Digitas Reports Third Quarter Results.* Fee Revenue Grows by 12% from Q3 2005 * Repurchased 5 Million Shares at an Average Per Share Price of $8.46 BOSTON -- Digitas Inc. (Nasdaq: DTAS DTAS Digitas Inc. (stock symbol) DTAS Deployed Theater Accountability Software DTAS Decision Theory Adaptive Systems Group DTAS Digital Test Access System (Hekimian) DTAS Data Transmission and Switching ) today reported results for the third quarter of 2006, in line with management's previously announced expectations. Third Quarter Results of Operations Digitas reported fee revenue for the third quarter of 2006 of $95.6 million, compared with $85.5 million for the third quarter of 2005. Total revenue, including reimbursable re·im·burse tr.v. re·im·bursed, re·im·burs·ing, re·im·burs·es 1. To repay (money spent); refund. 2. To pay back or compensate (another party) for money spent or losses incurred. pass-through expenses, was $187.4 million for the third quarter of 2006, compared to $134.3 million for the third quarter of 2005. The company reported net income of $6.2 million, or $0.07 per diluted di·lute 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, for the third quarter of 2006, as compared to net income of $8.0 million, or $0.08 per diluted share, in the prior-year period. Included in the company's net income results for the third quarter is a one-time restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $2.4 million, or $0.03 per share, related to severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when obligations resulting from the elimination of approximately 50 positions across its agencies. Adjusted cash earnings1 were $12.1 million, or $0.13 per share, for the third quarter of 2006, as compared to adjusted cash earnings of $9.4 million, or $0.10 per share, for the third quarter of 2005. The company's cash and short-term investments, at September 30, 2006, was $147.4 million, as compared to $217.3 million at December 31, 2005. The company also repurchased 5,005,453 shares of its common stock at an average price of $8.46 per share in the third quarter of 2006. David W. Kenny, Chairman and Chief Executive Officer, Digitas Inc., said, "Our client relationships are strong and growing. During the quarter, we made substantial progress against the operational issues that we outlined in July. I am confident that these steps strengthen our employee and client value propositions and support the consistent execution that our growth business demands." Nine Months Results of Operations Digitas reported fee revenue for the nine months ended September 30, 2006 of $293.3 million, compared with $253.4 million for the same period of 2005. Total revenue, including reimbursable pass-through expenses, was $553.7 million for the nine months ended September 30, 2006 compared to $406.4 million for the same period of 2005. The company reported net income of $34.2 million, or $0.35 per diluted share, for the nine months ended September 30, 2006, as compared to net income of $30.2 million, or $0.31 per diluted share, in the prior-year period. Adjusted cash earnings1 were $45.9 million, or $0.47 per share, for the nine months ended September 30, 2006, as compared to adjusted cash earnings of $33.9 million, or $0.35 per share, for the same period of 2005. Guidance Digitas said it anticipates fee revenue of $94 million-$97 million for the fourth quarter of 2006. The company also said it expects to achieve earnings per share calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] 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 of $0.08-$0.10 in the fourth quarter of 2006. In addition, Digitas expects adjusted cash earnings2 of $0.12-$0.14 per share for the fourth quarter of 2006. For the full year 2006, the company anticipates fee revenue of $387 million-$390 million, earnings per share calculated in accordance with generally accepted accounting principles of $0.44-$0.46, and adjusted cash earnings2 per share of $0.59-$0.61. Brian K. Roberts Brian K. Roberts is an animation director for Big Idea Productions. He was an animator and story artist for VeggieTales and voiced Gordon in Minnesota Cuke and the Search for Samson's Hairbrush. He has directed many VeggieTales episodes such as and Moe and the Big Exit , Chief Financial Officer, Digitas Inc., said, "We acted swiftly to take the necessary actions to strengthen our operations and are on track to meet the full-year growth targets set back in July. In addition, we continue to return cash to our shareholders through open market stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. . Over the last eight quarters, our repurchases have totaled more than $130 million in cash." Digitas will discuss its third quarter performance on a conference call this afternoon at 4:30 p.m. (Eastern). The call-in number is (888) 689-4452 (U.S. and Canada) or (706) 679-5891 (international). A live webcast of the conference call will also be available on the investor relations Investor relations The process by which the corporation communicates with its investors. page of the company's Web site, at http://investor.digitas.com. The financial and statistical information presented during the conference call is available for review at http://investor.digitas.com under the FAQ (Frequently Asked Questions) A group of commonly asked questions about