DAG Media, Inc. Reports Second Quarter Consolidated Financial Results

Tuesday August 5, 8:06 pm ET

NEW YORK, Aug. 5 /PRNewswire-FirstCall/ -- DAG Media Inc. (Nasdaq: DAGM - News), a leading independent publisher of print and online business page directories, announced today that consolidated net advertising revenue for the quarter ended June 30, 2003 was $1,526,000, versus $1,381,000 for the same period last year, an increase of $145,000 or 10.50%. The increase was primarily attributable to the general growth in business activity and to THE BLACKBOOK's contribution to recognized revenue. There was a net loss of $227,000 or $(0.08) per diluted share (based on 2.92 million shares) compared with a net loss of $72,000 and $(0.02) per diluted share (based on 2.92 million shares). The primary cause for the increase in net loss was the inclusion of THE BLACKBOOK's net loss of $149,000 in the Company's consolidated financial statements.

Net revenue for six months ended June 30, 2003 was $3,688,000 compared with $2,955,000 for the same period last year. Net Loss for the period was $161,000 or $(0.05) per diluted share (based on 2.92 million shares), compared with a net loss of $799,000, or $(0.27) per diluted share (based on 2.92 million shares), in the prior period. The increase in revenues resulted primarily from increased advertising revenue, of the Jewish Israeli Yellow Pages, both its 2002 second edition and the first 2003 edition, as well as THE BLACKBOOK's contribution of $151,000 to recognized revenue for the six months period ended June 30, 2003.

The Company also reported increased cash, cash equivalents and other marketable securities of $331,000 to $7,339,000 or $2.5 per share versus the same period last year. As of June 30, 2003 the Company also reported current assets of $12,698,000, total assets of $13,908,000, total shareholders' equity of $6,897,000 and a record high deferred revenues of $5,618,000, most to be recognized in the third and fourth quarter of this year.

DAG Media Chairman of board and Chief Executive Officer Assaf Ran remarked, "The progress we have achieved during the second quarter of 2003 is reflected by the record high deferred revenue section of which the vast majority will be realized upon publication of our directories in the third and fourth quarters of this year".

"In July 28th 2003, we appointed Mr. Ted Rubin as president of our subsidiary, BLACKBOOK Photography Inc. We trust Mr. Rubin's capability to lead THE BLACKBOOK to great success," added Mr. Ran.

DAG Media publishes and distributes three yellow page directories in print as well as photography and illustration directories. We also operate several web sites that complement our directories at www.newyellow.com and at www.blackbook.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.
                          CONSOLIDATED BALANCE SHEET
                                JUNE 30, 2003
                                 (Unaudited)

    Assets
    Current assets:
    Cash and cash equivalents                                        $644,562
    Marketable securities                                           6,694,683
      Total cash and cash equivalents and Marketable securities     7,339,245
    Trade accounts receivable, net of allowance for doubtful
     accounts of $898,000                                           2,804,210
    Directories in progress                                         2,200,230
    Deferred tax assets                                               153,389
    Other current assets                                              200,955
      Total current assets                                         12,698,029

    Fixed assets, net of accumulated depreciation of $166,618         287,749
    Goodwill                                                          458,131
    Trademarks and other intangibles, net                             441,037
    Other assets                                                       23,411
      Total assets                                                $13,908,357
    Liabilities and Shareholder's Equity
    Current liabilities:
    Accounts payable and accrued expenses                            $592,117
    Accrued commissions and commissions payable                       801,414
    Advanced billing for unpublished directories                    5,618,188
      Total current liabilities                                     7,011,719

    Shareholders' equity:
    Preferred shares -$0.01 par value; 5,000,000 shares authorized;
     no shares issued                                                      --
    Common shares - $0.001 par value; 25,000,000 shares authorized;
    2,996,190 issued and 2,927,460 outstanding                          2,996
    Additional paid-in capital                                      7,990,575
    Treasury stock, at cost-68,730 shares                            (231,113)
    Deferred Compensation                                             (99,086)
    Accumulated other comprehensive income                             72,896
    Accumulated deficit                                              (839,630)
      Total shareholders' equity                                    6,896,638
      Total liabilities and shareholders' equity                  $13,908,357




