Mandalay Media, Inc. Announces First Quarter Results

LOS ANGELES-(Business Wire)-August 20, 2009 - Mandalay Media, Inc. (OTCBB: MNDL) (the “Company” or “Mandalay Media”) announced today results for its 2010 fiscal year first quarter ended June 30, 2009. For the quarter ended June 30, 2009, the Company had quarterly revenue of approximately $10.1 million and EBITDA, excluding stock option expense (“Adjusted EBITDA”), a non-GAAP measure, of $1.0 million. The Adjusted EBITDA from the Company’s mobile business, which includes wholly-owned subsidiaries Twistbox Entertainment, Inc. and AMV holding Limited was $1.4 million.

Q1 Operating Highlights include:

Direct to Consumer Market Expansion: Expansion of direct-to-consumer services in key markets including the United States, Russia, Spain and Brazil. Expansion of Content Services for Apple’s iPhone platform.
New Product Development: Launch of Vodafone UK Gaming Portal, deployment of in-house Mobi-Gains mobile advertising platform and implementation of credit card billing for direct-to-consumer mobile content and services.
Play-for-Prizes Expansion: Expanded play-for-prizes titles with leading publishers including Konami, GameLoft and Digital Chocolate. Executed new distribution agreements with leading mobile operators for distribution in Canada, UK and France. Current development of Play-for-Prizes titles to be launched with Apple’s release of its 3.0 operating system update for iPhone and iTouch platforms.
Improved Operating Efficiencies: Further integration of platforms and operating teams to yield improvements in operating expenses beginning in June with full impact seen in the balance of the fiscal year.

“Our performance over our past two quarters demonstrates that the Company’s mobile business now has the scale and operating efficiencies to drive consistently strong operating results,” stated Ian Aaron, CEO of Twistbox, the Company’s wholly-owned subsidiary. “Despite the historical summer slow down for the mobile industry, we have continued to grow our business and drive improvements in EBITDA performance over our past two quarters. With the backlog of new market rollouts, the expansion of our business within our major carrier partners and the launch of new services on application storefronts including iPhone, Blackberry and Nokia, we believe that we are well positioned for continued expansion of our base business. Based on our current performance combined with a strong holiday season historical trend for the mobile industry which occurs during our fiscal third and fourth quarters, we expect to see continued revenue growth and improvement in our EBITDA margins.”

Fiscal 2010 Outlook:

As previously stated, for the fiscal year ending March 31, 2010, the Company is currently on a run rate to generate revenue in excess of $40 million and Adjusted EBITDA, as defined above, in excess of $3.5 million. The Company expects organic growth, operating efficiencies and cost reductions throughout the year to deliver improved results for fiscal 2010.

NON-GAAP Financial Measures

To comply with Regulation G promulgated pursuant to the Sarbanes-Oxley Act of 2002, Mandalay Media attached to this news release and will post to the Company's investor relations website (www.mandalaymediainc.com) any reconciliations of differences between non-GAAP financial information that may be required in connection with issuing the Company's quarterly financial results.

The Company, as is common in its industry, uses Adjusted EBITDA as a measure of performance to demonstrate earnings exclusive of interest, income taxes and non-cash events. The Company manages its business based on its cash flows. The Company, in its daily management of its business affairs and analysis of its monthly, quarterly and annual performance, makes its decisions based on cash flows. The Company, in managing its current and future affairs, cannot affect the amortization of the intangible assets to any material degree, and therefore uses Adjusted EBITDA as its primary management guide. Since an outside investor may base its evaluation of the Company's performance based on the Company's net loss not its cash flows, there is a limitation to the Adjusted EBITDA measurement. Adjusted EBITDA is not, and should not be considered, an alternative to net loss, loss from operations, or any other measure for determining operating performance of liquidity, as determined under accounting principles generally accepted in the United States (GAAP).

About Mandalay Media, Inc.:

Managed by leading media and technology industry executives, the Company’s mission is to build a unique combination of new media distribution and content companies through acquisitions with domestic and foreign businesses with strong management teams and historical financial performance. Through its wholly-owned subsidiary Twistbox Entertainment, Inc., the Company is a leading global producer and publisher of mobile entertainment. Twistbox has exclusive licenses with industry-leading brands, direct distribution with more than 120 wireless operators in over 45 countries and provides an extensive portfolio of award-winning games, WAP sites and mobile TV channels. Its wholly-owned subsidiary AMV Holding Limited is a European leader in direct-to-consumer mobile Internet content and services.

For more information, please visit www.mandalaymediainc.com or www.twistbox.com.

Safe Harbor:

This press release contains forward-looking statements about the Company within the meaning of the Private Securities Litigation Reform Act of 1995. Statements including words such as “estimate,” “expect,” “anticipate” or “believe” and statements in the future tense are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations set forth in the forward-looking statements. Some of the factors which could cause the Company’s results to differ materially from the expectations include the following: consumer demand for the Company’s products; consumer spending trends; fluctuations in the currencies of the countries in which the Company operates against the US dollar; timely development and release of the Company’s products; competition in the industry; the Company’s ability to manage expenses; the Company’s ability to manage and sufficiently integrate acquisitions of other companies; adverse changes in the securities markets; and other factors described in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2009. The Company does not undertake, and specifically disclaims any obligation, to release publicly the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Mandalay Media Inc.
Reconciliation of GAAP Net Loss to Adjusted EBITDA (excluding stock option expense)

				Twistbox
	MNDL			Entertainment Inc +
				AMV Limited
	3 Months Ended			3 Months Ended
	June 30			June 30
	2009			2009

Net Loss	$	(1.0	)	$	(0.2	)

Depreciation		0.1			0.1
Amortization		0.4			0.4
Stock related compensation		0.5
Net Interest expense		0.7			0.7
Income Tax		0.3			0.3
Other					0.1

Adjusted EBITDA	$	1.0		$	1.4