Sales OnLine Direct Reports FY '02 Results: Gross Revenues Up 31%, Gross Profit Up 80%


WORCESTER, Mass., April 1, 2003 (PRIMEZONE) -- Sales OnLine Direct (OTCBB:PAID) today announced financial results for its fourth quarter and fiscal year ended December 31, 2002. In fiscal year 2002, the Company earned $1,276,000 in gross revenues, an increase of approximately $304,000, or 31%, from the year ended December 31, 2001. The primary reason for the increase in revenues was a combination of greater sales of Company-owned product, offset by lower consignment sales.

The Company increased total gross profit by $234,000, or 80%, with a total gross profit of $528,000 for the year ended December 31, 2002, compared to $294,000 for the year ended December 31, 2001. The increase in gross profit is a result of the sales of higher quality company-owned products and more selective purchasing. This increase was partially offset by decreased commissions from consignment sales and decreased revenues generated from Web hosting, advertising, and sponsorships/celebrity signing events.

The Company realized a FY 2002 loss of $3,531,000, or $.03 per share. The 2002 performance compares favorably to the loss of $4,358,000, or $.07 per share for the year ended December 31, 2001.

Collectible Sales - Sales of collectibles through the company's Rotman Auction brand account for 97% of the Company's total revenues. Sales OnLine Direct increased the sales of its company-owned products and decreased sales of consignment items compared to previous years, tripling gross profit of company-owned product sales from $161,000 in 2001 to $490,000 for the year ended December 31, 2002.

Celebrity Signing Events - Web hosting, advertising and sponsorships of celebrity signing events revenues, decreased from $113,000 in 2001 to $31,000 in 2002 due primarily to a focus on developing the Auction Inc. Commerce(tm) software (aiSeller), an online auction management platform and build-out of celebrity Web sites that are expected to generate revenues during 2003. Rather than receiving cash for celebrity Web hosting and development services, Sales OnLine Direct now generally receives collectibles inventory from the celebrities. Revenue from the sale of this collectibles inventory is often spread out over several quarters and now appears as revenues for company-owned product rather than gross revenues for Web hosting.

AI Commerce Software -- Beginning in the third quarter 2001, Sales OnLine Direct devoted a large portion of its resources to research and development of its AI Commerce software, an e-business solution designed to increase revenues and reduce overhead for online auction sellers on eBay. During FY 2002, the company spent $929,449 on Web site development. The majority went to develop Auction Inc. Commerce(tm) software (aiSeller). In fourth quarter 2002, Sales Online essentially concluded its development and beta testing of AI Commerce, so the company anticipates that future Web site development will be greatly reduced and that AI Commerce will provide a new revenue channel for the company.

More than 200 eBay auction sellers of all sizes participated in the beta test of AI Commerce, which allowed them to utilize the software for free during the latter part of 2002. Since January 1, 2003, the software has been licensed to several hundred users and AI Commerce has been used to process tens of thousands of auctions on eBay. As of January 1, 2003, the Company earns 2.5 percent of the gross sale of items sold through online auctions utilizing the software.

Traffic through AI Commerce from sellers and auction buyers using the system has been growing at a rate of 20 percent per month since January 1, 2003. In March 2003, 105,000 unique users used AI Commerce to calculate shipping costs, manage orders and check out from auctions. Sales OnLine Direct was officially going to launch AI Commerce and announce expanded marketing plans and partners for the software on March 12th, 2003 but has delayed the launch until second quarter 2003 to allow time for a sales team to be put in place. The cost to use the Company's current development team to take sales and support calls is not cost effective.

"We are very pleased with our overall results for 2002, and much thanks must be given to our employees, professional staff and partners," stated Richard Rotman, CFO of Sales OnLine Direct. "Although 2002 was another difficult year for the general economy, it was our second consecutive year where we have produced significant year over year revenue growth and increased profit margins while reducing operating losses."

"Our collectibles sales are booming despite the weak economy," Rotman noted. "When the economy is soft, investors don't get the returns they would like through the traditional investment vehicles, so often they will turn to collectibles, which have always provided consistent returns for knowledgeable and savvy collectors. We anticipate continued growth in this area fueled by our higher quality of product and expansion into new collectibles categories."

"With the completion of our development and beta testing of AI Commerce, we are now working diligently to transition all of our beta customers into licensed, paying users and managing the implementation of the software for our sales backlog that has been burgeoning due to word-of-mouth and our limited sales efforts to date," Rotman stated. "We expect increased revenues from this new revenue channel each quarter throughout 2003 and beyond."

Operating Expenses. Total operating expenses for the year ended December 31, 2002 decreased slightly to approximately $3,664,000 from $3,785,000.

Sales, general and administrative ("SG&A") expenses for the year ended December 31, 2002 were approximately $2,735,000, compared to $2,742,000 for the year ended December 31, 2001. Administrative and non-technical payroll related costs increased by $222,000 over the year ended December 31, 2001. The increase in payroll expenses is largely attributable to the hiring of more collectibles-related staff for Rotman Auction. Professional fees decreased by $114,000, primarily attributable to a decrease in costs associated with the Company's litigation in 2001 and settlements of balances due various professionals in 2002. The Company has no litigation pending. Other SG&A expenses decreased by $114,000 principally due to lower lease termination costs.

"While Sales OnLine Direct has accomplished so much during the past year, we still have many milestones ahead of us," stated Greg Rotman, Sales OnLine Direct CEO. "We must move the company toward profitability by reducing our SG&A and R&D costs, while growing our new and existing revenue channels."

About Sales OnLine Direct and Rotman Auction

Sales OnLine Direct,, maintains and develops portals and Web sites for various companies and industries. The Company has focused its efforts on the antique and collectible industry, offering the "Ask the Appraiser" online appraisal service, marketing and publishing the "Maloney's Antiques and Collectibles Resource Directory" and developing Web sites that enhance the user's experience. Through Web hosting and managed services, Sales OnLine Direct has provided e-business solutions to many different companies including their own Rotman Auction division. This division sells tens of thousands of items per year through auction, direct sales, and special events and is a certified eBay Platinum Power Seller. The Company has developed the "AI Suite" of software to increase revenues and reduce overhead for sellers on eBay, and offers these essential e-tools to other companies. Through recent initiatives, Sales OnLine Direct is establishing itself as one of the most important collectibles portals, and online auction services and technology providers to the collectibles industry. The Company's common stock is traded on the Nasdaq OTC Bulletin Board under the symbol "PAID."

Link to, Rotman Auction on eBay: Link to, "Ask the Appraiser": Link to, Auction Inc:

This Press Release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are based upon current expectations or beliefs, as well as a number of assumptions about future events, including matters related to the Company's operations. Although the Company believes that the expectations reflected in the forward-looking statements and the assumptions upon which they are based are reasonable, it can give no assurance that such expectations and assumptions will prove to have been correct. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties, including without limitation, successful implementation of the Company's business strategy and competition, any of which may cause actual results to differ materially from those described in the statements. In addition, other factors that could cause actual results to differ materially are discussed in the Company's most recent filings, including Form 10-KSB and 8K with the Securities and Exchange Commission.

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