DG Systems First Quarter Revenues Increase 17% to $15.7 Million; First Quarter EBITDA Rises 9% to $3.6 Million; Closes $30 Million Credit Facility.DALLAS -- DG Systems, Inc. (Nasdaq: DGIT), the leading provider of digital media distribution services to the advertising and broadcast industries, today reported operating results for the three-months ended March 31, 2005. The table below summarizes the financial results:
Summary of Fiscal 2005 First Quarter Results
(in thousands, except per-share data)
Three Months Ended
March 31,
----------------------------------------------------------------------
2005 2004
----------------------------------------------------------------------
Revenues $ 15,703 $ 13,381
----------------------------------------------------------------------
EBITDA (1) 3,625 3,326
----------------------------------------------------------------------
Operating income 2,207 2,126
----------------------------------------------------------------------
Net Income 1,125 1,317
----------------------------------------------------------------------
Diluted income per share 0.02 0.02
----------------------------------------------------------------------
Weighted average shares - Diluted 72,924 74,116
----------------------------------------------------------------------
(1) EBITDA is earnings before interest, taxes, depreciation and
amortization. The first quarter 2005 results reflect a one-time $0.5
million reduction of operating expenses related to the re-negotiation
of an existing service agreement.
Commenting on the results, Scott K. Ginsburg, Chairman and Chief Executive Officer of DG Systems, stated, "First quarter revenue and 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 growth reflects our successful strategies of deploying the most robust electronic media distribution network ever designed. On-line traffic is at unprecedented levels, and we expect the on-line percentage will continue to grow throughout this year. "DG entered into several ground-breaking agreements during the 2005 first quarter that extend DG's leadership position in electronic ad delivery. In February we formed a partnership with ConfirMedia to bundle third-party airplay air·play n. The broadcasting of an audio or audiovisual recording on the air over radio or television. airplay Noun the broadcast performances of a record on radio verification and advertising campaign reconciliation services with our spot distribution service. This innovative service offering streamlines the workflow The automatic routing of documents to the users responsible for working on them. Workflow is concerned with providing the information required to support each step of the business cycle. between advertisers and media outlets while offering advertisers, agencies and media outlets real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. access to airplay data. This unique service is available today, and we are realizing significant benefits from this exclusive arrangement. "Accuracy and reliability are becoming the most important "buzz words buzz word Noun Informal a word, originally from a particular jargon, which becomes a popular vogue word buzz word n → palabra que está de moda " in radio, tv and network advertising. We have positioned DG Systems for future growth by developing solution sets that assist media outlets to be fully accountable, improve their internal processes, and demonstrate reliability to their customers. For example, one of the country's leading radio networks with over 180 million listeners weekly has embraced DG System's Starguide secure distribution network and the Verance company's watermark watermark: see paper. See digital watermark. technology as two of their key hallmarks for delivering both programming and financial integrity to their advertisers, as posted on the world wide web (www.TrustPremiere.com). It is important to note that such a prestigious organization relies upon our company's initiatives, systems and processes and, as we look to the future, it portends extremely well for our efforts to date. "The acquisition of Media DVX DVX Digital Voice Exchange DVX Dvd Extended DVX Device Driver subsequent to the quarter firmly positions DG as the dominant electronic media distribution company in 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. . We will leverage each company's sales expertise, technology investments, network infrastructure and strategic partnerships into a complementary, unique service profile with expanded service options for our customers. There is significant value in the prospective financial and operating synergies to be realized from these two networks. "These initiatives were complemented by the launch of our new online order management system, DGConnect(TM), and the continued upgrade and expansion of our network during the first quarter. The DG network today electronically reaches over 3,400 video destinations, providing advertisers a conduit conduit /con·du·it/ (kon´doo-it) channel. ileal conduit the surgical anastomosis of the ureters to one end of a detached segment of ileum, the other end being used to form a stoma on the to reach 97% of all U.S. TV stations, 92% of the cable systems, and 70% of all the broadcast and cable networks. No other electronic distribution network has this vast a footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. and reach across media outlets. "All of these partnerships and service enhancements are part of our strategy to deliver total customer satisfaction by introducing new levels of simplicity, transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. and accountability to the spot distribution process. And they have already begun translating into better service and a more attractive economic proposition for DG customers. These factors have driven increases in traffic on our electronic network and during the 2005 first quarter, DG made over 85% of its commercial deliveries to television, cable, and network broadcast destinations through its electronic network." In April 2005, DG closed a $30 million, 3.5-year senior secured revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility with JPMorgan Chase JPMorgan Chase (NYSE: JPM TYO: 8634 ) is one of the oldest financial services firms in the world. The company, headquartered in New York City, is one of the leaders in investment banking, financial services, asset and wealth management and private equity. With assets of $1. Bank, Comerica Bank - California and MetroBank. The new facility is comprised of a $15 million revolving credit line and a $15 million term loan. Omar Choucair, Chief Financial Officer of DG Systems, stated "We value the confidence placed in DG Systems by these respected financial institutions as they are supportive of our long-term plans for growth. This new credit facility provides DG with the financial flexibility to continue pursuing our strategies for organic expansion as well as growth through acquisitions. Additionally, the new credit facility allows DG to realize the benefits of favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. credit market conditions and interest rates." DG ended the first quarter of 2005 with net debt of $12.9 million, comprised of debt totaling $16.4 million and cash of $3.5 million. Reflecting the completion of the acquisition of Media DVX on April 15, 2005, DG's net debt was approximately $21.5 million. In the quarter ended March 31, 2005, the Company repurchased approximately 108,000 shares of its common stock in open market transactions. Non-GAAP Reconciliation EBITDA is defined as 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.