                               DAG MEDIA, INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Unaudited)

                                 Three Months Ended       Six Months Ended
                                      June 30,                June 30,
                                  2003        2002        2003        2002
    Advertising revenues       $1,525,746  $1,380,742  $3,687,622  $2,955,275
    Publishing costs              494,870     520,843     832,659     737,366
      Gross profit              1,030,876     859,899   2,854,963   2,217,909
    Operating costs and
     expenses:
      Selling expenses            524,327     548,935   1,549,546     998,998
      General and
       administrative             838,062     495,262   1,558,434   1,151,491
      Total operating costs
       and expenses             1,362,389   1,044,197   3,107,980   2,150,489
      (Loss) income from
       operation                 (331,513)   (184,298)   (253,017)     67,420
    Total other income, net        52,662      51,971     107,861     122,789
      (Loss) income before
    (provisions) benefit for
      income taxes               (278,851)   (132,327)   (145,155)    190,209
    Benefit (provision) for
     income taxes                  51,820      60,711     (15,838)    (94,151)
      (Loss) income before
       cumulative effect of
       change in accounting
       principle                 (227,031)    (71,616)   (160,993)     96,058
    Cumulative effect of change
     in accounting principle           --          --          --    (895,000)
    Net loss                    $(227,031)   $(71,616)  $(160,993)  $(798,942)
    Net (loss) income per
     common share:
    ---Basic
    (Loss) income before
     cumulative effect of
     change in accounting
     principle                     $(0.08)     $(0.02)     $(0.05)      $0.03
    Cumulative effect of change
     in accounting principle           --          --          --       (0.30)
    Net loss per common share      $(0.08)     $(0.02)     $(0.05)     $(0.27)
    ---Diluted
    (Loss) income before
     cumulative effect of
     change in accounting
     principle                     $(0.08)     $(0.02)     $(0.05)      $0.03
    Cumulative effect of change
     in accounting principle           --          --          --       (0.30)
    Net loss per common share      $(0.08)     $(0.02)     $(0.05)     $(0.27)
    Weighted average number of
     common shares outstanding
      - Basic                   2,927,460   2,925,486   2,927,460   2,918,495
      - Diluted                 2,927,460   2,925,486   2,927,460   2,933,454



                               DAG MEDIA, INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (unaudited)

                                                      Six Months    Six Months
                                                         Ended        Ended
                                                        June 30,     June 30,
                                                          2003         2002
    Cash flows from operating activities:
      Net loss                                        $(160,993)    $(798,942)
     Adjustment to reconcile net income (loss) to
      net cash provided by operating activities -
     Cumulative effect of change in accounting
      principle                                              --       895,000
    Depreciation and amortization                        80,684        39,312
    Amortization of deferred compensation                 4,428         1,893
    Bad debt expense                                    321,057       407,998
    Deferred taxes                                      285,715        13,109
    Changes in operating assets and liabilities-
      Accounts receivable                              (459,170)     (711,663)
      Directories in progress                           (89,402)     (344,657)
      Other current and noncurrent assets               (69,618)     (155,333)
      Accounts payable and accrued expenses            (160,088)       18,046
      Accrued commissions and commissions payable        (6,637)      183,000
      Advance billing for unpublished directories       836,637       418,702
      Income taxes payable                             (270,551)       (4,448)
        Net cash provided by (used in) operating
        activities                                      312,062       (37,983)

    Cash flows from investing activities:
      Proceeds from sale of marketable
       securities, net                                2,848,778     3,274,944
      Purchase of fixed assets                          (99,832)      (39,687)
      Proceeds from sale of fixed assets                 46,200            --
      Investment in marketable securities            (2,665,066)   (4,001,094)
        Net cash provided by (used in)
         investing activities                           130,080      (765,837)

    Cash flows from financing activities:
      Proceeds from exercise of stock option                 --        21,200
        Net cash provided by financing activities            --        21,200

    Net increase (decrease) in cash                    $442,142     $(782,620)

    Cash and cash equivalents, beginning of period      202,420     3,229,179

    Cash and cash equivalents, end of period           $644,562    $2,446,559

 

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