DG Systems Reports Record Third Quarter Operating Results; Third Quarter EBITDA Grows 50% To $3.5 Million; Positive EPS Continues; 3Q '02 EPS of $0.02 vs. $0.04 Loss in 3Q '01.Business Editors DALLAS--(BUSINESS WIRE)--Nov. 8, 2002 DG Systems, Inc. (Nasdaq: DGIT), the leading digital technology provider for managing and delivering short- and long-form audio and video content to the broadcast industry, today announced record financial results for the three and nine months ended September September: see month. 30, 2002. Consolidated revenues for the three months ended September 30, 2002 grew 3% to $16.4 million, compared to $15.9 million in the same period last year. Third quarter 2002 revenue comparisons reflect strong growth in the Company's media distribution division, offset by lower satellite receiver sales at DG's StarGuide division. 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.
tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to a net loss in the 2001 third quarter of $2.5 million, or a loss of $0.04 per diluted share. Positive net income comparisons reflect increased sales and reduced spending, including lower interest expense due to the Company's continued application of free cash flow to reduce debt. Commenting on the results, Matthew Matthew one of the twelve disciples. [N.T.: Matthew] See : Evangelism E. Devine Devine can refer to: People
fast - acting or moving or capable of acting or moving quickly; "fast film"; "on the fast track in school"; "set a fast pace"; "a fast car" ad industry and are being well-received as enhancements to our already industry leading suite of products and services. "Capitalizing on DG's secure network, wide distribution capabilities and music industry and radio experience, our services were adopted in the third quarter by a number of major record labels to simultaneously and securely deliver new music releases to our vast network of radio stations. Last quarter's successful Red Hot Chili Peppers Red Hot Chili Peppers are an American alternative rock band formed in Los Angeles, California in 1983. For most of its career, the group has consisted of vocalist Anthony Kiedis, guitarist John Frusciante, bassist Michael "Flea" Balzary, and drummer Chad Smith. release was followed this quarter by releases from Kelly Clarkson Kelly Brianne Clarkson (born April 24 1982) is an American pop rock singer. Clarkson made her debut under RCA Records after she won the highly publicized first season of the television series American Idol in 2002. , The Rolling Stones Rolling Stones, English rock music group that rose to prominence in the mid-1960s and continues to exert great influence. Members have included singer Mick Jagger (Michael Phillip Jagger), 1943–; guitarists Brian Jones , and Pearl Jam. Top record labels and artists are increasingly turning to DG Music as the preferred launch method as we ensure simultaneous, secure, digital quality deliveries to as many as 7,500 radio stations nationwide. This capability is unmatched in the industry and we are delighted to be serving this sector of the entertainment industry. "During the quarter we continued to apply free cash flow to debt reductions, and since January 1, 2002 we have lowered our debt by approximately 25% to $12.7 million from $16.8 million. The long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. benefits to this debt reduction strategy are evident as third quarter 2002 net interest expense and other was 35% lower than it was last year and this trend is expected to continue as we close in on eliminating our debt obligations in the first part of 2004. "We maintain a positive outlook for the remainder of 2002. Continued revenue gains combined with operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improvements and interest expense declines are expected to drive further improvements in bottom line results. We are confident in our ability to deliver positive operating results as measured by EBITDA, net income and 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. despite the uncertain advertising and economic environments." Consolidated revenues for the nine months ended September 30, 2002 were $47.5 million, compared to revenues of $53.4 million in the first nine months of 2001. EBITDA for the first nine months of 2002 was $8.8 million, compared to EBITDA of $8.3 million for the first nine months of 2001. Before giving effect to SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142, the change in accounting principle regarding the valuation of the Company's goodwill, DG's net income for the first nine months of 2002 was $1.5 million, or $0.02 per diluted share, compared to a net loss of $6.8 million, or a loss of $0.10 per diluted share, for the nine months ended September 30, 2001. Reflecting SFAS 142, the change in accounting principle, the Company reported a net loss for the first nine months of 2002 of $129.8 million, or $1.83 per diluted share, compared to a net loss in the comparable year-ago period of $6.8 million, or a loss of $0.10 per diluted share. About DG Systems, Inc. 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 over 900 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. The Company's third quarter conference call will be broadcast live on the Internet at 11:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy on November 8, 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. 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, 2002.
Digital Generation Systems, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
---- ---- ---- ----
Revenues $16,421 $15,919 $47,457 $53,438
Operating expenses, excluding
depreciation & amortization 12,960 13,612 38,622 45,105
------- ------- --------- -------
EBITDA 3,461 2,307 8,835 8,333
Depreciation & amortization 1,949 4,258 5,348 12,739
Restructuring charge - 771 791
------- ------- --------- -------
Operating income (loss) 1,512 (1,951) 2,716 (5,197)
Interest expense and other, net 330 508 1,215 1,559
------- ------- --------- -------
Net income (loss) before
cumulative effect of change in
accounting principle 1,182 (2,459) 1,501 (6,756)
Cumulative effect of change in
accounting principle - - 131,291 -
------- ------- --------- -------
Net income (loss) $ 1,182 $(2,459) $(129,790) $(6,756)
======= ======= ========= =======
Basic and diluted income (loss)
per common share before
cumulative effect of change in
accounting principle: $ 0.02 $(0.04) $ 0.02 $ (0.10)
======= ======= ========= =======
Basic and diluted net income
(loss) per common share $ 0.02 $(0.04) $ (1.83) $ (0.10)
======= ======= ========= =======
Basic weighted average common
shares outstanding 70,801 70,739 70,794 70,330
======= ======= ========= =======
Diluted weighted average common
shares outstanding 70,882 70,739 70,898 70,330
======= ======= ========= =======
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