Posts Tagged ‘DGIT’

DG Ends Strategic Review Process, No Deal Reached After Engaging 45 Potential Partners

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Feb 19 2013

Advertising and content delivery specialist DG announced  that a “special committee” of the company’s board of directors has completed its review of strategic alternatives for the company.

DG says that following the six months review, the committee is “not recommending any transaction or other strategic alternative” be taken by the company.

Since being formed in August 2012, the “special committee” has explored numerous strategic alternatives available to the DG, including a sale of all or parts of the business, a spin-off and split-off of parts of the business, capital structure alternatives, and potential merger combinations. As part of its active review, the committee and its financial advisor, Goldman Sachs, engaged with over 45 potential financial and strategic partners (including competitors) to determine their levels of interest in a strategic transaction involving the Company. None of the parties contacted presented a definitive transaction.

DG says that following this process, the Special Committee has advised the company’s board of directors that “its review of strategic alternatives has concluded,” and that “substantial benefit was derived from the strategic alternatives process and [the committee] will advise the board on potential actions to enhance the value of our business for our shareholders.”

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Related Content:

Press Release: Digital Generation Announces Conclusion of Special Committee Review of Strategic Alternatives

DG Reports Third Quarter 2012 Results (includes statement about strategic review process)

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DG Reports Third Quarter 2012 Results

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Nov 14 2012

Advertising and content delivery specialist DG reported that its consolidated revenue for the three months ended September 30, 2012 increased 11% to $93.8 million, compared to $84.6 million in the same period of 2011. DG’s third quarter loss from continuing operations, which includes a goodwill impairment charge related to the online segment of $208.2 million, was $219.7 million, or $7.96 per diluted share, compared to a loss of $2.7 million, or $0.10 per diluted share, in the year earlier period. Third quarter Adjusted EBITDA was $27.6 million, compared to $30.7 million in the third quarter of 2011.

“In the short term, we saw improvement of the online business this quarter, continued increased shift towards HD in TV and greater opportunities to help our clients make the move to video across all screens,” noted Neil Nguyen, President and CEO of Digital Generation. “It is clear from conversations with large advertisers that video convergence is a disruptive force that is now gaining acceptance and momentum with DG uniquely positioned to benefit. But it is also clear that we need to stay focused and execute with even more urgency to overcome current trends.”

Third quarter financial highlights include:

  • DG generated consolidated revenue in the quarter of $93.8 million, an increase of 11% over the same period a year ago.
  • The television segment generated revenue of $60.1 million, a decrease of 1% from the year earlier period. HD advertising revenue increased 15% to $36.5 million from the year earlier period.
  • The online segment generated revenue of $33.7 million, an increase of 40% from the year earlier period, due to DG’s acquisitions of MediaMind and EyeWonder during the 3rd quarter of 2011.
  • As of September 30, 2012, DG reported $68.6 million of cash and short-term investments and reported $455.0 million outstanding under its long-term credit facility.

 

Acquisitions / Dispositions / Discontinued Operations

The Company has completed several acquisitions that have impacted the comparability of the operating results presented. The results of operations for each of the following entities have been included in the Company’s results since the acquisition date.

  • MIJO Corporation (“MIJO”) on April 1, 2011 (included in television segment)
  • MediaMind Technologies, Inc. (“MediaMind”) on July 26, 2011 (included in online segment)
  • EyeWonder LLC, a Delaware LLC, and the equity interests of Chors GmbH, a German LLC (collectively, “EyeWonder”) on September 1, 2011 (included in online segment)
  • Peer 39, Inc. (“Peer 39”) on April 30, 2012 (included in online segment)
  • NCMG, Inc. (“North Country”) on July 31, 2012 (included in television segment)

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The company sold the net assets of its Springbox unit effective June 1, 2012 for estimated proceeds of $0.9 million, resulting in an after tax loss of $0.6 million. Results from Springbox have been included in discontinued operations for both 2012 and 2011.

 

Strategic Review Process:

The company said the following about its previously announced strategic review:

“In July 2012, we announced that our Board of Directors was undergoing a strategic review of the feasibility and relative merits of various financial strategies for the Company, which may include partnerships, strategic business model alternatives, a sale or other transaction. In connection therewith, we engaged Goldman Sachs to assist us in exploring strategic alternatives. The Board established a Special Committee composed of independent directors who are exercising the full power of the Board regarding, and are controlling, the Company’s strategic alternatives process. The strategic review process underway by the Special Committee is continuing and we do not intend to disclose developments in this process until such time as the Board of Directors approves or has a transaction or transactions to recommend to stockholders, or otherwise deems further disclosure appropriate.”

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Related Content:

Press Release: DG Reports Third Quarter 2012 Results

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DG Misses Top and Bottom Line Estimates in Q2 2012, Outlines Cost Containment Plan

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Aug 13 2012

Video delivery and advertising management specialist Digital Generation (DG) reported that its revenue for the second quarter of 2012 was $96.3m, an increase of 42% versus the same period a year ago, and an increase of 4% versus the previous quarter.

