Final Results-Replacement

RNS Number:3530R
Burst Media Corporation
01 April 2008



The 'Final Results' announcement released today at 7:00 under RNS No 2340R 
has been reformatted.

All material details remain unchanged.

The full text is shown below.



                                                                    1 April 2008

                            Burst Media Corporation
        Preliminary results for the twelve months ended 31 December 2007


Burst Media Corporation ("Burst" or "the Company"), the international online
advertising services and technology business, announces its preliminary results
for the year ended 31 December 2007.



Financial Summary

  * Total revenue for 2007 was $27.1 million (2006: $23.7 million),
    representing growth of 14% (2006: 10%).
      * Burst Network's revenue decreased to $21.9 million (2006: $22.1
        million) due to a combination of higher than expected staff turnover and
        lower than anticipated advertising revenue in the fourth quarter.
      * Burst Direct, launched in June 2006, made significant progress with
        revenue of $1.9 million (2006: $0.5 million), representing growth of
        over 300%. This growth is a result of a clearer value proposition and
        the use of strategies, such as purchasing ad inventory to recognise
        revenue from sold campaigns.
      * Burst AdConductorTM revenue increased almost 200% to $3.3 million
        (2006: $1.1 million) due to new customer wins (e.g., MTV Networks and
        Winstar) and growth from existing customers (e.g., TACODA and Reed
        Business Information).
  * Gross profit increased to $13.2 million (2006: $11.4 million).
  * Gross margin improved to 49% (2006: 48%).
  * Adjusted net income(1) was $1.3 million (2006: $2.8 million).
  * Adjusted EBITDA(1) was $1.4 million (2006: $2.4 million). The decrease was
    due primarily to an underachievement of the revenue projections for the
    Burst Network and an increase in employee related costs for new hires and
    for the retention of existing employees.
  * Net income was $0.3 million (2006: $0.2 million) and included
    non-recurring pre-tax charges of $0.7 million relating to the restructuring
    of the Company's management team.
  * Cash at 31 December 2007 was $12.6 million (2006: $13.0 million).
    Approximately $1.0 million in cash was used in 2007 to improve the payment
    terms to publishers from 90 days to 45 days, which has resulted in stronger
    recruitment and retention of publishers in Burst's media businesses.



Commenting on the results, Chief Executive Jarvis Coffin said, "While 2007 was a
challenging year for Burst, our two newest businesses, Burst Direct and Burst
AdConductor grew substantially. We began to refocus our Burst Network franchise
on the high value, brand advertising business that is of vital interest to our
web publishers.  Our businesses are now well-positioned to capitalise on the
growing interest in the ad network sector and especially the rise of vertical ad
networks that rely on the Internet's abundance of niche web sites that are
Burst's stock-in-trade. We look forward to a strong year in 2008."



Reconciliation of Net income (loss) to Adjusted net income(1) and Adjusted
EBITDA(1) ($000's):


                                      Year Ended December 31,
                                       2007          2006


Net income                             $ 332         $ 208

Adjustments:
Restructuring charges                    735             -

Equity-based compensation                236         2,584
Adjusted net income(1)                 1,303         2,792

Adjustments:
Interest income                        (579)         (520)
Income tax expense (benefit)             296          (70)
Depreciation and amortization            369           212
Adjusted EBITDA(1)                   $ 1,389       $ 2,414
         
Adjusted EBITDA(1) as percentage
of revenue                                5%           10%
                                     


(1) "Adjusted net income" (earnings excluding restructuring charges and
equity-based compensation) and "Adjusted EBITDA" (Adjusted net income before
interest income, taxes, depreciation and amortization) are non-U.S.GAAP
financial measures.  The Company believes Adjusted net income and Adjusted
EBITDA provide meaningful insight into the Company's ongoing economic
performance and therefore uses both Adjusted net income and Adjusted EBITDA
internally to assist in evaluating and managing the Company's operations.





Enquiries:

Burst Media Corporation
Jarvis Coffin, Chief Executive                       [phone]

Susan Villare, Chief Financial Officer

Hudson Sandler
Nick Lyon / James White                              [phone]

Altium
Tim Richardson / Paul Chamberlain                    [phone]

Portico Capital Securities
Raj Das / Mark Roszkowski                            [phone]





Chairman's statement

Fiscal 2007 was a challenging year of transition for Burst. Whilst the Company
continued to experience weakness in the core Burst Network business, it was
offset by the growth of its two newest businesses, Burst Direct and Burst
AdConductor.

