February 03, 2005

Shopping.com Reports Record Fourth Quarter and Year-End 2004 Financial Results

BRISBANE, Calif., Feb 03, 2005 /PRNewswire-FirstCall via COMTEX/ -- Shopping.com Ltd. (Nasdaq: SHOP), a leading online shopping comparison service, today reported financial results for the quarter and year ended December 31, 2004. Financial and Operating Results

Revenue -- Shopping.com reported record fourth quarter revenue of $33.6 million and full-year 2004 revenue of $99.0 million, representing year-over- year growth of 33 percent for the quarter and 48 percent for the year.

Adjusted EBITDA -- The Company's Adjusted EBITDA grew sharply to $9.2 million in the fourth quarter of 2004, an increase of 117 percent over the fourth quarter of 2003. For the full year, the Company reported Adjusted EBITDA of $22.0 million, up 72 percent over 2003. The Company's Adjusted EBITDA is net loss attributable to ordinary shareholders plus deemed dividend, interest expense, provision for income taxes, depreciation, amortization, stock based compensation, and restructuring and other charges, and less interest and other income, net. Adjusted EBITDA is not a measure of liquidity calculated in accordance with generally accepted accounting principles ("GAAP"), and should be viewed as a supplement to, not a substitute for, results of operations presented on a GAAP basis. A table reconciling Adjusted EBITDA to GAAP net income (loss) is included with this release.

Net Income -- The Company reported fourth quarter net income, exclusive of the deemed dividend, of $6.3 million as compared to $2.1 million in the fourth quarter of 2003, a 204 percent increase. Net income, exclusive of the deemed dividend, for fiscal 2004 increased to $12.2 million from $6.9 million in 2003. Net Loss Attributable to Ordinary Shareholders -- The Company recorded a non-cash deemed dividend of $7.2 million in the fourth quarter as a result of its recent initial public offering, resulting in a net loss attributable to ordinary shareholders of $917,000 or a loss per share of $0.09, compared to diluted earnings per share of $0.09 in the fourth quarter of 2003. As a result of the conversion of preferred shares to common shares in 2004, the Company recorded a non-cash deemed dividend of $17.7 million, resulting in a net loss attributable to ordinary shareholders of $5.5 million, or a loss per share of $0.70, for 2004.

Revenue per Paid Merchant Lead -- Revenue per paid merchant lead increased substantially in the fourth quarter of 2004, up 30 percent over the same quarter of 2003. Merchant lead traffic and the revenue associated with it grew as a result of increased investments in the site and users' experience that continued to optimize conversion to sale. Shopping.com has provided a metrics table attached to this press release providing additional detail and historical information on metrics that management believes are helpful to investors.

Management Commentary

"We are pleased to have delivered such strong results in our first quarter as a public company, reporting record revenue and solidifying our position as the leader in comparison shopping," commented Dan Ciporin, chairman and CEO of Shopping.com. "According to ComScore, in December Shopping.com had the most traffic of any comparison shopping site. We achieved this leadership with a simple but powerful focus, providing consumers with a better way to shop and as a result, providing merchants with a better way to sell."

Business Outlook

"We expect 2005 to be a year of significant growth for Shopping.com as we expand our categories and our geographic reach, setting the stage for continued long-term growth and profitability," said Mr. Ciporin. "We will continue to optimize our service for maximum conversion to sale while substantially increasing our investment to establish our leadership position internationally."

Shopping.com expects total revenue for the first quarter of 2005 in the range of $27 million to $28 million and Adjusted EBITDA of $4 million to $4.5 million. For full year 2005 the Company expects revenues to be in the range of $125 million to $132 million and Adjusted EBITDA in the range of $24 million to $26 million. The Company does not provide a complete reconciliation of Adjusted EBITDA forecasts to the forecast on a GAAP basis because information relating to the variable accounting for repriced stock options is not accessible on a forward- looking basis and its probable significance is therefore not determinable. The reconciliation of Adjusted EBITDA to GAAP includes all information reasonably available to the Company at the date of this press release.

Conference Call Details

The Shopping.com Fourth Quarter 2004 teleconference and webcast is scheduled to begin at 4:30 p.m. Eastern Time, on Thursday, February 3, 2005. To access the live webcast, please visit the investor relations section of the Company's website http://www.shopping.com at least 30 minutes prior to the scheduled time to download any necessary audio or plug-in software. An audio replay of the call will also be available to investors beginning at 7:30 p.m. ET on February 3, 2005, through February 18, 2005, by dialing (800) 405-2236 and entering the passcode 11021586.

About Shopping.com Shopping.com Ltd. is a leading online comparison shopping service. The Company gathers product and merchant data from across the Internet, organizes and structures it into a comprehensive catalog, and presents the resulting information to consumers in a user-friendly interface. Shopping.com was launched in 2003 as the new brand and corporate identity of Dealtime.com, founded in 1997, and Epinions.com, founded in 1999. For further information, please refer to the final prospectus available in connection with the offering. SOURCE Shopping.com Ltd.