Press Releases
DAG Media, Inc. Reports Third Quarter Financial Results and a $0.28 Per Share Cash Dividend
NEW YORK, Oct. 25 /PRNewswire-FirstCall/ -- DAG Media, Inc. (Nasdaq: DAGM - News), a leading independent publisher of print and online ethnic business directories, announced today that net advertising revenue for the quarter ended September 30, 2004 was $1,987,000 versus advertising revenue of $2,043,000 for the same period last year, a decrease of $56,000 or 2.74%. The slight decrease was primarily attributable to the decrease in recognized revenue related to the Jewish Israeli Yellow Pages Directory.
Net income was $1.189 million or $0.38 per basic share (based on 3.152 million shares) and $0.37 per diluted share (based on 3.238 million shares) compared with net income of $1.138 million and $0.39 per basic share (based on 2.929 million shares) and $0.38 per diluted share (based on 3.011 million shares). The increase was primarily due to the sale of Blackbook Photography Inc., which is reflected on the Discontinued operations section. On August 24, 2004, the company sold its wholly owned subsidiary, Blackbook Photography Inc., for $2.25 million. The Company's net profit from the sale after direct related costs, net of tax effect, totaled $1.169 million.
Net advertising revenue for the nine months ended September 30, 2004 was $5,027,000 compared with $5,580,000 for the same period last year. Net income for the period was $1,138,000 or $0.36 per basic share (based on 3.125 million shares) and $0.35 per diluted share (based on 3.230 million shares), compared with a net income of $1.151 million or $0.39 per basic share (based on 2.928 million shares and $0.37 per diluted share (based on 3.102 million shares), in the prior period. The decrease in net revenues was primarily attributable to the reduction of recognized revenues related to the New Yellow Manhattan Directory ninth edition (sold) partly offset by the increased recognized revenues of the tenth edition of the Jewish Master Guide Directory. The increased net income results primarily due to the sale of Blackbook Photography Inc., which is reflected on the Discontinued operation section.
The Company also reported increased cash, cash equivalents, other marketable securities and short term investments of $1,274,000 to $9,982,000 or $3.17 per share versus the same period last year. As of September 30, 2004 the Company also reported current assets of $13,189,000, total assets of $13,800,000, total shareholders' equity of $9,465,000 and deferred revenues of $2,794,000.
Due to the increases of both income and cash related to the sale of Blackbook Photography Inc., the Board of directors declared a $0.28 per share cash dividend to all shareholders of record on December 1st, 2004 to be paid on January 5, 2005.
Assaf Ran, Chairman of the board and CEO stated, "Our third quarter revenue reflects as expected the maturity and stability of the Jewish Israeli Yellow Pages directory. Growth should be anticipated in our other directory, The Jewish Master Guide (recognized in the fourth quarter)."
"I'm pleased with the board decision to distribute a dividend for the second year in a row which was enabled thanks to the Blackbook deal," added Mr. Ran.
DAG Media publishes and distributes Yellow Pages and business directories for domestic niche markets. We also operate several web sites that complement our directories at http://www.newyellow.com ; http://www.jewishyellow.com; http://www.jewishmasterguide.com; andhttp://www.theonlykosherdirectory.com .
Forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the Company's products, increased levels of competition, new products introduced by competitors, changes in the rates of subscriber acquisition and retention, and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.
DAG MEDIA, INC. BALANCE SHEET
(unaudited)
Assets September 30, 2004 |
|
Current assets: |
|
|
|
Cash and cash equivalents |
$4,347,203 |
Marketable securities |
4,590,734 |
Short term investment - insurance annuity contract at fair value |
1,044,202 |
Total cash and cash equivalents, marketable securities and short terms investments |
9,982,139 |
Trade accounts receivable, net of allowance for |
1,620,193 |
Directories in progress |
1,328,918 |
Other current assets |
257,304 |
Total current assets |
13,188,554 |
Property and equipment, net |
217,226 |
Trademarks and other intangibles, net |
275,518 |
Other assets |
118,863 |
Total assets |
$13,800,161 |
|
|
Liabilities and Shareholders' Equity |
|
|
|
Current liabilities: |
|
Accounts payable and accrued expenses |
$265,928 |
Accrued commissions and commissions payable |
605,000 |
Advanced billing for unpublished directories |
2,793,983 |
Income tax payable |
670,248 |
Total current liabilities |
4,355,159 |
|
|
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; 3,152,190 issued and 3,083,460 outstanding 3,152 |
|
|
|
Additional paid-in capital |
8,374,913 |
Treasury stock, at cost - 68,730 shares |
(231,113) |
Deferred compensation |
(31,478) |
Accumulated other comprehensive income |
35,284 |
Retained earnings |
