a
60 Cutter Mill Rd.
Suite 205
Great Neck, NY
11021
Tel: 516.444.3400
Fax: 516.444.3404

 

Press Releases

Press Release Source: DAG Media, Inc.

Contact:
Assaf Ran, CEO
Inbar Evron-Yogev, CFO
(718) 520-1000
SOURCE: DAG Media, Inc.

 

 

DAG Media, Inc. Reports second Quarter Financial Results

         NEW YORK, August 10, 2007 / PRIME NEWSWIRE/ -- DAG Media, Inc. (Nasdaq: DAGM - news)

       DAG Media, Inc. announced today that net sales for the three month period ended June 30, 2007 were $47,000 versus net sales of $0 for the same period in 2006.  This increase in net sales is mainly due to the sales made through DAG Media, Inc.’s subsidiary, Shopila, Inc.’s marketplaces.

      Loss from operations for the three month period ended June 30, 2007 was $666,000 (including write-off of Goodwill and Other intangible assets in the amount of $449,000) compared to a loss of $300,000 for the same period in 2006, an increase of $366,000. This increase resulted mainly from the write-off of Goodwill and Other intangible assets related to the acquisition of Shopila, in the amount of $449,000.

     For the three month period ended June 30, 2007, the consolidated loss from continuing operation was $433,000 or $(0.13) per basic and diluted common share (based on 3.236 million shares), compared to a loss of $208,000 or $(0.07) per basic and diluted common share (based on 3.157 million shares), for the three month period ended June 30, 2006. The increase in a loss of $225,000 resulted mainly from the write-off of Goodwill and Other intangible assets related to the acquisition of Shopila, in the amount of $449,000, offset by a decrease in Web development expenses of $100,000, which related to nextyellow.com web development expenses and an income tax benefit in 2007 of $61,000.

     Basic and diluted net loss per common share was $(0.11) for the three month period ended June 30, 2007, mainly due to  write-off of Goodwill and Other intangible assets in the amount of $449,000, versus basic and diluted net income  per common share of $0.14  for the three month period ended June 30, 2006. In 2006 net income was attributable to the gain on the sale of the Directories business.

      Net sales for the six month period ended June 30, 2007 were $72,000 versus net sales of $0 for the same period in 2006.  This increase in net sales is mainly due to the sales made through DAG Media, Inc.’s subsidiary, Shopila, Inc.’s marketplaces.
 
     Basic and diluted net loss per common share was $(0.16) for the six month period ended June 30, 2007, mainly due to  write-off of Goodwill and Other intangible assets in the amount of $449,000 in the second quarter, versus basic and diluted net income  per common share of $0.02  for the six month period ended June 30, 2006. In 2006 net income was attributable to the gain on the sale of the Directories business.

       On May 15, 2007, the Company formed a new wholly-owned subsidiary named DAG Funding Solutions, Inc, (“DAG Funding”). DAG Funding was formed to carry out a new business initiative centered on money lending services to businesses. More specifically, DAG Funding offers commercial short term funding solutions and loan services against collateral such as real estate, receivables, marketable securities, etc., accompanied, in most cases, by personal guarantees from the principals.

     Assaf Ran, Chairman of the Board and CEO stated, “In 2007 I have set my first priority to regain profitability and positive cash flow from operations, therefore we are committed to cut cash infusion to our cash draining operations and focus on enhancing profitable models, while maintaining our expense reduction approach. That means that DAG Funding is now our best performer while Next Yellow- our innovative patent pending online yellow pages solution is awaiting financing transaction on the subsidiary level. Since we will not issue more loans to Shopila and since Shopila is struggling financially and facing insufficient operating cash flow, we had to write-off the value of its goodwill and other intangible assets, which cause the majority of the loss in this quarter.”

  “I believe that now we have cleared the road a head.” added Mr. Ran.

