NetRadio Corporation Announces First Quarter Results

Although NetRadio consistently ranks among the top webcasters in Arbitron's ratings, the company's first quarter results indicate that it is still tough to turn a profit in the Web radio business.

NetRadio Corporation ( www.netradio.com) has announced first quarter net income of $3,138,366 or 31 cents per share. The bright light in the company's financial quarter was a deal negotiated with the Navarre Corporation that led to NetRadio showing an extraordinary gain of $5.5 million due to debt forgiveness.

The Navarre Corporation forgave $5.5 million of NetRadio's $9.6 million in debt in exchange for a $1 million payment made on March 26, 2001. The deadline for re-payment of the remaining debt was extended to the end of March 2002.

Without taking the extraordinary gain into account, the company showed a loss of $2,461,737 from operations on revenues of $202,415.

While NetRadio has reduced its operating costs by 47 percent compared to the first quarter last year, its revenues have unfortunately dropped by similar proportions. NetRadio states that it was primarily able to reduce operating costs by outsourcing its e-commerce operations to Amazon.com, negotiating permanently reduced bandwidth costs through more favorable contracts, and cuts in promotional advertising for the company's Web site.

"Protecting our cash reserves continues to be a top priority along with generating revenues through our new B2B strategy. We expect to see sales late in the second quarter from our first major B2B agreement, with Best Buy Co., and are aggressively pursuing additional opportunities. Going forward, we expect our monthly cash usage, excluding capital expenditures, to be less than $600,000,'' said Eric H. Paulson, chairman of the board, president and CEO.

NetRadio cites its co-branding agreement with BestBuy.com to provide custom audio entertainment as the highlight of the quarter.