1,314,244 |
Total shareholders' equity |
9,465,002 |
Total liabilities and shareholders' equity |
$13,800,161 |
DAG MEDIA, INC. STATEMENTS OF OPERATIONS
(unaudited)
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||
|
2004 |
2003 |
2004 |
2003 |
Advertising revenues |
$1,986,744 |
$2,043,232 |
$5,027,356 |
$5,580,216 |
Publishing costs |
225,496 |
225,892 |
772,837 |
928,910 |
Gross Profit |
1,761,248 |
1,817,340 |
4,254,519 |
4,651,306 |
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
Selling expenses |
963,068 |
922,110 |
2,280,664 |
2,372,402 |
Administrative and general |
745,178 |
730,794 |
2,015,866 |
1,899,490 |
Total operating costs and expenses |
1,708,246 |
1,652,904 |
4,296,530 |
4,271,892 |
|
|
|
|
|
Gain (loss) from operations |
53,002 |
164,436 |
(42,011) |
379,414 |
|
|
|
|
|
Other income |
84,735 |
95,546 |
328,520 |
200,747 |
Gain from sale of the New Yellow Directory |
--- |
1,207,997 |
--- |
1,207,997 |
Total other income |
84,735 |
1,303,543 |
328,520 |
1,408,744 |
Income from continuing operations before |
137,737 |
1,467,979 |
286,509 |
1,788,158 |
|
|
|
|
|
Provision for income taxes |
134,340 |
189,764 |
134,340 |
205,601 |
Income from continuing operations |
$3,397 |
$1,278,215 |
$152,169 |
$1,582,557 |
|
|
|
|
|
Discontinued operations: |
|
|
|
|
Gain on the sale of Blackbook, net of tax effect of $770,000 |
1,169,213 |
--- |
1,169,213 |
--- |
Income (loss) from discontinued operations net of tax benefit of $120,000 |
16,480 |
(139,786) |
(183,352) |
(431,561) |
Income (loss) from discontinued operations |
1,185,693 |
(139,786) |
985,861 |
(431,561) |
|
|
|
|
|
Net income |
$1,189,090 |
$1,138,429 |
$1,138,030 |
$1,150,996 |
|
|
|
|
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Net income (loss) per common share - Basic |
|
|
|
|
Continuing operations |
0.00 |
0.44 |
0.05 |
0.54 |
Discontinuing operations |
0.38 |
(0.05) |
0.31 |
(0.15) |
Total net income per common share - Basic |
$0.38 |
$0.39 |
$0.36 |
$0.39 |
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|
|
|
|
Net income (loss) per common share - Diluted |
|
|
|
|
Continuing operations |
0.00 |
0.43 |
0.04 |
0.51 |
Discontinuing operations |
0.37 |
(0.05) |
0.31 |
(0.14) |
Total net income per common share - Diluted |
$0.37 |
$0.38 |
$0.35 |
$0.37 |
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|
|
|
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Weighted average number of common shares outstanding |
|
|
|
|
--Basic |
3,152,190 |
2,929,895 |
3,125,455 |
2,928,281 |
--Diluted |
3,237,608 |
3,011,636 |
3,230,197 |
3,102,791 |
DAG MEDIA, INC. STATEMENTS OF CASH FLOWS
(unaudited)
|
Nine Months ended |
|
|
September 30, 2004 |
September 30, 2003 |
Cash flows from operating activities: |
|
|
Net income |
$1,138,030 |
$1,150,996 |
Adjustment to reconcile net income to net cash (used in) provided by operating activities: |
|
|
Depreciation and amortization |
102,403 |
85,464 |
Gain on sale of New Yellow Directory |
---- |
(1,207,997) |
Gain on sale of Blackbook Photography Inc. |
(1,939,213) |
---- |
Amortization of deferred compensation |
49,522 |
11,198 |
Bad debt expense |
524,926 |
667,261 |
Realized gain on sale of marketable securities |
(191,989) |
---- |
Non cash option expense |
16,092 |
---- |
Tax benefit of stock options exercised |
137,680 |
---- |
Deferred taxes |
(63,571) |
(192,635) |
Changes in operating assets and liabilities net of disposition of Blackbook Photography, Inc. |
|
|
Accounts receivable |
(486,514) |
(604,892) |
Directories in progress |
322,070 |
396,023 |
Other current assets |
85,814 |
(29,938) |
Other assets |
(4,412) |
--- |
Accounts payable and accrued expenses |
(342,968) |
31,947 |
Accrued commissions and commissions payable |
(61,817) |
(19,000) |
Advance billing for unpublished directories |
11,006 |
(673,305) |
Income taxes payable |
581,248 |
201,213 |
Assets and liabilities from discontinued operation |
---- |
416,139 |
Net cash (used in) provided by operating activities |
(121,693) |
232,474 |
|
|
|
Cash flows from investing activities: |
|
|
Proceeds from sale of marketable securities |
7,328,008 |
4,460,453 |
Purchase of fixed assets |
(24,969) |
(126,933) |
Investment in marketable securities move |
(5,258,515) |
(5,727,209) |
Proceeds from sale of fixed assets |
---- |
46,200 |
Cash received on sale of New Yellow |
|
|
Directory, net of expenses |
---- |
1,207,997 |
Cash received on sale of Blackbook |
|
|
Photography Inc., net of expenses and amounts |
1,800,245 |
---- |
Investment in Dune Medical Devises Ltd. |
---- |
(100,000) |
Net cash provided by (used in) investing activities |
3,844,769 |
(239,492) |
|
|
|
Cash flows from financing activities: |
|
|
Dividend paid |
(744,113) |
---- |
Proceeds from forfeit of gain on sale |
10,279 |
---- |
Proceeds from exercise of stock options |
156,142 |
10,640 |
Net cash (used in) provided by financing activities |
(577,692) |
10,640 |
Net increase in cash |
$3,145,384 |
$3,622 |
Cash and cash equivalents, beginning of period |
1,201,819 |
131,611 |
Cash and cash equivalents, end of period |
$4,347,203 |
$135,233 |