Thursday August 8, 4:05 pm Eastern Time

Press Release

SOURCE: DAG Media, Inc.

DAG Media, Inc. Announces Second Quarter Financial Results - Major Increase of Deferred Revenues

NEW YORK, Aug. 8 /PRNewswire-FirstCall/ -- DAG Media Inc. (Nasdaq: DAGM - News)

Net advertising revenues for the quarter ended June 30, 2002 were $1,381,000. For the same period last year net revenues were $1,431,000. There was a net loss of $72,000, or $(0.02) per diluted share (based on 2.92 million shares) compared with a net loss of $1,000 and no earnings per share (based on 2.91 million shares) for the comparative period ended June 30, 2001. The primary cause for decrease in revenue was attributable to the decrease in sales of the June 2002 edition of the Jewish Master Guide directory.

Net revenue for the six months ended June 30, 2002 was $2,955,000 compared with $2,935,000 for the same period last year. Net loss for the period was $799,000, or $(0.27) per diluted share (based on 2.92 million shares), compared with a net income of $65,000, or $0.02 per diluted share (based on 2.91 million shares), in the prior year. The cause for the increase in revenues was attributable to increased advertising revenue, primarily with respect to the fifth edition publication of new yellow Manhattan. The primarily cause for the decrease in net income was due to a goodwill write-off of $895,000 as required by the new SEC regulations, SFAS No. 141 and 142. Before giving effect to the goodwill write-off, net income for the six months ended June 30, 2002 was $96,000 versus $65,000 in the prior year, an increase of $31,000. Earnings per diluted share increased to 0.03 versus 0.02 in the same period last year.

The company also reported $6,903,000 or $2.3 per share in cash, cash equivalents, preferred stocks and other marketable securities and $3,969,000 in deferred revenue.

DAG Media publishes and distributes three yellow page directories in print and on the World Wide Web. DAG Media also operates a portal Web site on the Internet at 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, 2002
                                 (Unaudited)

     Assets
     Current assets:
     Cash and cash equivalents                                     $2,446,559
     Preferred stocks and other marketable securities               4,456,887
             Total cash and cash equivalents, preferred stocks
              and other marketable securities                       6,903,446
     Trade accounts receivable, net of allowance for doubtful
      accounts of $876,500                                          2,632,582
     Directories in progress                                        1,846,616
     Deferred tax asset                                               177,864
     Other current assets                                             265,088
             Total current assets                                  11,825,596
     Fixed assets, net of accumulated depreciation of $139,057        266,382
     Trademarks, net of accumulated amortization of $43,875           307,106
     Other assets                                                      19,462
             Total assets                                         $12,418,546
     Liabilities and Shareholder's Equity
     Current liabilities:
     Accounts payable and accrued expenses                           $118,151
     Accrued commissions and commissions payable                      778,000
     Advanced billing for unpublished directories                   3,968,642
     Income tax payable                                               261,900
             Total current liabilities                              5,126,693
     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                                     7,916,695
     Treasury stock, at cost - 68,730 shares                         (231,113)
     Deferred Compensation                                            (46,347)
     Unrealized gains on preferred stocks                              34,207
     Retained earnings                                               (384,585)
             Total shareholders' equity                             7,291,853
             Total liabilities and shareholders' equity           $12,418,546


                               DAG MEDIA, INC.
                           STATEMENTS OF OPERATIONS
                                 (Unaudited)

                         Three Months Ended June 30, Six Months ended June 30,
                                 2002        2001        2002          2001

     Advertising revenues     $1,380,742  $1,431,633  $2,955,275   $2,934,832
     Publishing costs            520,843     599,645     729,366      788,952
         Gross profit            859,899     831,988   2,225,909    2,145,880
     Operating costs
      and expenses:
         Selling expenses        548,935     490,452     998,998    1,076,055
         General and
          administrative         495,262     513,083   1,159,491    1,188,169
         Total operating costs
          and expenses         1,044,197   1,003,535   2,158,489    2,264,224
        (Loss) income from
          operation             (184,298)   (171,547)     67,420     (118,344)
     Interest income              51,971     170,571     122,789      252,751
    (Loss) earnings before
      provisions for Income
       taxes and cumulative
        effect of change in
         accounting principle   (132,328)       (976)    190,209      134,407
    (Benefit) provision for
      income taxes                60,711          --     (94,151)      69,000
        (Loss) income before
          cumulative effect of
           change in accounting
            principal            (71,616)       (976)     96,058       65,407
     Cumulative effect of change
      in accounting principle,        --          --    (895,000)          --
     Net (loss) income          $(71,616)      $(976)  $(798,942)     $65,407
     Earnings (loss) per
      common share:
     Basic -
    (Loss) income before
      cumulative effect of
       change in accounting
        principle                 $(0.02)     $(0.00)      $0.03        $0.02
     Cumulative effect of
      change in accounting
       principle                      --          --       (0.30)          --
     Net (loss) income
      per common share            $(0.02)     $(0.00)     $(0.27)       $0.02
     Diluted-
    (Loss) income before
      cumulative effect of
       change in accounting
        principal                 $(0.02)     $(0.00)      $0.03        $0.02
     Cumulative effect of
      change in accounting
       principle                      --          --       (0.30)          --
     Net (loss) income per
      common share                $(0.02)     $(0.00)     $(0.27)       $0.02
     Weighted average number
      of common shares
     Outstanding
        - Basic                2,925,486   2,907,460   2,918,495    2,907,460
        - Diluted              2,925,486   2,907,460   2,933,454    2,910,384


SOURCE: DAG Media, Inc.

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