Strategically, the Company has transformed itself from a media sales company
with one solution for web publishers into a media and technology company that
serves online publishers of all sizes, from small independent web sites seeking
sales representation to large media conglomerates that require an end-to-end
solution to manage their increasingly valuable online advertising sales
operations. This change allows Burst to compete more effectively in the evolving
online advertising landscape.

Burst continues to invest in the products and market presence that enables the
Company to participate credibly in what has become a very competitive market.
During 2007, the four major online media portals - Google, Microsoft, AOL, and
Yahoo! - all announced significant acquisitions that raised the profile of the
ad network sector to which Burst belongs. The inherent value of smaller,
independent publishers to these media and technology giants has raised the
visibility and validated the offering of ad networks with both publishers and
advertisers.

Additionally, Burst's AdConductor platform has generated interest among large
media companies in search of superior technology and process for management of
diverse networks of web sites. For these large publishers, who typically manage
both owned and operated sites, as well as affiliate sites they do not control,
the AdConductor platform allows them to centralise their ad management and
processes.  Improvements to this platform include the launch of a new
state-of-the-art publisher interface, more options for action-based optimization
and productivity improvements within campaign management. These enhancements
have benefited both of the Company's media businesses, Burst Network and Burst
Direct, and its external AdConductor customers.

The Board announced in December 2007 that it would initiate a strategic review
to explore alternative ways to maximize value for the Company's shareholders.
The Board has retained Portico Capital Securities to assist the Company with
this process.  Whilst progress is being made with regards to the strategic
review, its ultimate outcome cannot be predicted at this time.  Further
announcements regarding this review will be made in due course.

Burst continues to be an innovator in the online advertising marketplace.  The
new management team is now well established and has made significant progress
strengthening Burst's three businesses.  The Company has the right people and
the right product offerings in place to fully capitalise on the market
opportunities identified in what is projected to remain a competitive and
challenging market.


David Hanger
Non-Executive Chairman
1 April 2008



Chief Executive's statement

In 2007, Burst substantially grew its two new businesses, Burst Direct and Burst
AdConductor. Additionally, we refocused Burst Network to better serve the high
value, brand advertising customers that are vital to our web publishers. Total
revenue grew by 14% in 2007 as compared to 10% in 2006.  We continue to remain
profitable and I am confident that our operations are on solid ground to
capitalise on the future projected market growth rates.


Online Reach

Ad networks serve campaigns across a wide variety of sites that represent
Internet traffic as measured in individual visitors to a site, or "unique
visitors."  Burst Media reached 80.3 million(2) unique monthly Internet visitors
in the U.S. in December 2007, up 8.1% from 74.3 million(2) unique visitors in
December 2006.  This placed Burst Media as the 22nd(2) largest Internet property
in the U.S. at December 2007.  Burst Media reached 10.6 million(2) unique
monthly Internet visitors in the U.K. in December 2007 and was the 24th(2)
largest U.K. Internet property at 31 December 2007.


Burst Network

Burst Network remained the Company's largest division in 2007, generating over
80% of total revenue. The objective of Burst Network is to represent the
broadest and deepest array of quality online web publishers and to target an
advertiser's campaign to a specific audience. Large brand advertisers are
increasing the allocation of their overall advertising budget to online sites.
With a transparent network of over 4,600 high quality sites and robust targeting
technology, Burst Network continues to place emphasis on selling higher priced
brand advertising. Total revenue for this division decreased by $0.2 million to
$21.9 million in 2007 compared to $22.1 million in 2006.  The total number of
impressions for Burst Network was 50.5 billion for 2007 (2006: 55.1 billion).
Burst Network's publisher base grew over 20% to approximately 4,600(3) sites at
the end of 2007 from 3,800(3) sites at the end of 2006.

We continue to raise awareness of Burst Network with brand advertisers.  We have
developed and implemented a number of new initiatives to do this, including the
launch of audience-focused networks such as the Burst Moms Network and the CD
Kitchen Cooking Network.  Additionally, we are partnering with leading firms
such as PointRoll and Quattro Wireless to offer video and mobile advertising
solutions.  We are confident that this will help grow our existing accounts and
appeal to new accounts looking for a unique set of brand advertising solutions
from a single source. As a result of all of these initiatives, we increased our
weighted average unit prices by over 10% in 2007 as compared to 2006 and
continue to make progress raising prices in 2008.  Improving our pricing is
important to increasing the amount of inventory we are able to sell for our
publishers and, most importantly, to maintaining a high publisher retention
rate.