Q2 income from continuing operations was $518,000, or $0.02 per share, down 95% versus last year, and down 62% versus last quarter. Adjusted EBITDA for the quarter was $30.4m, compared to $31.2 million in the second quarter of 2011, and $29.6m last quarter.

DG CEO Neil Nguyen attributed the lower than expected results to “substantial deceleration of business in Europe in the back half of the quarter as well as [foreign exchange] impact.”

The results were below a consensus of equity analysts who expecting revenue of $100.7m, and earnings of $0.09 share.  Investors did not like the news and sent the shares down 17% the day after the earnings were released.

 

On a segment basis:

  • Revenue from television was $61.8 million, or 63% of total revenue, decrease of 2% versus last year, and flat with last quarter.   HD advertising revenue was $37.1m, up 10% versus last year, and up 6% versus last quarter.

 

  • Online revenue was $34.7m, up 577% versus last year, and up 10.2% versus last quarter.  The increase in online revenue was primarily due to DG’s acquisitions of MediaMind and EyeWonder during the 3rd quarter of 2011

 

Based on these results, DG CFO Omar Choucair,said the company was initiating a cost containment program.   “Based on the first half performance, management has identified cost reduction initiatives, which will reduce the company’s operating expenses over the back half of the year,” said Choucair. “Management believes this program will reduce current annual run rate expenses by approximately $12m beginning in September. Note that cost cutting will not impact R&D, as management believes the ongoing investments in projects, including the converge TV, online platform, enhanced online analytics, in-stream video products and upgraded CRM systems, are critical to achieving the company’s cross-platform strategy.”

The company ended the quarter with $57.0m of cash and short-term investments had $456.0m outstanding under its long-term credit facility.

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Related Content:

Press Release: DG Reports Second Quarter 2012 Results

Digital Generation Q2 2012 Earnings Call Transcript

Previous Quarter: HD and Online Drive Record Q1 2012 Revenue at DG

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HD and Online Drive Record Q1 2012 Revenue at DG

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
May 09 2012

Video delivery and advertising management specialist DG (Fastchannel) reported that its revenue for the first quarter of 2012 was $92.8m, an increase of 46% versus the same period a year ago.

Q1 income from continuing operations was $1.3m, down 90% versus last year. Adjusted EBITDA for the quarter was $29.6m, flat with last year.

Investors liked the results, sending the stock up almost six-and-a-half percent on an otherwise down day.

On a segment basis:

  • revenue from television was $61.8 million, or 67% of total revenue, an increase of 4% versus last year. HD advertising revenue grew 10% versus last year to $35.6m.

 

  • Online revenue was $31m, up $616% versus last year, primarily due to DG’s acquisitions of MediaMind and EyeWonder during the 3rd quarter of 2011.

 

“The first quarter saw great progress across the board as we began executing against our media convergence strategy,” said Neil Nguyen, CEO and President of DG. “We saw continued momentum with the integration of our online assets into a singular operation while our TV business hit a new high for HD adoption, ending the quarter at 25% of deliveries in HD format.”

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Related Content:

Press Release:  DG Reports First Quarter 2012 Results  http://dcft.co/IZvuB7

DG Pre-Announces Positive Q1 2012 Results

More Broadcast Vendor M&A: DG Acquires Peer39 for $15.5 Million in Cash and Stock

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DG Pre-Announces Positive Q1 2012 Results

Quarterly Results | Posted by Joe Zaller
Apr 25 2012

Video delivery and advertising management specialist DG (Fastchannel) pre-announced that it expects its revenue for the first quarter 2012 will be approximately $92.7m, versus the $91.1m consensus estimate of equity analysts.  The company said it benefitted from a slight outperformance by the TV business.

 

Related Content:

More Broadcast Vendor M&A: DG Acquires Peer39 for $15.5 Million in Cash and Stock

 

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More Broadcast Vendor M&A: DG Acquires Peer39 for $15.5 Million in Cash and Stock

Broadcast Vendor M&A | Posted by Joe Zaller
Apr 25 2012

Video delivery and advertising management specialist DG (Fastchannel) announced that it has signed a definitive agreement to acquire privately held Peer39 for approximately $15.5m in cash and stock.

Peer39 provides technology that improves the relevance of online display advertising based on the content and structure of web pages. The company says it collects and analyzes attributes that are critical to Real Time Bidding (RTB) for online display advertising. DG says it will integrate Peer39 into its online division, MediaMind.

Under the terms of the deal, DG will pay $10m in cash, issue approximately 357,000 shares and assume $2.3m earn out payment.

Peer39’s employees will join MediaMind, DG’s online division, and Peer39’s CEO Andy Ellenthal will become DG’s Executive Vice President of Sales and Ad Operations for both the TV and Online divisions, reporting directly to Neil Nguyen, CEO of DG.