a subject along with the answers. Vendors often display them on their Web sites for use as troubleshooting guidelines. section. Replays by telephone will be available for seven days following the call. To access the replay by telephone, please call (800) 642-1687 (U.S. and Canada) or (706) 645-9291 and request conference ID 8536035. Replays of the call will be available by webcast for an extended period of time at the company's Web site, at http://investor.digitas.com. About Digitas Inc. The agencies of Digitas Inc. (Nasdaq: DTAS) help blue-chip global brands develop, engage and profit from their customers through digital, direct and indirect relationships. Driving accountable and measurable relationship engines, the agencies are known for combining art (creativity and customer insight) with science (analytics, measurement and strategy) across digital and direct media. Founded in 1980, Digitas Inc. is headquartered in Boston. The Digitas agency has locations in Boston, Chicago, Detroit and New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . The Medical Broadcasting Company Noun 1. broadcasting company - a company that manages tv or radio stations company - an institution created to conduct business; "he only invests in large well-established companies"; "he started the company in his garage" is located in Philadelphia. The Modem Media agency has locations in Atlanta, London, Norwalk, and San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden . (1) The company's adjusted cash earnings calculation excludes from its GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). earnings amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , stock-based compensation, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). expenses (income), and cumulative effects of accounting changes if any, and employs the company's actual tax provision. While adjusted cash earnings is not intended to be a replacement for GAAP earnings, the company believes its adjusted cash earnings calculations are meaningful and helpful to investors as they exclude any noncash charges Noncash charge A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow. That is, this is treated as an accounting expense -- not a real expense that demands cash. which the company believes are not necessarily indicative of the performance of the company's underlying business. Management believes the presentation of earnings excluding these charges provides useful information to investors as measures of operating performance basic to the company's ongoing operations and comparable from period to period. Management uses adjusted cash earnings to evaluate its ongoing operations and for internal planning and forecasting purposes. Adjusted cash earnings is not a measure of liquidity and does not represent cash generated by operating activities. The following table reconciles adjusted cash earnings to GAAP earnings: [TABLE OMITTED] (2) The company's projected adjusted cash earnings per share are calculated and presented for the same reasons as described in the preceding note. The following table reconciles projected adjusted cash earnings per share to projected GAAP earnings per share. [TABLE OMITTED] Statements contained in this press release that are not historical facts are 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. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements include statements under the caption "Guidance" regarding management's expectations with respect to future revenues, earnings per share and adjusted cash earnings per share, statements by the company's Chief Executive Officer and Chief Financial Officer and statements regarding the company's future business prospects, profitability, diversity of clients and growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. . These and all other forward-looking statements in this press release are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from those projected or implied in such forward-looking statements. Such factors include, without limitation, overall economic and business conditions, the demand for the company's services (including the willingness and ability of the company's clients to maintain or expand their spending), competitive factors in the company's markets, the company's ability to meet client expectations for our services, and the company's ability to effectively manage its growth and client relationships, including the company's ability to expand its client roster and reduce revenue concentration among its two largest client accounts, and the company's ability to forecast future results of operations, among other factors. A further list and description of some of the risks and uncertainties potentially impacting the company's business and future performance can be found in the company's filings with the Securities Exchange Commission. Guidance offered by Digitas senior management today represents a point-in-time estimate made early in the fourth quarter and is based upon numerous assumptions that while believed to be reasonable may not prove to be accurate. The company expressly disclaims any current intention or obligation to update this forecast or any other forward-looking statement contained in this press release. [TABLE OMITTED] [TABLE OMITTED] |
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