NEW YORK, Aug. 10, 2007 (PRIME NEWSWIRE) -- DAG Media, Inc. (Nasdaq:DAGM) announced today that net sales for the three month period ended June 30, 2007 were $47,000 versus net sales of $0 for the same period in 2006. This increase in net sales is mainly due to the sales made through DAG Media, Inc.'s subsidiary, Shopila, Inc.'s marketplaces.
Loss from operations for the three month period ended June 30, 2007 was $666,000 (including write-off of Goodwill and Other intangible assets in the amount of $449,000) compared to a loss of $300,000 for the same period in 2006, an increase of $366,000. This increase resulted mainly from the write-off of Goodwill and Other intangible assets related to the acquisition of Shopila, in the amount of $449,000.
For the three month period ended June 30, 2007, the consolidated loss from continuing operation was $433,000 or $(0.13) per basic and diluted common share (based on 3.236 million shares), compared to a loss of $208,000 or $(0.07) per basic and diluted common share (based on 3.157 million shares), for the three month period ended June 30, 2006. The increase in a loss of $225,000 resulted mainly from the write-off of Goodwill and Other intangible assets related to the acquisition of Shopila, in the amount of $449,000, offset by a decrease in Web development expenses of $100,000, which related to nextyellow.com web development expenses and an income tax benefit in 2007 of $61,000.
Basic and diluted net loss per common share was $(0.11) for the three month period ended June 30, 2007, mainly due to write-off of Goodwill and Other intangible assets in the amount of $449,000, versus basic and diluted net income per common share of $0.14 for the three month period ended June 30, 2006. In 2006 net income was attributable to the gain on the sale of the Directories business.
Net sales for the six month period ended June 30, 2007 were $72,000 versus net sales of $0 for the same period in 2006. This increase in net sales is mainly due to the sales made through DAG Media, Inc.'s subsidiary, Shopila, Inc.'s marketplaces.
Basic and diluted net loss per common share was $(0.16) for the six month period ended June 30, 2007, mainly due to write-off of Goodwill and Other intangible assets in the amount of $449,000 in the second quarter, versus basic and diluted net income per common share of $0.02 for the six month period ended June 30, 2006. In 2006 net income was attributable to the gain on the sale of the Directories business.
On May 15, 2007, the Company formed a new wholly owned subsidiary named DAG Funding Solutions, Inc. ("DAG Funding"). DAG Funding was formed to carry out a new business initiative centered on money lending services to businesses. More specifically, DAG Funding offers commercial short term funding solutions and loan services against collateral such as real estate, receivables, marketable securities, etc., accompanied, in most cases, by personal guarantees from the principals.
Assaf Ran, Chairman of the Board and CEO, stated, "In 2007 I have set my first priority to regain profitability and positive cash flow from operations, therefore we are committed to cut cash infusion to our cash draining operations and focus on enhancing profitable models, while maintaining our expense reduction approach. That means that DAG Funding is now our best performer while Next Yellow, our innovative patent pending online yellow pages solution, is awaiting financing transaction on the subsidiary level. Since we will not issue more loans to Shopila and since Shopila is struggling financially and facing insufficient operating cash flow, we had to write-off the value of its goodwill and other intangible assets, which caused the majority of the loss in this quarter."
"I believe that now we have cleared the road ahead," added Mr. Ran.
DAG Media, Inc., through our subsidiaries, provides solutions to the online yellow pages industry and to local search, as well as e-commerce web site and short term non-banking commercial loans. We operate several web sites: http://www.nextyellow.com, http://www.shopila.com, http://www.dagfundingsolutions.com and http://www.dagmedia.com.
This release contains forward-looking statements within the meaning Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the words "believe", "expect", "intend", "estimate" and similar expressions. Those statements appear in a number of places in this release and include statements regarding our intent, belief or current expectations or those of our directors or officers with respect to, among other things, trends affecting our financial conditions and results of operations and our business and growth strategies. These forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those projected, expressed or implied in the forward-looking statements as a result of various factors (such factors are referred to herein as "Cautionary Statements"), including but not limited to the following: (i) the successful integration of new businesses that we have acquired or may acquire; (ii) the successful consummation of the sale of our directories business; (iii) the success of our new business strategy; (iv) our limited operating history; (v) potential fluctuations in our quarterly operating results; (vi) challenges facing us relating to our growth; and (vii) our dependence on a limited number of suppliers. These forward-looking statements speak only as of the date of this release, and we caution potential investors not to place undue reliance on such statements. You should review all of our reports filed with the Securities and Exchange Commission along with this press release. We undertake no obligation to update or revise any forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Cautionary Statements.
