Thursday August 9, 2:16 pm Eastern Time

Press Release

SOURCE: DAG Media Inc.

DAG Media, Inc. Announces Second Quarter Financial Results

KEW GARDENS, N.Y., Aug. 9 /PRNewswire/ -- DAG Media Inc. (Nasdaq: DAGM - news) announced its financial results for the second quarter ended June 30, 2001.

Net revenue for the quarter ended June 30, 2001 was $1,432,000 compared with $135,000 for the same period last year. There was a net loss of $(1,000) and no earnings per share (based on 2.91 million shares) compared with a net loss of $(258,000), or $(.09) per diluted share (based on 2.91 million shares) for the comparative period ended June 30, 2000. The primary cause for the increase in revenues and income was the fact that in the three months ended June 30, 2001 two yellow page directories were published including ``NewYellow,'' whereas in the three months ended June 30, 2000, only one directory was published.

Net revenue for the six months ended June 30, 2001 was $2,935,000 compared with $2,769,000 for the same period last year. Net income for the period was $65,000, or $.02 per diluted share (based on 2.91 million shares), compared with a net loss of $(405,000), or $(.14) per diluted share (based on 2.91 million shares), in the prior year. The primary cause for the increase in revenues and income was the fact that in the six months ended June 30, 2000, there was a loss of $(511,000) taken into account the cumulative effect of change in accounting principle whereas this loss did not effect the 2001 period.

Assaf Ran, the company's CEO commented, ``We are facing a very competitive and challenging period and I am confident in our Company's ability to overcome and increase our market share in the yellow page market. The fourth edition of our Manhattan New Yellow directory is scheduled for October of this year and hopefully, by then, we will see the breakthrough that we anticipate.''

On July 9, 2001, the Company's CFO, Orna Kirsh gave notice to the Company's Board of Directors that she would not be renewing her employment contract that terminated on July 19, 2001 due to personal considerations. Ms. Kirsh indicated that she would remain with Company until August 15, 2001 thereby allowing management enough time to transition in a new CFO. The transitioning CFO, Yael Shimor-Golan began her employment on July 31, 2001. Mrs. Yael Shimor-Golan, who maintains her CPA in Israel, previously worked at Marks, Paneth & Shron LLP, a Manhattan accounting firm since 1999. From 1995 until 1999, Mrs. Shimor-Golan was a Partner at the firm Shimon Dill & Co. an accounting firm in Jerusalem, Israel. Ms. Kirsh added, `` I wish the Company success. I know the Company has grown in the last few years and I hope it continues its growth further. The transition DAG Media has made from a private to public Company was most beneficial to its shareholders as well as to the success thus achieved.''

DAG Media publishes and distributes yellow page directories in print and on the World Wide Web. DAG Media also operates several Web sites on the Internet including http://www.newyellow.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
                                JUNE 30, 2001
                                 (unaudited)

    Assets
    Current assets:
      Cash and cash equivalents                             $6,652,893

      Restricted cash                                          244,987
      Trade accounts receivable, net of allowance for
        doubtful accounts of $528,500                        2,313,962
      Directories in progress                                1,430,585
      Deferred tax asset                                        78,202
    Other current assets                                       210,700
          Total current assets                              10,931,329

    Fixed assets, net of accumulated depreciation
      of $89,820                                               243,619
    Goodwill and trademarks, net of accumulated
      amortization of $114,835                               1,236,146
    Other assets                                                17,346
        Total assets                                       $12,428,440

    Liabilities and Shareholders' Equity
    Current liabilities:
      Accounts payable and accrued expenses                   $126,664
      Accrued commissions and commissions payable              552,000
      Advanced billing for unpublished directories           3,236,666
      Income tax payable                                       296,090
      Total current liabilities                              4,211,420

    Shareholders' equity:
      Preferred shares - $ .01 par value;
        5,000,000 shares authorized; no shares issued               --
      Common shares - $ .001 par value;
        25,000,000 authorized; 2,976,190 issued
        and 2,907,460 outstanding                                2,976
      Additional paid-in capital                             7,916,701
      Treasury stock, at cost- 68,730 shares                 (231,113)
      Deferred compensation                                   (68,387)
      Retained earnings                                        596,843
        Total shareholders' equity                           8,217,020
        Total liabilities and shareholders'
          equity                                           $12,428,440


                               DAG MEDIA, INC.
                           STATEMENTS OF OPERATIONS
                                 (unaudited)

                              Three Months Ended          Six Months Ended
                                   June 30,                   June 30,
                              2001          2000         2001          2000

    Advertising
      revenues                    $1,431,633      $135,498   $2,934,832    $2,768,952
    Publishing costs                 599,645        61,466      788,952       562,282
      Gross profit                   831,988        74,032    2,145,880     2,206,670

    Operating costs and expenses:
      Selling expenses               490,452        84,491    1,076,055       944,389
      Administrative and
        general                      513,083       568,976    1,188,169     1,247,657
        Total operating costs
          and expenses             1,003,535       653,467    2,264,224     2,192,046

    Interest income                   80,708       106,263      162,888       186,262
    Gain on sale of
      investments                     89,863            --       89,863            --
    Other income                     170,571       106,263      252,751       186,262

    (Loss) earnings from
      operations before
      provision (benefits)
      for income taxes and
      cumulative effect of
      change in accounting
      principle                        (976)     (473,172)      134,407       200,886

    Provision (benefit) for
      income taxes                       --      (215,359)       69,000      (94,707)

    Cumulative effect of
      change in accounting
      principle, net of
      tax benefit                         --            --           --     (511,071)
    Net (loss) income available
      to common
      shareholders                    $(976)    $(257,813)      $65,407    $(404,892)
    Net (loss) income per common share
      --Basic
        Income before cumulative
        effect of change in
        accounting
        principle                      $0.00        $(.09)         $.02          $.04
      Cumulative effect of
        change in accounting
        principle                         --            --           --         (.18)
      Net loss (income) per
        common share                   $0.00        $(.09)         $.02        $(.14)

      --Diluted
        Income before cumulative
        effect of change in
        accounting
        principle                      $0.00        $(.09)         $.02          $.04
      Cumulative effect of
        change in accounting
        principle                         --            --           --         (.18)
      Net loss (income) per
        common share                   $0.00        $(.09)         $.02        $(.14)

    Weighted average number
      of common shares outstanding
      --Basic                      2,907,460     2,907,460    2,907,460     2,907,460
      --Diluted                    2,907,460     2,907,460    2,910,384     2,908,133

 

SOURCE: DAG Media, Inc.

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