DG Systems Reports Second Quarter Results Company Reaches
Profitability on an EBITDA Basis
Business Wire - July 21, 1998 08:18
SAN FRANCISCO--(BUSINESS WIRE)--July 21, 1998--Digital Generation Systems, Inc. (NASDAQ/NMS:DGIT) a
leading provider of digital network services to the broadcast industry, today reported revenues of $10.1 million for its second
quarter ended June 30, 1998.
This compares to $5.4 million for the second quarter ended June 30, 1997.
DG Systems reached a significant milestone by achieving profitability of $112,000 on an earnings before interest, taxes,
depreciation and amortization (EBITDA) basis. This improvement compares to an EBITDA loss of $895,000 in the second
quarter 1997. DG Systems is typically measured on an EBITDA basis due to the significant capital expenditures and
depreciation expenses associated with the installation of its digital delivery equipment. The company reported a net loss per
share of $0.28 in the quarter, compared with net loss of $0.27 per share in the second quarter of 1997. For the six months
ended June 30, 1998, DG posted revenues of $20.0 million, an EBITDA loss of $216,000 and a net loss per share of $.59
versus revenues of $10.0 million, EBITDA loss of $2.2 million and a net loss per share of $.55 in the six months ended June
30, 1997.
"This major milestone toward net income in achieving EBITDA profitability is the reflection of continuing improvements in the
overall financial performance of the company," said Paul Emery, VP Finance & Administration & CFO of DG Systems. "DG
Systems continues to achieve higher efficiencies in the present quarter, compared to the second quarter of 1997 primarily
attributable to increases in digital volume, reaching digital video efficiencies, and effective cost control measures, including the
integration and centralization of our nationwide operations."
During the second quarter, DG Systems set a new record for digital deliveries and the company has now surpassed the three
million mark in cumulative digital deliveries through its network operating center.
DG Systems' growth strategy is two-fold: leveraging its existing video and audio infrastructures through higher volume; and
introducing new services to its customers. Last week, the company announced its iAudio service, which allows the transmittal
of radio spots via the Internet to the DG network operating center. iAudio links directly into DG Systems' network, which is
the only nationwide digital media delivery platform for audio and video. This new product launch in conjunction with its
previously released DG Online Internet capability, focuses on utilizing the Internet as a vehicle to expand its digital network and
offer additional service capabilities to its customers.
"The benefits to advertisers, agencies and broadcast stations of DG's digital network are increasingly clear and we intend to
continue to be on the cusp of evolving new services to meet the needs of our clients," stated Hank Donaldson, President &
CEO of DG Systems. "DG Online and now iAudio clearly demonstrate our commitment to providing our clients with innovative
solutions leveraging the benefits of Internet technology in conjunction with DG's broadcast quality and efficiency. "
Digital Generation Systems, Inc., has developed and operates both a nationwide, value added digital network and Internet
product linking hundreds of advertisers and advertising agencies with more than 6,500 radio and television stations across the
United States. The Company's fault-tolerant network operations center delivers audio, video, image and data content, which
facilitates transactions among advertising industry participants. DG Systems' URL is www.dgsystems.com.
This release contains forward-looking statements relating to 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 filed with
the Securities and Exchange Commission on March 31, 1998 and the Company's Form 10-Q filed on May 15, 1998.
Note to Editors: DG Systems is a trademark of Digital Generation Systems, Inc. All other trademarks are property of their
respective holders.
Digital Generation Systems, Inc.
Corporate Information
June 30, 1998
Three months Six months
ended ended
June 30 June 30
Income Summary 1998 1997 1998 1997
(In thousands, except
for per share and other
data)
Revenues $ 10,097 $ 5,405 $ 19,971 $ 10,011
Delivery & Material
Costs 3,666 1,813 7,412 3,288
Customer Operations 3,468 2,104 7,043 4,239
Sales & Marketing 1,235 1,126 2,499 2,141
Research & Development 601 620 1,189 1,268
General & Administrative 1,015 637 2,044 1,241
EBITDA 112 ($ 895) ($ 216) ($ 2,166)
Depreciation &
Amortization 2,880 1,968 5,713 3,733
Interest Income 45 215 114 466
Interest Expense ($ 696) ($ 553) ($ 1,407) ($ 1,064)
Net Loss ($ 3,419) ($ 3,201) ($ 7,222) ($ 6,497)
Earnings Per Share ($ 0.28) ($ 0.27) ($ 0.59) ($ 0.55)
Weighted Average Shares 12,216 11,733 12,196 11,710
Selected Balance Sheet
Data
Cash & Short-term
Investments 4,188 15,178
Total Assets 51,908 40,443
CONTACT: Digital Generation Systems, Inc.
Paul Emery, 415/276-6600
(VP Finance & Administration/CFO)
or
Lippert/Heilshorn & Associates
Lillian Armstrong/Kris Otridge, 415/433-3777
this stock has gotten alot of attention on bloomberg, on my watchlist |
