DAG Media, Inc. Reports Year 2003 Consolidated Financial Statements

Wednesday February 25, 4:01 pm ET

NEW YORK, Feb. 25 /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 year ended December 31, 2003 was $9,086,000 versus advertising revenues of $6,530,000 for year 2002, an increase of $2,556,000 or 39.14%. The increase derives from general increase in sales and growth of business. For the year ended December 31, 2003, the Company published three Blackbook's business directories compared to only one in 2002, recognizing revenues of $2,165,000 in connection with Blackbook compared to $364,000 in 2002.

Gross profit increased to $6,968,000 in 2003 from $4,800,000 in the twelve months period ending December 31, 2002.

For the year ended December 31, 2003, consolidated income before provision for income taxes was $1,887,000 compared to a loss of $353,000 in 2002. Net income after cumulative effect of change in accounting principal was $1,599,000 versus net loss of $1,093,000 in 2002. This increase of $2,692,000 attributable to the $1,208,000 gain from sale of the New Yellow directory, improved results of operations and the absence of 2002 charge of $895,000 related to the cumulative effect of change in accounting principle.

Basic and diluted net income per common share was $0.55 and $0.53 in 2003 versus net loss of $0.37 in 2002.

As of December 31, 2003, the Company also reported $8,781,000 or approximately $ 2.99 per share in cash, cash equivalent, marketable securities and short term investments, current assets of $13,164,000, and total assets of $14,451,000 and deferred revenues of $4,000,000.

Assaf Ran, Chairman of the board and CEO stated, "The sale of our New Yellow directory created a number of new opportunities for the Company. We have reinforced the Kosher Yellow Pages, launched the Complete Industry Directory of Blackbook as well as blackbookstock.com. Their success cleared the road for the inception of more exciting ventures. I'm confident that these new fronts will contribute more to our success than New Yellow."

"I would like to express my appreciation to our dedicated sales forces and employees for a job well done in 2003 and to encourage them to accomplish our challenges for year 2004," 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, http://www.blackbook.com, and at http://www.blackbookstock.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
                              DECEMBER 31, 2003

    Assets
    Current assets:
    Cash and cash equivalents                                     $1,201,819
    Marketable securities                                          6,560,805
    Short term investment - insurance annuity
     contract - at fair value                                      1,018,536
         Total cash and cash equivalents, marketable
          securities and short term investments                    8,781,160

    Trade accounts receivable, net of allowance
     for doubtful accounts of $567,000                             2,330,555
    Directories in progress                                        1,833,903
    Other current assets                                             218,118
                Total current assets                              13,163,736

    Property and equipment, net                                      286,633
    Goodwill                                                         458,131
    Trademarks and other intangibles, net                            419,274
    Other assets                                                     123,412

    Total assets                                                 $14,451,186

    Liabilities and Shareholders' Equity

    Current liabilities:
    Accounts payable and accrued expenses                           $734,961
    Commissions payable                                              782,254
    Advanced billing for unpublished directories                   4,000,483
    Dividends payable                                                744,113
    Income taxes payable                                              89,000
            Total current liabilities                              6,350,811
    Deferred income taxes                                             76,216
            Total liabilities                                      6,427,027

    Commitments and contingencies (Note 9)

    Shareholders' equity:
    Preferred shares - $.01 par value; 5,000,000
     shares authorized; no shares issued                                  --
    Common shares - $.001 par value; 25,000,000
     authorized; 3,045,190 issued and
     2,976,460 outstanding                                             3,045
    Additional paid-in capital                                     8,054,827
    Treasury stock, at cost- 68,730 shares                          (231,113)
    Deferred compensation                                            (81,000)
    Accumulated other comprehensive income                           102,185
    Retained earnings                                                176,215
              Total shareholders' equity                           8,024,159

     Total liabilities and shareholders' equity                  $14,451,186

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


                               DAG MEDIA, INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                               2003                  2002
    Advertising revenues                    $9,085,670            $6,529,605
    Publishing costs                         2,117,907             1,729,993
        Gross profit                         6,967,763             4,799,612

    Operating costs and expenses:
    Selling expenses                         3,313,867             2,336,710
    General and administrative
     expenses                                3,233,817             3,056,713
      Total operating costs and expenses     6,547,684             5,393,423

    Income (loss) from operations              420,079              (593,811)

    Interest income                            233,099               246,540
    Gain from the sale of the New
     Yellow directory                        1,207,997                 -----
    Realized gain (loss) on
     marketable securities                      26,043                (5,854)

      Total other income, net                1,467,139               240,686
    Income (loss) before income taxes        1,887,218              (353,125)

    Provision (benefit) for income taxes       288,254              (155,131)

    Income (loss) before cumulative effect
     of change in accounting principle       1,598,964              (197,994)

    Cumulative effect of change in
     accounting principle                       ------              (895,000)

    Net income (loss)                       $1,598,964           $(1,092,994)

    Income (loss) per common share:
    Basic -
      Income (loss) before cumulative effect
       of change in accounting principle         $0.55                $(0.07)
      Cumulative effect of change in
       accounting principle                       ----                 (0.30)
      Net income (loss)                          $0.55                $(0.37)
    Diluted-
     Income (loss) before cumulative effect
      of change in accounting principle          $0.53                $(0.07)
      Cumulative effect of change in
       accounting principle                       ----                 (0.30)
      Net income (loss)                          $0.53                $(0.37)

