DAGM Dag Media (MM)

NEW YORK, March 26 /PRNewswire-FirstCall/ -- DAG Media, Inc. (NASDAQ:DAGM) announced today that basic and diluted net loss per common share was $(0.05) in fiscal year 2006 versus net loss per common share of $(0.16) in fiscal year 2005. Net sales from continuing operations for the year ending on December 31, 2006 were $232,000 versus net sales of $0 for the year ending on December 31, 2005. The increase in net sales is due to $212,000 in sales made through Shopila's market places since Shopila's acquisition on October 11, 2006. $10,000 of the net sales are attributable to subscription revenues at nextyellow.com. Loss from operations for the year ending on December 31, 2006 was $1,107,000 compared to a loss of $651,000 for the year ended December 31, 2005, an increase of $456,000, or 70.0%. Of this increase $138,000 is due to nextyellow.com web development expenses and $105,000 represents marketing expenses associated with the operation of http://www.nextyellow.com/ and http://www.shopila.com/. $173,000 represents an increase in compensation expenses due to the adoption of SFAS 123(R) effective January 1, 2006. For the year ended December 31, 2006, consolidated loss from continuing operation was $867,000 or $(0.27) per basic and diluted share (based on 3.178 million shares), compared to a loss of $138,000 or $(0.04) per basic and diluted share (based on 3.118 million shares), in fiscal year 2005. The increase in loss of $729,000 resulted mainly from the increase in operating costs due to the operations of Next Yellow and the acquisition of http://www.shopila.com/ in October 11, 2006 and an increase in non-cash compensation expenses relating to the adoption of SFAS 123(R) effective January 1, 2006. The decrease in other income of $286,000 is primarily attributable to realized losses on marketable securities in 2006 compared to realized gains on marketable securities in 2005. Assaf Ran, Chairman of the board and CEO stated, "During 2006 we have accomplished several more steps in our plan to establish a new operation that will be more suitable for a publicly traded company. On April 20, 2006 we sold our Jewish directories business. On June 2006 we launched http://www.nextyellow.com/ our patent pending online yellow pages solution technology and on October 11, 2006 we completed the acquisition of http://www.shopila.com/. As we continue to build our new operations we make efforts to curb our expenses and to operate an efficient and lean team." "We are committed to continue to strive to enhance shareholders value," added Mr. Ran. We at DAG Media, through our subsidiaries, provide solutions to the online yellow pages industry by providing a local search and lead generation mechanism. We operate an e-commerce web site as well as several other web sites that complement our directories at http://www.nextyellow.com/; http://www.shopila.com/; 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 DECEMBER 31, 2006 Assets Current assets: Cash and cash equivalents $3,630,937 Marketable securities 2,267,134 Short term investment - insurance annuity contract - at fair value 1,116,350 Total cash and cash equivalents, marketable securities and short term investments 7,014,421 Trade accounts receivable 6,122 Due from purchasers- current portion 368,104 Other current assets 38,590 Total current assets 7,427,237 Property and equipment, net 16,483 Goodwill and other intangible assets, net 454,470 Capitalized web development costs, net 123,359 Due from purchasers - non current portion 97,222 Other assets 142,515 Total assets $8,261,286 Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued expenses $228,979 Promissory note 50,000 Income taxes payable 341,681 Deferred gain from the sale of Jewish Directories - current portion 243,057 Current liabilities of discontinued operations 35,000 Total current liabilities 898,717 Long term liabilities: Line of credit 54,506 Deferred tax liability 67,600 Deferred gain from the sale of Jewish Directories - non current portion 97,222 Total Liabilities 1,118,045 Commitments and contingencies (Note 11) Minority Interest 66,724 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 9,023,309 Treasury stock, at cost- 68,730 shares (231,113) Accumulated other comprehensive loss (127,595) Accumulated deficit (1,591,389) Total shareholders' equity 7,076,517 Total liabilities and shareholders' equity $8,261,286 DAG MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 2006 2005 Net Sales $232,192 $--- Cost of goods sold 189,290 --- Gross profit 42,902 --- Operating costs and expenses: Selling expenses 21,035 --- Web development expenses 137,666 --- Marketing expenses 105,101 --- General and administrative expenses 885,688 651,448 Total operating costs and expenses 1,149,490 651,448 Loss from operations (1,106,588) (651,448) Interest income 258,268 224,977 Realized (loss) gain on marketable securities (45,611) 288,008 Other income 14,232 --- Total other income 226,889 512,985 (Loss) from continuing operations before provision for income taxes and minority interest (897,699) (138,463) Tax benefit --- --- (Loss) from continuing operations before minority interest (897,699) (138,463) Minority interest 12,776 --- (Loss) from continuing operations (866,923) (138,463) Discontinued Operations: Gain (loss) on the sale of discontinued operations (net of tax effect of 0 in 2006 and 2005) 767,939 (55,000) Loss from discontinued operations (75,129) (317,590) (Loss) income from discontinued operations 692,810 (372,590) Net (loss) $(174,113) $(511,053) Basic and diluted net income (loss) per common share outstanding Continuing operations $(0.27) $(0.04) Discontinued operations $0.22 $(0.12) Net (loss) per common share $(0.05) $(0.16) Weighted average number of common shares outstanding - Basic and diluted 3,177,765 3,118,381 DAG MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 Additional Paid-in Common Stocks Capital Treasury Shares Shares Amount Shares Cost Balance, December 31, 2004 3,170,190 $3,170 $8,497,034 68,730 ($231,113) Issuance of common stock from exercise of options 21,000 21 34,399 Issuance of common stock to related party for services not yet performed 20,000 20 47,380 Non cash compensation 11,361 Dividend declared to be paid at 1/5/2006 ($0.10 per share) Unrealized loss on preferred stocks and other marketable securities Net loss for the year ended December 31, 2005 Total comprehensive loss Balance, December 31, 2005 3,211,190 3,211 8,590,174 68,730 (231,113) Issuance of common stock from exercise of options 4,000 4 5,516 Services performed for shares issued previous year Non cash compensation 183,012 Non cash compensation to related party for service performed 108,846 Issuance of common stock to related parties 40,000 40 80,560 Issuance of common stock to Guy Mushkat for Shopila acquisition 50,000 50 70,450 Options forfeited (15,249) Unrealized gain on preferred stocks and other marketable securities Net loss for the year ended December 31, 2006 Total comprehensive Income Balance, December 31, 2006 3,305,190 $3,305 $9,023,309 68,730 ($231,113) Retained Accumulated Earning Stock other (Accumu- Subscription Deferred comprehensive lated Receivable Compensation income (loss) Deficit) Totals Balance, December 31, 2004 --- $(53,920) $17,312 $343,963 $8,576,446 Issuance of common stock from exercise of options 34,420 Issuance of common stock to related party for services not yet performed (47,400) --- Non cash compensation 27,079 38,440 Dividend declared to be paid at 1/5/2006 ($0.10 per share) (1,250,186) (1,250,186) Unrealized loss on preferred stocks and other marketable securities (420,824) (420,824) Net loss for the year ended December 31, 2005 (511,053) (511,053) Total comprehensive loss (931,877) Balance, December 31, 2005 (47,400) (26,841) (403,512) (1,417,276) 6,467,243 Issuance of common stock from exercise of options 5,520 Services performed for shares issued previous year 47,400 47,400 Non cash compensation 11,592 194,604 Non cash compensation to related party for service performed 108,846 Issuance of common stock to related parties 80,600 Issuance of common stock to Guy Mushkat for Shopila acquisition 70,500 Options forfeited 15,249 --- Unrealized gain on preferred stocks and other marketable securities 275,917 275,917 Net loss for the year ended December 31, 2006 (174,113) (174,113) Total comprehensive Income 101,804 Balance, December 31, 2006 --- --- $(127,595)$(1,591,389) $7,076,517 DAG MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005 2006 2005 Cash flows from operating activities: Net (loss) $(174,113) $(511,053) Adjustment to reconcile net (loss) income to net cash used in operating activities - Gain on sale of Jewish Directories (481,468) --- Depreciation and amortization 44,150 14,856 Non cash compensation expense 305,848 38,439 Minority interest (12,776) --- Realized loss (gain) on sale of marketable securities 45,611 (288,008) Gain on the sale of fixed assets (14,232) --- Changes in operating assets and liabilities net of effects of disposition - Accounts receivable (6,122) --- Other current and non current assets (9,638) 1,483 Accounts payable and accrued expenses 147,206 5,811 Due from purchasers (125,047) --- Income taxes payable (25,652) --- Assets and liabilities from discontinued operations (146,900) 62,323 Net cash used in operating activities (453,133) (676,149) Cash flows from investing activities: Investment in preferred stocks, other marketable securities and annuity contract (2,591,432) (14,497,087) Proceeds from sale of marketable securities 2,628,275 17,610,799 Investment in convertible loan (25,000) --- Acquisition of Shopila (107,500) --- Purchase of fixed assets (18,729) --- Proceeds from sale of fixed assets 9,213 --- Capitalized web development costs (22,429) --- Cash received on sale of Jewish Directories, net of expenses 309,971 --- Assets of discontinued operations --- (6,072) Net cash provided by investing activities 182,369 3,107,640 Cash flows from financing activities: Proceeds from exercise of options 5,520 34,421 Dividends paid (314,246) (1,803,227) Net cash used in financing activities (308,726) (1,768,806) Net (decrease) increase in cash and cash equivalents (579,490) 662,685 Cash and cash equivalents, beginning of year 4,210,427 3,547,742 Cash and cash equivalents, end of year $3,630,937 $4,210,427 Supplemental Cash Flow Information: Taxes paid during the year $25,535 $176,414 Common stock issued to Ocean 7 and in regards to Shopila acquisition $151,100 --- Capitalized software acquired through issuance of stock and grant of options $47,400 $47,400 Acquisition of company: Liabilities assumed (140,000) Goodwill and other intangibles 465,100 Deferred tax liability (67,600) Minority interest (79,500) Less - Stock issued (70,500) Net cash paid $107,500 DATASOURCE: DAG Media, Inc. CONTACT: Assaf Ran, CEO, or Inbar Evron-Yogev, CFO, both of DAG Media, Inc., +1-212-489-6800 Web site: http://www.dagmedia.com/

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