Date: Thu, 18 Dec 1997 22:49:35 GMT Server: Apache/1.2.4 Last-Modified: Wed, 01 Oct 1997 18:39:35 GMT ETag: "42ca-2250-343298e7" Content-Length: 8784 Accept-Ranges: bytes Connection: close Content-Type: text/html DG SYSTEMS REPORTS 93% REVENUE GAIN FOR SECOND QUARTER 1996


For more information:
Robert Schettino
bobtino@thomaspr.com
Susan Ice
susani@thomaspr.com
Thomas Associates 415-596-2700

Jeff Byrne
Jbyrne@dgsystems.com
Tom Shanahan
tsha1@dgsystems.com
DG Systems 415-276-6600


DG SYSTEMS REPORTS 83% REVENUE GAIN FOR SECOND QUARTER 1996

Strong advertiser demand and industry's largest digital distribution network continue to drive growth

SAN FRANCISCO, CALIFORNIA - July 17, 1996 - Digital Generation Systems, Inc. (NASDAQ: DGIT), a leading provider of electronic distribution services to the broadcast industry, today reported second quarter 1996 revenue of $2.4 million, a gain of 83% over the second quarter of 1995.
     Earnings before interest, taxes, depreciation and amortization (EBITDA) improved from a loss of $1,357,000 in the second quarter of 1995 to a loss of $1,197,000 in the most recent quarter. EBITDA measures the company's cash flow results, excluding the costs of deploying its audio distribution equipment at production studios and broadcast stations. The company also reported a net loss per share of $0.18 in the quarter, compared with a net loss of $0.22 per share in the second quarter of 1995.
     "We are encouraged by the continued strong growth of our audio deliveries," said Henry Donaldson, DG Systems president and CEO. "Our revenue growth reflects a significant growth in demand among our advertiser, agency, and record company clients for digital delivery of their content to broadcasters."
     Unit deliveries of audio commercials and first-release music singles rose to 187,000 in the second quarter, nearly doubling the 95,000 deliveries achieved in the quarter a year ago. The company also expanded its online network of radio stations to over 4,700, representing nearly a 60% increase in the past twelve months.
     DG Systems also recently announced that over 250 television stations, including 20 out of the top 40 major network stations, have agreed to install the company's video receiving equipment and to receive video spot advertising over the DG Systems network. The company to date has deployed its ADvantage Digital Video Playback System (DVPS) at five television stations.
     Founded in 1991, Digital Generation Systems is a leading provider of electronic distribution services to the broadcast industry, linking hundreds of advertisers, agencies, music companies, and syndicators with over 4,700 radio stations in the United States. The company offers a family of services for quick and reliable delivery of CD-quality advertisements, new music singles, and short-form programming to radio stations, along with associated traffic instructions and supporting promotional material. DG Systems is headquartered in San Francisco, with field offices in New York, Chicago, Los Angeles, and Atlanta. DG Systems can be reached at 415-276-6600 or www.dgsystems.com on the World Wide Web.

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DIGITAL GENERATION SYSTEMS, INC.
Corporate Information
June 30, 1996
Description of Business:Digital electronic distribution services to the broadcast industry linking advertisers, agencies, music companies and syndicators to over 4,700 radio stations.
Corporate Address:875 Battery Street
San Francisco, CA 94111
Telephone/Fax:Phone: 415/276-6600
Fax: 415/276-6601
Trading Information:NASDAQ - DGIT
11,515,131 shares outstanding
1996 Price Range: $8 1/8 - $13 1/4
Current Price (7/16): $8 1/4
Officers:President & CEO: Henry W. Donaldson
V.P. Finance & CFO: Thomas P. Shanahan

Three Months Ended June 30
Income Summary
(in thousands, except for per share and other data)
19951996Change
 
Revenues$1,289$2,35983%
Delivery Costs$ 423$ 703
Customer Operations$ 735$ 977
Sales & Marketing$ 797$ 970
Research & Development$ 362$ 510
General & Administrative$ 329$ 396
EBITDA($ 1,357)($ 1,197)12%
Depreciation$ 530$ 936
Interest Income$ 84$ 434
Interest Expense($ 200)($ 388)
Net Loss($ 2,003)($ 2,087)-4%
 
Earnings per share($ 0.22)($ 0.18)
Weighted Average Shares9,13311,482
 
 
Financial Position
Cash & Short-term Investments$ 5,920$ 31,747
Total Assets$11,819$ 41,835
 
Other Data
Total Deliveries95,000187,00097%
On-Line Stations3,0004,70057%


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Digital Generation Systems, Inc.
875 Battery Street, San Francisco, California 94111

Telephone 415.276.6600 / 800.335.4DGS
Facsimile 415.276.6601

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