DG Systems Reports Record Annual Revenues and EBITDA; 2001 Revenues Rise to $70.7 Million; EBITDA Reaches $10.9 Million.Business & Technology Editors DALLAS--(BUSINESS WIRE)--Feb. 14, 2002 DG Systems, Inc. (Nasdaq: DGIT), the digital technology innovator for delivering and managing short- and long-form audio and video content to the broadcast industry, today announced financial results for the three- and twelve-month periods ended December December: see month. 31, 2001. Consolidated revenues for the fourth quarter ended December 31, 2001 grew almost five-fold to $17.3 million, from $3.7 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.
In the twelve months ended December 31, 2001, DG's consolidated revenues grew nearly five-fold to a record $70.7 million, from $14.4 million in 2000. EBITDA for the twelve months ended December 31, 2001 increased to a record $10.9 million, compared to negative EBITDA of $6.6 million in 2000. Commenting on the results, Matthew E. Devine, Chief Executive Officer of DG Systems, said, "DG generated record annual revenue and EBITDA in 2001 despite challenging economic and advertising environments. Our full year 2001 results reflect the benefits of emerging as the nation's largest digital distribution network as well as the 'win every day' culture of our dedicated employees. DG's EBITDA and free cash flow allowed us to reduce debt in the fourth quarter by over $2 million, or approximately 13%. "We are focused on developing additional revenue sources for our digital distribution network as we have approximately 50% more television station endpoints than our closest competitor. During 2001, we began the process of leveraging our industry leading position by introducing a suite of new digital media asset management products. "Our NetClear and AdCatalog applications are being adopted as the industry standard by broadcasters such as CBS (Cell Broadcast Service) See cell broadcast. , ABC ABC in full American Broadcasting Co. Major U.S. television network. It began when the expanding national radio network NBC split into the separate Red and Blue networks in 1928. , the WB and Telemundo, advertisers like Popeyes, McDonald's, Hasbro and ad agencies including Hill Holliday Hill, Holliday is an American advertising agency. It is part of the world's third largest advertising conglomerate. It was founded as Hill, Holliday, Connors, Cosmopulos, Inc., in 1968 in Boston, by founding partners Jack Connors, Jay Hill, Steve Cosmopulos and Alan Holliday. and Leo Burnett For the company, see . Leo Burnett (October 21, 1891 - June 7, 1971) was an advertising executive famous for creating such icons as the Jolly Green Giant, the Marlboro Man, Toucan Sam, Charlie the Tuna, Morris the Cat, the Pillsbury Doughboy, the 7up "Spot", and Tony the . Given the broad acceptance of such products, we plan to expand our offerings during the coming year. "The breadth of DG's network, product offerings and service reliability positions the company nicely for the anticipated rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in the advertising market. By highlighting the time and cost savings offered by our digital media asset management products, we will continue to drive revenue and EBITDA growth, achieve EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. profitability, and use our free cash flow to further reduce debt and strengthen our balance sheet." About DG Systems DG Systems and the Company's StarGuide division provide the standard in Digital Media Exchange services for the advertising and broadcast industries, featuring innovative satellite and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the transmission technology solutions and a suite of digital media asset management tools. DG's extensive industry network is the largest in the advertising and broadcasting industries, reaching more than 5,000 advertisers and agencies, 7,500 radio stations, and 875 television broadcast facilities with innovative delivery and management solutions for short- and long-form audio and video content. More information is available at www.dgsystems.com. 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 30, 2001, and the company's proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. dated May 18, 2001. The Company's fourth quarter conference call will be broadcast live on the Internet at 11:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy on February 14, 2002. 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. 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.
Digital Generation Systems, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Twelve Months
Ended Ended
December 31, December 31,
-------------------- -------------------
2001 2000 2001 2000
-------- -------- -------- ---------
Revenues $17,262 $ 3,715 $ 70,700 $ 14,419
Operating expenses,
excluding depreciation
& amortization 14,714 5,713 59,819 20,985
-------- -------- -------- ---------
EBITDA 2,548 (1,998) 10,881 (6,566)
Depreciation & Amortization 4,372 164 17,111 823
Merger charge - - 791 -
Non-cash compensation - 1,255 - 19,630
-------- -------- -------- ---------
Operating Loss ($1,824) ($3,417) ($7,021) ($27,019)
Interest (Income)
Expense and other, net 449 (32) 2,008 (279)
Equity in losses
of joint venture - 193 - 1,125
-------- -------- -------- ---------
Net Loss ($2,273) ($3,578) ($9,029) ($27,865)
======== ======== ======== =========
Net loss per common share: ($0.03) ($0.09) ($0.13) ($0.68)
======== ======== ======== =========
Basic & diluted weighted
average common shares
outstanding 70,778 41,179 70,443 40,912
======== ======== ======== =========
Note: As a result of the January 2001 merger between DG Systems and
StarGuide Digital Networks, the historical 2000 results are
those of StarGuide Digital Networks.
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