    DAG Media, Inc. through our subsidiaries provides solutions to the online yellow pages industry and to local search, as well as e-commerce web site and short term none banking commercial loans. We operate several  web sites: http://www.nextyellow.com, http://www.shopila.com, http://www.dagfundingsolutions.com and http://www.dagmedia.com
This release contains forward-looking statements within the meaning Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are typically identified by the words “believe”, “expect”, “intend”, “estimate” and similar expressions.  Those statements appear in a number of places in this release and include statements regarding our intent, belief or current expectations or those of our directors or officers with respect to, among other things, trends affecting our financial conditions and results of operations and our business and growth strategies.  These forward-looking statements are not guarantees of future performance and involve risks and uncertainties.  Actual results may differ materially from those projected, expressed or implied in the forward-looking statements as a result of various factors (such factors are referred to herein as “Cautionary Statements”), including but not limited to the following: (i)  the successful integration of new businesses that we have acquired or may acquire; (ii) the successful consummation of the sale of our directories business; (iii)  the success of our new business strategy; (iv) our limited operating history; (v) potential fluctuations in our quarterly operating results; (vi) challenges facing us relating to our growth; and (vii) our dependence on a limited number of suppliers. These forward-looking statements speak only as of the date of this release, and we caution potential investors not to place undue reliance on such statements.  You should review all of our reports filed with the Securities and Exchange Commission along with this press release.  We undertake no obligation to update or revise any forward-looking statements.  All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Cautionary Statements.

 

DAG MEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(unaudited)

 

Assets

June 30, 2007

 

Current assets:

    

Cash and cash equivalents

   $  2,330,524

Marketable securities

2,713,505

Short term investment – insurance annuity contract – at fair value

       1,019,688

         Total cash and cash equivalents, marketable securities and short term investment

6,063,717

 

 

   Trade accounts receivable

9,539

   Due from purchaser

291,937

   Short term notes

795,000

   Other current assets

            52,853

            Total current assets

7,213,046

 

 

Property and equipment, net

14,238

Capitalized web development costs, net

98,687

Other assets

         142,515

            Total assets

   $ 7,468,486

 

Liabilities and Shareholders’ Equity

Current liabilities:

 

Accounts payable and accrued expenses

    $     127,065

Promissory note

50,000

Line of credit

             54,506

Income tax payable

336,917

   Deferred gain from the sale of Jewish Directories

         218,751

          Total current liabilities

787,239

 

Commitments and contingencies

 

 

 

 

Shareholders’ equity:

 

Preferred shares - $ .01 par value; 5,000,000 shares authorized; no shares issued

----

Common shares - $ .001 par value; 25,000,000 authorized; 3,305,190 issued and 3,236,460 outstanding

3,305

Additional paid-in capital

9,109,717

Treasury stock, at cost- 68,730 shares

(231,113)

Accumulated other comprehensive loss

(93,269)

Accumulated deficit

      (2,107,393)

                     Total shareholders’ equity

        6,681,247

                     Total liabilities and shareholders’ equity

   $ 7,468,486


DAG MEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

Three Months
Ended June 30,

Six Months
Ended June 30,

 

2007

2006

2007

2006

 

 

 

 

 

Net sales

$ 46,612

----

 $ 71,636

----

Cost of goods sold

              34,000

                     ----

              52,013

                     ----

                Gross profit

              12,612

----

              19,623

                     ----

 

 

 

 

 

Interest income from short term notes

                 4,967

                      ----

                 4,967

                     ----

Operating costs and expenses:

 

 

 

 

Selling expenses

8,958

----

13,791

----

Web development expenses

12,336

112,994

24,672

112,994

Marketing expenses

11,677

15,529

14,866

15,529

Write off of Goodwill and Other intangible assets

 

449,057

 

----

 

449,057

 

----

General and administrative expenses

            201,429

            171,681

            430,450

            378,514

Total operating costs and expenses

            683,457

            300,204

            932,836

           507,037

 

 

 

 

 

Loss from operations

(665,878)