Burst Direct

Burst Direct, which is the Company's performance-focused ad network, grew its
revenue by over 300% to $1.9 million in 2007 from a maiden contribution of $0.5
million in 2006.  Burst Direct substantially improved its business this year by
focusing on strategies designed to meet the needs of direct response
advertisers. It has succeeded in 1) effectively using purchased inventory from
other media suppliers for the benefit of advertiser results, 2) introducing
dynamic pricing to leverage the different values of publishers' inventory, 3)
offering superior customer service compared to the market, and 4) launching
high-margin Cost Per Action (CPA) campaigns.



(2)  Figures are from comScore MediaMetrix.  Historical data relating to
unique visitors in the U.S. for 2006 have been restated to exclude a fast
growing   AdConductor client that had previously been included in reported reach
totals.

(3)  Inclusive of approximately 2,000 and 1,700 websites that are in both Burst 
Network and Burst Direct at 31 December 2007 and 31 December 2006, respectively.




Burst Direct's publisher inventory grew over 50% to approximately 3,900(3) sites
at the end of 2007 from approximately 2,500(3) sites at the end of 2006.  It
maintains relationships with other direct inventory suppliers, such as large
media properties and social networks from whom it buys inventory. The
combination of these inventory sources allows Burst Direct to better manage the
success and profitability of each campaign.

The performance advertising sector follows different rules from our traditional
brand advertising business and we continue to incorporate those changes to
improve the competitive standing of Burst

Direct. As we do this, we are able to comfortably offer both media sales
products in the marketplace, providing a more complete solution to publishers
and advertisers.



Burst AdConductor

Burst Media has invested in the technology and processes required to run online
advertising networks made up of unaffiliated web properties since its inception
12 years ago. With the Burst AdConductor product offering, we can support other
companies in this endeavour. The list of those prospects for AdConductor
continues to grow as both independent ad networks and major media conglomerates
actively announce plans to enter into the ad network business. For them,
AdConductor provides the foundation for building ad networks, namely the
end-to-end ad management workflow and systems, as well as the expertise and
business processes required to manage complex advertiser and publisher
relationships.

Revenue for the AdConductor business unit grew almost 200% to $3.3 million in
2007 from $1.1 million in the prior year.  As of the end of 2007, Burst
AdConductor managed 10 Enterprise customers and 17 Desktop customers.  During
2007, Burst AdConductor introduced enhanced user targeting capabilities,
significantly improved its ad management tools to more effectively manage
adertising campaigns and was awarded its eighth consecutive systems
certification by BPA Worldwide.

I am pleased to announce that Sean Keaveny joined the Company as Managing
Director of Burst AdConductor in February 2008.  Mr. Keaveny joins Burst from
Reed Business Interactive Division where he served as Vice President of
Operations.  As Managing Director, he will be responsible for driving revenue
growth and providing strategic leadership to the AdConductor business.



2008 Outlook

The Company has spent nearly two years managing internal change to address key
market and product strategy issues.  The Company's focus is now to capitalise on
the commercial opportunities we have identified, particularly the rise of
vertical ad networks that rely on the Internet's abundance of niche web sites,
Burst's principal stock-in-trade.  There has been a significant shift in the
market over the past year embracing the value of niche content online and the
role ad networks play in the process.  Through Burst Network's launch of
brand-focused networks and AdConductor's capability to build and manage virtual
networks for others, Burst Network and AdConductor can benefit from this trend.

Burst has started the new year with two clearly defined media sales offerings:
Burst Network is focused on brand advertisers needs, including premium ad
placements and transparency; Burst Direct deals specifically with direct
response campaigns and its business rules support their customers' needs. Their
sales propositions are defined specifically to meet the unit pricing and
inventory fulfilment expectations of our web publishers. Additionally, we are
making significant investments in the interface of our AdConductor product to
improve its marketability to Enterprise customers and its ability to make our
media sales teams more productive.


(3)       Inclusive of approximately 2,000 and 1,700 websites that are in both
Burst Network and Burst Direct at 31 December 2007 and 31 December 2006,
respectively.


Against the backdrop of change and progress in the industry and in our Company
specifically, we believe 2008 will be a strong year for Burst.



Final Notes

This year, two of my partners ended their long service to the Company. Bill
Davlin, our founding Chief Financial Officer and Bob Hanna, a co-founder and our
long-time sales leader, resigned from the Executive team in February 2007 and
resigned from the Board of Directors in December 2007. They both provided
wisdom, insight and skill to their jobs and their Board roles, and I wish them
all the best in their next endeavours. Dave Stein and I remain with the Company
as co-founders and Board members, bridging the early knowledge of the business
with the opportunities to grow in the future.


