Kaboose Reports Record Second Quarter 2008 Results with Revenue Increasing 161% to $21.24 Million and EBITDA Up 104% to $2.24 Million



    Achieves Six-Month Revenue of $39.69 Million and EBITDA of $3.80 Million

    TORONTO, July 31 /CNW/ - Kaboose Inc. (TSX: KAB), one of the largest
family-focused new media companies in the world, today announced financial
results for its second quarter of fiscal 2008 ended June 30, 2008.

    
    Financial Highlights for the Second Quarter

    -  Revenue increased 161% to $21.24 million from $8.14 million in the
       same quarter last year;

    -  EBITDA (earnings before interest, taxes, depreciation, amortization,
       stock-based compensation and other non-recurring charges) increased
       104% to $2.24 million from $1.10 million in the same quarter last
       year;

    -  Net loss for the quarter was $2.55 million, or $0.02 per share,
       compared to $0.06 million or nil cents per share in the second quarter
       of 2007; net loss for the second quarter of 2008 included amortization
       related to previous acquisitions of $3.68 million, compared to
       amortization of $0.95 million in the same quarter of 2007; and

    -  Balance sheet as at June 30, 2008 remains strong with cash and cash
       equivalents totaling $14.08 million.

    Financial Highlights for the Six-Month Period

    -  Revenue increased 170% to $39.69 million from $14.72 million in the
       same six-month period last year;

    -  EBITDA increased 206% to $3.80 million from $1.24 million in the same
       period last year; and

    -  Net loss for the first half of 2008 was $6.33 million, or $0.05 per
       share, compared to a loss of $0.15 million or nil cents per share in
       the same period of 2007; net loss for the six month period of 2008
       included amortization related to previous acquisitions of $7.28
       million compared to amortization of $1.80 million in the same period
       of 2007.

    Operational Highlights for the Quarter

    -  Advertising clients whose campaigns ran in the quarter included top
       Fortune 500 companies such as Bristol-Myers Squibb, Disney, Fidelity,
       Forest Laboratories, General Mills, GlaxoSmithKline, Hewlett-Packard,
       Johnson & Johnson, Kimberly-Clark, Mazda, Procter & Gamble, Reckitt
       Benckiser, Sony, Target, Unilever, Walgreens and Wal-Mart;

    -  In its first year entering, Kaboose.com was named an Honoree in the
       Family/Parenting category in the 12th Annual Webby Awards, the leading
       international honour for the Web;

    -  Kaboose's Bounty Group, the UK's favourite parenting club, confirmed
       its position as the top parenting publisher when the latest ABC
       figures issued for Bounty's 'Your Toddler' revealed that circulation
       increased by over 30% showing that the magazine significantly
       outperformed the rest of the market with many of the major publishers
       seeing a large decline in average net circulation;

    -  In May 2008, Kaboose launched three web widgets, Craft Finder, Recipe
       Finder and Growing Baby, which are the first in a series of more than
       ten releases planned for 2008 and mark the beginning of a multi-year
       initiative to syndicate and distribute the core consumer features on
       the Kaboose family of sites out to the web at large;

    -  In June 2008, Kaboose ranked third on PROFIT Magazine's 20th annual
       PROFIT 100 ranking of Canada's Fastest-Growing Companies, which ranks
       Canada's fastest-growing companies by five-year revenue growth and is
       Canada's largest annual celebration of entrepreneurial achievement;

    -  Also in June 2008, industry veteran Alexandra Aleskovsky joined
       Kaboose as General Manager and Senior Vice President, Online Media
       Properties and will oversee the operations and strategy of the
       Company's North American portfolio of online media properties focused
       on the mom demographic;

    -  Kaboose's Bounty Group extended its long-term relationship with
       Unilever, one of the world's largest consumer products companies, by
       broadening Unilever's selection of leading media channels from Bounty
       to capitalize on Bounty's unparalleled reach and expose Unilever
       brands to moms and young families across the UK;

    -  During the quarter, the Company purchased 1,110,499 shares on the open
       market for cancellation under the Normal Course Issuer Bid announced
       March 7, 2008; and

    -  Also during the quarter, Chairman and CEO Jason DeZwirek made
       additional purchases of more than two million Kaboose common shares on
       the open market.
    

    "Our strong growth in the second quarter was driven by the momentum of
our UK operations which continue to exceed our expectations," said Jason
DeZwirek, Chairman and Chief Executive Officer of Kaboose. "The continuing
strong performance of Bounty, which represents about 70% of our revenue, has
enabled us to weather the impact that the weak US economy has had on our North
American online advertising business. During this challenging period, we have
been able to grow our business substantially while investing for our future
with the introduction of cutting-edge user applications, new media offerings
for our advertising clients and additional revenue streams to fully capitalize
on the opportunities our market position affords us. Moreover, we see
considerable opportunity to leverage our expertise in each of our UK and North
American operations to build the world's leading integrated media company
focused on the young family market that is so highly coveted by the world's
leading brands."