    Weighted average number of common
     shares outstanding
     Basic                                   2,933,164             2,917,973
     Diluted                                 3,037,155             2,917,973

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


                               DAG MEDIA, INC.
          CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                               Additional
                             Common Stocks       Paid-in    Treasury Shares
                            Shares   Amount      Capital   Shares       Cost
    Balance December
     31, 2001            2,976,190   $2,976   $7,896,953   68,730   $(231,113)
    Stock option
     exercise               20,000       20       21,180
    Issuance of options
     to consultants                              152,843
    Amortization of
     deferred
     compensation
    Cancellation of
     options issued
     to consultants                              (58,029)
    Unrealized gains on
     preferred stocks
     and other marketable
     securities, net
     of taxes
    Net loss for the
     year ended
     December 31, 2002
    Balance,
     December 31, 2002   2,996,190   $2,996   $8,012,947   68,730   $(231,113)
    Stock Option
     exercise               49,000       49       71,531
    Amortization of
     deferred
     compensation
    Cancellation of
     options issued
     to consultants                              (29,650)
    Unrealized gains on
     preferred stocks
     and other marketable
     securities, net of
     income taxes
    Dividend declared to
     be paid at 1/5/2004
     ($0.25 per share)
    Net income for the
     year ended
     December 31, 2003
    Balance,
     December 31, 2003   3,045,190   $3,045   $8,054,827   68,730   $(231,113)


                             Deferred   Accumulated   Retained       Totals
                           Compensation    other      Earnings
                                       comprehensive
                                           income
    Balance
    December 31, 2001        $(49,678)    $15,361     $414,358     $8,048,857
    Stock option exercise                                              21,200
    Issuance of options
     to consultants          (152,843)                                   ----
    Amortization of
     deferred compensation     18,606                                  18,606
    Cancellation of options
     issued to consultants     58,029                                    ----
    Unrealized gains on
     preferred stocks and
     other marketable
     securities, net of taxes               7,057                       7,057
    Net loss for the year
     ended December 31,
     2002                                           (1,092,994)    (1,092,994)
    Balance,
     December 31, 2002       (125,886)    $22,418    $(678,636)    $7,002,726
    Stock Option exercise                                              71,580
    Amortization of deferred
     compensation              15,236                                  15,236
    Cancellation of options
     issued to consultants     29,650                                    ----
    Unrealized gains on
     preferred stocks and
     other marketable
     securities, net of
     income taxes                          79,767                      79,767
    Dividend declared to be
     paid at 1/5/2004
     ($0.25 per share)                                (744,113)      (744,113)
    Net income for the
     year ended
     December 31, 2003                               1,598,964      1,598,964
    Balance,
     December 31, 2003       $(81,000)   $102,185     $176,215     $8,024,159

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


                               DAG MEDIA, INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                      2003           2002
    Cash flows from operating activities:
      Net income (loss)                            $1,598,964    $(1,092,994)
      Adjustment to reconcile net income
       (loss) to net cash provided by operating
       activities -
       Gain on sale of New Yellow directory        (1,207,997)
       Cumulative effect of change in
        accounting principle                             ----        895,000
       Depreciation and amortization                  159,028        114,493
       Amortization of deferred compensation           15,236         18,606
    Bad debt expense                                  883,740      1,232,738
    Deferred taxes                                    515,320       (248,132)
    Realized (gain) loss on marketable securities        ----          5,854
      Changes in operating assets and liabilities -
      Accounts receivable                            (548,198)    (1,176,338)
      Directories in progress                         276,924       (608,867)
      Other current and non current assets            (86,783)        28,270
      Accounts payable and accrued expenses           (17,244)      (301,406)
      Accrued Interest Income                            ----         (8,782)
      Commissions payable                             (25,798)       163,092
      Advanced billings for unpublished directories  (781,069)     1,231,611
      Income taxes payable                           (181,549)         4,198
      Advances to employees                              ----        (22,876)
        Net cash provided by operating activities     600,574        234,467

    Cash flows from investing activities:
      Investment in Dune Medical Devices             (100,000)       (70,537)
      Investment in preferred stocks, other
      marketable securities and annuity contract   (8,573,154)    (6,796,164)
      Cash received on sale of New Yellow
       directory, net of expenses                   1,207,997
      Proceeds from sale of preferred stocks
       and marketable securities                    7,901,498      3,681,343
      Sale of property and equipment                   46,200
      Purchase of property and equipment             (155,296)       (97,068)
         Net cash provided by (used in) investing
          activities                                  327,245     (3,282,426)

    Cash flows from financing activities:
      Stock option exercise                            71,580         21,200
        Net cash provided by financing activities      71,580         21,200

    Net increase (decrease) in cash and cash
     equivalents                                      999,399     (3,026,75)

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

    Cash and cash equivalents, end of year         $1,201,819       $202,420

    Supplemental Cash Flow Information:
    Taxes paid during the year                        $21,936        $88,801
     Dividends declared but not paid                 $744,113        -------

    Acquisition of subsidiary company:

    Assets acquired                                                 $652,278
    Liabilities assumed                                            $(991,967)
    Goodwill and other intangibles                                  $633,132
                                                                    $293,443

    Less - cash acquired                                           $(211,406)
    Less - accrued acquisition costs                                $(11,500)
    Net cash paid                                                    $70,537

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

 

Source: DAG Media, Inc.

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