Jarvis Coffin
Chief Executive Officer
1 April 2008



BURST MEDIA CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Years Ended December 31, 2007 and 2006
(in thousands, except share amounts)

                                                               2007          2006
Revenue                                                      $27,053       $23,655
Cost of revenue                                               13,876        12,251
Gross profit                                                  13,177        11,404

Operating expenses:
Sales and marketing                                            6,331         5,309
General and administrative                                     3,531         2,360
Technology and product development                             2,366         1,514
Equity-based compensation                                        236         2,584
Restructuring charge                                             735             -
Total operating expenses                                      13,199        11,767

Loss from operations                                            (22)         (363)

Other income:
Interest income                                                  579           520
Other income (expense), net                                       71          (19)
Total other income                                               650           501

Net income before income tax expense (benefit)                   628           138

Income tax expense (benefit)                                     296          (70)

Net income                                                      $332          $208

Basic earnings per share                                       $0.00         $0.00
Fully diluted earnings per share                               $0.00         $0.00

Weighted average shares used in calculating:
Basic earnings per share                                  82,996,781    73,350,634
Fully diluted earnings per share                          83,049,529    73,498,934



See notes to consolidated condensed financial statements.


BURST MEDIA CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
December 31, 2007 and 2006
(in thousands, except share amounts)


                                                            2007          2006
                                     ASSETS:
CURRENT ASSETS

Cash and cash equivalents                                   $12,583       $13,012
Accounts receivable, less allowance for doubtful accounts
of $221 in 2007 and $220 in 2006                              5,852         5,565
Prepaid expenses and other current assets                       412           422
Total current assets                                         18,847        18,999

PROPERTY AND EQUIPMENT, NET                                     831           747

DEFERRED INCOME TAXES, NET                                      345           409

OTHER ASSETS                                                    221           214
                                                            $20,244       $20,369
          LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES
Due to publishers                                            $2,454        $3,500
Other current liabilities                                     1,204         1,038
Total current liabilities                                     3,658         4,538

OTHER LONG TERM LIABILITIES                                     104            56

Total liabilities                                             3,762         4,594

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

Common stock, $.01 par value; 150,000,000 shares
authorized, 83,028,562 and 82,928,652 
shares issued and outstanding at December 31, 
2007 and 2006, respectively                                     830           829
Additional paid-in capital                                   25,466        25,092
Accumulated deficit                                         (9,814)      (10,146)
Total stockholders' equity                                   16,482        15,775
                                                            $20,244       $20,369



See notes to consolidated condensed financial statements.


BURST MEDIA CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2007 and 2006
(in thousands, except for share amounts)
                                                              2007         2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.                                                   $ 332        $ 208
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization                                   369          212
Deferred income taxes                                          (56)        (409)
Bad debt                                                        307           34
Equity-based compensation                                       364        2,584
Deferred rent                                                    57           47
Changes in:
Accounts receivable                                           (602)        (263)
Prepaid expenses and other current assets                       138        (134)
Other assets                                                   (14)          (4)
Due to publishers                                           (1,046)        (478)
Other current liabilities                                       170           96
Net cash provided by operating activities                        19        1,893

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment                           (446)        (731)
Cost of acquiring trademarks and other properties                 -         (26)
Repayments of note receivable from member                         -           34
Net cash used in investing activities                         (446)        (723)

CASH FLOWS FROM FINANCING ACTIVITIES
Stock option exercises                                           11          645
Common stock issued, net of offering costs                        -        3,318
Series C units preference settlement                              -          421
Repayments of capital lease obligation                         (13)          (4)
Net cash (used in) provided by financing activities             (2)        4,380

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS          (429)        5,550
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                 13,012        7,462
CASH AND CASH EQUIVALENTS, END OF YEAR                      $12,583      $13,012


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

During the year ended December 31, 2007, the Company paid cash in the amounts of
$1 for interest and $277 for taxes.  During the year ended December 31, 2006,
the Company paid cash in the amounts of $1 for interest and $381 for taxes.


NON-CASH INVESTING ACTIVITIES

In 2007, the Company received $8 in common stock of a debtor in settlement of
accounts receivable due from the debtor.


NON-CASH FINANCING ACTIVITIES

The Company issued 63,745,150 Common shares in exchange for the Series A, B and
C membership units upon conversion to a C Corporation during the year ended
December 31, 2006.  The Company issued 14,235,664 Common shares in settlement of
a Series C membership unit holders' preference during the year ended December
31, 2006.


See notes to consolidated condensed financial statements.