    
    Financial Summary

    -------------------------------------------------------------------------
                                    Three-month period      Six-month period
                                       ended June 30         ended June 30
    (in $ millions)                   2008       2007       2008       2007
    -------------------------------------------------------------------------
    Revenue                         $ 21.24    $  8.14    $ 39.69    $ 14.72
    EBITDA(1)                          2.24       1.10       3.80       1.24
    Net loss                          (2.55)     (0.06)     (6.33)     (0.15)
    -------------------------------------------------------------------------

    (1) Reconciliation of EBITDA (earnings before interest, taxes,
        depreciation, amortization, stock-based compensation and other non-
        recurring charges), as reported above, to generally accepted
        accounting principles (GAAP) with the loss for the three-month and
        six-month periods ended June 30, 2008 and 2007 are shown below (all
        numbers expressed in millions).

    -------------------------------------------------------------------------
                                    Three-month period      Six-month period
                                       ended June 30         ended June 30
    (in $ millions)                   2008       2007       2008       2007
    -------------------------------------------------------------------------
    Net loss                        $ (2.55)   $ (0.06)   $ (6.33)   $ (0.15)
      Add/(Deduct)
      Amortization                     3.68       0.95       7.28       1.80
      Interest, net                    0.30      (0.13)      0.66      (0.34)
      Provision for (recovery of)
       income taxes                   (0.86)     (0.11)     (1.67)     (0.33)
      Foreign currency (gains)
       losses                          0.09         --      (0.05)        --
      Stock-based compensation         0.80       0.45       1.82       0.68
      Other non-recurring items        0.78         --       2.09      (0.42)
    -------------------------------------------------------------------------
    EBITDA(1)                       $  2.24    $  1.10    $  3.80    $  1.24
    -------------------------------------------------------------------------

    (1) Kaboose presents EBITDA information as a supplemental figure because
        management believes it provides useful information regarding
        operating performance. EBITDA is not a recognized measure under
        Canadian GAAP, does not have standardized meaning, and is unlikely to
        be comparable to similar measures used by other companies.
        Accordingly, investors are cautioned that EBITDA should not be
        construed as an alternative to net earnings or loss determined in
        accordance with GAAP as an indicator of the financial performance of
        the Company or as a measure of the Company's liquidity and cash
        flows.
    

    Conference Call

    Kaboose will host a conference call today at 8:30a.m. (EST) to discuss
its financial results. To access the conference call by telephone,
participants should dial 416-644-3424 or 1-800-594-3615 approximately 15
minutes prior to the beginning of the call to ensure participation. The
conference call will be archived for replay until Thursday, August 7, 2008 at
midnight. To access the archived conference call, listeners can dial
416-640-1917 or 1-877-289-8525 and enter passcode 21278438 followed by the
number sign. In addition, a live audio webcast of the conference call will be
available on the Investor Relation's page of the Company's corporate website
(http://corporate.kaboose.com). Please connect to the webcast at least 15
minutes prior to the conference call to ensure adequate time for any software
download that may be required to join the webcast. The webcast will be
archived on the same web page for 30 days following the live call.
    The second quarter financial statements and related management's
discussion and analysis are available for review on the Company's corporate
website (http://corporate.kaboose.com) on the Investor Relations - Financial
Reports page.

    About Kaboose Inc.

    Kaboose is one of the largest family-focused new media companies in the
world and one of the top-five most visited family destinations online. From
pregnancy to parenting, birthday parties to scrapbooking, and entertainment to
education, Kaboose has the content and applications to help parents plan and
share their family life. Kaboose owns some of the world's leading online
properties targeting families, including Bounty.com, BabyZone.com,
Kaboose.com, AmazingMoms.com, TwoPeasInABucket.com, BubbleShare.com,
BirthdayInABox.com, Funschool.com and Zeeks.com. Kaboose trades on the Toronto
Stock Exchange under the symbol "KAB."

    This document may contain forward-looking statements relating to Kaboose
Inc.'s operations or to the environment in which it operates, which are based
on Kaboose Inc.'s operations, estimates, forecasts and projections. These
statements are not guarantees of future performance and involve risks and
uncertainties that are difficult to predict, and/or are beyond Kaboose Inc.'s
control. A number of important factors could cause actual outcomes and results
to differ materially from those expressed in these forward-looking statements.
Consequently, readers should not place any undue reliance on such
forward-looking statements. Kaboose Inc. disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.





For further information:

For further information: Jonathan Pollack, Chief Financial Officer, TEL:
(416) 593-3000, FAX: (416) 593-4658

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KABOOSE INC.

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