DAG Media, Inc. Announced Third Quarter Consolidated Financial Results And A $0.25 Cash Dividend Per Share

Thursday November 6, 4:03 pm ET

NEW YORK, Nov. 6 /PRNewswire-FirstCall/ -- DAG Media Inc. (Nasdaq: DAGM - News) Dag Media, Inc., a leading independent publisher of print and online business directories, announced today that consolidated net advertising revenue for the quarter ended September, 2003 was $2,178,000, versus $1,850,000 for the same period last year, an increase of $328,000 or 17.73%. The increase was primarily attributable to the general growth in business activity and reflects an increase in sales of the latest editions of the Jewish Israeli Yellow Pages directories, increased web related income and individual book's sales. Cash and cash equivalents $8,320,000 and deferred revenues of $5,393,000.

Net income for the quarter was $1,138,000, or $0.39 per share, compared with a net loss of 87,000 for the quarter ended September 30, 2002. The increase results primarily due to the sale of the New Yellow Directory which is reflected on the other income section. On August 22nd, 2003 the company sold its New Yellow directory to Yellow Book USA, Inc. for $1.3 million in cash. The company's net profit before provision for income taxes from the sale totaled $1,208,000.

Net advertising revenue for the nine months ended September 30, 2003 were $5,866,000 compared with $4,805,000 for the same period last year, an increase of $1,061,000 or 22.01%. Net income for the period was $1,151,000, or $0.39 per share, compared with a net loss of $886,000, or $(0.31 per share), in the prior year. The increase resulted primarily from the general growth in business activity and reflects an increase in sales of the latest editions of the Jewish Israeli Yellow Pages directories. In addition, the increase attributable to the increased web related income, book's sales revenues and income sources from award show entry fees as well as revenues derives from reprints and production charges.

Due to the increase in both income and cash related to the sale of the New Yellow Directory, the Board of directors decided today on a $0.25 per share cash dividend distribution to all shareholders on record as of December 15, 2003.

Assaf Ran, Chairman of board and CEO stated, "Since the sale of New Yellow we are exploring a verity of exciting opportunities. We have already successfully launched the new Complete Industry Directory of the Blackbook as well as the new Blackbook stock.com web site. Both now, generating revenues on a daily basis. In addition, we are in process of reviewing additional ventures which I hope to execute in the near future."

"With the buds of recovery in the advertising industry I'm optimistic about next year," added Mr. Ran.

DAG Media publishes and distributes Yellow Pages directories in print and online as well as photography, illustration and design directories. We also operate several web sites that complement our directories at http://www.newyellow.com and at http://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
                              September 30, 2003
                                 (unaudited)

    Assets
    Current assets:
      Cash and cash equivalents                          $ 169,013
      Marketable securities                              8,150,755
        Total cash and cash equivalents
         and marketable securities                       8,319,768
      Trade accounts receivable, net of
       allowance for doubtful accounts of $798,000       2,569,529
      Directories in progress                            2,019,920
      Deferred tax asset                                   631,739
      Other current assets                                 161,874
        Total current assets                            13,702,830
    Fixed assets, net of accumulated depreciation
     of $ 189,616                                          309,752

    Goodwill                                               458,131
    Trademarks and other intangibles, net                  430,155
    Other assets                                           123,412
        Total assets                                  $ 15,024,280

    Liabilities and Shareholders' Equity
    Current liabilities:
    Accounts payable and accrued expenses                $ 141,017
    Accrued commissions and commissions payables           779,569
    Advanced billing for unpublished directories         5,392,755
    Income Tax Payable                                     479,298
        Total current liabilities                        6,792,639

    Shareholders' equity:
        Preferred shares - $ .01 par value;
         5,000,000 shares authorized; no shares
         issued                                                 --

        Common shares - $ .001 par value;
         25,000,000 authorized; 3,003,190 issued
         and 2,934,460 outstanding                           3,003

        Additional paid-in capital                       8,001,208
       Treasury stock, at cost- 68,730 shares             (231,113)
       Deferred compensation                               (92,316)
       Accumulated other comprehensive income               78,500
        Retained earnings                                  472,359
            Total shareholders' equity                   8,231,641
            Total liabilities and shareholders'
             equity                                   $ 15,024,280

      The accompanying notes are an integral part of this balance sheet.


