DG FastChannel® Reports Record Third Quarter 2009 Results

- Third Quarter Revenues Increase 17% to $48.3 Million –

- Third Quarter Adjusted EBITDA Rises 28% to $21.0 Million –

- Third Quarter Diluted Earnings Increases 83% to $0.22 per share –

• Press Release
• Source: DG FastChannel®, Inc.
• On 7:00 am EST, Thursday November 5, 2009

DALLAS--(BUSINESS WIRE)--DG FastChannel®, Inc. (NASDAQ: DGIT - News), a leading provider of digital media services to the advertising, entertainment and broadcast industries, today reported record third quarter financial results. Consolidated revenue for the third quarter 2009 increased 17% to $48.3 million compared to $41.4 million in the same period of 2008. Third quarter 2009 revenue from the delivery of high definition (HD) advertising content increased 68% to $15.6 million compared to $9.3 million in the same period of 2008.

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Symbol	Price	Change
DGIT	27.41	-0.06

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Scott K. Ginsburg, Chairman and CEO of DG FastChannel commented, “The Company’s impressive third quarter performance highlights early success from the adoption of our HD distribution platform. During the third quarter, over 44% of DG FastChannel’s HD business was delivered electronically, and that percentage should increase during the next few periods as more advertisers and media outlets adopt HD and file-based workflows. As a result, the Company’s HD revenues are expected to improve.”

“DG FastChannel’s expansion into rich media has provided important access to the online media business, advertising’s fastest growing segment. The Company’s Unicast division is actively leveraging its core competencies to more fully penetrate both the publisher and agency sides of the business. This reinforces the Company’s overriding goal of building a bridge between its traditional media business and the online media business. As Unicast further aligns its product mix with the Company’s video advertising division, potential growth synergies look very encouraging.”

Adjusted EBITDA was $21.0 million compared to $16.5 million in the comparable period of 2008, a gain of 28%. Third quarter 2009 net income was $5.4 million, or $0.22 per diluted share, compared with net income of $2.3 million, or $0.12 per diluted share in 2008. Third quarter 2009 normalized net income was $14.6 million, or $0.60 per diluted normalized net income per share, compared to normalized net income of $7.1 million, or $0.38 per diluted normalized net income per share in 2008. As of September 30, 2009, DG FastChannel had $26.8 million in cash and $107.8 million of debt, or net debt of $81.0 million. The terms “adjusted EBITDA” and “normalized net income” are defined below.

“DG FastChannel reported its highest ever adjusted EBITDA margin of 44% during the third quarter, and the Company’s goals of improving revenues, operating margins, profitability and cash flow remain key objectives. The Company’s financial condition and capital structure have been strengthened by reducing outstanding debt,” concluded Mr. Ginsburg.

Third Quarter 2009 Financial Results Webcast

The Company’s third quarter conference call will be broadcast live on the Internet at 11:00 a.m. ET on Thursday, November 5, 2009. The webcast is open to the general public and all interested parties may access the live webcast on the Internet at the Company’s Web site at www.dgfastchannel.com. Please allow 15 minutes to register and download or install any necessary software.

Non-GAAP Reconciliation, Adjusted EBITDA, Normalized Net Income and Diluted Shares Used in Normalized Net Income Per Share Calculation Definitions

Adjusted EBITDA is defined as earnings before interest, taxes, unrealized investment gains and losses, stock-based compensation, and depreciation and amortization. Although adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with generally accepted accounting principles (GAAP), the Company believes this Non-GAAP financial measure provides meaningful supplemental information regarding our performance and liquidity. However, investors should not consider this measure in isolation or as a substitute for operating income, cash flows from operating activities or any other measure for determining the Company’s operating performance or liquidity that is calculated in accordance with GAAP. In addition, because adjusted EBITDA is not calculated in accordance with GAAP, it may not necessarily be comparable to similarly titled measures employed by other companies. A reconciliation of the adjusted EBITDA figures to GAAP net income is included herein.

Normalized net income is defined as net income before amortization of intangible assets, stock-based compensation expense, unrealized investment gains and losses, and deferred tax expense (mostly related to the utilization of tax net operating loss carryforwards/credits), and release of the deferred tax asset valuation allowance. DG FastChannel considers normalized net income to be another important indicator of the overall performance of the Company because it eliminates the effects of events that are either not part of the Company’s core operations or are non-cash.

Diluted shares used in normalized net income per share calculations is defined as diluted common shares outstanding used in GAAP net income per share calculations, excluding the effect of Accounting for Stock-Based Compensation under the treasury stock method. DG FastChannel considers normalized net income and diluted normalized net income per share to be additional important indicators of the overall performance of the Company because they eliminate the effect of non-cash items.

Adjusted EBITDA and normalized net income should be considered in addition to, not as a substitute for, the Company's operating income and net income, as well as other measures of financial performance reported in accordance with GAAP.

Reconciliation of Non-GAAP Financial Measures

In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, the Company is presenting the most directly comparable GAAP financial measures and reconciling the non-GAAP financial measures to the comparable GAAP measures.

Recent Acquisitions

During 2008, the Company completed the acquisitions of the Vyvx advertising services business and Enliven Marketing Technologies Corporation as of June 5, 2008 and October 2, 2008, respectively. Accordingly, the results of operations for each acquired entity have been included in DG FastChannel’s results since the respective acquisition dates.

About DG FastChannel

DG FastChannel provides innovative, technology-based solutions to help advertisers and agencies work faster, smarter and more competitively. DG FastChannel delivers the standard in digital media services to the advertising, broadcast and publishing industries. Through its Unicast and Springbox operating units, DG FastChannel is a leading Internet marketing technology company offering online marketing and advertising solutions through a powerful combination of proprietary visualization technology, and a premium rich media advertising platform for the creation, delivery and reporting of premium rich media.

The Company utilizes satellite and Internet transmission technologies and has deployed a suite of digital media intelligence and asset management tools designed specifically for the advertising industry, including creative and production resources, and digital asset management. The Company has an online media distribution network used by more than 5,000 advertisers and agencies, and over 21,000 online radio, television, cable, network and print publishing destinations. For more information visit www.dgfastchannel.com.

Forward-Looking Statements

This release contains forward-looking statements relating to the Company, including the expected growth of destinations capable of receiving HD-enabled advertising content and making progress toward our goals of improving revenues, operating margins, profitability and cash flows. These forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those projected. These and other risks relating to DG FastChannel’s business are set forth in the Company’s filings with the Securities and Exchange Commission. DG FastChannel assumes no obligation to publicly update or revise any forward-looking statements.

(Financial Tables Follow)

Omar Choucair
Chief Financial Officer
DG FastChannel, Inc.
972/581-2000