BURST MEDIA CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(in thousands, except share amounts)



NOTE 1 - DESCRIPTION OF THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES


Basis of Presentation

The consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America and
include the accounts of BURST! Media UK Limited, the Company's wholly-owned
subsidiary.  All significant intercompany balances and transactions have been
eliminated.  Certain information and note disclosures, which are normally
included in annual financial statements prepared in accordance with U.S. GAAP,
have been omitted. The consolidated statements reflect all adjustments which
are, in the opinion of management, necessary to present fairly the Company's
financial position and the results of operations.


Reclassifications

Certain previously recorded amounts have been reclassified to conform to the
current period presentation.


Re-incorporation and Initial Public Offering

The Company was originally organized in January 1996 as a New York Limited
Liability Company (Burst LLC). On April 10, 2006, the Company was
re-incorporated under the laws of the State of Maryland. The re-incorporation
changed the form of the entity from a Limited Liability Company (LLC) to a C
Corporation. The Company acquired 100% of the assets and liabilities of Burst
LLC in exchange for all of the Company's outstanding capital stock (equivalent
to 63,745,150 shares of $0.01 par value common stock), which was thereupon
distributed to  the members of Burst LLC on a pro rata basis in connection with
its dissolution on April 11, 2006.  The exchange was recorded at the Company's
historical carrying value on the date of conversion.

On April 21, 2006, the Company issued 3.5 million new shares of common stock on
the AIM market of the London Stock Exchange at $1.47 per share, generating $3.3
million in net proceeds.  The issue costs (legal, commissions and other)
totalled $1.8 million in cash.  In addition, the Company issued 14,235,664
shares of Common stock as part of the Series C Members' preference settlement.
The stock trades on the AIM market under the symbol "BRST".

Prior to the Company's Initial Public Offering on April 21, 2006, the operations
of Burst LLC were governed by its amended and restated operating agreement dated
January 31, 2000.  The amended and restated operating agreement provided for the
issuance of membership units that entitled each series of membership units to
certain rights and obligations.


Foreign Currency

The financial accounts of BURST! Media UK Limited are measured using the local
currency as its functional currency.  The assets and liabilities of this
subsidiary are generally translated into U.S. dollars at the current exchange
rates as of the balance sheet dates and revenues and expenses are translated at
average exchange rates each month.

The Company also conducts certain transactions denominated in foreign
currencies.  Net foreign currency transaction gains were $25 and $41 for the
years ended December 31, 2007 and 2006, respectively and are included in Other
income (expense), net.


Equity-Based Compensation

SFAS No.123(R), "Share-Based Payment," requires the use of an option pricing
model for estimating fair value, which is amortized to expense over the vesting
period of an option grant.  As such, pro-forma disclosure of fair value
recognition is no longer an alternative. The Company has applied the provisions
of SFAS No. 123(R) to the financial statements for the years ended December 31,
2007 and 2006.  The Company applied the modified prospective application
transition method as permitted by this statement.  As such, financial statements
for prior periods to the effective date of this statement have not been
restated.


NOTE 2 - EARNINGS PER SHARE

Basic and diluted earnings per share for the years ending December 31 are
calculated as follows:


                                                              2007         2006
Numerator:
Net income used in calculating basic and diluted              $332         $208
earnings per share

Denominator:
Weighted average number of common shares outstanding    82,996,781   73,350,634
Effect of dilutive securities - stock options               52,748      148,300
Shares used in calculating diluted earnings per share   83,049,529   73,498,934


Antidilutive options outstanding were 3,353,455 and 868,222 at December 31, 2007
and 2006, respectively.



NOTE 3 - RESTRUCTURING


On February 26, 2007, William Davlin, the former Chief Financial Officer and
Robert Hanna, the former Senior Vice President of Sales, announced their
resignations from the Company to pursue other interests. They remained on the
Board as uncompensated non-executive Directors until December 2007.  On December
4, 2007 and December 7, 2007, respectively, Mr. Davlin and Mr. Hanna resigned
from the Board of Directors.

As part of their severance agreements, Mr. Davlin and Mr. Hanna each received
lump sum payments of $297 and reimbursement for combined legal services of
approximately $13. Both Mr. Davlin and Mr. Hanna had 110,000 options as of their
separation date at a strike price of $1.46 that were immediately vested on
February 26, 2007.  In connection with the acceleration of these options, the
Company recorded approximately $128 of equity-based compensation expense at the
date of their resignation.  These options expired unexercised in 2007.

As of December 31, 2007, Mr. Davlin and Mr. Hanna owned 5,274,583 shares and
10,305,860 shares of the Company's Common stock, which represented approximately
6.4% and 12.4% of the total outstanding Common shares of the Company,
respectively.


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