(300,204)

(908,246)

(507,037)

Other income, net

            111,584

              92,368

            136,391

           49,739

Loss from continuing operations before income tax benefit and minority interest

        (554,294)

(207,836)

        (771,855)

(457,298)

Income tax benefit

              61,290

                      ----

              67,600

                     ----

Loss  from continuing operations before minority interest

        (493,004)

(207,836)

        (704,255)

(457,298)

Minority interest

              60,149

                      ----

66,724

                     ----

Loss  from continuing operations

(432,855)

(207,836)

(637,531)

(457,298)

Discontinued Operations:

 

 

 

 

Gain on the sale of discontinued operations

72,916

766,385

121,527

607,800

Loss from discontinued operations

                      ----

          (113,973)

                      ----

          (75,129)

Income from discontinued operations

              72,916

            652,412

            121,527

         532,671

 

 

 

 

 

Net Income (loss)

 

    $    (359,939)

    $     444,576

    $    (516,004)

   $      75,373

 

 

 

 

 

Basic and Diluted net income (loss) per common share outstanding:

 

 

 

 

Continuing operations

     $      (0.13)

     $      (0.07)

     $      (0.20)

   $       (0.15)

Discontinued operations

              0.02

              0.21

              0.04

              0.17

    Net income (loss) per common share

    $       (0.11)

    $        0.14

    $       (0.16)

   $        0.02

Weighted average number of common shares outstanding

 

 

 

 

--Basic and Diluted

        3,236,460

        3,157,405

        3,236,460

     3,149,973

 

 

 

 

 

 

DAG MEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Six Months Ended June 30,

 

 

 2007

 2006

Cash flows from operating activities:

 

 

  Net income (loss)

     $     (516,004)

     $         75,373

  Adjustments to reconcile net income (loss) to net cash used in

 

 

  operating activities:

 

 

  Gain on the sale of  Jewish Directories

(121,527)

(426,107)

  Depreciation and amortization

32,330

6,602

  Amortization of deferred compensation and non cash compensation

86,408

166,374

  Write off of Goodwill and Other intangible assets

449,057

----

  Minority Interest

(66,724)

----

  Realized loss on sale of marketable securities

10,569

70,861

  Deferred tax

(67,600)

----

  Gain on the sale of fixed assets

----

(14,232)

  Changes in operating assets and liabilities:

 

 

       Accounts receivable

(3,417)

----

       Other current assets

(14,263)

(58,563)

       Due from purchasers

----

(58,881)

       Accounts payable and accrued expenses

(136,915)

87,328

       Income tax payable

(4,764)

----

       Assets and liabilities of discontinued operations

----

(104,249)

              Net cash used in operating activities

(352,850)

(255,494)

 

 

 

Cash flows from investing activities:

 

 

   Proceeds from sale of marketable securities

480,439

2,541,023

   Investment in marketable securities

(806,391)

(2,558,739)

   Issuance of short term notes

(795,000)

----

   Investment in convertible loan

----

(25,000)

   Purchase of fixed assets

----

(5,588)

   Proceeds  from sale of fixed assets

----

9,213

   Cash received on sale of Jewish Directories, net of expenses

173,389

181,693

             Net cash provided by (used in) investing activities

(947,563)

142,602

 

 

 

Cash flows from financing activities:

 

 

    Dividend paid ($0.4 per share)

----

(314,246)

    Proceeds from exercise of stock options

----

5,520

              Net cash used in financing activities

----

(308,726)

             

 

 

Net decrease in cash

          (1,300,413)

             (421,618)

Cash and cash equivalents, beginning of period

3,630,937

4,210,427

Cash and cash equivalents, end of period

      $   2,330,524

      $   3,788,809

 

 

 

Supplemental Cash Flow Information:

 

 

Capitalized software acquired through issuance of stock

----

$37,920

Common stock issued for services performed

----

$45,000

Taxes paid during the period

$4,764

$5,844