“Advertisers are looking to take advantage of RTB, a fundamentally disruptive and transformative trend in online advertising,” said Nguyen. “The Peer39 solution complements existing data-driven solutions offered by MediaMind, strengthening our offering to the RTB trading market.”

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Related Content:

Press Release: DG Acquires Peer39 to Expand Online Data Offering; Names CEO Ellenthal as EVP of DG’s Global Sales and Operations  

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Recent Regulatory Filings From Broadcast & Digital Media Technology Vendors

broadcast industry technology trends, Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Mar 06 2012

This is the time of year when public companies file a variety of documents with securities regulators.

If you really want to understand what’s going on at these businesses, it’s worth spending the time to review these filings.

Here’s a sampling of recently filed documents from broadcast and digital media technology vendors, in alphabetical order by company.

 

Avid 2011 10-K Filing

Avid 8-K Filing Details Executive Bonus Plan

Belden 2011 10-K Filing

Digital Generation (DG Fastchannel) 2011 10-K Filing

DTS Audio 2011 10-K Filing

Harmonic 2011 10-K Filing

Harmonic 8-K Filing – Details Executive Salary and Bonus Plan

Miranda Q4 and Full Year 2011 MD&A (Management Discussion and Analysis)

RealD 10-Q Filing

Rovi 2011 10-K Filing

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DG (Fastchannel) Q1 Results Up Significantly Year-Over-Year, But Down Versus Last Quarter

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
May 05 2011

HD programming and advertising content delivery service  provider DG (formerly DG Fastchannel) reported that its revenue for the first quarter of 2011 was $64.7m, an increase of 19%  versus last year, but a decrease of 15% versus the previous quarter.

GAAP net income in the first quarter was $12.7m, an increase  of 59% versus the same period last year, but down 13% versus the previous quarter. First quarter non-GAAP net income was $15.5m, an increase of 49% versus last year, but down 28% versus the previous quarter. Adjusted EBITDA was $29.4m, an increase of 22% compared to the same period of 2010, but a decrease of 23% versus the previous quarter.

Revenue from the delivery of HD advertising content during the quarter was $32.45m, an increase of 64% versus the same period a year ago, but down 6% compared to the previous quarter.

Separately, the company announced that it recently completed a $30 million stock repurchase program, and that its board has approved a further stock repurchase program authorizing the company to purchase up to $50 million of its common stock.

DG also said it has secured a new $150m revolving credit facility to fund future expansion strategic growth initiatives, along with general corporate purposes. Lenders included Wells Fargo Bank, N.A., US Bank, Comerica Bank and Fifth Third Bank.

“We are pleased with our first quarter results, which reflect strength across all of our business units,” said Neil Nguyen, President of DG. “The continued migration of advertising content delivery to HD once again positively impacted our financial performance, contributing to our record results for the quarter.”

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Related Content:

Press Release: DG® Reports Record First Quarter 2011 Results

Press Release: DG Announces $50 Million Stock Repurchase Program

More Broadcast Vendor M&A: DG Fastchannel Acquires Canadian Ad Firm MIJO, Second M&A Deal in Six Months

DG Q4 2010 Results: DG Doubles Net Income in 2010 as HD Ad Delivery Revenue Increases 72%

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More Broadcast Vendor M&A: DG Fastchannel Acquires Canadian Ad Firm MIJO, Second M&A Deal in Six Months

broadcast industry technology trends, broadcast industry trends, Broadcast technology channel strategy, Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Apr 05 2011

DG Fastchannel announced that it has acquired MIJO, a provider of broadcast and digital media services to the Canadian advertising, entertainment and broadcast industries, for $39.5m in cash.

This appears to be a good exit for 32-year old MIJO, which provides US and multinational brands with a platform of bilingual and integrated media services.  MIJO had 2010 revenue of C$17.4m ($18m USD) and EBITDA of approximately C$3m, meaning that it achieved a valuation of 2.2x revenue and 5.8x EBITDA.

DG says it expects to achieve approximately $3.5m in cost synergies during the initial 12 month period following close.

MIJO co-founders Joel Reitman and Michael Goldberg are expected to remain with the company together with the core group of 110 employees, in order to assure operating continuity for Canadian clients.

This is the second M&A deal for DG FastChannel in the last six months.  Last September, it acquired Match Point Media LLC, a provider of services to the infomercial industry, for $26 million in cash.

It is likely that DG will continue to be acquisitive.  Last month the DG announced that it had appointed a new board member with “extensive experience in M&A” to assist the company with global expansion and operational improvement.

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Related Content:

You can read the DG press release about the acquisition of MIJO here.

DG FastChannel Buys Match Point Media, Expands into Infomercial Market

DG Appoints new board member to focus on M&A

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

broadcast technology market research, Broadcast technology vendor financials, Quarterly Results | 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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