DG Systems Achieves Positive Net Income and Eps; Reports Record Third Quarter Results.Business Editors DALLAS & SAN FRANCISCO--(BUSINESS WIRE)--Nov. 8, 2000 - Revenues Increase 13% - - EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become Rises to $2.6 Million - - StarGuide Merger Receives SEC and FTC FTC See Federal Trade Commission (FTC). Approval - DG Systems, Inc. (Nasdaq:DGIT), the leading digital distributor of advertising to the broadcast industry, today reported record results for the third quarter and nine-month periods ended September 30, 2000, achieving positive earnings for the first time in the Company's history. Consolidated revenues for the quarter ended September 30, 2000 rose 13.0% to $13.8 million from $12.2 million in the same period last year. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Commenting on the results, Matthew E. Devine, Chief Executive Officer of DG Systems, stated, "DG reached a milestone in the third quarter as we generated positive net income for our shareholders and, for the seventh consecutive quarter, attained double-digit sales growth. Our strong financial results underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. the many successes we have had in executing on our business plan and developing new technology to enhance our customer satisfaction, while reducing operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Senior management continues to focus on top-line growth through strategic partnerships like the Entertainment Digital Networks OneDigitalPath(TM) alliance as well as creating a more efficient cost structure." Mr. Devine continued, "In addition to our financial achievements, we moved closer to our merger with StarGuide Digital Networks as the SEC declared effective our Form S-4 and the Federal Trade Commission and Department of Justice granted early termination of the waiting period under the Hart, Scott, Rodino Act. The combination of StarGuide and DG will produce the premiere delivery solution for digital multimedia content, while leveraging our industry relationships to help launch CoolCast." CoolCast(R), a division of StarGuide Digital Networks, is a startup Internet broadcaster that aggregates both TV quality video and CD quality digital audio content for delivery to desktop PC users. The CoolCast service is offered free of charge to desktop PC users who are DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary enabled. Consolidated revenues for the nine-month period rose 12.0% to $40.0 million compared to $35.8 million for the same period last year. EBITDA for the first nine months of 2000 increased 664% to $5.4 million, compared to EBITDA of $709,000 for the same period last year. The Company significantly reduced its net loss for the period to $213,000 or $0.01 per share, compared to a net loss of $7.8 million, or $0.29 per share, for the same period last year. The combination of DG and StarGuide will provide advertisers, agencies and broadcasters a convenient, reliable and fast way to reach their ultimate target - the consumer. StarGuide's leading edge technology is showcased through its CoolCast video-enhanced Internet portal which aggregates live, high quality video and CD-quality digital audio for PC users. Unlike competing services, the CoolCast service allows millions of simultaneous users to access its join-in-progress streaming video A one-way video transmission over a data network. It is widely used on the Web as well as company networks to play video clips and video broadcasts. Computers in home networks stream video to digital media hubs connected to a home theater. and audio through broadband Internet See broadband. connections, providing entertainment and information without sacrificing productivity for desktop PC users. In May 2000, ZoomTown.com, the broadband Internet subsidiary of Broadwing Inc. (NYSE NYSE See: New York Stock Exchange :BRW BRW Business Review Weekly (business magazine; Melbourne, Victoria, Australia) BRW Business Report Writer BRW Barrow, AK, USA - Barrow (Airport Code) BRW Business Requirement Worksheet ), began delivering the CoolCast service to its ADSL See DSL. ADSL - Asymmetric Digital Subscriber Line subscribers in the Greater Cincinnati area, the nation's most highly concentrated base of broadband users. DG Systems operates a private, nationwide digital network for distributing audio and video content that links thousands of advertisers and hundreds of advertising agencies with approximately 7,500 radio and over 775 television stations across the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada. DG Systems recently agreed to merge with StarGuide Digital Networks, a leading provider of long form audio and digital network distribution services to the broadcast industry, in a tax-free stock-for-stock transaction. The Company can be reached at 415-276-6600 or at www.dgsystems.com. StarGuide's division, CoolCast (www.coolcast.com), is an Internet broadcaster that delivers join-in-progress streaming media See streaming audio, streaming video and digital media hub. combined with regular Web content to PC users. The CoolCast service is currently available to thousands of broadband Internet users nationwide through partnerships with DSL service providers such as Broadwing Inc.'s (NYSE:BRW) ZoomTown.com and BRE (Business Rules Engine) Software that automates policies and procedures within an organization, whether legal, internal or operational. The use of a rules engine (BRE) requires placing the company rules in an external repository that can be easily reviewed rather than Properties (NYSE:BRE). Additional partnerships and content relationships are pending. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the company, including the expansion of its digital distribution network, and the demand among certain clients for digital audio and video delivery services. These forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those projected. These and other risks relating to DG Systems' business are set forth in the company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the Securities and Exchange Commission on March 28, 2000. The Company's third quarter conference call will be broadcast live on the Internet following its earnings announcement at 11:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy on Wednesday, November 8. The webcast is open to the general public. Interested parties may access the live call on the Internet via the Company's web site at www.dgsystems.com, and via www.vcall.com. Please allow 15 minutes to register and download and install any necessary software.
Digital Generation Systems, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
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2000 1999 2000 1999
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Revenues $13,779 $12,202 $40,028 $35,782
Operating expenses,
excluding depreciation &
amortization 11,200 11,685 34,612 35,073
------ ------ ------ ------
EBITDA 2,579 517 5,416 709
Depreciation & Amortization 1,673 2,280 4,857 7,204
----- ----- ----- -----
Operating Income (Loss) $906 $(1,763) $559 $(6,495)
Interest Expense, net 167 297 772 1,257
--- --- --- -----
Net Income (Loss) $739 $(2,060) $(213) $(7,752)
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Net earnings (loss) per
common share:
Basic $0.03 ($0.08) ($0.01) ($0.29)
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Diluted $0.03 ($0.08) ($0.01) ($0.29)
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Weighted average common
shares outstanding:
Basic 28,215 26,673 28,050 26,510
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Diluted 29,531 26,673 28,050 26,510
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