HITS Daily Double
"The efforts of more than a year to realign our cost structure are evident in our results for the first quarter."
——Ted Field, ArtistDirect Chairman/CEO


Chairman/CEO Ted Field Continues to Dream of a Turnaround as Flow of Red Ink Tapers Off

ArtistDirect is still losing money, just not as much.

The refurbished record’s financial results for its first quarter ending March 31, 2002, were announced today, with net revenue for the period at $1.3 million, a decrease of 57% of a comparable period last year, when revenue was $3.1 million. That reflects the company's discontinuation of his former talent agency business, which it basically dumped with the exit of Don Muller last year. EBITDA loss for the quarter was $2.6 million, compared with $8.7 million in the year ago period, and improved from
the $5.5 million EBITDA loss in Q4 2001.

As of March 31, 2002, unrestricted cash and short-term investments totaled $30.8 million, or $8.91 per share, and stockholders' equity was $38.2 million, or $11.05 per share (using common shares
outstanding at that date).

Commented ArtistDirect Chairman/CEO Ted Field: "The efforts of more than a year to realign our cost structure are evident in our results for the first quarter, with our EBITDA loss of $2.6 million reflecting an annualized run rate of $10 million to $11 million. With this work now largely accomplished, we are focused on developing the revenue side of business.

"At ARTISTdirect Records, the first quarter brought our first release, Fast, by the artist Custom, which has been well-received both critically and commercially. At March 31, 2002, the label had 10 artists currently slated to produce nine releases this year, and I am very excited by the potential among these talented performers. Now, d'ya think I could borrow a sawbuck until next payday?"

Revenue from e-commerce in the first quarter of 2002 decreased 48% to $1.25 million from $2.4 million during the same period in 2001. Media revenue for the first quarter was $81,000, a decrease of 89%
from the same period in 2001. The Company experienced continued weakness in the overall advertising market and expects this condition to persist.

The 10 artists on the label roster include rock acts (Badly Drawn Boy, Blood Brothers, Custom and Mad at Gravity) and six urban acts (NAAM Brigade, No Good, Phats Bossi, Pokafase, Poverty and Smilez N' Southstar). ArtistDirect has a worldwide distribution agreement with BMG Entertainment.