MediaBay, Inc. Announces First Quarter 2000 Results; Sales Increase 25.7%; Results Exceed Analysts' Expectations

Business Wire, May 11, 2000

Safe Harbor Statement Under The Private Securities Litigation Reform Act of 1995: The statements which are not historical facts contained in this press release are forward looking statements that involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements.

Such factors include, but are not limited to, the ability of the Company to successfully integrate newly acquired businesses into its operations and the uncertainty regarding the actual effect of acquisitions on the Company, risks relating to the Company's direct mail campaigns and the ability of its book club to retain members, risks relating to the Company's growth strategy, dependence on third party service providers, uncertainty of the scope of future product returns, collection and risks associated with selling products on credit, competition and other risks detailed in the Company's Securities and Exchange Commission filings. The words "believe" and "should" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

                            MEDIABAY, INC.
                 Consolidated Statements of Operations
             (Dollars in thousands, except per share data)
                              (Unaudited)


                                           Three months ended March 31,
                                               1999           2000
                                           ------------  -------------
Sales                                       $    12,827   $     16,127
Returns, discounts and allowances                 2,898          5,181
                                           ------------  -------------
         Sales, net                               9,929         10,946
Cost of sales                                     4,626          5,750
                                           ------------  -------------
         Gross profit                             5,303          5,196
Expenses:
    Advertising and promotion                     1,486          2,440
    General and administrative                    2,015          3,182
    Depreciation and amortization                 1,414          1,983
                                           ------------  -------------
         Operating income (loss)                    388         (2,409)
    Interest expense, net of interest
     income of $23 and $54 in
     1999 and 2000, respectively                  1,053          1,068
                                           ------------  -------------
         Net loss                          $       (665) $      (3,477)
                                           ============  =============
Net loss per share of common stock
      (basic and diluted)                  $       (.09) $        (.34)
                                           ============  =============


Pro Forma Results Excluding Merger and
 Acquisition Related Costs:
Net (loss) on a GAAP basis                 $       (665)  $     (3,477)
Amortization of goodwill and purchased
     Intangibles relating to mergers and
     acquisitions                                 1,281          1,808
Interest expenses and finance charges
     relating to debt incurred in mergers
      and acquisitions                            1,055          1,122
                                           ------------  -------------
Pro forma net income (loss), excluding
     merger and acquisition related costs  $      1,671   $       (547)
                                           ============  =============
Pro forma diluted income (loss)
     per share                             $        .21   $      (0.05)
                                           ============  =============
Diluted weighted average number of
     common shares outstanding                    9,301         10,253
                                           ============  =============