DG, provider of digital media services to the advertising, entertainment and broadcast industries, reported record Q3 financial results. Revenue was up 18% to $56.9 million compared to $48.3 million in the same period of 2009. Q3 adjusted EBITDA increased 24% to $26.0 million compared to $21.0 million for the same period of 2009.
“The Q3 results were driven by 59% growth in HD revenues, a result of both increasing demand from marketers and advertisers for HD spots, as well as accelerating HD adoption by the leading network and television broadcasters,” said Scott Ginsburg, Chairman and CEO of DG. “A solid start to the new television season and strong performance in the entertainment and automotive verticals surpassed Company expectations.”
“At the same time DG took steps to bring digital technology to the Direct Response advertising space, which is one of the last unconverted segments of the North America broadcast market,” said Neil Nguyen, President and Chief Operating Officer of DG. “The Company acquired Matchpoint Media, a leader in the infomercial distribution market, and launched a dual edge server solution to address the specific needs of this market. We made significant progress in leveraging this technology in our longform business, and are pleased with the success in transitioning our Pathfire business to a retail model, signing a number of customer agreements in the quarter.”
Other Q3 highlights:
•Revenue from the Company’s Internet media service division, Unicast, increased 31% from the year earlier period.
•As of September 30, 2010, the Company reported $91.7 million in cash and no debt.
•Revenue from the delivery of HD advertising content increased 59% to $24.7 million compared to $15.6 million in the same period of 2009.
•Net income was $9.9 million, or $0.34 per diluted share, compared to net income of $5.4 million, or $0.22 per diluted share in the same period of 2009.
•Non-GAAP net income was $12.8 million, or $0.44 per diluted share, compared to non-GAAP net income of $7.4 million, or $0.30 per diluted share in the same period of 2009.
•The Company acquired Matchpoint Media, a leader in the $5 billion Direct Response industry, on October 1, 2010 for $26 million in cash.
The Company expects revenues for the Q4 to be approximately $67 million to $69 million and adjusted EBITDA to be approximately $29 million to $31 million. For FY 2010 the Company expects revenues of $238 million to $240 million and adjusted EBITDA of approximately $107 to $109 million. These estimates include Q4 results from Matchpoint Media, which was acquired 10/1.