DAG MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(unaudited)
Assets June 30, 2007
-------------
Current assets:
Cash and cash equivalents $ 2,330,524
Marketable securities 2,713,505
Short term investment - insurance
annuity contract - at fair value 1,019,688
------------
Total cash and cash equivalents,
marketable securities and short
term investment 6,063,717
Trade accounts receivable 9,539
Due from purchaser 291,937
Short term notes 795,000
Other current assets 52,853
------------
Total current assets 7,213,046
Property and equipment, net 14,238
Capitalized web development costs, net 98,687
Other assets 142,515
------------
Total assets $ 7,468,486
============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 127,065
Promissory note 50,000
Line of credit 54,506
Income tax payable 336,917
Deferred gain from the sale of Jewish
Directories 218,751
------------
Total current liabilities 787,239
Commitments and contingencies
Shareholders' equity:
Preferred shares - $ .01 par value;
5,000,000 shares authorized; no
shares issued --
Common shares - $ .001 par value;
25,000,000 authorized; 3,305,190
issued and 3,236,460 outstanding 3,305
Additional paid-in capital 9,109,717
Treasury stock, at cost- 68,730 shares (231,113)
Accumulated other comprehensive loss (93,269)
Accumulated deficit (2,107,393)
------------
Total shareholders' equity 6,681,247
------------
Total liabilities and
shareholders' equity $ 7,468,486
============
DAG MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Six Months
------------- -------------
Ended June 30, Ended June 30,
------------- -------------
2007 2006 2007 2006
Net sales $ 46,612 -- $ 71,636 --
Cost of goods sold 34,000 -- 52,013 --
--------- --------- --------- ---------
Gross profit 12,612 -- 19,623 --
--------- --------- --------- ---------
Interest income from
short term notes 4,967 -- 4,967 --
--------- --------- --------- ---------
Operating costs and
expenses:
Selling expenses 8,958 -- 13,791 --
Web development
expenses 12,336 112,994 24,672 112,994
Marketing expenses 11,677 15,529 14,866 15,529
Write off of Goodwill
and Other intangible
assets 449,057 -- 449,057 --
General and
administrative
expenses 201,429 171,681 430,450 378,514
--------- --------- --------- ---------
Total operating costs
and expenses 683,457 300,204 932,836 507,037
--------- --------- --------- ---------
Loss from operations (665,878) (300,204) (908,246) (507,037)
Other income, net 111,584 92,368 136,391 49,739
--------- --------- --------- ---------
Loss from continuing
operations before
income tax benefit
and minority interest (554,294) (207,836) (771,855) (457,298)
--------- --------- --------- ---------
Income tax benefit 61,290 -- 67,600 --
--------- --------- --------- ---------
Loss from continuing
operations before
minority interest (493,004) (207,836) (704,255) (457,298)
--------- --------- --------- ---------
Minority interest 60,149 -- 66,724 --
--------- --------- --------- ---------
Loss from continuing
operations (432,855) (207,836) (637,531) (457,298)
--------- --------- --------- ---------
Discontinued Operations:
Gain on the sale of
discontinued
operations 72,916 766,385 121,527 607,800
Loss from discontinued
operations -- (113,973) -- (75,129)
--------- --------- --------- ---------
Income from
discontinued
operations 72,916 652,412 121,527 532,671
--------- --------- --------- ---------
Net Income (loss)
$(359,939) $ 444,576 $(516,004) $ 75,373
========= ========= ========= =========
Basic and Diluted net
income (loss) per
common share
outstanding:
Continuing operations $ (0.13) $ (0.07) $ (0.20) $ (0.15)
Discontinued operations 0.02 0.21 0.04 0.17
--------- --------- --------- ---------
Net income (loss)
per common share $ (0.11) $ 0.14 $ (0.16) $ 0.02
========= ========= ========= =========
Weighted average
number of common
shares outstanding
-- Basic and Diluted 3,236,460 3,157,405 3,236,460 3,149,973
========= ========= ========= =========
DAG MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended June 30,
2007 2006
----------- -----------
Cash flows from operating activities:
Net income (loss) $ (516,004) $ 75,373
Adjustments to reconcile net
income (loss) to net cash used
in operating activities:
Gain on the sale of Jewish
Directories (121,527) (426,107)
Depreciation and amortization 32,330 6,602
Amortization of deferred
compensation and non cash
compensation 86,408 166,374
Write off of Goodwill and Other
intangible assets 449,057 --
Minority Interest (66,724) --
Realized loss on sale of
marketable securities 10,569 70,861
Deferred tax (67,600) --
Gain on the sale of fixed assets -- (14,232)
Changes in operating assets and
liabilities:
Accounts receivable (3,417) --
Other current assets (14,263) (58,563)
Due from purchasers -- (58,881)
Accounts payable and accrued
expenses (136,915) 87,328
Income tax payable (4,764) --
Assets and liabilities of
discontinued operations -- (104,249)
----------- -----------
Net cash used in operating
activities (352,850) (255,494)
----------- -----------
Cash flows from investing activities:
Proceeds from sale of marketable
securities 480,439 2,541,023
Investment in marketable
securities (806,391) (2,558,739)
Issuance of short term notes (795,000) --
Investment in convertible loan -- (25,000)
Purchase of fixed assets -- (5,588)
Proceeds from sale of fixed
assets -- 9,213
Cash received on sale of Jewish
Directories, net of expenses 173,389 181,693
----------- -----------
Net cash provided by (used
in) investing activities (947,563) 142,602
----------- -----------
Cash flows from financing activities:
Dividend paid ($0.4 per share) -- (314,246)
Proceeds from exercise of stock
options -- 5,520
----------- -----------
Net cash used in
financing activities -- (308,726)
----------- -----------
Net decrease in cash (1,300,413) (421,618)
Cash and cash equivalents,
beginning of period 3,630,937 4,210,427
----------- -----------
Cash and cash equivalents,
end of period $ 2,330,524 $ 3,788,809
=========== ===========
Supplemental Cash Flow Information:
Capitalized software acquired
through issuance of stock -- $ 37,920
=========== ===========
Common stock issued for
services performed -- $ 45,000
=========== ===========
Taxes paid during the period $ 4,764 $ 5,844
=========== ===========