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DG FastChannel, Inc. (DGIT)
Q1 2008 Earnings Call
May 8, 2008 11:00 am ET
Scott K. Ginsburg - Chairman and Chief Executive Officer
Omar A. Choucair - Chief Financial Officer
Patrick Vogt - Director, President and Chief Executive Officer, Enliven
Jason Helfstein - Oppenheimer
Richard Fetyko - Merriman Curhan Ford & Co.
Murray Arenson - Ferris, Baker Watts
David Cohen - Midwood
Josh Colson - Millennium Partners
Jim Leahy - Morgan Joseph
» DG FastChannel Q3 2007 Earnings Call Transcript
» American Pacific Corporation Q4 2009 Earnings Call Transcript
Scott K. Ginsburg
This morning we announced two significant positive advances reflecting further progress and development for DG FastChannel as the leading digital advertising solution company. We recorded record, quarterly revenue, EBITDA and income and announced that we have reached a definitive agreement to merge with Enliven Marketing Technologies which will immediately make DG FastChannel a leader in the rapidly expanding Internet and mobile advertising verticals.
We’ve been active on many fronts since our last call, as we also move forward with Vyvx transaction, had considerable tracks with our HD offerings and embarked on our plan to strengthen that platform.
Before we proceed further, I would like to ask Omar Choucair to read the Safe Harbor language.
Omar A. Choucair
Our discussion with you today may contain certain forward-looking statements related to the company including the expansion of its digital distribution network and the demand amongst certain clients or digital audio and video media services and its expectations for the pending transactions with Vyvx ad distribution and Enliven. These statements are based on the economic and market conditions as of May 7, 2008 and assume no material changes in economic conditions or other major world events.
The company can give no assurance as to whether these conditions will continue or if they change, how such changes may affect the company’s current expectations. While the company may from time-to-time revise this outlook or issue updated guidance, it assumes no obligation to do so.
Listeners are further cautioned that these forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those projected. These and other risks related to the DG FastChannel company are set forth in the company’s filings with the Securities and Exchange Commission.
Today’s call and webcast include non-GAAP financial measures within the meaning of SEC Reg G. A reconciliation of all non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance of GAAP can be found in today’s press release.
Scott K. Ginsburg
The highlights of the press releases that were put out today, I’m going to just make several points and then turn over some detailed information to Omar. But as you know if you’ve read the releases that we’ve announced that we’ve signed a definitive agreement to merge with Enliven in a stock-for-stock transaction. It is a strategic transaction for our company and shareholders for several reasons.
One, it will take advantage by growing demand for online media. Two, it broadens our service offerings for our advertising and agency customers. It will create a robust and comprehensive platform, integrated platform for our customers. And through a single work flow platform we will have the ubiquitous reach of TV, radio, print, mobile, the Internet and other digital devices and outlets. And we can take our customers messages anywhere and everywhere.
In a few minutes, I’ll ask Omar again to fill in on the financial details of the merger, but let me turn for a moment to our first quarter results. DG FastChannel reported an excellent first quarter 2008 results that reflect continued success on our mission to serve the advertising community while extracting operating efficiencies and improvements. We continue to enhance our media solutions to make them available to more advertisers and more agencies. Additionally, we have realized significant operating synergies and cost efficiencies from the recent acquisitions.
We reported record first quarter revenues, EBITDA and operating income. We reported record quarterly HD revenues of approximately $3.7 million. We concluded our program to realize approximately $7 million of annual operating synergies from our 2007 completed transactions. And today, we’re reaffirming our 2008 financial guidance including all the transactions that were completed in 2007.
We will discuss all these efforts in greater detail shortly, but first let me ask Omar to review the first quarter ‘08 financial results.
Omar A. Choucair
Thank you for joining today’s call for the activities that we’ve had over the last couple of days. As you’ve read, the company did enter into definitive agreement to merge with Enliven and I’m just going to cover a couple of the high points.
The company will issue approximately 4.5 million DGIT shares, which were exclusive of the shares that are currently owned by DG to the Enliven shareholder base reflecting an exchange ratio of 0.51 shares of DG for each share of Enliven.
The DGIT shareholders will own approximately 80% of the combined common stock of the company and the Enliven shareholders will own the remaining 20%. The company DG will assume to retire approximately $4.5 million of fair value of Enliven debt.
The combined company will have nine total Board members and the Enliven company group has reflected the two new Board members which we have mentioned inside the press release. The company intends to file a Form S-4, which is basically a joint proxy within the next several weeks. And we anticipate the process to conclude sometime in Q3 with a closing sometime during that period.