Fourth quarter business highlights:
•Yahoo! JAPAN began deploying MediaMind's ad serving technology on its GyaO! subsidiary, Japan's largest free video streaming site.
•The APAC region maintained its double digit growth trends.
•DG launched a solution to leverage the usage of tablets and smart phones while watching television by delivering automatic content recognition within TV ads.
•The Company entered the mobile market through a partnership, adding a mobile rich media authoring solution to its platform.
•In a commitment to greater campaign analysis and control by advertisers, DG launched its Verification Suite and introduced Versa Tag, a tag management solution. Versa Tag is being beta-tested by advertisers across numerous verticals, including financial, pharmaceutical, automotive, telecommunications and consumer products.
Full year 2012 financial highlights:
•Total revenue increased to $386.6 million.•Online segment revenues now represent over-one third of total revenues. •Data driven products and services revenues increased over 200%.
•Operating expenses included non-cash goodwill write-downs of $219.6 million relating to the online business unit and also included costs of $8.5 million associated with Special Committee, proxy matters, merger and integration efforts.
•2012 Adjusted EBITDA margins were 33% on a consolidated basis as compared to 42% in 2011.
•Cash flow from operations totaled $76.1 million in 2012.
•Our provision for income taxes for 2012 is impacted by the goodwill impairment charge because the vast majority of the charge is not deductible for income tax purposes. Further, as a result of the goodwill impairment charge, we recorded a valuation allowance on all of our deferred tax assets.
Full year 2012 business highlights:
•The Company substantially completed the integration of its online businesses.
•The Company consolidated its New York area offices into one location on Broadway.
•The senior management team was strengthened to address the market opportunity with addition of new Chief Financial Officer, Chief Marketing Officer, General Counsel and Chief Technology Officer.
•Full year political revenues totaled $8.5 million.
Online Segment Goodwill Charge
During the third quarter, the Company completed an interim goodwill impairment test of the online reporting unit. DG's third quarter operating results included a $208.2 million non-cash charge before income taxes related to the write-down of theonline reporting unit's goodwill.In addition to the interim impairment test, the Company is required to perform an annual impairment test as of December 31, 2012. As a result, the Company has recorded an additional non-cash charge of $11.4 million for additional impairment of goodwill of its online reporting unit.
Classification of the Company's Debt
On July 26, 2011, we entered into an amended and restated credit agreement (the "Amended Credit Facility") that provides for $490 million of term loans (the "Term Loans") and $120 million of revolving loans. The Term Loans were fully funded at closing and mature in 2018.
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