DG Doubles Net Income in 2010 as HD Ad Delivery Revenue Increases 72%

Posted by Joe Zaller
Feb 15 2011

HD programming and advertising content delivery service provider DG (formerly DG Fastchannel) reported that its revenue for the fourth quarter of 2010 was $76.1m, an increase of 32% versus last year, and an increase of 28% versus the previous quarter.

DG’s results were above both the consensus of equity analysts who were expecting revenue of $68.7m, and its own previously issued guidance of $67m – $69m.

Revenue from the delivery of HD advertising content during the quarter increased 61% to $34.5m as more advertisers switched to HD spots.

Net income for the quarter was $14.6m, an increase of 46% versus Q4 2009.  On a non-GAAP basis the company reported net income of $21.6m, an increase of 77% versus the same period a year ago. The company also said that Q4 adjusted EBITDA rose 47% to $38m.

DG took a $5.9m non-cash impairment charge during the quarter, related to the writedown of its Springbox division, which the company said is now non-core to its business.

The company also said it bought back $8.7m worth of its owns shares during the quarter.

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Record Full Year Results

For the full year 2010, the company posted revenue of $247.5m, an increase of 30% versus 2009, and above the company’s previously issued full year guidance of $238 – $240m.

Full year revenue from the delivery of HD advertising content grew 72% to $103 million.

Full year net income was $41.6m, double the result posted in 2009.  On a non-GAAP basis, the company posted net income of $58.8m, an increase of 98% versus the previous year.

The company, which raised $108m through a public equity offering in the second quarter of 2010, said that it spent $13.1m buying back its own shares during year, and also retired all of its outstanding senior secured debt.

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You can read the full DG Q4 and full year earnings press release here.

A review of DG’s previous quarterly results is here.

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