As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , the Company believes that it may be useful to an investor in evaluating its performance. However, investors should not consider this measure in isolation or as substitutes for operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , cash flows from operating activities or any other measure for determining the Company's operating performance or liquidity that is calculated in accordance with generally accepted accounting principles. In addition, because EBITDA is not calculated in accordance with generally accepted accounting principles, it may not necessarily be comparable to similarly titled measures employed by other companies. A reconciliation of the EBITDA figures included herein can be made by deducting 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. , excluding depreciation and amortization from the Company's revenues (see attached financial table). About DG Systems, Inc. (www.dgsystems.com) DG Systems and its StarGuide and SourceTV divisions provide the standard in Digital Media Exchange services for the advertising and broadcast industries, featuring dependable satellite and Internet transmission technology and a suite of digital media asset management tools. DG's extensive digital network is the largest in the advertising and broadcasting industries, reaching more than 5,000 advertisers and agencies, over 3,400 television, cable, and network broadcast destinations and over 10,000 radio stations with innovative delivery and management solutions for short-and long-form audio and video content. DG Systems is based in Irving, Texas Irving (pronounced 'er-ving') is a city located in the U.S. state of Texas within Dallas County. According to the 2000 U.S. Census, the city population was 191,615; the 2006 estimate was 201,927 according to the North Central Texas Council of Governments, and 196,084 according to , with offices located in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , Detroit, Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , Chicago, Boca Raton Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. , Wilmington, Ohio For other places with the same name, see Wilmington (disambiguation). Wilmington is a city in Clinton County, Ohio, United States. The population was 11,921 at the 2000 census. It is the county seat of Clinton County. and Louisville, Kentucky  “Louisville” redirects here. For other uses, see Louisville (disambiguation). . The Company's 2005 first quarter conference call will be broadcast live on the Internet at 10:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today, Monday, May 9, 2005. 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 or www.fulldisclosure.com. Please allow 15 minutes to register and download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary software. 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 31, 2005.
Digital Generation Systems, Inc.
Condensed Consolidated Balance Sheet
(unaudited)
(In thousands)
March 31, December 31,
2005 2004
----------- ------------
Cash $ 3,451 $ 8,059
Accounts receivable 12,223 12,559
Inventories 1,366 1,475
Property and equipment 13,199 12,453
Goodwill 34,974 34,974
Deferred tax assets 17,281 17,974
Investment in Verance Corporation, at cost 5,045 ---
Other 19,889 20,023
----------- -----------
TOTAL ASSETS $ 107,428 $ 107,517
=========== ===========
Accounts payable and accrued liabilities $ 8,351 $ 6,998
Deferred revenue 2,279 2,694
Debt and capital leases 16,398 18,393
----------- -----------
TOTAL LIABILITIES 27,028 28,085
TOTAL STOCKHOLDERS' EQUITY 80,400 79,432
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 107,428 $ 107,517
=========== ===========
Digital Generation Systems, Inc.
Condensed Consolidated Statements of Income
(unaudited)
(In thousands, except per share data)
Three Months Ended
March 31,
--------------------
2005 2004
--------- ----------
Revenues $ 15,703 $ 13,381
Operating expenses, excluding depreciation &
amortization 12,078 10,055
--------- ----------
EBITDA 3,625 3,326
Depreciation & amortization 1,418 1,200
--------- ----------
Operating income $ 2,207 $ 2,126
Interest expense and other, net 392 270
--------- ----------
Income before income taxes 1,815 1,856
Provision for income taxes 690 539
--------- ----------
Net income $ 1,125 $ 1,317
========= ==========
Basic net income per common share $ 0.02 $ 0.02
========= ==========
Diluted net income per common share $ 0.02 $ 0.02
========= ==========
Weighted average outstanding shares - Basic 72,726 72,167
========= ==========
Weighted average outstanding shares - Diluted 72,924 74,116
========= ==========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion