Despite a decline in sales, MediaBay improved its bottom line in the third quarter, thanks to lower spending in areas such as advertising and administration. It posted net income of $285,000, compared to a net loss of $187,000 in the third quarter of last year.

MediaBay had sales of $9.6 million in the third quarter, down from $11.3 million during the comparable period last year. The company attributed the decline to a $2.3 million decrease in sales at its Audio Book Club. To improve cash flow, the company has cut the amount it spends recruiting new members to the club. MediaBay chairman Carl Wolf called the net income earned during the quarter "a small first step in growing our company and our shareholder value." Earlier this fall, the company announced a restructuring through which it expects to save $1.4 million a year in operating costs and the completion of more than $1 million in financing.

For the nine months ended September 30, the company had net sales of $29.7 million, compared with $32.7 million for the first three quarters of 2002. The lower spending on member recruitment resulted in a $4.3 million decline in Audio Book Club revenue for the year to date. MediaBay's net loss of $1.5 million for the nine months was more than twice its net loss of $607,000 for the first nine months of last year.