Edited by Joshua Smith

July 9 - Alloy Online, Inc. (Nasdaq:ALOY), a leading Generation Y-focused media and direct marketing company focused on the 70 million members of Generation Y, today announced that it has reached a definitive agreement to acquire CASS Communications, a leading provider of integrated advertising and marketing services connecting national advertisers and their agencies with the college and high school markets. Under the terms of the agreement, Alloy has issued approximately 1.7 million shares of stock and paid $9.7 million in cash and future performance based consideration to complete the acquisition. The transaction is expected to close in early August.

Founded in 1968, CASS' contracted media and promotional channels include college and high school newspapers reaching over 21 million readers. Additionally, CASS reaches over 6.5 million students on college and high school campuses through its outdoor and display media assets and provides marketers with full service event production and promotion capability. CASS is based in Chicago with offices in New York and Los Angeles.

Matt Diamond, Alloy's co-founder and CEO, commented, "We are extremely pleased to add CASS to our growing portfolio of media assets. The combination of CASS and Alloy will allow us to better serve the advertising community as CASS significantly increases our reach into the teen and young adult demographic groups. Additionally, CASS' management team, with over 30 years of experience helping organizations connect with college and high school students, enhances Alloy's capabilities in providing comprehensive and effective marketing programs for advertisers seeking the teen and collegiate audiences."

The deal, valued at some $33 million, also gives Alloy access to a number of long-term relationships that CASS has fostered with blue chip marketers. These are advertisers who are likely to have made little investment in the interactive medium as yet, so their introduction to the range of advertising services that Alloy provides will be invaluable to the firm.

Alan Weisman, CEO of CASS, added, "We are thrilled to bring together CASS and Alloy, two of the leaders in serving as marketing gateways to the teen and young adult market. By joining CASS' experience in the market and extensive relationships with advertisers together with Alloy's vast name database and broad array of media assets, we will be able to better capitalize on the growing demand for access to the vibrant college and high school markets."

Alloy will also benefit from CASS' sturdy cash balance and positive cash flow, which will assist to offset Alloy's operating losses.

Mr. Diamond concluded, "We anticipate that CASS will make a meaningful contribution to Alloy's sponsorship and advertising business going forward. We expect CASS to generate approximately $4 million in revenue, $600,000 of EBITDA and $400,000 of operating income for the balance of fiscal 2001, split roughly 75% and 25% between our third and fourth fiscal quarters, respectively. For fiscal 2002, we expect CASS to produce approximately $8 million in revenue, $2.5 million of EBITDA and $1.6 million in operating income. In acquiring CASS, we deployed a portion of the proceeds from our recent $18 million convertible preferred stock raise. Post deal, we still have over $25 million of cash remaining on our balance sheet, leaving Alloy with ample financial flexibility to continue executing our business plan."