proforma negative $2,008,000 in 2007, compared with a negative EBITDA of $435,000 in 2006. (See EBITDA table at end of this release for further non-GAAP information).

"The contraction in newspaper print advertising throughout the industry is having a significant impact on our core business," stated Leslie Bernhard, president and chief executive officer of AdStar, Inc. "We will continue to support the newspaper industry with Web-based ad sales and payment processing services, while we direct our focus towards providing advertising services in new publishing channels.  Our mobile advertising order entry dashboard development activities during the past year have allowed us to target new digital publishing opportunities, and we anticipate traction in this area during the months to come.  We will continue to develop strategic partnerships and pursue business opportunities with content publishers, and we have launched a major initiative to advance sales and partnership opportunities in the wireless industry."

As of December 31, 2007, AdStar's cash and cash equivalents approximated $717,000, compared with $2.5 million as of December 31, 2006, a net decrease of $1,828,000.

Bernhard concluded, "We have significantly reduced expenses in recent months, reflecting the completion of our recent development activities, and this should allow our cash requirements to decline substantially going forward."

AdStar will conduct an investor conference call to discuss 2007 operating results and the outlook for the balance of the year on April 1, 2008, at 4:15 p.m. EDT. Shareholders and other interested parties may participate in the conference call by dialing 800-860-2442 (international/local participants dial 412-858-4600) and asking to be connected to the "AdStar Conference Call" a few minutes before 4:15 p.m. EDT on April 1, 2008. The call will also be broadcast live on the Internet at http://www.adstar.com/. A replay of the conference call will be available one hour after the call ends on April 1, 2008 through April 8, 2008 at 5:00 pm EDT by dialing 877-344-7529 (international/local participants dial 412-317-0088) and entering the conference ID 417911. The replay of the call will be archived on the company's website at http://www.adstar.com/ until June 1, 2008.

About AdStar, Inc.

AdStar, Inc. (OTCBB: ADST) is a leading provider of e-commerce transaction services and payment processing solutions for the digital and print advertising and publishing industries. AdStar's proprietary suite of e-commerce services includes remote ad-entry software, mobile and web-based ad transaction and campaign management services, and payment processing and content processing solutions. AdStar is headquartered in Marina del Rey, Calif. and its Edgil Associates subsidiary is located in Billerica, Mass. For more information on AdStar, visit http://www.adstar.com/.

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.

   AdStar Company Contact: Jeff Baudo, 310-577-8255, 
   AdStar Media Contact: Kevin Wilson, 513-898-1008,
    

                        Financial Tables to Follow



  AdStar, Inc. and Subsidiary
  Consolidated Balance Sheet
  As of December 31, 2007

  Assets

  Current assets:
    Cash and cash equivalents                                    $717,000
    Accounts receivable, net of allowance for doubtful
     accounts of $71,000                                          571,000
    Notes receivable from officers - current portion                9,000
    Prepaid and other current assets                              126,000
      Total current assets                                      1,423,000

  Notes receivable from officers, net of current portion          197,000
  Property and equipment, net                                     109,000
  Capitalized and purchased software, net                         261,000
  Intangible assets, net                                        1,133,000
  Goodwill                                                      2,132,000
  Other assets                                                     40,000

      Total assets                                             $5,295,000

  Liabilities and Stockholders' Equity

  Current liabilities:
    Due to publications                                        $1,223,000
    Accounts payable and accrued expenses                         630,000
    Deferred revenue and customer deposits - current portion      113,000
    Capital lease obligations - current portion                     6,000

      Total current liabilities                                 1,972,000

  Deferred revenues, net of current portion                        24,000
  Capital lease obligations, net of current portion                20,000
      Total liabilities                                         2,016,000
  Commitments and contingencies

  Stockholders' equity:
  Preferred Stock, par value $0.0001; authorized 5,000,000
   shares; 0 issued and outstanding                                     -
  Common Stock, par value $0.0001; authorized 40,000,000
   shares; 20,209,648 issued and 20,141,852 outstanding             2,000
  Additional paid-in capital                                   27,051,000
  Treasury stock; 67,796 shares, at cost                          (68,000)
  Accumulated deficit                                         (23,706,000)
      Total stockholders' equity                                3,279,000
      Total liabilities and stockholders' equity               $5,295,000



  AdStar, Inc. and Subsidiary
  Consolidated Statements of Operations
  For the Years Ended December 31, 2007 and 2006

                                                   2007           2006

  ASP, net                                      $1,910,000     $1,908,000
  Licensing and software                         2,282,000      2,477,000
  Customization and other                          568,000        729,000
  Net revenues                                   4,760,000      5,114,000

  Cost of revenues, including depreciation and
   amortization of $339,000 and $432,000         2,067,000      2,112,000

    Gross profit                                 2,693,000      3,002,000

  General and administrative expense             2,226,000      1,900,000
  Product maintenance and development costs      1,627,000        934,000
  Selling and marketing expense                  2,127,000      1,468,000
  Amortization of customer list                     88,000         88,000

    Loss from operations                        (3,375,000)    (1,388,000)

  Interest income                                   78,000         13,000
  Interest expense                                  (5,000)        (5,000)

    Loss before income taxes                    (3,302,000)    (1,380,000)

  Provision for income taxes                        (8,000)       (13,000)

    Net loss                                   $(3,310,000)   $(1,393,000)

  Loss per share - basic and diluted                $(0.16)        $(0.07)
  Weighted average number of shares - basic and
   diluted                                      20,122,014     19,339,000



  AdStar, Inc. and Subsidiary
  Calculation EBITDA
  For the Years
  Ended December 31, 2007 and 2006

                                                   2007            2006

  Net Loss                                     $(3,310,000)   $(1,393,000)
  Provision for Income Taxes                         8,000         13,000
  Interest Expense (Income), net                   (73,000)        (8,000)
  Depreciation and Amortization                    508,000        593,000
  Stock Compensation                               859,000        360,000
    EBITDA                                     $(2,008,000)     $(435,000)



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. 

DATASOURCE: AdStar, Inc.



CONTACT:  Jeff Baudo of AdStar, Inc., [phone], ;

or Media, Kevin Wilson, [phone], , for

AdStar, Inc.



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

Copyright