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MIVA Announces Third Quarter 2008 Results

Third Quarter Adjusted EBITDA Loss Narrows to $1.6 million from $3.5 million in Second Quarter


FORT MYERS, FL. - November 10, 2008 - MIVA, Inc. (NASDAQ: MIVA), today reported financial results for the third quarter ended September 30, 2008.

Third Quarter 2008 Results from Continuing Operations Summary:

"I believe that over the last quarter we have made progress in our strategy of returning the business to profitability. During the quarter we announced a broad range of growth and cost control initiatives including a restructuring program that we expect will return our Media E.U. operation to adjusted EBITDA profitability in Q4 2008; the beta release of our new MIVA Media technology platform that we expect will deliver cost efficiencies and opportunities for revenue growth; and the continued expansion of our ALOT brand, within which we launched our new customizable toolbar and homepage products."

"With the cost of these initiatives now largely behind us, and with the added liquidity delivered through our credit line of up to $10.0 million from Bridge Bank, N.A., I believe we have now reached a pivotal point in our turnaround plan that will enable us to narrow our EBITDA loss in Q4 2008 and reach EBITDA profitability in 2009," commented Peter Corrao, President and Chief Executive Officer.

Third Quarter Results from Continuing Operations

Revenue was $28.2 million in Q3 2008, compared to revenue of $30.2 million in Q2 2008. The $2.0 million decrease was due primarily to an expected decline in revenue in MIVA Media E.U. as a result of our restructuring program. MIVA Direct, our primary traffic business, contributed 36.8% of total revenue in Q3 2008, compared to 34.2% in Q2 2008. MIVA Direct's revenue remained stable at $10.4 million in Q3 2008 compared to $10.3 million in Q2 2008. MIVA Media U.S. revenue also remained stable at $11.8 million in Q3 2008 compared to $12.0 million in Q4 2008.

Gross margins were 50.7% in Q3 2008, compared to 50.4% in Q2 2008. Gross margins increased marginally due to increased contribution from our MIVA Direct division on a lower consolidated revenue base.

Total operating expenses were $23.3 million in Q3 2008, compared to $21.5 million in Q2 2008. The operating expenses in Q3 2008 included restructuring charges of $2.7 million, a one-time litigation judgment expense of $2.4 million relating to an earn-out to the sellers of Comet Systems, Inc., a company we acquired in 2004 and which became our MIVA Direct business, and non-cash compensation expense of $1.2 million. The operating expenses in Q2 2008 included restructuring charges of approximately $0.8 million, non-cash compensation expense of $0.7 million, and a one-time litigation settlement charge of approximately $0.2 million. Adjusting for these non-cash and one-time expenses, our adjusted operating expenses were approximately $17.0 million in Q3 2008 compared to adjusted Q2 2008 operating expenses of $19.8 million. This period to period decrease in adjusted operating expenses is primarily attributed to the results of the restructuring initiatives in 2007 and 2008.

EBITDA was a loss of $7.9 million in Q3 2008, compared to an EBITDA loss of $5.2 million in Q2 2008. Q3 2008 EBITDA included $2.7 million in restructuring charges, $2.4 million for a one-time litigation judgment, and $1.2 million in non-cash compensation expense. Q2 2008 EBITDA included $0.8 million in restructuring charges, $0.7 million in non-cash compensation expense, and approximately $0.2 million in litigation settlement charges.

Adjusted EBITDA was a loss of $1.6 million in Q3 2008, compared to Adjusted EBITDA loss of $3.5 million in Q2 2008. Q3 2008 Adjusted EBITDA loss excluded $2.7 million in restructuring expense, $2.4 million for a one-time litigation judgment, and $1.2 million in non-cash compensation expense. Q2 2008 Adjusted EBITDA loss excluded $0.8 million in restructuring charges, $0.7 million in non-cash compensation expense, and approximately $0.2 million in litigation settlement fees.

GAAP net loss from continuing operations was $10.5 million or $(0.32) per basic share in Q3 2008 compared to GAAP net loss from continuing operations of $6.3 million, or $(0.19) per basic share in Q2 2008.

Adjusted net loss from continuing operations was $3.5 million or $(0.11) per diluted share in Q3 2008, compared to Adjusted net loss from continuing operations of $3.9 million or $(0.12) per diluted share in Q2 2008. Q3 2008 Adjusted net loss excluded the $0.7 million in amortization, $1.2 million non-cash compensation expense, $2.7 million in restructuring charges, and $2.4 million for a one-time litigation judgment. Q2 2008 Adjusted net loss excluded $0.7 million in amortization, $0.7 million in non-cash compensation expense, $0.8 million in restructuring charges, and approximately $0.2 million in litigation settlement fees.

Cash and cash equivalents were $11.2 million at September 30, 2008, a decrease of $6.0 million from June 30, 2008 cash of $17.2 million. The $6.0 million decrease includes expenditures related to development of the new platform ($1.4 million), restructuring charges ($1.0 million), and the EBITDA loss.

As of September 30, 2008, the Company had an active base of 139 full time employees, down from 184 at June 30, 2008, and 230 at December 31, 2007. The decrease from December 31, 2007 is due primarily to the Company's 2008 restructuring plans.

Third Quarter Metrics by Business

(1) MIVA Media E.U. revenues, paid clicks, gross margin and TAC adjusted for discontinued operations (Italy) for periods presented.

(2) MIVA Direct's gross margin excludes advertising spend of $6.5 million in Q3 2008 and $7.2 million in Q2 2008, which is included in consolidated operating expenses within the marketing, sales, and service category. The total paid clicks metric does not reflect clicks generated through our MIVA-owned primary traffic business, MIVA Direct, including our toolbar products.