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


                                Three Months Ended       Nine Months Ended
                                    September 30,            September 30,
                                 2003          2002       2003         2002
    Advertising revenues   $2,178,238    $1,849,750  $5,865,860  $4,805,025
    Publishing costs          262,854       294,933   1,095,513   1,024,299
    Gross Profit            1,915,384     1,554,817   4,770,347   3,780,726
    Operating costs and
     expenses:
    Selling expenses          991,530       862,339   2,541,076   1,861,337
    Administrative and
     general costs            900,657       912,989   2,459,090   2,072,480
    Total operating costs
     and expenses           1,892,187     1,775,328   5,000,166   3,933,817

    Income (loss) from
     operations                23,197      (220,511)   (229,819)   (153,091)

    Other income              103,678        46,462     211,539     169,250
    Gain from sale of the
     New Yellow Directory   1,207,997            --   1,207,997          --
    Total other income      1,311,675        46,462   1,419,536     169,250

    Income (loss) before
     (provision) benefit
     for income taxes       1,334,872      (174,049)  1,189,717      16,159

    (Provision) benefit
     for income taxes        (196,443)       86,753     (38,721)     (7,397)
    Income (loss) before
     cumulative effect of
     change in accounting
     principle              1,138,429       (87,296)  1,150,996       8,762
    Cumulative effect of
     change in accounting
     principle                     --            --          --     (895,000)
    Net income (loss)      $1,138,429      $(87,296) $1,150,996    $(886,238)

    Net income (loss) per
     common share
     -Basic
    Income (loss) before
     cumulative effect of
     change in accounting
     principle                 $ 0.39       $ (0.03)     $ 0.39       $ 0.00
    Cumulative effect of
     change in accounting
     principle                     --            --          --        (0.31)

    Net income (loss) per
     common share              $ 0.39       $ (0.03)     $ 0.39      $ (0.31)
     -Diluted
    Income (loss) before
     cumulative effect of
     change in accounting
     principle                 $ 0.38       $ (0.03)     $ 0.37       $ 0.00
    Cumulative effect of
     change in accounting
     principle                     --            --          --        (0.31)

    Net income (loss) per
     common share              $ 0.38       $ (0.03)     $ 0.37      $ (0.31)

    Weighted average number
     of common shares
     outstanding
     -Basic                 2,929,895     2,927,460   2,928,281    2,921,516
     -Diluted               3,011,636     2,927,460   3,102,791    2,931,330

  The accompanying notes are an integral part of these financial statements


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

                                                 Nine Months    Nine Months
                                                    Ended          Ended
                                                September 30,   September 30,
                                                     2003           2002

    Cash flows from operating activities:
      Net income (loss)                          $ 1,150,996    $ (886,238)
      Adjustment to reconcile net income
      (loss) to net cash provided by (used in)
      operating activities:
    Gain on sale of New Yellow Directory          (1,207,997)            --
      Cumulative effect of change in accounting
       principle                                          --        895,000
      Depreciation and amortization                  118,815         66,605
      Amortization of deferred compensation           11,198         10,513
      Bad debt expense                               667,944        830,359
    Realized gain on preferred stocks and
     marketable securities                                --          2,035
     Deferred taxes                                 (192,635)            --
     Changes in operating assets and liabilities-
       Accounts receivable                          (571,376)      (752,293)
       Directories in progress                        90,906       (253,161)
       Other current assets                          (38,722)       (68,417)
       Other assets                                    8,181             --
       Accounts payable and accrued expenses        (611,188)       (28,137)
       Accrued commissions and commissions payable   (28,481)       163,837
       Advance billing for unpublished directories   611,204        409,393
       Income taxes payable                          208,749        (78,094)
          Net cash provided by (used in) operating
           activities                                217,594       (311,402)

    Cash flows from investing activities:
     Proceeds from sale of marketable securities,
      net                                          4,460,453      3,327,925
     Purchase of fixed assets                       (149,082)       (60,480)
    Cash received on sale of New Yellow Directory,
     net of expenses                               1,207,997             --
     Proceeds from sale of fixed assets               46,200             --
     Cash paid for acquisition of subsidiary              --        (70,537)
     Investment in Dune Medical Devises Ltd.        (100,000)            ---
     Investment in marketable securities          (5,727,209)    (4,995,927)
          Net cash used in investing activities     (261,641)    (1,799,019)

    Cash flows from financing activities:
     Proceeds from exercise of stock options          10,640         21,200

          Net cash provided by financing activities   10,640         21,200

    Net decrease in cash                           $ (33,407)  $ (1,466,417)
    Cash and cash equivalents, beginning of period   202,420      3,229,179
    Cash and cash equivalents, end of period       $ 169,013    $ 1,762,762

  The accompanying notes are an integral part of these financial statements.



Source: DAG Media Inc.

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