DG Systems Announces $12.9 Million Capital Infusion; Completes Oversubscribed Private Placement & Converts Preferred Stock to Common Stock.SAN FRANCISCO--(BUSINESS WIRE)--Aug. 14, 1998-- NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on Affirms DG Systems' Continued Listing Digital Generation Systems Inc. (NASDAQ/NMS:DGIT) ("DG Systems") today announced it has completed a private placement totaling $12.9 million for 4.6 million shares of the company's common stock. In another action, the company converted all of its outstanding preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. to common stock at a price of $2.80 per share. These actions bring the total outstanding shares of common stock, including the shares issued for the private placement, to approximately 22,000,000 shares as of August 14, 1998. In addition, the company announced it received affirmation of its continued listing on the NASDAQ National Market System ("Nasdaq") on August 12, 1998. The company took advantage of significant demand from its current institutional holders including Dawson-Samberg Capital Management, which invested $4.3 million, Technology Crossover Ventures, Integral Partners, London Merchant Securities, and Glynn Capital Management. In total, existing institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. contributed $8.6 million of the $12.9 million private placement. New significant investors in the company included Victory Ventures and broadcast industry veteran, Scott Ginsburg, former president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Chancellor Media and former chairman and CEO of Evergreen Media. Ginsburg stated, "I am enthusiastic about the investment opportunity DG Systems presents. I have been following the company's progress and believe it is well positioned in a growth marketplace based on its superior strategy and technology." Hank Donaldson, president & CEO of DG Systems stated, "We are extremely pleased with the outcome of this transaction. This capital infusion Capital infusion Often refers to the cross-subsidization of divisions within a firm. When one division is not doing well, it might benefit from an infusion of new funds from the more successful divisions. and the investors involved represent both a significant event in the company's history and a strong endorsement from major current shareholders and individuals respected in the industry. It further validates that DG Systems' strategy and technology is on the right track. With this additional infusion of capital we are in an enviable position to continue to build on our solid network and strong customer base while taking advantage of the enormous opportunity in both radio and video digital distribution." Donaldson continued, "Having recently accomplished another milestone in the company's history, profitability on an 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 basis, these additional funds will enable DG Systems to pursue aggressively its growth initiatives of increasing penetration of its video network and developing products and services for delivery via the Internet, such as iAudio." In addition, the company announced it received affirmation of its continued listing on the NASDAQ National Market System ("Nasdaq") on August 12, 1998. Nasdaq granted the company a waiver to the shareholder approval requirement for the private placement based on overwhelming shareholder support, the financial condition of the company and the fact that the issuance is not materially over Nasdaq's 20% limit. Digital Generation Systems Inc., has developed and operates both a nationwide, value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. digital network and an Internet product linking hundreds of advertisers and advertising agencies with more than 6,600 radio and television stations across the U.S. The company's fault-tolerant network operations center See NOC. Network Operations Center - (NOC) A location from which the operation of a network or internet is monitored. Additionally, this center usually serves as a clearinghouse for connectivity problems and efforts to resolve those problems. delivers audio, video, image and data content, which facilitates transactions among advertising industry participants. DG Systems' URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. is www.dgsystems.com. This release contains forward-looking statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the company's expansion of its digital distribution networks, the demand among certain clients for digital audio video delivery services and iAudio Internet service, and future product offerings. 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 System's 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 31, 1998 and the company's Form 10-Q Form 10-Q See 10-Q. . Note to Editors: DG Systems is a trademark of Digital Generation Systems Inc. All other trademarks are property of their respective holders.
CONTACT: Digital Generation Systems Inc.
Paul Emery, 415/276-6600
or
Lippert/Heilshorn & Associates
Lillian Armstrong/Kris Otridge, 415/433-3777
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