| Cautionary Note Regarding Forward-Looking Statements This presentation contains certain "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995, including statements relating to, among other things, (i) the timing of our acquisition of the Enthusiast Media Group, (ii) acquisition-related cost savings, (iii) future business plans, strategies and financial results, and (iv) growth opportunities. These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause future events, achievements or results to differ materially from those expressed by the forward-looking statements. Factors that could cause actual results to differ include: (i) the challenges and costs of closing, integration and restructuring the Enthusiast Media Group, (ii) interest rate volatility and the impact of a significant increase in the Company's debt service obligations, (iii) market acceptance of and continuing retail demand for physical copies of magazines, books, DVDs, CDs and other home entertainment products, (iv) our ability to realize additional operating efficiencies, cost savings and other benefits from the acquisition, (v) an evolving market for entertainment media, (vi) regulatory or other delays in completing the proposed purchase in a timely manner or at all, (vii) the challenges maintaining relationships with suppliers; (viii) adverse changes in general economic or market conditions; (ix) the ability to attract and retain employees pending consummation of the transaction; (x) intense competition in the marketplace and (xi) other events and other important factors disclosed previously and from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 25, 2007. We do not intend to, and disclaim any duty or obligation to, update or revise any forward-looking statements or industry information set forth in this presentation to reflect new information, future events or otherwise. USE OF NON-GAAP FINANCIAL MEASURES We use both generally accepted accounting principles (GAAP), and non-GAAP or adjusted financial measures to evaluate and report the results of our business. A reconciliation of the non-GAAP financial measures to the comparable GAAP financial measure is available on the home page of our website at www.sourceinterlink.com by selecting “Reconciliation of Non-GAAP Financial Measures.” Non-GAAP financial measures should be viewed as supplements to — not substitutes for —results of operations presented on the basis of accounting principles generally accepted in the United States. We believe that non-GAAP financial measures are used by and is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to evaluate our performance without regard to items such as special items and amortization expense, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired. Our management uses non-GAAP financial measures to assist in comparing operating performance from period to period on a consistent basis; for planning and forecasting overall expectations and for evaluating actual results against such expectations; and in communications with the board of directors, stockholders, analysts and investors concerning our financial performance. |