Business Outlook

We expect Q4 2008 revenue will be $25.0 to $26.0 million and EBITDA loss of between ($0.5) million and ($1.5) million. For MIVA Media U.S. we expect Q4 2008 revenue to be approximately $12.0 million; for MIVA Direct we expect Q4 2008 revenue to be approximately $9.0 million; and for MIVA Media E.U. we expect Q4 2008 revenue to be approximately $4.0-$5.0 million. We are forecasting 2008 total revenues from continuing operations of $116.0 to $117.0 million and an EBITDA loss from continuing operations between $(11.0) million and $(12.0) million, excluding restructuring charges and litigation judgments and settlements. However, with the anticipated growth in ALOT and its expected higher monetization, reduced corporate expenses, and the anticipated introduction of the new platform, we expect operating performance to improve in 2009 and we expect to be EBITDA profitable in 2009

Management Conference Call

Management will participate in a conference call to discuss the full results for the Company on November 10, 2008, at approximately 4:30 p.m. ET. The conference call will be simulcast on the Internet at http://ir.miva.com/medialist.cfm.

A replay of the conference call will be available on the investor relations area of MIVA's website at http://ir.miva.com/medialist.cfm. Interested parties may email questions in advance to Lowell Robinson of MIVA, Inc. at lowell.robinson@miva.com

MIVA believes that "Adjusted EBITDA", "Adjusted net income/loss" and "Adjusted net income/loss per share" provide meaningful measures for comparison of the Company's current and projected operating performance with its historical results due to the significant increase in non-cash amortization that began in 2004 primarily due to certain intangible assets resulting from mergers and acquisitions. MIVA defines Adjusted EBITDA as EBITDA (earnings before interest, income taxes, depreciation and amortization) plus non-cash compensation expense and plus or minus certain identified revenues or expenses that are not expected to recur or be representative of future ongoing operation of the business. MIVA uses Adjusted EBITDA as an internal measure of its business and believes it is utilized as an important measure of performance by the investment community. MIVA sets goals and awards bonuses in part based on performance relative to Adjusted EBITDA. MIVA defines Adjusted net income/loss as net income/loss plus amortization and non-cash compensation expense, plus or minus certain identified revenues or expenses that are not expected to recur or be representative of future ongoing operation of the business, in each case including the tax effects (if any) of the adjustment. MIVA believes the use of these measures does not lessen the importance of GAAP measures.

About MIVA®, Inc.

MIVA, Inc. is an online advertising and media company that operates across the US and Europe. MIVA's mission is to deliver valuable digital audiences to advertisers, which is achieved through two distinct divisions: MIVA Media, which offers Pay-Per-Click Ads across both vertical and contextual networks and MIVA Direct, which offers display and toolbar advertising solutions and focuses on the development and monetization of consumer sites.

Forward-looking Statements
This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as "plan," "intend," "believe," "anticipate," "will," "expect" or "forecast" or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation, the potential that the information and estimates used to predict anticipated revenues and expenses were not accurate; the risks associated with the fact that we have material weaknesses in our internal control over financial reporting that may prevent us from being able to accurately report our financial results or prevent fraud; the risk that we have in the past and may in the future incur goodwill impairment charges that materially adversely affect our earnings and our operating results; the risk that our stock may be de-listed from NASDAQ if we fail to maintain NASDAQ minimum stock price requirements, risk that our new products and services will not meet expectations, the risk that we will not be able to comply with our bank loan covenants, the potential that demand for our services will decrease; the risk that we will not be able to continue to enter into new online marketing relationships to drive qualified traffic to our advertisers; the risk that our distribution partners will use unacceptable means to obtain users or that we will need to remove traffic generated by distribution partners; risks associated with our ability to compete with competitors and increased competition for distribution partners; political and global economic risks attendant to our business; risks associated with legal and cultural pressures on certain of our advertiser's service and/or product offerings; other economic, business and competitive factors generally affecting our business; the risk that operation of our business model infringes upon intellectual property rights held by others; our reliance on distribution partners for revenue generating traffic; risks associated with maintaining an international presence; difficulties executing integration strategies or achieving planned synergies with acquired businesses and private label initiatives; the risk that we will not be able to effectively achieve ongoing growth or return to profitability; the risk that new technologies could emerge which could limit the effectiveness of our products and services; risks associated with the operation of our technical systems, including system interruptions, security breaches and damage; risks associated with Internet security, including security breaches which, if they were to occur, could damage our reputation and expose us to loss or litigation; risks relating to regulatory and legal uncertainties, both domestically and internationally. Additional key risks are described in MIVA's reports filed with the U.S. Securities and Exchange Commission, including the Form 10-K for fiscal 2007 and its most recent Form 10-Q. MIVA undertakes no obligation to update the information contained herein.

Non-GAAP Financial Measures
This press release includes discussion of additional financial measures "Adjusted EBITDA," "Adjusted Net Loss," "Adjusted Net Income," "Adjusted Net Loss Per Share" and "Adjusted Net Income Per Share," which are not considered generally accepted accounting principle (GAAP) measures by the Securities and Exchange Commission, and may differ from non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. MIVA provides reconciliations of these two financial measures to GAAP measures in its press releases regarding actual financial results. A reconciliation of these financial measures to net income/loss and net income/loss per share for the three and nine months ended September 30, 2008 included in this press release is set forth below.

®Registered trademark of MIVA, Inc. All other marks properties of their respective companies.


U.S. MIVA Investor Relations Contact
Lowell Robinson
Lowell.Robinson@miva.com
(212) 736-9151

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